Abstract
A significant number of households in Delaware live in manufactured homes which they own that are on rented lots in manufactured housing communities. Due to immobility of the homes and consequently the peculiar inequality in bargaining power between the land owner and the homeowner associated with such tenancies, in 2013 Delaware passed a “Rent Justification Act,” applicable only to this type of tenancy. Under the Act, annual rent increases in excess of the percentage increase in the Consumer Price Index (“CPI”) must be justified in an arbitration pursuant to the rent adjustment standards in the law if they are contested by the homeowners. In July 2022, amendments to the Act suspended for five years a portion of the standards for allowable rent increases in excess of the CPI and substituted other standards which sunset in five years and amended other provisions of the Act. This article was substantially completed before the 2022 amendments and addresses the Act’s pre-existing provisions, while an addendum briefly describes and comments on the 2022 amendments.
While the standard in the Act for annual allowable rent increases is customary among the manufactured housing community rent legislation which has been adopted in six other states, the standards for setting allowable increases above the increase in the CPI undermine the purposes of the Act. The law mandates the use of rents agreed to by incoming homeowners as a measure of allowable rents for all spaces in a community, subject to a requirement that such increases are phased in. An amendment now in effect for five years exempts new leases of one year or more from the regulation.