SB 81 – AS INTRODUCED
2005 SESSION
05/01
SENATE BILL 81
AN ACT providing recourse for homeowners in manufactured housing parks who are confronted with unjustifiable rent increases.
SPONSORS: Sen. Flanders, Dist 7; Sen. Odell, Dist 8; Sen. Fuller Clark, Dist 24; Sen. Hassan, Dist 23; Rep. Millham, Belk 5
COMMITTEE: Public and Municipal Affairs
This bill establishes a legal procedure for tenants of manufactured housing parks to challenge unjustifiable rent increases and establishes criteria for determining whether the proposed rent increase is unjustifiable. If mediation before the board of manufactured housing is not successful, the tenants may file an action in superior court.
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Explanation: Matter added to current law appears in bold italics.
Matter removed from current law appears [in brackets and struckthrough.]
Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.
05-0930
05/01
STATE OF NEW HAMPSHIRE
In the Year of Our Lord Two Thousand Five
AN ACT providing recourse for homeowners in manufactured housing parks who are confronted with unjustifiable rent increases.
Be it Enacted by the Senate and House of Representatives in General Court convened:
1 Findings; Purpose.
I. The general court finds that:
(a) Factors unique to home ownership in manufactured housing parks require that the owners of such homes be protected from involuntary forfeiture of their homes due to unreasonable increases in lot rent.
(b) There are over 25,000 of New Hampshire families and individuals who own homes located in manufactured housing parks. Many of these homeowners are elderly persons on fixed incomes or young families seeking “starter homes.” In some parts of the state this is the only available form of housing affordable to many families.
(c) Homeownership in manufactured housing parks differs from other forms of homeownership as well as from the traditional landlord relationship. Unlike other homeowners, because these homeowners do not control the land on which their homes rest, they have no control over this substantial portion of their housing costs.
(d) Vacant lots on which to place an existing manufactured home are extremely rare, and the cost of relocating a home, even if such a vacancy were to exist, is prohibitively high and threatens the structural integrity of many manufactured homes.
(e) The homeowners’ total lack of bargaining power disrupts the normal operation of market forces and renders these homeowners captive to whatever terms a park owner may choose to impose. Although many parkowners choose not to take advantage of their superior bargaining power, many do. This often results in homeowners being evicted because of park rents they can no longer afford, and as a result, losing their home altogether because there is no alternative site on which to place it.
(f) Under current New Hampshire law homeowners who rent lots in manufactured housing parks have no legal remedy whatsoever for an unjustifiable and unreasonable rent increase.
II. As a result of the findings under paragraph I, the general court declares that it is necessary to protect the fundamental security needs of owners of manufactured homes located in manufactured housing parks by providing them with some legal recourse against park owners who exploit their uniquely powerful bargaining position to impose unreasonable and unjustifiable rent increases.
2 Manufactured Housing Parks; Fees; Specific Explanation for Justifiable Increase Required. Amend RSA 205-A:6, I to read as follows:
I. A manufactured housing park owner or operator shall fully disclose in writing all terms and conditions of the tenancy including rental, utility and service charges, prior to entering into a rental agreement with a prospective tenant. No charges so disclosed may be increased by the park owner or operator without [an] a specific explanation for [the] a justifiable increase and specifying the date of implementation of said increase, which date shall be no less than 60 days after written notice to the tenant, and subject to the recourse provided under RSA 205-A:6-a. Nothing in this section[, however,] shall be construed to permit a park owner or operator to vary the terms of a written or oral rental agreement without the express written consent of the tenant.
3 New Section; Manufactured Housing Parks; Recourse for Certain Rent Increases. Amend RSA 205-A:6 by inserting after section 205-A:6 the following new section:
205-A:6-a Recourse for Certain Rent Increases.
I. Any notice of an increase in lot rent which exceeds the percentage increase in the consumer price iIndex since the current lot rent became effective may be challenged according to the procedures set forth in this section. The term “consumer price index” means the index published monthly by the United States Department of Labor, Bureau of Labor Statistics for the New England region. In this section, “increase in lot rent” includes the cost of any utility or other ongoing service the financial responsibility for which is transferred from the parkowner to the homeowner.
II. Within 30 days of the receipt of notice of an increase in lot rent under this section, 1/3 of manufactured housing owners in the park, one vote per manufactured home unit, may bring a petition requesting that the board of manufactured housing conduct a mediation in an attempt to assist the parties in reaching and agreement regarding the amount of the rent increase. Each mediation before the board shall be conducted by 2 members of the board chosen by the chairperson, no more than one of whom shall be a park owner or a park tenant. If no petition is filed in accordance with the requirements of this paragraph, no challenge may be made to the proposed rent increase.
III. If after 60 days from the filing of the petition the parties have not reached an agreement, any 5 signatories to the petition, or 50 percent of the signatories in a park containing fewer than 10 occupied homes, may file an action in the superior court seeking a declaratory judgment that the rent increase is unjustifiable.
IV. A hearing on the petition shall be held within 90 days of the filing of the petition and the court shall issue a decision within 60 days of the hearing.
V. In any proceeding under this section there shall be an irrebutable presumption that a rent increase is justifiable when the amount of such increase does not exceed the tenant’s pro-rata share of increases in operating costs and property taxes for the park in which the tenant resides.
VI. In determining whether the proposed rent increase is unjustifiable the court shall consider:
(a) Increases in the park owner’s operating expenses.
(b) Increases in the park owner’s property taxes on the park.
(c) Increase in the cost of debt service which is directly related to acquisition or capital improvements in the park.
(d) The return on the park owner’s equity investment over the past 3 years, and the reasons offered by the owner for seeking an increase in the return on his or her investment.
(e) A sampling of current lot rents in the region in which the park is located as compiled and reported by the New Hampshire housing finance authority.
VII. If the court finds that there are deteriorating conditions in the park relative to roads, water supply, sewerage disposal, electric service, or other conditions which threaten the health and safety of park residents, it may condition its approval of any otherwise justifiable rent increases upon a showing by the park owner that her or she has made specific appropriate plans for repair of the defective conditions.
VIII. While a challenge to a rent increase pursuant to this section is pending, park tenants shall pay the amount of the rent increase to the park owner, who shall hold such amounts in escrow pending a mediated agreement between the parties or a final decision from the court, provided, however, that no park tenant shall be evicted for non-payment of the rent increase prior to a final disposition of the matter by the board or the superior court. Failure by the park owner to place the challenged rent increase in escrow shall constitute a violation of RSA 358-A:2. If the petitioners appeal the superior court decision to the supreme court the park owner may remove the rent increase funds from escrow, mingle them with any other funds, and evict a tenant who has not paid the increase for non-payment of rent. If the court enters a final judgment declaring the rent increases or any part thereof unjustifiable, the park owner shall refund the amount of the unjustifiable increase to each tenant household.
4 Jurisdiction of Board of Manufactured Housing. Amend RSA 205-A:27, I-II to read as follows:
I. The board shall hear and determine matters involving manufactured housing park rules, specifically RSA 205-A:2, RSA 205-A:7, and RSA 205-A:8, and conduct rent mediations pursuant to RSA 205-A:6-a.
I-a. The board shall have the power to issue a decision as to whether a rule of a manufactured housing park is reasonable as applied to the facts of a specific case. If the board determines that the rule is unreasonable, such ruling shall be binding on the parties in any subsequent court proceeding between the parties, unless the board's decision is reversed on appeal under RSA 205-A:28.
I-b. If a park owner promulgates a park rule which the board finds unreasonable as applied to the facts of a specific case, but such rule does not violate any provision of RSA 205-A:2, I-X, no damages, civil penalty, or attorneys fees shall be awarded to the tenant notwithstanding the provisions of RSA 205-A:12, 205-A:12-a, 205-A:13-a, or 358-A.
II. Notwithstanding any other provision of law to the contrary, the board shall not have jurisdiction over any issues relative to rent or rental increases or jurisdiction over evictions, except as provided in RSA 205-A:6-a.
5 Effective Date. This act shall take effect January 1, 2006.