CHRISTIANSBURG – The subsidiary that operates Massies Mobile Home Park is being sued in response to a water shutdown incident in November.
That adds another wrinkle to a saga that began earlier this year after the property was bought by a firm tied to a controversial hedge fund.
Christiansburg-based Southwest Virginia Legal Aid, along with a number of tenants, awaits a scheduled Jan. 6 hearing in the Montgomery County General District Court on the legal organization’s filing of 13 wrongful exclusion claims against Massie MHP LLC.
Massie MHP, a subsidiary of Homes of America LLC, bought the long-standing RV park in August. Shortly after the change of ownership, numerous tenants received evictions, with at least some questioning the debts claimed on the forms.
The issuance of the notices raised widespread concerns about evictions among tenants and heightened existing perceptions by many residents about other issues at the park.
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Lawyers said in the fall that they were working with Massie’s lawyer in Roanoke to try to resolve issues surrounding the notices.
Then, on November 15, Montgomery County — through its supply arm, the Public Service Authority — shut off water to the park after its owners failed to pay the bill. Water was shut off around 10 a.m. that day and restored a few hours later after the park owner paid the outstanding bill, county spokeswoman Jennifer Harris said at the time.
“The owners of Massie’s Mobile Home Park are the sole account holders with the PSA, meaning residents pay owners and owners pay PSA,” Harris wrote in an email in November.
The owners owed just over $14,000, Legal Aids attorney Kristi Murray said. After purchasing the park, the owners paid the first utility bill, but didn’t pay the next two, or at least not on time, she said.
Virginia law has provisions that prevent landlords from intentionally disrupting service, Murray said. And although the water was turned back on several hours later, state law does not require a specific length of time that must elapse for an act to be considered a willful disruption of essential service, she said.
“We delivered intentional causation of a service disruption,” Murray said.
One of the tenants’ court lawsuits alleges that the landlord “willfully and without court approval … disrupted or caused the disruption of an essential service to the plaintiff(s).”
Legal Aid seeks to recover damages, legal penalties and attorneys’ fees, Murray said. The damages sought could be either $5,000 or four months’ rent per customer, whichever is greater, she said.
Although Legal Aid has contacted just over two dozen tenants throughout the Massie ordeal, 13 have been selected as plaintiffs in the current wrongful foreclosure case, Murray said.
Despite several attempts, the Roanoke Times was unable to reach Massie’s attorney in Roanoke. An email sent to Bryan Grimes Creasy generated an automated reply stating he would not be in his office until January 3.
One of the tenants in the wrongful foreclosure case previously interviewed by The Roanoke Times could not be reached for comment.
Regarding the earlier termination notices, Murray said in a December interview that they were in a kind of “hold.”
As Legal Aid began to tackle the conundrum with the notices, attorneys for the organization said in the fall that they discovered discrepancies with the forms they saw.
The forms cited 2018 laws that are no longer in effect, Legal Aid said. The code sections referenced in notices to tenants in September were repealed and replaced due to a 2019 revision of the Landlord-Tenant Act, the organization said.
Then several amounts claimed in the notices were not the correct ones owed by the tenants served, Legal Aid said. There were indeed some tenants who were behind, but the organization said it noticed amounts that were specifically owed by the US Department of Housing and Urban Development and not by the tenants themselves.
One resident interviewed by the Roanoke Times in the fall said the $50 they put into their October rent payment was earmarked for utilities. But they said the specific amount was really guesswork as the utility bills aren’t clear since the change of ownership.
Massie MHP and Homes of America share an address in Englewood, New Jersey with Smith Management LLC, according to out-of-state business records.
Alden Global Capital, the hedge fund that has received much attention and scrutiny in recent years for its acquisitions and subsequent weeding out of newspapers, is described as a division of Smith Management LLC in a 2008 filing with the US Securities and Exchange Commission.
Homes of America has recently drawn attention to its acquisitions of a number of RV properties across the country through subsidiaries such as Massie MHP. Various news reports from different parts of the country addressed concerns from local residents about sharp rent increases the company pushed through after the takeovers.
Similar concerns recently surfaced in the nearby Princeton, West Virginia area, where the group, which included Smith Management and Homes of America, bought several trailer parks.
Mountain State Justice Inc., a not-for-profit law firm, filed a class-action lawsuit arguing that the new owners of Mercer County parks have up to doubled property rents in the communities, the Bluefield Daily Telegraph reported in December.
The Mountain State Justice requested an injunction to prevent the Mercer County Health Department from issuing permits for the parks, but a judge ultimately denied the request.
Legal Aid in Christiansburg cannot pursue a federal class action lawsuit against the owners of Massie’s because of some regulations that govern the organization, Murray said.
Living in the USA has been getting more and more expensive lately. A real estate research firm found that rents across the country have risen about 11% over the past year. Mobile homes are one of the last affordable housing options in America today, but they are also becoming cheaper for people. A growing number of investors are buying up these parks as many of the longtime owners are looking to retire and sell. While many people own their RVs, they still have to pay rent for the land they sit on. When investors step in, they’ve been known to charge that rent and other fees. A June 2021 report showed that investors accounted for almost a quarter of mobile home park purchases between 2019 and 2021. Compared to the previous two years, it was a 13% increase in investor ownership. Mobile Home Park University is an organization that runs a boot camp to help investors who want to buy these parks. According to them, the fact that renters can’t afford the $5,000 to move a mobile home keeps revenue stable and makes it easy to increase rents without losing occupancy. More than 22 million Americans live in mobile homes, and policy experts say they could expect rent increases of up to 70%. In general, it depends on what the investor decides. For these residents, an increase would have a significant impact on their ability to keep up with their finances, they cannot afford the land rent and they are evicted, they also end up losing their homes and they eventually have to give up their homes and their homes eventually fall owned by the park owners who can then rent them out to someone else,” McCarthy said. Affordable housing options are limited, and only 1 in 4 low-income households who qualify for state housing assistance actually receive it. State mortgage company Fannie Mae says, that the annual average household income of RV owners is about $35,000, which is half the average annual income for people who own locally built homes.The thing is, these investors aren’t necessarily acting alone, they’re doing it with government support Investors have access to government loans from agencies like Fannie Mae, which has recognized that these RV owners tend to have lower incomes.”Fannie Mae and Freddie Mac have a mission that requires them to preserve the affordable housing stock in the United States, and it’s ironic that they’re actually giving money to these private equity guys who are actually making the most affordable housing in the United States is becoming less and less affordable,” McCarthy told Park so they have more influence over the decisions made. But it can be difficult because they don’t qualify for the same government loans as investors. “A lot of them can buy their parks on behalf of the investors, but when they do, they’re doing it with less attractive financing,” McCarthy said. “That’s typically provided by mission-focused organizations like Community Development Finance Institutions, and that means, in general, the interest rates on this type of loan are likely to be almost double what they would be for Fannie Mae or Freddie Mac funding. Once the municipality takes control of these parks, they make the investments in the park to improve them. They’re adding community centers, they’re adding new infrastructure, they’re adding covered bus stops for their kids. I mean, the kind of thing that the community needs and you’re not raising the rent for yourself.” There’s been pressure on state laws that require park owners to notify residents if they want to sell so they have time to settle down organize and decide whether to bid, but only a handful of states like Massachusetts and New Hampshire have made this possible. “Little by little, as people become more aware of this, states are taking action and state legislatures are pushing through this opportunity to acquire legislation, so that’s a good thing,” McCarthy said.
