The Hidden Risks of Non-Compliance with the Pennsylvania MHCRA

Owners and operators of manufactured home communities in Pennsylvania must comply with the requirements of the Pennsylvania Manufactured Home Community Rights Act (“MHCRA”), codified at 68 P.S. §§ 398.1 et seq. Because the MHCRA is designed to protect residents, it also establishes clear rules for community operators regarding written leases, community rules and regulations, and mandatory disclosures. Failure to comply can have significant consequences, including the inability to enforce certain fees or lease provisions and exposure to litigation.

This article highlights several key compliance areas that community owners should carefully review: (1) written leases, (2) community rules and regulations, and (3) disclosure of rent, fees, and other charges.

Written Lease Requirements

The MHCRA contemplates that residents of manufactured home communities occupy their lot pursuant to a written lease. The lease is the foundational document governing the relationship between the community owner and the resident.

Leases must clearly set forth the rental terms and should incorporate the community’s rules and regulations and mandatory disclosures that are set forth at length below.

Owners do also need to be mindful as to how lots are priced. This requires that all rental charges be uniformly applied to all residents of “the same or similar category.” This does not require that each lot be the exact same size or require that all “corner” lots be priced the same despite other factors. It does, however, require that Owners have a rationale to their pricing.

Another key compliance point involves rent increases. While the Pennsylvania legislature is actively considering several bills that would introduce rent controls to the Commonwealth for the first time, there are no current rent control laws in Pennsylvania. But, under the MHCRA, rent may not be increased during the term of a lease, meaning owners must plan increases around renewal periods.

Additionally, the MHCRA prohibits any clauses in a lease that attempt to waive statutory rights under the MHCRA. Any lease provision that attempts to limit the rights provided under the MHCRA may be deemed void and unenforceable.

Community Rules and Regulations

The MHCRA expressly permits community owners to adopt rules and regulations governing the operation and use of the manufactured home community. However, the MHCRA imposes several important limitations on those rules.

First, rules must be fair and reasonable and must relate to legitimate community interests such as health, safety, and the upkeep of the property. Owners cannot create arbitrary rules that are unrelated to the owner’s interest in the community.

Second, rules must be uniformly applied to residents within the same or similar category. For example, a community may not selectively enforce rules against some residents but not others. This is particularly important when contemplating legal action against a resident. If owners show leniency in enforcement of a particular rule, but seeks to enforce it against a troublesome resident, it not only will create a defense against eviction, but it could call into question the validity of the rule for the rest of the community.

Third, residents must receive a written copy of the rules and regulations before the owner accepts any deposit, fee, or rent from a prospective resident. The rules must also be incorporated into the lease and posted in a public and conspicuous location within the community, such as the management office. The location should be publicly accessible.

The failure to adhere to the above guidelines regarding bot the substance of the rules and how they are communicate to the community could result in their unenforceability and, in certain cases, could even create resident claims against the owner.

Mandatory Disclosure of Rent, Fees, and Charges

One of the most significant provisions of the MHCRA involves disclosure requirements. The law requires community owners to provide prospective residents with a written disclosure of all rent, fees, service charges, and assessments before accepting any deposit, fee, or rent and before executing a lease.

These disclosures must include:

• Lot rent;
• Service charges or assessments payable to the owner;
• Utility charges payable to the owner (such as water, sewer, trash, internet, cable, electricity, or fuel); and
• Notice of any additional utility charges for which the resident may be responsible.

The depth and detail to these disclosure can vary depending on the length of the lease. Therefore, if Owners do not have a standardize lease term, Owners should have different disclosure documents prepared in order to comply with the MHCRA.

The disclosure document must also include a specific cover notice with statutory language that advises the resident as to their rights under the MHCRA.

Lastly, while Owners may require residents to sign a receipt acknowledging that they received the disclosure and the community rules, they cannot demand a signature binding the resident to any other clauses. However, acknowledgment of receipt is still an important compliance safeguard.

Consequences of Non-Compliance

Failure to comply with the MHCRA’s disclosure and documentation requirements can have significant legal consequences, including being unable to collect rent, fees, or other charges through judicial process even if the resident agreed to the charges informally or paid them previously.

The statute also provides for private legal actions by parties who are aggrieved by violations of the MHCRA, allowing claims for damages or other relief in court.

Conclusion

If you are a manufactured home community owner, understanding your obligations under the law is critical to minimize the impact on your business.

Consulting with counsel that is familiar with the MHCRA and your business can help minimize vacancies and limit legal exposure.

Stark & Stark regularly represents landlords, including manufactured home community owners, in all matters relating to their business, including representing them in the acquisition of new communities, lease compliance, rules & regulations compliance, and litigation.