ALJDEC decisions subject to certification as final

21F-LTA2121003-ADH · Arizona State Department of Housing - LTA · 2021-11-23

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

GAIL ROSADO, et al.,

Petitioners,

vs.

BREIT TH MHC JV L.P., TREEHOUSE MANAGEMENT, and EVERGREEN VILLA MOBILE HOME PARK, et al.,

Respondents.

No. 21F-LTA2121003-ADH

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: August 19, 2021 and October 12, 2021.

APPEARANCES: Kelly Yeilding appeared on behalf of Gail Rosado, et al. (“Petitioners”) with Mike Chonka, Gail Rosado, Patsy Thompson, and Roger Randall Fuller as witnesses. Scott Baluha, Esq. appeared on behalf of Treehouse Management and Evergreen Villa Mobile Home Park (“Respondent”) with Tishanna Newmman and Lyle Goldberg as witnesses. Janice Carter, Cynthia Frias and Gay Golden observed.

ADMINISTRATIVE LAW JUDGE: Jenna Clark.

_____________________________________________________________________

Having heard the evidence and testimony and having considered the record in this matter, the undersigned Administrative Law Judge hereby makes the following Findings of Fact and Conclusions of Law and issues the following Recommended Order to the Director of the Arizona Department of Housing (“Department”).

Findings of Fact

Background and Procedure

Respondents are comprised of a 55+ manufactured home community located in Chandler, AZ, which is one of several mobile home park communities owned by Breit TH MHP JV L.P. and operated by Treehouse Management. Lyle Goldberg is the resident manager of Evergreen Villa, which is the mobile home park where Petitioners reside.

On May 07, 2021, the Department received a petition from Petitioners that alleged Respondent violated Arizona Revised Statutes (“Ariz. Rev. Stat”) §§ 33-1412(B), 33-1413(A-C), 33-1413(G-H), 33-1413(K)(3), 33-1432(A)(1-3), 33-1432(E-F), 33-1432(H), 33-1433(A)(12), 33-1434(A)(1-2), and 33-1434(C-D). Twenty-four additional mobile home owners in Respondent’s park co-signed the petition.

On May 14, 2021, the Department provided notice of the underlying petition to Respondent. Respondent was required to respond to the petition by June 03, 2021.

On May 26, 2021, Respondent provided a written Answer to the underlying petition, and also submitted a Motion to Dismiss to the Department.

On June 02, 2021, Respondent’s Answer and Motion to Dismiss were forwarded to Petitioners. Later that same date, Petitioners submitted a written Request for Hearing to the Department.

On June 04, 2021, the Department referred this matter to the Office of Administrative Hearings (“OAH”), an independent state agency, for an evidentiary hearing on August 05, 2021. Per the June 10, 2021, Notice of Hearing the issues to be determined are whether Respondent committed one or more of the statutory violations alleged in Petitioners’ petition.

Hearing Evidence

Gail Rosado, Mike Chonka, Patsy Thompson, and Roger Randall Fuller testified on behalf of Petitioners. Petitioners submitted Exhibits A-G into the record. Respondent called Tishanna Newmman and Lyle Goldberg as witnesses. The Notice of Hearing and Department’s agency file were also admitted into the record as their own exhibits. The substantive evidence of record is as follows:

Residents own their mobile homes and rent space at the mobile home park pursuant to their individualized lease agreement contracts.

In or around May 2020, Respondent purchased Evergreen Villa and took over the existing lease agreements the prior owner, Silver King, had with the residents of the community. All of the terms and conditions outlined in residents’ Silver King lease agreements remained in effect through the expiration of the contracts after Respondent became the owner of the property.

Ms. Rosado had resided at Respondent’s park for the last nine years. During that time she also worked for Respondent as an independent janitorial contractor.

Ms. Rosado was terminated on or about May 16, 2021.

It was customary for Respondent to leave non-legal notices on residents’ front doors and porch areas, often in clear plastic sheaths. No additional care was employed to secure them, so many times the notices ended up in unintended places like driveways, sidewalks, and neighbor’s yards. No notice contained private, confidential, or otherwise sensitive personal identifying information.

In March 2021, Ms. Rosado submitted a complaint to Respondent regarding the state of the park’s pool hose, the cleanliness of the clubhouse, their community entrance sign, sub-par conditions of lighting throughout the park, pet waste, and tree debris throughout the common area.

On or about April 29, 2021, during a community clubhouse meeting, Respondent provided lease renewal packets to residents. Attached thereto were additional packets of park policies.

Multiple items in the renewal lease agreement that Respondent had provided were either missing or incorrect, including, but not limited to: the lease terms, the premises address, base rent, the owner’s name and address, jury trial waiver information, the utility rate disclosure, landscaping responsibilities; specifically, trees and shrubbery, and statements of policy; subleasing.

Residents advised Respondent of the numerous discrepancies in their lease agreements. Respondent advised that it would make corrections in exchange for resident signatures, which some residents took advantage of prior to the conclusion of the meeting. Respondent also advised that residents could bring their lease renewal agreements to its off-site office for correction and signature, by appointment only.

Respondent was asked by Ms. Rosado to host another community clubhouse lease renewal meeting for residents.

On May 07, 2021, Respondent issued a letter to Ms. Rosado that, in pertinent parts, denied her request for Respondent to host a lease renewal meeting for residents, accused her of violating community rules for failing to properly dispose of garbage after a “community cleanup” she hosted on May 01, 2021, denied her allegation that the park was not being properly maintained in accordance with the Arizona Mobile Home Parks Residential Landlord Tenant Act (“Act”), and alleged that her complaint submittals and miscellaneous inquiries could be considered harassment.

In May 2021, Respondent increased the rent by $27.00.

On July 02, 2021, the City of Chandler opened Code Enforcement Case CE-21-07-1916 for Respondent’s mobile home park, based on a complaint received by Ms. Rosado earlier that same date regarding “fencing deterioration” and community “sign damage.” A city inspector substantiated the complaints and also noted other areas of concern, including landscaping.

On July 07, 2021, a twelve-item Notice of Violation was issued to Respondent for various violations regarding the maintenance of the property.

On July 21, 2021, Respondent submitted an appeal to the city and accompanying extension request to September 01, 2021, to abate all of the alleged code violations. Respondent’s request was approved.

By the final date of the hearing Respondent had satisfactorily remediated all but one alleged code violation, the park’s entrance sign, but was in the process of addressing its completion.

By the date of the hearing, Petitioners had not made an appointment to correct their leases with Respondent, nor had they requested Respondent to bring corrected leases to their respective residences for signage.

Any resident, Petitioners included, who had not signed a new lease with Respondent since its purchase of the park remained under a month-to-month tenancy under the provisions and terms of their prior Silver King lease agreement.

In closing, Respondent argued that Petitioner was required to establish violations of the Act, their lease agreement, and/or park rules and regulations. More broadly, disputes over lease irregularities, conditions of the property, and obligations of Respondent to provide proper notices to residents upon intent to invoke any legal remedy. Respondent opined that a demand for rent is not a legal notice, and noted it approved every resident request regarding receipt of non-legal notices via its online portal. Respondent also noted that no resident was required to sign a lease renewal agreement that contained one or more errors. Respondent further argued that a jury trial waiver is not in violation of the Act. Silver King leases and Respondent rules have same provisions regarding tree landscaping, save palm trees which Respondent agrees to maintain. Respondent also argued that it diligently moved to address all property improvement, safety, and sanitation issues, and has remediated all but one item due to global pandemic issues outside of its immediate control.

In closing, Petitioners argued that notices were required to be delivered in person or via postal mail, regardless of the type of communication issued. Petitioners also argued that the erroneous and missing information from the rental agreements Respondent presented its residents violated the Act. Petitioners opined that a “meeting of the minds” was not necessary because any disagreement between the parties defaulted into a 1-year lease agreement bearing the prior leases terms. Petitioner also opined that the City of Chandler investigated at the residents’ request, not Respondent’s.

CONCLUSIONS OF LAW

The Department has jurisdiction to determine whether Respondent violated the LTA, as alleged in Petitioners’ petition. The matter was properly brought before OAH for adjudication.

Petitioners bear the burden of proof to establish the violation(s) by a preponderance of the evidence. Respondent bears the burden to establish affirmative defenses by the same evidentiary standard.

“A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not. A preponderance of the evidence is “[t]he greater weight of the evidence, not necessarily established by the greater number of witnesses testifying to a fact but by evidence that has the most convincing force; superior evidentiary weight that, though not sufficient to free the mind wholly from all reasonable doubt, is still sufficient to incline a fair and impartial mind to one side of the issue rather than the other.”

Ariz. Rev. Stat. § 33-1412(B) provides in pertinent parts, that a person "notifies" or "gives" notice to another by taking steps reasonably calculated to inform the other in ordinary course whether or not the other actually comes to know of it. A person "receives" a notice or notification when it comes to his attention, or in the case of the landlord, it is delivered in hand or mailed by registered or certified mail to the place of business of the landlord through which the rental agreement was made or at any place held out by him as the place for receipt of the communication, or in the case of the tenant, it is delivered in hand to the tenant or mailed by registered or certified mail to him at the place held out by him as the place for receipt of the communication.

Ariz. Rev. Stat. § 33-1413(A) provides that at the beginning of the tenancy, a signed, written rental agreement must be executed by the landlord or designated agent and a tenant. The rental agreement shall be executed in good faith by both parties and shall not provide for the waiver of any rights given to either party. The rental agreement shall be for a specific period and shall include the amount of the rent, and the amount of the security deposit, if any.

Ariz. Rev. Stat. § 33-1413(B) provides, in pertinent parts, that if the landlord and tenant agree to the term of the rental agreement, the rental agreement may be for any term. If the landlord and tenant disagree on the term of the rental agreement, the rental agreement shall be for twelve months. Any written rental agreement shall have all blank spaces completed, and executed copies of the written rental agreement shall be furnished to all parties within ten (10) days of execution.

Ariz. Rev. Stat. § 33-1413(C) provides that the rental agreement may include conditions not prohibited by this chapter or other rule of law governing the rights and obligations of the parties.

Ariz. Rev. Stat. § 33-1413(G) provides that upon the expiration or renewal of any rental agreement, the landlord may increase or decrease the total rent or change payment arrangements. The landlord shall notify the tenant in writing by first class or certified mail or by personal delivery at least ninety days prior to the expiration or renewal of any rental agreement of any such increase or change.

Ariz. Rev. Stat. § 33-1413 (H) provides, in pertinent part, that on expiration of a written rental agreement for a specified term or written renewal of a rental agreement, tenancy is on a month-to-month basis unless the landlord or the tenant requests a new written rental agreement.

Ariz. Rev. Stat. § 33-1413(K)(3) provides, in pertinent part, that the tenant may demand in writing and the landlord shall offer a long-term initial or renewal rental agreement. The tenant shall have ten (10) days from the date of receipt of the agreement to accept or reject it. If an agreement is not signed and returned to the landlord within the ten (10) day period, the tenant is deemed to have rejected the agreement.

Ariz. Rev. Stat. § 33-1432(A)(1-3) provides that the landlord must disclose the name and address of the person authorized to manage the premises, the name and address of the owner of the premises, and if applicable, the name and address of a person authorized to act for and on behalf of the owner for the purpose of service of process and for the purpose of receiving and receipting for notices and demands to the tenant in writing before entering into the rental agreement.

Ariz. Rev. Stat. § 33-1432(E) provides that the landlord shall post in a conspicuous place a copy of the current utility rates unless the tenant is charged directly by the utility company.

Ariz. Rev. Stat. § 33-1432(F) provides that each tenant shall be notified, in writing, of any rent increase at least ninety(90) days prior to the increase by first class or certified mail or by personal delivery.

Ariz. Rev. Stat. § 33-1432(H) provides that the landlord shall make available to all tenants, at no cost, a concise written summary of the Arizona mobile home parks residential landlord and tenant act, including any legislative changes made in the preceding year. The summary must also include information regarding where a complete copy of the act may be obtained or reviewed, including listing the Arizona department of housing's website. The director shall post the approved summary on the Arizona department of housing's website.

Ariz. Rev. Stat. § 33-1434(A)(1-2) provides that a landlord shall comply with the requirements of all applicable city, county and state codes materially affecting health and safety, and make all repairs and do whatever is necessary to put and keep the premises in a fit and habitable condition.

Ariz. Rev. Stat. § 33-1434(C) provides that for new tenants who are moving into a mobile home park, any rental agreements that are executed or adopted after December 31, 2016, shall specifically disclose in writing any requirement that the tenant maintain one or more existing trees located on the mobile home space.

Ariz. Rev. Stat. § 33-1434(D) provides that any change regarding the tenant's obligation to maintain any one or more trees located on the mobile home space constitutes a substantial modification of the rental agreement.

Here, the record reflects that Respondent issued its residents rental lease agreements that contained a multitude of errors, and made no overt attempts to correct the errors and reissue them to the residents, Petitioners included, for signature. The undersigned is not swayed by Respondent’s argument that the onus was on its residents, including Ms. Rosado, to make corrections to their respective lease agreements and provide Respondent with a copy so Respondent could possibly sign it into effectuation. However, because none of Petitioners lease agreements were signed, the remaining arguments regarding the terms contained therein are moot. The record also reflects that all but one of Petitioners’ community-related complaints have been satisfactorily remediated, and that Respondent is in the process of repairing the last outstanding item. The record further reflects that Respondent only employs the use of non-legal door notices where a resident has not expressly withdrawn their consent to receive correspondence in that manner. Thus, violations of Ariz. Rev. Stat. §§ 33-1432(A)(1-3) have been established, but 33-1412(B), 33-1413(B-C), 33-1413(G-H), 33-1413(K)(3), 33-1432(E-F), 33-1432(H), 33-1433(A)(12), 33-1434(A)(1-2), and 33-1434(C-D) have not.

Notably, the record is devoid of sufficient evidence to establish that Respondent’s $27 monthly rent increase was done in violation of Ariz. Rev. Stat. §§ 33-1413(A) or 33-1432(F).

Therefore, because Petitioners have established by a preponderance of the evidence that Respondents violated Ariz. Rev. Stat. §§ 33-1432(A)(1-3) and 33-1413(A), they have also established grounds for the Department to take disciplinary action against Respondent. However, because Petitioners have failed to sustain their burden of proof in this matter based on alleged violations of Ariz. Rev. Stat. §§ 33-1412(B), 33-1413(B-C), 33-1413(G-H), 33-1413(K)(3), 33-1432(E-F), 33-1432(H), 33-1433(A)(12), 33-1434(A)(1-2), and 33-1434(C-D), the undersigned has no alternative than to conclude that the portion related portions of the petition be dismissed, as the Department has no grounds to discipline Respondent based on alleged violations of these statutes.

Recommended Order

Based on the foregoing,

IT IS ORDERED that Petitioners’ Complaint and Petition be granted, in part, and dismissed, in part.

IT IS FURTHER ORDERED that Respondent is not required to reimburse Petitioners’ $50.00 filing fee.

In the event of certification of the Administrative Law Judge Decision by the Director of the Office of Administrative Hearings, the effective date of the Order will be five days from the date of that certification.

Done this day, November 23, 2021.

Office of Administrative Hearings

/s/ Jenna Clark

Administrative Law Judge

Transmitted electronically to:

Tom Simplot, Director

Arizona Department of Housing