When Different Lot Rents Are Lawful: Applying the MHCRA’s “Same or Similar Category” Rule

The Pennsylvania Manufactured Home Community Rights Act (“MHCRA”) does not require every homesite in a manufactured home community to carry identical rent, fees, or charges. It does, however, require that rental charges and rules be uniformly applied to residents and prospective residents in the “same or similar category.” 68 P.S. § 398.4(b).

But, what does the “same or similar category” mean?

The MHCRA Standard

For community owners and operators, the practical question is not simply whether Lot 12 costs more than Lot 13. The question is whether the community can identify, apply, and document a legitimate category-based reason for the difference.

Section 398.4 of the MHCRA permits a community owner to establish fair and reasonable rules related to the health, safety, and upkeep of the community, provided they are not arbitrary or capricious. It also requires uniform application of “all rules or rental charges” to lessees or prospective occupants of the same or similar category.

“Rental charges” should be treated broadly for compliance purposes. Accordingly, a community should not analyze lot rent in isolation. The category analysis should encompass the entire recurring economic package charged by the owner or operator: lot rent; amenity-related charges; water, sewer, trash, cable, internet, fuel, or electric charges billed by the owner, and so on.

The statutory language does not mean all sites must be treated as identical. Nor does it require, for example, that all single lots must be one price and all double lots must be another price. It simply means the owner should have an identifiable and consistently applied basis.

Legitimate Category Factors

In Midway Terrace v. Foley, 430 Pa. Super. 562, 635 A.2d 191(Pa. Super. 1993), the court found that the mobile home park landlord did not violate 68 P.S. § 398.4 by charging a tenant on a smaller lot the same rent as tenants on larger lots where the landlord showed that rent was based on the cost of providing services, and the number of people living on the lots.

Therefore, rent doesn’t have to be linked to physical characteristics. In fact, limiting it to physical characteristics alone could open the door to residents arguing that rents should be less because of their lot’s view, noise, traffic, odors, or other perceived advantages or disadvantages. That is not the intent of the statute.

A defensible category system begins with objective non-discriminatory differences. The key is consistency. A community may reasonably conclude that waterfront sites, oversized sites, sites with upgraded utility infrastructure, and standard interior sites are different categories. But the owner should be prepared to explain why two lots that appear comparable are assigned different classifications or pricing, or why the lots are still in the “same or similar category.” Categories should reflect real, recurring distinctions that can be applied across current and future residents.

Records Make the Difference

The strongest compliance position is created before a dispute arises. A community should be able to produce a clear records showing what each category is, which sites are in it, what charges apply, and when the charge became effective.

An owner could benefit from creating a master matrix listing every homesite and its applicable category. In order to avoid allegations of inconsistencies via nomenclature alone, it is recommended to avoid designations of categories that create a hierarchy, such as “upgraded” or “premium” unless the nomenclature is congruent with pricing.

Avoiding the Appearance of Selective Pricing

The most problematic pricing practices are often not those involving different rent amounts, but those involving unexplained exceptions. Risk increases when comparable sites have different charges because of informal deals, undocumented manager discretion, ad hoc concessions, or resident-specific treatment.

Owners should avoid:

• Charging one resident a recurring fee that comparable residents do not pay without a documented reason why.
• Applying discounts, surcharges, or utility arrangements via verbal agreement only.
• Reclassifying a site without recording the objective reason why, especially if there has been any recent resident complaints

A concession can be legitimate, particularly where supported by a written lease term, settlement, or transition arrangement. But it should be documented as an exception with a defined basis, scope, duration, and approval. The absence of records is what transforms a potentially lawful distinction into an appearance of arbitrary treatment.

A Pactical Compliance Rule

Before imposing or continuing a different charge, the owner should be able to answer four questions:

1. What “category” is this site or resident in?
2. What objective facts place it in that category?
3. Are the same charges applied to all similarly categorized sites or residents?
4. Where is the contemporaneous record proving the answer?

If the answer to the fourth question is unclear, the pricing decision may still defensible, but more difficult (and expensive) to defend even if it was commercially reasonable when made.

Conclusion

If you are a manufactured home community owner, understanding compliance pitfalls before a complaint is made is the best way to avoid legal exposure.

Consulting with counsel that is familiar with the MHCRA and your business can help minimize exposure for compliance issues.

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.