The Delaware Superior Court recently ruled in a case involving the City of Wilmington and RHR Holdings, LLC, concerning a vacant property registration fee. The court decided to stay the motion to dismiss filed by RHR Holdings, which contested the City’s assessment of a vacant property fee. This ruling affects property owners in Wilmington and highlights the importance of following administrative procedures when disputing municipal fees.
The case, City of Wilmington v. RHR Holdings, LLC, was filed under docket number N25J-03690. It revolves around a residential property owned by RHR Holdings located at 505 North Broom Street. The City assessed a $10,000 vacant registration fee for the year 2023. RHR Holdings requested a waiver, which the City granted, but it also mandated that the property must be occupied by January 1, 2025, to avoid additional fees.
In July 2024, RHR Holdings entered into a lease agreement for the property, claiming they complied with the City’s directive. However, the City still assessed a vacant property fee for 2024. RHR Holdings contested this fee, leading to a series of communications with the City. While the City removed the 2023 fee, the 2024 assessment remained, prompting the City to initiate a monition proceeding to collect the outstanding balance.
On December 5, 2025, the City recorded a Writ of Monition in the court to collect the fee. RHR Holdings filed two motions to dismiss the writ in April and May 2026, arguing that the City’s actions were improper. The City, in response, contended that RHR Holdings had not exhausted the available administrative remedies to challenge the fee assessment.
In its ruling, the court emphasized the importance of the doctrine of exhaustion of administrative remedies. The court stated, "The application of the doctrine of exhaustion of administrative remedies requires Defendant to pursue the administrative appeal process provided in the Code." The court also noted that the Commissioner of the Department of Licenses and Inspections has exclusive jurisdiction to review appeals related to vacant property assessments.
Judge Martin B. O’Connor presided over the case and highlighted that RHR Holdings did not follow the proper administrative procedures outlined in the City Code. The court pointed out that the City Code provides specific guidelines for property owners to contest assessments and that RHR Holdings had not demonstrated that it had pursued these remedies.
The court's decision to stay the motion to dismiss gives RHR Holdings an additional sixty days to pursue the administrative remedies available to them. The court ordered RHR Holdings to submit a status report by November 13, 2026, updating the court on their progress with the administrative appeal.
This ruling is significant as it reinforces the necessity for property owners to utilize the established administrative processes before seeking judicial intervention. By emphasizing the need for administrative remedies, the court aims to maintain a proper relationship between the courts and administrative agencies, preventing unnecessary burdens on the judicial system.
The impact of this decision extends beyond the parties involved. It serves as a reminder to property owners in Wilmington and potentially other municipalities that they must adhere to local regulations and procedures when disputing municipal fees. Failure to do so may result in the dismissal of their claims, as seen in this case.
As for what’s next, RHR Holdings has the opportunity to appeal the court's decision if they are dissatisfied with the outcome of the administrative remedies. However, details regarding any related cases or further appeals were not available in the court filing.