Dagsboro residents question developer rental properties

The Woodlands of Pepper’s Creek property owners attended this week’s Dagsboro Town Council meeting to voice their concerns related to developer Fernmoor Homes renting out properties within the community.

Dina Mach, president of the Home Owners Association, said she first learned the developer was planning on renting out homes in the community after seeing an advertisement on Facebook. When she inquired regarding the rentals, she was informed they would be renting eight homes under construction and their model. Another homeowner who inquired was told two of the properties were already leased, effective Oct. 1.

“Of course, all of us homeowners were taken completely by surprise,” she said. “We’ve very concerned this is going to decrease the value of our homes, make it very difficult for any of us to sell any of our homes because of the stringent mortgage rules… Not to mention, none of us were led to believe it was going to be living in a rental community, we thought it was going to be an owner-occupied community.”

Mach said the HOA was approaching council to see if they could do anything to help the property owners.

“We believe the council also thought this was going to be an owner-occupied facility,” she said, adding they have been in touch with local Attorney General’s office as well as their attorney. “Doesn’t this change our community makeup to a commercial enterprise because it’s the developer renting out such a large lot of rental units?”

Town Solicitor Rob Witsel said he was not familiar with all the facts and facets of the situation, and therefore did not feel comfortable rendering an opinion to the council that evening.

“The code does not prohibit rental of residential real estate by anyone except for a person who does not have a rental license,” he said, noting he had not looked at the site plan to see if there were any restrictive covenants. “It would seem to me that the only prohibition would be in the developer’s own restrictive covenants.”

“My thinking is, unless there’s some kind of restrictive covenant found in the declaration or condo documents, it probably doesn’t exist and then it’s hard for the town to enforce,” added councilman Bill Chandler.

He recommended the HOA have their attorney look into case law regarding deceptive trade practices claims and the Consumer Fraud Act.

“I’m signaling my own reticence to think that the Town of Dagsboro has in the way of any kind of rule or regulation that could be applicable, even though my sympathies and empathies go to the owners because I think there’s a big difference between owner-managed rental property and someone else managing the rental property.”

The HOA was told to provide documents to the Town for Witsel’s review, and he would render an opinion to council at the October council meeting.