Pot-Nets’ owners plan to increase land lot rent

Residents of the manufactured home community association say owners of six manufactured home communities in the Long Neck area are illegally trying to get around the law. They say park owners are retaliating against homeowners after the General Assembly passed House Bill 107 that requires manufactured homeowner land-lot rental payments to be paid monthly over the year, unless the tenant prefers to pay rent on a yearly basis.

But homeowners say Pot-Nets Communities owners are using HB 107 to raise rents on anyone who chooses to pay monthly.

Pot-Nets co-owner Robert Tunnell Jr. sent a letter Sept. 8 to homeowners, saying the recent law is causing him to raise land lot rents because of increased administrative costs.

“We’ve had to revamp our software system and accounting features,. That was a hefty amount. In addition, we’re adding in credit card payment options,” said Robert Tunnell III.

The letter was sent to the 3,000 manufactured homeowners in the six Pot-Nets Communities: Bayside, Creekside, Coveside, Dockside, Lakeside and Seaside. The letter states: “We had not intended to increase 2009 market rents for 2010; however, adding a monthly payment option for Pot-Nets residents will create a significant increase in our workload and administrative costs.”

He says 2009 rents will be increased by 3.5 percent for 2010. However, if homeowners prefer to continue paying yearly, they will receive a 5 percent discount off their annual rent if it is paid in one lump sum by April 15, 2010.

“If that current resident is paying annually and chooses to stay on an annual plan, there is no increase whatsoever. The only people that are paying more are those who chose to go to a monthly plan,” said Tunnell. He also said HB 107 does not apply to existing rental agreements. “Pot-Nets Communities has gone above and beyond the law,” said Tunnell. “We are voluntarily offering a monthly payment plan to all residents that we are not obligated to offer,” said Tunnell.

Delaware Manufactured Homeowners’ Association (DMHOA) Vice President John Walsh says he’s received many complaints from Pot-Nets’ residents about the letter and rent increases. Walsh also said months ago, when he met with Pot-Nets homeowners, Tunnell said he was not planning on increasing lot rents.

“He said he had no intention of raising rent for 2010 because of problems with the economy,” said Walsh.

Tunnell denies having said owners were not planning rent increases. “That’s not what we said at the time,” he said.

Walsh called the 3.5 percent increase outrageous and said a simple, cheap accounting program could handle the administrative workload. “This is something I think is pure retaliation against DMHOA and its members. It’s also a pure desire to make more money,” he said.

“I think, where it is not flatly illegal, Tunnell is pushing the envelope. I think the provision of the law is clear, and what he’s doing is seeking a way to get around the law – basically seeing what he can get away with. It’s not just with him but with other landlords, too, to see how far they can push before they see a backlash,” he said.

House Majority Whip Valerie Longhurst, D-Bear, is chairwoman of the Manufactured Housing Committee. She said the problem is in interpreting the law. She also said House attorneys are looking into the bill’s legal ramifications.

“The problem is landowners are interpreting the law how they want,” said Longhurst. “The homeowners don’t have an attorney. They’re behind the eight ball already with no representation,” she said. Longhurst said lawmakers cannot dictate payments for private companies, but landowners do have to give homeowners an option. “What I don’t understand is if they don’t respond, they will automatically pay yearly. What they’ve done is they’re increasing their rent if they decided to go monthly,” she said.

Walsh said the landowners are acting illegally. The letter states: “Please select and indicate the method of payment you would like to have for the year 2010 and return the enclosed postcard by Oct. 1, 2009. If we do not receive a response from you, you will remain on an April 15 annual payment plan.”

Walsh said, “In the letter he sent to the people of Pots-Nets, his statement was unless we hear from you, homeowners will automatically be kept on the one-sum lump payments. The law says the opposite. Monthly payments are the norm. That is contrary to the law,” said Walsh.

Longhurst said when the General Assembly reconvenes in January, she plans to meet in person with landowners. “I’ll be bringing them in, and we’ll discuss how the quarterly and yearly payments are going. They need to be held accountable,” she said.

“Is it ethical? Of course it’s not ethical. They found ways to go around the legislation,” she said.

Walsh also said Tunnell also plans to increase trash, water and cable – all franchises Tunnell owns – a charge Tunnell denies. “We’ve had no formal notification yet, but the folks in the Pot-Nets area are waiting with bated breath. There’s no limit on what he can charge, but for water he has to go through the Public Service Commission,” said Walsh.

Tunnell said he has nothing to do with cable fees. Water fees are regulated by the Public Service Commission, and trash provider Delaware Solid Waste Authority is planning rate increases in 2010, he said.

Rep. John Atkins, D-Millsboro, said he’s also looked into the issue after his constituents contacted him – many of them residents of the Pot-Nets manufactured home communities.

“In his letter, he ties the excuse for the rent increase to the law that we passed that treats manufactured homeowners like every other citizen in the state,” said Atkins. He said the law extended the same right to manufactured homeowners that those living in single-family home and apartments have.

“It’s the House attorneys’ opinions that he is clearly violating the law. I know the Attorney General’s Office has been contacted. Right now, I’m being told Tunnell’s the only park owner in the state that’s raising his rent,” said Atkins.