SB 23 — AN ACT TO AMEND TITLE 25 OF THE DELAWARE CODE RELATING TO RENT JUSTIFICATION.

Summary

Section 7042 of Title 25 of the Delaware Code lists the completion and cost of any capital improvements or rehabilitation work in a manufactured home community, as distinguished from ordinary repair, replacement, and maintenance, as a factor that may justify an increase in rent but only until the cost of the improvement has been fully recovered. Like Senate Substitute No. 2 for SB 23, this Act clarifies this provision by making the recovery of such capital improvement or rehabilitation work a fee under § 7008, the fee section of this chapter, so that it is a separate charge from rent and provides notice requirements regarding the fee. This Act provides a revised definition of capital improvement and rehabilitation work. This definition is placed in the definitions section of Chapter 70. Chapter 70 defines rent as including fees, preserving a community owner’s ability to enforce payment of the fee. By identifying this assessment as a fee, it is clearly identified as separate from a base rent increase. Senate Substitute No. 3 for Senate Bill No. 23 differs from Senate Substitute No. 2 for Senate Bill No. 22 as follows: 1. It removes lines from the definition of capital improvement or rehabilitation work that conflict with the rest of the definition. 2. It adds the requirement that capital improvement or rehabilitation work must benefit the entire manufactured home community. 3. It limits the correction of deficiencies to comply with changes to building codes or laws enacted after construction was completed. 4. It clarifies that the community owner must still comply with other provisions of the rent justification law, § 7042(a)(1) and § 7043 of Title 25, before imposing this fee. 5. Permits a challenge to the fee to be consolidated with other proceedings challenging a rent increase under § 7042 and § 7043 of Title 25. 6. It adds that the fee must be collected at a rate of 10% of the cost of the capital improvement or rehabilitation work or over the number of years necessary to not exceed 10% of the rent, whichever amount is lower. This Act also makes technical corrections to conform existing law to the standards of the Delaware Legislative Drafting Manual.

Bill Text

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The bill clarifies the definition of capital improvements and establishes specific requirements for charging related fees, separating them from rent increases.

• § 7003

  or means what the context implies. In this subchapter, the following definitions apply. apply: → or means what the context implies.

  Clarifies the language in the definitions section.

• § 7003

  Capital improvement or rehabilitation work” means work that primarily benefits the manufactured home community; increases the longevity, utility, or worth of the property; → Capital improvement or rehabilitation work” means work that primarily benefits the manufactured home community;

  Clarifies that capital improvements must benefit the entire manufactured home community.

• § 7003

  does not mean work that is routine maintenance for the purpose of keeping property in ordinarily efficient operating condition. → does not mean work that is routine maintenance for the purpose of keeping property in ordinarily efficient operating condition.

  Reiterates that routine maintenance is excluded from capital improvements.

• § 7008(n)

  A community owner may charge a fee to recover the cost of capital improvement or rehabilitation work, as defined in § 7003 of this title. → A community owner may charge a fee to recover the cost of capital improvement or rehabilitation work, as defined in § 7003 of this title.

  Establishes the authority for community owners to charge fees for improvements.

• § 7008(n)(3)

  The fee to recover the cost of capital improvement or rehabilitation work must be recovered evenly over the number of years necessary in an amount that is the lower of either of the following: → The fee to recover the cost of capital improvement or rehabilitation work must be recovered evenly over the number of years necessary in an amount that is the lower of either of the following:

  Specifies how the fee for capital improvements can be collected.

• § 7042(c)

  (8) The amount of rental assistance provided by the community owner to the home owners under § 7021A of this title. → (8) The amount of rental assistance provided by the community owner to the home owners under § 7021A of this title.

  Clarifies that rental assistance is considered in rent justification.

• § 7042(d)

  A community owner may charge a fee under § 7008 of this title to recover the cost of capital improvement or rehabilitation work, as defined in § 7003 of this title, in the manufactured home community. → A community owner may charge a fee under § 7008 of this title to recover the cost of capital improvement or rehabilitation work, as defined in § 7003 of this title, in the manufactured home community.

  Clarifies that fees for improvements can be justified in rent increases.

• § 7042(e)

  a civil penalty, criminal fine, or litigation-related costs for rent-related proceedings into rent charged under any circumstance. → a civil penalty, criminal fine, or litigation-related costs for rent-related proceedings into rent charged under any circumstance.

  Clarifies prohibition on including penalties in rent charges.

• § 7042(e)

  the cost of capital improvements or rehabilitation work, once that cost has been fully recovered by rental increases that were incorporated into a prior rental increase in excess of CPI-U, where the prior rental increase was fees that were properly implemented under this subchapter. section. → the cost of capital improvements or rehabilitation work, once that cost has been fully recovered by rental increases that were incorporated into a prior rental increase in excess of CPI-U, where the prior rental increase was fees that were properly implemented under this subchapter.

  Prohibits reuse of recovered improvement costs for future rent increases.

Action History

1. June 07, 2018

   Adopted in lieu of the original bill SB 23, and Assigned to Judicial & Community Affairs Committee in Senate

Sponsors

• William J. Carson · Primary
• Sean M. Lynn · Cosponsor
• David L. Wilson · Cosponsor
• John A. Kowalko · Cosponsor
• Brian J. Bushweller · Cosponsor
• Bruce C. Ennis · Primary

Subjects