2023 Delaware Code › Title 25 - Property › Chapter 70. Manufactured Homes and Manufactured Home Communities Act › Subchapter IV. Right of First Offer › § 7035. Right of first offer; auction.

§ 7035. Right of first offer; auction.
(a) If the Authority has sent the required annual notice to a community owner and the community owner then decides to sell, transfer, or convey all or part of the manufactured home community at auction, the community owner shall notify the homeowner association directly of its intention if the Authority has informed the community owner of a registered homeowner association in that community. The community owner's notice must also be sent to DMHOA or its successor, to the Authority. A copy must be sent under § 7015 of this title to each homeowner in the affected community. If the Authority has not informed the community owner that a registered homeowner association exists in the community, the community owner must send the notice of the intent to convey the community at auction directly to the Authority. The notice shall include a list of the known names and mailing addresses of all homeowners in the community. The Authority shall, within 5 business days of the receipt of the notice from the community owner, send the notice to all homeowners on the list.
(b) The notice of a community owner's intention to sell, transfer, or convey all or part of the manufactured home community at auction must be sent within 10 days after a date for the auction has been established and at least 60 days prior to the date of the auction. The notice must be sent by overnight service with signature receipt. The notice must state all of the following:
(1) The intention to sell the community at auction.
(2) The date, time, and place of the auction.
(3) The terms of the auction, which must be similar to other auction practices and standards in the area.
(c) At least 60 days prior to a scheduled auction, the community owner shall provide all pertinent information directly to the homeowner association if the Authority has informed the community owner of a registered homeowner association in the community. Copies of the pertinent information must also be sent to DMHOA or its successor, to the Authority. A community owner may not be held liable for misinformation provided by a third-party professional. Pertinent information from third-party professionals, if already available, including any of the following:
(1) Descriptions of topography.
(2) Soils, including a Phase I environmental soil study and a Phase II study, if required.
(3) Flood plain study.
(4) Wetlands study.
(5) Water system.
(6) Water quality.
(7) Distribution system.
(8) Sanitary survey.
(9) Wastewater disposal.
(10) Access, egress, and interior community roads.
(11) Storm water drainage.
(12) Electrical, telephone, and cable utility services.
(13) Boundary survey, home lot plan, if available.
(14) A USGS plan.
(15) Aerial photo.
(16) Tax map.
(17) Flood zone map.
(18) Soils map.
(19) Site photographs.
(20) A future repair and capital improvement analysis.
(d) Within 30 days of receiving the notice of the auction, a homeowner association in the affected community may make an offer to purchase the community. If the homeowner association makes an offer, and the community owner accepts the offer, the parties shall negotiate in good faith for the sale, transfer, or conveyance of the community to the homeowner association. If the community owner accepts the offer, a contract shall be formalized and ownership shall be transferred as under § 7033 of this title.
(e) If the homeowner association makes an offer to purchase the community within 30 days after receiving the notice of the auction sale, but the community owner does not accept the offer, the community owner may proceed to auction the community. The homeowner association's offer must be the minimum bid at the auction and the community owner may not accept a bid of less than the homeowner association's offer.
(f) If a homeowner association participates in the auction process by providing deposit moneys, if required, the homeowner association has the right to purchase the community within 7 days after the date of the auction for 1% higher than the winning bid with the same terms and conditions. If a homeowner association decides to purchase the community for 1% higher than the winning bid under the same terms and conditions, a contract of sale must be formalized within 20 calendar days, and the change of ownership must be completed within 90 days. However, if the homeowner association does not participate in the auction process, or if the homeowner association fails to respond within 7 business days and to formalize a contract within 20 calendar days, or to complete the change of ownership within 90 calendar days, the community owner has no further obligation to the homeowner association.
(g) If the winning bidder does not complete the transaction, and if the association still does not have the next highest bid, and if the community owner still intends to sell the community to the next highest bidder, the community owner must repeat the procedure under subsection (f) of this section.
(h) A community owner has the right to accept or reject any auction bids.
74 Del. Laws, c. 35, §  2;  70 Del. Laws, c. 186, §  1;  76 Del. Laws, c. 336, §  1;  77 Del. Laws, c. 238, §§  2-20;  79 Del. Laws, c. 330, §  1;  82 Del. Laws, c. 38, § 32;