As we’re well into 2017, quite a few legislative changes have developed since January. With passed and potential bills affecting the multifamily industry on a nationwide and state level, check below to see if you’re affected.
PENDING: CFPB’s Alternative Data with Credit Scoring (see inquiry announcement)
While this is not hugely developed, you should be aware that on February 16, the Consumer Financial Protection Bureau (CFPB) announced that they were taking public feedback on the benefits and risks of using alternative credit data sources (like cell phones, rental payments, social media, etc.) to make lending decisions about consumers who are “credit invisible”. Although this would potentially improve the accessibility of affordable credit to “credit invisible” consumers, many have raised concerns about the impact to consumer privacy if this alternative data would be reported. The CFPB is accepting comments from the public until May 19th on regulations.gov.
PENDING: Repeal of the Costa-Hawkins Act (AB 1506)
This bill would repeal the Costa-Hawkins Act, which currently prevents cities and counties throughout California from adopting restrictive rent control policies, such as: 1) regulating initial rates and rates established after a change in tenancy, 2) rent controls on newly constructed housing built after 1995, and 3) rent controls on single-family homes. Read our article to learn why we, and others in the multifamily industry, oppose this bill.
PENDING: Immigration Status in Housing (AB 291)
As we covered in a previous article, Assembly Bill 291 would prohibit landlords and properties from disclosing the tenant’s immigration or citizenship status to any immigration authority, law enforcement agency, or local, state, or federal agency. They are also prohibited from inquiring into the immigration or citizenship status of a rental applicant or tenant. As currently amended, the landlord would have to pay statuary damages (per person whose information was disclosed) of 12 times the monthly rent charged.
Finder Fees and Apartment Tenants (HB 2039)
This bill eliminates the $200 cap and annual, five times per year limitation on apartment “finder fees”. This law makes it legally acceptable to reward tenants—or any unlicensed person— for assisting in showing or renting a property. HB 2039 also specifies that an unlicensed tenant or person may not actively work to promote or advertise vacancies, and receive payment (finder fees) for their services. After its effective date (TBD), property management firms or property owners may provide unlimited finder fees in the form of rent credits to their renters.
Forcible Entry or Detainer (HB 2237)
HB 2237 prohibits any court or agency from requiring specific forms for notices or pleadings in eviction actions. For example, the usage of any court-created 5-day and 10-day notices will not be required in an action for forcible entry or any special detainer. Any notice or pleading that meets statutory requirements will be sufficient to pursue an eviction action.
PENDING: Tax Deductions for Properties ADA Retrofit (HB 2214)
HB 2214 has not yet passed, however, if enacted it would offer rental properties a tax deduction for expenses occurred while retrofitting the property to comply with the requirements of the Americans with Disabilities Act.
Seattle Caps Move-In Fees (CB 118817)
Effective January 15, 2017, this legislation caps the move-in amount housing providers can collect from new renters. Acceptable non-refundable fees are the application fee and any one-time cleaning fee charged at the initiation of tenancy. Other common non-refundable fees charged at move-in like administrative fees or pet fees are prohibited. Under CB 118817, the maximum security deposit is limited to the first month’s rent. The Washington Multifamily Housing Association provides a good breakdown of Seattle’s fee limitations. This law only effects the City of Seattle and single-family, owner occupied rental homes are exempt.
Portland’s Relocation Ordinance (Ordinance 188219)
This new Portland housing ordinance requires landlords to pay tenants a relocation fee if they are evicted without cause or if the rent is raised more than 10% in a 12-month period. For no-cause terminations, property owners must pay within 45 days of the termination notice. For rent increases, the property owner will have 14 days after the tenant gives notice to pay the relocation costs. Compensation fee ranges from $2,900 for a studio to $4,500 for a 3-bedroom or larger. This ordinance is already in effect in the city of Portland.
PENDING: Credit Protections of Certain Utility Customers (HB 7030)
Connecticut’s HB 7030 would prohibit electric distribution, gas, telephone or water companies or providers from submitting information about a customer’s nonpayment history to a credit reporting agency, unless the customer is more than 60 days delinquent. After at least 30 days of account delinquency, utility companies must send a physical notification to the nonpaying customer that the delinquency information will be provided to credit rating agencies after 60 days. If passed, frequent late payments (within the 60 day period) will be unreported.
Fair Criminal Record Screening for Housing Act of 2016 (ACT 21-677)
Unlike when we reviewed it in January, B21-0706 has passed and now goes under the name D.C. Act 21-677. This act prohibits landlords from asking about an applicant’s prior criminal convictions until after they’ve extended a conditional offer of tenancy. After a conditional offer has been extended, property owners can only consider denying applicants based on specified types of convictions (see bill), and only if they’ve occurred in the past 7 years. If the rental offer is withdrawn, based on nondiscriminatory factors, the applicant can then request the reason in writing without charge. Property owners who fail to comply will be fined $1,000-5,000, depending on the amount of rental units owned. Make sure you request tenant screening reports after extending a conditional offer!
Did we miss legislation in your state? Let us know and we’ll add it to our next quarterly update. Don’t forget to subscribe!