Rent increase; health or safety violations [Effective July 1, 2026]

# (a)

For purposes of this section,

# (1)

“Escrow account” means an account with an FDIC-insured financial institution in an arrangement that requires that the financial institution hold the escrowed funds for the purpose of payment due to homeowners under this section.

# (2)

a. “Health or safety violation” or “violation” means a decision that contains a finding of fact or conclusion of law by any court, administrative agency, county, or municipality that a violation of a requirement under this chapter or federal, state, or county law exists and threatens the health or safety of the residents, visitors, or guests of the manufactured home community.

b. A violation is deemed to have started on the date that the violation is final. A violation is final if the decision finding the violation has been fully determined on appeal to the appropriate court, if all time for filing an appeal with respect to the decision has expired, or the decision is not subject to judicial review.

# (3)

“Total rent increase” means the difference in the amount of rent that a homeowner will owe in 1 year under the increased amount of rent in a notice under § 7051 of this title and the amount of rent the homeowner would owe in 1 year without the rent increase.

# (b)

A community owner may only increase rent under § 7052A or § 7052B of this title if 1 of the following apply:

# (1)

During the 12 months preceding the date of the notice of the rent increase, there has not been a health or safety violation in the manufactured home community that continued for 15 or more consecutive days.

# (2)

The community owner complies with subsection (c) of this section.

# (c)

A community owner may increase rent if the condition that constitutes the violation under subsection (a) of this section is not corrected if the community owner complies with all of the following:

# (1)

Provides DEMHRA with all of the following before sending the notice of the rent increase:

a. A surety bond or a letter of credit as follows:

1. If the community owner provides a surety bond, the surety bond must be from an admitted carrier that is licensed in Delaware and has a rating from AM Best of A or better.

2. If the community owner provides a letter of credit, the letter of credit must be from an FDIC-insured financial institution.

3. The surety bond or letter of credit must be all of the following:

A. Payable to the Delaware Manufactured Home Relocation Authority.

B. In an amount sufficient to fund 100% of the total rent increase for all affected homeowners.

C. Contains the purpose of securing that the community owner will correct the violation by a specified date. For purposes of this section, the date by which the violation is corrected cannot be later than 1 year after the date of the violation.

b. A list that includes all of the following:

1. The name of each affected homeowner and the total rent increase for each homeowner.

2. The mailing address of each affected homeowner.

3. The total rent increase for all affected homeowners.

c. Written documentation of how the violation will be corrected.

# (2)

Sends a copy of the documents required under paragraph (c)(1) of this section with the notice of the rent increase and to the Delaware Manufactured Home Owners Association and the Department of Justice.

# (d)

If a community owner increases rent under subsection (c) of this section and provides documentation to DEMHRA that the violation has been corrected by the date under paragraph (c)(1)a.3.C. of this section, DEMHRA shall cancel and surrender the surety bond or letter of credit to the community owner and the liability upon the surety bond or letter of credit is discharged.

# (e)

If a community owner increases rent under subsection (c) of this section and does not provide documentation to DEMHRA that the violation has been corrected by the date under paragraph (c)(1)a.3.C. of this section, the rent increase does not take effect and DEMHRA shall do all of the following:

# (1)

Make a claim on the surety bond or draw on the letter of credit.

# (2)

Deposit the funds from the surety bond or letter of credit in an escrow account.

# (3)

Within 30 days of the date under paragraph (c)(1)a.3.C. of this section, send each affected homeowner the amount of the total rent increase as provided under paragraph (c)(1)b.1. of this section.

# (f)

DEMHRA may promulgate regulations necessary to implement this section.

# (g)

The Superior Court has jurisdiction over disputes under this section.