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15-IB09 Attorney General Advisory Opinion on Payments to Landowners for Removal or Disposal of Manufactured Homes Abandoned Prior to a Change in Use Application

Written on: November 4th, 2015 in Manufactured Housing

 

 

 

 

 

 

OFFICE OF THE ATTORNEY GENERAL OF THE STATE OF DELAWARE

ATTORNEY GENERAL OPINION No. 15-IB09

 

 

November 4, 2015

 

VIA Email

 

Kevin M. Carroll
Chairperson
Delaware Manufactured Home Relocation Authority
110 N. Main Street, Suite G
Camden, Delaware 19934
DEMHRA Chair demhra.chair@gmail.com

 

RE:     Advisory Opinion on Payments to Landowners for Removal or Disposal of Manufactured Homes Abandoned Prior to a Change in Use Application

 

Dear Chairperson Carroll:

 

You have asked for advice on two questions regarding the Delaware Manufactured Home Relocation Authority (“DEMHRA”) and its ability to provide relocation payments to landowners that apply for abandoned home benefits.  More specifically, you have asked (i) whether 25 Del. C. § 7014(a) requires DEMHRA to grant abandoned home benefits to an applying landowner when “the home in question has been abandoned before the landowner announced its intent to engage in a change of use in the park”; and (ii) whether the landowner’s continued payment of DEMHRA assessments between the time of a homeowner’s abandonment and the landowner’s announcement of a change in use has any effect on that landowner’s right to collect benefits.[1]

 

For the reasons that follow, we believe that DEMHRA’s authority to provide abandoned home benefits to applying landowners is limited to situations in which the abandonment occurred as a result of the landowners’ filing of a change in use application.  In light of this conclusion, we believe that DEMHRA cannot make abandoned home payments to a landowner for the removal or disposal of a manufactured home that was abandoned prior to the announcement of a change in use, notwithstanding any continued payment of assessments by the landowner.

 

Background

 

DEMHRA was formed in 2003, when the General Assembly passed the Manufactured Home Owners and Community Owners Act (the “Act”).[2]  Among other things, the Act charged DEMHRA with an obligation to provide financial assistance to both tenants and landlords in certain circumstances where the landowner has determined to undergo a “change in use” of its property from a manufactured home community to some other purpose.

 

To that end, DEMHRA (through its board of directors) was required to set a $3.00 per month assessment against each “rented lot in a manufactured home community.”[3]  One-half of the required assessment is the responsibility of the tenant, and the remaining half is the responsibility of the landlord for each rented lot. [4]  The landlord is required to collect the tenant’s portion of the assessment as part of its monthly collection of rent, and to remit both the tenant and landlord’s portion of the assessment to DEMHRA on a quarterly basis.[5]  The assessments are paid into a Trust Fund (also established by the Act), which provides the source of the financial assistance that DEMHRA is authorized by the Act to provide.

 

The Act also sets forth the terms and conditions under which DEMHRA can make financial assistance payments to tenants and landlords.  With respect to the former, the Act gives individuals who are tenants in a manufactured home community that is undergoing a change in use two options:  they can attempt to move their manufactured home and receive relocation assistance (or, if the home cannot reasonably be relocated, non-relocatable home assistance),[6] or they can abandon their manufactured home and receive an abandoned home payment.[7]  In both cases, the amount of the payment is determined by DEMHRA and cannot be challenged on appeal.[8]  With respect to the latter, the Act provides that landlords undertaking a change in use of their property are “entitled to receive from the Trust Fund payment in an amount to be determined by the Board [of DEMHRA] to be sufficient to remove and/or dispose of a non-relocatable or abandoned manufactured home pursuant to § 7013(a) and (f) of this title.”[9]

 

According to your September 4, 2015 Letter, the questions at issue here arise out of the following fact pattern:

 

  1. A tenant in a manufactured home community abandons a manufactured home;
  2. At the time of such abandonment, no “change in use” plan has been provided to the Authority, as contemplated by the Act;
  3. The landlord continues to remit the full monthly assessment (e., both the tenant and landlord portions) to DEMHRA for the lot on which the abandoned manufactured home is located;
  4. Eventually, the landlord determines to undertake a change in use of the land, and files the requisite paperwork with its tenants and DEMHRA; and
  5. The landlord applies for financial assistance to remove and/or dispose of the previously abandoned manufactured homes pursuant to 25 C. § 7014(a).

 

In general, you have asked whether (i) a landlord in such a fact pattern is entitled to payment pursuant to 25 Del. C. § 7014(a); and (ii) whether the landowner’s continued payment of both its and the tenant’s portion of the monthly assessment has any effect on any such right to payment.  To our knowledge, no Delaware Court has addressed these issues.

 

Discussion

 

Section 7014(a) of the Act sets forth the limited circumstances in which a landlord undergoing a change in use can receive financial assistance for the removal and/or disposal of manufactured homes that are left on the subject property:

 

A landlord is entitled to receive from the Trust Fund payment in an amount determined by the Board [of DEMHRA] to be sufficient to remove and/or dispose of a non-relocatable or abandoned manufactured home pursuant to § 7013(c) and (f) of this title.[10]

 

In our view, the bolded language in the quote above represents a clear and unambiguous attempt by the General Assembly to limit the circumstances in which landlords can receive payment for non-relocatable or abandoned manufactured homes to those in which the homes were deemed non-relocatable or abandoned pursuant to those two sections of the Act.[11]  In other words, unless the home in question would be considered “abandoned” or “non-relocatable” under those two referenced sections of the Act, the landlord is not entitled to compensation.

 

With respect to both of these sections of the Act, a factual predicate for a manufactured home to be considered either non-relocatable or abandoned is the existence of an ongoing change in use plan.  Section 7013(c), which sets forth DEMHRA’s ability to pay tenants for nonrelocatable homes, entitles a tenant to such a payment “if the home, which is on a lot subject to a change in use of land, cannot be relocated.”[12]  Section 7013(f) – the provision relevant to the fact pattern set forth in your letter – permits a tenant to abandon its manufactured home only if it determines not to seek relocation assistance pursuant to Section 7013(a).[13]  And entitlement to relocation assistance under Section 7013(a) is clearly limited to situations in which a tenant is subject to a change in use of the land on which its manufactured home is located.[14]

 

Reading the Act as a whole and giving meaning to each provision provided by the General Assembly – which the law requires us to do[15] – leads us to believe that Section 7014(a) of the Act only entitles landowners to compensation from DEMHRA and the Trust Fund when the home in question is abandoned by a tenant in response to a change in use application.  Given this determination, we do not believe that a landowner’s continued payment of assessments that it is not required by law to pay – as the lot in question is no longer a “rented lot”[16] – alters this result.

 

Conclusion

 

Based on our review of the Act, the factual scenario outlined by your letter and applicable law, we believe that the provisions of the Act that permit DEMHRA to provide financial assistance to landowners for the removal or disposal of an abandoned manufactured home are limited to situations in which the manufactured home in question was abandoned as a result of a “change in use” plan being filed by the landowner.  To make the contrary determination would, in our view, expand the limited scope of the Act into a general assistance program designed to help landlords of manufactured home communities with assistance in removing and/or disposing of abandoned manufactured homes.  We believe that if the General Assembly had intended to create such a program – the efficacy or desirability of which we take no position on – it would have done so in clear and explicit language.  Absent such a legislative change, it is our advice that DEMHRA lacks the authority to provide financial assistance to the landowner in the factual scenario described by your letter.

 

If you have any further questions, please do not hesitate to contact us.

 

Very truly yours,

/s/ Scott W. Perkins

_____________________

Scott W. Perkins

Deputy Attorney General

 

 

APPROVED:

/s/ Aaron R. Goldstein

_____________________

Aaron R. Goldstein

Acting State Solicitor

 

[1] See September 4, 2015 Letter from Kevin Carroll to Aaron Goldstein, at page 2.

[2] See 74 Del. Laws Ch. 35; 25 Del. C. § 7001, et seq.

[3] 25 Del. C. § 7012(f)(1).  DEMHRA retained the ability to alter or amend the size of that assessment. Id.  Currently, the monthly assessment is set at $5.00.

[4] 25 Del. C. § 7012(f)(2).

[5] Id.

[6] See 25 Del. C. § 7013(a) (“If a tenant is required to relocate due to a change in use or conversion of the land in a manufactured home community … and complies with the requirements of this section, the tenant is entitle to payment from the Trust Fund of the lesser of: (1) The actual, reasonable expenses of moving the manufactured home and existing appurtenances to a new location within a 25-mile radius … ; or (2) The maximum relocation payment, which must be established by [DEMHRA’s] board of directors.”); 25 Del. C. § 7013(c)(2) (“If the board determines that a manufactured home cannot be relocated …, the board shall provide compensation to the tenant. … [T]he amount of compensation may not exceed an amount set by the [DEMHRA] Board and which may be adjusted from time to time by the Board….”).

[7] See 25 Del. C. § 7013(f) (“In lieu of the procedure in subsection (a) of this section, a tenant may abandon the manufactured home in the manufactured home community.  A tenant shall receive a payment from the Trust Fund for the abandoned manufactured home. … The amount of the payment shall be set by [DEMHRA]. ….”).

[8] 25 Del. C. § 7013(a), (f).

[9] 25 Del. C. § 7014(a).

[10] 25 Del. C. § 7014(a) (emphasis added).

[11] Dir. of Rev. v. CNA Holdings, Inc., 818 A.2d 953, 957 (Del. 2003) (“The goal of statutory construction is to ‘ascertain and give effect to the intent of the legislature.’  ‘If a statute is unambiguous, there is no need for judicial interpretation, and the plain meaning of the statutory language controls.’”) (footnotes and citations omitted).

[12] 25 Del. C. § 7013(c) (emphasis added).

[13] 25 Del. C. § 7013(f) (“In lieu of the procedure in subsection (a) of this section, a tenant may abandon the manufactured home in the manufactured home community.”).

[14] 25 Del. C. § 7013(a) (“If a tenant is required to relocate due to a change in use or conversion of the land in a manufactured home community …, the tenant is entitled to payment ….”).

[15] See generally Chase Alexa, LLC v. Kent County Levy Court, 991 A.2d 1148, 1151 (Del. 2010) (holding that Delaware’s “rules of statutory construction are designed to ascertain and give effect to the intent of the legislators, as expressed in the statute”); Oceanport Indus., Inc. v. Wilmington Stevedores, Inc., 636 A.2d 892, 900 (Del. 1994) (providing that where “[t]he General Assembly passed the pertinent statutes as a whole and not in parts or sections …, each part or section should be read in light of every other part or section to produce an harmonious whole”).

[16] 25 Del. C. § 7012(f)(1).





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