HB 1403 – Restriction on Political Subdivision Rental Regulation

By a vote of 67-28, the House has passed Jud McMillin’s HB 1403 which imposes restrictions on a political subdivision’s ability to regulate rental properties. Landlord tenant relations strikes me as something that, by and large, should be under local control. It’s a matter of local quality of life, and the particulars can be quite variable from place to place. The rental situation in Brookville, Indiana is going to be a lot different from that of West Lafayette.

Most of the changes seem to grandfather in rental regimes in place before 1984.

It restricts the ability of a political subdivision to require a landlord to obtain a permit or attend a class prior to leasing a rental unit. However, a permit may be required if its free, doesn’t expire, and will cover an entire rental unit community.

It prohibits a political subdivision from inspecting and imposing a fee on a rental unit managed by a professional manager, has been inspected by one of a variety of professionals (architect, engineer, inspector for insurance companies, HUD), and the inspection indicates that electrical, plumbing, water, HVAC, bathrooms, smoke detectors, and the structure are all safe and habitable. Inspections beyond those specified items are not allowed. The subdivision could inspect beyond that if it received a specific complaint but could not impose a fee for the inspection.

A registration fee of $5 is permitted, but a rental community can only be subjected to one registration fee. It can’t, apparently, be per unit. A penalty for a nuisance or ordinance violation can be imposed but only if the landlord is given notice and an opportunity to cure the nuisance first.

Comments

  1. says

    I’m not sure I’m being hyperbolic when I say the Indiana GOP doesn’t care about whether nonrich people, especially those who aren’t straight and white, die.

    Also, any GOP person who preaches small government and keeping that government close to the people gets punched in the mouth.

  2. Gene says

    The proposed law is to prevent cities like Bloomington from imposing landlord licensing and its attendant costs and bureaucracy. There’s already laws on the books in every city to insure rental properties are safe and fit for habitation, as well as enforcement mechanisms.

    I disagree with Paul’s statement: “Landlord tenant relations strikes me as something that, by and large, should be under local control. It’s a matter of local quality of life, and the particulars can be quite variable from place to place. The rental situation in Brookville, Indiana is going to be a lot different from that of West Lafayette.” A college town is very similar to a non-college town, The only real differences are turnover and lease length.

    Having live in rental units, I ‘get’ that the enforcement of standards can be wanting. Indy sucks at this. The solution is to enforce the damn standards, not add another thick layer of government. If there’s any bad landlords in Bloomington or West Lafayette, why aren’t those localities enforcing the laws on the books ? How will licensing and classes and such turn a bad landlord into a good one ? New York City has the most restrictive landlord laws in the world, but there’s still a bazillion bad landlords.

    The left would love to instigate local laws about guns, marriage, business regulation, fireworks, And licenses, everything’s gotta be licensed.

    exhoosier – huh ? Onerous local government is still onerous. As for the race-baiting, jeez, how about making a list of Deans and department chairs at IU that aren’t white. Or members of the Bloomington city council that aren’t white. How about black engineering students at Purdue ? Very short lists.

    • says

      A college town is very similar to a non-college town, The only real differences are turnover and lease length.

      Perhaps it’s just my recent (last 20 years) experience, but as someone who rented both as a college student and as a college grad, I fully understand the need for different towns have different restrictions towards landlords.

      Maybe it’s just me, but I really doubt even 20% of the 67 legislators who voted for this thing understood what they were doing.

    • sjudge says

      If you can’t charge a registration fee, cities like Indianapolis are going to argue, probably correctly, that they can’t afford the inspections, and thus won’t inspect. That said, Gayl’s post below does show that if we allow this issue to be resolved locally, it’s going to be easier to come up with innovative solutions.

  3. Gayl Killough says

    This is another bill that is more problematic than what it may first appear. The average person has no idea how bad this bill is for local units of government in terms of the State of Indiana legislators trying to micromanage a local situation.

    Especially since the housing bubble, we now have a lot of out of town property owners, a lot of accidental landlords, abandoned properties, unclear titles of land ownership, etc. I mentioned yesterday in the homeless post that the ultimate goal for me is to find long term housing for homeless people. I work at the system level, and the system level includes landlords, housing mediation, code enforcement, police runs, and safety. It is a very delicate balance of negotiation among all these different entities.

    The bill is trying to micromanage the rental registry of West Lafayette. However, there was no regard to all of the other rental registries and housing polices of the remaining cities and jurisdictions in the rest of Indiana. How this will affect Evansville and other cities, I am not sure, because the bill did not take in consideration any other situation than what is in West Lafayette.

    The situation in West Lafayette started last year with some legislators thinking that the city was making “extra” money by charging fees to landlords. The vast amount of rental to Purdue students played a role in that a few parents were not happy with the inspections provided by landlords, and wanted independent inspections done. This can’t be done for free by the city. But there is much bigger problems that all cities face.

    The fact is that cities lose upwards of millions of dollars due to properties not being kept up, especially rental properties. The problems is more with out of town owners and accidental owners. This is less about slumlords as it is about trying to recoup a little bit of the huge amount of money that is lost by local units of government dealing with rental properties. It is hard to explain how much time and effort it really takes to even try to keep up.

    In Evansville, we have a voluntary portion of our rental registry, where a landlord can certify that they have a good rental unit for $10 per rental unit. The local property owners association actually came up with this idea on their own, they wanted a way to separate themselves as good landlords through certification. So while I don’t think the intent of the bill is to interfere with voluntary fees, the $5 maximum annual fee could be problematic depending on how the bill is written in final stage and how it is interpreted.

    The mandatory portion of requiring landlords to register with current contact information came about mostly due to our police department last year. Imagine a house burns down. The assessor’s database gives a P.O. Box for London, England for that address for the tax bill. Trying to figure out the actual owner in order to contact them is very difficult and time consuming. Another example, the police raid a rental house for a drug bust. They need to contact the landlord, but there is no contact information, and no clear way to get a hold of the landlord. There is a lot of rental property that has out of town property owners, but they use local property managers to manage and rent out the property. There is nothing in the tax assessor bills regarding property managers, so cities don’t have that information. We were getting a lot of contact information voluntarily, but the police were frustrated with holdouts that did not want to cooperate with giving information about who actually manages the property. So the point of registration is so that we have local contact information for rental properties. We do not charge any fees for the mandatory registration requirement, which is what I think the $5 is cap is supposed to address.

    I could obviously write a book on this so I will stop before this post gets any longer, but housing is very complex for local units of government.

  4. Gayl Killough says

    @Gene

    I think I disagree overall with you.

    There is a lot more going on that what my post indicates, I am trying to keep it somewhat simple and I did not want to write a book, but there are many other related complex issues with local housing that could be affected by this bill too.

    I saw your post after I had already started writing most post. However, your post also illustrates how complicated and complex dealing with housing is for local units of government. This bill is out of its league.

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