Hometown America rescinded its 2019 rent increase rather than provide specific financial information supporting its return on investment, finally allowing the HOA to receive some justice.
After three years of arbitration and court battles, an arbitrator required Hometown to actually prove that its ROI has gone down - at that point, Hometown rescinded its rent increase rather than divulge its huge ROI and supporting financial records.
For the past three years the HOA has taken Hometown to arbitration/court, winning the denial of some of the rent increases.
It is the HOA’s contention that Hometown America continues to use predatory pricing practices against many older, low-income and sick tenants living in low-income housing. Hometown continues to engage in predatory practices even though the Rent Justification Law was passed to protect tenants from such practices in 2013.
In 2016 Hometown offered tenants two options: one was a 10-year option that required tenants a minimum increase of 2.5 percent and a maximum of 5 percent. This is Hometown’s preferred option because it gave them a much larger guaranteed increase over a 10-year period and tenants would lose their arbitration rights. The second option allowed tenants to stay in their original lease, but they charged the entire cost of a bulkhead repair all in one year for both 2017 and 2018.
They did this even though the bulkhead had at least 20 useful years and the cost should have been spread out over 20 years. The resulting average increase in 2017 and 2018 respectively is about 18 percent and 14 percent that is charged in perpetuity (forever in the base rent).
These huge illegal increases effectively forced/coerced low-income tenants into the only option they could afford - the 10-year Hometown-preferred option.
Further, Hometown indicated that these large illegal increases could continue forever if tenants remained in their current lease - placing even greater pressure on low-income tenants effectively forcing them into the 10-year option.
Robert Weymouth
Rehoboth Beach
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