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DIVISION OF LAND SALES, CONDOMINIUMS, AND MOBILE HOMES vs. OAK PARK VILLAGE COOPERATIVE, INC., D/B/A OAK PARK VILLAGE, 88-003978 (1988)

Court: Division of Administrative Hearings, Florida Number: 88-003978 Visitors: 30
Judges: VERONICA E. DONNELLY
Agency: Department of Business and Professional Regulation
Latest Update: Mar. 17, 1989
Summary: Previous owner could not rescind the lot rental increase as he was without authority to control what he no longer owned.
88-3978.PDF

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS


DEPARTMENT OF BUSINESS REGULATION, ) DIVISION OF FLORIDA LAND SALES, ) CONDOMINIUMS AND MOBILE HOMES, )

)

Petitioner, )

)

vs. ) CASE NO. 88-3978

) OAK PARK VILLAGE COOPERATIVE, ) INC., d/b/a OAK PARK VILLAGE, )

)

Respondent. )

)


RECOMMENDED ORDER


Pursuant to notice, a formal hearing was conducted in this case on December 29, 1988, at Fort Myers, Florida, before Veronica E. Donnelly, a duly designated Hearing Officer of the Division of Administrative Hearings. Appearances for the parties at the hearing were as follows:


FOR PETITIONER: Reynold Meyer, Esquire

Assistant General Counsel Department of Business Regulation Division of Florida Land Sales, Condominiums and Mobile Homes

725 south Bronough street Tallahassee, Florida 32399-1070


FOR RESPONDENT: David DuPree, Esquire

Winesett, Avery, DuPree & Whigham, P.A.

2248 First street

Post Office Drawer 610

Fort Myers, Florida 33902-0610


On June 20, 1988, the Petitioner, DEPARTMENT OF BUSINESS REGULATION, DIVISION OF FLORIDA LAND SALES, CONDOMINIUMS AND MOBILE HOMES, (hereinafter the

DIVISION) filed a Notice to Show Cause directed to OAK PARK VILLAGE COOPERATIVE, INC., d/b/a OAK PARK VILLAGE, (hereinafter the COOPERATIVE). Pursuant to a showing that the Respondent was not prejudiced by an amendment to the Notice to Show Cause, the Petitioner was allowed to amend its initial pleading. The Amended Notice to Show Cause dated November 17, 1988, alleges that the COOPERATIVE violated state law in the following manner: by noticing and implementing a thirty seven dollar rental increase per month effective April 1, 1987, during the term of the lot rental agreement; by increasing the lot rental amount without giving ninety days written notice.


During the hearing, the DIVISION presented two witnesses and submitted six exhibits. The COOPERATIVE called two witnesses and presented one composite

exhibit. All of the exhibits were admitted into evidence. Official recognition was taken of the calendar for the years 1986-1987, as requested by the parties.


A transcript was not ordered of the proceeding. Both parties filed Proposed Recommended Orders on February 1, 1989. Rulings on the Proposed Findings of Fact are in the Appendix of the Recommended Order.


FINDINGS OF FACT


  1. Oak Park Village is a mobile home park which is owned and operated by the COOPERATIVE. All of the one hundred and thirty three (133) corporate shareholders are former renters who formed the corporation in order to purchase the park from Mr. Paster and Mr. Perrault, the previous park owners. When the purchase was made, the remaining sixty-six (66) mobile home owners who rented lots within the park did not participate in the purchase. These mobile home owners remained within the park in their status as renters.


  2. The COOPERATIVE'S predecessors in title filed a mobile home park prospectus and an amended prospectus with the DIVISION, as required by law. The renters who received the initial prospectus between April 1985 and October 1986, continued their relationship with the park under this prospectus. All of the newer renters were subject to the amended prospectus, which became effective October 1986.


  3. Each prospectus contains a copy of the lease form. All of the renters had to sign a written lease before they could enter the park. The term of a lease within the park was normally for a one year period, which ended on December 31st. However, if a tenancy did not begin on January 1st of any year, the first term would end on December 31st of the year the lease was made. Each lease contains an automatic renewal clause. Unless the renter notifies the mobile park owner in writing sixty (60) days in advance of the automatic renewal on December 31st of his intention to leave the park, the lease is automatically renewed for another one year period. In the lease and in each prospectus, only the renters can prevent the automatic renewal from taking effect.


  4. On September 19, 1986, the mobile home park owners, Mr. Paster and Mr. Perrault gave written notice to the renters of their intent to increase the lot rental amount effective January 1, 1987, from one hundred and fifty dollars ($150.00) a month to one hundred and fifty six dollars and forty cents ($156.40) per month for a one year period. This advance notice gave the renters the opportunity to terminate their leases and relocate before the automatically renewal or January 1, 1987, which would include this lot rental price increase. None of the renters gave the owners a sixty (60) day advance written notice of their intention to leave the park at the end of the term. Therefore, potential purchasers were on notice that sixty-six (66) renters intended to automatically renew their written leases on January 1, 1987, for a one year term. On January 1, 1987, the automatic renewal went into effect. Under the lease terms and each prospectus, every renter owed one thousand eight hundred seventy six dollars and eighty cents ($1,876.80) as lot rent for the year 1987. The renters had the option to pay this amount in equal monthly installments of one hundred and fifty six dollars and forty cents ($156.40) over the twelve month period. However, the mobile home park owner's right to the one thousand eight hundred seventy six dollars and eighty cents ($1,876.80) vested on January 1, 1987. Contrary to the stipulation of the parties, the law and the evidence shows that written leases were in effect on January 1, 1987.

  5. On December 26, 1986, the COOPERATIVE purchased Oak Park Village. At the time of purchase, the COOPERATIVE took the property subject to the existing leases, and the automatic renewals which were inchoate on December 26, 1986, but which would become operative on January 1, 1987.


  6. After the sale was completed, Mr. Paster attempted to rescind the notice of rent increase, which was to take effect on January 1, 1987. As Mr. Paster no longer owned the property at the time he attempted this recision, he was unable to effectuate a recission.


  7. On December 30, 1986, the COOPERATIVE mailed written notices to its sixty-six (66) renters. The notices informed the renters that the rent would remain at one hundred and fifty dollars ($150.00) for three months and would then increase to one hundred and eighty seven dollars ($187.00) per month from April 1, 1987, to December 31, 1987. This came to an annual rental amount of two thousand one hundred and thirty three dollars ($2,133.00). This was an annual increase of two hundred and fifty six dollars and twenty cents ($256.20) per renter during the 1987 lease term, when the increase initiated by the prior owners is compared with the proposed increase.


  8. In comparing the notice of increase dated September 19, 1986, and the notice dated December 24, ,1986, it appears that the first three reasons listed for the proposed increases are identical. The only additional reason for an increase which is listed on the notice dated December 24, 1986, from the new owners is "Maintenance needs of the park."


  9. The notices sent by the new owners, the COOPERATIVE, were postmarked December 30, 1986, and were placed in the individual post office boxes of all of the tenants on the same day. Page twelve of each prospectus defines "notice" as follows:


    Unless otherwise provided by statute, administrative rule, or this Prospectus, any notice shall be deemed given by posting by first class mail or by actual hand delivery.


  10. Rule 7D-32.02(3), Florida Administrative Code, the applicable rule to these proceedings, provides as follows:


    Notice given by personal delivery shall be deemed given when actually delivered to the homeowner. Notice by U.S. Mail shall be deemed given five days after notice is placed in the U.S. Mail addressed to the mobile homeowner's last known address.


    As the prospectus and the amended prospectus both defer to the administrative rule in effect which defines the term "notice," the COOPERATIVE's notice did not occur within a ninety day period, even under the COOPERATIVE's theory of the case, as set forth in its Proposed Recommended Order.


    CONCLUSIONS OF LAW


  11. The Division of Administrative Hearings has jurisdiction over the subject matter of and the parties to this proceeding. Section 120.57(1), Florida Statutes.

  12. The DIVISION may institute enforcement proceedings in its own name against a mobile home park owner if the DIVISION has reasonable cause to believe that a violation of any provision of Chapter 723, Florida Statutes, or any rule promulgated pursuant to Chapter 723, Florida Statutes, has occurred. Section 723.006, Florida Statutes (1986).


  13. The COOPERATIVE is the mobile home park owner as defined in Section 723.003(7), Florida Statutes (1986). When the COOPERATIVE purchased the park, the shareholders, as renters within the park until the time of purchase, had actual knowledge that sixty-six (66) renters had leases which were automatically renewed for a one year term beginning January 1, 1987. The COOPERATIVE was required to recognize the rights of these renters under their existing leases. Denco, Inc. v. Belk, 97 So.2d 261 (Fla. 1957). As the applicable prospectus was deemed incorporated into the lease agreements under Section 723.031(10), Florida Statutes (1986), the COOPERATIVE was required to recognize the rights and obligations of the park owner and the renters under these documents, as well as the actual written lease.


  14. Under the leases, which had been automatically renewed by the renters when they did not give written notice of termination by November 1, 1986, the rent for 1987 was one thousand eight hundred seventy six dollars and eighty cents ($1,876.80) on January 1, 1987 for a one year term. Because the lease defined the sum as an annual charge which could be laid by the renter in twelve monthly installments (at the renter's option), the lot rental amount could only be changed once a year. This is the only interpretation which could be given to this document, as drafted by the COOPERATIVE's predecessors in interest.


  15. When Mr. Paster sent the notice to rescind the lot rental increase, he was without the authority to do so. The property had already been purchased by the COOPERATIVE, as stated within the first paragraph of the same notice. Once the transfer was made, privity no longer existed between Mr. Paster and the renters. He was no longer the landlord/park owner, and he had lost the right to rescind agreements which ran with the transfer of the reversion (the landlord's property interest) to the COOPERATIVE. Gray v. Callahan, 197 So. 396 (Fla. 1940).


  16. As the amount due for the 1987 lot rental was determined for the full year on January 1, 1987, the COOPERATIVE did not give the renters the ninety

  1. days notice which is required by each prospectus, the leases, Rule 7D- 32.02(3), Florida Administrative Code [2/6/85-8/2/87], and Section 723.037(1), Florida Statutes (1986). The notice came too late, as the new mobile home park owner did not have the right to change the lease which would become effective on January 1, 1987, when the park was purchased. The COOPERATIVE could not effectuate an increase in the lot rental amount until January 1, 1988.


    Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED:


    1. That the DIVISION enter a Final Order finding the COOPERATIVE not guilty of the violation as charged in the first allegation set forth in the Amended Notice to Show Cause dated November 17, 1988. As the increase implemented by the prior owners could not be rescinded by them, the actual increase implemented by the COOPERATIVE was only two hundred and fifty six dollars and twenty cents ($256.20) over a nine month installment period.


    2. That the DIVISION enter a Final Order finding the COOPERATIVE guilty of the second allegation set forth in the Amended Notice to Show Cause.

    3. That the COOPERATIVE rebate the actual 1987 increase of two hundred and fifty six dollars and twenty cents ($256.20) to each renter. The one renter who was required to pay an additional increase should receive a rebate which reflects the difference between what the COOPERATIVE demanded as the lot rental amount for the 1987 term and the annual amount required under the lease and the 1987 increase which was not successfully rescinded by Mr. Paster.


    4. That the COOPERATIVE shall pay the DIVISION by cashier's check a civil penalty in the amount of five hundred dollars ($500.00). This amount is suggested by the Hearing Officer because the evidence presented at hearing showed that the increase in the lot rental amount was used for the park maintenance, which was the additional reason listed on the notice of increase after the park was purchased by the COOPERATIVE. It should also be noted that the violation will be rectified by the rebate to the renters. Based upon these considerations, a higher penalty appears to be too severe under the facts of this case.


DONE AND ENTERED this 17th day of March, 1989, at Tallahassee, Florida.


VERONICA E. DONNELLY

Hearing Officer

Division of Administrative Hearings The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-1550

(904) 488-9675


Filed with the Clerk of the Division of Administrative Hearings this

17th day of March, 1989.


APPENDIX TO RECOMMENDED ORDER IN CASE NO. 88-3978


Petitioner's proposed findings of fact are addressed as follows:


  1. Accepted. See Preliminary Matters.

  2. Accepted. See Preliminary Matters.

  3. Accepted. See Preliminary Matters.

  4. Accepted. See Preliminary Matters.

  5. Accepted. See Preliminary Matters.

  6. Accepted. See HO# 1.

  7. Accepted. See HO# 1 and HO# 5.

  8. Accepted. See Conclusions of Law.

  9. Accept that the prior owners increased the lot rental amounts as set forth in the Proposed Finding. Reject that Mr. Paster was able to effectuate a recision. See HO# 1, HO# 4, and HO# 6.

  10. Accepted. See HO# 2.

  11. Accepted. See HO# 3.

  12. Accepted. See HO# 3.

  13. Accept the date notice of increase was given. See HO# 4. Reject that a recision could occur. See HO# 6.

  14. Accepted. See HO# 5.

  15. Accepted. See HO# 1.

  16. Accepted. See HO# 1.

  17. Rejected. See HO# 4.

  18. Accept that the Proposed Finding reflects the content of the notice. See HO# 7. However, because the recision attempted by Mr. Paster was ineffective, the actual increase was different than the representations within the notice. See HO# 7. The bank's requirement is immaterial and irrelevant, and is rejected on that basis.

  19. Accepted. See HO# 10.

  20. Accepted.

  21. Rejected Irrelevant under the Amended Notice to Show Cause.

  22. Rejected. Irrelevant under the Amended Notice to Show Cause.


Respondent's proposed findings of fact are addressed as follows:


  1. Accepted. See Preliminary Matters.

  2. Accepted. See HO# 1 and HO# 5.

  3. Accepted. See HO# 1.

  4. Accepted that a majority of the prior renters formed a corporation to purchase the park. However, the evidence presented did not show that the Renters Association made the purchase. It was the Hearing Officer's understanding from the evidence adduced at hearing that the original renters association was still active, and that the COOPERATIVE was formed to purchase and manage the park. The portion of the Proposed Finding which reflects that the Renters Association purchased the park is rejected. See HO# 1.

  5. Accepted. See HO# 4.

  6. Accepted.

  7. Rejected. Irrelevant as the Renters Association was not the owner at the time the discussions occurred. The renters were subject to the applicable rules, laws, leases, and the prospectus or amended prospectus.

  8. Rejected. Irrelevant.

  9. Accepted. See HO# 5.

  10. Rejected. See HO# 6.

  11. Accepted. See HO# 7, HO# 9, and HO# 10.

  12. Reject that the proposed increase was accurate based upon the fact that a recision by Mr. Paster did not occur. See HO# 7.

  13. Rejected. Irrelevant.

  14. Accepted that renters paid one hundred and fifty per month between January 1, 1986 and March 1, 1986. It is irrelevant what the shareholders paid, and therefore proposed findings on the shareholder's payments are rejected. See HO# 7.

  15. Rejected. Not part of the allegations in the Amended Notice to Show Cause.

  16. Accepted. See HO# 7.

  17. Accepted. Considered in mitigation in the civil fine recommendation by the Hearing Officer.

  18. Rejected. Irrelevant.

  19. Rejected. Not part of the allegations in the Amended Notice to Show Cause. Irrelevant.

  20. Rejected. See HO# 4.

  21. Rejected. Contrary to fact. The lease form was attached to the prospectus, as filed with the DIVISION, by the previous owners. See Petitioner's Exhibits #1 and #2. In any event, the lease terms prevail, and a written lease set forth the rental term. See HO# 3.

COPIES FURNISHED:


Reynold Meyer, Esquire Assistant General Counsel

Department of Business Regulation Division of Florida Land Sales, Condominiums and Mobile Homes

725 South Bronough Street Tallahassee, Florida 32399-1070


David DuPree, Esquire Winesett, Avery, DuPree &

Whigham, P.A.

2248 First Street

Post Office Drawer 610

Fort Myers, Florida 33902-0610


Docket for Case No: 88-003978
Issue Date Proceedings
Mar. 17, 1989 Recommended Order (hearing held , 2013). CASE CLOSED.

Orders for Case No: 88-003978
Issue Date Document Summary
Jun. 02, 1989 Agency Final Order
Mar. 17, 1989 Recommended Order Previous owner could not rescind the lot rental increase as he was without authority to control what he no longer owned.
Source:  Florida - Division of Administrative Hearings

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