PASCO COUNTY, Fla., – Residents of a 55+ manufactured home community are taking the property owner to court after a significant lot rent increase. According to the lawsuit, some residents’ lot rent went up 126% in just one year.
Gail Berghold, 79, moved to The Highlands at Scotland Yards in Dade City in 2017. Berghold told News 6 she was paying more than $600 a month in lot rent, but in January, her lot rent jumped to $1,300.
“I’m lucky if I have enough money for groceries from one paycheck to the other,” said Berghold.
News 6 has been covering the lot rent increases at manufactured home communities across Florida. In many of these communities, which had a reputation of being affordable, residents own their homes but lease the land.
Residents have been writing into the News 6 Results Desk, telling us corporations are buying their communities then drastically raising the lot rent.
Struggling to Sell
To get out of the costly lot rent, Berghold put her home on the market twice with few offers, and she is not alone.
“I should have gotten around $225,000 for my house. I have it listed right now for $179,000. I’m going to drop the price and I’m going to drop the price until I can get out of it,” said Donna Reed, 71.
Reed is also a real estate agent and has sold homes in The Highlands at Scotland Yards. She said she used to sell on average 1.5 homes a month, but since the rent increase, she has only sold three homes this year.
“They’ll say what’s the lot rent. I’ll say $1,441.59 and they’re like ‘are you crazy,’” Reed told News 6.
Mediation
Reed and Berghold are among a group of residents suing the property owner, Legacy Communities. According to its website, the company owns 55+ communities across the U.S. Most of them are in Florida.
According to the lawsuit, Legacy Communities bought The Highlands at Scotland Yards in 2022, and then in August 2023, residents received notice that they would need to pay a one-time fee of $3,557.44.
Under current Florida law, manufactured homeowners are allowed to request mediation with the property owner if there is a dispute over lot rent or changes in park rules.
“I think that statute has a good purpose in mind, but like any good purpose of mind, it can be convoluted and bastardized, and in this case, it was not used as shield for the community to protect themselves, but as a sword by the landowner,” said George Harder, the attorney representing the residents.
The residents requested mediation with Legacy Communities to determine what the more than $3,500 Pass On charge is for. Since The Highlands at Scotland Yards did not have an HOA at the time, the community created a committee of five residents to represent them at mediation.
“When they came out of the mediation, they had now a brand-new agreement that says they are going to go to market rent, that is defined in the statutes as what would the market bear in this area,” Harder said. “That agreement stated there were going to be five communities that are within 15 miles that have comparable amenities that this community has, and they were going to average it.”
The Lawsuit
Harder took on the case after mediation. He said it was never discussed what market rent was or what those five communities would be.
Then, in Sept. 2024, residents received 90-day notice that a lot rent increase will take effect in Jan. 2025, with some residents seeing increases upwards of 100%. The residents filed a lawsuit to determine what the market rent was.
“Legacy came back and stated well, we have five communities that we selected, two of them within 15 miles and three of them way over here, 37-41 miles away near the Gulf and we’re using that as comparable rents,” Harder said.
According to Harder, at least one of those comparable communities is owned by Legacy Communities.
The lawsuit accuses Legacy Communities of breach of contract because the residents said their prospectus only allows small annual rent increases.
A prospectus outlines what residents currently pay and what they could be charged in the future. This includes lot rent, special assessments and other fees.
“This prospectus has basically two different rents. One of them tries to keep you with CPI, consumer price index, and the other one says that if you wanna approach market rent, and market rent is higher, you can do CPI plus 2%. So, for this year, they should have had an increase of 5% versus 126%,” Harder told News 6.
News 6 asked Harder what the residents hope to get out of the lawsuit.
“First of all, to demonstrate to Legacy that this agreement that was entered into by the five community members had to have been ratified by the entire community, because there was never a notice given that that was supposed to be discussed in mediation,” he said.
Harder also said the residents are willing to go back to the prospectus where it is CPI plus 2%.
Legacy’s Response
News 6 emailed Legacy Communities to ask the reason behind the lot rent increase as well as its response to the lawsuit.
A person who represented herself as the media contact for Highlands at Scotland Yards responded to our initial request. News 6 sent seven emails over the course of three days.
We asked pointedly, more than once, “Can you explain the reason behind the significant increase in lot rent?” We also asked for a “comment on the pending lawsuit the residents filed.”
News 6 was told the company president, Andrew Fells, wanted to have a call to “provide context on background,” but because we could not agree on a time and date, the company never answered our questions, then sent a statement reading “because of the pending lawsuit, Legacy will not comment.”