Topic du jour: are Landlord laws getting better or worse?

Question

I'm bringing this up as a topic of discussion because what happens in the most liberal cities/states has a tendency to work it's way to other states. I like to see what's coming our way.

Forget the COVID rent moratorium for a moment and only consider long-term, permanent regulation in your local market or state. Are things getting better or worse for Landlords? Is your local government protecting private property rights or are they acting as if the Tenant has all the rights and you're the evil, greedy bloodsucker?

Jim K. · Answer

@Nathan G.

Realistically, very little has changed in our market section, self-managed long-term C-class rentals here in the 'Burgh and some of the immediate suburbs. What kept the rent coming in before wasn't the threat of legal action if it didn't, it was the desire of the tenant to maintain a good situation for themselves as long as possible: a nice home, a good landlord who took care of his responsibilities, at a fair price.

Laws do seem to be getting dumber. We landlords have been unmercifully screwed by no-eviction policies to some extent, it's true. We've been asked to bear more than our fair share of keeping America as healthy as possible. This is unfairly punitive.

But most of these laws really just end give the magistrates and judges more discretion...and working on your business relationship with these people has always been part of successful property management. We get maybe forty inquiries a year here in the forums asking if one state is more tenant-friendly than another, by people who hire a property manager and never ask about her/his relationships with the local law enforcement, experience with the local judicial authorities, knowledge of local rental property laws, etc.

I don't think there's been a major legal shift at this point. What we are seeing are the fundamentals of the business reassert themselves in a time of crisis, fundamentals which we sadly don't emphasize enough here or elsewhere, reminding up to get away from our spreadsheets and calculations and densely written contracts, and work on our soft skills.

Account Closed · Answer

Getting more challenging and complex, for sure.    I think most of us operate in large cities, and many of those large cities have voter bases that are or were renters.   "Cancel rent" type movements get a lot of press, and both those voter bases and the politicians do notice.

My city has always seemed very reasonable (as does Ohio as a whole, generally), but lately have been moving to complicate the landscape for housing providers....  For example, evictions now require the PM/landlord to be there, affadavits are no longer allowed. Apparently they are also going to forbid screening based on "source of income" (eg government vouchers).

I believe this trend will continue nationwide, how fast or slow it continues is probably related to how bad the epidemic and government dysfunction get.

David Wandel · Answer

Baltimore City keeps adding new tenant friendly laws almost every year. Two years ago they enacted a rental license law. Property must be inspected and pass inspection. This year they passed legislation requiring an addendum to the lease listing all the tenant advocacy groups and free legal aid organizations. No lead certification, no rental license, no addendum the eviction is thrown out. Pre COVID eviction time line is 3-5 months. The judges often do what they want and disregard the law in favor of the tenant.

Tenant advocacy /legal aid are present in the courtrooms to assist the tenants in delaying/fighting their evictions. This atmosphere is slowly creeping out into the surrounding counties. I am expecting things to get much worse as time goes on.

I don't see anyone talking about this side of investing in Baltimore. There is great cash flow here, but only if you know how to screen your tenants.

Bjorn Ahlblad · Answer

@Nathan G. I think the longer term laws are one thing but the practices and knee jerk reactions by politicians and activists are having a detrimental effect.

In places like Oakland Ca. The mayor said any LL or PM will be fined a thousand dollars if they do BG checks. How can they enforce that is unknown to me but the 'law' is hugely interfering with the ability to do your job.

In Seattle and Tacoma you have to take the first qualified applicant. In some areas there are no evictions period; only cash for keys.

Rioters are seemingly allowed/encouraged to deface buildings, demolish store fronts and even set fires without being charged-with no end in sight.

None of these restrictions are affecting my business for now, and all my tenants are paying. But what does the future look like? Who knows?

Soh Tanaka · Answer

This is in IL. Since I started managing rentals, some of the changes are, depending on the location, voucher holders (Section 8)/source of income became a protected class, smoke detectors have to have 10-year sealed batteries, and you have to take 2-step screening with the first step you can NOT screen/ask the criminal history. Obviously, the actual laws are more complicated, and the above is a very short summarized version.

Also, every year, a rent control bill is proposed.

Brandon Vukelich · Answer

Ditto to @Bjorn Ahlblad.  I had a PM business in Seattle from 2010-2014 and the city was just getting worse every year.  My brother and I saw the writing on the wall for Seattle and sold our building in 2017.  It is one of THE most tenant-friendly cities in the nation with no signs of slowing down the course against landlords.  I encourage investors to look elsewhere.  The appreciation over the last decade has been amazing and attracting a lot of investors but not worth the risk, IMO.  Fortunately we all don't want the same thing.  Already very competitive everywhere.

Russell Brazil · Answer

In the DC area, things are mostly the same as they were 15 years ago, with maybe a slight move back towards landlords with the elimination of TOPA on single unit properties. That is a law that gave that the tenants the right to purchase properties for sale. It now only exists here on multifamily properties, after we got it overturned a few years ago.

Reece Iovine · Answer

Columbus ohio is starting to see some changes when it comes to landlord tenant laws. All of which is focuses on the tenant. Nothing has passed yet but I'll be interested to see how things play out over the next few months...

Jim K. · Answer

In the past, our government officials' greatest accomplishment is that they had come out of the right pink orifice of the landed gentry or nobility, and we implicitly believed God had given them power to rule over us. Go back a bit more and we celebrated their sleeping with our brides during the first night of our marriage. What gives, Nathan? The election's over, and moreover, this political sloganeering is not like you.

Corby Goade · Answer

In my market it can really only get worse- there are no regulations for PMs and the only regulation in my city is a limit on applications fees. That one limitation came because crappy slum lords who have no clue what they were doing were legitimately taking advantage of people.

I believe as investors and landlords we have a big voice here. There's more to this than the "greedy investor" and the "slum lord." Those are real people, I meet them every day. If we police ourselves and treat tenants like human beings, follow fair housing guidelines and act professionally, there will be far fewer reasons for regulations.

To a certain extent, it's true, there are plenty of people in government, mostly at the city level, who are there to be punish evil business owners, but we can be diligent and not hand them their ammunition.

Topic du jour: are Landlord laws getting better or worse?

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