LETTER TO THE EDITOR: Are landowners engaging in predatory pricing practices?

When the Rent Justification Act that was enacted to finally give over 50,000 Delaware tenants in manufactured home communities protection from unscrupulous landowners that have been using predatory pricing practices against defenseless tenants, the new law was to have provided protection to tenants from landowners that continue to believe they have the right to raise rents for basically any reason.

For example, Hometown America has over the past two years increased rents for tenants in the Rehoboth Bay community that remained in their original lease by 18 percent even though the new law was to have protected tenants from unreasonable and burdensome space rental increases. Hometown did this even though a judge ruled in 2016 that rent increases in the range of 14 percent is clearly not the intent of the law. These large increases are inflicted on tenants even when the Consumer Price Index was a very low 0.6 percent.

To add insult to injury, Hometown America requires the tenants who remained in their original lease to repay the entire amount of a repair to the bulkhead in one year for two successive years, even though Hometown called the repair a capital improvement that should have been divided evenly over the useful life of the asset.

In fact, they discriminated against the tenants that stayed in their original lease by allowing the tenants that accepted Hometown’s preferred 10-year lease — 10 years to pay off the cost of the bulkhead repair. Hometown used a huge rent amount difference between the one-year and 10-year lease options to force low-income tenants into Hometown’s preferred 10-year lease.

In addition, they left the increased cost of the bulkhead repair that was totally repaid in one year in the tenant’s base rent in perpetuity (for life). Allowing capital improvements in perpetuity will result in millions of dollars of windfall profits to Hometown America. This is clearly an absurd/unfair outcome given that rents are supposed to be reasonable and not a burden to tenants.

You might ask, how did this happen? Well the law that was written primarily by the landowner’s lawyer is almost totally ambiguous and vague requiring anyone adjudicating it, to make ongoing interpretations outside the actual written law. The arbitration process uses other lawyers from the in-state’s “lawyer fraternity” to determine the “hoped for” fair outcome.

This has resulted in Hometown charging 14 rent increases, requiring certain tenants to repay the entire amount of the cost of the asset in one year, leaves the increased rent amount in the base rent amount for life even though the asset’s cost has been paid off and deceptively forces tenants into Hometown’s preferred 10-year lease.

So, what do you think? Does it appear to you that some landowners are once again engaging in predatory pricing practices?

Robert Weymouth
Rehoboth Beach

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