Homeowners in four local manufactured home parks are trying hard to understand the latest leases offered by their landlord, Manufactured Home Communities (MHC). Residents in Aspen Meadows, Camelot, Mariners Cove and McNichol Place are questioning what the new leases proposed to them over the past month by MHC representatives really mean. Meetings have been set to air out residents’ concerns and, hopefully, reach some better understanding of what MHC is presenting to its tenants.
Few homeowners in MHC parks trust the large Chicago-based, investor-owned landlord and its nominal subsidiaries, MHC Financing Limited Partnership and MHC Operating Limited Partnership. That mistrust goes directly to how the landlord has established rents over the years and how it is trying to raise rents now through the issuance of confusing new leases.
In Mariners Cove, residents have recently been offered new leases with rent hikes ranging from $40 a month to $240 a month, explained Jay Estep, president of the park tenants association. There are several different new monthly rates within Mariners Cove, he explained. Homeowners with waterfront lots overlooking Indian River Inlet would be charged $750 a month. Those with waterfront lots overlooking lesser water views would be charged $675 a month. Anyone whose lot borders water would be charged at least $650 a month. Lots with no water front or water view would have their current rents rise $40 a month.
“MHC says there will be no true rent cap this time,” said Estep. “Instead they are trying to base future rents on the Consumer Price Index (CPI), with a rather complex formula that’s hard to understand. What I get from their offer is that the future actual rent increases will be somewhere in the range of 3 percent annually. In the past 10 years, there has been only one year when the CPI was over 3 percent. But in the 1980s the CPI hit 9 percent. Anyway, the new CPI-based rent formula is a minimum amount of rent increase, not a rent cap.”
MHC has told homeowners in Aspen Meadows, Camelot, Mariners Cove and McNichol Place that they don’t have to sign the new leases. But MHC has advised those homeowners that if at least 100 of them in each park sign the leases soon, the leases will stand. If not, negotiations will stop.
“We don’t know what their rush is,” said Estep. “We asked MHC, and they just said they want to calm everybody down and put these old issues behind them. From our standpoint, it looks like bribery or coercion. MHC says it’s just an inducement.”
Questionable leases are nothing new to residents in MHC-owned parks. Since 2001, MHC lease provisions have been the subject of legal debate, court opinion and state appeals. Seven former MHC lease provisions have been declared illegal within the context of the new Manufactured Home Owners and Community Owners Act signed into law last June. But the issues of how to raise annual rents and whether to include rent caps has not yet been legally defined, although tenants are hoping the Delaware Supreme Court will address rent caps in their favor before April 1.
“If the Supreme Court rules in tenants’ favor, the rents will stay as they are with a 5.5-percent cap on increases,” said Estep. “If the Supreme Court rules in MHC’s favor, everything is out the window and who knows where the rents will go from there.”
Informational meetings for Camelot residents will be held at noon, Saturday, Feb. 28, in the Aspen Meadows clubhouse. Meetings for McNichol Place residents will be held at 3 p.m., Saturday, Feb. 28, in the same location. Meetings for Mariners Cove residents will be held at 2 p.m., Saturday, March 6, at the American Legion Post 28 on John J. Williams Highway. For more information call Bill Reed at 645-0380.
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