Manufactured home community owner ordered to pay more than $800,000 in penalties

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Residents of a manufactured home community won a preliminary victory.

An administrative hearing officer ruled in favor of the Pine Haven manufactured home community’s residents. The ruling stated that Blue Beach Bungalows DE, LLC violated the residents’ statutory protections. The community is located near Milford.

The officer ruled that Blue Beach willfully violated Delaware’s Consumer Fraud Act, among other laws, and ordered the company to pay over $800,000 in penalties and rebates of excess rent paid by residents. Blue Beach has 30 days to appeal the order.  

“Owners of manufactured home communities should consider themselves on notice,” said Attorney General Kathy Jennings. “Exploiting vulnerable Delawareans with threats and lies is not something manufactured home community owners can expect to get away with.” 

“We’re grateful for the DOJ’s vigorous enforcement of our state’s manufactured housing and consumer fraud laws against an exploitive community owner who took advantage of vulnerable residents,” said Anthony Panicola, supervising attorney of the Elder Law Program at Community Legal Aid Society, Inc.
In April 2023, after receiving numerous complaints from residents, The department’s Consumer Protection Unit issued a Summary Cease and Desist Order requiring Blue Beach to refrain from making false statements to residents and evicting residents in violation of the law, among other things.

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The order was accompanied by a complaint detailing how residents were subjected to illegal rent increases, illegally threatened with eviction and arrest, and, in some cases, forced out of their homes prematurely.

An administrative proceeding followed, culminating in an administrative hearing and a ruling.

“The harm caused by [Blue Beach]’s actions cannot be undone,” the Hearing Officer wrote in a 90-page opinion issued on April 4th. Despite operating as a manufactured home community with “numerous year-round residents,” the park owner repeatedly made false and misleading claims about the park’s nature as justification for taking action against residents.

Residents had complained that the owner wanted to make the site into a camper park. It now has a combination of RVs and manufactured homes.

The Hearing Officer ordered the park owner to rebate all tenants and former tenants “any excess rental payments,” and awarded an administrative penalty of $737,000 for willful violations of the Consumer Fraud Act, as well as a penalty of $94,000 for violations of the Cease and Desist Order. The park owner has the option to appeal, and the order is not final until the window for appeal is closed.

 A number of Pine Haven residents targeted for eviction by the park owner were protected due to a recent amendment to Delaware’s Manufactured Housing Code. 2022’s House Bill 374 expanded the definition of a manufactured home to include certain camper trailers, recreational vehicles, and motor homes that have been known to be dwellings.

The Cape Gazette reported that residents are also unhappy about water and sewage issues at the site. DNREC issued a sewage violation notice more than a year ago.

It was also reported last year that the owner would pay residents $5,000 to vacate the park.

Manufactured housing complaints can be made to the Office of the Manufactured Housing Ombudsperson on the Delaware Department of Justice’s website or by calling the hotline at (800) 220-5424.?? 

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