A Utah-based mobile home park operator must repay metro-Denver-area residents nearly $150,000 in wrongly withheld security deposits, arbitrary fees and improperly charged attorneys fees as the result of a settlement reached with the Colorado attorney general’s office last week.
The investigation signaled a warning to other park managers that abuses that have frequently been the subject of complaints across the state won’t be tolerated, and also serves as an invitation for other tenants who feel they’ve been treated unfairly to step forward, Attorney General Phil Weiser said.
“There are companies out there who operate irresponsibly on the view they’ll get away with it,” Weiser said. “We got several complaints about this matter, and that is what caused us to look into it. There could easily be other actors out there, other incidents out there that we need to look into. We want to get word out about the settlement, so if there are others and we can do something, we want to know about it.”
As the state has experienced a tighter housing market, mobile homes — also referred to as manufactured homes — have become the nation’s largest source of unsubsidized affordable housing. But they’re part of an unusual business model in which residents usually own their mobile home, but pay lot rent to park operators for the space where it’s parked.
Even the term “mobile home” is a bit of a misnomer, since it’s often impractical or prohibitively expensive to move them — thus giving park owners considerable leverage when it comes to issues like rent increases, questionable fees and threat of eviction. The Colorado Sun, in collaboration with media outlets statewide, last year published an award-winning investigative series, “Parked: Half the American Dream,” that detailed how disputes between tenants and park owners have reached the boiling point.
Seven Colorado parks operated by Kingsley Management Corp. were identified in the settlement, which was sparked by resident complaints and ultimately included more than 200 residents, and dates back to Oct. 1, 2016. The parks include Lamplighter Village and Kimberly Hills in Federal Heights; Front Range in Broomfield; Friendly Village of the Rockies in Thornton; Friendly Village of Aurora; Arbordale Acres in Lafayette; and Casa Estates in Westminster.
All are separate business entities, but managed by Kingsley Management.
“I’ve heard about complaints from people who are suffering from unscrupulous and wrongful practices,” Weiser said. “So we started looking into them, and found that there’s a process where people are entitled to get back security deposits, but they were being wrongly denied. And we wanted to do something about it. We were able to look into it, and the company pretty quickly said, ‘We’ll take responsibility and we’ll address this issue.’”
Sheila Meer, attorney for Kingsley Management in the settlement, noted that those 200 or so owed refunds were spread among thousands of residents and multiple years. She added that Kingsley voluntarily audited every tenant account and has “initiated several critical improvements in the oversight of its field operations to avoid such problems in future.”
Housing advocates welcome AG’s attention
Andrea Chiriboga-Flor of the housing nonprofit 9to5 Colorado said mobile home owners have tried in the past to present these same types of grievances to previous Colorado attorneys general — but were met with polite dismissal.
“So it’s definitely a shift to hear about this,” she said. “When (Weiser) first took office we reached out right away, and flagged that mobile homes were a really big issue. We talked to staff about what we’re seeing on the ground, that this is a really common problem. His office was a lot more interested in taking a stand on this.”
Chiriboga-Flor added that previously, when the state has failed to act, most tenants had little recourse except to pursue complaints through legal channels, which generally was too costly. With the AG’s office prepared to act on their behalf, she said, the power dynamic could change.
“One reason we’ve heard of so many park owners taking advantage, especially the big companies, is that they’re never being challenged,” she said. “They’re getting away with it. This sets a huge precedent for all folks who are not real property owners.”
More than $125,000 of the total settlement of $146,770.26 will be returned to tenants whose security deposits were wrongly withheld. Once the state subpoenaed documents related to the contested deposits, Kingsley Management launched an internal audit and began to refund the security deposits to homeowners, according to the agreement.
Kingsley Management also must return $20,877.93 to tenants who were improperly charged attorney fees for unsuccessful eviction actions. The same internal audit led the company to begin refunding to homeowners the costs of “unauthorized, non-existent or unverifiable legal services.”
Cheryl Whisenhunt owns mobile homes at two of the Kingsley properties, one she inherited when her mother died. A check for $150 made out to her mother arrived several months ago, she said, but she hasn’t tried to cash it yet.
Whisenhunt worked for a veterinary clinic in its boarding department, but has been out of work since the coronavirus hit. So whatever the refund she might get from the park owners, she feels heartened that at least the state listened and took action. But for some, she said, the refund might come too late.
“The sad part is, I’ve watched family by family disappear from that park at Lamplighter,” she said. “The problem is getting the word out to these people, who maybe still don’t know this (settlement) exists. They could have money coming, but don’t realize it.”
As of Oct. 7, when the agreement with the state was reached, Kingsley Management had refunded $91,579.91 to current and former residents. The remaining $55,190.35 will be maintained in trust, while the company periodically retries to contact the tenants. Whatever cannot be refunded will be transferred to the state treasurer under the unclaimed property law.
Residents who think they may be owed money but haven’t received it can contact Kingsley Management or the attorney general’s office at stopfraudcolorado.gov.
Will refunds act as a deterrent?
In addition to the settlement, Kingsley Management also agreed to pay $10,000 for the cost of the state’s investigation. As negotiations reached the final stages, Kingsley Management asked that part of its payment to the state come in the form of a charitable donation. Weiser’s office selected the affordable housing nonprofit Habitat for Humanity of Metro Denver. Both payments must be made within 45 days of the settlement date.
Because Kingsley Management cooperated with the investigation and this was its first violation, the attorney general’s office viewed consumer restitution an “appropriate remedy and deterrence.” Also built into the agreement are certain obligations for the park management, such as allowing tenants to preview their monthly charges four days before they’re due, so they may make a timely challenge to any they think are inappropriate.
If Kingsley Management violates any of the provisions, it could be subject to future civil monetary penalties, according to the attorney general.
More than 100,000 people live in more than 900 mobile home parks across the state. But the park industry, with its attractive business model that has traditionally favored park owners, has become increasingly consolidated as corporate investors gobbled up many formerly mom-and-pop operations.
That combination of potentially lucrative returns and a business dynamic that gave park owners leverage over generally low-income mobile home owners finally got serious attention in the 2019 legislative session. For the first time since the state’s Mobile Home Park Act passed in 1985, legislators revamped the law to at least partially level the playing field for homeowners.
With the passage of House Bill 1309, Colorado mobile home residents gained more time to address eviction proceedings. Perhaps even more importantly, the new law provided a means for residents to raise grievances without the expense of hiring an attorney and going to court. That mechanism, overseen by the state’s Department of Local Affairs, also collects and annually reports data generated by disputes and violations.
Although that program began on May 1, few complaints flowed into the program after years of pent-up demand for relief — a development many attributed to the onset of the coronavirus pandemic, as concerns about lost jobs and looming expenses took priority.
Since May 1, the state has received 90 complaints for the dispute resolution process, according to DOLA.
Jack Regenbogen, senior attorney at the Colorado Center on Law and Policy, which tackles housing issues, praised the attorney general’s office for taking on mobile home park owners. But he also wonders if repayment alone is enough to act as a deterrent.
“I do think that ultimately there needs to be some statutory reform,” he said. “There are other types of fees that are perfectly legal, but are still very much predatory.”
Weiser said that his office’s Consumer Protection Division, which investigated the Kingsley Management case, will work in concert with DOLA to monitor the volume and types of complaints submitted to the dispute resolution program. That data could provide clues as to whether additional areas of abuse might merit attention from his office.
“The reason this is such an important policy issue is that, to many people, mobile homes are the most affordable kind of house,” Weiser added. “We do have a serious affordability challenge in our state. More and more people have been squeezed, homelessness has been on the rise. We need to stand up for everybody, particularly people who are most vulnerable, and mobile home operators taking advantage of people through irresponsible and illegal tactics is wrong and we’ll use every tool we can.”
Weiser said his office is committed both to addressing affordable housing and protecting consumers, and the intersection of those goals remains critical to the state.
“That makes it a natural area of focus,” he said. “The other concern is we have operators acting irresponsibly, taking advantage of people. That’s something we’re not going to tolerate.”