ALJDEC

00F-L990021-BFS · Department of Building and Fire Safety · 2000-05-04

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: May 2, 2000 at 9:00 a.m. APPEARANCES: Petitioner appeared on her own behalf; Respondents appeared through their attorney, Michael A. Parham, Esq. ADMINISTRATIVE LAW JUDGE: Diane Mihalsky _____________________________________________________________________

The parties presented evidence and argument with respect to whether Respondents’ inclusion in the rental agreement of a term prohibiting park tenants from subletting their manufactured houses, when in the past it had allowed such subleases, violated the Arizona Mobile Home Parks Residential Landlord & Tenant Act. Based on the entire record, the undersigned makes the following Findings of Fact, Conclusions of Law, and Recommended Order. FINDINGS OF FACT Respondents are the owners and property managers of Friendly Village of Orangewood Mobile Home Park (“Friendly Village”), a park in Mesa. Petitioner lives with her husband in South Carolina. She has not lived in the Phoenix area on a regular basis at any relevant time but desires to keep her manufactured home in the event she ever needs her own place to live and, presumably, as an investment. For about 10 years before the summer of 1994, Petitioner rented a spot in Casa Del Francisco, a park located in south Phoenix, for her manufactured home. Casa Del Francisco was a family park until approximately 1989, when it converted to an over 55 park. During the entire ten years, Petitioner sublet her manufactured home to various retired sublessees during the winters, which Petitioner’s lease agreement with Casa Del Francisco allowed. Casa Del Francisco Park was managed by Kingsley Management Corp., a Respondent in this matter that also manages Friendly Village. South Phoenix became less desirable and, in summer 1994, Petitioner moved her manufactured home to Friendly Village because, among other things, it allowed tenants to sublease their manufactured homes. Petitioner signed a Mobile Home Space Lease Agreement, whose effective date was August 1, 1994 and that provided: Resident cannot assign or transfer this Agreement, nor sublease the space or any mobile home located thereon unless it is specifically authorized in writing by Management. For the purpose of this section the term “sub-lease” shall mean a lease with an option to purchase or any other arrangement whereby Resident transfers any interest whatever in either the space or the mobile home.[1]

Petitioner also offered into evidence a copy of Friendly Village’s Rules, whose effective date was July 1, 1994 and provided: This Park is operated and intended for persons 55 years of age or older pursuant to the Federal Fair Housing Amendments Act of 1988. Public Law 100-430. At least one person per mobile home must be at last 55 years of age or older. Residents must be at least 18 years of age. Provided however, all persons less than years of age who were residing in the Park with Management’s approval and consent on or before March 12, 1989, the effective date of the Act, are grandfathered in as Residents, and shall be allowed to reside in the park as long as they fully comply with the terms of their Agreement, all Rules now in effect or subsequently adopted, and the Arizona Mobile Home Parks Residential Landlord and Tenant Act. . . .[2]

Petitioner subleased the manufactured home in Friendly Village to Dr. John Lescault for six months, commencing November 1, 1994.[3] Petitioner subleased the manufactured home to Dr. Lescault or other sublessees for the winter or tourist season of the years 1995-96, 1996-97, 1997-98, and 1998- 99. All of the tenants were responsible and none caused any problems for Respondents. Petitioner’s home is well maintained. She has hired persons who perform maintenance while she is in South Carolina and she inspects the home regularly. The last lease agreement that the parties both signed before the one at issue was dated November 10, 1997, is very similar to the 1994 lease agreement, and provided in relevant part as follows: XIII. Permissible Use.

Resident’s mobile home shall be used solely and exclusively as a residence for Resident. Any other use, including but not limited to use of said mobile home for business or commercial purposes not covered herein constitutes a violation of the Rules and Regulations . . . . . . . .

XIX. Miscellaneous. . . . .

G. Neither this Agreement, nor the mobile home park space, nor the tenancy in the Park may be assigned without prior written permission from the park. Resident may not sublet the leased premises without such prior permission. Any assignment or subletting by Resident in violation of this paragraph will be null and void and shall be considered a material breach of this Agreement for which Management may elect to terminate the Agreement. Except as otherwise so limited, the obligations of the Agreement shall be binding upon and shall inure to the benefit of the parties hereto, their heirs, assigns and successors in interest, but Resident’s rights of occupancy do not inure or transfer to others.[4]

On February 3, 1999, Respondent Carolyn Douglass, one of the on-site co- managers of Friendly Village, sent a letter to Petitioner in response to her request about renting her home. Mrs. Douglass informed Petitioner that “I really don’t think you will have much of a problem renting your home on a long term basis since there are a few homes here rented that way.” On July 21, 1999, Respondent Kingsley Management Corporation sent a letter to Petitioner and the other tenants of Friendly Village a letter. Attached the letter was a lease, which the letter requested that tenants sign and return because “[a]ll present rental agreements will expire July 31, 1999.”[5] The lease attached to the July 21, 1999 letter was entitled “Rental Agreement” and provided in relevant part as follows: XII. Description of the Parties.

This Rental Agreement is entered into by and between Management and Resident(s) only. Except as otherwise set forth, Resident represents that Resident is the sole registered owner(s) of the mobile home, and further represents that except during times of vacation, will reside in the Park at all times during the term of this Agreement. Subletting is expressly prohibited. . . . . . . .

XXIII. Permissible Use.

Resident’s mobile home shall be used solely and exclusively as a residence for Resident. Any other use, including but not limited to use of said mobile home for business or commercial purposes constitutes a violation of the Rules and Regulations . . . . . . . .

XIX. Miscellaneous

. . . .

G. Neither this Agreement, nor the mobile home park space, nor the tenancy in Park may be assigned without prior written permission from the Park. Resident may not sublet the leased premises without such prior permission. Any assignment of subletting by Resident in violation of this paragraph will be null and void and shall be considered a material breach of this Agreement for which Management may elect to terminate the Agreement. Except as otherwise so limited, this Agreement shall be binding upon and shall inure to the benefit of the parties hereto, their heirs, assigns and successors in interest.[6]

Mrs. Douglass testified at the hearing that Respondents changed its policy and form lease to prohibit tenants from subleasing their manufactured homes because, although Petitioner’s sublessees had never been a problem, some tenants had entered into subleases without obtaining management’s prior approval of the sublessees. This created a potential security problem because unapproved people who were not on record were living in the park. In addition, some of the rental homes were not well-maintained because renters have no pride of ownership. Petitioner did not sign or return the Rental Agreement but, instead, requested that she be given “the right of ‘grandfathering’ as has been afforded to other homes presently subleased.”[7] On July 29, 1999, Petitioner was informed that “[t]he management decision not to allow subletting in the future is one that was made after very careful consideration and years of experience dealing with this situation. I’m not able to waive this policy for you; however, if you already have arrangements for this coming winter season, I am willing to allow you to sublet your home under the same conditions as in the past just for this coming winter, but we would not be able to approve a sublet thereafter.” On September 20, 1999, Petitioner sent a letter to Respondents, informing them: It is our intent to stay with the law stated in the “Mobile Home Parks Residential Landlord and Tenant Act . . . § 33-1452 . . . . A rule or regulation adopted after the Tenant enters into the rental agreement is enforceable against the tenant only if it does not work a substantial modification of his rental agreement.”

Subletting is critical to our situation. Approval for a potential leasee [sic] as required in this park’s Rental Agreement XIX, Miscellaneous G in prior years will be in compliance as has always been the case in the past. Previous tenants have been responsible home owners from other states. None have ever been declined approval by Park Management.

On October 21, 1999, Petitioner entered into an agreement to sublet the manufactured home in Friendly Village to Louis Capurro for six months commencing on November 1, 1999.[8] Mr. Capurro lived at Friendly Village between November 1999 and April 2000 without incident and desires to sublet Petitioner’s home during the 2000-01 season. On November 17, 1999, Respondents informed Petitioner that “our position of making a one-time exception to the park Rules and allowing you to sub lease this year only has not changed.” Respondents were concerned because “it appeared . . . [Petitioner was] still panning to sublease beyond this year.” Mrs. Douglass testified at the hearing that Respondents allowed five or six tenants of the Friendly Village to sublease manufactured homes during the 1999-2000 season to avoid forcing the tenants to breach contracts they had previously entered. As noted above, Petitioner was extended the same courtesy, even though it does not appear that she had entered into a sublease when she learned of the change in policy in June 1999. No tenants have been allowed to sublease their manufactured homes for the 2000-01 season. On February 24, 2000, the Department of Building and Fire Safety received Petitioner’s complaint, which was based on the facts and law summarized above, Respondents timely answered the complaint, a notice of hearing issued, and the matter was assigned to the Office of Administrative Hearings, which held a hearing in due course. CONCLUSIONS OF LAW In this administrative proceeding, Petitioner bears the burden of proof and must establish statutory a violation by a preponderance of the evidence.[9] “A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.”[10] A preponderance of the evidence is “evidence which is of greater weight or more convincing than evidence which is offered in opposition to it; that is, evidence which as a whole shows that the fact sought to be proved is more probable than not.”[11] “In interpreting a statute, we must determine and give effect to the legislative intent behind the statute. . . . To determine the legislative intent, we examine the policy behind the statute and the evil sought to be remedied. . . . We also consider the context of the statute, the language used, the subject matter, the historical background, and the effects and consequences of the statute. . . .”[12] “A cardinal rule of statutory interpretation is to give full effect to each statutory word or phrase so that no part is rendered void, superfluous, contradictory or insignificant.”[13] The Mobile Home Park Residential Landlord & Tenant Act (the “Act”) does not require landlords to permit tenants to sublease their homes or allow landlords to withhold approval of subleases only for cause.[14] “A rule or regulation adopted after the tenant enters into the rental agreement is enforceable against the tenant only if it does not work a substantial modification of his rental agreement.”[15] “‘Rental agreement’ means leases or agreements and valid rules adopted under § 33-1452 embodying the terms and conditions concerning the use and occupancy of a mobile home space.”[16] Although the statutes are not entirely clear, a “rental agreement” under the definitional statute seems to consist of at least two documents: (a) the lease, which the landlord and the tenant sign and which may be referred to in the singular as a “rental agreement,”[17] plus (b) rules and regulations, which must, among other things, be provided to prospective tenants and must apply to all tenants equally,[18] but need not be signed. Although the term “rental agreement” is used somewhat inconsistently in the Act, which could give rise to an argument that the Act is ambiguous in this respect, it is clear that what the act prohibits is rules, not terms of a lease or any other portion of the rental agreement, that “work a substantial modification.” Any other interpretation could arguably prevent a landlord from ever changing a term of rental agreement or lease other than rent, even though the Act contains no such express prohibition.[19] Because the change prohibiting subleases was made to the lease or “rental agreement,” not the rules, and because nether the Act nor the terms of the lease or rental agreement ever required Respondents to allow Petitioner to sublease her manufactured home, she has not established that Respondents violated the Act when they prohibited her from subleasing her manufactured home after April 2000. Done this day, May 4, 2000.

______________________________________ Diane Mihalsky Administrative Law Judge

Original transmitted by mail this ____ day of May, 2000, to:

Department of Building and Fire Safety N. Eric Borg ATTN: Michelle M. Castañeda East Virginia, Suite 100 Phoenix, AZ 85004

By ___________________________

----------------------- [1] Petitioner’s Exhibit 1(IV)(a) at 4, § 11.

[2] Petitioner’s Exhibit 1(IV)(a) at 1, § 4 (emphasis added).

[3] Petitioner’s Exhibit 1(IV)(c). [4] Respondents’ Exhibit A at 6 and 8.

[5] Petitioner’s Exhibit 1(V)(b); Respondents’ Exhibit B. [6] Petitioner’s Exhibit 1(IV)(b); Respondents’ Exhibits C and D (emphasis added).

[7] Petitioner’s Exhibit 1(V)(c).

[8] Petitioner’s Exhibit 1(IV)(d).

[9] See A.A.C. R2-19-119; see also Culpepper v. State, 187 Ariz. 431, 438, 930 P.2d 508, 515 (App. 1996).

[10] Morris K. Udall, Arizona Law of Evidence § 5 (1960).

[11] Black’s Law Dictionary at page 1064 (6th ed. 1990).

[12] State ex rel. Ross v. Nance, 165 Ariz. 286, 288, 798 P.2d 286, 288 (1990) (citations omitted).

[13] Westburne Supply, Inc. v. Diversified Design and Construction, Inc., 170 Ariz. 598, 600, 826 P.2d 1224, 1226 (Ct. App. 1992).

[14] Compare A.R.S. § 33-1452(D)(3) (The landlord “shall not . . . [d]eny any resident of a mobile home park the right to sell his mobile home . . . but the landlord may reserve the right to approve the purchaser of such mobile home as a tenant but such permission may not be unreasonably withheld . . . .”) with A.R.S. § 33-1354 (“Unless otherwise agreed, the tenant shall occupy his mobile home only as a dwelling unit and may sublet, upon written agreement with the park management.”).

[15] A.R.S. § 33-1452(C) (emphases added).

[16] A.R.S. § 331409(25) (emphases added).

[17] See A.R.S. § 33-1413(A) (“At the beginning of the tenancy, a signed written rental agreement shall be executed in good faith by the landlord or designated agent and a tenant;” emphasis added).

[18] A.R.S. § 33-1452(A)(3) and (6).

[19] See A.R.S. § 33-1413(C) (“The rental agreement may include conditions not prohibited by this chapter or other rule of law governing the rights and obligations of the parties.”).

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