Legislative Session - 1st Legislative Update - 01/05/24

Posted By: Paul Smith Legislative Update,


1st Legislative Update

Friday, January 5th 

It’s time for our first legislative report of 2024!

Following are some of the issues we will be facing at the 2024 Utah Legislature:

Tax Assessors Prohibitions

In Utah, properties that are used as a “primary residence” receive a 40% discount on property taxes. In other words, if there are two homes next door to each other and the property tax on each would be $10,000, if one is a primary residence, it receives a 40% discount, or $4,000 off. If the other is a second home or vacation rental, it pays the full tax. 

Tax assessors are motivated to identify homes that are vacation rentals or second homes because they make more money off them ($4,000 each in above example). 

One way they look for higher tax revenue is to identify properties where the tax notice is mailed to an address that is not the property address. They would like to assume in that case the property doesn’t deserve the 40% exemption/discount. 

The problem is that there are over 125,000 single family homes that are a renter’s primary residence and still get the 40% discount. That's over 1/3 of all rental units in Utah that are single family homes. 

Some assessors are assuming properties don’t get the exemption and are making owners jump through many hoops to prove they deserve the exemption. 

State statute says assessors can obtain a “statement” from a property owner that states the property is being used as a primary residence. But some assessors go further. They ask for:

  •  a lease of at least a year
  •  a copy of a renter’s drivers license with the renter’s current address listed
  •  voter records of the renter
  •  utility bills of the renter

There are many reasons we may not be able to produce these. Some tenants are month to month. Some leases are less than a year. And, there is no mechanism in our lease so we can require renters to give us documents like the ones the assessors want. 

Even if we could obtain all of those things, which in most cases we can’t, it is a huge burden on property owners. 

We are working this session to prohibit assessors from requiring anything beyond a statement from the owner that a property is being used as someone’s (even a renter’s) primary residence. 

When we receive an official bill file we will update you. 

Eviction Expungement

Rental Operators should be very proud that RHA was the first in the country to work with renter’s advocates to create a win/win eviction expungement bill. 

Currently, any tenant who pays off the balance due from an eviction for nonpayment, can petition the court to “expunge the eviction”. This means it is removed from their record like it never happened. Rental Operators now have a tool where we can tell renters that if they pay the balance, they can get the eviction off their record. Both sides win!

This year there will be a bill to allow dismissed evictions to also be expunged within 90 days. Anything that encourages renters to resolve issues by paying rents or moving quickly, in exchange for a clean slate is win/win and we support this. We will keep you updated. 

Notice of Rent Increase

Moving in a tight market is hard. It’s takes time to find a place and get approved. Some states require 60 days notice of a rent increase to give renters extra time to look around for a new place if they don’t like the rent increase. We have agreed in principle to change Utah law to require 60 days notice of a rent increase if someone is under contract. It would not apply to month to month tenancies or change the amount of notice required to end a renter’s lease term. More info to come.

Property Management Licensing and Division of Real Estate Issues

Currently to manage real estate for others, a real estate license is required which includes 120 hours of training, only 3% of which is on property management. This is simply too large a barrier and the Office of Professional Licensing will be issuing a report soon encouraging changes. 

In addition, the division of real estate, which regulates property managers, has been very difficult to work with the last 12 years. There may need to be statute changes, including which division regulates property managers, to balance protections for renters and limit regulatory complexity for property managers. 

This is a complex issue with many people having many emotions. Because of that, we won’t go into details right now. As legislation is created and moves forward we will include all stakeholders in discussions and do lots of education on what changes are proposed. 

If you are interested in being involved in our government affairs committee, which meets every Friday at 10 am, starting January 19th, let us know and we will get you involved. Committee information: https://www.rhautah.org/government-affairs-committee