Chapter 71. Conversion Of Manufactured Home Communities To Manufactured Home Condominium Or Cooperative Communities
TITLE 25
Property
Manufactured Home Communities
CHAPTER 71. CONVERSION OF MANUFACTURED HOME COMMUNITIES TO MANUFACTURED HOME CONDOMINIUM OR COOPERATIVE COMMUNITIES
§ 7101. Purpose of chapter.
This chapter provides a procedure for the orderly transition of a manufactured home community from single-unit rental to multiple-unit usage as a manufactured home condominium or cooperative community.
64 Del. Laws, c. 14, § 2; 74 Del. Laws, c. 35, § 6.;
§ 7102. Definitions.
The following words, terms and phrases, when used in this chapter, shall have the meanings ascribed to them in this section, except where the context clearly indicates a different meaning:
(1) "Affected local community" shall mean the municipality or county in which the largest portion of the real property which has been proposed as a conversion project is situated. An "affected local government" shall mean the elected council or other governing body of an affected local community;
(2) "Comparable housing" shall mean a dwelling place or manufactured home community site which is:
a. Decent, safe, sanitary and in compliance with all local and state housing codes;
b. Open to all persons regardless of race, creed, national origin, ancestry, marital status or sex;
c. Provided with facilities equivalent to that provided by the owner in the manufactured home community site which is undergoing conversion, and is equivalent to such manufactured home community in each of the following categories:
1. Apartment size or manufactured home size, or community rental space which can accommodate a manufactured home equal in size to that in which the displaced resident was formerly residing (including substantially equivalent yard space and automobile parking space);
2. Rent range;
3. Special facilities necessary for a handicapped or infirm person if the displaced resident is handicapped or infirm;
d. Located in an area not less desirable than that of the manufactured home community being converted, in regard to each of the following:
1. Accessibility to the tenant's place of employment;
2. Accessibility of community and commercial facilities;
3. Environmental quality and conditions; and
e. In accordance with additional reasonable criteria which the tenant has requested in writing at the time of making any requests under this chapter, as determined by the Attorney General;
(3) "Conversion project" shall mean the area which comprises or formerly comprised a manufactured home community which has been converted to, or which will be converted to or include a condominium, cooperative or other form of multiple-unit housing (and which includes peripheral areas used for landscaping or recreation);
(4) "Long-term vacancies" shall mean dwelling units in the manufactured home community which were not leased, or not occupied by bona fide tenants for more than 5 months prior to the preliminary notice;
(5) "Manufactured home community" shall mean any manufactured home or trailer community designed to house manufactured homes which are served by utilities on a year-round basis. This chapter shall not apply to a community or camp devoted to recreational vehicles which move to the site under their own power or can be towed to the site by an automobile;
(6) "Multiple-unit usage" means use as a manufactured home condominium or cooperative community.
(7) "Nonpurchasing tenant" shall mean a tenant who has elected not to purchase a unit or units in the proposed conversion project. A "purchasing tenant" shall mean a tenant who has agreed to purchase a unit or units in the proposed conversion project;
(8) "Owner" shall mean the legal entity (including a natural person or group of persons) which owns the real estate on which a manufactured home is located. The word "owners" refers to instances where a manufactured home community is located on 2 or more separate parcels where the owners, or the legal status or character of the owners, differ. The word "owner" shall also include "owners" unless the context indicates otherwise, and shall include any developer or other person acting in concert with, or with the consent of the owner;
(9) "Relocation assistance plan" shall mean a proposed plan of assistance to tenants which is intended to enable such tenants to obtain comparable housing with a minimum of difficulty and expense;
(10) "Tenant" shall mean a person, 18 years of age or older, who has at least a leasehold interest in a manufactured home community and who, for rent or by written or oral contract or other good consideration, is leasing or is purchasing or has purchased a manufactured home or manufactured home site within the community. For purposes of §§ 7103(c) and 7105 of this title a tenant shall mean an individual who rents a manufactured home site or the head of household where a family rents a site. An owner of a manufactured home community owning manufactured homes or sites within the community is not a "tenant" under this chapter;
(11) "Tenant association" or "tenants' association" shall mean a group of tenants comprising at least half of those tenants residing within a manufactured home community.
64 Del. Laws, c. 14, § 2; 74 Del. Laws, c. 35, §§ 7, 8.;
§ 7103. Requisites for conversion.
(a) The conversion to multiple-unit usage of any real property on which a manufactured home community is situated shall be permitted only where the vacancy rate of manufactured home sites in the affected local community constitutes 5 percent or more of all manufactured home sites available; or the ratio of multiple-unit manufactured home housing is 25 percent or less of all manufactured home sites available in the affected community all as established according to the records of the appropriate municipal board of assessment and planning and zoning commission or county board of assessment and planning and zoning commission, as the case may be.
(b) No real property on which a manufactured home is located shall be converted into multiple-unit usage unless at least 35 percent of the tenants at the date the conversion plan is filed with the recorder of deeds have agreed to the proposed conversion; provided, however, that in the event of any vote or tally, there shall be only 1 vote for each manufactured home site.
(c) No real property on which a manufactured home community is located shall be converted into multiple-unit usage if the rent for any tenant has been raised during the 6-month period immediately prior to the preliminary notice.
64 Del. Laws, c. 14, § 2; 74 Del. Laws, c. 35, § 8.;
§ 7104. Conversion plan.
Where real property is being utilized as a manufactured community, such real property cannot be converted to multiple-unit usage until the owner of such property has filed a true copy of the conversion plan with the Attorney General; with the office of the Recorder of Deeds of the county or counties in which the land is situated; and has mailed or delivered a copy to the tenant's association, if 1 is in existence within the manufactured home community at that time. The conversion plan shall contain:
(1) Information for the affected local government including, but not limited to, the following:
a. A description of the boundaries of the real estate which is to be converted;
b. The name and business address of each corporate and noncorporate developer and owner of the property;
c. Where a developer or owner is a corporation, the name and address of each officer and member of the corporation's board of directors;
d. A listing of all stages of the proposed conversion process, including the proposed finishing date for each stage;
e. The developer's assessment of the impact of the proposed conversion on: The immediate surrounding area; local schools; traffic patterns and density; on-street parking; and on utilities and services furnished by the municipality or county;
f. The developer's assessment of the impact of the conversion on the number of available manufactured home rental spaces in the affected local community;
(2) Information needed by present lessees and others who must make a decision concerning whether or not to purchase units in the conversion project, including but not limited to:
a. A description of the rental structure and of each type of unit in the proposed conversion project, together with the specific initial fixed price for each unit, including any proposed fees or charges, and how such price was computed and in conjunction with the tenants' association right of first refusal described in §§ 7105(a)(2) and 7108(a) of this title an explanation as to how the specific fixed price for the entire community was calculated explaining in detail the profit to be made by the owner;
b. Information in summary form relating to mortgage financing; estimated down payment for each unit; alternative financing and down payments; monthly payments of principal, interest and real estate taxes; and estimated federal income tax benefits and liabilities;
c. Site plans, including drawings of the property as it would appear after conversion into multiple-unit housing;
d. A copy of each organizational document, including all proposed covenants, conditions and restrictions;
e. The number and location of any proposed off-street parking spaces, enclosed storage spaces, and recreational areas;
f. The extent to which the developer will provide any capital contribution for the maintenance or improvement of common areas;
g. Statement by the owner that he has received a certificate attesting that the proposed conversion project meets all zoning codes of the county and municipality in which the project will be located, or the conversion project is a valid preexisting nonconforming use;
(3) Information relating to nonpurchasing tenants including, but not limited to, a proposed relocation assistance plan; and a list of comparable housing in the area, including available manufactured home and nonmanufactured home housing. The relocation plan shall include information relating to all agencies and organizations which provide alternative housing relocation assistance;
(4) A listing of all tenants of the manufactured home community at the time of the conversion plan, by name; and a listing of those tenants which have agreed to purchase units in the conversion project, together with the signatures of the purchasing tenants.
64 Del. Laws, c. 14, § 2; 74 Del. Laws, c. 35, § 8.;
§ 7105. Notice requirements.
(a) Preliminary notice period. -- Any owner of real estate on which a manufactured home community is located who wishes to convert such property to multiple-unit usage shall provide a written preliminary notice to each tenant, and to the tenants' association, if 1 is in existence, of the owner's intention to convert the property. The preliminary notice shall not constitute, nor shall it include, a notice to the tenant to terminate his tenancy. Such preliminary notice shall also notify each tenant of the following:
(1) That there is a mandatory 3-year grace period prior to eviction;
(2) That the tenants' association has the exclusive option to purchase that portion of the community which the owner proposes to convert, and must, within 90 days from the date it receives the preliminary notice, and the separate writing described in § 7108(a) of this title, notify the owner of its intent to exercise its option;
(3) That if the tenants' association decides not to exercise its option, upon the expiration of the 90-day period, the option shall convert into a right of first refusal meaning that the property shall not be sold to any other purchaser, at any time, at any price or terms without first having been offered on the same terms to the tenants' association;
(4) That no tenant shall be evicted prior to the expiration of the 3-year grace period, except for the following causes:
a. Nonpayment of rent; or
b. Violation of a material provision of the lease.
(b) Grace period. -- After the expiration of 90 days from the date of the preliminary notice or filing of the conversion plan with the Recorder of Deeds, whichever is later, the owner may give final notice to each tenant that the tenant must vacate the premises at the end of the 3-year period, unless the tenant comes within any of the exceptions set forth in this section and § 7111 of this title. From the time of the delivery of the final notice, each tenant shall have a 3-year grace period before the owner may institute legal action for eviction. In any instance where a tenant's lease is for a period of time which extends beyond the expiration date as set forth in the final notice, the grace period shall continue until expiration of such tenant's lease.
(c) Final notice. -- The final notice shall contain a provision stating that each tenant in occupancy at the time of the preliminary notice shall have the exclusive right to purchase a unit in the proposed conversion project, and that such exclusive right to purchase shall continue through the first 90 days after the waiver or termination by the tenants' association of its option, and for such additional time thereafter as the owner shall permit. A copy of the final notice shall also be mailed or delivered to the tenants' association, if such association was in being at the time of the preliminary notice. The final notice shall contain a provision that any person who is a tenant of the manufactured home community, and who elects to purchase a unit in the conversion project, shall not be required to pay more for any unit than the price set forth in the conversion plan, nor more than any other person purchasing the same type of unit. The final notice shall not constitute, nor shall it include, a notice to the tenant to immediately terminate his tenancy.
64 Del. Laws, c. 14, § 2; 74 Del. Laws, c. 35, § 8.;
§ 7106. Approval by Attorney General.
No conversion of real property on which a manufactured home community is situated shall be lawful unless such conversion has received the approval of the Attorney General after a thorough review the conversion plan to determine compliance with this chapter. Where the Attorney General has not acted to approve, conditionally approve or disapprove a conversion plan or prospective conversion within 90 days after receipt of the conversion plan, the conversion plan or prospective conversion shall be deemed to have been approved; provided, however, that the provisions of § 7103 of this title are mandatory, and cannot be waived. The Attorney General may, by a writing addressed to the owner, suspend his decision for an additional 30 days. When the conversion plan is approved, no provision of the plan shall be changed without the written approval of the Attorney General.
64 Del. Laws, c. 14, § 2; 74 Del. Laws, c. 35, § 8.;
§ 7107. Extension and termination of leases.
(a) Any tenant at the time of the preliminary notice grace period shall be entitled to have his lease extended, on the same terms and conditions as the immediately preceding lease, until the expiration of the grace period. Nothing in this subsection shall prevent the owner from increasing rent pursuant to § 7110(d) of this title.
(b) After receipt of the final notice, and upon 30 days' written notice to the owner, a tenant may without penalty terminate his existing lease; provided, however, that the owner shall receive a full month's rent for any partial month of tenancy.
64 Del. Laws, c. 14, § 2.;
§ 7108. Option to purchase; right of first refusal; rescission of contract to purchase; nonpurchasing tenant with children attending school.
(a) Where there is a tenants' association in existence at the time of the preliminary notice, the owners of the real property which is to be converted shall in a separate writing mailed to the association, upon approval of the plan by the Office of the Attorney General, grant to the association the exclusive option to purchase the community for a period of 90 days at the price set forth in the plan. If the tenants' association should exercise its option, it shall have 120 days from the date of its exercise of its option to complete the purchase. If the tenants' association decides not to exercise its options, upon the expiration of the 90-day period, the option shall convert into a right of first refusal meaning that the property shall not be sold to any other purchaser, at any time, at any price or terms, without first having been offered on the same terms to the tenants' association.
(b) Should the tenants' association fail to exercise its option to purchase within the 90-day period, the owner shall grant to the tenant the exclusive option to purchase the unit for a period of 90 days thereafter at the price set forth in the plan. Upon the request of a tenant, the owner shall provide the tenant with a listing of the types of units within the conversion project, and the price for each type of unit. If the tenant should exercise that tenant's option, that tenant shall have 120 days from the date of the exercise of that tenant's option to complete the purchase. If the tenant decides not to exercise that tenant's option, upon the expiration of the 90-day period, the option shall convert into a right of first refusal, meaning that the property shall not be sold to any other purchaser at any time, at any price or terms without first having been offered on the same terms to the tenant.
(c) For a period of 60 days after a purchasing tenant has agreed in writing to purchase a unit within the conversion project, such tenant shall have the right to rescind such contract without the imposition of any penalty or fee. If the tenant rescinds, any renegotiation or new agreement signed by the owner and the purchasing tenant shall be valid and binding, if such renegotiation occurs between the time of rescission and the expiration of the 60-day period set forth in this subsection.
(d) Where the 3-year grace period has expired and a nonpurchasing tenant with children still attending school has failed to move, such tenant shall be permitted to remain until 1 week following the end of the school year; or if any of the children is about to graduate, 1 week after the graduation ceremony; whichever is later.
64 Del. Laws, c. 14, § 2; 70 Del. Laws, c. 186, § 1; 74 Del. Laws, c. 35, § 8.;
§ 7109. Rights of nonpurchasing tenants.
(a) All manufactured home sites occupied by nonpurchasing tenants shall be managed by the same manager or agent who manages all other units in the manufactured home community. The owner shall provide to nonpurchasing tenants all services and facilities required by law on a nondiscriminatory basis. The owner shall guarantee such obligation of the manager or agent to provide all such services and facilities for each tenant until such time as the tenant no longer resides on the premises. This obligation will be the obligation of the tenants' association if it exercises its right of first refusal and purchases the community.
(b) Where an owner has given notice of that owner's intent to convert a manufactured home community, each tenant who has not purchased a unit in the proposed conversion project shall, during the remaining term of the rental agreement and any extension thereof, be entitled to the same rights, privileges and services that were enjoyed by tenants prior to the date of the preliminary notice together with those that are granted, offered or provided to purchasers or prospective purchasers of the conversion project.
64 Del. Laws, c. 14, § 2; 70 Del. Laws, c. 186, § 1; 74 Del. Laws, c. 35, § 8.;
§ 7110. Rights of tenant during conversion.
(a) After the filing of a conversion plan, during the grace period, no owner may evict or fail to renew the lease of a tenant of a manufactured home community which is the site of a proposed conversion; provided, however, that eviction proceedings may be commenced for nonpayment of rent or a similar breach by a tenant of a contractual obligation to the owner.
(b) The prices, terms and conditions offered to tenants by the owner for the purchase of a unit within the conversion project shall be the same as, or more favorable than, those set forth in the conversion plan and those offered to the general public.
(c) Any tenant who has left the manufactured home community or is about to do so because the owner or his agents are substantially interfering with his comfort, peace or quiet contrary to the terms of this chapter may apply to the Attorney General for assistance. The Attorney General may act on such tenant's behalf to secure restraining actions to abate the disturbance and/or to prohibit the owner from engaging in any course of conduct (including, but not limited to, interruption or discontinuance of essential services) which would substantially interfere with such person's tenancy.
(d) Where the lease of a tenant expires after the conversion plan has been filed, and such tenant continues to rent a site within the manufactured home community, the owner shall not increase the rent on an annual basis more than the average or the prior year's annual increase in rent of the 3 geographically nearest manufactured home communities in the county in which the community is located. The average increase in rent will be determined as of the date on which the lease expires. There shall be no more than 1 rent increase imposed upon the tenant during any 1 calendar year.
64 Del. Laws, c. 14, § 2; 74 Del. Laws, c. 35, § 8.;
§ 7111. Handicapped and elderly tenants.
In addition to the protection provided to tenants under this chapter, the following provisions shall apply on behalf of any tenant who is handicapped or who is 65 years of age or older:
(1) The owner shall supply a list of at least 3 comparable rental units, including manufactured home communities, which have vacancies and which can accommodate such person if such exists, subject, however, to the terms of § 7112(c) of this title;
(2) The owner shall supply the address and telephone number of the nearest municipal, state or federal agency which can provide information and assistance to such tenant under the National Housing Act [12 U.S.C. § 1701 et seq.] and the Uniform Relocation Assistance Act [§ 9301 et seq. of Title 29];
(3) Where the tenant remains on the premises at the expiration of the 3-year period, and has in good faith attempted to obtain adequate housing, such tenant shall be permitted to stay on the premises until permanent housing is obtained. Any increase in rent shall be in conformity with the terms of subsection (d) of § 7110 of this title.
64 Del. Laws, c. 14, § 2; 74 Del. Laws, c. 35, § 8.;
§ 7112. Eviction; access to comparable housing.
(a) Where, at the conclusion of the grace period, a tenant is evicted by order of court solely as a result of the conversion, the owner shall pay for all expenses incurred by such tenant in moving into his new residence. If the new residence is in a manufactured home community, such expenses shall include all "setting up" expenses, including connections to all utilities.
(b) Within 18 full months after receiving final notice any tenant may request that the owner provide a list of available comparable housing or comparable manufactured home sites and a reasonable opportunity to examine and rent such comparable housing or manufactured home site.
(c) After the expiration of the 3-year period, the owner may institute an action in the Superior Court for the eviction of any tenant or tenants who still have manufactured homes within the community or who otherwise have continued to reside within the community; or a tenant, group of tenants or tenant association may apply to the Superior Court for a stay of any eviction proceedings. The Court may, in its discretion, authorize 1-year stays of eviction subject to such rent increases as authorized by § 7110(d) of this title until such time as the Court is satisfied that the tenant has been provided a list of comparable housing or comparable manufactured home sites and is satisfied that the tenant has been provided a reasonable opportunity to examine and rent such housing or manufactured home site. Except where the owner has failed to provide such a list of comparable housing or manufactured home sites, or has failed to provide a reasonable opportunity to examine and rent such housing or manufactured home site, the Court shall grant not more than 5 such eviction stays.
64 Del. Laws, c. 14, § 2; 74 Del. Laws, c. 35, § 8.;
§ 7113. Penalties; jurisdiction.
(a) Civil penalties. --
(1) Where an owner violates a provision of § 7105 of this title any action taken by the owner to convert the real property on which a manufactured home community is located into multiple-unit usage shall be invalid; provided, however, that the owner, by again giving the preliminary notice required under § 7105 of this title, may again begin the conversion process.
(2) Where the owner fails to give the tenants' association its option to purchase under § 7108 of this title, no subsequent sale or purchase of the real property or of any unit within the conversion project shall be valid. Where the owner fails to provide a tenant with an opportunity to purchase under § 7108 of this title, the tenant shall nevertheless be offered a unit in preference to any nontenant who has agreed to purchase a unit during or subsequent to the time of the tenant's right to purchase.
(3) Any binding agreement entered into by an owner which results in a violation of any provision of this chapter is:
a. Void, if a person residing in the manufactured home community at the time of the preliminary notice was an object of, or was adversely affected by, such violation; or
b. Voidable at the option of any party thereto.
(b) Criminal penalties; jurisdiction. --
(1) Any person who is convicted of a violation of a provision of this chapter shall be fined a sum not less than $100 nor more than $500 for each offense. Where the violation is ongoing and continuous, each day's continuation of such violation shall constitute a separate offense.
(2) The Superior Court shall have jurisdiction over all offenses under this section.
64 Del. Laws, c. 14, § 2; 74 Del. Laws, c. 35, § 8.;
§ 7114. Modification or waiver of chapter.
(a) Except as otherwise provided in this section, any provision in a lease or other agreement which waives or modifies any provision of this chapter shall be void and unenforceable as against public policy. An owner and tenant may, however, agree to a modification or waiver of some or all of the protections afforded to the tenant pursuant to this chapter; provided, however:
(1) The modification or waiver is encompassed in a written contract which is separate from the lease;
(2) The modification or waiver is voluntarily entered into without duress;
(3) The modification or waiver is entered into with full understanding of this chapter, the terms of any contract to which the modification or waiver applies, and the modification or waiver itself;
(4) The modification or waiver is for adequate consideration.
(b) In any action involving a modification or waiver, the owner shall have the burden of proof to establish that the requirements of this chapter and of this section have been met.
64 Del. Laws, c. 14, § 2.;