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In a number of cases over the years, Minnesota trial courts have construed Minnesota law to limit rent increases in MH parks to those that are “reasonable.” This conclusion was widely accepted because Minn. Stat. 327C.02 provides that a park owner cannot impose rule changes on residents that are substantial modifications of the original agreement, and a reasonable rent increase is not to be considered a substantial modification. This limit makes sense as well because of the unique circumstances of MH parks; residents are at the mercy of park owners because it is so difficult to move manufactured homes.
In 2008, APAC filed suit on behalf of the residents of the Skyline Village MH park in Inver Grove Heights, asserting that the owner’s latest lot rent increase was unreasonable and therefore unenforceable under the law. APAC sought HPP’s help with the case, and we joined as co-counsel. The trial court unexpectedly ruled that the statute did not place any reasonableness limitations on rent increases, and the residents decided to appeal.
In July 2010, in the case of Skyline Village Park Association v. Skyline Village, L.P., (Mn App file no. 19-C2-08-006655), the Minnesota Court of Appeals issued a decision disappointing park residents. Examining the statute as a whole, the Court concluded that the statute limits rule changes but that rent increases are not to be considered rule changes. What was most disappointing and most remarkable about the Court’s reasoning was how it interpreted the phrase: “ a reasonable rent increase made in compliance with section 327C.06 is not a substantial modification of the rental agreement…” Disregarding the long accepted canon of judicial construction that the court should give meaning to every word inserted in the statute by the legislature, the appellate panel decided that the word “reasonable” before “rent increase” was superfluous.
The result is that MH park residents are no longer protected by any limits on lot rents, contrary to long held expectations. This would apparently be true even in situations such as that in a HPP case some years ago where a park owner seeking to shortcut the process for closing a park (requiring nine months notice) decided to drive out residents with a notice doubling the rent in a one month period.