Articles Posted in Delaware Supreme Court

This was a case between the owner of a manufactured homes community, Bon Ayre Land, LLC (Landowner), and an association that represented the affected homeowners, Bon Ayre Community Association (HOA) about what Delaware law required the Landowner to show to increase rent above inflation. Their dispute arose under Chapter 70 of Title 25 of the Delaware Code, commonly known as the "Rent Justification Act." To raise rent by more than inflation, the Act set out three conditions a landowner had to satisfy. One condition required the owner show that the proposed increase was directly related to operating, maintaining or improving the manufactured home community, and justified by one or more factors listed under subsection (c). The one factor at issue here was market rent: that rent which would result from market forces absent an unequal bargaining position between the community owner and the home owners. Among its many arguments, the Landowner argued that the Superior Court erred in giving effect to the word "and," and that the Landowner ought to have been allowed to justify a rent increase based on market rent alone. The Landowner admitted that it failed to present any evidence of its proposed rent increases being directly related to operating, maintaining or improving the community. But, the Landowner argued that the Act could not be read sensibly as it was plainly written and that the term "and" in section 7042(a)(2) should have been read as "or." Contrary to the Landowner's argument, the Delaware Supreme Court found nothing "absurd" about the use of "and" in joining section 7042's three conditions. "Consistent with proper principles of interpretation, the Superior Court gave effect to the clear language of the Act and gave it an interpretation that is consistent with the Act's stated purpose." Because the Landowner concededly made no showing that its proposed rental increase was directly related to operating, maintaining or improving the community, the Superior Court properly reversed the arbitrator's ruling that the Landowner could raise rents in excess of CPI-U. View "Bon Ayre Land, LLC v. Bon Ayre Community Association" on Justia Law