The Issue As presented in the petition to determine the invalidity of a proposed rule filed on February 14, 1992, and as refined in the parties' joint stipulation filed at hearing on September 14, 1992, the issue presented for disposition is the validity of proposed amendments to rules 12D-6.001(3) and 12D-6.002(1)(d)1. and 2., F.A.C.
Findings Of Fact The following facts are based in their entirety on the parties' joint stipulation presented at hearing on September 14, 1992: This is a Section 120.54(4), F.S., rule challenge proceeding initiated by the Florida Manufactured Housing Association, Inc., Petitioner, to challenge the validity of proposed amendments to Rules 12D-6.001(3) and 12D-6.002(1)(d)1. and 2., F.A.C., as proposed by the State of Florida Department of Revenue, Respondent. The Division of Administrative Hearings has jurisdiction over the parties and subject matter of this action. The Petitioner is the Florida Manufactured Housing Association, Inc., "FMHA". The FMHA is a not-for-profit corporation organized to do business in the State of Florida. The FMHA is located at 115 North Calhoun Street, Tallahassee, Florida 32301. The agency affected by this proceeding is the Respondent, Florida Department of Revenue, whose address is Post Office Box 3000, Tallahassee, Florida 32315-3000. The proposed rules at issue in this proceeding are proposed Rule 12D- 6.001(3) and proposed rule 12D-6.002(1)(d)1. and 2., F.A.C., as published in Volume 18, Number 4 of the Florida Administrative Weekly, January 24, 1992. The challenged provisions of these rules provide as follows: 12D-6.001(3) - "Permanently affixed." A mobile home shall be considered "permanently affixed" if it is tied down and connected to the normal and usual utilities, and if the owner of the mobile home is also the owner of the land to which it is affixed. 12D-6.002(1) This rule subsection shall apply if the owner of the mobile home is also the owner of the land on which the mobile home is permanently affixed and the mobile home has a current sticker affixed, regardless of the series. (d) This rule subsection shall apply to mobile home parks operating a sales office in which a mobile home is being offered for sale where the dealer/developer/owner owns the mobile home and the land to which it is permanently affixed as follows: The dealer/developer/owner must pay real property taxes even if the mobile home has been issued a dealer license plate. A mobile home discussed in this subsection shall not be considered tangible personal property or mobile home inventory. The proposed rules were promulgated by the Department of Revenue to give effect to the statutory change to Section 193.075, F.S., as set forth in Committee Substitute to Senate Bill 1578 which provides as follows: 193.075 Mobile Homes -- A mobile home shall be taxed as real property if the owner of the mobile home is also the owner of the land on which the mobile home is permanently affixed. A mobile home shall be considered permanently affixed if it is tied down and connected to the normal and usual utilities. A mobile home that is taxed as real property shall be issued an "RP" series sticker as provided in Section 320.0815. A mobile home that is not taxed as real property shall have a current license plate properly affixed as provided in Section 320.08(11). Any such mobile home without a current license plate properly affixed shall be presumed to be tangible personal property. The Florida Manufactured Housing Association, Inc., is a trade association representing the interests of approximately 1300 mobile home parks, dealerships, manufacturers and related mobile home service firms who conduct business in the State of Florida. One of the primary purposes of the FMHA is to act on behalf of its members before the various governmental entities of the state, including the Respondent, Florida Department of Revenue. The subject matter of the proposed rules at issue in this proceeding is within the general scope of interest and activity of the FMHA. The relief requested in this action is of the type appropriate for FMHA to obtain on behalf of its members. The proposed rules and economic impact statement were promulgated by the Department of Revenue in accordance with the requirements of Section 120.54, F.S. The FMHA member manufacturers, dealers and park owners who are substantially affected by the proposed rules at issue herein are engaged in the business of selling mobile homes and offer mobile homes for sale to the public. A number of these homes are tied down in accordance with all applicable local, state and federal requirements and connected to the normal and usual utilities so that they can be displayed as fully functioning "model" homes prior to the time they are sold. The FMHA member manufacturers, dealers and park owners who display fully functional mobile homes for sale to the public maintain they have no intention of permanently affixing the homes to their real property. The homes are maintained in this manner for the purposes of safety and display only, with the full intention that they be removed from the realty subsequent to the sale. A substantial number of the members of the FMHA will be substantially affected by the proposed rules, because their business activities are subject to the rule provisions challenged herein and because it is FMHA's position that the proposed rules will directly impact the continued ability of FMHA member manufacturers, dealers and park owners to display fully functioning model homes held for sale to the public on their real property without being subject to ad valorem tax liability. FMHA members who own and operate mobile home parks, mobile home dealerships and mobile home manufacturing enterprises are subject to the rulemaking authority of the Respondent, Department of Revenue. A substantial number of FMHA members are engaged in the process of manufacturing mobile homes. Mobile home manufacturers commonly display one or more completed mobile home units which are tied down and connected to the normal and usual utilities at model home centers located on their manufacturing premises. The homes are held for sale to mobile home dealers or to the general public. The homes are tied down and connected to utilities for purposes of safety and display. The attachment of the homes to the property is not intended by the manufacturer to be permanent. When the homes are sold, they are disconnected from the utilities, removed from the tie-downs, and transported off the manufacturer's property. The removal process does not cause damage to the home or the real property. A substantial number of FMHA members operate retail sales lots, where new and used mobile homes are held for sale and displayed for sale to the public. These homes are owned by the retail dealers. Mobile home dealers typically display one or more mobile homes which are tied down and connected to the normal and usual utilities located on the dealer's sales lots. The homes are held for sale to mobile home park owners or the general public. The homes are tied down and connected to utilities for purposes of safety and display. The attachment of the homes to the property is not intended by the dealer to be permanent. When the homes are sold, they are disconnected from the utilities, removed from the tie-downs, and transported off the dealer's property. The removal process does not cause damage to the home or the real property. A substantial number of FMHA members own and operate rental mobile home parks. In rental mobile home parks, a tenant places his own mobile home upon land owned by the park owner commonly referred to as a park "developer", and leases the land. A substantial number of FMHA members who own mobile home parks also hold dealer licenses, and operate a mobile home sales business within the park. Mobile home park owners or developers typically display one or more model homes which are tied down and connected to the normal and usual utilities. The homes are held for sale to the public. When the units are sold to a purchaser, they are disconnected from the utilities, removed from the tie-downs, and transported from the model home area to a designated lot within the mobile home park. This process does not result in damage to the mobile home or the real property. At the time of sale, the purchaser of the mobile home enters into a land lease with the mobile home park owner. At his option, the purchaser may choose to terminate the lease and remove the mobile home from the mobile home park. In some instances, FMHA members, who own mobile home parks and operate a sales business within the park, lease both land and mobile homes to tenants as part of a lease option agreement, where the park owner retains ownership of the home and land until the home purchase option is exercised. If the tenant fails to exercise the option or defaults under the agreement, the park owner may sell the home to another purchaser. That purchaser may either remove the mobile home from the lot, or enter into a new land lease with the park owner. Under proposed Rules 12D-6.002(1)(d)1. and 2., mobile homes owned by FMHA member manufacturers, dealers and park owners determined to be permanently affixed to real property, as defined by Section 193.075, F.S., and owned by the manufacturers, dealers and park owners will be declared real property, and taxed accordingly. Under the proposed rules the assessment date is January 1 of any given year, and a mobile home permanently affixed to real property owned by FMHA member manufacturers, dealers, or mobile home park owners on January 1 will be taxed as real property. The FMHA member manufacturers, dealers and park owners determined to own mobile homes permanently affixed to their realty will have their real property tax increased by the assessed valuation of the mobile homes, without regard to their intended use or disposition of the homes.
Findings Of Fact 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. 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. 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. 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. 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. 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. 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. 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." 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. 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.
Findings Of Fact Michael Weiss is part owner of Suncoast International, Inc. and general manager of the corporation's only business, a trailer park in Flagler County known as Flagler by the Sea Mobile Home Park. At all pertinent times, the park has leased or offered for lease a total of 44 mobile home lots. In mid-1985, Mr. Weiss received a letter from petitioner Department of Business Regulation (DBR) informing him that park owners were required by law to prepare and distribute prospectuses to mobile home tenants. Efforts to draft a prospectus meeting petitioner's approval began in August of 1985. After several revisions, the petitioner approved a prospectus on June 13, 1986, No. 1802171P, for all lots. Mr. Weiss received written notice of approval, together with a copy of the prospectus to which it pertained, with attachments, on June 26, 1986; and promptly arranged for a copier to produce 50 uncollated copies of everything received from the petitioner, see Petitioner's Exhibit No. 1, including the cover letter. With the assistance of Mr. and Mrs. Whaley, who worked for the company at the park, he tried to assemble at least 44 complete sets of these materials. In late May of 1986, Mr. Weiss had given all tenants notice by registered mail of his intention to raise rents, effective September 1, 1986. Realizing he needed to distribute prospectuses before any rent increase, he had simultaneously informed tenants that a then current (but unapproved) version of the prospectus was available for inspection. Respondent's Exhibit No. 5. Hand Delivery As instructed, Ms. Whaley encouraged tenants to pick copies of the prospectus up when they paid their rent. She kept a list of persons to whom she distributed copies of the prospectus. Part of the list survived and has been received in evidence. Respondent's Exhibit No. 2. One tenant, Mary Oetken, received a copy of the approved prospectus on July 29, 1986. But the prospectus given to Ms. Oetken did not contain rules and regulations, a copy of the lot rental agreement, a lot layout plan, or the number of her lot. Ms. Oetken already had a copy of her lot rental agreement, and park personnel customarily distributed copies of rules and regulations to each tenant, before tenancies began. On August 29, 1986, another tenant, Betty Marinoff, wife of Peter, received a copy of an approved prospectus. Before September 1, 1986, Ms. Whaley hailed Mr. Philip H. Bird, and handed him a copy. Whether these copies of the approved pro-spectus included all attachments the evidence did not disclose. Robert Onusko, who has leased a lot in Flagler by the Sea Mobile Home Park continuously since August of 1981, has had a copy of the park's rules and regulations since he moved in. As did all other tenants, he paid increased rent beginning September 1, 1986. Although Mr. Onusko himself received no copy of an approved prospectus until January of 1989, Petitioner's Exhibit No. 7, Angela Whaley gave his daughter Marilyn a copy of the prospectus when Marilyn paid rent in July or August. Taped to Doors Not all tenants were then in residence at the park. About half lived there full time. (T.127) With respect to lots whose lessees were away, Mr. Weiss directed Mr. and Mrs. Whaley to tape copies of the prospectus on trailer doors. "That was common procedure with late payments or whatever . . . " T.112. In mid-August of 1986, Ms. Whaley told him that prospectuses had been distributed for each lot, either by delivery to a tenant or by posting. Clarence Rainey leased a lot from 1977 to 1989 at Flagler by the Sea Mobile Home Park, where he lived part of the year, returning to Illinois in the summer. Told by a neighbor that they were available, he asked for and received a prospectus in November of 1986. He had not received one earlier. With her husband Roger, Madeline DuJardin resided at Flagler by the Sea from February of 1979 until February of 1988. She did not get a copy of the approved prospectus before the rent increased on September 1, 1986, from $125.00 to $150.00 per month. Neither Mr. and Mrs. Rainey nor Mr. and Mrs. DuJardin received copies when they were originally distributed. Their trailers were among those to which copies were taped, weeks or months before their return in cooler weather. Charles A. Bond, who shared a trailer with a half-brother, resided at Flagler by the Sea from November 21, 1985, until December 31, 1988. While he lived at the park he never received a prospectus. Brothers surnamed Karcher each leased lots from respondent. Ms. Whaley gave one Mr. Karcher a copy of the approved prospectus, before September 1, 1986. But Richard Karcher, who in those days only spent a week at a time in the park, at intervals of several months, did not receive a copy of the approved prospectus before the rent increased. Richard Karcher had obtained a preliminary draft of the prospectus, but it differed in important respects from the draft which was eventually approved. In June of 1988, he obtained another copy of the prospectus, the copy, he testified, which he gave DBR's investigator, which also differs in important respects from the approved version. Attached to the copy Mr. Karcher gave DBR's investigator was a set of the park rules and regulations. It is not clear whether Ms. Whaley told Mr. Weiss that she had taped an approved copy to Mr. Richard Karcher's door. (T. 126, 128) Change of Law Effective July 1, 1986, statutory changes altered prospectus requirements. Petitioner mailed advice concerning the new requirements when it sent out annual fee statements to mobile park owners. Mr. Weiss did not personally receive this advice nor any written notice of the nine workshops petitioner conducted in August of 1986 to acquaint park owners with the statutory changes. Although approved a few days earlier, respondent's prospectus did not conform to all the new requirements. In early 1988, Mr. Weiss heard from Gloria Thompson, a DBR employee in its Tampa office, in connection with a complaint filed by Charles Jagde, the same person whose complaint led to the investigation that gave rise to the present proceedings. Ms. Thompson found no violation on the original complaint. Respondent's Exhibit No. 6. Eventually Mr. Weiss learned that revisions to prospectus No. 1802171 were necessary. On November 18, 1988, he filed another proposed prospectus with petitioner. After its approval on January 30, 1989, park personnel distributed the revised, approved prospectus, No. 1802171P86, to the tenants.
Recommendation It is, accordingly, RECOMMENDED: That DBR enter an order requiring respondent to send complete copies of currently approved prospectuses by registered mail to all tenants who have not received such copies personally and signed receipts so stating. DONE and ENTERED this 30th day of July, 1990, in Tallahassee, Florida. ROBERT T. BENTON, II Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, FL 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 30th day of July, 1990. APPENDIX Petitioner's proposed findings of fact Nos. 1 through 6, 9, 11 through 14 and 16 through 19 have been adopted, in substance, insofar as material. With respect to petitioner's proposed finding of fact No. 7, the evidence did not establish the contents of the copy of the prospectus the Miranoffs received. With respect to petitioner's proposed finding of fact No. 8, Mr. Onusko's adult daughter Marilyn received a copy of the prospectus before the rent increased. Petitioner's proposed finding of fact No. 10 pertains to subordinate matters only. With respect to petitioner's proposed finding of fact No. 15, Mr. Karcher so testified, without contradiction. Respondent's proposed findings of fact Nos. 1 through 5, 7 through 10, 12 through 19, 21, 22, 24, and 27 through 30 have been adopted, in substance, insofar as material. With respect to respondent's proposed finding of fact No. 6, the prospectus had not been approved at that time. With respect to respondent's proposed finding of fact No. 11, she did not personally deliver prospectuses to all tenants. With respect to respondent's proposed finding of fact No. 20, the differences were material. Respondent's proposed findings of fact Nos. 23, 25 and 26 are immaterial. COPIES FURNISHED: Donna H. Stinson, Esquire Moyle, Flanigan, Katz, Fitzgerald & Sheehan, P.A. The Perkins House, Suite 100 118 North Gadsden Street Tallahassee, FL 32301 Debra Roberts, Esquire Department of Environmental Regulation 725 South Bronough Street Tallahassee, FL 32399-1007 Joseph A. Sole General Counsel Department of Business Regulation 725 South Bronough Street Tallahassee, FL 32399-1000 Paul Martz, Esquire Martz & Zimmerman 3 Palm Row St. Augustine, FL 32084 Stephen R. MacNamara Secretary Department of Business Regulation 725 South Bronough Street Tallahassee, FL 32399-1000 =================================================================
The Issue This case concerns a Notice to Show Cause served by Petitioner on Respondents, by which Petitioner orders Respondents to cease and desist their activities, to pay statutory fees, and to be assessed penalties. The activities in question are associated with the alleged need for Respondents to pay annual fees for mobile home lots rented within an alleged mobile home park operated by Respondents from the years 1984 through 1991. See, Section 723.007, Florida Statutes. Based upon the alleged nonpayment of the annual fees, Petitioner seeks to impose a civil penalty in accordance with Section 723.006(5)(d)1., Florida Statutes.
Findings Of Fact In 1978, Park T. Brittle purchased property in Leon County, Florida, which had been foreclosed on by Barnett Bank. This property had been originally developed by Miles Salgret. Prior to the purchase by Park T. Brittle, some lots had been sold by Mr. Salgret, approximately four in number. The property in question is known as Briarwood Estates. The Briarwood Estates is for use by mobile home owners who either own or rent lots on this property. Subsequent to his purchase, Park T. Brittle had the property surveyed by Tom Howard, a surveyor. Through this survey, a plat was prepared. The plat was submitted to the Leon County Property Appraiser. Subsequent to that time, beginning in 1980, the lots within Briarwood Estates have been individually assessed by the Property Appraiser for tax purposes. That is to say that the tax assessment is made on the individual lot owners. Park T. Brittle has sold 29 or 30 lots during his ownership. The property that is described in the plat is property in which the individual lot owners own to the center line of the roads which adjoin the lots. Respondents provide water and street lights as amenities within Briarwood Estates. Respondents are billed for these utilities and, in turn, charge individual lot owners for the amenities. In addition to the mobile home lots which have been sold, beginning with 1984 when the Florida Mobile Home Act was passed, the relevant time frame in this inquiry, Respondents have rented 10 or more mobile home lots on the property known as Briarwood Estates. These lots were rented to residential mobile home owners. More specifically, Respondents have continually collected monthly rents for mobile home lots on the property from 16 residential mobile home owners. All 16 of these mobile homes, during the period of 1984 through 1991, were mobile homes which were at least 8 feet by 35 feet in dimension. None of these 16 mobile homes are owned by Respondents. The 16 lots are not for purposes of rental spaces for RVs. In view of an attempt to institute a rental increase for the mobile home lots which Respondents rented at Briarwood Estates, a complaint was made to Petitioner concerning Respondents' intention to increase the rental fees. Respondents deferred to the requirements set forth by Petitioner concerning rent increases for those lots rented to the residential mobile home owners. Respondents complied notwithstanding Respondents' claimed uncertainty concerning the necessity to follow the guidelines and requirements established by Petitioner for adopting rent increases for lots rented to residential mobile home owners at Briarwood Estates. The uncertainty asserted by Respondents concerned the question of whether the 16 lots for which Respondents receive rents are part of a mobile home park, as defined in Section 723.003(6), Florida Statutes. Respondent, Park T. Brittle, testified at page 17 in the hearing transcript: "I attempted to follow those guidelines, not because I felt obligated, but if indeed later on it was determined that I was operating a mobile home park, I wanted to be sure that I was clear on that part of it." This refers to the increases in lot rental fees. Respondents do not concede that they are operating a mobile home park as it pertains to the payment of annual fees for each of the 16 lots in the amount of $1.00 in 1984 and $3.00 from 1985 through 1991, together with a 10% late fee charge for each year and each lot if the fees were not paid prior to December 31st of the year in question. Consequently, the fees for the 16 lots in the years 1984 through 1991 have not been paid. The amount due for the annual lot fees and penalties is $387.20. In addition to the amount assessed for annual fees for the lots and penalties for late payment, historically, Petitioner has assessed a $500.00 fine per year for noncompliance with the requirement to pay annual lot fees. Respondents do not believe that they are operating a mobile home park, rather it is their assertion that they are operating a mobile home subdivision. Respondents have cooperated with the Petitioner in the investigation concerning the payment of annual fees for lot rentals which was occasioned by inquiries by Park Brittle as well as a complaint by a tenant in one of the sixteen lots in question over increases in the monthly mobile home lot rental fees.
Recommendation Upon consideration of the Findings of Fact and Conclusions of Law, it is RECOMMENDED that final order be entered which requires Respondents to pay $387.20 in annual fees and penalties for the period 1984-1991, and assesses a civil penalty in the amount of $500. DONE and ENTERED this 7th day of October, 1992, in Tallahassee, Florida. CHARLES C. ADAMS 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 7th day of October, 1992. APPENDIX TO RECOMMENDED ORDER, CASE NO. 92-2961 The following discussion is given concerning the proposed facts of the parties: Petitioner's Facts: Paragraphs 1 through 11 are subordinate to facts found. Paragraph 12 is not necessary to the resolution of the dispute. Paragraph 13 is subordinate to facts found. Respondents' Facts: Paragraphs 1 through 7 are subordinate to facts found. COPIES FURNISHED: E. Harper Field, Esquire Department of Business Regulation 725 South Bronough Street Tallahassee, FL 32399-1007 George Carswell, Esquire Post Office Box 508 Monticello, Florida 32344 Henry M. Solares, Director Department of Business Regulation, Florida Land Sales Condominiums and Mobile Homes 725 South Bronough Street Tallahassee, FL 32399-1007 Donald D. Conn, General Counsel Department of Business Regulation 725 South Bronough Street Tallahassee, FL 32399-1007
The Issue The issues for consideration in this case concern the petition and challenge to the validity of Rule 7D-32.001(4); Rule 7D-32.003 and Rules 7D- 32.004(1) and (2), Florida Administrative Code. The basis for the challenge is premised upon an alleged vagueness, inadequacy in the establishment of standards for agency decisions, the vesting of unbridled discretion in the agency and the contention that the rules are arbitrary and capricious.
Findings Of Fact Petitioner is the owner of Lake Waldena Resort, a mobile home park located in Marion County, Florida. That park is regulated under the provisions of Chapter 723, Florida Statutes. Petitioner is a mobile home park owner within the definition set out in Section 723.003(7), Florida Statutes. In addition, Petitioner is presently charged, through a notice to show cause/administrative complaint, with violating Section 723.037(3), Florida Statutes and Rule 7D- 32.004(1), Florida Administrative Code, by his alleged refusal to meet with a designated homeowners' committee within 30 days of the giving of notice of a proposed increase of lot rental. That disciplinary case was heard on the same date as the present case and is awaiting disposition through a recommended order. If Petitioner is found to have violated provisions within Chapter 723, Florida Statutes and Chapter 7D-32, Florida Administrative Code, he may be subjected to a civil penalty or have other administrative sanctions imposed. The rules that are under challenge are related to the formation of the homeowners committee; the activities of that committee in ascertaining the basis for the park owners' reason for a lot rental increase; the obligation of the park owner to meet with the committee and the opportunity of the park owner to request certification of the committee's selection to participate in the meeting envisioned by Section 737.0037(3), Florida statues. Respondent by the authority set forth in Section 732.006(6), Florida Statutes, is authorized to promulgate rules which it deems to be necessary to implement, enforce, and interpret the provisions of Chapter 723, Florida Statutes. In accordance with that authority and the authority set forth in Section 723.037, Florida Statutes, it enacted the rules which are the subject of this dispute. Intervenor is a Florida non-profit corporation which represents over 150,000 mobile home owners and tenants in Florida and has as its purpose the representation of those mobile home owners in various activities, to include legal issues. The Petitioner and Respondent and the mobile home owners whom the Intervenor represents are substantially affected by the decision concerning the validity of the aforementioned rules.
Findings Of Fact After a realtor told Robert Edward Poland that the Flagship Bank was foreclosing on Villa Rosa Mobile Home Park in Jacksonville Beach, Mr. Poland and his wife offered to purchase the property. The incompetency of the owner, Mrs. Ritchie, then in her eighties, together with ensuing legal proceedings, complicated negotiations. But on August 21, 1986, Robert Edward Poland and Jacqueline Poland became joint owners of Villa Rosa Mobile Home Park. A portion of the park they acquired in fee simple, but another portion (now known as Beach Boulevard Trailer Park) they acquired only as a life estate pur autre vie. On the death of Mrs. Ritchie in mid-October 1987, the life estate was extinguished, and that portion has become the property of Mrs. Ritchie's daughter, Elizabeth Drey, and possibly the daughter's husband, Richard Drey. Only beginning with rent for February of 1989, however, have the Dreys begun receiving income from the trailer park. Rent Raised On August 21, 1986, the day they acquired ownership, the Polands gave tenants written notice of their intention "to adjust rent effective December 1, 1986" to $130 a month for a single mobile home lot and to $155 monthly for a double wide mobile home on a single lot. This proposed rental increase did not pertain to lots 3, 6, 13, 15, 47, 48, 49, 50, 51, 52, 53, 54, 55, or 007, which were rented only to over-nighters. Perhaps misunderstanding the notice, Tom Williams on Lot C began paying a higher amount on October 1, 1986, before the increase took effect. The following month, Debra Black Wood, J. E. Turner and James Mahoney also paid the increased rent prematurely. In their cases, and in the case of Mr. Williams, the Polands accepted the money but credited the surplus to the tenant. Not counting the lot which the boundary between the Drey property and the Polands' property divides, Mr. and Mrs. Poland offered for rent or lease 26 or more mobile home lots as residences, both before and after Mrs. Ritchie's death. The following tenants' monthly rent increased by the amounts indicated on December 1, 1986: Name of Tenant Lot No. Amount of Increase Ila Story 1 $30.00 Rosa Robinson 2 30.00 Rick Tahey 4/5 55.00 Virginia Dawson 7 5.00 Isabe Sutcliffe 8 30.00 Deborah Blackwood 9 5.00 B. E. Turner 12 30.00 Ingrid C. Fegan 14 30.00 Helen Marin 17 40.00 Alden Waterman 18 30.00 Ethel Dunsmoor 19 30.00 Martina O'Hare 20 30.00 Zora Hyde 21 30.00 William Vollkmer 22 30.00 Richard Rasmussen 23 5.00 Marjorie Barnes 24 30.00 James Mahoney 26 30.00 Roger Zucco 27 5.00 George Bunting 29 55.00 Robert Grabel 30 55.00 David Escopie 31 30.00 Catherine Stevens 32 30.00 Richard Law 33 30.00 Maxwell Page 35 30.00 Helen Hines 36 5.00 Norman Peterson 37 5.00 Hernandez/Johns 38/39 25.00 Lester Rogers 40 30.00 Rita Boyer 41 30.00 Thelma Thornton 42 30.00 Maxwell Page 43 30.00 Kenneth Driscoll 44 55.00 Edna Praine 45 55.00 Cassus Powell 100 30.00 David Koehler 101 5.00 Jerry Welker 102 62.50 John Embleton 103 5.00 Corrine Beach 104 55.00 Clyde Wiley 105 30.00 Candie Blasman 106 30.00 Harry Wilson 107 30.00 Stanley Dolka A 30.00 Goffery Riser D 5.00 William Page E 30.00 Pat Pattillo F 40.00 Roy Pike G 30.00 Frieda Suomella H 5.00 Charlotte Reid I 30.00 Bernard Hakes J 30.00 Herbert Davis K 30.00 Lee Haley L 30.00 Heide Alexander M 30.00 Joseph Moore N 5.00 Mary Lo Wampler O 40.00 Ernest Grizzard P 30.00 Bertha Martin Q 40.00 Cathy Lumbar R 65.00 Ruth Pooley S 5.00 Norma Baker U 5.00 H. W. DeMoss V 30.00 Arthur Pitman W 40.00 Jesse Wagnor X 5.00 James Hicks Y 5.00 Robert Wilder 00 20.00 At hearing, Mr. Poland testified to a total of 85 lots of which "seventy-three are singlewide [including some devoted to overnighters], and the balance would be overnighters or doublewides." T.88. According to DBR records, respondents reported 87 lots when applying for approval for their prospectus. Petitioner's Exhibit No. 3, pp. 000017, 000021. Past Practice Historically, the park had been run on the basis of oral agreements, creating month-to-month tenancies. Such records as existed when the Polands acquired ownership of the mobile home park reflected 13 different amounts charged different tenants for equivalent mobile home lots. Apparently Mrs. Ritchie had played favorites. A longtime resident testified that the rental rate structure was "kind of on the buddy/buddy system." T. 68. From time to time, and on no more than a month's notice, Mrs. Ritchie had raised rents. Robert L. Davis, who moved to the trailer park in October of 1976, originally paid $50.00 a month. On September 1, 1983, monthly rent increased from $50.00 to $75.00; and on December 1, 1983, from $75.00 to $100.00. One longtime resident, Katherine Stevens, "imagined" (T.127) that Mrs. Ritchie had asked for rent increases to defray utility rate hikes, but written notices of increases offered no explanation. T.48-49. Like Mr. Davis and Ms. Stevens, Robert Wilder, who seeks no money in this proceeding (T.75), was a tenant at the mobile home park before June 4, 1984. Until May of 1986, nobody ever received a prospectus. On June 10, 1983, however, rules and regulations were drawn up which provided in paragraph 20: Management specifically reserves the right to increase rental rates, fees, charges or assessments imposed on resident either by amendment or by addition to these rules, provided thirty (30) day written notice is given. Rosa Ritchie herself gave Ms. Stevens and other tenants a copy of the rules and regulations which first set out in writing her practice of giving thirty days' notice before raising rents. Regulatory Approval Only after the Polands had acquired the property, and announced their intention to raise rents, did Mr. Poland learn of the requirement that a prospectus be furnished tenants. On September 9, 1986, he wrote Mr. John D. Floyd of DBR as follows: With regards to the prospectus of Villa Rosa, please find enclosed a copy of the Rules and Regulations which are provided each tenant prior to renewing or extending `an existing rental agreement and prior to entering into a new rental agreement. This document was previously submitted to your Division and I assume that it remains acceptable. Petitioner's Exhibit No. 3. In response, Senior Clerk Pamela T. Parker of the Department of Business Regulation, Division of Florida Land Sales, Condominiums and Mobile Homes, wrote Mr. Poland on September 19, 1986, listing various "deficiencies for form." With regard to the prospectus, she wrote, among other things: The prospectus fee was not in accordance with Section 723.011(1)(d), Florida Statutes. Please submit a check for the appropriate amount. Petitioner's Exhibit No. 3. Having received this reply, Mr. Poland wrote Ms. Parker on September 25, 1986, as follows: Enclosed please find the Mobile Home Prospectus, Filing Statement and Filing Fee. Currently, there are no rental agreements in writing for the mobile home park. All agreements are oral, to the best of my knowledge. Petitioner's Exhibit No. 3, p. 000018. Petitioner received Mr. Poland's letter of September 25, 1986, the following day. The letter is marked "RECEIVED FISCAL SEP 26 1986." DBR's Division of Florida Land Sales, Condominiums and Mobile Homes did not "process" the $150 check which accompanied the letter, until October 15, 1986, however, when somebody marked the letter "RECEIVED FISCAL OCT 15 1986" and crossed through the earlier received stamp. Another eight days passed before a form letter from the Division went out to Mr. Poland advising him of the Division's intention to examine the contents of his filing, to ensure its adequacy, and promising him he would "be notified as to the results of this examination within" forty five days of October 15, 1986. On November 20, 1986, more than 45 days after the prospectus had been received, the Division sent another letter to Mr. Poland, signed by Bridget St. Clair, apprising Mr. Poland of a number of deficiencies in the prospectus. On December 2, 1986, Mr. Poland made a second submission. In a cover letter addressed to Ms. St. Clair, he wrote: During our recent telephone conversation, you indicated that a prospectus is not necessary unless a rate increase Is anticipated. Since I have no intention of raising rates for the next year, I do question why this prospectus is necessary. Your thoughts on this point would be greatly appreciated. Petitioner's Exhibit No. 3, p. 000013. In May of 1987, after several further emendations, Mr. Poland was told over the telephone that the prospectus submitted in December passed muster, as revised. Having received oral approval, he asked an employee, Jack N. Justice, to deliver prospectuses. Mr. Justice delivered by hand to every resident who was home a copy of the prospectus and, whenever somebody was not at home, put a copy in the mail box. (Before these deliveries, the planned increase in rent had taken effect, as of December 1 of the previous year.) Petitioner gave written notice of approving the prospectus by letter dated May 27, 1987. The approved prospectus apprised tenants of the landlord's intention to pass on "ad valorem property taxes or utilities charges ... during the term of the lot rental agreement ... [p]rorated equally among all lots," Petitioner's Exhibit No. 1, p. 46, and warned tenants that an increase in water, sewer or garbage collection charges or property taxes "may result in an increase in the home owner's lot rental amount." Id. Rent Raised Again On June 25, 1987, Mr. Poland sent out a second notice proposing another increase of rent, to take effect on October 1, 1987, "due to the increase in real estate taxes and for capital improvements, including the water pressure problems complained of." Petitioner's Exhibit No. 4. The increase amounted to $15.00 per month for each single mobile home on a single lot, and to $20.00 for double wide mobile homes (or other mobile homes on double lots.) Id. On April 7, 1987, the City of Jacksonville Beach increased water and sewer rates. Mr. Poland's claim that the increase resulted in an average additional charge of approximately $14.12 per month per lot went unrebutted. A garbage collection container had to be added at $100 ($1.15 per lot) a month; $330 was expended to install a new water meter. Ad valorem taxes increased between 1985 and 1986, but were not shown to have risen at any time after December 1, 1986. The following tenants paid increased rent in the following monthly increments, effective October 1, 1987: Name of Tenant Lot No. Amount of Increase *Ila Story 1 $15.00 Mark Robson 2 15.00 *Rick Tahey 4/5 25.00 Seahorn/Gulledge 7 15.00 *Isabe Sutcliffe 8 15.00 William R. Hernandez 9 15.00 Bertie Willis 10/11 25.00 *B. E. Turner 12 15.00 *Ingrid C. Fegan 14 15.00 Ray Brozoski 16 5.00 *Helen Marin 17 15.00 *Alden Waterman 18 15.00 *Ethel Dunsmoor 19 15.00 *Martina O'Hare 20 15.00 *Zora Hyde 21 15.00 *William Vollkmer 22 15.00 William E. Wolfe 23 15.00 H. D. Seahorn 25 15.00 *James Mahoney 26 15.00 *Roger Zucco 27 15.00 Roland Page 28 15.00 *George Bunting 29 15.00 *Robert Grabel 30 15.00 Joseph Mickey 31 5.00 *Catherine Stevens 32 15.00 *Richard Law 33 15.00 Edna Barrett 34 15.00 *Maxwell Page 35 15.00 *Helen Hines 36 15.00 Christ. Hooley 37 15.00 *Hernandez/Johns 38/39 20.00 Arminta Rogers 40 15.00 *Rita Boyer 41 15.00 *Thelma Thornton 42 15.00 *Maxwell Page 43 15.00 *Kenneth Driscoll 44 15.00 *Edna Praine 45 15.00 James Wilson 46 15.00 Nancy C. Lane 100 15.00 *David Koehler 101 15.00 *Jerry Welker 102 15.00 *John Embleton 103 15.00 *Corrine Beach 104 20.00 *Clyde Wiley 105 15.00 *Candie Blasman 106 15.00 *Harry Wilson 107 20.00 *Stanley Dolka A 15.00 Tom Williams C 15.00 *Goffery Riser D 15.00 *William Page E 15.00 *Pat Pattillo F 15.00 *Roy Pike G 15.00 *Frieda Suomella H 15.00 *Charlotte Reid I 15.00 Michelle Holt J 15.00 *Herbert Davis K 15.00 *Lee Haley L 15.00 *Heide Alexander M 15.00 Joseph Morris N 15.00 *Mary Lo Wampler O 15.00 *Ernest Grizzard P 15.00 Juanita Holliman Q 15.00 *Kathalee Lombar R 15.00 *Ruth Pooley S 15.00 *Norma Baker U 15.00 *H. W. DeMoss V 15.00 *Arthur Pitman W 15.00 *Jesse Wagnor X 15.00 *James Hicks Y 15.00 W. Crowe Z 15.00 *Robert Wilder 00 20.00 Asterisks indicate those who were tenants on December 1, 1986. No lot rental agreements were in writing.
Recommendation It is, accordingly, RECOMMENDED: That petitioner reprimand respondents for raising rents before distributing prospectuses to their tenants. That petitioner require respondents to return the amounts by which rents collected for December of 1986 and January, February, March and April of 1987 exceeded rents charged the same tenants for November of 1986. DONE AND ENTERED this 1st day of December, 1989, in Tallahassee, Leon County, Florida. ROBERT T. BENTON, II 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 1st day of December, 1989. APPENDIX TO RECOMMENDED ORDER, CASE NO. 88-5983 Petitioner's proposed findings of fact Nos. 1 through 4 recite procedural matters only. Petitioner's proposed findings of fact Nos. 5 through 11, 13, 15 through 19, and 21 through 25 have been adopted, in substance, insofar as immaterial. With respect to petitioner's proposed finding of fact No. 12, ad valorem taxes may also have contributed to the 1986 increase. Petitioner's proposed finding of fact No. 14 is rejected. With respect to petitioner's proposed finding of fact No. 20, Mrs. Ritchie distributed something she called rules and regulations. With respect to petitioner's proposed finding of fact No. 26, the charges themselves were included but not increases. Respondents' proposed findings of fact Nos. 1 through 4, 6, 7, 10 through 12, 14 through 17, 21, 22, 23, 25, and 26 have been estopped, in substance insofar as material. Respondents' proposed finding of fact No. 5 in immaterial. With respect to respondents' proposed findings of fact Nos. 8 and 9, the change in garbage collection charges, except for addition of a dumpster, occurred before respondents acquired the property; and the tax increase was $5,000.00 not $10,000.00. With respect to respondents' proposed finding of fact No. 13, respondents' selective (DBR advised them not to raise rents before distributing prospectuses) reliance on DBR for legal advice, whenever it may have ended, does not give rise to an estoppel. With respect to respondents' proposed findings of fact Nos. 18 and 19, utility rate charges are only one variable; usage was not proven. With respect to respondents' proposed finding of fact No. 20, Leroy Kierstaedt and Haze Studivant were apparently overnighters. With respect to respondents' proposed finding of fact No. 24, Ms. Stevens said she "imagined" this was so. Respondents' proposed finding of fact No. 27 was not established by the evidence. COPIES FURNISHED: Reynold Meyer Assistant General Counsel Department of Business Regulation Division of Florida Land Sales, Condominiums and Mobile Homes 725 South Bronough Street Tallahassee, Florida 32399-1070 Jeffrey C. Regan, Esquire 1300 Gulf Life Drive Jacksonville, Florida 32207 =================================================================
The Issue Whether Respondents, Wayne Jones, manager (Mr. Jones), and Sun Key Village (Sun Key), are entitled to an award of attorney's fees and costs pursuant to sections 57.105(5) and 120.595, Florida Statutes (2010),1/ and ,if entitled to an award, then the determination of a reasonable amount.
Findings Of Fact The Beaulieus are residents of Sun Key, a mobile home park located at 8607 26th Avenue, East, Palmetto, Florida. Mr. Jones is the manager of Sun Key. Sun Key is a mobile home park as defined by section 723.003(6), Florida Statutes. On March 25, 2010, the Beaulieus filed a Petition for Relief with the Commission stating: I still feel this is discrimination-- Mr. Jones states I am violating park rules by having a dog over 20 lbs this dog is a Visitor not a resident pet. It is my sons' dog--visits on occasion. There are many dogs over 20lbs & living in Sun Key. This is selective enforcement!!! Ms. Beaulieu attached to her Petition for Relief a lengthy hand-written document, alleging that other residents were violating Sun Key park rules concerning the size and number of permissible dogs. On March 30, 2010, the Commission forwarded the Beaulieus' petition to DOAH. An Initial Order was issued, requiring the parties to respond concerning, in part, the amount of time required for the hearing and the date and location for the hearing. On April 6, 2010, Carol S. Grondzik, Esquire (Ms. Grondzik), of Lutz, Bobo, Telfair, Eastman, Gabel & Lee, filed a response for Respondents. On April 8, 2010, the Beaulieus, acting as their own attorneys, filed a response. Based on the responses, the Administrative Law Judge set the case for final hearing on August 3, 2010. On April 12, 2010, Respondents filed a Motion to Dismiss. In the Motion to Dismiss, Respondents argued that the Beaulieus "have not alleged they are members of a protected class under fair housing law." Further, the motion referenced Ms. Beaulieu's letter dated March 8, 2010, requesting an appeal of the Commission's no cause determination. Specifically, the Motion to Dismiss stated that the Beaulieus' complaint was for "selective enforcement" and not tied to retaliation based on the prior housing complaint filed by Ms. Beaulieu's sister. Thus, the Motion to Dismiss concluded that: [B]ecause Petitioners do not assert that they are members of a protected class under fair housing law, because they do not pursue a claim of retaliation against Respondents Wayne Jones and Sun Key, and because Bert Blanchard and the Sun Key Village Homeowners Association, Inc., are not providers of housing subject to fair housing laws, this Petition should be dismissed as a matter of law. On April 12, 2010, Ms. Grondzik served, by U.S. mail, a copy of the Motion for Attorney's Fees and Costs, pursuant to section 57.105, with a letter to the Beaulieus. Specifically, Ms. Grondzik's letter states: A Motion for Attorney's Fees and Costs is also enclosed for your review. I will hold this motion for at least 21 days before filing with the Division as required by Florida law. This allows you time to analyze the relevant facts and law, to seek advice as necessary, and to take action. On April 19, 2010, DOAH issued a Notice of Ex-parte Communication after it had received a copy of a letter that had been sent by Kenneth Wiggins (Mr. Wiggins), an attorney for the Beaulieus, to Ms. Grondzik. The terms of the letter sought to settle the dispute between the Beaulieus and Respondents. Mr. Wiggins, however, did not make an appearance for the Beaulieus before DOAH, and it was unclear who mailed the letter to DOAH. In any event, the Beaulieus continued to represent themselves in the proceedings before DOAH. On July 7, 2010, the Beaulieus filed a motion for continuance of the August 3, 2010, hearing date. The Administrative Law Judge denied the motion. On July 19, 2010, the Beaulieus filed a Notice of Voluntary Dismissal of their petition. On July 21, 2010, Respondents filed the Motion for Attorney's Fees and Costs and Notice of Filing Affidavit of Carol S. Grondzik. Ms. Grondzik's affidavit set out the hourly rate and the scope of work performed to date in the case. On July 29, 2010, Respondents filed a Memorandum of Law in Support of Respondent's [sic] Motion for Attorney's Fees and Costs. At the January 14, 2011, hearing, Ms. Beaulieu testified about instances where the mobile home park failed to enforce its rules and regulations concerning the pet size for residents. Further, she testified that she had brought the DOAH proceeding to address the unfair and selective enforcement of the mobile home park's rules. Sun Key Village Mobile Home Park, Park Rules and Regulations provides, in pertinent part, that: 9. Pets: A maximum of two small pets are permitted, which at maturity must not weigh greater than 20 pounds each. Pets must be confined to the interior of the home when the resident is not present and must be on a leash at all times when outside of tenant's home. They must be transported to areas outside of residence or common areas for exercise. The record shows that the Beaulieus were provided a copy of the rule when moving into Sun Key. Mr. Wayne Jones testified that there were instances when exceptions had been made for residents to have dogs larger than 20 pounds. For example, he identified that residents, who had large, elderly dogs when they moved into Sun Key, were allowed to keep their pets. Mr. Peterson, an attorney who has extensive experience in representing mobile home park owners, testified concerning the reasonableness of the attorney's fees and costs. Mr. Peterson testified that he considered the factors outlined in Florida's Patient's Compensation Fund v. Rowe, 472 So. 2d 1145 (Fla. 1985), and reviewed the legal file in this case. Based on his review, Mr. Peterson found that 57.2 hours were reasonable in defense of this case and that the blended hourly rate of $235.92 was reasonable. Therefore, Mr. Peterson testified the reasonable attorney's fees to be $13,494.40 and the amount of taxable costs to be $575.00. Mr. Peterson also testified that Respondents would be entitled to attorney's fees for having to litigate the issue of fee entitlement. Mr. Peterson testified that 14 hours would not be an unreasonable amount of time for preparing and attending a hearing concerning the entitlement to fees, for a total of $3,302.88 using the blended hourly rate of $235.92. Based on a review of the record and testimony offered at trial, 71.2 hours is a reasonable amount of time spent on the defense of the instant case and litigating the issue of entitlement to attorney's fees. A review of the record and testimony shows that $235.92 an hour is a reasonable prevailing blended hourly rate. The parties stipulated that the Beaulieus are not members of a protected class under the fair housing law.
The Issue The issue in this case is whether the Respondent's proposed rule 7D-31.002 is an invalid exercise of delegated legislative authority. The Petitioners and the Intervenor MLH Property Managers, Inc., contend that the rule is invalid. The Respondent and the Intervenor Federation Of Mobile Home Owners Of Florida contend the proposed rule is valid.
Findings Of Fact Facts stipulated to by the parties Petitioner, Florida Manufactured Housing Association, Inc. (FMHA), is a Florida nonprofit corporation whose address is 115 North Calhoun Street, Suite 5, Tallahassee, Florida 32301. The agency affected by this proceeding is the Respondent, Department of Business Regulation, Division of Florida Land Sales, Condominiums and Mobile Homes (DBR), whose address is The Johns Building, 725 South Bronough Street, Tallahassee, Florida 32399-1000. The DBR is charged with the implementation, enforcement and interpretation of Chapter 723, Florida Statutes, concerning mobile home park lot tenancies. The DBR also possesses statutory authority to impose civil penalties against a mobile home park owner for any violation of Chapter 723, Florida Statutes, a rule of the Department promulgated thereunder, or a properly promulgated park rule or regulation. This proceeding concerns the Respondent's proposed rule 7D-31.002, which was published in Vol. 16, No. 7 of the Florida Administrative Weekly (April 27, 1990). The FMHA is a Florida nonprofit corporation, which is organized and maintained for the benefit of the owners of approximately 1,000 mobile home parks containing a combined total of approximately 300,000 to 350,000 mobile home lots. The owners of the 1,000 mobile home parks comprise a substantial portion of the membership of the FMHA. One of the primary purposes of the FMHA is to act on behalf of its members before the various governmental entities of this state, including the Respondent, Florida Department of Business Regulation, Division of Florida Land Sales, Condominiums and Mobile Homes. FMHA member mobile home parks are subject to the provisions of Chapter 723, Florida Statutes, and the rules of the DBR contained in Rules 7D-30 through 7D-32, Florida Administrative Code. FMHA member mobile home parks are required to register with the DBR, to pay annual fees to the DBR, to file prospectuses and pay filing fees for the same to the DBR, to submit advertising to the DBR for approval, and are otherwise subject to the regulatory authority of the DBR with respect to the operation and management of their mobile home parks. Additionally, FMHA member mobile home parks are subject to the DBR's enforcement authority, which includes the power to fine or impose other civil penalties for failure to comply with the above-referenced rules and statutes. Each of the owners of the FMHA member mobile home is engaged in the business of leasing individual mobile home lots to mobile home owners. The mobile home owners lease mobile home lots for the purpose of installing on the lots a mobile home owned by the tenant. The Federation of Mobile Home Owners of Florida (FMO) is a Florida nonprofit corporation whose membership is comprised of over 100,000 mobile home owners residing in Florida. The normal activities of the FMO include, among other things, representing the interests of Florida's mobile home owners before Florida administrative agencies, including DBR and the Division of Administrative Hearings, in rulemaking proceedings and otherwise. Thousands of FMO members reside in mobile home parks which are governed by Chapter 723, Florida Statutes, and the rules adopted thereunder by DBR. Thousands of FMO members were tenants of those parks on June 4, 1984, and thousands more have become tenants by purchasing a home located in those parks from a former mobile home owner who was a tenant of those parks on June 4, 1984. MLH Property Managers, Inc. (MLH), a Delaware corporation, is the managing general partner of MLH Income Realty Partnership V, a New York limited partnership. MLH Income Realty Partnership V is the owner of eight mobile home parks in the State of Florida, each of which contain 26 or more mobile home lots which are offered for lease or rent for the placing thereon of mobile homes to be used as residences. NIH has entered into rental agreements with the majority of residents in each of the parks which have a one-year term, with the intent of NIH that the terms and conditions of tenancy be established on a yearly basis. The NIH parks contain lots which were leased to their present mobile home owner tenants (or their predecessor mobile home owners) prior to June 4, 1984. The full text of the proposed rule which is the subject of this proceeding is as follows: 7D-31.002 Tenancy. (a) A tenancy under chapter 723, Florida Statues, begins when the mobile home park owner and mobile home owner enter into an initial rental agreement as defined in section 723.003(4), Florida Statues, or when the mobile home owner assumes occupancy in the park, whichever occurs first. (b) Once a tenancy begins in accordance with paragraph (1)(a) of this rule, it is continuous and cannot be terminated by the mobile home park owner except pursuant to section 723.061, Florida Statutes. (a) The enactment of chapter 723, Florida Statutes, did not terminate the tenancy of a mobile home park owner which was in existence on June 4, 1984, the effective date of the chapter. Furthermore, chapter 723, Florida Statutes, does not allow or authorize the mobile home park owner to terminate a tenancy in existence on June 4, 1984, the effective date of the chapter, in any manner other than pursuant to section 723.061, Florida Statutes. (b) A tenancy in existence on June 4, 1984, the effective date of chapter 723, Florida Statutes, shall be deemed a tenancy under chapter 723 if, prior to June 4, 1984, the mobile home owner either entered into a rental agreement with the mobile home park owner, or the mobile home owner assumed occupancy in the mobile home park. The rest of the facts The Respondent has previously attempted to adopt a similar rule. In Volume 14, Number 7, of the Florida Administrative Weekly of February 19, 1988, the Respondent published a proposed rule 7D-31.002. The rule proposed in February of 1988 read as follows: 7D-31.002 Fee, Charges and Assessments. For tenancies in existence before June 4, 1984, including any assumptions of those tenancies pursuant to Section 723.059, Florida Statutes, the mobile home owner is not obligated to pay any fees, charges or assessments which were not disclosed fully in writing prior to occupancy, any provision to the contrary in a prospectus notwithstanding, unless the park owner can establish that the fees, charges or assessments have been collected as a matter of custom as defined in subsection (4) of this rule. Furthermore, the mobile home owner is not obligated to install any permanent improvements at all, including those mandated by governmental entities or utility companies. For tenancies created on or after June 4, 1984, pass through charges, as defined in Section 723.003(9), Florida Statutes, may be imposed by the mobile home park owner if the mobile home owner's obligation to pay such charges was disclosed in general terms pursuant to Sections 723.011 and 723.012, Florida Statutes, or pursuant to Section 723.013, Florida Statutes, even though the charge being imposed was not disclosed specifically, and the imposition of such pass through charges is not a violation of section 723.042, Florida Statutes. However, pass through charges may not be imposed if the mobile home owner's obligation to pay such charges was not disclosed generally and prior to occupancy as required by Sections 723.011(2) and 723.012, Florida Statutes, or Section 723.013, Florida Statutes, whichever is applicable. No fee, charge or assessment shall be imposed by a mobile home park owner on the purchaser of a mobile home situated in the park that is offered for sale by a resident of the park and as a condition to the purchaser being reviewed or approved for residency in the park. A fee, charge or assessment has been collected as a matter of custom if it was collected prior to July 1, 1967. In the case of Florida Manufactured Housing Association, Inc., v. Department of Business Regulation, Division of Florida Land Sales, Condominiums and Mobile Homes, et al., 10 F.A.L.R. 3919 (June 24, 1988), the former proposed rule quoted immediately above was determined to be invalid on several grounds. The proposed rule that is the subject of this case will substantially affect the substantial interests of the Petitioner and each of the Intervenors. A substantial number of the members of the FMHA and the FMO are substantially affected by the proposed rule and the relief sought is the type and nature which these associations may properly seek on behalf of their respective members. Mr. Bob Custer is a Vice President in De Anza Corporation. De Anza Corporation is the owner of Mobile Americana Mobile Home Park. De Anza Corporation is a member of the FMHA. De Anza Corporation purchased the park in July 1976. At that time there was a written lease offered to all home owners in the park. Subsequently, the park offered written leases to home owners in the park. After the adoption of Chapter 723 on June 4, 1984, the park owner filed a prospectus with the DBR, received approval from the DBR, and distributed the approved prospectus to the mobile home owners in the park in 1985. The prospectus contains provisions, including fees and charges, that are different from the earlier offered rental agreements used in the park. The prospectus is the controlling document used by De Anza Corporation in determining increases in lot rent and fees and charges that will be collected during the tenancy. Mr. Tom Keenan is the Vice President for Property Operations for Mobile Home Communities, Inc., which owns and operates 10 mobile home parks in Florida. Each of the individual-parks is a member of the FMHA. Lake Haven Mobile Home Park is owned and operated by Mobile Home Communities, Inc. Lake Haven Mobile Home Park entered into 4 year leases with its tenants, beginning in 1975 and again in 1979. After the adoption of Chapter 723, on June 4, 1984, Lake Haven Mobile Home Park filed and received approval for a prospectus from DBR, which was distributed to mobile home owners in 1985. The prospectus, including the rental agreement therein, contains terms and conditions different from the earlier 4 year leases (including the term of the rental agreement which is changed to annual), and there are different fees and charges which can be collected. Of the 379 lots that are rented in the park, approximately 200 tenants entered the park prior to the delivery of the prospectus. Mobile Home Communities, Inc., operates the park pursuant to the disclosures contained in the prospectus. Ms. Jan West is the owner and operator of Eagle's Nest Mobile Home Estates, a 64 space mobile home park located in Fruitland Park, Florida. Ms. West is a member of the FMHA. Eagle's Nest was developed in the 1930's and purchased by Jan West's parents in the 1940's. Prior to 1987 the rental agreements in the park were all oral. Ms. West does not know the terms and conditions of the rental agreements offered to tenants when her parents operated the park. All 64 of the lots in the park were offered for rent or lease on June 4, 1984, the effective date of Chapter 723. In 1987 Eagle's Nest filed a prospectus with the DBR and the prospectus was approved. All of the tenants of the park signed the lease agreement contained in the prospectus in 1987 when the approved prospectus was delivered. The fees and charges that are included in the prospectus were never disclosed in writing to any of the tenants prior to the delivery of the prospectus. The prospectus is the document that Eagle's Nest uses to determine the landlord tenant relationship under Chapter 723. Eagle's Nest collects lawn mowing fees and special services fees when they apply. Ms. West does not know if there were charges, other than the base rent, that were collected prior to 1987. She does not know if other charges, like late charges, return check charges, guest fees, vehicle storage fees, pet fees, special services fees, or pass-through charges were charged prior to delivery of the prospectus. Lawn mowing fees and maintenance fees were collected prior to 1987. It is a common practice in the industry to use a fixed term lease, or a lease for a term of years, in the prospectus and rental agreement approved by the DBR. The Mobile Home Study Commission was created in 1988 to study problems with alternative dispute resolution relating to mobile home park rents. Chapter 88-147, Laws of Florida. The Study Commission was reauthorized in 1989 for another one year period to study this issue. Chapter 89-202, Laws of Florida. The Study Commission was in existence, in 1988, when the Florida Manufactured Housing Association challenged an earlier proposed rule, 7D-31.002, which regulated the fees and charges that could be collected in mobile home parks. In that case the Division of Administrative Hearings issued a Final Order invalidating the earlier proposed rule on several grounds. That Final Order was affirmed by the First District Court of Appeal. Florida Manufactured Housing Association, Inc. v. Department of Business Regulation, 10 F.A.L.R. 3919 (DOAH 1988), affirmed, 547 So.2d 636 (1st DCA 1989) (hereafter referred to as FMHA I). The DBR appeared at the Study Commission in 1990 and suggested legislation to directly overturn the hearing officer's decision in FMHA I. That suggested legislation was virtually identical to the proposed rule at issue in this proceeding. The legislation suggested by the DBR was not adopted. Thirty-five to forty percent of the tenants residing in MLH parks today resided there prior to the enactment of Chapter 723, Florida Statutes, on June 4, 1984. MLH or its predecessors in interest delivered prospectuses approved by DBR to all tenants residing in the parks on June 4, 1984, at or before the expiration of those tenants' pre-Chapter 723 leases. The prospectuses delivered to such residents disclosed the manner in which the residents' lot rental amount would be increased, other fees and charges which the resident would thereafter be charged, and the manner in which pass-through charges (for governmentally- mandated capital improvements) would be assessed. In some of its barks MLH has passed on ad valorem property tax increases to park tenants. A number of tenants in MLH's parks are now contending that such charges cannot be passed on to them, even though such charges are disclosed in the park prospectuses which they received after enactment of Chapter 723, Florida Statutes, because (the tenants assert) such charges were not disclosed to them prior to their moving into the parks before the enactment of Chapter 723. MLH has no knowledge as to whether each charge disclosed in its approved Chapter 723 prospectuses was disclosed by the previous owners of MLH parks at the time that the original tenant moved onto a particular lot before the enactment of Chapter 723. MLH intends to continue passing on ad valorem tax increases. The prospectuses for MLH parks approved by DBR provide for the collection of a $3.00 annual DBR filing fee. The obligation to pay that filing fee was not disclosed to tenants who moved into the parks before the enactment of Chapter 723 because, at that time, neither DBR nor any other state agency had regulatory jurisdiction over the parks and the legislature did not impose such a filing fee until the passage of Chapter 723 and the concomitant creation of the Bureau of Mobile Homes. As to the years prior to the enactment of Chapter 723, it is sometimes very difficult, if not impossible, for a current park owner to ascertain and establish what fees, charges, and assessments were disclosed to tenants before they moved into a park. There was no central regulatory authority at that time which was charged with the responsibility to monitor such disclosures. There was no required, standardized disclosure document such as the prospectus which is now required of most parks by Chapter 723. Some parks now subject to regulation under Chapter 723 came into existence as early as the 1930's and operated as informal, family-run businesses. Thus, for the industry in general, the records are not available to establish what disclosures were made to tenants who long ago moved in, and still reside in the parks, at the time they initially took up residence. MLH intends to continue the operation of its parks in Florida and, therefore, will be governed directly by the proposed rule, if it is adopted. Prior to the enactment of Chapter 723, there was no statutory limitation on the frequency of rent increases, no requirement that the park owner disclose the factors which would be considered in setting rents, and no requirement of the park owner to mediate rent disputes with statutorily recognized tenant organizations, all of which are now imposed under Chapter 723. All of the approved MLH prospectuses contain the land use descriptions required by Section 723.012(4)(c), (5), (14) (b), Florida Statutes, including a lot layout showing the location and size of all lots in the parks (whether vacant or occupied), the location of all recreation and common facilities, and a detailed description of those facilities. MLH was a member of the Florida Manufactured Housing Association at the time that the Division of Administrative Hearings rendered its opinion in Florida Manufactured Housing Association, Inc. v. Department of Business Regulation, 10 F.A.L.R. 3910 (D.O.A.H. 1988) ("FMHA I") and at the time FMHA I was affirmed by the First District Court of Appeal. DBR will apply the proposed rule to the administration of Section 723.031(5),(6), Florida Statutes. DBR will apply the proposed rule to the administration of existing rule 7D-31.001(5), Florida Administrative Code. "Length of tenancy," as used in existing rule 7D- 31.001(5), F.A.C., is not defined by Chapter 723, Florida Statutes, or by existing DBR rules. Nor is the term "tenancy" expressly defined in Chapter 723, Florida Statutes or in DBR's implementing rules. The word "continuous" used in the proposed rule is intended to have its common and ordinary meaning. The resale value of a tenant's mobile home in a park, as compared to the value of a comparable mobile home purchased from a dealer's lot, is significantly higher due to the recreational and other amenities which are provided by the park owner for the tenants' use. The resale value of a tenant's mobile home in a park, as compared to the value of a comparable mobile home purchased from a dealer's lot, is significantly higher if the tenant can pass on to the purchaser of the in-place home a rent schedule which is more favorable than the current rent schedule being charged for a home newly being placed in the park. MLH uses and has entered into fixed-term, twelve-month leases with tenants in some of its parks. Those leases are part of DBR-approved prospectuses for the parks. MLH's parks and other parks regulated under Chapter 723, Florida Statutes, compete vigorously for tenants and are willing to and, in fact, do negotiate long-term leases and even lifetime leases with residents of the parks. It is important to park operators to have the flexibility to modify the prospectus disclosures regarding the use of vacant lots, vacant common areas, and land and improvements devoted to recreation facilities, in order to meet market changes and competition. It is very difficult, and sometimes impossible to obtain unanimous consent of residents in a mobile home park on most issues. In the case of MLH's park at Ellenton, Florida, the park land and improvements are valued at approximately $22,000,000. Yet it would cost MLH conservatively, $56,300,000 to purchase the homes in the park from the tenants. It would cost MLH, conservatively, $9,200,000 to $22,000,000 to move all of the tenants' homes from the park. Moreover, a portion of that required purchase price is for value added to the homes by reason of the placement of the homes in the owner's park. Ninety-eight percent (98%) of the 1000 members in the full park division of the FMHA have parks that contain more than twenty-five (25) spaces. The Department of Health and Rehabilitative Services licenses a total of 5,500 mobile home parks in the State of Florida. FMHA developed a model prospectus for its members to comply with the law as enacted in 1984. FMHA advised its members to put all potential fees, charges, and assessments in prospectuses although such fees, charges, and assessments may not have been disclosed to the homeowner prior to the homeowner's occupancy in the park or prior to the homeowner entering into his or her initial rental agreement. Mobile Americana Mobile Home Park, a Pinellas County mobile home park, was purchased by De Anza in July, 1976. The park's prospectus number 5200119P was approved and delivered to homeowners in 1985. Since 1976, several leases and rules and regulations have been in effect in the park. The prospectus number 5200119P includes fees, charges, and assessments that were not previously disclosed in prior leases to homeowners. However, De Anza is not presently charging or collecting these undisclosed fees. De Anza manages A Garden Walk Mobile Home Park for MLH. Prospectus numbers 5000867P and 500086P86 are offered in the park. MLH offers various leases in A Garden Walk, including lifetime leases and the leased marked MLH Ex. $9. MLH Ex. #9 was used in the park after 1985 although the exact time of use is not known. Neither De Anza or MLH know what fees, charges, or assessments were disclosed to homeowners by previous park owners. For the last 3 years, De Anza has managed Hacienda Village Mobile Home Park. De Anza sets the rental amounts in its parks and uses the market approach. With the market approach, the park owners arrive at a market rent by comparing the rents in their parks with rents of other mobile home communities of comparable value. The park owners unilaterally arrive at the market value rent. The collection of governmental fees is accounted for in arriving at the market value rent. Approximately 5 to 7 years prior to the enactment of Chapter 723, Florida Statutes, De Anza disclosed to homeowners living in De Anza owned parks the homeowners' obligations to pay for increased costs due to governmental actions and increases in taxes. All pre-1984 De Anza leases were subject to Chapter 83. Mobile Americana, Hacienda Village, and A Garden Walk are members of the FMHA. Mobile Home Communities also operates Windmill Village Mobile Home Park. Homeowners in Windmill Village were provided a prospectus in 1985. The prospectus contains terms and conditions that are different from the rental agreement that was in effect from 1983 until 1985. Five of the parks owned by MLH were purchased on July 1, 1987. The other three parks were purchased between July 2, 1986, and 1989. At the time MLH purchased its eight parks each park had an approved prospectus in place. One of MLH's parks, Colony Cove Ellenton, is located in Ellenton, Florida, and offers three separate prospectuses, including prospectus numbers 410024P, 410024P86 and 410024P2. Pages 74, 75, and 76 of Colony Cove Ellenton prospectus number 410024P describe the park's recreational facilities. The park owner, on page 77, paragraph 4(f), reserves the right from time to time to alter or change any of the facilities by the removal, relocation, or alteration of existing facilities or the construction of new facilities. Page 85 of this prospectus provides for the collection of costs incurred as a result of state and local government actions. MLH owns and operates Clearwater Cascade Mobile Home Community of Clearwater, Florida. Prospectus Number 5200525P86 lists each lot, including lot size, as well as describes recreational facilities and common facilities in the park. LaCasa Mobile Home Park, a MLH park, offers at least two prospectuses in the park, prospectus numbers 5800237P and 5800237P86. Prospectus number 5800237P describes the recreational facilities in the park. The prospectus provides for an assessment to homeowners for ad valorem taxes. The park owner also reserves the right from time to time to change any of the facilities by the removal, relocation, or alteration of existing facilities or the construction of new facilities. MLH has not been told by the Division it would not have a right to make modifications to its facilities in accordance with its prospectuses. The prospectuses delivered to homeowners in MLH parks allow for a variety of lease situations. There are no provisions in the prospectuses delivered by MLH which state that a prospectus applies only to persons who were in residence on June 4, 1984. All of the MLH prospectuses include reservation language similar to language contained in the Colony Cove Ellenton prospectus, reserving the right to modify facilities. MLH owns and operates Valleydale Estate Mobile Home Park, which it purchased on July 1, 1987. The Valleydale Estates prospectus contains some fees that were not disclosed to homeowners prior to occupancy. When MLH purchased Valleydale, it did not inquire as to disclosures made to homeowners. MLH also owns Heritage Village Mobile Home Park. Prior to its purchase of the park, MLH did not inquire as to disclosures made to homeowners living in the park. Since 1984, Dr. Faye Mayberry has been the Chief of the Bureau of Mobile Homes. The Division has the duty to review and approve prospectuses. Park owners draft prospectuses and submit them to the Division for review. Approximately 3000 prospectuses have been approved by the Bureau of Mobile Homes. As part of the approval process the Division does not verify the accuracy of the contents of the prospectus, nor does the Division determine if the contents of the prospectus are consistent with rental agreements offered to a particular mobile home owner. Park owners are advised by the Division that failure to cite deficiencies in the prospectus filing does not relieve them of obligations under the law. On January 10, 1985, Rule 7D-30.003 Florida Administrative Code, was adopted. Mobile home parks may offer more than one version of a prospectus in a park. Park owners sometimes submit subsequent prospectus filings that are inconsistent with previously delivered prospectuses. The Division has not established a policy regarding subsequent prospectus filings which contain disclosures concerning the number of lots in the park which are inconsistent with the disclosures in the previously approved and delivered version of the prospectus. Such inconsistencies between the subsequent prospectus and the previously approved and delivered prospectus filings are handled by the Division on a case by case basis. Prior to June 4, 1984, the primary issue of concern for mobile home owners was the mobile home park owners' failure to live up to disclosures that were given prior to the homeowners' occupancy in the park. (TV V, pg. 613). The prospectus delivered to mobile home owners residing in the following mobile home parks included fees, charges, and assessments other than pass-through charges, which were not disclosed to homeowners until after they moved into the parks: Park East Club -- Sarasota, Florida Caribbean Estates -- New Port Richey, Florida River Grove Mobile Home Village -- Sebastian, Florida Hacienda Village -- Winter Springs, Florida Ocean Pines Mobile Home Park - Indialantic, Florida A Garden Walk -- Palm Beach Gardens, Florida The amount for which a mobile home located in a mobile home park can be sold tends to decrease when the lot rental amount charged by the park increases. It costs several thousand dollars to move a double- wide mobile home within a 50 mile radius and set it up again the way it was before the move. /1 Many FMO members have complained to the FMO leadership of prospectuses being delivered in their mobile home parks which include fees, charges, or assessments which were not disclosed prior to June 4, 1984.
The Issue 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.
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.
Recommendation 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 =================================================================
