Election 2020: Anti-Rental Tax Signs Turn Middlesex Beach Green

If you were to stroll around Middlesex Beach over the past week, you could not help but notice the proliferation of largely green campaign, lawns signs. The lawn signs, which read, No Rental Tax, No More Litigation, are being posted in opposition to the rental tax proposition, which incumbent candidates Steve Larsen, Marty Shecter and Nancy Glasgow support. [1] Larsen, Shecter and Glasgow have all promised in their respective campaign materials to bring the proposition before the community in the form of a proxy vote for a covenant change, should they win re-election on September 19, 2020. In fact, on March 14, 2020, they successfully moved the board to have the association, itself, pay for the expense of authoring the proxy ballot for a covenant change. However, to date the board has yet to move forward with the motion.

One of the anti-Rental Tax lawn signs is now visible on Short Road; five are visible on Bridge Road, one is visible on Addy Road, and one is visible on the common walkway adjacent to Addy Road.

Dean Mayhugh, who is a full time resident and is playing host to two of the signs at 19 Bridge Road, believes that if the 8% rental tax proposition is adopted by the community, he will be next. "Definitely. It will definitely happen." says Mayhugh, referring to the possibility of full time residents having to pay a higher assessment than the one seasonal residents would pay. Mayhugh's family has been a fixture in Middlesex Beach since his Aunt and Uncle purchased the property in Middlesex Beach in 1974 or thereabouts, when Mayhugh was seventeen-years-old. The property at 19 Bridge Road has since passed to him.

For that to happen the community would have to define a separate class of residents, who live in the community year round, to charge these property owners a higher assessment than the one seasonal residential owners would pay.

When asked to explain the rationale behind the 8% rental tax, Mayhugh explains it this way, "It is the same politics I escaped in [Washington], DC and later in Philadelphia, [Pennsylvania]. Only now it has caught up with me."

Bill Leconte, who owns the property at 21 Bridge Road (adjacent to Mayhugh's property) and is also playing host to two of the lawn signs, was so moved he decided to run for a position on the board to unseat one of the three proponents of the 8% Rental Tax proposition.

Leconte rationalizes his participation in running for a position on the board this way, "I am against any infringement on peoples's rights and do not want Middlesex beach funds used to fend off lawsuits because of misguided board decisions." [3]

The fervor over the rental tax issue is not necessarily isolated to owners, rather it has begun to spill over to the Middlesex Beach staff as well. When offered an Anti-Rental Tax lawn sign, a source on the community patrol, snapped one up. "I think the whole thing is stupid." the source says, referring to following the example set by the municipalities, Fenwich Island and South Bethany, involving a rental tax. Fenwich Island has an 7% rental tax to fund a staffed visitor center.

Presumably the source on the community patrol intends to plant the sign on his/her personal property away from the Middlesex Beach Association.

In fact in Steve Larsen's campaign material he advances the false narrative that Middlesex Beach is an "outliner" in charging vacation rental properties fees when the opposite is true. Only three homeowner associations out of a total of 37 HOAs in Delaware charge what are referred to as resort fees to tenants.  These resort fees are otherwise usage fees for access to amenities, like tennis courts, pools, boating piers, launch ramps and the like. The three HOAs on Larsen's list of neighborhoods that charge resort fees, that are not entirely within the municipal boundries, charge usage fees indiscriminantly to both tenants and owners. [2]

Middlesex Beach has no amenities whatsoever. Further, none of the three HOAs on Larsen's list of neighborhoods that charge resort fees charge usage fees to a private beach in isolation.

Again, over the course of the board meeting, held on Saturday, March 14, 2020, the board passed a motion put forward by Steve Larsen to engage the resident lawyer, Mary Schrider-Fox, to draft a proxy ballot for a covenant change, adopting a draft amendment on a percentage fee against rental income that Larsen authored. To date Larsen never shared the draft amendment with anyone. On the event that any resulting proxy for a covenant change is distributed to the community for a vote the matter would then be actionable by any one of the forty eight vacation rental property owners, who could potentially sue the Middesex Beach Association to compel the homeowner association to set aside the proxy on the grounds that the covenant change is illegal on its face and cannot be voted on by the members of the Middlesex Beach Association.

Ultimately, as the association has just concluded a frivolous law suit with the Norman Law Firm and the DMF Associates this past year, which cost the parties over 250,000.00 dollars, any litigation would only further erode the association's prospects of accessing affordable indemnity insurance. As it stands today, when the current contract expires in 2021, the association will reportedly see the cost of insurance premiums to go up from 60.00 per resident or thereabouts to 312.50 dollars per resident, a five fold increase. After two successive exercises in litigation, costing over 250,000.00, assuming that happens, the association will reportedly see the cost of insurance premiums to go up from 312.50 per resident or thereabouts to over 1,000.00 dollars per resident. That presumes it is possible to get indemnity insurance after two major legal actions, involving litigation, each costing over a quarter million dollars spaced a year apart.

incumbent candidate profiles for the election now scheduled for September 19, 2020

• Ellen Throop;
• Steve Larsen;
• Marty Shecter and
• Nancy Glasgow.

References