THE BIG PICTURE
LEGISLATIVE WATCH
The LandlordingWorld Is Flat. Or Is it? STUBBORN MISCONCEPTIONS ABOUT LANDLORDS AND PROPERTY MANAGERS HAVE LED TO SOME DISASTROUS LEGISLATION. IT’S TIME TO MAKE YOUR VOICE HEARD.
by BrianWojcik
espite Aristotle’s evidence (circa 330 B.C.) that the Earth is round, its shape nevertheless was hotly debated for centuries thereafter. Even today, “flat Earth societies” still exist, based on a belief that the Earth is flat. A comparison can be drawn with landlording. (No, really!) General apathy among landlords has allowed groups with vested interests to create similarly relentless miscon- ceptions about our community, which could have a devastating impact on all parties involved. Why does apathy exist in the landlord community? It is an unintended—and unfortunate—result of an arm’s-length concern toward legislation and policy over the years. While landlord-tenant laws have been catching up to modern times to ensure fairness and equity for both parties, strong tenant advocacy groups have rallied for—and success- fully pushed through—legislation that tilts in favor of the tenant. While small business and independent landlords are a silent majority of rental housing in the United States (53 percent), they are missing a collective voice with policy makers. Hence, landlord indifference. One can look to Baltimore, Maryland, as a prime example. When a tenant ad- vocacy publication asserted that its Rent THE ROOT CAUSE OF LANDLORD APATHY
Court—established to provide remedy to landlords for nonpayment of rent—is unfair to tenants, Senate Bill 801 was created. And it almost passed. While proposed with noble intent, there were many false “truisms” that legislation couldn’t remedy. And it actu- ally would have done very little to help tenants, while shifting significant burden onto the landlord. The bill sought to: • Supersede the definition of rent, regardless of what is written and agreed to in a signed lease • Add a $30 surcharge on each case filed in court, and use that money to fund a tenant advocacy group • Require landlords to send a “Notice of Default” • Add trial delays • Prohibit variable-cost utilities from being included in the filing Why should this debate matter to landlords outside of Baltimore, Maryland? Law and policy have a strong tendency to migrate across state borders, evolving over time to reflect contemporary social values and ethics. The basis of tenant-landlord law was common law until 1972, when the Uniform Residential Landlord and Tenant Act (URLTA) was created, and later adopt- ed in at least 20 states.
The bottom line is this: Tenant advo- cacy groups pushing for social justice have a loud voice, while the the small business and independent landlord is effectively mute. It’s time for the “silent majority” to organize and bring a col- lective voice to the discussion. THE CHALLENGE FOR LANDLORDS Our challenge as a community of small business and independent land- lords is a general lack of organization and sufficient data. Recent legislation attempts like Baltimore’s SB 801 seek to shift the personal responsibility of tenants to the landlord. This kind of feel- good legislation sounds great in political conversations to win votes. But ultimate- ly, if passed, this legislation would have adversely impacted the financial ability of landlords to provide affordable hous- ing—meaning both sides lose! Consider the cost to landlords. Balti- more had 6,880 eviction filings in fiscal year 2015. The average time to evict and turn over a unit, and then re-rent, is approximately four months. With an average cost of lost rent and turnover of $4,000 (median rent of $944), the cost to landlords for evictions in Baltimore is $27 million annually. And nationally? Assuming a 3 percent eviction rate in the United States, with an average cost to landlords of $3,250, the total is $4 billion annually. And it’s the small busi-
48 | think realty magazine march :: april 2017
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