SB 132

Abstract

Senate Bill No. 132 (SB 132) and Senate Bill No. 110 (SB 110) both revise the requirements for rent increases in manufactured home communities and the dispute resolution process when a rent increase is proposed. Many of the revisions to Chapter 70 of Title 25, which governs manufactured homes on rented lots in manufactured home communities, are identical in both SB 132 and SB 110. The main difference between SB 132 and SB 110 is that SB 110 clarifies when a manufactured home community owner can recover the cost of a capital improvement from the homeowners in the community by making the amount the community owner collects a capital improvement assessment fee that ends when the cost of the capital improvement is recovered, instead of a permanent rent increase. SB 132 does all of the following: 1. Adds definitions and clarifies how often a rent increase may occur or be requested. 2. Revises the requirements for when rent may be increased above the Consumer Price Index for All Urban Consumers. 3. Adds disclosure requirements to the rent increase dispute resolution process. 4. Clarifies the legal standard and scope of a court’s review of an arbitrator’s decision. 5. Clarifies when rent increases take effect. 6. Makes technical corrections to conform existing law to the standards of the Delaware Legislative Drafting Manual Senate Substitute No. 1 for SB 132 differs from SB 132 because it includes the revisions to Chapter 70 of Title 25 that are in SB 110, which are as follows: 1. Repeals the definition of “market rent” because that term is not a factor considered for justifying a rent increase under current law. 2. Clarifies that the amount the community owner collects from a capital improvement assessment fee ends when the cost of the capital improvement is recovered, instead of a permanent rent increase, consistent with a recent ruling by the Supreme Court of Delaware. 3. Adds a corresponding technical change that continues to allow a homeowner or homeowner association to dispute a capital improvement assessment fee under the existing rent increase dispute resolution process. Senate Substitute No. 1 for SB 132 differs from SB 132 and SB 110 as follows: 1. Restores changes in utility charges as a factor that may justify a rent increase above the CPI-U. 2. Reorganizes the notice requirements under § 7053(a) for clarity. 3. Allows a homeowner to receive income and operating expense statements from the community owner for a period of time longer than 3 years upon a showing of good cause. 4. Requires an arbitrator to use the standards in Chapter 70 of Title 25 in making a decision.