Kathy Jennings

delaware.gov

By Joseph Edelen

WILMINGTON — The owner of Lincoln’s Pine Haven manufactured housing community must pay over $800,000 in penalties and rebates related to excessive rent increases after violating Delaware’s Consumer Fraud Act and other laws, the Delaware Department of Justice announced Thursday.

Blue Beach Bungalows DE, LLC — the property owner of the Lincoln community — repeatedly told year-round residents that the campground was seasonal, leading the group to illegally increase rent, make threats of eviction and arrest, and force residents out of their homes prematurely, according to an April 4 opinion release by the agency.

After residents made numerous complaints to the state’s Consumer Protection Unit, the unit sent a cease-and-desist order to Blue Beach Bungalows in April of 2023, which urged the company to stop making false statements to residents and violating their legal protections under state law.

Following the cease-and-desist order, the company continued to claim that Pine Haven was a seasonal community in its communications with residents, according to the opinion.

The order was accompanied by a complaint regarding how these claims were used to violate residents’ rights, such as illegal rent increases, which led to an administrative hearing last September.

“The harm caused by (Blue Beach Bungalows’) actions cannot be undone,” hearing officer Jameson Tweedie wrote in the April 4 opinion.

Since the park owners used false claims to justify their actions against residents, the hearing officer ordered the company to repay excess rental payments to all current and former tenants.

In addition to rebates for excessive rent increases, the company must pay an administrative penalty of $737,000 for violating the Consumer Fraud Act and $94,000 for breaching the state’s cease-and-desist order, according to the Department of Justice.

“Owners of manufactured home communities should consider themselves on notice,” Attorney General Kathy Jennings said in a statement. “Exploiting vulnerable Delawareans with threats and lies is not something manufactured home community owners can expect to get away with.”  

Blue Beach Bungalows has 30 days to file an appeal retroactive to the April 4 opinion.

Thursday’s order marks another chapter in the ongoing issues plaguing residents of the Lincoln manufactured housing community.

Following the property’s sale to Blue Beach Bungalows in September 2022, residents began receiving notices to vacate, though some of these notices dated back to that summer.

In February 2023, residents received notices to vacate from a lawyer for the group’s parent company, the Ocean City, Maryland-based Blue Water Development Corp.

Notices sent to residents living in manufactured homes said they had one year to leave, and that the owners were “willing to provide a monetary incentive” to those who left “promptly.”

However, residents living in campers on the property also received notices to vacate, though they were only given until March 15, 2023, according to the letter, and were not offered any incentives.

Protections were extended to manufactured housing residents in July 2022, when Gov. John Carney signed legislation into law that expanded the definition of a manufactured home to include campers, recreational vehicles and motor homes. The policy was sponsored by Rep. Madinah Wilson-Anton, D-Newark, and championed by Ms. Jennings.

In a separate issue, the Department of Natural Resources and Environmental Control issued a notice of violation to Blue Beach Bungalows regarding the Pine Haven property January of 2023.

The property owners, along with their parent company, were faulted for “failure to possess appropriate on-site wastewater and disposal system permits” and for “untreated wastewater surfacing above septic tanks and cesspool disposal areas within the campground community,” according to the notice.