IN THE SUP ERIOR COURT

OF THE STATE OF DE LAWARE

BON AYRE COMMUNITY : ASSOCIATION, INC., : C.A. No. K15A-05-00 2 WLW : in and for K

ent County Appellant , : : v. : : BON AYRE L

AND, LLC, :

: Appellee. :

Submi tted: Oc tober 1, 2 015 Decided : January

12, 2016 OPINION AND OR

DER Upon an Appeal from the Dec ision of the Arbitrator; Super ior Co urt’s D ecisi on on Appel lee’s Request fo r a Rent Increas e Above the C PI-U.

Denied.

James G. McG iffin, Jr., Esquire of Com munity Le gal Aid Society, Inc., Dover, Delawa re; attor ney fo r Appella

nt. L. Vincent R amunno , Esquir e of Ram unno & Ram

unn o, P.A., Wilm

ington, Delaware; attorney for Appellee.

WITHAM, R. J.Bon Ayre Comm. Ass oc. v . Bon Ayre Land, LLC

C.A. No. K15 A-05- 002 WLW January 12, 2016

2 Appellant Bon Ay re Com munity Associat ion, Inc. (“B ACA”) appeals th e nonbindin g decision of the Arbitrator to allow an increase in lot rent in the Bon Ayr e manufactured

home c omm

unity in excess of the Consumer Price Index for All Urban Consumers in the Philadelphia-Wilmington-Atlantic City area (“CPI-U”). The issue before the Court i s whether App el lee Bon Ayre La

nd LLC (“Bon A

yre”) com

plied with the pr

ovisions of th e title 25, section 7042 of the Delaware Code whenraising rent in exc ess of the CP I-U. BACA raises tw o issues on a ppeal. B ACA’ s first cl aim i s that B on Ayre’s requested rent increase was not justified because the record contained no evidence that the reque sted incre ase was directly related to op erating, maint aining, or impro ving the com

munity as requir ed by th e 25 Del. C. § 7042. BACA argues that failure to me et this ele ment p reclu des Bon Ayre from justify ing a rent i ncrease

in

excess of the CPI-U base d on any of the cr iteria li sted in subs ection (c). Bon Ayre cla ims an interpretation that allows market rent as a stand alone ju stificati on for ren t increase, and further argues that any other interpretation woul d be inconsis tent with legislativ e intent and r

edundant. BACA’s second claim is that Bon Ayre’s re quested rent increase was not j ustified be cause the record does not contain enough suf ficient, reliable, or com

petent evi dence to j ustify

a rent inc reaseunder the market rent factor. In response , Bo n Ayr

e supports t

he Arbitrator’s findings and further claim s the statut

e i s ambig uous, vague , and unw orkable, and there fore uncon stitutional. For th e followingreasons, this Court finds a rent increase above the C PI-U ha s no t been justified under the p rovisions of 25 Del . C

. § 7042. This Court fu rther fi nds the statuteis not ambiguous, vague, or unworkable, and Bon Ay re’s challenge t o theBon Ayre Comm. Ass oc. v . Bon Ayre Land, LLC

C.A. No. K15 A-05- 002 WLW January 12, 2016

1 At arbit ratio n, bot h part ies agr eed th e appl icabl e average CPI-U was 1.6% for the pre vious thirty-six month period. Appellant’s Ex. A at 7.

2 The proposed contract

for this home owner, Mr. Powers, was submitted in exhibit A of the Appellant’s opening brief and indicates that the proposed increase was from $309 to $399; however , the home owne

r testified at the a

rbitrati on hearing that t

he propo sed incr

ease was from $309 to $379. Appellant’s Ex. A at 7. 3 statute’ s constituti onality is theref ore witho ut mer

it. I. FACTS AND PROCEDURAL BACKGROUND Bon Ayre is a co mmun it y of ma nu factured homes located in Sm yrna, Delaware. Residenc y in the comm unity is limit

ed, with some exceptions , to individ uals who are fifty-five years of age or older. The res idents o wn their homes and pay rent to Bon Ay re for th e lo t u po n wh ich th e ho me si ts . Ma ny o f th e ho me
owners are m

embe rs of BA CA, a c orporation organize d to repre sent the int erests of the home owners. The catalyst for the current action was the notice of a propos ed increa se in rent sent to three ho me ow ners in De cemb er 2014 a nd to one home owner in January 2015. The CPI -U for t

he thirty -six months prece ding the prop osed rent i ncrease was 1.6%. 1 The proposed rent increase fo r the three ten ants receiving their notice in December

2014 was fro m $349 to $39 9, or 14.3%. The propo sed rent in crease f or the single tenant re ceiving noti ce in Janua ry 2015 was fro m $309 t o $3 79, or 22.6%. 2 Because the proposed rent increase exceeded the CPI-U, the D elaware Manufactured Home Relocation Authority (“ Authority”) was required to schedule a mee ting between Bon Ayre and the af fected home own er, or BACA as the hom

eowners ’Bon Ayre Comm. Ass oc. v . Bon Ayre Land, LLC

C.A. No. K15 A-05- 002 WLW January 12, 2016

3 25 Del. C. § 7043(b).
4 25 Del. C. § 7042 stat

es in per tinent pa rt: (a) A community owner may raise a home owner’s rent for any and all 12-month periods governed by the rental agreement in an amount g reater than

the aver age a nnual inc rease of the Consumer Price Index For All Urban Consumers in th e Philadelphia-Wilming

ton-Atla ntic City area (“ CPI-U”) for the mos t r ecently availab le preceding 36-month

periodprovided

the community

owner c an demons trate the increa se is justifie d for the

following

condition s: (1) The community owner, during the preceding 12-month period, has not been found in violation o f any

provision

of this ch apter th at threa

tens the health

or safety of the residen ts, visitor s or gue sts that persists for more than 15 days, beg inning from the day the community

owner received notice of such violation; and (2) The proposed rent increase is directly related to opera ting, maintaining or imp roving the manufactured home community , and justified by 1 or more f actors listed under subsection (c) of this section. (b) Th e D el aw ar e S ta te Ho us in g A ut ho ri ty s ha ll monitor the CPI-U and report to the Author ity fin dings and recommendations relevant to the cost of re nt in manufactured home communities in Delaware. (c) One or more of the fol lowing fac tors may justify the increase of rent in an amount greater than the CPI -U: (1) The comp letion an d cost of a ny c apital i mproveme

nts or re habilitat ion work in the manufactured home community , as distinguished from ordinary repair, replacement and maintenance; (2) Change s in prope

rty taxes o r other ta

xes within the manufa

ctured home 4 representative, to discuss the reasons for the increase. 3 The required mee ting for the home o wners re ceiving notice in D ecem ber 2014
was hel d on Jan uar y 23, 2 015. The mee ting for the

single hom

e owner r eceiving notice in January

2015 was he ld on Febr

uar y 24 , 20 15 . Th e di sp ut es o f th e ho me
owners at these

separate meetings were

identical . Each

home o wner disp uted that th e market rent analysis justified the proposed rent increa s e and that the proposed increase was not r

elated to o perati ng, maintaining, or im proving the community

as required under 25 Del. C. § 7042. 4 The homeo w ners also d isputed whether theBon Ayre Comm. Ass oc. v . Bon Ayre Land, LLC

C.A. No. K15 A-05- 002 WLW January 12, 2016

co mm un it y; (3 ) C ha ng es in ut il it y ch ar ge s w it hi n t he ma nu fa ct ur ed ho me co mm un it y; (4) Changes in insurance

costs and financing asso ciated with the manuf acture d home co mm un it y; (5) Changes in reasonabl e operat ing and maintenance expenses relating to the manufactured

home community including, but not limited to: costs for water service; sewer se rvice; se ptic serv ice; wat er dispos al; trash

collecti on; and em

ploy ees; (6) The need for repairs caused by circumstances other than ordinary wear and tear in th e m an uf ac tu re d h om e c om mu ni ty. (7) Market rent.--For

purposesof this section, “market rent” means that rent which would result from market forces absent an unequal bargaining position between the community

owner and the home owner s . In determining marke t rent relevant considerations include rents charged to rec ent new home owners entering the subject manufactured

home comm

unity and/or by

compara

ble manuf

acture d home communitie s. To be compa rable, a manufactured hom

e community mu st be within the competitive ar ea and mu st offer similar facilities, services, amenities and manage ment. (8) The a mount of r

ental as sistance

provided by t he commun

ity owner to the home owners under § 7021A of this title.
5 One petition was filed for the three home owners who received notice in December 2014 and one petition was filed for the single home owner w ho received notice in January 2015. 5 meet ing was held in good faith. The homeowners objected to the rent

increase , and BACA f iled two se

parate petitions for

arbitra tion under 25 Del. C. § 7043(c). 5 The parties agreed to c onsolidate t he two pet

itions for o ne arbitr ation hear ing. Atthe arbitration hearing, Bon Ayre presented three witne sses in suppor t of their posit ion. Th e first witness, James Rostoski (“ Rostoski”), was a licensed real estateappraiser and was presented as an expert witness. Rostoski prepared amarket study f or BonAyre to determ

ine the correct “m

arket rate” for a lot in the Bon Ayre

commun ity. Rostoski use d Barcla y Far ms, Southern M eadows, Wild Me adows, a nd Village Brook as c ompar

able com muniti es with

which to c onduct a com

parable rent analy sis. Rostosk i visited Bon Ay re once, but never visited the other communitiesBon Ayre Comm. Ass oc. v . Bon Ayre Land, LLC

C.A. No. K15 A-05- 002 WLW January 12, 2016

6 Contract proposals for a

nine year lease show that the per month rent is set at $389 for the first year, but incr

eases each month thereafter. Rent in the nint h y ear is $521 per month, for an average increa se of 3.8% per year over the course of the lease

. See Appellant’s Ex. A. 6 in the analy sis. Rosto ski’s re port adj usted curr

ent mo nthly r

ental fee s in the compa rablecomm

unities for fac tor s such as loc ation, se rvices inc luded in the rent such as snow removal

and lawn ca

re, im provem ents, whether residency was lim ited to persons fi fty- five y ears of age or olde

r, and whether ame nities such as com

munity

roo ms and swimming pool s were availab le for use by the residents

. Based on th ese adjustm ents, Rostoski det

ermi ned that the

mar ket rent f or Bon Ayre was $465 per month. Bon Ayre ’s s eco nd wit nes s wa s J ames Dra per (“Dr ape r”) , sa les ma nage r for Bon Ayre. D raper testified that rent for new lots was currently setat$399 per m

onth for a one y ear lea se and that nine year

leases were available starting at $389 per month for the first year. 6 He also testif ied that he

had only one sale a

nd one pending

s ale in 2015. N o home s were s old in 2014. D raper w as also Bon Ayre’ s represe ntativeat the home owner m eetings in January and Fe bruary 2015 . He testified th at he han ded out a packet of information that included Rostoski’s report at both m eetings. Bon Ayre’ s third witness was Donna Finnocchiaro (“F inno cchiaro” ) who is emplo y ed by Lenape Properties Managem ent, Inc. as the property m anager of Bo n Ayre. Finnocchiaro testified that brand new leases were at a m onthly rate of $399 per month a s of Januar

y 1, 20 15. Var ious wi tnesses for BACA testified to lot rent and amenities at Ba rclayBon Ayre Comm. Ass oc. v . Bon Ayre Land, LLC

C.A. No. K15 A-05- 002 WLW January 12, 2016

7 Appellant’s Ex. A at 9. 8 Appellant’s Ex. A at 9. 7 Farm s, Wild Me adows, a

nd reasons f

or mov ing to BonAyr

e. Am ong thesewitnesses
was Larry

Dougherty

and Fred Neal. Larry

Dougherty testified that

he has live d in the Barcla

y Far ms com munity since 2009, curr ent ly pa ys $475 per m onth in lot rent, and that the comm

unity owner imposed a 3 % cap on lot rent increases. Fred Neal testified that has lived in Wild Meadow since 2003, and before a recent c ourt decis ion his lot rent w as $437 per month. No other witnesse s testifie d to th eir curre nt rent. After hearing bot

h parties, the Arbitrator interpretedsection 7042 as allowi ng market rent to be used a s a stand al one reaso n for incr easing rent in excess of the CPIU. 7 The Arbitrator determ ined that an interpretation requiring the proposed rental increase be direct ly re lated to op erating, maint aining, or impr oving the com

munity before a ny of t

h e eight factors listed in subsection (c) could be considered was inconsistentwith the s tated purpo se of the subchap ter, and

section 7042 was therefore inherently

inconsisten

t andcontradic tory. The Ar bitrator f urther fo und the stat

ute to be redundant a

nd noted the r

esult of ap plying the statute would be that a com munity
owner could never justify a rent increase by relying solely on “ market rent.” Th e Arbitra tor concluded t

hat theonly log ical wa

y to inte rpret sec tion 7042 wa s that “ if the rent incr

ease is not

being sought f

or capita l impr oveme nts, ordinary wear

and tear

or changes in operating and maintenance expenses, then it must be justified by m

arket rent.” 8 The Arbitra

tor then pr

oceeded to calculat

e an alte rnative valuation of marketBon Ayre Comm. Ass oc. v . Bon Ayre Land, LLC

C.A. No. K15 A-05- 002 WLW January 12, 2016

9 Tunnell Com

panies L.P

. v. Greenawalt , 2014 WL 5173037, at *4 ( Del. S uper. Oct. 14, 2014). 10 25 Del. C. § 7044.

11 Tunnell Companies L.P. , 2014 WL 5173037, at *4. 8 rent for Bon A

yre. The star

ting point for

the calc ulation wa s the average monthl y lot rent at three compa rable 55+comm

unities, B arclay

Farm s, Southern Meadows, and Wild Meadows. The ave

rage m onthly l otrent rate of $454.55 was adjuste d up 10% for perm anent im

provem ents found in

Bon Ayr e such as st

reetlight s, sidew alks, and curbs. The amount was then adjuste d down 5% for a lack of amenities, a nd further adjusted down 20% f

or servic es included

in other r

ents but not i n Bon Ayre ’s rent such as trash r

emova l, lawn service, swim

ming poo l, and a f

itn ess center. The average monthl y rent

of $454.55 was adjusted down 15% to an a mount of $386.37. BACA ha s filed this time ly appe al of the A rbitrator ’s deci sion. II. STANDARD

OF REVIEW “A comm unity ow ner, [H ome O wne rs As so cia ti on ], o r an y aff ect ed h ome
owner may appe al the non-binding decision of the Arbitrator to the Delaware Superior Court.” 9 “Th e appeal s hall be on th e record and the Cou

rt shall address written and/or

ora l argum

ents of the

parties a s to whethe

r the rec ord crea

ted in the arbitrat ion is suffic ient just

i fica tion unde r the C ode fo r the c ommunity ow ner’s pr op osed rental incr ease in exce ss of CPI-U.” 10 Restated , “[ t]he Co urt m ust independent

ly address a

rguments of the pa

rties as t o whether the record c reated in

the arbitratio n is suffi cient to jus tify an increase in rent abo ve the CPI-U.” 11Bon Ayre Comm. Ass oc. v . Bon Ayre Land, LLC

C.A. No. K15 A-05- 002 WLW January 12, 2016

12 25 Del. C. § 7040. 13 Id.
14 Id. 9 III. DISCUSSION A. The Requested Rent Increase Was Not Justified Because the Record Contain ed No Evi dence S howing the R equeste d Incre ase was Directly Related to Operating, Maintaining, or Improving the Communit

y On June 30, 2013, title 25, chapter 70, subchapter III of the Delaware Cod e went into effect . This su

bchapter is titled “Afforda ble Manufa

ctured H ousing” and is hereinaf

ter ref erred to as the “ Rent Justif ication A ct” or the

“Ac t.” Its p urpose “ is to accom modat e the confli cting inter

ests of pro tecting manuf

actured h ome ow ners, residents and tenants from unreasonable and b urdensom e space r ental incr eases while simult aneously

providing fo r

the need of

manuf actured h ome c omm

unityowners to receive ajust, r easonable and fair return o n their pro perty.” 12 The statute notes that “[o]nce a man ufa ctu red ho me is situated on a manufactured housing comm unity site, the difficult

y and c ost of m

oving the hom

e gives the comm

unity owner disproporti onate power i n establishin g rental rat es.” 13 The twi n goals of th e legislatio n are to “

protect th e subs t ant ial in ves tmen t mad e by ma nu fac tu red ho me owners” and to “provide manufacture d home comm unity owners with a

fair return on their investment.” 14 To a chieve the se goals, rental spa ce incre ases are

limit ed by statute unl ess a com

munity owner m eets cer tain statut ory r equirem ents.Bon Ayre Comm. Ass oc. v . Bon Ayre Land, LLC

C.A. No. K15 A-05- 002 WLW January 12, 2016

15 25 Del. C. § 7042(a) allows tha t the owne

r of a mob ile home comm unity may raise a home owner's rent by an a

mount in excess of

the averag e annua

l CPI- U for the

preced ing thir ty- six month period if : (1) The community owner, during the preceding 12-month per iod, has notbeen found in violatio n of any provision

of this chapter tha t threatens the health or safety of the re sidents, visitors or guests t hat pers ists for mo

re than 1 5 day s, beginning from

the day the community owner received notice of such violation; and (2) The prop osed ren

t increa se is d i rectly re

lated to operating, maintaining or improving the manuf

acture d home

co mm un it y, and justified by 1 or more f actors listed under subsection (c) of this section (emphasis added). 16 This test issubject to

consider able dispute by

the part ies. 17 25 Del. C. § 7042(c) (emphasis added). 10 The statutory

requirem ents are found in 25 Del. C. § 7042(a). 15 , 16 This two prong conjunct

ive test co nsists of thr

ee distinc t elem

ents and requires each ele ment be met b efore r

ent ma y be increased in

excess of th e CPI-U. The sec ond prong of t he test is a compound condition requiring that the rent incr ease be directly related to operating, maint aining, or im proving the community, and that the r ent incre ase be justified by one or more

of the fact ors li sted in subse ction (c) . Subsec tion (c) l ists eight factors that “mayjustify

the incre ase of rent in

an amount

greater than the CPIU.” 17 In Tunnell Com

panies v. Greenawa l t , the S uperior Court stated this rule as follows: A comm unity ow ner m ay inc reaserent for any a nd all 12 m

onth period re ntal agre ement s in an amo unt grea ter t han the CPI– U on ly i f th e comm unity owner candemon strate the increase is justified. To justify such an increase, the comm unity owner

must demonstrate: (1) it has not had anyhealth or s afety

violations that persist more than 15 days after itreceive d notice of

the violati on during the p revious 12–m onth period;Bon Ayre Comm. Ass oc. v . Bon Ayre Land, LLC

C.A. No. K15 A-05- 002 WLW January 12, 2016

18 Tunnell Companies L.P. , 2014 WL 5173037, at *2. 19 Bon Ayre

Land LLC

v. Bon Ayre Community Association , 2015 WL 893256, at *2 (De l. Super. Feb. 26, 2015).

20 Ridgewood Manor

II, Inc. v. Delaware Manufactured Home Relocation Auth. , 2014

WL 7453275, at *5 (Del. Ch. Dec. 31 , 2014 ) (cit ing State v. Skinner , 632 A.2d 82, 85 (Del.1993)). See also 2A Sutherland Statutory Construction § 45:2 (2014).

21 Coastal Barge Corp. v. Coastal Zone Indus

. Control Bd. , 492 A.2d 1242, 1246

(Del. 1985).
22 Id. 11 (2) t h e proposed i ncrease is direct ly re lated to ope

rating, m aintaining, or impr ov in g t he ma nu fac tu red ho me comm unity; a nd (3) the incre ase is justifi ed by at least on e of several fa ctors. 18
This statem

ent of the rule for increasing rent in excess of the CPI-U was rei terated i n Bon Ayre La nd LLC v. Bon Ayre Communi t

y Asso ciation ( Bon Ayre I ). 19 In both cases, the commun ity o wners w ere found to have violated the procedural requirem ents of 25 Del. C. § 7043, and t hus an in dept

h analy sis of

the applic ation of section 7042(c) w as not requ ired. N onetheless , the rul e as state d in Greenawa lt and Bon Ayre I

clearly laid out thr

ee distinc t elem

ents that m

ust be m et in order to satisfy the Rent Justification Act’s requirements for rent i ncreases in excess of th e CPI-U. The current case pre sents a dir ect chall enge to the

Superior Court’ s previous interpret ations, so a full blo wn analysis of t he rule is n ow appropr iate. W hen a st atute is clear and unambiguous, there is no need for statutory interpretation. 20 In these c ases, a court’ s role is li mited to an applic ation of

the literal

meaning of the wor

ds. 21 Amb iguityexists when “a s tatute is reasonab ly susc eptible of differe nt conclusio ns or interpre tations .” 22 When a statute is ambig uous, m

ethodsBon Ayre Comm. Ass oc. v . Bon Ayre Land, LLC

C.A. No. K15 A-05- 002 WLW January 12, 2016

23 One-Pie Investments, LLC v. Jackson , 43 A.3d 911, 914 (Del. 2012).
24 Id. 25 Mayor and Council of Wilmington v. Dukes , 157 A.2d 789, 793-94 (Del. 1960). See also Hayward v. Gaston , 542 A.2d 760, 768 (Del. 1988) (“If a literal interpretation of

a statute leaves a result inconsistent with the general statutory intention, such interpretation must give way to general intent.”).

26 Doroshow, Pasquale, Krawitz & Bhaya v. Nanticoke Mem’l Hosp., Inc. , 36 A.3d 336, 343 (Del. 2012).

27 Chase Ale

xa, LLC v. Kent Cnty. Le vy Court , 991 A.2d 1148, 1152 (Del. 2010). 28 One-Pie

Investm ents, LLC , 43 A.3d a t 914; Dukes , 157 A.2d at 793-94. 29 In re Adoption of Swanson , 623 A.2d 1095, 1099 (Del. 1993). 12 of statutory construct ion are em

ployed to determ

ine legisla

tive intent

. 23 The primary purposewhen applyi ng met hods of stat

utory i nterpret ation is “to determ ine and give effect to legisl ative int ent.” 24 This inten t must prevail

even if pr

eserving l egislative intent results in “an i nterpret ation not consistent with the strict letter of the stat ute.” 25 Thesemetho d s require

the statute

be read i n the aggre gate rath er than in p arts, a nd that each section be “read in light of all oth ers to prod uce a harmoniou s whole.” 26 No words in a statute should be “construed as surplusage if there is a re asonable constructi on which wo uld give them meaning, and courts m ust ascrib e a purpose

to the u se of statut ory language, i f reasonabl y possible.” 27 When a pplying t hese

m ethods, “lite

ral or pe rceived i nterpret ations whi ch yie ld misc hievous or a bs ur d results are to be avo ided.” 28 “Regardles s of one’ s vie ws as to the wisdom of the statute, ou r ro le a s ju dg es i s l imi ted to apply ing the stat ute objec tively

and not revising it.” 29 The legislativ e intent behind the Re ntJustification Actis found in 25 Del. C. § 7040. Sec tion 7040 fir st no tes t hat ma nufactur ed housing is a

vital sourc e ofBon Ayre Comm. Ass oc. v . Bon Ayre Land, LLC

C.A. No. K15 A-05- 002 WLW January 12, 2016

30 25 Del. C. § 7040. 31 Id. 32 Id. 33 Id. 13 afforda ble housin g in Delawa

re, espe cially

for lowe

r-incom e households who otherwis e would not be

able to m ove into home owner ship. This section also notes that manuf

actured h o m e owners make substantial

investm ents in their home s, and

once a ho me is s itu ated on a rent al s ite , the dif ficu lty and cost o f mov in g t he h ome gives the com

munity owner “ disproporti onate powe r in establ ishing renta

l r ates.” 30 “The continuing pos sibility

of unreasonable space rental increases in manufactured ho me comm

unities threat en s to dim

inish the va

lue of manufactur

ed home owners ’ investments .” 31 This section specifically states that “ [t]hro ugh this subcha pter, the General Assembly seeks to protect the substant ial investm

ent made by manufactured ho me owners, and enable the State to benef it from the availa

bility of affor

dable housing for lowe

r-incom e citizens, witho ut the need for additional state fund ing.” 32 Section 7040 further recognizes the property rights of manufac tured hom e com munity
owners and seeks t

o provide them wi th a fair return on t

heir inves tment . The

stated purposeof the Re nt Justific ation Act is “toaccom

modat e the conf licting interests of protectingmanuf

actured h ome ow ners, re sidents and tenant s from unreasona

ble and bu rde ns ome space re ntal incre ases whil e sim ultaneously

providing fo r the ne ed o f manufactured

home c omm

unity ow ners to re ceive a j ust, rea sonable and fair return
on their prop erty.” 33 Thus, the legislature seeks to ba lance the se com

peting inter

ests. Reading section 7042

as a harm

onious whole

requires all

subsections be readBon Ayre Comm. Ass oc. v . Bon Ayre Land, LLC

C.A. No. K15 A-05- 002 WLW January 12, 2016

34 Se ction 7042(a) begins by stating “A community owne r may raise

a home own er’ s ren t . . . .” (emphasis added).

35 25 Del. C. § 7042(b). 36 25 Del. C. § 7042(c) (emphasis added). 14 in a way that

renders no section s uperfluo us. Section 7042(a) d efines two conditions that must be metbefore a rental increase in excess of the CPI-U

may be consider

ed. The conditions are conjunct ive. Th e first c onditionrequires the comm unity owner not have been found in violation of any of the provisions of title 25, chapter 70 that threatened the health

or safety of residents, visitors or guests that persistedfor more than fifteen days i n the previ ous twelve month p eriod. T

he second c onditionrequires the proposed rent incr

ease be directly

related to operati ng, maint aining, or impr oving the commun ity and

justifie d by one

or mo re fact

ors in sect

ion 7042(c) . Secti on 7042(a) contains the only language thatperm its a com munity owner toraise rent in

excess of the CPI-U. 34 Section 70 42(b) of r equires th e Delawa

re State Housing Authority to moni tor th e CPI- U and to re port to the A

uthority “fin dings and

recom menda tions relevant

to the costs of

rent in m anufactur ed home com

muniti es in Delaware. 35 Section 7042(c) li sts eight fa

ctors that “ may justify the increa se of rent in an amount greater than the CPI-U.” 36 The use o f the wor d “m ay” i ndicates a n indeterm inate outcome. The eight factors in section 7042(c) m ay justify an increase in rent greater than the CPI-U, but on the other hand, they may not. When one reads section 7042(a) and section 7042(c) as aharmonious whole, it becom es apparent that any one of the factors in sect

ion 7042(c) will jus tify a

n increas e in rent greater thanBon Ayre Comm. Ass oc. v . Bon Ayre Land, LLC

C.A. No. K15 A-05- 002 WLW January 12, 2016

15 the CPI-U only if the “ proposed rent increase is direct ly rel ated to ope rating, maint aining or im

proving” the

comm unity. If theGenera

l A ssembly had intended that any one of the eight factors would be a s tand a lone justification for a rental increase, it w ou ld hav e us ed l ang uag e in di cat in g a d ete rmin ate ou tco me such as “ one
or more of the following factors will justify the increase of rent in an am ount greater than the CPI- U.” T o interpret s ec tion 7042 as a llowing any

subsection ( c) elem

ent to o perate as a stand alone justification for a rent increase in excess of the CPI-U requires a reading of subsection (c) without reference to the other parts of the statute, and would thus render subsections (a) an d (b ) surplusage. Bec ause the r ules of statutor y construction disfavor a reading that renders any part of a statute as surplusage, allowing a

ny subse ction (c) factor t

o suffice as stand al one justif

ication for a re nt increa se in exce ss of the CP I-U is di sfavored. Requiring a n increase in rent in ex cess of theCPI-U

be directl

y related t

o operating, maintaining, or improving the manufactured home community

is not inconsistent with legislativeintent In the case at bar, Bon Ay re argue s that market ren t is suffic ient as a s tand alone element under the statute to justify a re n tal incre ase above the CPI- U. Thi s interpretationechoes the Arbitra tor’s in terpreta ti on of the sta

tute as sta

ted in the Decision of the Ar

bitrator o f April

23, 2015. The Ar

bitrator f ound that the requirem ent in section 7 042(a), that the increase be directly related to operati ng , maint aining, or improving the comm unity, was inconsistent with Act ’s stated purpose, and there fore inhe rently inconsisten

t and contr adictory . The A rbitrator posited that “ the statute

in question is redundant and the result would simply be thatBon Ayre Comm. Ass oc. v . Bon Ayre Land, LLC

C.A. No. K15 A-05- 002 WLW January 12, 2016

37 Appellant’s Ex. A at 9. 16 acomm unityowner co uld never j ustify a rent inc rease by

rely ing solely

on ‘market rent. ’” 37 However, to re ach this int erpreta tion, it is necessar

y to disr egard sec tion 7042(a)(2 ) and to ignor

e other pos sible inter

pretations that would

not render pa rts of the statute surplusage. Requirin g that a re ntal incre ase be dir ectly related to operati ng, m aintaining,

or impr oving thecomm

unity is not inconsist

ent with th e Act’ s purpose. The stated purposeis to pro tec t th e su bs tan ti al i nv est ment made by man ufa ctu red ho me owners and to pr ovide m anufactur ed home com

munity owners w ith a fair

return on t

h ei r investm ent. Section 7040 states that the comm unity ow ner acquires dispro portionate power in s etting rental rates on ce a ho me ow ner has pl ace d h is manu fac tu red ho me
on a lot. In order to pro tect a hom e owner’ s investm

ent, the General A ssemb ly established protectio ns with re gards to rent increases. These protections require a

comm unityowner to j ustify

a rent inc rease in e xce ss of the CP I-U and that any increase in excess of the CPI -U be dir ectly related to operati ng, m aintaining, or impro ving the comm

unity. The G eneral A ssemb ly als o built in pro tections f or the

comm unityowner. A comm

unity ow ner is all owed to inc rease r ent up to the CPI-U withno justification whatsoever. But, rather than lim it a comm unity owner

to only

an increase

of up to the CPI- U, th e statute also allows for larger increases when justified by c er tain enum erated f actors an d when re lated to ope rating, m aintaining,

or impr oving the com

munity . This a

llows a co mm

unityowner to p ass on costs to the homeowner

that m ay deg rade his r

eturn over

time . This ability to relay costs relatedBon Ayre Comm. Ass oc. v . Bon Ayre Land, LLC

C.A. No. K15 A-05- 002 WLW January 12, 2016

17 to the opera

ting, maintaining, or im proving the c omm

unity tothe hom

e owner protects t he community owner’s return on his in vestment. Requiring a n increase in rent in ex cess of theCPI-U

be directl

y related t

o operating, maintaining, or improving the manufactured home community is not redundan t In constru ing a s tatute, a court is required to strive for an interpretation that gives eff ect to legi slative int

ent while at the sam

e time giving m

eaning to all wor

ds in the statute. The Ar

bitrator’ s interpretation that is em braced by Bon Ay re fails in this regar d. This i nterpret ation fail s to give m eaning to se ction 7042(a)( 2). On t he otherhand, BA CA pr oposed an interpr etation tha

t gives eff

ect to legi slative int

ent and gives m

eaning to a

ll words in

the statute . Under

this interp retation, the justific ation elem

ent in sect

ion 7042(c) esta

blishes why th e com

munity owner is seekin g a re ntal incre ase in exc ess of the C PI-U, and the “ directly related” elem

ent in section 7042(a)( 2) requir

es the incr

ease in ex cess of the

CPI-U be spent oper ating, maint aining, or

improving the comm

unity. Although section 7042(c) lists som e costs that would dire ctly e ffect th e cost of do ing business, an exhaus ti ve list wou ld be neitherpractical n or necessar ily complete. T he ma rket rent elem ent allow s the

comm unityowner

to protect the retur n on his investm

ent by a llowing a r

ental incr ease in excess of t he CPI- U for co sts not spec ifically listed in se ction 7042(c ). For example, an increase in costs to the comm unity owner based

on the generali zed costs of doing business , the addition of a new ser vice such a s free W

i-Fi, or the contra

cting for the services of full time security or a social director could be recouped under the market rent justi fication.Bon Ayre Comm. Ass oc. v . Bon Ayre Land, LLC

C.A. No. K15 A-05- 002 WLW January 12, 2016

38 Bon Ayr

e claims rent was not

increa sed in

the three ye ars prior to the proposed increase, and the average y

early incr ease was therefore

7% per ye ar under Bon Ay re’s proposed

increase, and less than 5% per y ear when based on the rent determined by the Arbitrator. A

ppellee’s Ans. Br. at 3. Nothing in the statute prevents the retroactive application of an increase up to the CPI-U, but the increases in this cas e still exceed the sta tutory limit in this case, which is the CPI-U of 1.6% per y ear as stipulated by the parties. 18 Construing section 7042(a) as inconsisten t with the Act’ s purpose de feats the goals of th e legislat

ion. In es sence, B on Ayr e claim s that prote cting the pr operty rights of com

munity owners r

equires a n interpretation that

would allo w a rent in creasebased solely

upon ma rket rent . This is wrong for two rea sons. Fir st, the stat ute’s goal with r

espect to c omm

unity ow ners is to protect their rig htto receive a just, reasonable and fair return. To that end, the statute allows for rent incre ases up to the CPI-U with no justification, an d allows for increases in excess of the CPI-U when a co mm

unity owner is faced with costs that would potentially degrade th e return on investm

ent. Se cond, all owing an increa se based sol ely on m arket re nt could lead to situation s where a ho me ow ner is f ace d wi th an u nre aso nab le o r bu rde ns ome increase in rent even when the

re is no thr

eat to a communit y owner’s just, reasonable, and fair re turn on their investm ent. A c omm

unity ow ner m ay off

er a low er rate

to induce home o wners to place their homes in the comm unity, and later raise rental rates to the “ mark

et rate” with im

punity. In thepresent c ase, the rental increases were between 14 .4% and 22.6 %. 38 These are the types of rent in creases the statute seeks to avoid. Allowinga com munity owner to i ncrease

rent base d solely

on a m arket re nt justific ation does not bal ance the r ights of the

home o wner and

the comm

unity owner, itplaces the

rights of t

he com munity owner in a

po si ti on su per io r to th at o f th e ho meBon Ayre Comm. Ass oc. v . Bon Ayre Land, LLC

C.A. No. K15 A-05- 002 WLW January 12, 2016

39 25 Del. C. § 7042(c). 40 Id.
41 Id.
42 25 Del. C. § 7043(b). 19 owner. Based on this interpre t ation of the statute, Bon Ay

re has fa iled to m eet the requirem ents of section

7042(a)( 2) requir

ing thatproposed rent increa ses be dire ctly related to operati ng, m aintaining, or im proving the c omm

unity, and th us a rent increase in excess of th e CPI-U is not ju stified. B. The Record From the Arbitration Hearing Does N ot Contain a Sufficient Am ount of Reliable or Compe tent Evidence to Justify an Increase in Rent Based on Ma rket Rent. Section 7042 defines market

rent as “that rent which would result from market forces absent an u nequal bar gaining position betw een the co mm unity ow ner and the ho me owners.” 39 A relev ant consid erat ion when determ ining m arket re nt is “ rents charged to rec ent new ho me ow ner s en ter in g t he s ub jec t man ufa ctu red ho me
comm unityand/or by comparable m anufactured ho me communities.” 40 Compa rable

comm unities are comm

unities that are within the competitive area and offer similar services , ame nities, a

nd man agem

ent. 41 When rely ing on m arket re nt as just ification for increasi ng rent in excess of the CPI-U, “the comm unity owner shall provide a range of ren tal rates fro m low to high, an d when relev ant the mean and median.” 42 The comm

unity owner

must a lso disclose

whether these rental rates were determ ined atarm’s length, whether

a relate d party

has an own ership inte

rest in any

compa rableBon Ayre Comm. Ass oc. v . Bon Ayre Land, LLC

C.A. No. K15 A-05- 002 WLW January 12, 2016

43 Id.
44 79 Del. Laws ch. 63, § 1 (2013). 45 79 Del. Laws ch. 304, § 1, 6 (2014). 20 lot or community

used, and the time relevance of the data. 43 When the Rent Ju stificati on Act wa s initially passed in Ju ne 2013, se ction 7042(c)(7 ) stated tha

t “re levant cons iderations include rents charge d by com parable manuf actu r ed home communities in th e applican t’s competitive area.” 44 This l anguagewas changed to read “relevant considerations include ren ts charged to recen t
new ho me own ers enter

ing the subj ect m anufactur ed home com

munity and/or by compa rablemanufactured

ho me communities.” 45 The 2014 amendm ent makes clear that rents adve

rtised by a com munity owner ca

n no longer be

considere d relevant. The statute now requires information that is more specific . The a

mendm ent mu st be read to require

a showing o f rents a

ctually charged t

o new hom

e owners entering either the subje ct ma

nu fact ured home com

munity or a com

parable manufactured home community. Although the statute states that rents charged t o new hom

e owners entering the subject comm unityor a com

parable comm unity are relevant considerations, it does not further specify

what fa ctors are to be considered in determ ining m arket re nt. The statutedefin es c omp ara bl e man ufa ctu red ho me comm unities as those with “similar faciliti es, services, amenit ies and management,” but does not require these factors be used in determ

ining m arket re nt for a spe cific com munity . Nor doe s the statut e forbid the consideration of other factors such as location within the

competitive ar

ea or site impro veme nts. The

determ ination of what facto rs affe ct ma rket rent and theextentBon Ayre Comm. Ass oc. v . Bon Ayre Land, LLC

C.A. No. K15 A-05- 002 WLW January 12, 2016

46 Appellant’s Ex. A at 2. 47 A-47. 21 to which the y aff

ect m arket re nt are bes t left to th ose with e xpertise i n the field

. Thus, any f

actor af fecting mar

ket rent m

ay be presente d by eit

her side solong as the factor is supporte d by cred ible evide nce. T he only manda tory i nclusion is th e show ing of rents c harged to r ecent new

home o wners en

tering the

su bjec t manufactured

home c omm

unity a nd/or by com parabl e man ufa ctu red ho me communities. A marke t rent repor

t is not fundam entally fla wed when i t uses facto rs not explicitly required by the statute In the cas e at bar, BA CA firs t claim s the repor t submi tted by

Rostoski is fundam entally fla wed and sh ou ld be d is reg ard ed i n i ts ent ire ty. B on Ayre cla ims that the Rostoski report on market rent compar isons supplies the type o f in for ma tion required under the s tatute. Rostos ki wa s admi tted as an expert wit ness and his credenti als wer

e not challenge d at the ar

bitration h earing. 46 No expert witness was called by BACA t o dispute Ros toski’s f indings, but

Rostoski w as questione d by opposing counsel on

various fi ndings in the r

eport. In challengi ng the repor t, BACA first argues that Rostos ki used the w rong defini tion for m

arket re nt. Rostoski’s report defined mar

ket rent a s “[t]he m

ost probable

rent that a propert

y woul d brin g in a competitive and open m

arket re flecting a

ll conditions and restr

ictions o f the lease agreem ent, including pe

rmit ted uses, use restr

ictio ns, expense obligations, TI, concession s, renewa

l and purcha se options, and tenan t improvements.” 47 Although this definition does not exactly match the statutory definition, the definitions areBon Ayre Comm. Ass oc. v . Bon Ayre Land, LLC

C.A. No. K15 A-05- 002 WLW January 12, 2016

22 substantial ly similar . Rost oski ’s definition embraces the s tatute’ s definitio n and adds otherfactors that would be releva nt in predicting market rent. Ther efore, Rost oski ’s definition of ma rket rent does not cr

eate an i ssue so dire as to fundamentally flaw the report. BACA further argues Rostoski’s report considered location when the act does not consider l ocation as a facto r to be con sidered in calculat ing ma rket rent , and devalued or

ignored cr

iteria suc h as inclusi ons in rent, ame nities, a nd man agem

ent. A s not ed above, th e statute s tates crite ria for determini ng “comparable communities,” but is silent a s to what f

actors m ust be considered when determ ining m arket re nt with the single exc eptionof “r

ents charged to recent new home owner s entering the subject manufactured

home co mm

unit y and /o r by c omp ara bl e man ufa ctu red ho me communities.” Rostoski was admitted as an expe

rt and re lied oncriteria he deemed relevant to determ

ining Bon Ay

re’s m arket re nt in the com

petitive a rea. N othing in the statute pr

ecludes R ostoski from

consideri ng the fac tors reli ed upon in his r eport. Howeve r, Rostos ki did fail

to consider

“re nts charged to recent new home owners entering the subje ct ma nufactur ed home com

mun i ty and/

or by c omparable manufactured ho me communities,” and that failure will be discus sed below. Moreover, this Court h as previous ly note d its app roval of th e type of information contained in Rostoski’ s report. Referr ing to theRostoski re

port in Bon Ayre I , this Cour

t stated: The report was over 37 pages long and included detailed d escriptio ns of each comm

unity and the surrounding area. T he report included definitions , maps, pictures a nd a table with a summ ary that

included si de by side com

parison of pertinentinformation such a s monthly re nt, ageBon Ayre Comm. Ass oc. v . Bon Ayre Land, LLC

C.A. No. K15 A-05- 002 WLW January 12, 2016

48 Bon Ayre I, 2015 WL 893256, at *9. 23 restrict ions, th e numb e r of units, ame nities, im provem ents, and the services which ar

e inc luded in the rent. Most importantly, the report explained the reconciliation process where the appraiser ta kes the relevant elements of comparis on, assig ns them a value, a nd us es them to calculate an appropriate market rent. Under the A ct, this r eport is precisel y the t

ype of information that s hould be on ha nd prior to deciding to raise th e rent abov e the CPI-U . . . . 48 The Court made no com

ment a s to the com

petency of the inf

orma tion contain ed in the report, but

noted by inferenc e that fa

ctors not li sted in the s tatute may be used for mark et rent a nalysi s. BACA al so challe nges the com petency of the Rost

oski report

because t

he appraiser did not provide an adequate foundatio n for the m arket re nt
recom menda tion. Rostoski te st ified that it was dif ficult to doan exact c ompar ison because each com munity within the competitive area offered differe nt amenities and services

. Based on hi s e xperience , Rostoski adjusted rents in c omparable

comm unities upw ard or d own ward by a certain percenta ge based upo n criteria such

as location, inclusions, impr oveme nts, am

enities, and wheth er thecomm unity w as a 55+ comm

unity. Rostoski adequate ly expl ained his rational fo r each adjust ment. He admitted he did not pe

rsonally visit each compa rable com munity and only visited Bon Ayre one tim e, but not v isitin g a comm unity does not render the evidence incom petent per se. These e xplanations and valuat io n s could have been countered by a rebu ttal e xpert wit

ness, but no ne was ca

lled. T herefor e, BAC A’s ch allenge based upon the

competency

of the appraiser’ s report f ails.Bon Ayre Comm. Ass oc. v . Bon Ayre Land, LLC

C.A. No. K15 A-05- 002 WLW January 12, 2016

49 A-114 at 80. 50 Bon Ayr

e claims rents in comparable communities were prese nted by Mr. Doug

herty as to Barcla y F arms and Mr. Neal as to Wild Meadows, but these rents were re nts paid by existing tenants, and not rents paid by ne w home owners moving into the community

.

24 The Statute requires evidence of rents charged to recent new home owners ente ring the subje ct manufac tured homecommuni ty and/or by compara ble manufac tured homecommuni ties BACA next claim s that no evi dence of r ents actua lly pai d by new ho me owners
e ntering Bon Ay

re or a c omparable com munity was ever

presente d. Bon Ayr e counters this claim by stating that the evidence showing Bon Ayrepresently charges $399 per month for a o ne yea r lease a nd offers a nine y ear lea se starting a t $389 per month is undisputed . Bon Ayr e also cla

ims it is undisputed

that com

parable

comm unities are charging in excess of $400 and up to $573 per month. The stat ute
as amended

requires a showing o f rents c harged to recent ne w hom e owners entering the subject

m anufactur

ed home com

munity or com parable c omm

unities. A

t the arbitrat ion hearing, Dick Draper, site m anager and sales manager a t Bon Ay re, testified thaton e ho me had been sol d in 2015 with another sa

le pending, and no homes were sold in 2014. 49 No other evid ence show ing rents a ctually charged t o new tenants i n Bon Ayre or oth er comparable communities was presente d. The statute does not require a setnumber of rents charged to new hom e owners be shown, but one com

pleted sal e and one pe nding sale i n a two y ear peri od is not adequate. The ren

t figur es us ed for comparable com munities are not acceptable under the statute be cause the

re was n o showing tha

t the rent figures w ere act

ually charged to new hom

e owne rs mo vin g th eir ma nuf actu red homes int o th e co mmunit y. 50Bon Ayre Comm. Ass oc. v . Bon Ayre Land, LLC

C.A. No. K15 A-05- 002 WLW January 12, 2016

25 Although it may be difficult to gain access to ren t figures actually charged to new ho me owner s enteri ng a comparable manufactured home com munity, they

are nonetheles s required

by sta tute if rent in a compa

rable com

munity is consider

ed. Because Bon Ayre

failed to make an adequate showing of rents being charged to new ho me owners in

the Bon Ay

re com munity , and made no show ing of rents charged t

o
new home o wners m

oving into a comparable com munity, they

have failed to meet

the requirements of section 7042(c)(7).

The Arbit rator’s dec ision to grant a rent incre ase in exc ess of the CPI-U was not supported by substantial evidence BACA claims the Arbitr ator’s decis ion to rai se rent in ex cess of the CPI-U,
even though not granting Bon Ayre the full increase they sought, was not supported by substantial

evidence. In granti ng the rent in cr ease, the Arbitrator discounted portions of the Rost

oski findings and

relied on o ther porti ons. The fatal fl aw in the Arbit rator ’s market rent analy sis is that Bon Ayre ’s rent was compa

red to re nts in compa rablecomm

unities, but there was nev er a showing of r ental figu res actually charged to new hom

e owners entering t

he com parable c omm

unity. To m ake any determ inationunder section 7042(c)(7), evidence of rental fees cha rge d t o n ew h ome
owners is required. Because this information was not place d in evide nce, the Arbitrator’s decision could not have been supported by substantial evidence. C. The Statute is Not Am biguous, Vague, and Unwork able Although not raised as a counte rclaim, Bon Ayre claims in the ir answe r ing brief that the st atute is unc onstit utional because i t is am biguous, vague, and unworkable. Bon Ayre argues the statute provides for non-binding arbitration thatBon Ayre Comm. Ass oc. v . Bon Ayre Land, LLC

C.A. No. K15 A-05- 002 WLW January 12, 2016

51 25 Del. C. § 7044. 52 Tunnell Companies, L.P. , 2014 WL 517037, at *3 (“Tunnell had not met its burden of proof in justifying the rent incr eases. As such, Arbitrator recommended T unn ell reduce the rent increases to the CPI-U.”)

.

53 Pot-Nets Coveside Homeowners Associat ion v. Tunnell , 2015 WL 3430089, a

t *6 (Del. Su per. May 26, 20 15) (“It i s clear , the C ourt, based on th e plai n, li teral langua ge of 25 Del. C. § 7044, does not ha

ve jurisd icti on to hear disputes concerning any thing other than whether a community owner' s proposed rent increase above the CPI –U is justified.”). 26 is in fact bi nding unless r eversed o n appeal tothe Super ior Court. Bon Ayre further argues that the st atute is am biguous. BACA c laims the statute is constitution al and that the arbitrat ion is no n-binding in t he sense th at either

party may appeal the arbitrat or’s de cision to the

Superior Court. Section 7044 of the Act states “[t]he c ommunity owner, the h ome ow ners' associati on, or any

affect ed home owner m

ay app eal the de cision of the arbi trator within 30 d ays of the date o f issuance of the arbit rator's deci sion.” 51 The arb itration clausecontains no limit s on the availabil ity of the appea

l process, and the ar

bitration is therefo re non-bi nding. Bon Ayre argues that the non -binding lan guage is inconsisten t and err oneous because the arbitrator’s decis ion is in fact b inding unless rev ersed on ap peal. To highlight the claim

ed inconsist

ency, Bon Ay

re first points to a de cis ion in Tun nell Companies

, L.P. v. Gre ena walt in which th e Superio r Court r eferre d to the Arbit rator ’s decision as a “recommendation,” 52 and then to a sub sequent decision in Pot-Net s CovesideHomeow ners Assoc iation v. T unnell in which th e Superior Court ruled the Arbit

rator’ s decision to di smi ss could not be disturbed. 53 Howeve

r, the decision not to distur

b the Arbi trator’ s decision to dis m iss was ba sed on aBon Ayre Comm. Ass oc. v . Bon Ayre Land, LLC

C.A. No. K15 A-05- 002 WLW January 12, 2016

54 Appellee’s ans. br. at 24.
55 In re Kennedy , 472 A.2d 1317, 1330 (Del. 1984). 27 jurisdictional analy sis and not on the Arb itrator’ s decision r egarding th e justif

ication of arent incr

ease in ex cess of the

CPI-U . In the s ubsequent c ase, the Pot-Net s court determined

that “the General A ssembly’ s specific use of ‘the record crea ted in the arbitrat i on i s sufficie nt jus tific atio n und er the Code f or th e communit y owner’s proposed rental increase

in excess o f the CPI

–U[,] ’ and ex clusion of a

ny othe r issue

or topic following ‘as to whether,’ wa s purposeful,” an d therefore there w as no jurisdictional basis on which the Cou r t c ould overru le the Ar

bitrator’ s decision to dismiss. B on Ayr e claim s “[a] statut

e that for ces this Co urt to ref

er to the a

rbitrato r’ s decision as a ‘r ecom menda tion’ in one case

and as untouc hable and beyond re dress
even if wrong in another case cannot be deemed workable and c apable of rational applicati on and therefo re, is impermissibly vag ue.” 54 “To succeed, however , the compl ainant

must demonstrate that t he law is im

perm is sibly va

gue in all of

its appli cations.” 55 Bon Ayre has failed to m ake an argument that the statute i s imper missib ly vagu e in all of

its applica

tions. Bon

Ayre further

claims that a court shouldnot be placed in the intole rable posi tion of

having to dea

l with the numer

ous ambiguities and inconsisten cies they see in this statute. Nonethel ess, it is the job of the courts to in

terpr et the law s passed by the Gene ral Asse mbly . Part of that j ob is resolving ambig uities and i nconsistenc ies that m ay exi st within a

statute. BACA has admitted that there may

be am biguities in the subsect

ion regar ding mar ket rent, andBon Ayre Comm. Ass oc. v . Bon Ayre Land, LLC

C.A. No. K15 A-05- 002 WLW January 12, 2016

28 the Pots-Ne ts court re ferred to parts of section 7043 regardin g meetings betw een the parties a s the epitom

e of am biguous, but these sec tions are n otso ambiguous that a courtcannot fa shion an inte rpretati on that im

plements legisla

tive intent . For the se reasons, this Court f

inds the sta

tute is cons titutional. CONCLUSION The requeste d incr ease in r ent in exce ss of the CP

I-U is not justifie d and not in compl iance wi th 25 Del. C. § 7042. Theref ore, any rent incr ease in ex cess of the CPI-U is DENIED . Ther e has not be en suffic ient just ification for the proposed rent increase based on ope

rating, m aintaining, or im

proving the

comm unity. There a

lso has not been suf

ficient justific ation based

on mar ket rent. Bon Ay

re’s c hallenge to the const itution ality of the st atute fails , and is with out merit. IT IS SO ORDERED.
/s/ William L. Witham, Jr. Resident Judge WLW/ dmh