95-000630RU Florida Manufactured Housing Association, Inc. vs. Florida Land Sales, Condominiums, And Mobile Homes Status: Closed DOAH Final Order on Thursday, August 31, 1995.

Summary: Agency repeal of rule is invalid delegation.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

FLORIDA MANUFACTURED HOUSING )

ASSOCIATION, INC., a Florida )

incorporated association not for )

profit, )

)

Petitioner, )

)

vs. )

)

DEPARTMENT OF BUSINESS AND )

PROFESSIONAL REGULATION, DIVISION )

OF FLORIDA LAND SALES, ) CASE NO. 95-0630RU

CONDOMINIUMS AND MOBILE HOMES, )

)

Respondent. )

and )

)

FEDERATION OF MOBILE HOME )

OWNERS OF FLORIDA, INC., )

)

Intervenor. )

___________________________________)

FINAL ORDER

Pursuant to notice, the Division of Administrative Hearings, by its

designated Hearing Officer, William F. Quattlebaum, held a formal hearing in

this case in Tallahassee, Florida on May 31, 1995.

APPEARANCES

For Petitioner: David D. Eastman, Esquire

Post Office Box 669

Tallahassee, Florida 32302

For Respondent: Robin Suarez, Esquire

1940 North Monroe Street

Tallahassee, Florida 32399-0792

For Intervenor Robert S. Cohen, Esquire

Post Office Box 10095

Tallahassee, Florida 32302

STATEMENT OF THE ISSUE

Whether the proposed repeal of Rule 61B-31.001(5), Florida Administrative

Code, constitutes an invalid exercise of delegated legislative authority.

Further, whether certain agency policies constitute rules and violate the

provisions of Section 120.535, Florida Statutes.

PRELIMINARY STATEMENT

On January 20, 1995, the Department of Business and Professional Regulation

proposed the repeal of Rule 61B-31.001(5), Florida Administrative Code. On

February 10, 1995, the Florida Manufactured Housing Association, Inc., (FMHA)

filed a Petition to Determine the Invalidity of the Proposed Repeal of the rule

and challenging certain agency policies as unpromulgated rules.

At the hearing, the Petitioner presented the testimony of three witnesses

and had exhibits numbered 1-3 admitted into evidence. The Respondent presented

the testimony of one witness and had one exhibit admitted into evidence.

Admitted as Hearing Officer Exhibits were a prehearing stipulation and Office of

the Governor Executive Order Number 95-74.

A transcript of the hearing was filed. Proposed orders were filed by the

Petitioner and the Respondent. The proposed findings of fact are ruled upon in

the Appendix which is attached and hereby made a part of this Final Order.

FINDINGS OF FACT

1. The Florida Manufactured Housing Association, Inc. (FMHA) is a Florida

not for profit corporation organized to represent the interests of the owners of

approximately 750 mobile home parks. All of the parks owned by FMHA members are

regulated by the Respondent. The FMHA's members will be substantially affected

by the proposed repeal of the rule. The FMHA has standing to participate in his

proceeding.

2. The Florida Department of Business and Professional Regulation,

Division of Florida Land Sales, Condominiums and Mobile Homes (Respondent), is

the state agency charged with implementation, administration and enforcement of

Chapter 723, Florida Statutes, relating to Mobile Home Park Lot Tenancies.

3. The Federation of Mobile Home Owners of Florida, Inc. (Federation) is a

Florida not for profit corporation organized to represent a substantial number

of mobile home owners residing in Florida mobile home parks. The Federation's

members will be substantially affected by the proposed repeal of the rule. The

Federation has standing to participate in this proceeding.

4. Insofar as is relevant to this case, a mobile home owner commonly rents

a mobile home park lot upon which the home is placed. Pursuant to Section

723.011(1)(a), Florida Statutes, the owner of a mobile home park containing 26

or more lots must deliver a prospectus to the home owner prior to entering into

an enforceable rental agreement for the mobile home lot.

5. A mobile home park prospectus is intended to provide full and fair

disclosure of the terms and conditions of residency and sets forth the

regulations to which the home owner will be subjected after signing a lot rental

agreement with the park owner. The prospectus must be filed with and approved

by the Respondent.

6. The challenged rule was adopted as Rule 7D-31.01(5), Florida

Administrative Code, in 1985. Without alteration, it was subsequently

renumbered as Rule 61B-31.001(5), Florida Administrative Code, and provides as

follows:

The Prospectus distributed to a home owner or

prospective home owner shall be binding for the

length of the tenancy, including any assumptions

of that tenancy, and may not be changed except

in the following circumstances:

(a) Amendments consented to by both the

home owner and the park owner.

(b) Amendments to reflect new rules or

rules that have been changed in accordance

with procedures described in Chapter 723, F.S.,

and the prospectus.

(c) Amendments to reflect changes in the name

of the owner of the park.

(d) Amendments to reflect changes in zoning.

(e) Amendments to reflect a change in the person

authorized to receive notices and demands on the

park owner's behalf.

(f) Amendments to reflect changes in the entity

furnishing utility or other services.

(g) Amendments required by the Division.

(h) Amendments required as a result of revisions

of Chapter 723, F.S.

(i) Amendments to add, delete or modify user

fees for prospective home owners.

7. Neither the statute nor the rule defines what is meant by the term

"tenancy."

8. Historically, the Respondent has taken the position that the prospectus

was binding on the park owner and the mobile home owner until the mobile home no

longer occupied the lot or the tenant was evicted, whichever occurred first. In

other words, the "tenancy" existed for as long as the mobile home remained on

the lot, and the prospectus was binding during the length of the "tenancy",

including any assumptions of the "tenancy."

9. However, several legal cases, most recently in 1992, have essentially

stated that a mobile home "tenancy" exists for the period of time during which a

mobile home rental agreement is effective.

10. The effect of the legal decision is to permit Rule 61B-31.001(5),

Florida Administrative Code, to be construed to provide that a prospectus is

valid only for the period covered by a rental agreement.

11. The Legislature has not adopted legislation subsequent to the case

which would affect the substance of the decision.

12. On January 20, 1995, the Respondent published notice of the proposed

repeal of Rule 61B-31.001(5), Florida Administrative Code, in the Florida

Administrative Weekly, Vol. 21, No. 3.

13. The Respondent's purpose in repealing the rule is primarily to

eliminate the language relating the period of validity for a prospectus to the

"tenancy."

14. Although the Respondent asserts that it has no current policy as to

the period of validity for a prospectus, the Respondent acknowledges taking the

continuing position that the prospectus is binding for longer than the period of

a rental agreement.

15. The Petitioner challenges the agency position as being an

unpromulgated, and therefore invalid, rule.

16. The Petitioner also challenges as being an unpromulgated and invalid

rule, the Respondent's decision to discontinue the review and approval mechanism

for amendments to any previously approved prospectus.

17. The Respondent asserts that, notwithstanding prior practice, it has no

statutory authority to review and approve amendments to a previously approved

prospectus and that it will no longer do so.

CONCLUSIONS OF LAW

18. The Division of Administrative Hearings has jurisdiction over the

parties to and subject matter of this proceeding. Section 120.56, Florida

Statutes.

19. There are essentially two issues being raised by the Petitioner.

First, paraphrasing from the FMHA's proposed order, the FMHA challenges the

repeal of the rule because it contends that the adopted rule is an authorized

exercise of delegated legislative authority and that the repeal results in an

absence of a rule which has significant effects on the FMHA membership. Second,

the FMHA asserts that the Respondent has adopted non-rule policy specifically

related to the length of the prospectus' validity and to the Respondent's

apparent assertion that it will no longer review and approved amendments to a

previously approved prospectus, that the policies meet the statutory definition

of "rule," and that such "rules" violate the provisions of Section 120.535,

Florida Statutes.

20. "Rule" means each agency statement of general applicability that

implements, interprets, or prescribes law or policy or describes the

organization, procedure, or practice requirements of an agency and includes any

form which imposes any requirement or solicits any information not specifically

required by statute or by an existing rule. The term also includes the

amendment or repeal of a rule. Section 120.52(16), Florida Statutes.

21. As defined at Section 120.52(8), Florida Statutes, an "[i]nvalid

exercise of delegated legislative authority" means action which goes beyond the

powers, functions, and duties delegated by the Legislature. The definition

further states that a proposed or existing rule is an invalid exercise of

delegated legislative authority if any one or more of the following apply:

(a) The agency has materially failed to

follow the applicable rulemaking procedures

set forth in s. 120.54;

(b) The agency has exceeded its grant of

rulemaking authority, citation to which is

required by s. 120.54(7);

(c) The rule enlarges, modifies, or contravenes

the specific provisions of law implemented,

citation to which is required by s. 120.54(7);

(d) The rule is vague, fails to establish

adequate standards for agency decisions, or

vests unbridled discretion in the agency; or

(e) The rule is arbitrary or capricious.

22. The burden of proof falls to the Petitioner to establish that the rule

is an invalid exercise of delegated legislative authority.

23. The repeal of Rule 61B-31.001(5), Florida Administrative Code meets

the definition of rule.

24. The Respondent reasonably asserts that a home owner should be able to

rely on the information set forth in the prospectus for longer than the term of

a rental agreement because after renting a lot to a mobile home owner, the park

owner is in a superior bargaining position with the home owner. Were the terms

and conditions of the prospectus to be changed to the home owner's dismay, the

home owner must either accept the changes or move the mobile home from the

rental lot.

25. In Section 723.004(1), Florida Statutes, the Legislature addressed the

relationship between park owner and home owner as follows:

The Legislature finds that there are factors

unique to the relationship between a mobile home

owner and a mobile home park owner. Once occupancy

has commenced, unique factors can affect the

bargaining position of the parties and can affect

the operation of market forces. Because of those

unique factors, there exists inherently real and

substantial differences in the relationship which

distinguish it from other landlord-tenant

relationships....

26. However, the courts have interpreted "tenancy" in such fashion as to

permit Rule 61B-31.001(5), Florida Administrative Code, to be construed to

indicate that a prospectus is valid only for the period covered by a rental

agreement. Hobe Associates, Ltd., v. Dept. of Business Regulation, 504 So. 2d

1301 (Fla 1st DCA 1987); Herrick v. Dept. of Business Regulation, 595 So. 2d 148

(Fla 1st DCA 1992).

27. The agency explicitly disagrees with the position that the prospectus

is valid only for the period of the rental agreement and therefore proposes to

repeal the affected rule. The agency has proposed no standard to replace the

rule, but continues to take the position that the prospectus is valid for longer

than the rental period.

28. Although the statute is silent as to the effective period of a

prospectus, the Legislature has adopted no legislation which would alter the

Herrick decision.

29. The repeal of the rule fails to establish adequate standards for

agency decisions and vests unbridled discretion in the agency. Accordingly, the

repeal is an invalid exercise of delegated legislative authority.

30. The Petitioner asserts that the agency has developed policy as to the

effective period for a prospectus, that such policy meets the definition of a

rule, and that the agency is in violation of Section 120.535, Florida Statutes.

31. Although the Respondent asserts that it developed no current policy as

to the period of validity for a prospectus, the Respondent acknowledges taking

the position that the prospectus is binding for longer than the period of a

rental agreement. This position is contrary to the case law cited herein.

32. The Petitioner also asserts that the Respondent's apparent decision to

discontinue the review and approval mechanism for amendments to a previously

approved prospectus is likewise a rule and that the agency is in violation of

Section 120.535, Florida Statutes. The Respondent asserts that, notwithstanding

prior practice, it has no statutory authority to review and approve amendments

to a previously approved prospectus and that it will no longer do so.

33. In relevant part, Section 120.535, Florida Statutes, provides as

follows:

(1) Rulemaking is not a matter of agency

discretion. Each agency statement defined

as a rule shall be adopted by the rulemaking

procedure provided by s. 120.54 as soon as

feasible and practicable. Rulemaking shall

be presumed to be feasible and practicable to

the extent provided by this subsection unless

one of the factors provided by this subsection

is applicable.

(a) Rulemaking shall be feasible unless the

agency proves that:

1. The agency has not had sufficient time to

acquire the knowledge and experience reasonably

necessary to address a statement by rulemaking;

or

2. Related matters are not sufficiently resolved

to enable the agency to address a statement by

rulemaking; or

3. The agency is currently using the rulemaking

procedure expeditiously and in good faith to adopt

rules which address the statement.

(b) Rulemaking shall be presumed to be practicable

to the extent necessary to provide fair notice to

affected persons of relevant agency procedures and

applicable principles, criteria, or standards for

agency decisions unless the agency proves that:

1. Detail or precision in the establishment

of principles, criteria, or standards for agency

decisions is not reasonable under the circumstances;

or

2. The particular questions addressed are of

such a narrow scope that more specific resolution

of the matter is impractical outside of an adjudi-

cation to determine the substantial interests of

a party based on individual circumstances.

34. The evidence establishes that at this time, the agency policy,

contrary to case law, is that a prospectus is binding for longer than the period

of a rental agreement. Although providing little guidance to affected persons,

this position is an agency statement of general applicability that interprets or

prescribes law or policy, and is therefore a rule. Accordingly, rulemaking is

required unless the agency can establish factors that demonstrate that

rulemaking is not feasible or practicable.

35. In this case, the evidence fails to establish that rulemaking is not

feasible or practicable. The agency has had sufficient time to acquire the

knowledge and experience reasonably necessary to address this matter statement

by rulemaking. There are no related matters preventing the agency from

addressing the matter by rulemaking. The agency is not currently using the

rulemaking procedure expeditiously and in good faith to adopt rules which

address the statement.

36. Further, rulemaking is necessary to provide fair notice to affected

persons of the agency's position related to the effectiveness of a prospectus.

The evidence is insufficient to demonstrate that detail or precision in the

establishment of principles, criteria, or standards for agency decisions is not

reasonable under the circumstances or that the particular questions addressed

are of such a narrow scope that more specific resolution of the matter is

impractical outside of a case-by-case adjudication.

37. As to the Respondent's apparent decision to discontinue the review and

approval mechanism for amendments to a previously approved prospectus, the

Respondent asserts that it has no statutory authority to review and approve

amendments to a previously approved prospectus. Notwithstanding the alleged

lack of authority, historically the agency has reviewed and approved amendments

to a prospectus.

38. Section 723.011(1)(a), Florida Statutes, requires that the prospectus

delivered by a mobile home park owner to a home owner be filed and approved by

the Respondent. It is illogical to assert, as does the Respondent, that they

are without jurisdiction to review and pass judgement on an amendment to an

approved prospectus. The agency procedure has previously been challenged and

upheld. Hobe Associates, Ltd., v. Dept. of Business Regulation, 504 So. 2d 1301

(Fla 1st DCA 1987); Water Oak Management v. Dept. of Business Regulation, 12

FALR 1144 (Div. Admin. Hearings 1990); Florida Manufactured Housing Association

v. Dept. of Business Regulation, DOAH Case No. 85-3858R (Div. Admin. Hearings

1986).

38. In any event, the agency's decision to cease review and approval of

amendments meets the definition of a rule and violates of Section 120.535,

Florida Statutes. The evidence fails to establish sufficient factors to

demonstrate that rulemaking related to amendments is not feasible or

practicable. Although the agency asserts that it plans to engage in rulemaking

to "establish a ministerial requirement" that amendments be filed so that the

agency is the "repository of completed and updated copies" of any prospectus,

there is no credible evidence that the agency is currently using the rulemaking

procedure expeditiously and in good faith to adopt rules which address the

statement.

FINAL ORDER

Based upon the foregoing findings of fact and conclusions of law, it is

determined the proposed repeal of Rule 61B-31.001(5), Florida Administrative

Code, constitutes an invalid exercise of delegated legislative authority.

It is further determined that, as to the Respondent's policy statements

addressed herein related to length of prospectus validity and to approval of

amendments to any filed and approved prospectus, such statements are in

violation of Section 120.535, Florida Statutes. The Respondent shall

immediately discontinue all reliance upon the statements or any substantially

similar statement as a basis for agency action.

DONE and ENTERED this 31st day of August, 1995, in Tallahassee, Florida.

___________________________________

WILLIAM F. QUATTLEBAUM

Hearing Officer

Division of Administrative Hearings

The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-1550

[phone]

Filed with the Clerk of the

Division of Administrative Hearings

this 31st day of August, 1995.

APPENDIX TO FINAL ORDER, CASE NO. 95-0630RU

The following constitute rulings on proposed findings of facts submitted by

the parties.

Petitioner

The Petitioner's proposed findings of fact are accepted as modified and

incorporated in the Final Order except as follows:

8-11. Rejected, unnecessary.

Respondent

The Respondent's proposed findings of fact are accepted as modified and

incorporated in the Final Order except as follows:

14. Rejected, unnecessary.

15. Rejected, subordinate.

18-19. Rejected, unnecessary.

20-24. Rejected, not supported by the greater weight of evidence.

Intervenor

The Intervenor did not file a proposed order.

COPIES FURNISHED:

Henry M. Solares, Director

DBPR, Division of Florida Land Sales,

Condominiums and Mobile Homes

1940 North Monroe Street

Tallahassee, FL 32399-0792

David D. Eastman, Esquire

P.O. Box 669

Tallahassee, FL 32302

Robin Suarez, Esquire

1940 North Monroe Street

Tallahassee, FL 32399-0792

Robert S. Cohen, Esquire

P.O. Box 10095

Tallahassee, FL 32302

Carroll Webb, Executive Director

Administrative Procedures Committee

Holland Building, Room 120

Tallahassee, FL 3239-1300

Liz Cloud, Chief

Bureau of Administrative Code

The Elliot Building

Tallahassee, FL 32399-0250

NOTICE OF RIGHT TO JUDICIAL REVIEW

A PARTY WHO IS ADVERSELY AFFECTED BY THIS FINAL ORDER IS ENTITLED TO JUDICIAL

REVIEW PURSUANT TO SECTION 120.68, FLORIDA STATUTES. REVIEW PROCEEDINGS ARE

GOVERNED BY THE FLORIDA RULES OF APPELLATE PROCEDURE. SUCH PROCEEDINGS ARE

COMMENCED BY FILING ONE COPY OF A NOTICE OF APPEAL WITH THE AGENCY CLERK OF THE

DIVISION OF ADMINISTRATIVE HEARINGS AND A SECOND COPY, ACCOMPANIED BY FILING

FEES PRESCRIBED BY LAW, WITH THE DISTRICT COURT OF APPEAL, FIRST DISTRICT, OR

WITH THE DISTRICT COURT OF APPEAL IN THE APPELLATE DISTRICT WHERE THE PARTY

RESIDES. THE NOTICE OF APPEAL MUST BE FILED WITHIN 30 DAYS OF RENDITION OF THE

ORDER TO BE REVIEWED.

=================================================================

DISTRICT COURT OPINION

=================================================================

IN THE DISTRICT COURT OF APPEAL

FIRST DISTRICT, STATE OF FLORIDA

FEDERATION OF MOBILE HOME NOT FINAL UNTIL TIME EXPIRES TO

OWNERS OF FLORIDA, INC., and FILE MOTION FOR REHEARING AND

DEPARTMENT OF BUSINESS AND DISPOSITION THEREOF IF FILED.

PROFESSIONAL REGULATION,

DIVISION OF FLORIDA LAND SALES, CASE NO. 95-3525 & 95-3538

CONDOMINIUMS AND MOBILE HOMES, DOAH CASE NO. 95-630RU

Appellant,

vs.

FLORIDA MANUFACTURED

HOUSING ASSOCIATION, INC.,

Appellee.

_______________________________/

Opinion filed November 13, 1996.

An appeal from an order of the Division of Administrative Hearings.

Peter M. Dunbar and Robert S. Cohen of Pennington & Haben, P.A., Tallahassee,

for Appellant/Federation of Mobile Home Owners of Florida, Inc.

Robin L. Suarez of Department of Business and Professional Regulation,

Tallahassee, for Appellant/Department of Business and Professional Regulation.

W. Dexter Douglass and Michelle Anchors of Office of the Governor, Amicus

Curiae.

David D. Eastman, Jack M. Skelding, Jr., and Carl R. Peterson, Jr. of Skelding,

Labasky, Corry, Eastman, Hauser & Jolly, P.A., Tallahassee, for Appellee.

DAVIS, J.

The Federation of Mobile Home Owners of Florida, Inc., and the Florida

Department of Business and Professional Regulation, Division of Florida Land

Sales, Condominiums, and Mobile Homes (the Division), appeal a final

administrative order determining that the proposed repeal of Rule 61B-31.001(5),

Florida Administrative Code, constitutes an invalid exercise of delegated

legislative authority in violation of section 120.54(4), Florida Statutes

(1993), and that the Divisions policy statements relating to the length of

validity of a prospectus and to the elimination of any procedure for approving

amendments to previously filed and approved prospectuses violate section

120.535, Florida Statutes (1993). The broad issues raised in this appeal are

whether the Division's decision to repeal Rule 61B-31.001(5) is "rulemaking,"

and, if so, whether such repeal violates section 120.54, Florida Statutes

(1993), and whether repeal of this rule amounts to the institution of a non-rule

policy violative of section 120.535. Because we agree with the hearing

officer's conclusion that the elimination of the procedure for approval of

amendments to prospectuses violates section 120.54 by improperly vesting the

Division with unbridled discretion over the manner of performance of a

statutorily mandated obligation to approve prospectuses, as well as the

alternative holding that the repeal of this rule was an improper method of

instituting two non-rule policies in violation of section 120.535, we affirm.

However, because his reasoning was based upon anerroneous interpretation of

earlier decisions of this court, we reject the hearing officer's conclusion that

the repeal of the rule as it relates to the length of viability of a prospectus

violates section 120.54(4)

The Florida Legislature enacted Chapter 723 (formerly Chapter 83) to

provide mobile home owners with security in their dealings with mobile home park

owners. Stewart v. Green, 300 So.2d 889, 891 (Fla. 1974); Palm Beach Mobile

Homes, Inc,. v. Strong, 300 So.2d 881-, 886-87 (Fla. 1974); Herrick v. Florida

Dep't of Business Regulation, 595 So.2d 148, 157 (Fla. 1st DCA 1992) . Mobile

home owners and mobile home park owners are in a peculiar tenancy relationship

referred to by the Florida Supreme Court as "a hybrid type of property

relationship" distinct from a traditional landlord/tenant relationship. Stewart

v. Green, 300 So.2d at 892; see also s 723.004, Fla. Stat. (1993). The high

cost of moving a mobile home into or out of a mobile home park places the

resident mobile home owner in an unequal bargaining position with the mobile

home park owner from whom he rents a lot. One of the means of providing tenants

with this security is the requirement that the mobile home park owner provide

tenants and prospective tenants with an approved prospectus. This court in

Herrick reiterated the importance of the prospectus as one of the foundations of

the Legislature's efforts to protect mobile home owners. Herrick, 595 So.2d at

152.

An approved prospectus must be delivered prior to the creation of an

enforceable rental agreement. s 723.011, Fla. Stat. The prospectus is a

document providing full and fair disclosure of the terms and conditions of

residency in the mobile home park, and sets forth regulations to which the

mobile home owner will-be subjected after signing a lot rental agreement. A

prospectus must include

a description of the mobile home park property (Section

723.012(4)(c)), a description of the recreational and

other common facilities to be used by the home owners

(Section 723.012(5)), the arrangements for management of

the park and maintenance and operation of the park

property (Section 723.012(6)), a description of all

improvements which are required to be installed by the

mobile home owner (Section 723.012(7)), a description of

the manner in which utility and other services will be

provided to the home owners (Section 723.012(8)), an

explanation of the manner in which rents and other

charges will be raised, including 90 days advance notice

and disclosure of any rate increase or pass-through

charges, and any other fees, costs or charges to which

the home owner may be subjected (Section 723.012(9)), and

an explanation of the manner in which park rules or

regulations will be set, changed or promulgated,

including park regulations currently in effect (Section

723.012(10))

Village Park Mobile Home Ass'n, Inc. v. Florida Dep't of Business Regulation,

506 So.2d 426, 428 (Fla. 1st DCA), review denied mem., 513 So.2d 1063 (Fla.

1987). Nothing in chapter 723 defines how long the required prospectus remains

valid. Nor does the statute explain how or when a prospectus may be amended.

The substance of Rule 61B-31.001(5) was originally adopted in 1985 as Rule

7D-31.01(5), and was later renumbered (as Rule 7D- 31.001 (5) and then Rule 61B-

31.001(5)) without any substantive changes. Rule 61B-31.001(5) provides:

The Prospectus distributed to a home owner or prospective home owner shall

be binding for the length of the tenancy, including any assumptions of that

tenancy, and may not be changed except in the following circumstances:

(a) Amendments consented to by both the home

owner and the park owner.

(b) Amendments to reflect new rules or rules

that have been changed in accordance with

procedures described in Chapter 723, F.S., and

the prospectus.

(c) Amendments to reflect changes in the name

of the owner of the park.

(d) Amendments to reflect changes in zoning.

(e) Amendments to reflect a change in the

person authorized to receive notices and

demands on the park owner's behalf.

(f) Amendments to reflect changes in the

entity furnishing utility or other services.

(g) Amendments required by the Division.

(h) Amendments required as a result of

revisions of Chapter 723, F.S.

(i) Amendments to add, delete or modify user

fees for prospective home owners.

Neither Chapter 723 nor the rule defines "tenancy." The rule uses the word

"tenancy" in attempting to define the term of viability of a prospectus. When

the Division adopted the rule in 1985 it took the position that the prospectus

was binding on the park owner and the mobile home owner until the mobile home

owner no longer occupied the lot or the tenant was evicted, whichever occurred

first.

After Herrick v. Florida Department of Business Regulation, 595 So.2d 148,

157 (Fla. 1st DCA 1992) was decided, the Division believed that "tenancy" had

been defined to mean the term of a lot rental agreement, or at least that the

case could be interpreted in that manner. Although contending that the case

should not be interpreted as having restricted the meaning of "tenancy" to the

term of a rental agreement, the Division was concerned that the decision of this

court would have the effect of permitting Rule 61B-31.001(5) to be construed to

provide that a prospectus is valid only for the period covered by a rental

agreement. The Division decided to repeal Rule 61B-31.001(5) because the

Division reasoned that the rule no longer accomplished an appropriate

implementation of section 723.012 if interpreted in that manner. Therefore the

Division published notice of the proposed repeal of Rule 61B-31.O01(5) in the

Florida Administrative Weekly, as required by section 120.54(1)(b), Florida

Statutes (1995).

The Florida Manufactured Housing Association, Inc. (FMHA), is a Florida

not-for-profit corporation organized to represent the interests of the owners of

approximately 750 mobile home parks. FMHA petitioned to determine the

invalidity of the proposed repeal, asserting that the proposed repeal was

illegal because the Division was replacing a clearly articulated standard

establishing the effective term of such prospectuses, and governing the manner

and method of amending prospectuses, with non-rule policies, in violation of

section 120.535. These non-rule policies are that the prospectus remains in

effect for some undetermined amount of time greater than the term of any

particular rental agreement and that the Division will not review and approve

amendments to previously approved prospectuses. FMHA also averred that those

two alleged non-rule policies are violative of section 120.56, as an invalid

exercise of delegated legislative authority because they enlarge, modify, or

contravene the law implemented as interpreted by the District Court of Appeal,

First District, and as ratified by subsequent legislative inaction. Finally,

FMHA's petition asserted that the proposed repeal itself, as distinct from the

policies allegedly being substituted for the rule, is invalid rulemaking

pursuant to section 120.54(4) on four grounds: first, because the Division

failed to follow the rulemaking procedures in section 120.54; second, because

the Division exceeded its grant of rulemaking authority in that the repeal

enlarges, modifies, or contravenes the law implemented as interpreted by the

District Court of Appeal, First District; third, because the remaining rules are

so vague as to vest unbridled discretion in the Division, particularly with

regard to the nature and method of permissible prospectus amendments; and

fourth, because the repeal is arbitrary and capricious in view of earlier

precedent finding the rule to be consistent with chapter 723.

The hearing officer ruled that the repeal of Rule 61B- 3.001 (5) is an

invalid exercise of delegated legislative authority under section 120.54(4) and

that the repeal is also invalid because the non-rule policies that the Division

is seeking to substitute for the rule are improper under section 120.535. The

hearing officer did not expressly rule on the claim that the non- rule policy is

an invalid exercise of delegated, legislative authority under section 120.56.

1/

THE CHALLENGE UNDER SECTION 120.54(4)

The hearing officer found that the repeal of Rule 61B- 3.001(5) meets the

definition of a rule. He further found that this "rule" was an invalid exercise

of delegated legislative authority for two reasons: it conflicted with

decisions which "have interpreted `tenancy' in such fashion as to permit Rule

61B- 3.001 (5) to be construed to indicate that a prospectus is valid only for

the period covered by a rental agreement" and because "[t]he repeal of the rule

fails to establish adequate standards for agency decisions and vests unbridled

discretion in the agency." The parties have-asked this court to resolve what

they characterize as a question of first impression: whether the repeal of a

rule is, in and of itself, subject to challenge through the rulemaking process.

While section 120.52(16), Florida Statutes (1993), provides that the term

"rule" "includes the amendment or repeal of a rule," there are no reported

Florida decisions addressing whether that provision makes the repeal of any rule

subject to rulemaking challenge, or simply entitles interested parties to seek

repeal of a rule in rulemaking proceedings, and to receive notice of amendments

and repeals as required by section 120.54(1), thus permitting a challenge when

the repeal has the corollary effect of creating a new rule. Cf. All Risk Corp.

of Florida v. Florida Dep't of Labor & Employment Sec., 413 So.2d 1200 (Fla. 1st

DCA 1982)(rule challenge based upon a rule repeal and simultaneous substitution

of new proposed rules). To constitute "rulemaking" a rule repeal is required to

satisfy independently the remainder of the definition of a "rule" in section

120.52(16): "agency statement of general applicability that implements,

interprets, or prescribes law or policy or describes the organization,

procedure, or practice requirements of an agency..." A repeal that does not have

the effect of creating or implementing a new rule or policy is not a "rule"

subject to challenge. For example, in Balsam v. Florida Department of Health

and Rehabilitative Services, 452 So. 2d 976 (Fla. 1st DCA 1984), this court

applied the rationale that "[a] rule is any agency statement of general

applicability that prescribes laws or policy or describes the organization,

procedure, or practice requirements of an agency" to a claim that a moratorium

on the receipt of certificate of need applications was a rule subject to the

rulemaking procedures in chapter 120. The court in Balsam quoted Florida

Department of Administration v. Harvey, 356 So.2d 323 (Fla. 1st DCA 1978) in

support of its conclusion that the moratorium was a rule, because "[a]ny agency

statement is a rule if it purports in and of itself to create certain rights and

adversely affect others'..." The moratorium was a rule, the court held, because

it denied the applicants their right to timely review. See also Florida Bd. of

Trustees of the Internal Improvement Trust Fund v. Lost Tree Village Cor., 600

So.2d 1240, 1244 (Fla. 1st DCA 1992) (distinguishing Balsam and holding that a

moratorium on consideration of applications for use of sovereign submerged lands

was not a rule because the Board was not required by law to accept such

applications)

In the present case the hearing officer specifically held the portion of

the "rule" relating to the amendment process invalid because it vests the agency

with unbridled discretion over the amendment process and determined that the

portion of the "rule" defining the term of viability of a prospectus conflicts

with the relevant portions of chapter 723 as interpreted by this court. In

other words, the hearing officer found that both aspects of this repeal "create

certain rights and adversely affect others..." Florida Dep't of Administration

v. Harvev, 356 So.2d at 325.

Chapter 723 requires the promulgation of a prospectus, and makes it part of

the contract between the mobile home park owner and the mobile home owner, but

does not state expressly whether that prospectus is valid and enforceable for

the length of a single rental agreement or some longer period. Nor does the

statutory scheme, contain any provisions controlling the manner of amendment of

a prospectus. We note the recent enactment of the Florida Legislature creating

a study commission to propose changes to the Florida Mobile Home Act to resolve

the "lack of clarity" in the law "concerning the status, duration,

applicability, and amendments of the disclosures contained in the prospectuses

and offering circulars provided to mobile home owners in this state..." Ch. 96-

394, s 2, 1996 Fla. Sess. Law Serv. (West)

Chapter 723 obligates the mobile home park owner to provide tenants with an

approved prospectus. It follows that there must be some procedure enabling the

park owner to obtain approval of amendments to the prospectus as the information

required to be contained therein changes. This court has previously recognized

the Division's obligation to review prospectuses and approve them or to state

reasons for disapproving the proposed prospectus. See Village Park Mobile Home

Ass'n, Inc. v. Florida Dep't of Business Regulation, 506 So.2d at 427. Rule

61B-31.001(5), providing the manner of amendment of a prospectus and stating

that the prospectus is "binding for the length of the tenancy," has been upheld

against previous challenges. See Hobe Assocs. Inc. v. Florida Dep't of Business

Regulation, 504 So.2d 1301 (Fla. 1st DCA 1987); Water Oak Management Corp. v.

Florida Dep't of Business Regulation, 12 FALR. 1144 (Fla. Dep't of Bus. Reg.

1990). We agree with the hearing officer that, to the extent the elimination of

an amendment process by repeal of the rule improperly vests the agency with

unbridled discretion over review and approval of amendments to prospectuses, the

repeal is a "rule" and violates section 120.54.

The remaining issue in the section 120.54 challenge is whether the repeal

of the portion of Rule 61B-31.001(5) which purports to define the period of

viability of the prospectus is arbitrary and capricious because the repeal is,

in and of itself, a rule which is substantively in conflict with the statutes

implemented. The hearing officer premised his ruling that the repeal of the

rule providing that a prospectus is viable for the length of a "tenancy" was

arbitrary and capricious and therefore invalid on an erroneous interpretation of

this court's decisions in Herrick and Hobe Associates, Ltd. v. Florida

Department of Business Regulation, 504 So.2d 1301 (Fla. 1st DCA 1987). It was

the same misinterpretation of those cases that prompted the Division to repeal

the rule, in the belief that Herrick had possibly defined "tenancy" to mean the

term of the rental agreement. This misapprehension is based primarily upon the

statement that "tenancy in Tan Tara Mobile Home Park is on an annual basis..."

Id. at 156. However, Herrick does not define the term "tenancy" as it is used

in this rule to define the term of viability of a prospectus. In fact this

court expressly declined in Herrick to define "tenancy" for purposes of the

length of viability of a prospectus. Id.

As this court stated in Herrick, it is inappropriate for us to legislate

the meaning of "tenancy" in this context. The Division recites numerous

provisions in Chapter 723 in support of its interpretation that it is the intent

of the Legislature that the prospectus should continue to be effective after the

expiration of the term of the original rental agreement. However, none of those

statutory provisions actually state how long the prospectus should be viable.

We reiterate that "the time is ripe for provision of a legislative

definition...," Herrick, 595 So.2d at 157. Although it does not change the

outcome of this decision, we reject the hearing officer's conclusion that the

repeal of the rule relating to the term of viability of the prospectus is

improper because the hearing officer relied upon a misinterpretation of Herrick

and Hobe to reach that conclusion.

THE CHALLENGE UNDER SECTION 120.535

The hearing officer also held that the Division had acknowledged "taking

the position that the prospectus is binding for longer than the period of a

rental agreement[,]" and that "notwithstanding prior practice, [the Division

asserts that] it has no statutory authority to review and approve amendments to

a previously approved prospectus and that it will no longer do so." The hearing

officer concluded that these were agency statements of general applicability

interpreting or prescribing law or policy and that the Division had failed to

establish that rulemaking was unreasonable, not feasible, or impractical,

thereby violating section 120.535. We affirm the decision invalidating the

repeal of this rule because, by repealing the rule, the Division is implementing

a non-rule policy concerning the length of validity of a prospectus and because

the Division's decision to discontinue the review and approval mechanism for

amendments is also a statement of general applicability interpreting or

prescribing law or policy, which the Division is required under section 120.535

to establish through proper rulemaking procedures. See Christo v. Florida Dep't

of Banking and Finance, 649 So.2d 318 (Fla. 1st DCA), review dismissed mem., 660

So.2d 712 (Fla. 1995)

Appellants assert that FMHA did not have standing to raise this issue

because the alleged non-rule policies have yet to be applied to anyone. But one

may have standing whose `substantial interests are affected' by the lack of a

rule. See Cortese v. School Bd. of Palm Beach County, 425 So.2d 554, 556 n.4

(Fla. 4th DCA 1982), review denied mem., 436 So.2d 98 (Fla. 1983). We conclude

that the uncertainty engendered by the Division's non- rule policy substantially

affects the interests of mobile home park owners such that they have standing.

See Ward v. Bd. of Trustees of the Internal Improvement Trust Fund, 651 So.2d

1236 (Fla. 4th DCA 1995). FMHA has standing to raise this challenge because the

prospectus is such a fundamental element of the mobile home park business that

the absence of a procedure to obtain approval of amendments to the prospectus,

and the confusion regarding the effective term of the prospectus, has direct

impact on the business decisions and affects the substantial interests of FMHA's

members. See Televisual Communications Inc. v. Florida Dep't of Labor &

Employment Sec., 667 So.2d 372 (Fla. 1st DCA 1995); Florida Dep't of

Professional Regulation v. Sherman College of Straight Chiropractic, 20 Fla. L.

Weekly D2534 (Fla. 1st DCA November 16, 1995). As this court explained in

Village Park, 506 So.2d at 429, the Division is charged with the responsibility

of approving the prospectus. The mobile home park owner is statutorily

obligated to provide tenants with an "approved" prospectus, and cannot enter

into a binding rental agreement until after providing the prospective tenant

with an "approved" prospectus. See ss 723.011(1)(a), 723.014(1). Therefore,

the mobile home park owners have demonstrated the requisite injury-in- fact

attributable to the elimination of the process for approval of amended

prospectuses. The record contains support for the conclusion that the

abrogation of such review procedures without substituting alternative procedures

implements non-rule policy that there will no longer be any process for review

and approval of amendments, in violation of section 120.535.

The repeal of this rule also has the effect of instituting a second non-

rule policy that a prospectus is valid for some undetermined period of time

longer than the rental agreement. Although the Division argues that there is no

such policy, there is ample record evidence to support the hearing officer's

finding that such a policy exists. For example, Bureau Chief Norred testified

that the statute and the case law did not establish the longevity of the

prospectus, that the rule did, and that the reason the agency wanted to repeal

the rule was because the definition of "tenancy" in Herrick had given a meaning

to the rule contrary to the policy of the agency.

The Division failed to prove that rulemaking is impractical, and the

hearing officer expressly held that there was "no credible evidence" of a good

faith attempt to expeditiously use the rulemaking procedure to address these

policies. The Division failed to carry its burden of establishing a valid

defense under section 120.535. See Christo v. Florida Dep't of Banking &

Finance, 649 So.2d 318 (Fla. 1st DCA), review dismissed mem., 660 So.2d 712

(Fla. 1995)

Accordingly, we hold that the present rule repeal is invalid because the

elimination of an amendment process has the effect of vesting unbridled

discretion in the Division over the manner of performance of a statutorily

mandated obligation to approve prospectuses, in violation of section 120.54(4).

The repeal also has the effect of implementing non-rule policy governing the

term of a prospectus and concerning the lack of responsibility of the Division

to approve amendments to prospectuses, in contravention of section 120.535. We

therefore AFFIRM the order invalidating the repeal of Rule 61B-31.001(5),

Florida Administrative Code.

BARFIELD, C.J., and KAHN, J., CONCUR.

ENDNOTE

1/ There is no merit to the claim that this rule repeal is invalid under

section 120.56 on the theory that the non-rule policy of the agency enlarges,

modifies, or contravenes the specific provisions of law the rule was intended to

implement. In Christo v. Florida Dep't of Banking and Finance, 649 So.2d 318

(Fla. 1st DCA), review dismissed mem., 660 So.2d 712 (Fla. 1995), the appellant

had asserted that unpromulgated agency rules were invalid under both sections

120.535 and 120.56. The hearing officer held that there was no violation of

section 120.56 "because the manuals did not enlarge, modify or contravene the

specific provisions of law they were intended to implement." Id. at 319.

However, this court held that "the Legislature, in enacting section 120.535,

intended section 120.535 to be used as the exclusive method to challenge an

agency's failure to adopt agency statements of general applicability as rules."

Id. at 321. Thus, the decision affirmed the ruling that the appellant had

stated no claim under section 120.56, but rejected the reasoning of the hearing

officer in that case.

MANDATE

From

DISTRICT COURT OF APPEAL OF FLORIDA

FIRST DISTRICT

To the Honorable, Hearing Officer William F. Quattlebaum

Division of Administrative Hearings

WHEREAS, in that certain cause filed in this Court styled:

FLORIDA MANUFACTURED HOUSING

ASSOCIATION, INC., a Florida

incorporated association not for

profit

vs.

DEPARTMENT OF BUSINESS AND

PROFESSIONAL REGULATION, DIVISION CASE NO. 95-3525

OF FLORIDA LAND SALES, YOUR CASE NO. 95-0630RU

CONDOMINIUMS AND MOBILE HOMES

and

FEDERATION OF MOBILE HOME

OWNERS OF FLORIDA, INC.

The attached opinion was rendered on November 13, 1996.

YOU ARE HEREBY COMMANDED that further proceedings be had in accordance with said

opinion, the rules of this Court and the laws of the State of Florida.

WITNESS the Honorable Edward T. Barfield

Chief Judge of the District Court of Appeal of Florida, First District and

the Seal of said court at Tallahassee, the Capitol, on this 3rd day of December,

1996.

___________________________________________

(seal) Jon S. Wheeler

Clerk, District Court of Appeal of Florida,

First District

MANDATE

From

DISTRICT COURT OF APPEAL OF FLORIDA

FIRST DISTRICT

To the Honorable, Hearing Officer William F. Quattlebaum

Division of Administrative Hearings

WHEREAS, in that certain cause filed in this Court styled:

FLORIDA MANUFACTURED HOUSING

ASSOCIATION, INC., a Florida

incorporated association not for

profit

vs.

DEPARTMENT OF BUSINESS AND

PROFESSIONAL REGULATION, DIVISION CASE NO. 95-3538

OF FLORIDA LAND SALES, YOUR CASE NO. 95-0630RU

CONDOMINIUMS AND MOBILE HOMES

and

FEDERATION OF MOBILE HOME

OWNERS OF FLORIDA, INC.

The attached opinion was rendered on November 13, 1996.

YOU ARE HEREBY COMMANDED that further proceedings be had in accordance with said

opinion, the rules of this Court and the laws of the State of Florida.

WITNESS the Honorable Edward T. Barfield

Chief Judge of the District Court of Appeal of Florida, First District and

the Seal of said court at Tallahassee, the Capitol, on this 3rd day of December,

1996.

___________________________________________

(seal) Jon S. Wheeler

Clerk, District Court of Appeal of Florida,

First District