STATE OF FLORIDA
DIVISION OF ADMINISTRATIVE HEARINGS
DEPARTMENT OF BUSINESS REGULATION,) DIVISION OF FLORIDA LAND SALES, ) CONDOMINIUMS AND MOBILE HOMES, )
)
Petitioner, )
)
vs. ) CASE NO. 89-3183
)
ALFRED HERRICK, d/b/a )
TAN TARA MOBILE HOME PARK, )
)
Respondent. )
)
RECOMMENDED ORDER
Pursuant to notice, the Division of Administrative Hearings, by its duly designated Hearing Officer, Mary Clark, held a formal hearing in the above- styled case on November 6, 1989, in Tallahassee, Florida.
APPEARANCES
For Petitioner: Debra Roberts
Assistant General Counsel Department of Business Regulation
725 South Bronough Street Tallahassee, Florida 32399-1007
For Respondent: David D. Eastman, Esquire
Post Office Box 669 Tallahassee, Florida 32302
STATEMENT OF THE ISSUES
A Notice to Show Cause issued on May 5, 1989, alleges that Respondent violated Sections 723.031(5) and (6), F.S. by increasing mobile home park lot rentals on January 1, 1987 and on October 1, 1987, and by collecting charges for water, sewer and waste disposal from at least one homeowner when such charges were not disclosed prior to tenancy.
If it is determined that those violations occurred, it is necessary to recommend an appropriate penalty and corrective action.
PRELIMINARY STATEMENT
Respondent, Alfred Herrick, petitioned for a formal administrative hearing in response to the notice to show cause, and the case was referred to the Division of Administrative Hearings.
The hearing was continued once for good cause and with the concurrence of both parties. The parties also stipulated that Petitioner's local witnesses
could be presented by deposition and that venue for the hearing would be in Tallahassee, Florida.
At the hearing, Petitioner presented the testimony of Dr. Faye S. Mayberry, Bureau Chief of the Bureau of Mobile Homes, Department of Business Regulation; and Alfred Herrick. The testimony of Bonnie Charron and Peggy Headley, park residents, was submitted in depositions filed on November 21, 1989.
Petitioner's eleven exhibits were received in evidence as Petitioners Exhibits #1-11.
Respondent testified in his own behalf and his exhibits #1-2 were received in evidence.
By stipulation the record was left open to allow the parties to file depositions of local witnesses. Two depositions were filed as stated above, and on February 1, 1990, the parties stipulated to facts that otherwise would have been presented through additional depositions.
Both parties filed thorough proposed recommended orders with proposed findings of fact. The facts in this proceeding are generally uncontroverted and the findings proposed by both parties are substantially adopted herein.
FINDINGS OF FACT
At all times relevant to these proceedings, Alfred Herrick has been the park owner of Tan Tara Mobile Home Park, which is located in Melbourne, Florida. Respondent purchased the park in 1980.
Eighty-four (84) lots are offered for rent or lease in the Tan Tara Mobile Home Park. Seventy-eight (78) lots are
offered to tenants who own their home. Nineteen (19) lots were leased on or after November 1, 1986.
The proposed prospectus for the Tan Tara Mobile Home Park was filed with the Division on September 13, 1985. The prospectus was deemed adequate to meet the requirements of Chapter 723, Florida Statutes on December 23, 1983. The prospectus was delivered to homeowners after January 1986.
The prospectus review by the Division determines adequacy with Chapter 723, Florida Statutes. The prospectus is not reviewed to determine consistency with rental agreements or disclosures made to homeowners. Park owners are advised that approval of the prospectus by the Division does not relieve the park owner of any requirements under the law. The park owner determines the contents of the prospectus. Homeowners have no input as to the contents of or in the review process of the prospectus.
The prospectus for Tan Tara Mobile Home Park contains a number of disclosures, as required by 723.012, F.S., relating to the mobile home park property, and sets out the terms and conditions of the rental agreement between the park owner and individual tenants of mobile home park. Included in the prospectus is the disclosure of all of the charges which may be charged by the park.
Paragraph VII. UTILITY AND OTHER SERVICES, provides the following relevant disclosures:
Water - Treated drinking water is provided by the City of Melbourne Utilities and is provided to each mobile home site. The charges for this service is [sic] currently included in the tenants' total monthly rental fee.
* * *
Sewage - Sewage disposal is provided by the City of Melbourne Utilities. The charges for this service is [sic] included in the tenants' monthly rental fee.
* * *
Waste and trash disposal - The collection of garbage and trash is provided by the City of Melbourne Utilities and is provided for each mobile home. The charge for this service is currently included in the tenants' total monthly rental fee. ...
Paragraph VIII. RENT, RENTAL INCREASES AND OTHER CHARGES, provides the following relevant disclosures:
The base rent and other charges applicable to your lot are effective January 1, 1985, as reflected in this section. The "base rent" refers to the regular monthly rent established by the Park Owner from time to time. The base rent is subject to annual rent increases effective each January 1st, after ninety (90) days notice from the Park Owner or Management of such increase.
* * *
"Other charges" refers to "special use fees" and "pass through charges".
SPECIAL USE FEES refers to those separately itemized amounts charged in addition to the base rent for those specific items hereinafter set forth. The following special use fees are in effect within the park:
Owner reserves the right to charge an Entrance or "Move-in" fee. The present amount charged for this fee in the Park is $1,000.00.
Late rental payment fee of
$10.00 after the fifth day of the month and $2.00 per day thereafter.
Return check charge of $10.00 for each check not honored by the banking institution upon which the check is drawn.
An additional charge of $5.00
per month for each and every person over two occupying a mobile home.
Extra visitor and/or guest charge of $2.00 per person per day staying more than 15 consecutive days or 30 days total.
Lawn maintenance fee, including mowing, edging, and trimming, in the amount of $10.00 for each required maintenance.
If it becomes necessary for Management to place the Tenant' s garbage in proper containers, there will be an additional charge of $5.00 assessed to the Tenant for each occurrence.
An additional charge of $5.00 per month for a Tenant's washing machine due to the extra water usage caused by the washing machine and also sewerage charges.
For the purchaser, there will be a registration fee of $75.00 for investigating any proposed new Tenant into the Park.
A new Tenant nonrefundable application fee of $75.00 for investigating any proposed new Tenant into the Park.
A garbage and trash "removal" fee not included in the normal garbage or waste removal, of a minimum of $5.00, the exact charge to be determined by Park Management based upon size and weight of such excess refuse so removed by Management.
Additional copies of the Prospectus are available at the park Off ice for Tenants requesting same for which there is a charge of $50.00 for each additional copy requested.
Pet fee of 5.00 per pet per month.
Skirting area clean up minimum fee of $20.00 if tenant fails to do this.
* * *
PASS THROUGH CHARGES, means those amounts other than special use fees, which are itemized and can be charged separately from the base rent and which represents the mobile home owner's share of cost charged to the park Owner by any State or local government or utility company. These charges will be passed on to the
Tenant(s) on a pro rata basis. ("Pro rata basis" means that percentage derived by dividing the number of mobile home spaces leased by a resident by the total number of occupied mobile home spaces in the park.) The pass through charges which may be passed on to the Tenant(s) are as follows:
Water charges or increases in same;
Sewer charges or increases in same;
Waste disposal charges or increases in same;
* * *
I. Replacement utility costs charged to the Park Owner by State or local government incurred as the result of the actions of any utility company
for any utility or other services not provided or available to park residents on the delivery date that replaces, in whole or in part, any utility or other service that is provided or is available to park residents on the delivery date.
* * *
The above-mentioned pass through charges and costs which are billed by either the State or local governmental entities or utility companies may be passed through to the Tenants after providing at least ninety (90) days advanced written notice to all Tenants. The amount of an increase in pass through charges shall be limited to the increased costs or charges billed to the park owner by the State or local governmental agency or utility company plus any maintenance and administrative costs related to same as is permitted by 723.045, Florida Statutes.
* * * (Petitioner's Exhibit #2,
pp 11, 61-66, emphasis added)
On September 2, 1986, Mr. Herrick gave a notice to all residents within the Tan Tara Mobile Home Park of a "base rent" increase effective January 1, 1987.
On June 23, 1987, Mr. Herrick gave a notice of a pass through charge effective October 1, 1987. The notice provided for billing each tenant for the actual usage of water, sewer and waste disposal. In addition, the notice provided that the extra charge for washing machines would be eliminated
effective October 1, 1987. Further, the notice indicated that due to the charges for water, sewer and waste disposal becoming effective October 1, there would not be a base rent increase on January 1, 1988.
The cost of providing water, sewer and waste disposal, prior to October 1, 1987, had been included in the base rent charged by Tan Tara Mobile Home Park. Mr. Herrick calculated that the portion of base rent for those utilities was $12.50 for each lot.
Individual water meters were installed and beginning October 1, 1987, the park owner began assessing all homeowners in the park for water, sewage and garbage based on individual usage. This cost was in addition to the base rent. The park owner also began assessing each homeowner two dollars and fifty cents ($2.50) per month, for meter reading
Beginning January 1, 1989, Herrick started deducting from the base rent the $12.50 previously computed for utilities. He then continued to add on the utility charge based
on the individuals meter reading.
Bonnie and Reginald Charron are residents of Tan Tara Mobile Home Park. They first assumed occupancy in the park in 1982, leasing lot number 18. At that time they were given the park rules and regulations marked Petitioner's Exhibit 6. No disclosures regarding water, sewage, and garbage were made prior to occupancy.
On or after August 30, 1984, the Charrons moved to lot 23. No other disclosures were made regarding the homeowners' obligation to pay for water, sewage or garbage. The prospectus was delivered to the Charrons on January 25, 1986. Since assuming occupancy in the park, the Charrons have been continuous residents and have not been evicted pursuant to Section 723.061, F.S. The Charrons paid fifteen dollars ($15.00) extra per month for their three (3) children plus five dollars ($5.00) per month for the washing machine. Mrs.
Charron was advised the five dollars ($5.00) per person was required to cover the cost for extra water and sewage being used by those persons. When the Charrons began to pay for water, sewage and garbage based on individual usage) the fifteen dollars ($15.00) per month was never deducted from the base rent. Since October 1, 1987, the Charrons cost for water, sewage, and garbage has exceeded twelve dollars and fifty cents ($12.50) per month.
Peggy E. Headley is a resident of Tan Tara Mobile Home Park. She moved into the park in September of 1982. On August 23, 1982, she was given the park rules and regulations marked Petitioner's Exhibit 8. No other disclosures were made regarding her obligation to pay for water, sewage and garbage. The prospectus was delivered to Mrs. Headley on January 25, 1986.
Mrs. Eddie Walters is a resident of Tan Tara Mobile Home Park. She moved into the park in May of 1977. At that time, she received a copy of the park rules and regulations. On January 16, 1986, she received the prospectus.
Respondent stipulated that water, sewage, and garbage charges have not been collected from homeowners as a matter of custom.
It is undisputed that prior to occupancy in the mobile home park, the tenants listed above did not receive a disclosure from the park owner that they would be responsible for paying pass through or pass on charges as defined in the park prospectus.
The rules and regulations which were in effect in the park were amended at various times, and at various times provided that water would be included in the base rent and/or that the park owner may charge separately for water. The set of rules and regulations attached to the prospectus provided that the management reserved the right to assess "pass through charges", including for water, on a pro rata basis. "Pro rata basis" is defined in the rules and regulations in the same manner as defined in the prospectus:
"...that percentage derived by dividing the number of mobile home spaces leased by a resident by the total number of occupied mobile home spaces in the park." (Petitioner's Exhibit #2, p. 73)
Neither the prospectus nor the rules and regulations provide for collection of water or other utilities based on individual usage.
Oral lot rental agreements are in effect in Tan Tara Mobile Home Park. No written lot rental agreements have ever been executed between homeowners and the Respondent or prior park owners of Tan Tara. The term of the oral lot rental agreements is one year and begins January 1 of each year.
Respondent has not been required by any governmental agency to install individual water meters or assess homeowners based on usage. However, an official with the City of Melbourne Water and Sewage Operations recommended installing individual meters as a means of finding out where the water was going. Herrick had contacted the city regarding high water and sewer bills.
After the meters were installed the city noted an average monthly reduction of 173,200 gallons of water at the park.
Water charges within the park are determined by reading individual meters which are located on each individual lot within the mobile home park. The meter readings are forwarded to New York, where Mr. Herrick maintains his residence and main business. A bill for water usage is sent from New York to each tenant and the payment is received in the New York office. Water usage records are kept each month by the New York office in order to determine water usage and the appropriate billing rates for water and sewer for individual residents.
CONCLUSIONS OF LAW
The Division of Administrative Hearings has jurisdiction over the parties and subject matter in this proceeding, pursuant to Section 120.57(1), F.S.
Respondent's mobile home park is subject to the provisions of Chapter 723, F.S., as it includes 10 or more lots offered for rent or lease as provided in Section 723. 002, F.S.
The Division of Land Sales, Condominiums and Mobile Homes has the authority to enforce the provisions of Chapter 723 and to require that a park owner cease and desist an unlawful practice and take affirmative action to carry out the purposes of Chapter 723, as provided in Sections 723.005, F.S., and 723.006(5), F.S.
The Division contends that Respondent increased the lot rental amount on January 1, 1987 and on October 1, 1987, in violation of Section 723.031(5),
F.S. and that Respondent collected charges for water, sewage and waste disposal, which were not disclosed prior to tenancy and have not been collected as a matter of custom between the park owner and at least one homeowner, in violation of Section 723.031(6), F.S.
The Division's position is that, notwithstanding the provisions of the prospectus and the regulations attached to the prospectus, the tenants who were already in the park when the prospectus was distributed and who had not been told prior to moving into the park that water would be charged extra, were entitled to the same arrangement that they enjoyed at the time they moved in.
Paragraphs (2), (5) and (6) of Section 723.031, F.S. (1989) provide:
723.031 Mobile home lot rental agreements.
* * *
(2) Whether or not a tenancy is covered by a valid written rental agreement, the required statutory provisions shall be deemed to be a part of the rental agreement.
* * *
The rental agreement shall contain the lot rental amount and services included. An increase in lot rental amount upon expiration of the term of the lot rental agreement shall be in accordance with s.
723.037 or s. 723.059(4), whichever is applicable, provided that, pursuant to s. 723.059(4), the amount of the lot rental increase is disclosed and agreed to by purchaser, in writing. An increase in lot rental amount shall not be arbitrary or discriminatory between similarly situated tenants in the park. No lot rental amount may be increased during the term of the lot rental agreement, except:
When the manner of the increase is disclosed in a lot rental agreement with a term exceeding 12 months and which provided for such increase not more frequently than annually.
For pass-through charges as defined in s. 723.003(9).
That no charge may be
collected that results in payment of money for sums previously collected as part of the lot rental amount.
The provisions hereof notwithstanding, the mobile home park owner may pass on, at any time during the term of the lot rental agreement, ad valorem property taxes and utility charges, or increases of either, provided that the ad valorem property taxes and the utility charges are not otherwise being collected in the remainder of the lot rental amount and provided further that the passing on of such ad valorem taxes or utility charges, or increases of either, was disclosed prior to tenancy, was being passed on as a matter of custom between the mobile home park owner and the mobile home owner, or such passing on was authorized A law. Such ad valorem taxes and utility charges shall be a part of the lot rental amount as defined by this chapter.
Except for pass-through charges, as defined in this chapter, failure on the part of the mobile home park owner or developer to disclose fully all fees, charges, or assessments prior to tenancy, unless it can be shown that such fees, charges, or assessments have been collected as a matter of custom between the mobile home park owner or operator from collecting said fees, charges, or assessments; and refusal by the mobile home owner to pay any such fee, charge, or assessment shall not be used by the park owner or developer as a cause for eviction in any court of law.
(emphasis added)
* * *
It appears that the utility charge at issue is properly designated a "pass-on" charge described in Section 723.031(5) (c), F.S. rather than a "pass through" charge.
Both "pass-through" and "pass-on" charges were legally authorized in Chapter 83, F.S., prior to June 4, 1984 (the effective date of Chapter 723, F.S.), and are clearly authorized under Chapter 723, F.S.
In 1988, the Department attempted to promulgate a rule prohibiting those charges unless they were disclosed fully in writing prior to occupancy or were collected as a matter of custom, as defined by the proposed rule. That
rule was invalidated in the case, Florida Manufactured Housing Association, Inc.
v. Department of Business Regulation, Division of Florida Land Sales, Condominiums and Mobile Home Owners of Florida, Inc., 10 FALR 3919 (DOAH Case #88-1133R, Final Order entered June 24, 1988).
Section 723.037, F.S. provides that a park owner shall give 90-days written notice prior to an increase in lot rental amount, a reduction in services or utilities provided by the park owner or a change in rules and regulations. This section also provides a mechanism for resolution of disputes related to those increases or changes.
Even though the pass-on charge, as indicated above, is allowed by law, the manner in which those charges are passed in this case is contrary to the law and to the park's prospectus and rules and regulation.
In October 1987, and until January 1989, Herrick was retaining the
$12.50 already included in the base rent for water at the same time that homeowners were also being charged on an individual basis for their water consumption.
In addition, the prospectus and regulations provide for a pro-rata pass through and describe what that means in explicit terms. It means all homeowners share equally in the increase, not that they will be charged on what they use.
The prospectus is a disclosure document which, when implemented, establishes the terms and conditions of she rental agreement between the park owner and mobile home owner. Section 723.012, F.S., Village Park Mobile Home Assn. v. State Department of Business Regulation, 406 So2d 426 (Fla 1st DCA 1987), rev. den. 513 So2d 1063.
The tenants in this case received the prospectus and entered into enforceable rental agreements with the park owner, based upon that prospectus, in January 1986. Each of the tenants for whom evidence was submitted acknowledged receipt of the prospectus in January 1986. The park owner has not delivered another prospectus to the tenants and therefore, during 1987 and continuing to the present time, the terms and conditions of the prospectus delivered controls the terms and conditions of the tenancy. Hobe Associates, Ltd. v. State Department of Business Regulation, 504 So2d 1301 (Fla 1st DCA 1987).
Herrick1s charges for water and sewer commencing on October 1, 1987, violate Section 723.031(5)(c), F.S. as they resulted in payment of money for sums previously collected as part of the lot rental amount and were otherwise being collected in the remainder of the lot rental amount; they were not disclosed prior to tenancy, were not passed on as a matter of custom, nor were they "authorized by law".
Based on the foregoing, it is hereby, RECOMMENDED:
That a Final Order be entered finding that Alfred Herrick, d/b/a Tan Tara Mobile Home Park violated Section 723.031(5), F.S., and requiring that:
Respondent immediately cease assessing homeowner for utilities based on individual usage, and
Respondent reimburse to each homeowner all sums collected since October 1, 1987, for utilities over and above that sum that would have been collected under a "pro rata" computation as described in the prospectus and park regulations. This latter computation should credit the homeowners for the $12.50 collected each month from October 1, 1987 until January 1, 1989.
DONE AND RECOMMENDED this 15th day of March, 1990, in Tallahassee, Leon County, Florida.
MARY CLARK
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 15th day of March, 1990.
COPIES FURNISHED:
Debra Roberts
Asst. General Counsel
Dept. of Business Regulation 725 S. Bronough Street Tallahassee, FL 32399-1007
David D. Eastman, Esquire
P.O. Box 669 Tallahassee, FL 32302
James Kearney, Director Dept. of Business Regulation The Johns Building
725 S. Bronough Street Tallahassee, FL 32399-1060
Joseph A. Sole General Counsel
Dept. of Business Regulation The Johns Building
725 S. Bronough Street Tallahassee, FL 32399-1000
Stephen R. MacNamara Secretary
Dept. of Business Regulation The Johns Building
725 S. Bronough St. Tallahassee, FL 32399-1000
=================================================================
AGENCY FINAL ORDER
=================================================================
STATE OF FLORIDA DEPARTMENT OF BUSINESS REGULATION
DIVISION OF FLORIDA LAND SALES, CONDOMINIUMS AND MOBILE HOMES
DEPARTMENT OF BUSINESS REGULATION, DIVISION OF FLORIDA LAND SALES, CONDOMINIUMS AND MOBILE HOMES,
Petitioner,
vs. DBR CASE NO. MH89344
DOAH CASE NO. 89-3183
ALFRED HERRICK, d/b/a
TAN TARA MOBILE HOME PARK,
Respondent.
/
FINAL ORDER
This Order is entered by the Director of the Division of Florida Land Sales, Condominiums and Mobile Homes, Department of Business Regulation, State of Florida, pursuant to Section 120.59, Florida Statutes, following a review of the record in the case and the Recommended Order entered by the Hearing Officer, Division of Administrative hearings, on November 6, 1989.
The findings of fact as determined by the Hearing Officer in the Recommended Order are hereby adopted in this Final Order. The conclusions of law contained in the Recommended Order, to the extent of any consistency with the conclusions of law set forth herein, are accepted, as is the Recommended Penalty.
APPEARANCES
For Petitioner: Debra Roberts
Assistant General Counsel Department of Business Regulation 725 South Bronough Street Tallahassee, Florida 32399-1007
For Respondent: David D. Eastman, Esquire
Post Office Box 669 Tallahassee, Florida 32302
STATEMENT OF THE ISSUES
A Notice to Show Cause issued on May 5, 1989, alleges that Respondent violated Sections 723.031(5) and (6), Florida Statutes by increasing mobile home park lot rentals on January l, 1987 and on October 1, 1987, and by collecting
charges for water, sewer and waste disposal from at least one homeowner when such charges were not disclosed prior to tenancy.
PRELIMINARY STATEMENT
Respondent, Alfred Herrick petitioned for a formal administrative hearing in response to the notice to show cause, and the case was referred to the Division of Administrative Hearings.
The hearing was continued once for good cause and with the concurrence of both parties. The parties also stipulated that Petitioner's local witnesses could be presented by deposition and that venue for the hearing would be in Tallahassee, Florida.
At the hearing, Petitioner presented the testimony of Dr. Faye S. Mayberry, Bureau Chief of the Bureau of Mobile Homes, Department of Business Regulation; and Alfred Herrick. The testimony of Bonnie Charron and Peggy Headley, park residents, was submitted in depositions filed on November 21, 1989.
Petitioner's eleven exhibits were received in evidence as Petitioners Exhibits #1-11.
Respondent testified in his own behalf and his exhibits #1-2 were received in evidence.
By stipulation the record was left open to allow the parties to file depositions of local witnesses. Two depositions were filed as stated above, and on February 1, 1990, the parties stipulated to facts that otherwise would have been presented through additional depositions.
Both parties filed thorough proposed recommended orders with proposed findings of fact. The facts in this proceeding are generally uncontroverted and the findings proposed by both parties are substantially adopted herein.
Ruling On Exceptions Filed By Tan Tara
The Hearing Officer's findings of fact numbers seven (7) and eight (8) are supported by competent, substantial evidence, therefore the exceptions to these findings of fact are denied.
The exception to the hearing officer's Conclusion of Law 8, on page 16 being incorrectly numbered paragraph 9 is accepted. All other exceptions to the hearing officer's conclusions of law are denied.
FINDINGS OF FACT
At all times relevant to these proceedings, Alfred Herrick has been the park owner of Tan Tara Mobile Home Park, which is located in Melbourne, Florida. Respondent purchased the park in 1980.
Eighty-four (84) lots are offered for rent or lease in the Tan Tara Mobile Home Park. Seventy-eight (78) lots are offered to tenants who own their home. Nineteen (19) lots were leased on or after November 1, 1986.
The proposed prospectus for the Tan Tara Mobile Home Park was filed with the Division on September 13, 1985. The prospectus was deemed adequate to
meet the requirements of Chapter 723, Florida Statutes on December 23, 1985. The prospectus was delivered to homeowners after January 1986.
The prospectus review by the Division determines adequacy with Chapter 723, Florida Statutes. The prospectus is not reviewed to determine consistency with rental agreements or disclosures made to homeowners. Park owners are advised that approval of the prospectus by the Division does not relieve the park owner of any requirements under the law. The park owner determines the contents of the prospectus. Homeowners have no input as to the contents of or in the review process of the prospectus.
The prospectus for Tan Tara Mobile Home Park contains a number of disclosures, as required by 723.012, F.S., relating the the mobile home park property, and sets out the terms and conditions of the rental agreement between the park owner and individual tenants of mobile home park. Included in the prospectus is the disclosure of all of the charges which may be charged by the park.
Paragraph VII. UTILITY AND OTHER SERVICES, provides the following relevant disclosures:
Water - Treated drinking water is provided by the City of Melbourne Utilities and is provided to each mobile home site. The charges for this service is currently included in the tenants' total monthly rental fee.
* * *
Sewage - Sewage disposal is provided by the City of Melbourne Utilities. The charges for this service is [sic] included in the tenants' monthly rental fee.
* * *
Waste and trash disposal - The collection of garbage and trash is provided by the City of Melbourne Utilities and is provided for each mobile home. The charge for this service is currently included in the tenants' total monthly rental fee...
Paragraph VIII. RENT, RENTAL INCREASES AND OTHER CHARGES, provides the following relevant disclosures:
The base rent and other charges applicable to your lot are effective January 1, 1985, as reflected in this section. The "base rent" refers to the regular monthly rent established by the Park Owner from time to time.
The base rent is subject to annual rent increases effective each January 1st, after ninety (90) days notice from the Park Owner or Management of such increase.
* * *
"Other charges" refers to "special use fees" and "pass through charges".
SPECIAL USE FEES refers to those separately itemized amounts charged in addition to the base rent for those specific items hereinafter set forth. The following special use fees are in effect within the park:
Owner reserves the right to charge an Entrance or "Move-in" fee. The present amount charged for this fee in the Park in $1,000.00.
Late rental payment fee of $10.00 after the fifth day of the month and $2.00 per day thereafter.
Return check charge of $10.00 for each check not honored by the banking institution upon which the check is drawn.
An additional charge of $5.00 per month for each and every person over two occupying a mobile home.
Extra visitor and/or guest charge of $2.00 per person per day staying more than 15 consecutive days or
30 days total.
Lawn maintenance fee, including mowing, edging, and trimming, in the amount of $10.00 for each required maintenance.
If it becomes necessary for Management to place the Tenant's garbage in proper containers, there will be an additional charge of $5.00 assessed to the Tenant for each occurrence.
An additional charge of $5.00 per month for a Tenant's washing machine due to the extra water usage caused by the washing machine and also sewerage charges.
For the purchaser, there will be a registration fee of $75.00 for investigating any proposed new Tenant
into the Park.
A new Tenant non-refundable application fee of
$75.00 for investigating any proposed new Tenant into the Park
A garbage and trash "removal" fee not included in the normal garbage or waste removal, of a minimum of
$5.00; the exact charge to be determined by Park Management based upon size and weight of such excess refuse so removed by Management.
Additional copies of the Prospectus are available at the Park Office for Tenants requesting same for which there is a charge of $50.00 for each additional copy requested.
Pet fee of $5.00 per pet per month.
Skirting area
clean up minimum fee of $20.00 if tenant fails to do this.
PASS THROUGH CHARGES, means those amounts other than special use fees, which are itemized and can be charged separately from the base rent and which represents the mobile home owner's share of cost charged to the Park Owner by any State or local government or utility company. These charges will be gassed on to the Tenant(s) on a pro rata basis. ("Pro rata basis" means that percentage derived by dividing the number of mobile home spaces leased b a resident b the total number of occupied mobile home spaces in the park.)
The pass through charges which may be passed on to the Tenant (s) are as follows:
Water charges or increases in same;
Sewer charges or increases in same;
D. Waste disposal charges or increases in same;
* * *
I. Replacement utility costs charged to the Park Owner by State or local government incurred as the result of the actions of any utility company for any utility or other services not provided or available to park residents on the delivery date that replaces, in whole or in part, any utility or other service that is provided or is available to park residents on the delivery date.
* * *
The above-mentioned pass through charges and costs which are billed by neither the State or local governmental entities or `utility companies may be passed through to the Tenants after providing at least ninety (90) days advanced written notice to all Tenants. The amount of an increase in pass through charges shall be limited to the increased costs or charges billed to the park owner by the State or local governmental agency or utility company plus any maintenance and administrative costs related to same as is permitted by 723.045, Florida Statutes.
(Petitioner's Exhibit #2,
pp 11, 61-66, emphasis added)
On September 2, 1986, Mr. Herrick gave a notice to all residents within the Tan Tara Mobile Home Park of a "base rent" increase effective January 1, 1987.
On June 23, 1987, Mr. Herrick gave a notice of a pass through charge effective October 1, 1987. The notice provided for billing each tenant for the actual usage of water, sewer and waste disposal. In addition, the notice provided that the extra charge for washing machines would be eliminated effective October 1, 1987. Further, the notice indicated that due to the charges for water, sewer and waste disposal becoming effective October 1, there would not be a base rent increase on January 1, 1988.
The cost of providing water, sewer and waste disposal, prior to October 1, 1987, had been included in the base rent charged by Tan Tara Mobile Home Park. Mr. Herrick calculated that the portion of base rent for those utilities was $12.50 for each lot.
Individual water meters were installed and beginning October 1, 1987, the park owner began assessing all homeowners in the park for water, sewage and garbage based on individual usage. This cost was in addition to the base rent. The park owner also began assessing each homeowner two dollars and fifty cents ($2.50) per month, for meter reading.
Beginning January 1, 1989, Herrick started deducting from the base rent the $12.50 previously computed for utilities. He then continued to add on the utility charge based on the individuals meter reading.
Bonnie and Reginald Charron are residents of Tan Tara Mobile Home Park. They first assumed occupancy in the park in 1982, leasing lot number 18. At that time they were given the park rules and regulations marked Petitioner's Exhibit 6. No disclosures regarding water, sewage, and garbage were made prior to occupancy.
On or after August 30, 1984, the Charrons moved to lot 23. No other disclosures were made regarding the homeowners obligation to pay for water, sewage or garbage. The prospectus was delivered to the Charrons on January 25, 1986. Since assuming occupancy in the park, the Charrons have been continuous residents and have not been evicted pursuant to Section 723.061, F.S. The Charrons paid fifteen dollars ($15.00) extra per month for their three (3) children plus five dollars ($5.00) per month for the washing machine. Mrs.
Charron was advised the five dollars ($5.00) per person was required to cover the cost for extra water and sewage being used by those persons. When the Charrons began to pay for water, sewage and garbage based on individual usage- the fifteen dollars ($15.00) per month was never deducted from the base rent. Since October 1, 1987, the Charrons cost for water, sewage, and garbage has exceeded twelve dollars and fifty cents ($12.50) per month.
Peggy E. Headley is a resident of Tan Tara Mobile Home Park. She moved into the park in September of 1982. On August 23, 1982, she was given the park rules and regulations marked Petitioner's Exhibit 8. No other disclosures were made regarding her obligation to pay for water, sewage and garbage. The prospectus was delivered to Mrs. Headley on January 25, 1986.
Mrs. Eddie Walters is a resident of Tan Tara Mobile Home Park. She moved into the park in May of 1977. At that time, she received a copy of the park rules and regulations. On January 16, 1986, she received the prospectus.
Respondent stipulated that water, sewage, and garbage charges have not been collected from homeowners as a matter of custom.
It is undisputed that prior to occupancy in the mobile home park, the tenants listed above did not receive a disclosure from the park owner that they would be responsible for paying pass through or pass on charges as defined in the park prospectus.
The rules and regulations which were in effect in the park were amended at various times, and at various times provided that water would be included in the base rent and/or that the park owner may charge separately for water. The set of rules and regulations attached to the prospectus provided that the management reserved the right to assess "pass through charges," including for water, on a pro rata basis. "Pro rata basis" is defined in the rules and regulations in the same manner as defined in the prospectus:
". . . that percentage derived by dividing the number of mobile home spaces leased by a resident by the total number of occupied mobile home spaces in the park." (Petitioner's Exhibit #2, p. 73)
Neither the prospectus nor the rules and regulations provide for collection of water or other utilities based on individual usage.
Oral lot rental agreements are in effect in Tan Tara Mobile Home Park. No written lot rental agreements have ever been executed between homeowners and
the Respondent or prior park owners of Tan Tara. The term of the oral lot rental agreements is one year and begins January 1 of each year.
Respondent has not been required by any governmental agency to install individual water meters or assess homeowners based on usage. However, an official with the City of Melbourne Water and Sewage Operations recommended installing individual meters as a means of finding out where the water was going. Herrick had contacted the city regarding high water and sewer bills.
After the meters were installed the city noted an average monthly reduction of 173,200 gallons of water at the park.
Water charges within the park are determined by reading individual meters which are located on each individual lot within the mobile home park. The meter readings are forwarded to New York, where Mr. Herrick maintains his residence and main business. A bill for water usage is sent from New York to each tenant and the payment is received in the New York office. Water usage records are kept each month by the New York office in order to determine water usage and the appropriate billing rates for water and sewer for individual residents.
CONCLUSIONS OF LAW
The Division of Administrative Hearings has jurisdiction over the parties and subject matter in this proceeding, pursuant to Section 120.57(1), F.S.
Respondent's mobile home park is subject to the provisions of chapter 723, F.S., as it includes 10 or more lots offered for rent or lease as provided in Section 723.002, F.S.
The Division of Land Sales, Condominiums and Mobile Homes has the authority to enforce the provisions of Chapter 723 and to require that a park owner cease and desist an unlawful practice and take affirmative action to carry out the purposes of Chapter 723, as provided in Sections 723.005, F.S., and 723.006(5), F.S.
The Division contends that Respondent increased the lot rental amount on January 1, 1987 and on October 1, 1987, in violation of Section 723.031(5),
F.S. and that Respondent collected charges for water, sewage and waste disposal, which were not disclosed prior to tenancy and have not been collected as a matter of custom between the park owner and at least one homeowner, in violation of Section723.031(6), F.S.
The Division's position is that, notwithstanding the provisions of the prospectus and the regulations attached to the prospectus, the tenants who were already in the park when the prospectus was distributed and who had not been told prior to moving into the park that water would be charged extra, were entitled to the same arrangement that they enjoyed at the time they moved in.
Paragraphs (2), (5) and (6) of Section 723.031, F.S. (1989) provide:
723.031 Mobile home lot rental agreements
* * *
(2) Whether or not a tenancy is covered by a valid written rental agreement, the required statutory
provisions shall be deemed to be a part of the rental agreement.
The rental agreement shall contain the lot rental amount and
services included. An increase in lot rental amount upon expiration of the term of the lot rental agreement shall be in accordance with s. 723.037 or s. 723.059(4), whichever is applicable, provided that, pursuant to
723.059(4), the amount of the lot rental increase is disclosed and agreed to by the purchaser, in writing. An increase in lot rental amounts. shall not be arbitrary or discriminatory between similarly situated tenants in the park. No lot rental amount may be increased during the term of the lot rental agreement, except:
When the manner of the increase is disclosed in a lot rental agreement with a term exceeding 12 months and which provided for such increase not more frequently than annually.
For pass-through charges as defined in s. 723.003(9).
That no charge may be collected that results in payment of money for sums previously collected as cart of the lot rental amount. The provisions hereof notwithstanding, the mobile home park owner may pass on, at any time during the term of the lot rental agreement, ad valorem property taxes and utility charges, or increase of either, provided that the ad valorem property taxes and the utility charges are not otherwise being collected in the remainder of the lot rental amount and provided further that the passing on of such ad valorem taxes or utility charges, or increases of either, was disclosed prior to tenancy, was being gassed on as a matter of custom between the mobile home park owner and the mobile home owner, or such passing on was authorized by law. Such ad valorem taxes and utility charges shall be a part of the lot rental amount as defined by this chapter.
Except for pass-through charges, as defined in this chapter, failure on the part of the mobile home park owner or developer to disclose fully all fees, charges, or assessments prior to tenancy, unless it can be shown that
such fees, charges, or assessments have been collected as a matter of custom between the mobile home park owner or operator from collecting said fees, charges, or assessments; and refusal by the mobile home owner to pay any such fee, charge, or assessment shall not be used by the park owner or developer as a cause for eviction in any court of law.
(emphasis added)
* * *
It appears that the utility charge at issue is a charge that could be passed on during the term of the rental agreement as described in Section 723.031(5)(c), F.S. rather than a pass
Section 723.037, F.S. provides that a park owner shall give 90-days written notice prior to an increase in lot rental amount, a reduction in services or utilities provided by the park owner or a change in rules and regulations. This section also provides a mechanism for resolution of disputes related to those increases or changes.
Even though the pass-on charge, could be passed on during the term; the manner in which those charges are passed in this case is contrary to the law and to the park's prospectus and rules and regulation.
In October 1987, and until January 1989, Herrick was retaining the $12.50 already included in the base rent for water at the same time that homeowners were als& being charged on an individual basis for their water consumption.
In addition, the prospectus and regulations provide for a pro-rata pass through and describe what that means in explicit terms. It means all homeowners share equally in the increase, not that they will be charged on what they use.
The prospectus is a disclosure document which, when implemented, establishes the terms and conditions of the rental agreement between the park owner and mobile home owner. Section 723.012, F.S., Village Park Mobile Home Assn. v. State Department of Business Regulation, 406 So2d 426 (Fla. 1st DCA 1987), rev. den. 513 So2d 1063.
The homeowners in this case received the prospectus in January 1986. Each of the homeowners for whom evidence was submitted acknowledged receipt of the' prospectus in January 1986.
Herrick's charges for water and sewer commencing on October 1, 1987, violate Section 723.031(5)(c), F.S., as they resulted in payment of money for sums previously collected as part of the lot rental amount and were otherwise being collected in the remainder of the lot rental amount; they were not disclosed prior to tenancy, were not passed on as a matter of custom, nor were they "authorized by law".
ORDER
Based on the above findings of fact and conclusions of law it is hereby, ORDERED:
For homeowners whose prospectus provided that water, sewer, and waste disposal would be assessed on a pro rata basis:
Respondent shall immediately cease assessing for water, sewer and waste disposal based on individual usage; and
Within 30 days from date of this Final Order, Respondent shall reimburse to each homeowner all sums collected since October 1, 1987, for water, sewer and waste disposal over and above that sum that would have been collected under a "pro rata" computation as described in the prospectus and park regulations. This latter computation shall be $12.50 collected each month from October 1, 1987 until January 1, 1989.
DONE AND ORDERED this 13th day of June, 1990, in Tallahassee, Leon County, Florida.
MATTHEW M. CARTER II, DIRECTOR
Division of Florida Land Sales Condominiums and Mobile Homes Department of Business Regulation State of Florida
RIGHT OF APPEAL
THIS FINAL ORDER CONSTITUTES FINAL AGENCY ACTION AND MAY BE APPEALED BY RESPONDENT PURSUANT TO SECTION 120.68, FLORIDA STATUTES, AND RULE 9.110, FLORIDA RULES OF APPELLATE PROCEDURE, BY FILING A NOTICE OF APPEAL CONFORMING TO THE REQUIREMENTS OF RULE 9.110(d) FLORIDA RULES OF APPELLATE PROCEDURE, BOTH WITH THE APPROPRIATE DISTRICT COURT OF APPEAL ACCOMPANIED BY THE APPROPRIATE FILING FEE, AND WITH CONNIE D. BLACKMAN, DOCKET CLERK FOR THE DIVISION OF FLORIDA LAND SALES, CONDOMINIUMS AND MOBILE HOMES, WITHIN 30 DAYS OF THE RENDITION OF THIS ORDER.
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that a true and correct copy of the foregoing has been furnished by Certified U.S. Mail to David Eastman, P.O. Box 669, Tallahassee, Florida 32302, this 13th percent day of June, 1990.
CONNIE D. BLACKMAN, DOCKET CLERK
COPIES FURNISHED:
Debra Roberts
Assistant General Counsel
Faye Mayberry, Chief Bureau of Mobile Homes
================================================================= DISTRICT COURT OPINION
=================================================================
IN THE DISTRICT COURT OF APPEAL FIRST DISTRICT, STATE OF FLORIDA
ALFRED HERRICK, d/b/a TAN TARA NOT FINAL UNTIL TIME EXPIRES MOBILE HOME PARK, TO FILE REHEARING MOTION AND
DISPOSITION THEREOF IF FILED.
Appellant,
CASE NO. 90-2057
v. DOAH CASE NO. 89-3183
FLORIDA DEPARTMENT OF BUSINESS REGULATION, DIVISION OF FLORIDA LAND SALES, CONDOMINIUMS AND MOBILE HOMES,
Appellee.
/ Opinion filed February 19, 1992.
An Appeal from an Order of the Department of Business Regulation.
David D. Eastman of Parker, Skelding, Labasky & Corry, Tallahassee, for Appellant.
Susan C. Marvin, Assistant General Counsel, Department of Business Regulation, Tallahassee, for Appellee.
Thomas A. Munkittrick, Attorney for Amicus Curiae, Federation of Mobile Home Owners of Florida, Inc., Largo.
JOANOS, Chief Judge.
Alfred Herrick (Herrick), owner of Tan Tara Mobile Home Park, appeals a final administrative order issued by the Division of Florida Land Sales, Condominiums, and Mobile Homes (Division), finding Herrick in violation of section 723.031(5) and (6), Florida Statutes. Herrick alleges error in the Division's determination that he improperly charged tenants in Tan Tara Mobile
Home Park for water, sewer, and waste disposal when such charges were not disclosed prior to occupancy. We affirm, the order as modified.
The essential facts in this case are undisputed, and indeed, Herrick has stipulated to the operative facts, i.e., that he increased charges collected from park tenants twice in one year, that he changed the manner in which he assessed park tenants for water, and that water, sewage, and garbage charges had not been collected on an individual basis in the past as a matter of custom.
Thus, it is the legal effect of Herrick's conduct which is at issue in this case, rather than the conduct itself.
On May 5, 1989, the Division issued a notice to show cause against Herrick charging that the park owner (1) violated section 723.031(5), Florida Statutes, by increasing the lot rental amount on January 1, 1987, and again on October 1, 1987; and (2) violated section 723.031(6), Florida Statutes, by collecting charges for water, sewage, and waste disposal, which charges were not disclosed prior to tenancy and had not been collected as a matter of custom between the park owner and at least one homeowner. Herrick petitioned for a formal hearing, and the matter was referred to the Division of Administrative Hearings, and heard on November 6, 1989.
Tan Tara Mobile Home Park is located in Melbourne; the owner's business and residence is in Ithaca, New York. There are eighty-four lots in the park; nineteen of these lots were leased after November 1, 1986. When Herrick bought the park in 1980, water and sewer charges were included as part of the rent.
The former owner cautioned Herrick that water was being wasted in the park, and that he should include the water use in the rent. Initially, Herrick calculated water and sewer use to be added to the lot rental charge by dividing the total bill he received from the water company by the number of homes in the park.
That charge came to $12.50 per home.
Pursuant to the 1984 enactment of Chapter 723, Herrick filed and received approval of a park prospectus on December 23, 1985. The prospectus constitutes the disclosure document provided to the tenants. The Tan Tara prospectus was delivered to all tenants living in the park, beginning in January 1986.
Pertinent portions of the Tan Tara prospectus pertaining to charges which may be included in the lot rental fee provide:
UTILITY AND OTHER SERVICES
Water - Treated drinking water is provided by the City of Melbourne Utilities and is provided to each mobile home site. The charge for this service is currently included in the tenants' total monthly rental fee.
. . . .
Sewage - Sewage disposal is provided by the City of Melbourne Utilities. The charge for this service is included in the tenants' monthly rental fee. . . .
Waste and trash disposal - The collection of garbage and trash is
provided by the City of Melbourne Utilities and is provided for each mobile home. The charge for this service is currently included in the tenants' total monthly rental fee.
RENT, RENTAL INCREASES AND OTHER CHARGES
The base rent and other charges applicable to your lot are effective January 1, 1985, as reflected in this section. The "base rent" refers to the regular monthly rent established by the Park Owner from time to time. The base rent is subject to annual rent increases effective each January 1st, after ninety (90) days notice from the Park Owner or Management of such increase.
"Other charges refers to "special use fees" and "pass through charges".
SPECIAL USE FEES refers to those separately itemized amounts charged in addition to the base rent for those specific items hereinafter set forth. The following special use fees are in effect within the park:
a) Owner reserves the right to charge an Entrance or "Move-in" fee. The present amount charged for this fee in the Park is $1,000.00.
. . .
h) An additional charge of $5.00 per month for a Tenant's washing machine due to the extra water usage caused by the washing machine and also sewer age charges.
. . .
PASS THROUGH CHARGES, means those amounts other than special use fees, which are itemized and can be charged separately from the base rent and which represents the mobile home owner's share of cost charged to the Park Owner by any State or local government or utility company. These charges will be passed on to the Tenant(s) on a pro rata basis. ("Pro rata basis" means that percentage derived by dividing the number of mobile home spaces leased by a resident by the total number of occupied mobile home spaces in the
park.) The pass through charges which may be passed on to the Tenant(s) are as follows:
Water charges or increases in same;
Sewer charges or increases in same;
. . .
D. Waste disposal charges or increases in same;
. . .
I. Replacement utility costs charged to the Park Owner by State or local government incurred as the result of the actions of any utility company for any utility or other services not provided or available to park residents on the delivery date that replaces, in whole or in part, any utility or other service that is provided or is available to park residents on the delivery date.
The above-mentioned pass through charges and costs which are billed by either the State or local governmental entities or utility companies may be passed through to the Tenants after providing at least ninety (90) days advanced written notice to all Tenants. The amount of an increase in pass through charges shall be limited to the increased costs or charges billed to the park owner by the State or local governmental agency or utility company plus any maintenance and administrative costs related to same as is permitted by 723.045, Florida Statutes. . . .
On September 2, 1986, all residents of the park were notified that the base rent would increase effective January 1, 1987.
Based on advice and recommendation from the City that water usage in the park was "way above average," Herrick had individual water meters installed during June through August 1987. On June 23, 1987, letters were sent to the residents of the park, advising that beginning October 1, 1987, residents would be billed for actual usage on a pro-rata basis, per pass through charges set forth in the prospectus. 1/ The letters further advised that due to the increase in charge for water, sewer, and waste disposal charges, there would not be a rent increase on January 1, 1988. Herrick charged $2.50 per residence for reading meters, and as of October 1, 1987, Herrick assessed park residents for water, sewage, and garbage on an individual basis. This cost was in addition to the base rent, which still included a charge of $12.50 per month representing Herrick's original estimated pro rata charge for utilities. Beginning January 1, 1989, Herrick deducted the $12.50 previously computed for utilities from the base rent, but continued to add on the charges based on the individual meter readings. Herrick stipulated that water, sewage, and garbage charges had not
been collected from individual residents as a matter of custom. The rental agreements in the park are oral agreements, for a term of one year, beginning January 1 of each year.
The hearing officer found that the "pass on" charge effected by Herrick was authorized by law, but found she manner in which the charges were passed on in this base was contrary to the law and to the park's prospectus and rules and regulations. The hearing officer concluded:
8. Herrick's charges for water and sewer commencing on October 1, 1987, violate Section 723.031(5)(c), F.S. as they resulted in payment of money for sums previously collected as part of the lot rental amount and were otherwise being collected in the remainder of the lot rental amount; they were not disclosed prior to tenancy, were not passed on as a matter of custom, nor were they "authorized by law."
This conclusion of law was adopted by the Division in its amended final order. The Division ordered Herrick to cease assessing water, sewer, and waste disposal based on individual usage. For those residents who received a prospectus prior to occupancy, assessments for water, sewage, and garbage were directed to be in accordance with the prospectus, that is, on a pro rata basis. For residents who were delivered a prospectus after assuming occupancy in the park, assessments for such services were to be based on the disclosures made known to the resident prior to occupancy in the park. 2/ In addition, Herrick was directed to refund all sums collected for water, sewer, and waste disposal based on usage. To effect this refund, the homeowners were to receive a credit for the $12.50 collected in the base rent from October 1, 1987, until January 1, 1989, and Herrick was directed to reimburse each resident all sums collected for water, sewage, and garbage services, over and above the $12.50 collected in the base rent during this period. Since Herrick began deducting the $12.50 from the base rent beginning January 1, 1989, he was not required to credit the $12.50 after that date.
The record reflects that Herrick violated section 723.031(5), Florida Statutes, by increasing lot rental fees twice during 1987. The first increase occurred in January 1987, pursuant to proper ninety-day notice; the second increase occurred in October 1987, when Herrick began charging tenants for water usage on an individual basis, while continuing to collect the $12.50 pro rata monthly fee for water which was included in the base rent. The record also reflects that Herrick violated section 723.031(6) Florida Statutes, by charging tenants for water, sewage, and waste disposal on the basis of individual usage, when this particular manner of collecting for these services had not been disclosed prior to tenancy, and had not been previously collected on the basis of individual usage as a matter of custom. Further, assessment on the basis of individual usage was in violation of the prospectus, which specified that water, sewer, and waste charges, "or increases in same, would be passed on to the tenants on a pro rata basis. In short, the park owner's prospectus and the statute will not permit the park owner's conduct, and we affirm the action taken by the Division on this basis.
Before addressing the arguments raised by the parties, it is important to recognize that the purpose for enacting The Florida Mobile Home Act was to protect mobile homeowners, by equalizing the economic leverage mobile home park owners hold over the tenants. 1 J. Hauser, Florida Residential Landlord-Tenant Manual, Chapter 8 (Supp.1991). In Stewart v. Green, 300 So.2d 889 (Fla. 1974) and Palm Beach Mobile Homes, Inc. v. Strong, 300 So.2d 881 (Fla. 1974), the supreme court observed that the legislature had finally recognized "that a hybrid type of property relationship exists between the mobile home owner and the park owner and that the relationship is not simply one of landowner and tenant." Stewart, 300 So.2d at 892. Mobile home tenancy usually involves persons who own their residences which are of considerable size, and once set up in a park, the residences are not mobile in the real sense of the word.
"Because of the difficulties inherent in moving the home from one settled location to another, ... it is hard to imagine a situation where the park owner and the tenants are in an equal bargaining position on rent increases. Belcher
v. Kier, 558 So.2d 1039, 1042 (Fla. 2d DCA), review denied, 570 So.2d 1305 (Fla. 1990). See also Harris v. Martin Regency, Ltd., 576 So.2d 1294, 1297 (Fla. 1991); Lanca Homeowners, Inc. v. Lantana Cascade of Palm Beach, Ltd., 541 So.2d 1121, 1124 (Fla.), cert. denied, U.S. , 110 S.Ct. 405, 107 L.Ed.2d 371 (1989); B.J. Pearce v. Doral Mobile Home Villas, Inc., 521 So.2d 282 (Fla. 2d DCA 1988). The current costs of moving a mobile home range from $4,000 to
$10,000. See 1 J. Hauser, Landlord-Tenant Manual, at 69.
The delivery of a prospectus to all residents of a mobile home park containing twenty-six or more lots, is one factor in the legislative effort to afford protection to occupants and prospective occupants of a park. The prospectus is a disclosure document. Village Park Mobile Home Assoc. v. State, Dept. of Business Regulation Div. of Florida Land Sales, Condominiums and Mobile Homes, 506 So.2d 426, 428 (Fla. 1st DCA), review denied, 513 So.2d 1063 (Fla.
1987). It is drafted by the park owner, and must contain information as specified by section 723.012, Florida Statutes, including a description of the manner in which utilities and other services are to be provided, an explanation of the manner in which lot rentals will be increased, a provision for ninety days advance notice of any increase or reduction in service, and disclosure of any rate increase or pass through charges to which the homeowner could be subjected. Village Park v. Dept. of Business Regulation, 506 So.2d at 428.
That is, the prospectus delineates the basis for, and the procedure governing, future rent increases. Id., at 429. Unless the park owner fully discloses all proposed fees, charges, and assessments, he waives the right to obtain such in the future. Lemon v. Aspen Emerald Lake Assoc., Ltd., 446 So.2d 177 (Fla. 5th DCA 1984).
The applicable disclosure provisions are set forth at section 723.011, Florida Statutes (Supp. 1986), 3/ which provides in part:
(1)(a) In a mobile home park containing
26 or more lots, the park owner shall file a prospectus with the division. Prior to entering into an enforceable rental agreement for a mobile home lot, the park owner shall deliver to the home owner a prospectus approved by the division. ...
The park owner shall furnish a copy of the prospectus or offering circular together with all of the exhibits
thereto to each prospective lessee. Delivery shall be made upon execution of the rental agreement or at the time of occupancy, whichever occurs first. However, the park owner is not required to furnish a copy of the prospectus or offering circular if the tenancy is a renewal of a tenancy and the mobile home owner has previously received the prospectus or offering circular.
With regard to a tenancy in existence on the effective date of this chapter, the prospectus or offering circular offered by the mobile home park owner shall contain the same terms and conditions as rental agreements offered to all other mobile home owners residing in the park on the effective date of this act, excepting only rent variations based upon lot location and size, and shall not require any mobile home owner to install any permanent improvements. (Emphasis supplied.)
. . .
Section 723.012, Florida Statutes, sets forth the information required to be included in the prospectus or offering circular provided to each prospective lessee. Among other things, the prospectus must include:
A description of all improvements, whether temporary or permanent, which are required to be installed by the mobile home owner as a condition of his occupancy in the park.
The manner in which utility and other services, including, but not limited to, sewage and waste disposal, cable television, water supply, and storm drainage, will be provided, and the person or entity furnishing them. The services and thee lot rental amount or user fees charged by the park owner for the services provided by the park owner shall also be disclosed.
An explanation of the manner in which the lot rental amount will be raised, including, but not limited to:
Notification of the mobile home owner at least 90 days in advance of the increase.
Disclosure of any factors which may affect the lot rental amount, including, but not limited to:
Water rates.
Sewer rates.
Waste disposal rates.
Maintenance costs, including costs of deferred maintenance.
Management costs.
Property taxes.
Major repairs or improvements.
Any other fees, costs, entrance fees, or charges to which the mobile home owner may be subjected.
Disclosure of the manner in which the pass-through charges will be assessed.
. . .
(11) The park rules and regulations and an explanation of the manner in which park rules or regulations will be set, changed, or promulgated. (Emphasis supplied.)
The provisions governing lot rental agreements are set forth in section 723.031, Florida Statutes, which provides in part:
No rental agreement shall contain any rule or regulation prohibited by this chapter, nor shall it provide for promulgation of any rule or regulation inconsistent with this chapter or amendment of any rule or regulation inconsistently with this chapter.
Whether or not a tenancy is covered by a valid written rental agreement, the required statutory provisions shall be deemed to be a part of the rental agreement.
The home owner shall have no financial obligation to the park owner as a condition of occupancy in the park, except the lot rental amount. The parties may agree otherwise as to user fees which the home owner chooses to incur. No user fees shall be charged by the park owner to the mobile home owner for any services or amenities which were previously provided by the park owner and included in the lot rental amount unless there is a corresponding decrease in the lot rental amount.
No rental agreement shall be offered by a park owner for a term of less than l year, and if there is no written rental agreement, no rental term shall be less than 1 year from
the date of initial occupancy; however, the initial term may be less than l year in order to permit the park owner to have all rental agreements within the park commence at the same time. Thereafter, all terms shall be for a minimum of 1 year.
The rental agreement shall contain the lot rental amount and
services included. An increase in lot rental amount upon expiration of the term of the lot rental agreement shall be in accordance with s. 723.037 or s. 723.059(4), whichever is applicable, provided that, pursuant to s.
723.059(4), the amount of the lot rental increase is disclosed and agreed to by the purchaser, in writing. An increase in lot rental amount shall not be arbitrary or discriminatory between similarly situated tenants in the park. No lot rental amount may be increased during the term of the lot rental agreement, except:
When the manner of the increase is disclosed in a lot rental agreement with a term exceeding 12 months and which provides for such increases not more frequently than annually.
For pass-through charges as defined in s. 723.003(9).
That no charge may be collected that results in payment of money for sums previously collected as part of the lot rental amount. The provisions hereof notwithstanding, the mobile home park owner may pass on, at any time during the term of the lot rental agreement, ad valorem property taxes and utility charges, or increases of either, provided that the ad valorem property taxes and the utility charges are not otherwise being collected in the remainder of the lot rental amount and provided further that the passing on of such ad valorem taxes or utility charges, or increases of either, was disclosed prior to tenancy, was being passed on as a matter of custom between the mobile home park owner and the mobile home owner, or such passing on was authorized by law. Such ad
valorem taxes and utility charges shall be a part of the lot rental amount as defined by this chapter.
Except for pass-through charges, as defined in this chapter, failure on the part of the mobile home park owner or developer to disclose fully all fees, charges or assessments prior to tenancy, unless it can be shown that such fees, charges or assessments have been collected as a matter of custom between the mobile home park owner and the mobile home owner, shall prevent the park owner or operator from collecting said fees, charges, or assessments; and refusal by the mobile home owner to pay any such fee, charge, or assessment shall not be used by the park owner or developer as a cause for eviction in any court of law.
. . .
(9) No rental agreement shall provide for the eviction of a mobile home owner on a ground other than one contained in s. 723.061.
(9) The term "pass-through charge" means the mobile home owner's proportionate share of the necessary and actual direct costs and impact or hookup fees for a governmentally mandated capital improvement, which may include the necessary and actual direct costs and impact or hookup fees incurred for capital improvements required for public or private regulated utilities.
Under the provisions of section 723.011(2), a prospective tenant is afforded the safeguards inherent in the prospectus "upon execution of a rental agreement or at the time of occupancy, whichever occurs first." Tenants already in residence when the act went into effect are to be furnished a prospectus setting forth the same terms and conditions applicable to all other mobile home owners residing in the park on the effective date of the act. 723.011(3), Fla.Stat. (Supp.1986); Village Park v. Dept. of Business Regulation, 506 So.2d at 729.
Herrick contends: (1) the prospectus delivered in January 1986 governs rent increases as to all tenants, including those tenants in occupancy prior to delivery of the prospectus; (2) tenancy in the park is on an annual, rather than a continuous basis, so the park owner can collect fee increases from tenants in occupancy in the park prior to delivery of the prospectus; (3) section 723.037, Florida Statutes, permits the park owner to amend the prospectus to reduce services and begin charging "pass on" charges for utilities upon 90-day notice. Herrick further asserts that his conduct is not governed by the amendments
effected in 1986, but by the statute in effect when he delivered the prospectus, because retroactive application of the amendments as to him would unconstitutionally impair the obligations of contracts.
The Division contends: (1) the tenants in residence prior to delivery of the prospectus are entitled to rely upon the disclosures made prior to their occupancy, and while all park tenants must receive a prospectus, the terms and conditions are different for those persons in occupancy in parks prior to the June 4, 1984, effective date of Chapter 723; (2) tenancy in a mobile home park is continuous from the date a lot rental agreement is entered into or the home owner assumes occupancy, until the homeowner terminates the agreement or is evicted pursuant to section 723.061; (3) section 723.037 is a procedural notice provision which must be read in pari materia with all of Chapter 723, and does not authorize the park owner to amend the prospectus in a manner inconsistent with Chapter 723 upon ninety day notice, for to do so would frustrate the disclosure purpose of the prospectus; and (4) the Division was required to apply the law in existence when Herrick improperly assessed the homeowners. The Division further maintains that certain provisions of Herrick's prospectus not in compliance with section 723.011(3) are void and are not constitutionally protected.
We address these contentions seriatim. First, we conclude that Chapter 723 evinces legislative intent that the prospectus delivered by the park owner to prospective lessees, and to all mobile home owners in occupancy on the effective date of Chapter 723, shall govern the terms and conditions of the tenancy as to both pre-existing occupancy and occupancy which commences with delivery of the prospectus. As to pre-existing tenancies, section 723.011(3) provides that "the prospectus or offering circular offered by the mobile home park owner shall contain the same terms and conditions as rental agreements offered to all other mobile home owners residing in the park on the effective date of this act, excepting only rent variations as to lot location and size, and shall not require any mobile home owner to install any permanent improvements." We construe this provision to mean that the prospectus prepared by the park owner must incorporate the disclosures made to mobile home owners in occupancy prior to the June 4, 1984, effective date of Chapter 723, and the park owner is precluded from including anything in the prospectus which would require these prior tenants to install permanent improvements. Similarly, the terms and conditions off the prospectus do not govern pre-existing tenancies until renewal of the tenancy.
Second, tenancy in Tan Tara Mobile Home Park is on an annual basis, and fee increases may be collected from all tenants, including those in occupancy prior to delivery of the prospectus, upon renewal of the tenancy, in accordance with the terms and conditions of the prospectus and the provisions of Chapter 723.
We recognize that the Division's theory of a continuous tenancy pertains to the continuous and binding nature of disclosures made by a park owner to a park tenant, and to the unique nature off this hybrid tenancy. Nevertheless, effect can be given to legislative intent to protect mobile home owners from arbitrary, unreasonable fee increases without fashioning a definition of "tenancy" in the context of mobile home park lot tenancies that the legislature has not seen fit to provide. The disclosures required to be set forth in the prospectus are one aspect of the statutory protections afforded the mobile home owner. By the same token, the statute recognizes a park owner's need to adjust rental charges and charges for services, and includes a procedure whereby such adjustments can be effected, after proper notice to the affected tenants, and affording the tenants an opportunity to be heard. See 723.037, Florida Statutes (1987). 4/
Third, we conclude that section 823.037 does not permit the park owner to amend the prospectus to reduce services, and to "pass on" charges for utilities in a manner different from that disclosed in the prospectus upon nothing more than a ninety day notice. Rather, section 723.037 is a procedural notice provision which must be read in pari materia with the other provisions of chapter 723. Pursuant to section 723.037, Herrick was authorized to assess a rent increase and increase in charges assessed for utilities once annually, upon ninety day written notice, provided the increase in utility charges was assessed pro rata in accordance with the prospectus and with section 723.031(5), Florida Statutes. Herrick concedes that he was not entitled to include the estimated pro rata utility charge in the base rent, and at the same time assess charges for utilities on an individual basis. This conduct constituted a clear violation of the park prospectus, which specifies that increases in water, sewer, and waste disposal charges "will be passed on to the Tenant(s) on a pro rata basis," and of sections 723.012(8) and 723.031(5)(c) and (6), Florida Statutes. In a similar vein, we reject Herrick's contention that although he admittedly erred in assessing tenants twice for the same services, because he forbore a formal rent increase in January 1988, the spirit of the statute was not offended. As a practical matter, Herrick's conduct effected a hidden rent increase.
Moreover, we reject Herrick's assertion that application of the 1986 amended version of Chapter 723, in effect at the time the charges at issue were assessed, would impair his constitutionally protected contract rights. 5/ See Art. I, 10, Fla. Const. An impairment of contract rights claim must be considered in the context of the end sought to be attained by the legislation at issue and whether the means devised to achieve that end are reasonable and appropriate. Mahood v. Bessemer Prop., Inc., 154 Fla. 710, 18 So.2d 775 (1944). In Mahood, the court explained:
The remedial law in force at the time the contract is made enters into and becomes a part thereof, but the parties to the contract have no vested right under the contract clause of the Federal Constitution, in the particular remedy or modes of procedures then existing. It may be assumed that the parties made their contract with knowledge of the power of the State to change the remedy or method of enforcing the contract, which may be done by a State without impairing contract obligations. (citation omitted.) A State may by legislative enactment modify existing remedies and substitute others without impairing the obligation of contracts, provided a sufficient remedy be left or another sufficient remedy be provided.
18 So.2d at 779-780.
Former Chapter 83, now Chapter 723, was enacted to provide mobile home owners with security in their dealings with mobile home park owners. Stewart v. Green, 300 So.2d 889, 891 (Fla. 1974); Palm Beach Mobile Homes, Inc. v. Strong,
300 So.2d 881, 886-887 (Fla. 1974). The 1986 amendments to Chapter 723 were, for the most part, clarifying in nature. In no sense, did these amendments abrogate a right available to Herrick in the 1985 statutory provisions. For example, section 723.012(8), Florida Statutes (1985), requires the park owner to disclose "[t]he manner in which utility and other services, including, but not limited to, sewage and waste disposal, television, water supply, and storm drainage, will be provided and the person or entity furnishing them." The park prospectus at issue in this case expressly provided that increases in water, sewage, and waste disposal would be passed on to park tenants on a pro rata basis. Thus, the manner in which Herrick passed on these increases contravened both the prospectus and the statute, whether one looks to the 1985 version or the 1986 amended version of Chapter 723.
We appreciate the difficulty experienced by the Division in its efforts to give effect to legislative intent to protect the unique tenancy of the mobile home owner without benefit of a statutory definition of "tenancy. To avoid possible abuse in this area, perhaps the time is ripe for provision of a legislative definition of this unique hybrid tenancy recognized seventeen years ago by the Florida Supreme Court in Stewart v. Green.
We conclude that the violations specified, and the remedies imposed by the Division in its amended final order, are appropriate to the circumstances of this case, and are authorized by the provisions of section 723.006, Florida Statutes (Supp. 1986). Moreover, these remedies are consistent with, and give effect to, legislative intent that residents of mobile home parks shall not be subject to any charge which is not set forth in the mobile home park prospectus, and has not been disclosed prior to tenancy.
Accordingly, the amended final order is affirmed in all respects save the provisions of paragraph three of the decretal portion of the order. This provision is modified to reflect that homeowners who were delivered a prospectus after assuming occupancy in the park, shall be assessed for water, sewer, and waste disposal based on the disclosures contained in the prospectus.
BOOTH and ALLEN, JJ., CONCUR.
ENDNOTES
1/ Although the letter advised that residents would be billed for actual usage on a "pro rata basis," Herrick agrees that beginning in October 1987, residents were billed for individual usage.
2/ The park rules and regulations in effect prior to the January 1986 delivery of the prospectus did not provide for water or other utility assessments based on individual usage. Rather, such charges had been assessed on a pro rata basis, even as to long-term tenants who had received no disclosures prior to occupancy. Therefore, the Division's error in separating park tenants into two classes has no bearing on the propriety of the remedies ordered, since the disclosures made known to tenants prior to occupancy were the same disclosures set forth in the prospectus.
3/ The violations at issue in this case began in October 1987. Therefore, all statutory references pertain to the 1986 amended version of Chapter 723, effective July 1, 1986. Ch. 86-162, 16, Laws of Fla.
4/ At oral argument of this cause, counsel for the Division indicated that the Division is no longer pursuing its theory of continuous tenancy.
5/ Herrick recognizes that pursuant to the rules promulgated by the Division, a park owner is in no sense precluded from amending a prospectus. However, such amendment cannot be effected by the expedient of a ninety day notice. To permit a park owner to amend a prospectus in this fashion would abrogate the park tenants' legislatively prescribed rights and protections, and would be invalid as a unilateral alteration to a bilateral agreement.
| Issue Date | Proceedings |
|---|---|
| Mar. 15, 1990 | Recommended Order (hearing held , 2013). CASE CLOSED. |
| Issue Date | Document | Summary |
|---|---|---|
| Feb. 19, 1992 | Opinion | |
| Jun. 13, 1990 | Agency Final Order | |
| Mar. 15, 1990 | Recommended Order | Mobile home park owner charged tenants for utilities already collected as part of the rent-cease and desist and repay the money |
