Some in modern media have lost the art of the follow up inquiry.  When possible, a good follow up may lead to clarification or additional and useful insights.  Again, for transparency’s and accuracy’s sake, here was that follow up.

> “Pardon me, but while what you provided was helpful, you didn’t mention the antitrust suits pending against Sun Communities and several other defendants, several of which are members of the Manufactured Housing Institute (MHI) and/or MHI state affiliates. I’m thinking about Hayek at al vs. Datacomp et al, Case No. 23-cv-6715, which names Sun as a defendant. I’m also thinking about: Sailer et al v. Datacomp et al, Case #1:23-cv-14565. Can you add some context to concerns investors might have about Sun, given their sheer numbers of claims, legal costs, and potential loses involved?”

Note carefully this phrase from Bing AI’s response above: “These lawsuits [Hayek et al vs. Datacomp et al, Case No. 23-cv-6715¹and Sailer et al v. Datacomp et al, Case #1:23-cv-14565³] could pose significant concerns for investors who are interested in Sun Communities or other manufactured home community owners.”

This was the next follow up inquiry by MHProNews.

> “Hayek at al vs. Datacomp et al, Case No. 23-cv-6715 and Sailer et al v. Datacomp et al, Case #1:23-cv-14565 each indicated that additional defendents might be added, right? Is it possible that other Manufactured Housing Institute (MHI) members and/or MHI itself might become embroiled in such litigation, given concerns raised by Samuel Strommen at Knudson Law about MHI and it purported violations of antitrust law? After all, several of the defendants are MHI board members and MHI has a fiduciary duty to its members which may have arguably been breached, correct?”

So, as Bing AI indicated, it is not an attorney, a remark programmers doubtlessly used to mitigate liability. But it is fair to say that these are complex questions, which MHProNews is hereby attempting to simplify and make more accessible to industry pros, investors, public officials and others who are likely to read this report.

But citing and applying the legal information it referenced online, Bing’s AI admitted that reputational, financial and other risks may be involved for Sun Communities (SUI) as well as MHI. That’s a fair assessment, in our manufactured home industry expert view. Indeed, once more, Bing’s AI has been useful in confirming evidence-based concerns previously published on MHProNews and/or MHLivingNews, and on several occasions, nowhere else in what passes for manufactured housing trade media or blogging.

Speaking of other news sources, it is also worth noting that Bing AI raised the point that MHI states that it has a “news” page. But then Bing’s AI noted that the following about MHI’s “news” page: “However, it [i.e.: MHI’s news page] does not seem to address or acknowledge the concerns or controversies involving Sun Communities or other MHI members.” While the precise nature of MHI’s plan going forward with that self-designated news page is not entirely clear, what is obvious at this point is that Bing’s AI has made a keen observation.

Namely, and repeating for emphasis: “However, it [i.e.: MHI’s news page] does not seem to address or acknowledge the concerns or controversies involving Sun Communities or other MHI members.” When authentic news is ignored that is an ill reflection on MHI or on key MHI members, it calls into question the true meaning and purpose of MHI’s so-called “Code of Ethical Conduct.” There are still no known examples of MHI invoking this code of conduct, despite several possible concerns raised by  MHARR, mainstream media, MHLivingNews, MHProNews, and certain sources within MHI’s network.

What the cases Hayek at al vs. Datacomp et al, Case No. 23-cv-6715 and Sailer et al v. Datacomp et al, Case #1:23-cv-14565 each do is raise concerns about what MHProNews alleged in the report and analysis raised above. Namely, that MHI, rather than holding their members accountable to a specific set of ethical standards, appears instead to be giving those members cover. They do so in a variety of ways, that include speaking at MHI events and meetings, as well as bestowing on members awards when some of those awarded for “excellence” appear to have well publicized controversies from credible sources that ought to mitigate against any positive award or recognition.  Some examples of that are linked below.

Whatever MHI was around the turn of the century, there is an evidence-based case to be made that they are no longer the trade association that they posture has a meaningful code of ethical conduct.  There appears to be an array of firms that are engaged in evidence-based concerns of antitrust violations as well as so-called “predatory” business practices. Noting that the Kentucky Manufactured Housing Institute (KMHI) was cited above as giving an award to complaint-plagued Flagship Communities, the following segue is warranted. In the report below that cites NBC affiliate Lex18 and Spectrum 1 News, KMHI’s executive director Logan Hanes made the following remark. Ponder how it may apply to the allegations in the antitrust cases cited above involving Sun and several other MHI members.

“I think there’s certainly bad actors in every industry that do have unfair rent increases,” KMHI Executive Director Logan Hanes said. “But there’s also been a lot of benefits to some of these larger groups coming in and purchasing these communities — investing in the infrastructure. Some of the communities in Kentucky still have clay pipes, so a lot of that has increased; so because of that you are providing a safer community — providing better quality to the tenants.” That appears to be a case of trying to have it both ways, as Hanes surely knows that some of his own members and/or those of MHI are accused of that type of predatory behavior of sharply driving up site fees in a manner that can result in economic evictions for previously stable residents. See the report linked below for the context of Hanes’ remarks.

MHProNews mused almost a year ago that manufactured housing was arguably becoming a target rich environment for public officials and plaintiff’s attorneys. Since that report, several troubling cases has been filed. More are potentially on the horizon.

To be clear, there are some questions that could be raised about those cases. MHProNews seems to stand alone in both probing the legal issues and some possible defenses.

While there are some apparent glitches (e.g.: industry data claim) in the pleadings of the various litigants that MHProNews previously noted, in our view they are not likely to significantly (if at all) benefit the defendants. Indeed, if the attorneys involved get the right expert, the glitches could be turned to their advantage. Why? Because the glitches are often based on information that has been advanced by MHI and/or some of MHI’s prominent members, that may include defendants.

MHI and MHI linked trade media and bloggers appear to be a kind of fog machine, spewing out approved talking points, attempting to generate a rosier narrative, while ignoring scandals that in some cases are right under their own noses.

Recall that GuruFocus previously made the following remarks in a report on Berkshire Hathaway owned Clayton Homes.

What has emerged from the dawn of the Berkshire era in manufactured housing is the kind of predatory business model that has become all too common in MHVille. Sun’s CEO is quite aware that they could have followed a development business model and could have done so profitably. As Shiffman said, it could be more profitable, in several cases, then the consolidation business model that they are pursuing.

So, it isn’t just residents that have apparent beefs with Sun, as the Hayek and Salena cases might make someone think. As this recent article being unpacked herein from GuruFocus helped draw attention to the possible concerns that investors should have.

Is Sun a Value Trap, as GuruFocus suggested?

While GuruFocus may be going over the edge in using an Altman Z analysis in warning investors of a possible bankruptcy scenario for Sun Communities in the visible future, they nevertheless may have done some a favor by sounding yet another cautionary note about Sun Communities (SUI) and their leadership.

In wrapping up on Sun Communities, it is worth noting that Sun – in this instance – can be used as a kind of a stand-in for the consolidation movement that is increasingly apparent at MHI during the Berkshire era. Public officials ought to lean into these concerns. Why? Because affordable housing is a major issue in the U.S. And because there is ample – and perhaps growing – evidence that laws are being violated that are harmful to the public interest.  See the related reports to learn more.  And watch for another issue that has gone largely unreported by others in MHVille that will be another significant article supported by evidence and research that is often found only on MHProNews. ###

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