Lucille Williams owns a 1960-model mobile home, for which she had leased a space in Bay City Mobile Home Park since 1971. Williams’ lease agreement included a term providing that in the event of a transfer of the lease, the mobile home could only stay on the premises if it met Bay City’s mobile-home standards.
One of these standards was that the manufacturer placed a U.S. Housing and Urban Development Department seal certifying compliance with federal standards on the mobile home at the time it was manufactured; HUD seals are not placed on mobile homes manufactured prior to 1976.
Williams’ daughter desired to be added to the lease in 2005. Bay City refused Williams’ request to partially "transfer" the lease to her daughter, on grounds that the mobile home did not comply with the Park’s standards in that it had neither sufficient square footage nor the required HUD seal.
Williams filed a lawsuit, asking for a declaratory judgment allowing her daughter to be added to the lease and the mobile home to remain on the premises.
The trial court ruled in Williams’ favor, finding that both the square footage and HUD seal requirements were arbitrary and capricious and, thus, would not be enforced.
Delaware law does not allow lease transfers to be prohibited purely on the basis of either age or aesthetics, and the trial court found that the square footage requirement was an aesthetics prohibition, while the HUD seal requirement was a prohibition on the basis of age.
Bay City appealed to the Delaware Supreme Court, which affirmed the trial court’s ruling.
The state’s high court rejected Bay City’s argument that the HUD seal restriction on lease transfer was expressly authorized under 25 Delaware Code Section 7020, pointing out that Section 7020 goes on to expressly prohibit landlords from "restricting mobile home transfer based on the exclusive or dominant criterion of age. Thus, the HUD code may not mask an invalid age restriction."
HUD seals did not exist in 1960, when Williams’ home was built, so no matter what condition the home was in at the time of the transfer, it could never have met that requirement.
On the other hand, a home built in 1976 could have the seal, yet have been in dilapidated condition by the time a transfer was requested. Accordingly, the seal requirement in no way guaranteed the safe condition of a home and was, rather, a pretext for a discrimination against certain homes based on their age.
The court explained further that the "34 years since the promulgation of the HUD code have created enormous potential for dangerous deterioration, about which a HUD seal discloses nothing."
As a result, the HUD seal requirement was arbitrary and capricious, had nothing to do with the safety of the home at issue in a transfer request, and reflected a prohibited restriction on home age, the court found.