Owners of Cape Cod Housing Community Sued for Allegedly Extorting Money from Residents
"Manufactured home ownership is an important housing option for Massachusetts consumers," said AG Coakley. "All homeowners must be treated fairly and in accordance with laws designed for their protection."
According to the Attorney General's lawsuit, Morgan RV Resorts, LLC ("Morgan") and its sales team aggressively solicited homeowners at Peters Pond to pay up to $16,000 as a membership fee to remain in the community. This fee would be in addition to the $6,000 annual fee homeowners pay to lease their site. The membership fees do not include any apparent benefits. The defendants, directed by Morgan's president, Robert J. Moser, allegedly threatened homeowners that if they did not pay to join the "club," they could be removed from their site at their own expense and without compensation. Many homeowners had invested their life's savings in their Cape Cod home. According to the complaint, nearly one hundred homeowners have paid to join the club out of fear that they would lose their home.
The Peters Pond manufactured housing community is the seasonal home for dozens of retirees and elderly residents. As in most manufactured housing communities, residents own their homes but must rent the tract of land on which the manufactured home is situated. Once a manufactured home is situated on a tract, the home is essentially immobile. Manufactured housing communities must be annually licensed by the municipality's board of health. The Peters Pond community owners operate without the requisite manufactured housing community license.
The complaint alleges that residents were threatened by Morgan's pressure sales tactics, which include intercepting homeowners at the community gate to listen to a sales pitch and repeatedly contacting them at their home and by phone. When homeowners asked to see the membership contract, the defendants allegedly told homeowners that they needed to pay a $1,000 deposit and could not show the contract to a lawyer. Defendants then distributed a threatening letter to homeowners from their own lawyer that asserts defendants' right to remove the homeowners from the community. When homeowners in the community gathered at barbecues and discussed the conditions at Peters Pond, the complaint alleges that homeowners were threatened with eviction if they continued to assemble.
Tired of constant harassment from salespeople and the threat of losing their homes, homeowners tried to sell their homes. Defendants again allegedly interfered with the homeowners' rights by restricting "For Sale" signs on their property and preventing brokers from entering the community. Prospective buyers were told that they must pay $16,000 to join the club before purchasing the home. Defendants threatened homeowners by saying Morgan could, at their discretion, reject any potential homebuyer.
Attorney General Coakley's Office is seeking injunctive relief to prevent defendants from soliciting further illegal fees from consumers. Attorney General Coakley's lawsuit seeks the recovery of monies that Morgan improperly collected for memberships, as well as penalties for violations of the Manufactured Housing Act and the Consumer Protection Act. The lawsuit would also require that Morgan obtain proper licensure and cease all unfair and deceptive conduct.
Assistant Attorney General Jonathan Engel of Attorney General Coakley's Consumer Protection Division is handling this matter, with assistance from paralegal James Maloney.