TITLE 25

Property

Manufactured Home Communities

CHAPTER 70. Manufactured Homes and Manufactured Home Communities Act

Subchapter V. Delaware Manufactured Home Relocation Trust Fund

§ 7041. Delaware Manufactured Home Relocation Authority [For application of this section, see 79 Del. Laws, c. 304, § 7].

(a) The Authority shall be administered by a board of directors (“Board”) as follows:

(1) Five voting members as follows:

a. One member who is appointed by the Governor from a list of at least 2 nominees submitted by the largest not-for-profit association representing manufactured homeowners in the State.

b. One member who is appointed by the Governor from a list of at least 2 nominees submitted by the largest not-for-profit association representing the manufactured home industry in this State.

c. One member who is appointed by the Governor from the public-at-large.

d. One member, who is not a landlord, community owner, homeowner, or tenant, who is appointed by the Speaker of the House of Representatives.

e. One member, who is not a landlord, community owner, homeowner, or tenant, who is appointed by the President Pro Tempore of the Senate.

(2) One nonvoting member, who is not a landlord, community owner, homeowner, or tenant, appointed by the Attorney General, as a representative of the Consumer Protection Unit of the Department of Justice.

(3) All Board members shall be residents of the State and serve at the pleasure of the authority that appointed such member.

(4) The terms of the members shall be staggered so that no more than 2 members’ terms end at the same time. The first 2 appointees shall serve for a term of 1 year, the next 2 appointees shall serve for a term of 2 years, and the remaining 1 appointee shall serve for a term of 3 years. Thereafter, all appointees shall serve for a term of 2 years; provided, however, that a member may be appointed for a term of less than 2 years to ensure that the Board members’ terms expire on a staggered basis. The term for any member of the Board may subsequently be renewed for an additional term or additional terms.

(5) The Governor shall designate 1 member of the Board as the chairperson of the Board.

(b) (1) The Board may employ or retain such persons as are reasonable and necessary to perform the administrative and financial transactions and responsibilities of the Authority and to perform other necessary and proper functions not prohibited by law. Except as provided under paragraph (b)(2)b. of this section, the Authority is responsible for all direct and indirect costs for its operations under § 7042 of this title, including receipts and disbursements, personnel, rental of facilities, and reimbursement to other state agencies for services provided and, therefore, must be fiscally revenue-neutral.

(2) a. Members of the Board may be reimbursed from moneys of the Authority for actual and necessary expenses incurred by them as members.

b. The Authority must pay each voting member of the Board $100 for each board meeting the member attends from money appropriated by the General Assembly for this purpose.

(3) There is no civil liability on the part of, and no civil cause of action of any nature against, the Authority, an agent or employee of the Authority, Board, or a member of the Board for any act or omission in the performance of powers and duties under this subchapter unless the act or omission complained of was done in bad faith or with gross or wanton negligence.

(4) Meetings of the Board are subject to the provisions of the Freedom of Information Act, Chapter 100 of Title 29. All meetings must be conducted at a central location in the State, unless agreed to for a given meeting by at least 3 of the 5 board members.

(c) The Board shall do all of the following:

(1) Adopt a plan of operation and articles, bylaws, and operating rules.

(2) Establish procedures under which applicants for payments from the Authority may be approved.

(3) Authorize payments and adjust, eliminate, or reinstate the Trust Fund assessment established under § 7042 of this title only if at least 3 of the 5 members of the Board approve the payments or assessments.

(4) Facilitate the initial meeting between the homeowners and landowner and select an arbitrator under § 7053 of this title.

(d) The Authority and its board of directors may sue or be sued and may borrow from private finance sources and issue notes or vouchers in order to meet the objectives of the Authority and those of the Trust Fund established under § 7042 of this title.

74 Del. Laws, c. 35, §  274 Del. Laws, c. 147, §§  3, 478 Del. Laws, c. 132, §§  1-379 Del. Laws, c. 63, §  582 Del. Laws, c. 38, § 3484 Del. Laws, c. 21, § 1

§ 7042. Delaware Manufactured Home Relocation Trust Fund [Expires July 1, 2029, pursuant to subsection (d) of this section].

(a) The Delaware Manufactured Home Relocation Trust Fund (“Trust Fund”) is established in the Division of Revenue of the Department of Finance for exclusive use by the Delaware Manufactured Home Relocation Authority to fund the Authority’s administration and operations. All interest earned from the investment or deposit of moneys in the Trust Fund must be deposited into the Trust Fund.

(b) Moneys in the Trust Fund may be expended for only the following purposes:

(1) To pay the administrative costs of the Authority, except board-member compensation for meeting attendance under § 7041(b)(2)b. of this title.

(2) To carry out the objectives of the Authority by assisting manufactured homeowners who are tenants in a manufactured home community where the community owner intends to change the use of all or part of the land on which the community is located or where the community owner intends to convert the manufactured home community to a manufactured home condominium community or to a manufactured home cooperative community pursuant to Chapter 71 of this title, and by assisting manufactured home community owners with the removal or disposal, or both, of nonrelocatable or abandoned manufactured homes.

(3) To carry out the Authority’s responsibilities under subchapter VI of this chapter.

(4) To fund the Delaware Manufactured Home Owner Attorney Fund under § 7046 of this title.

(c) After notifying the manufactured homeowners who are tenants in a community owner’s manufactured home community that the community owner intends to change the land use or to convert the community under paragraph (b)(2) of this section, if the community owner does not change the land use or convert the community within 3 years of notification, or if the Authority finds there is prima facie evidence under § 7024(c)(2) of this title that the owner did not intend in good faith to change land use, the community owner shall, within 30 days of the date the Authority provides written notice to the community owner, reimburse the Authority for whatever moneys the Authority has expended from the Trust Fund with respect to that manufactured home community, along with double the legal interest rate. The date of the mailing of notice by the Authority is deemed the date that a community owner is notified about reimbursing the Authority. However, if the community owner, with due diligence, has not been able to complete the change-in-use process within 3 years, the Authority may grant a reasonable extension to the community owner to complete the process.

(d) Except as required for liquidation under subsections (f) and (k) of this section, the Trust Fund terminates on July 1, 2029, unless terminated sooner or extended by the General Assembly.

(e) The cap on the Trust Fund is $15 million. The cap may be adjusted, eliminated, or reinstated by the Board at any time, subject to the voting requirements under § 7041(c)(3) of this title.

(f) If the Trust Fund ceases to exist, the funds held at the time of dissolution must be liquidated as follows:

(1) Fifty percent of the total funds, on a per capita basis, to tenants of rented lots in manufactured home communities in Delaware who have occupied the lots for at least the 12 months immediately prior to the time of the dissolution.

(2) Fifty percent of the total funds to landlords owning rented lots at the time of dissolution, prorated on the number of lots actually rented by the landlords for at least the 12 months immediately prior to the time of dissolution.

(g) (1) a. The Board shall set a monthly assessment for deposit in the Trust Fund for each rented lot in a manufactured home community. The Board may adjust, eliminate, or reinstate the assessment, and shall notify landlords and tenants of each adjustment, elimination, or reinstatement under Board regulations.

b. One-half of the monthly assessment set under paragraph (g)(1)a. of this section is the obligation of the tenant of rented lot, and ½ of the assessment is the obligation of the landlord.

c. Beginning on December 11, 2019, the landlord portion of the monthly assessment is credited 50 cents for each rented lot.

d. Beginning on December 11, 2019, 50 cents of the tenant portion of the monthly assessment for each rented lot is redirected to the Delaware Manufactured Home Owner Attorney Fund under § 7046 of this title.

(2) a. The monthly assessment set under this subsection must be paid as follows:

1. The tenant’s portion of the monthly assessment under paragraph (g)(1)d. of this section is the obligation of the tenant of the rented lot.

2. The landlord’s portion of the monthly assessment under paragraph (g)(1)c. of this section is the obligation of the landlord.

b. The landlord shall collect the tenant’s portion of the assessments under this section on a monthly basis as additional rent. The landlord shall remit to the Trust Fund both its portion and the tenant’s portion of the assessments on a quarterly basis. The landlord is responsible for safeguarding all assessments it collects. Failure by a tenant to pay to the landlord the tenant’s portion of the assessment as additional rent is grounds for termination of the rental agreement under § 7016 of this title. An assessment is not due or collectable for a vacant lot.

(3) If a lot is rented for any portion of a month, the full monthly assessment must be paid to the Trust Fund.

(4) If a rental agreement contains a capping provision which limits the amount by which rent may be increased, the Trust Fund assessment is deemed not to be rent for purposes of rent increases.

(5) a. If within 30 days of the quarterly due date a landlord fails to remit to the Trust Fund both its portion and the tenant’s portion of the assessment, the Authority may notify the landlord in writing, demanding payment and stating that, unless the required payment is made within 7 days from the date of mailing, legal action may be initiated to collect any assessment, interest, at the rate of 1% per month until paid in full, or other sums due and owing. Any written notice must comply with § 7015 of this title. If the Authority is awarded a judgment in its favor, the Authority may request and the court shall award reasonable attorney’s fees, costs, and expenses. Failure by the Authority to provide the notice under this paragraph (g)(5)a. is not prejudicial to the Authority’s right to pursue such cause of action.

b. A landlord may assert as an affirmative defense to legal action initiated under paragraph (g)(5)a. of this section that a tenant has failed to pay its portion of the assessment. There is a rebuttable presumption that the tenant has paid its required assessment amount in full.

(h) The Authority may not for any reason, including age, income level, or geography, exempt any landlord or tenant from paying the Trust Fund assessment.

(i) The Trust Fund must be audited annually. If the State Auditor’s Office performs the audit, the Authority shall pay the cost of the audit to the State from the Trust Fund. The completed audit must be made available to the public by placing it on a website, by offering it as a hard copy for a fee which reflects reasonable reproduction cost, or in some other manner determined by the Authority.

(j) In addition to providing for an annual audit under subsection (i) of this section, the Authority shall make available to the public, at least on a quarterly basis, the amount of the payment made to each tenant and landlord, along with a description of the property related to the payment and the reason for the payment.

(k) If the Delaware Manufactured Home Owner Attorney Fund ceases to exist, the funds held at the time of dissolution must be liquidated on a per capita basis to tenants of rented lots in manufactured home communities in Delaware who have occupied the lots for at least the 12 months immediately before the time of the dissolution.

74 Del. Laws, c. 35, §  270 Del. Laws, c. 186, §  176 Del. Laws, c. 336, §  177 Del. Laws, c. 238, §§  2-2079 Del. Laws, c. 330, §  182 Del. Laws, c. 38, § 3582 Del. Laws, c. 62, § 382 Del. Laws, c. 141, §§   22, 2584 Del. Laws, c. 21, § 2

§ 7043. Relocation expenses; payments for nonrelocatable homes.

(a) If a tenant is required to relocate due to a change in use or conversion of the land in a manufactured home community under § 7024(b) of this title and complies with the requirements of this section, the tenant is entitled to the maximum relocation payment, established by the Board, from the Trust Fund, regardless of destination, including to property that is not in a manufactured home community or that is located in another state.

(b) The amount of a relocation payment determined under subsection (a) of this section is final and may not be appealed.

(c) A tenant is not entitled to compensation for relocation under subsection (a) of this section if any of the following apply:

(1) The landlord moves the tenant’s manufactured home by mutual consent to another lot in the manufactured home community or to another manufactured home community at the landlord’s expense.

(2) The tenant is vacating the manufactured home community and so informed the landlord before notice of the change in use was given.

(3) The tenant abandons the manufactured home under subsection (g) of this section.

(4) The tenant has failed to pay the tenant’s share of the Trust Fund assessment during the course of the tenancy.

(5) The tenant’s home is a camper trailer, recreational vehicle, motor home, or similar vehicle or trailer.

(d) Compensation for nonrelocatable homes.

(1) A tenant is entitled to compensation from the Trust Fund for the tenant’s manufactured home if the home, which is on a lot subject to a change in use of land, cannot be relocated. The Board shall establish criteria for determining whether a home can or cannot be relocated. The criteria must include all of the following:

a. Availability of a replacement home site.

b. Feasibility of physical relocation.

(2) If the Board determines that a manufactured home cannot be relocated under paragraph (d)(1) of this section, the Board shall provide compensation to the tenant. The amount of compensation, as determined by a Board-approved, certified manufactured home appraiser, is the fair market value of the home as sited and any existing appurtenances, but excludes the value of the underlying land. However, the amount of compensation may not exceed an amount set by the Board and which may be adjusted from time to time by the Board, to be paid in exchange for the title of the nonrelocatable manufactured home. Prior to receiving payment for a nonrelocatable home, the tenant must deliver to the Board the current title to the home duly endorsed by the owner or owners of record, valid releases of all liens shown on the title, and a tax release. The Board shall then relinquish the title to the landlord to facilitate the removal or disposal of the home from the manufactured home community. For the purpose of compensation to the landlord under § 7044 of this title, a home that cannot be relocated is deemed abandoned. The determination of the Board as to the amount of compensation is final and may not be appealed.

(e) Except as provided for abandonment under subsection (g) of this section, in order to obtain payment from the Trust Fund for the relocation of a manufactured home, a tenant must submit to the Authority, with a copy to the landlord, an application for payment which includes all of the following:

(1) A copy of the notice of termination or nonrenewal of the rental agreement due to change in use of land, under § 7024(b)(1) of this title.

(2) A contract with a licensed moving or towing contractor for the moving expenses for the manufactured home.

(f) The Authority shall approve or reject payment to a moving or towing contractor within 30 days after receipt of the information required by this section, and forward a copy of the approval or rejection to the tenant, with a voucher for payment if payment is approved.

(g) In lieu of the procedure under subsection (a) of this section, a tenant may abandon the manufactured home in the manufactured home community. A tenant must receive a payment from the Trust Fund for the abandoned manufactured home. Before collecting a payment, a tenant shall deliver to the Authority a current State of Delaware title to the manufactured home duly endorsed by the owner of record, a valid release of all liens shown on the title, and a tax release. The amount of the payment shall be set by the Authority. The Authority shall not set the amount of payment under this subsection for a camper trailer, recreational vehicle, motor home, or similar vehicle or trailer that is defined as a “manufactured home” by § 7003(12)b. of this title to be less than the lowest payment it sets for a “manufactured home” as defined by § 7003(12)a. of this title. The Authority’s determination of the amount of the payment is final and may not be appealed.

74 Del. Laws, c. 35, §  274 Del. Laws, c. 147, §  879 Del. Laws, c. 151, §  282 Del. Laws, c. 38, § 3683 Del. Laws, c. 358, § 3

§ 7044. Payment of funds to landlord for removal or disposal of abandoned homes.

(a) A landlord is entitled to receive from the Trust Fund payment in an amount determined by the Board to be sufficient to remove or dispose, or both, a non-relocatable or abandoned manufactured home under § 7043(d) and (g) of this title.

(b) Payment for removal or disposal, or both, of a manufactured home under subsection (a) of this section must be authorized by the Authority and made in the form of a voucher issued to the Division of Revenue of the Department of Finance, directing the Division to issue a check in a designated amount to the landlord.

(c) If the Trust Fund does not have sufficient moneys to make a payment to a landlord under this section, the Authority shall issue a written promissory note to the landlord for funds due and owing. Promissory notes may be redeemed in order of issuance of the notes as additional moneys come into the Trust Fund.

(d) If a landlord realizes a profit from the removal or disposal, or both, of a manufactured home, the landlord shall reimburse the Trust Fund for any profit gained by the landlord pertaining to that home.

(e) A landlord may not receive payment from the Trust Fund if the landlord has failed to pay the landlord’s share of the total Trust Fund assessment during the course of tenancies or has failed to remit the tenant’s share as required under § 7042(g)(2) of this title.

(f) It is a class A misdemeanor for a landlord or a landlord’s agent to file a notice, statement, or other document required under this section which is false or contains a material misstatement of fact.

74 Del. Laws, c. 35, §  274 Del. Laws, c. 147, §§  5, 982 Del. Laws, c. 38, § 37

§ 7045. Payment of funds to tenants.

(a) When a payment to a tenant is authorized by the Authority, payment must be made in the form of a voucher issued to the Division of Revenue of the Department of Finance, directing the Division to issue a check in a designated amount to the named tenant.

(b) If the Trust Fund does not have sufficient moneys to make a payment to a tenant under this section, the Authority shall issue a written promissory note to the tenant for funds due and owing. A promissory note may be redeemed in order of issuance of the notes as additional moneys come into the Trust Fund.

(c) It is a class A misdemeanor for a tenant or a tenant’s agent to file a notice, statement, or other document required under this section which is false or contains a material misstatement of fact.

74 Del. Laws, c. 35, §  274 Del. Laws, c. 147, §§  5, 982 Del. Laws, c. 38, § 38

§ 7046. Delaware Manufactured Home Owner Attorney Fund.

(a) The Delaware Manufactured Home Owner Attorney Fund is established through funding provided under § 7042 of this title to provide legal representation and advocacy for manufactured homeowners in disputes with community owners.

(b) The Department of Justice must enter into a contract, under the requirements of subchapter VI, Chapter 69 of Title 29, for a person to assist and represent manufactured homeowners in disputes with community owners with matters that include all of the following:

(1) Providing educational materials and presentations for manufactured homeowners on their rights as manufactured homeowners.

(2) Forming a homeowners association.

(3) Defending an eviction.

(4) Enforcing a breach of a lease agreement by a community owner.

(5) Remedying the failure of a community owner to maintain communities in a manner consistent with local, state, and federal health and safety rules, regulations, and laws.

(6) Challenging a potentially unenforceable term in a lease agreement.

(7) Challenging a potentially unenforceable community rule.

(8) Challenging a rent increase under subchapter III of this chapter, if all of the following apply:

a. The proposed rent increase is 3% or higher plus the CPI-U as defined in § 7052 of this title.

b. The challenge is requested by either of the following:

1. The homeowners association that represents 25% or more of the homeowners.

2. A simple majority or more of the homeowners who received notice of the proposed rent increase under § 7043 of this title, calculated based on 1 vote for each home that received notice.

(c) Not less than quarterly, the Authority shall issue a voucher to the Division of Revenue directing the Division of Revenue to issue a check to the Department of Justice in the amount of the assessments collected under § 7042(g)(1)d. of this title.

(d) The Department of Justice shall file an annual report with the General Assembly October 1 of each year that shall provide all of the following information as of the end of the prior fiscal year:

(1) The amount in the Attorney Fund.

(2) The amount that was spent in the previous year.

(3) The number of cases the contracted attorney worked on in the previous year.

(4) The number of manufactured homeowners who were represented by the contracted attorney in the previous year.

82 Del. Laws, c. 62, § 4