Legislative Session Weekly Update 3 - Feb 6, 23
There were several new developments this week on bills of importance and a new bill that affects rental units in HOA’s:
HB 314 Domestic Violence Amendments Marsha Judkins, (R), Provo
STATUS: To be amended and to be heard in committee soon
We have been working with Representative Judkins on a bill that will expand on the work we as an industry started which gives victims of domestic violence a way out of a lease with a small cancelation fee. Currently law requires 45 days rent as the fee and applies to people who have a police report indicating they are a victim of DV, or that have a protective order.
We saw language on this for the first time this week, and while the language needs some tightening up, we anticipate the amended language will:
- Reduce from 45 to 30 days rent the amount of the fee
- Require the renter to give a 30-day notice and vacate within 15 so we have 15 days to turn the unit
- Allow prepaid rent to be counted towards the fee (for example if the renter gave notice on the 5th and had paid that month’s rent, if they were out by the 20th and paid 5 more days rent for the following month that would be sufficient)
- Add other types of protective orders to widen the number of victims who would qualify
We feel this bill is a needed protection for renters who are victims of DV but doesn’t hurt landlords. In fact, the language in here will actually be an improvement and add protections for landlords, particularly the requirement to have 15 days to turn the rental unit with rent being paid. The RHA will support this bill and expect it to be in committee Thursday.
HB 316 RESIDENTIAL RENTAL AMENDMENTS GayLynn Bennion (D), Cottonwood Heights
STATUS: To be amended and to be heard in committee soon
This original bill did two things:
- It required all expenses in the contract be listed in the first page of the lease, or on consecutive pages
- It required 90 days’ notice of rent increase if the increase is greater than 10% or $100
We met with the sponsor to discuss her proposals. Just last year we required rental expense disclosure during the application process. The sponsor and renter’s advocates stated they felt like requiring the same things in leases was the natural best step. After meeting this week, we agreed that since we have only had 6 months with the last change, we would hold off on attempting to require statutory intervention in leases, for now.
On the 90-day notice issue, the sponsor related her goal was to prevent surprises and give tenants time to decide what do if they receive a rental increase greater than they were expecting. Approximately 37 states require 30 days’ notice to raise rent, making Utah’s rule in the majority. While the rental housing industry does not believe longer than 30 days’ notice for a rent increase is necessary, we discussed possibly requiring 60 days’ notice when a lease is in place. That would mean notice for rent increases on month-to-month tenancies would still be 30 days. It would also mean that any month-to-month fees or lease escalations would be binding because they were clearly articulated, and the tenant was given plenty of notice.
Government Affairs Committee members debated the issue, and many noted that they already provide 60 days’ notice of rental increases. Other indicated opinion that requiring more notice would hurt renters in the long run. They noted with less flexibility to adjust rents at the end of term, that operators might instead add automatic rent increases into the lease (called escalations, which are very common in commercial leases) or raise month-to-month fees that automatically increase rent if the lease reverts to month-to-month.
We expect a modified bill stripped of everything except the 60 days’ notice language to be heard in committee this week. The RHA is likely to remain neutral on the issue, but a final decision has not been made.
Concerned rental operators are encouraged to attend our government affairs committee meeting on Wednesday at 2 pm at our office to learn more and share their opinion.
Un-numbered House Bill on Garnishments Marsha Judkins (R), Provo
STATUS: Abandoned for this year, with an agreement to work on better language for next year
This bill would have added protections for bad tenants and other debtors who owe money and reduce the effectiveness of garnishments. It would have made it harder to garnish a debtor’s wages and would incentivize debtors to make sure their income stayed below a certain level of income so they could never be held accountable for any debt.
While it sounds consumer friendly (it is definitely anti-business), this bill would have been devastating for low-income renters because if it was harder to hold renters accountable for the money they owed, landlords would simply increase their deposits and/or rental criteria, making it more difficult for renters who make less than a certain income and would be difficult to garnish to find a place to rent.
After discussing the ramifications of the bill, Representative Judkins has pulled the bill this session. We committed to work with her over the next year to find ways to help debtors better understand their options and require better disclosures and communications.
Community Association Act Amendment, UN-numbered, Wayne Harper (R), West Jordan
Several years ago the rental housing industry sought and received prohibitions on community associations (HOA’s/PUD) charging extra fees to rental unit operators. The community association community is seeking the ability to charge a $250 annual administrative fee to rental operators. A concession being offered is that the fee could only be charged in associations that allowed the maximum number of rentals in their community that would comply with HUD financing limits allow (35-50%). If allowing an annual fee to be charged (which would most likely be passed on to the renter in the lease) increased the number of rental units in community associations, it would help with rental supply and housing affordability. It could also create more opportunities for investors.
Unnumbered Property Rental Amendments, Rep. Ken Ivory, (R) South Jordan
Representative Ivory has asked to talk to us about potential proposals and we hope to meet with him Monday. We will provide an update once we meet with him.
For more information see our previous updates: Click here
Download Legislative Tracking Report Feb 6, 2023 - Excel