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NO. 103. AN ACT RELATING TO INCREASES IN MOBILE HOME LOT RENTAL RATES.

(H.11)

It is hereby enacted by the General Assembly of the State of Vermont:

Sec. 1. 10 V.S.A. § 6201 is amended to read:

§ 6201. DEFINITIONS

As used in this chapter, unless the context requires otherwise:

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(2) "Mobile home park" means any parcel of land under single or common ownership or control which contains, or is designed, laid out or adapted to accommodate, more than two mobile homes. Nothing herein shall be construed to apply to premises used solely for storage or display of mobile homes. Mobile home park *[shall]* does not mean any parcel of land under the ownership of an agricultural employer who may *[accommodate thereon]* provide up to four mobile homes used by full-time workers or employees of the agricultural employer as a benefit or condition of employment or any parcel of land used solely on a seasonal basis for vacation or recreational mobile homes.

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(10) "Lot rent" means any charge assessed on a mobile home park resident for rental and occupancy of a mobile home lot, but does not include charges permitted under section 6238 of this title.

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(12) "Single or common ownership or control" means ownership or control by any person or persons and includes affiliations of individuals or entities, or both, that are formed in order to derive profit, consideration or any other beneficial interest. The following individuals and entities shall be presumed not to be affiliated for beneficial interest unless there is substantial evidence of an intent to evade the purposes of this chapter:

(A) A stockholder in a corporation, if the stockholder and the stockholder's spouse, parents, children and siblings own, control or have a beneficial interest in less than five percent of the outstanding shares in the corporation.

(B) An individual in the capacity as an agent and within the normal scope of the individual's duties as a court appointed guardian, attorney, real estate broker or salesperson, engineer or land surveyor, unless compensation received or beneficial interest obtained as a result of these duties indicates more than an agency relationship.

(C) A seller or chartered lending institution that only provides financing for all or a part of the purchase price at rates not substantially higher than prevailing lending rates in the community and subsequently grants a partial release of the security when the buyer establishes or maintains a mobile home park.

Sec. 2. 10 V.S.A. § 6236(e)(4) is amended to read:

(e) All mobile home leases shall contain the following:

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(4) Notice that the owner shall not discriminate based on age, except as permitted under *[section 4508(b) of Title 9]* 9 V.S.A. § 4503(b) and (c). If age restrictions exist in all or part of a park, the specific restrictions and geographic sections in which restrictions apply shall be documented in the lease.

Sec. 3. 10 V.S.A. § 6251 is amended to read:

§ 6251. MOBILE HOME LOT RENT INCREASE; NOTICE; MEETING

(a) A mobile home park owner shall *[notify]* provide written notification on a form provided by the department to the commissioner and all the affected mobile home park leaseholders of any lot rent increase no later than 60 days before the effective date of the proposed increase. The notice shall include all the following:

(1) The amount of the proposed lot rent increase, including any amount of the increase that is attributable to a surcharge for any capital improvements of the mobile home park pursuant to subsection (b) of this section, the estimated cost, which includes interest, of the capital improvements and the proposed duration of the surcharge prorated in 12-month increments sufficient to recover the estimated cost of the capital improvements.

(2) The effective date of the increase.

(3) A copy of the mobile home park leaseholder's rights pursuant to *[10 V.S.A.§ 6251]* this section and sections 6252 and 6253 of this title.

(b) If the mobile home park owner requests a lot rent increase that includes a surcharge for any capital improvements, which, for the purposes of this section, include replacement or repair of any major infrastructure systems, that exceed $2,500.00, the mobile home park owner shall submit to the commissioner an affidavit stating the estimated costs of the improvements, the expected date of completion of the improvements and the time frame required for the surcharge to provide for recovery of the cost of the improvements. The lot rent surcharge shall terminate when the park owner has recovered the cost of the capital improvements. A lot rent surcharge for capital improvements shall be implemented to minimize the financial burden on the mobile home park leaseholders.

(c) If the mobile home park owner fails to notify either the mobile home park leaseholders or the commissioner of a lot rent increase as required by subsection (a) of this section *[or if the mobile home park owner, the park operator or the park manager fails to attend the meeting required in subsection (b) of this section]*, the proposed lot rent increase shall be ineffective and unenforceable.

Sec. 4. 10 V.S.A. § 6252 is amended to read:

§ 6252. LOT RENT INCREASE DISPUTE; *[EXCEPTION COMMITTEE;]*

MEDIATION

(a) If the percentage of a proposed lot rent increase is more than *[ten percent for a lot rent at or below the state median lot rent rate, as calculated by the department, or more than five percent for a lot rent above the state median lot rent rate]* one percentage point above the U.S. Consumer Price Index for all Urban Consumers, Housing Component, published by the U.S. Bureau of Labor Statistics in the periodical "Monthly Labor Review and Handbook of Labor Statistics" as established annually by the department, and if, within *[14]* 15 business days after *[the meeting held pursuant to subsection 6251(c) of this title, the number of mobile home park leaseholders that corresponds to a majority of the occupied leased lots files a written petition]* receipt by the commissioner of the notice required pursuant to subsection 6251(a) of this title, a majority of the leaseholders of the occupied leased lots files with the commissioner and the park owner a written petition that includes the name of the person who will act as the representative of the leaseholders and a statement that they dispute the proposed lot rent increase, *[the following shall occur within five days after receipt of the petition:]* the commissioner shall send a list of qualified professional mediators compiled by the department in cooperation with park owners and leaseholders to the park owner and to the leaseholders' representative. Within five business days of receipt of the list, the park owner and the leaseholders' representative shall agree on a mediator from the list provided by the commissioner and notify the commissioner of the name, address and telephone number of the mediator selected, accompanied by the mediator's agreement to conduct the mediation. If the commissioner has not been notified of a mediator as required by this subsection, the commissioner shall appoint a mediator from the department's list.

(b) *[If the dispute is not resolved by the exceptions committee, the mediation panel]* The mediator shall conduct one or more mediation sessions within *[25 days after the petition is filed pursuant to subsection (a) of this section]* the period that ends 10 days prior to the effective date of the proposed lot rent increase. The mediation shall include the mobile home park owner and the leaseholders, or their respective representatives and shall attempt to resolve the dispute. No later than five days before the initial mediation session, the mobile home park owner shall provide to the *[mediation panel]* mediator and the leaseholders' representative all documents and information that the park owner considers relevant to support the proposed lot rent increase. The mobile home park owner shall have the burden of providing information to show that proposed lot rent increase is reasonable. The *[mediation panel]* mediator may also request any additional documents or information for the purposes of the mediation process. Any resolution of the dispute shall include an agreement regarding the amount of lot rent increase and the effective date. If the dispute is resolved, the mobile home park owner shall not be required to provide any additional notice in order for the lot rent increase to take effect pursuant to the resolution.

(c) *[Within 30 days after the petition is filed pursuant to subsection (a) of this section, the mediation panel shall issue a report to the parties and the commissioner regarding the outcome of the mediation.]* The mediator shall issue to the parties and the commissioner a report signed by the mediator and the parties regarding the outcome of the mediation. The report shall not be admitted into evidence and the *[members of the mediation panel]* mediator shall not be competent to testify in any subsequent action regarding the proposed lot rent increase.

Sec. 5. 10 V.S.A. § 6253(a) and (c) are amended to read:

(a) If the parties are unable to resolve the disputed proposed lot rent increase pursuant to the process provided in section 6252 of this title *[and the lot rent increase is more than ten percent for lot rent at or below the state median lot rent rate, as calculated by the department, or more than five percent for lot rent above the state median lot rent rate]*, an action for abatement of some or all of the proposed lot rent increase based on a claim that the increase is clearly excessive may be initiated by the number of affected mobile home park leaseholders that corresponds to a majority of the occupied leased lots filing a complaint in the superior court in the county in which the mobile home park is located within 30 days after the effective date of the proposed lot rent increase.

(c) For the purposes of this section, a clearly excessive lot rent increase is an increase that is unreasonable based upon the park owner's total reasonable or documented expenses, including consideration of debt service and a reasonable return to the mobile home park owner on investment*[, equity, or asset value,]* with consideration being given to *[alternative and]* comparable investments.

Sec. 6. 10 V.S.A. § 6254(c) is amended to read:

(c) The department may charge a mobile home park owner an annual fee of no more than $9.00 for each occupied leased lot in the park on *[September 1, 1995, and September 1, 1996]* September 1 of each year. The mobile home park owner may charge this fee to the mobile home park residents. The fee shall be submitted to the department with the registration form required in subsection (a) of this section *[on September 1, 1995 and September 1, 1996]*. If a mobile home park owner charges the fee under this subsection to the mobile home park residents, the fee shall not be deemed to be a lot rent increase and shall not be included in any calculation of a lot rent increase pursuant to section 6251 of this title. A mobile home park owner shall not be charged the fee under this subsection for any mobile home park in which all the mobile homes are owned by themobile home park owner. The commissioner may enforce filing of the registration form and payment of the fee under subsection 6205(a) of this title. A special fund shall be created for these fees, to be used by the department of housing and community affairs for its expenses in administering the laws regarding mobile home parks, and to pay any fees required in the mediation process pursuant to *[10 V.S.A. § 6252]* section 6252 of this title and for legal representation for leaseholders pursuant to *[10 V.S.A. § 6253]* section 6253 of this title. This special fund shall be managed in accordance with V.S.A. Title 32 Chapter 7, subchapter 5.

Sec. 7. 9 V.S.A. § 2602(a)(4) is added to read:

(a) When a mobile home is sold or offered for sale:

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(4) A legible copy of the disclosure required in subdivision (2) of this subsection shall be prominently displayed on a new mobile home in a location that is clearly visible to a prospective buyer from the exterior.

Sec. 8. POSITION AUTHORIZED

One (1) limited service position is authorized for the department of housing and community affairs. In FY 2000, the department shall convert this limited service position to a full-time classified position when permanent funding is available.

Sec. 9. EFFECTIVE DATE

This act shall take effect on passage, except that Secs. 12 and 13 of this act shall take effect on January 1, 1998, and shall apply to any sale of a mobile home park that occurs on or after January 1, 1998.

Sec. 10. 2 V.S.A. chapter 21 is added to read:

CHAPTER 21. JOINT HOUSING COMMITTEE

§ 701. CREATION OF COMMITTEE

(a) There is created a joint housing committee whose membership shall be appointed each biennial session of the general assembly. The committee shall consist of three representatives, at least one from each major party, appointed by the speaker, and three members of the senate, at least one from each major party, appointed by the committee oncommittees.

(b) The committee shall elect a chairperson and vice-chairperson and shall adopt rules of procedure. The office of chairperson shall rotate biennially between the house and senate members. The committee may meet during a session of the general assembly at the call of the chairperson or a majority of the members of the committee. The committee may meet no more than six times during adjournment, subject to the approval of the speaker of the house and the president pro tem of the senate. A majority of the membership shall constitute a quorum.

§ 702. EMPLOYEES; RULES

(a) The staff of the legislative council shall provide professional and clerical assistance to the joint committee.

(b) For attendance at a meeting when the general assembly is not in session, members of the joint housing committee shall be entitled to compensation for services and reimbursement of expenses as provided under 2 V.S.A. § 406.

(c) The joint housing committee shall keep minutes of its meetings and maintain a file thereof.

§ 703. FUNCTIONS

The joint housing committee shall:

(1) conduct a continuing review of affordable housing in the state, including housing need and availability, housing affordability, planning for future housing needs and other related topics;

(2) at least annually, report to the general assembly the results of its findings and deliberations;

(3) work with, assist and advise other committees of the general assembly, the executive and the public, in housing related matters within their respective responsibilities.

Sec. 10a. SUNSET OF JOINT HOUSING COMMITTEE

Chapter 21 of 2 V.S.A. (Joint Housing Committee) shall sunset on July 1, 2001.

Sec. 11. 32 V.S.A. § 5828 is added to read:

§ 5828. MOBILE HOME PARK SALE; CAPITAL GAIN CREDIT

A taxpayer of this state shall receive a credit against the tax imposed under section 5822 or 5832 of this title for a qualified sale of a mobile home park. The credit shall be in the amount of seven percent of the taxpayer's gain subject to federal income tax for the taxable year. Credit in excess of the taxpayer's tax liability for the taxable year may be carried forward for credit in the next succeeding three taxable years. "Qualified sale of a mobile home park" means the land comprising a mobile home park that is transferred in a single purchase to a group composed of a majority of the mobile home park leaseholders as defined in 10 V.S.A. § 6242(a), or to a nonprofit organization that represents such a group.

Sec. 12. 32 V.S.A. § 10002(n) is added to read:

(n) Also excluded from the definition of "land" is the land comprising a mobile home park that is transferred in a single purchase to a group composed of a majority of the mobile home park leaseholders, as defined in 10 V.S.A. § 6242(a), or to a nonprofit organization that represents such a group.

Sec. 13. RENTAL HOUSING HEALTH AND SAFETY STANDARDS; REPORT

(a) The department of housing and community affairs in cooperation with the department of labor and industry shall review the health and safety conditions of the rental housing stock, except mobile home rental housing, in Vermont and report their findings and recommendations to the House Committee on General, Housing and Military Affairs and the Senate Committee on General Affairs and Housing on or before January 15, 1999. The report shall include:

(1) A review of the current federal, state and local laws and regulations that establish health and safety standards for rental housing, including provisions for monitoring and enforcing compliance with those standards.

(2) An analysis of the quality and condition of the existing rental housing stock in Vermont, with particular emphasis on the safety and health conditions of rental housing available to low income Vermonters. The analysis will include consideration ofinformation provided by the Vermont Housing Council and the organizations it represents, the Vermont Apartment Owners Association, and the affordable housing coalition.

(3) Recommendations for improving and maintaining the health and safety conditions of rental housing, and methods and resources for monitoring and enforcement of health and safety housing standards.

Approved: April 23, 1998