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West Stockbridge mobile-home park tenants score following the West Stockbridge Rent Control Board’s negligible rent increase

The third meeting decided the fate of residents of the Residences on Mill Pond following a proposed triple rent surge.

West Stockbridge — Tenants of the Residences on Mill Pond mobile-home park at 40 Albany Road in West Stockbridge can now breathe a sigh of relief following the town’s Rent Control Board decision on May 8 that upped their monthly fees by less than $2.

For the past two months, the West Stockbridge Select Board has convened as the town’s Rent Control Board in accordance with its governance. The subject of the three meetings, including two public hearings, has been a Petition for Rent Adjustment, a proposed rate hike that would have tripled the rent for tenants from $241 per month currently to $797.51 per month.

The proposal wasn’t novel for the residents as they have won previous battles over a surge in rental rates when the issue has come before the town’s governing board. Once again, the tenants prevailed. The Rent Control Board voted unanimously to increase the monthly rental rate at Mill Pond by $1.44 to $242.44 per month.

Owner Tom Lennon filed the rent-hike proposal at the end of 2023 as corporate agent for Lennon Capital Group LLC that purchased the 35-lot mobile-home community from Gennari’s Mill Pond Trailer in 2022 for $900,000. In his petition, Lennon contended that the appraised value of the property was $1.78 million, with the amount allegedly substantiated by a professional appraiser. However, at $878,800, the town’s appraised value for the land and five outbuildings including a five-bedroom, single-family home was more in line with Lennon’s purchase price.

Chair Kathleen Keresey said no public comment or comments from tenants or Lennon’s representatives would be taken at the meeting that was reserved for deliberations and included town counsel Tim Zessin. Although Zessin called the formula for calculating the maximum allowable monthly rent for the community “pretty simple,” some variables of the equation needed scrutiny. That formula amounted to multiplying the fair market value by an annual rate of return and adding in reasonable annual operating expenses before dividing that tally by the number of units in the community (35 for Mill Pond) and again by 12 months in a year.

The Rent Control Board agreed early in the meeting that the fair market value wasn’t the $1.78 million proposed by Lennon but rather $178,800 as identified by the town as the land’s assessed value. The outbuildings, assessed at $700,000 by the town, weren’t considered in the equation as they weren’t applicable to the tenants. The board declined to invoke a 2014 decision that further divided the land value, using only a quarter of that total land value as applicable to the mobile-home park since there wasn’t any evidence to support the park’s use of only one-fourth of the property.

With $178,800 being the fair market value of the park’s property, board members applied an 8.5 percent rate of return since that figure wasn’t contested.

Next, the group considered the park’s operating expenses as set out by Lennon. Zessin defined operating expenses as those outlays recurring monthly, such as landscaping, snow removal, and basic repairs. He distinguished operating expenses—that could be considered in setting the community’s maximum monthly rental rate—from capital expenditures that don’t occur every year and wouldn’t generally be considered in the rate-setting equation.

For Mill Pond, the board denied a claimed $13,800 annual expense for renting an on-site dumpster as no evidence of a signed agreement for the rental was shown and the dumpster wasn’t on site. Additionally, testimony at other hearings showed that residents take their trash to the free town dump, negating the need for the dumpster. However, property taxes of $8,474 annually were incorporated into the operating expenses, as were expenses for insurance ($5,157), utilities/electric ($4,078), water/sewer ($52,770), repairs ($4,835), and a small excise tax per unit. However, landscaping and snow removal expenses were determined to be the rental value of the unit for the tenant who had been performing these services, at $1,446 for each category, or a total of $2,892 annually. The cost of renewing the owners corporate license, or LLC, was included at $500, eliminating an extra charge for expedited service, and the legal/professional expenses claimed were cut down from a total of $10,460 for the year to $2,880, the amount of legal expenses attributable to park evictions. Claimed property-management expenses of $18,728 were denied in full due to conflicting testimony as to who provides these services, as well as the need for park reserves at $10,000 annually.

All claimed capital expenditures, including the repair of the community’s water system, were denied as not having been agreed to by the tenants pursuant to Commonwealth regulations covering mobile-home parks. “It would be my position that any capital expenditures would not be allowed,” Zessin said. “I think there’s no question that these expenses were actually incurred—the water system was actually fixed—the regulations just prevent recovery of any expenditures unless they’re specifically allowed for in an occupancy agreement.”

The board arrived at a maximum monthly rent rate of $242.44 by starting with the park’s fair market value of $178,800, multiplying that by an 8.5 percent rate of return on investment for Lennon, adding in $86,628 of operating expenses, then dividing that number by 35 units at the park, and, finally, dividing by 12 months per year. Zessin commented that this outcome “very coincidentally, is almost identical to what [tenants] are currently paying.”

Before adjourning, the board agreed to authorize Keresey, as chair, to work with town counsel to finalize the decision.

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