Rental Housing Journal Utah August 2016

August 2016 - Vol. 8 Issue 8

Rental Housing Journal Utah

2. President’s Message – Important Events Reminder

UPCOMING EVENTS General Membership Meetings Ogden ................................... Sept 27th 7PM Salt Lake ............................ Sept 29th 7PM

3. Director’s Message – Big Issues Discussed

www.uaaGeneralMembershipMeetings.com

Good Landlord Class Washington Terrace .... Sept 15th 8:30AM Salt Lake.......................... Sept 10th 6:00 PM www.GoodLandlordingTraining.com

5. Ask the Attorney – It's Time to Update Your Occupancy Standards

EVENTS Economic Forecast.....................................Sept 13th (Salt Lake Board of Realtors, Sandy)

www.uaahq.org/economic-conference

PAC Luncheon ................................................Oct 12th (Topgolf, Murray)

www.uaahq.org/uaa-pac

Landlord Legal Cruise ................ Jan 8th-Jan 15th RC Allure of the Seas, Western Caribbean

www.uaahq.org/cruise

www.rentalhousingjournal.com • Professional Publishing, Inc Official Publication of The Utah Apartment Association Utah’s Leading Advocate for the Rental Housing Industry – 888-244-0401 – WWW.UAAHQ.ORG

In Big Win for Landlords, Health Department Changes Rule

I

n a big win for the rental housing industry the Utah State Health Department has drafted a rule change to make compiled composite testing illegal in Utah.

This type of testing was preferred by meth testers and the Salt Lake Valley Health Department because it often led to properties that would not have failed other meth tests, to fail and generate work and cases for them.

State Health Department rules were silent on this type of “short

UAAPAC Event to be Held at Topgolf October 12th

T

he UAA Government Affairs Committee will raise money for the Political Action Committee (PAC) from 10:30 AM to 3:00 PM on October 12th at Topgolf in Midvale. Topgolf is a new premier golf entertainment complex where the competition of sport meets your favorite local hangout. You can challenge your friends and family to addictive point-scoring golf games that anyone from the hopeful pro golfer to your neighbor’s 7-year-old kid can play year-round. Just picture a 240continued on page 5

Eviction Law Changes Proposed

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proposal from a Utah State Senator would add 24 days to most evictions, cost $1,120 more each and the treble damages provisions from Utah Eviction Laws.

The balance in Utah Landlord/ Tenant law is threatened by a new proposal to extend the length of an eviction by 24 days and to remove treble damages provisions, according to UAA Executive Director, Paul Smith.

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Utah Apartment Association

President’s Message Important Events Reminder

448 E Winchester St Ste. 460 Salt Lake City, UT 84107 Ph: (801) 487-5619 Fax: (801) 484-8649 www.uaahq.org

The Utah Apartment Association has several important things going on this fall I want to remind you of.  Awards nominations are currently being accepted for our annual tribute awards which will be held January 27th. For more information on which awards you can nominate for, go to www.uaahq.org/tribute-awards

Peter Harradine, AIT, CAM Board Chair Utah Apartment Association

 We are soliciting volunteers to serve on UAA committees. To volunteer or to find out which committees you can help with, email paul@uaahq.org

 We have our Economic Forecasting Conference coming up October 12th.

This annual event is an important opportunity to learn more about what is happening in the Utah Economy and how it will impact your bottom line.For more info www.uaahq.org/economic-conference

We hope you will take advantage of our offerings and opportunities this fall.

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503-933-6437 Rental Housing Journal Utah · August 2016

Utah Apartment Association 448 E Winchester St Ste. 460 Salt Lake City, UT 84107 Ph: (801) 487-5619 Fax: (801) 484-8649 www.uaahq.org

Director’s Message

Big Issues Discussed

L. Paul Smith, CAE Executive Director Utah Apartment Association

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recently returned from a government affairs conference where apartment associations from all over the country met to network and share information on issues they are facing.

One of the big issues discussed was the lawsuits against owners who are still using the 2 people per bedroom rule. National groups are now filing discrimination suits against owners who restricting occupancy for families with children

to two people per bedroom. HUD has ruled that families with small children should be accommodated.

In this copy of the Rental Housing Journal there is an article on adopting the 2 people per bedroom plus one more in every unit. Please read and adopt that rule. It could save you from lawsuits and fines.

Another issue is criminal exclusion. HUD is pushing back against blanket policies prohibiting people with criminal history. While we are advising owners not to overreact (its still a “reasonable business policy” to deny people with recent

and serious criminal history because of the risk of loss and to the community), we are saying immediately stop:  Denying all people with criminal history  Denying people with just one charge or arrest  Having time periods longer than 7 years for most types of crimes, and even shorter for some

You should also consider accommodation request to “ignore” minor criminal acts like drug possession or non-violent felonies for those who have completed a

treatment program. There should be an appeal process for anyone who contests denial and want an opportunity to explain the mitigating circumstances.

Most of all, get legal advice.

Lastly, the issue of emotional support animals is still huge all over the country. Fortunately, Utah has pioneered the best practices for this, and instructions and forms are available for members on our website. We hope you will take advantage of the resources and system that we created that is now being taught and used as the model all over the country.

We are vigilantly fighting for you. Please continue to spread the word that everyone in our industry needs to be a part of us, not only to take advantage of the great resources and training, but to as one industry stand up for property rights and reasonable regulation.

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Rental Housing Journal Utah

Ask the Attorney It's Time to Update Your Occupancy Standards

By Kirk Cullimore, Jr. Law Offices of Kirk A. Cullimore

I

n 1991 the Housing And Urban Development oďŹƒce (HUD) issued a memorandum on occupancy standards in rental housing.

These standards are those used to determine discriminatory the fact of occupancy policies for families with children under the age of 18.

The memo, called the Keating Memorandum, spelled out that HUD would consider two persons per bedroom a reasonable standard, except in cases that aren't reasonable.

In other words, the government said in most cases it would be OK to limit the number of occupants in an apartment or rental unit to two per bedroom. So in a studio or a one bedroom if there are children under the age of 18 in the household, a landlord must allow two. In a two bedroom: four, a four bedroom: 8, etc.

Over the years, there's been case law on several situations where two per bedroom was not a high

enough occupancy standard. Examples include an urban area like Chicago with high rents, courts have determined that three people in a one bedroom, when one of them as a child, is reasonable.

Additionally, courts have generally ruled that a small child is a reasonable add on in any situation. For instance, if a family of five applied for a two bedroom apartment, and there was an infant as part of the

family, a occupancy standard of four would be discriminatory.

So, to err on the side of caution attorneys and the UAA have for years been advising people to have occupancy standards that we call the 2+1 rule. That means in a one bedroom we allow three. In a two bedroom we allow five. Going to three-bedroom will all seven, etc.

Remember the standards only apply to households that have continued on page 6

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Rental Housing Journal Utah ¡ August 2016

Rental Housing Journal Utah

UAAPAC Event ...continued from page 1 5 Reasons to Donate to the UAA PAC 1. Keeping landlord/tenant rights balanced We believe rights should be equal which means judicial (court) remedies should be equally required and available. UAAPAC has helped speed up evictions times from 45 down to 21 days to provide more balance.

2. Preventing sales tax on rent Some surrounding states require property managers to collect sales tax on rent, an administrative nightmare that also makes housing less affordable.

3. Preventing excessive fees UAAPAC has worked to ban inspections fees, reduce business license fees, and has fought any fee created to take more of your hard earned income.

4. Stopping unnecessary regulations yard outfield with dartboard-like targets in the ground. The closer to the center or “bull’s-eye” you get and the farther out you hit your microchipped balls, the more points you receive. Score even bigger with Topgolf ’s extensive food and beverage menu that is sure to impress even the pickiest foodies. It’s not golf – it’s Topgolf.

UAAPAC fights unnecessary regulations by proactively pushing laws that limit what government can regulate. Examples include preventing regulation on sub-metering and who must pay utilities, preventing application fee bans, and preventing funding city staff off property inspections.

The event will includes presentations from elected officials and lobbyists on the issues and the value of the UAAPAC. The schedule will be:

Almost every year, government officials propose a 6-7% tax on property management services as well as the services property managers use, such as legal services and advertising. UAAPAC works to protect you from such a law.

10:00 AM 10:30 AM – Noon Noon Noon – 3:00 PM

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Rental Housing Journal Utah

Eviction Law Changes Proposed ...continued from page 1 "A State Senator reached out to us very early in the process (the 2017 Legislative Session begins in January) about changing the eviction statute to favor tenants. He says a constituent brought him concerns and he wanted our input in drafting solutions. We are very appreciative that he sought our feedback on his bill," said Smith.

Smith continued, "the proposal is preliminary and the industry should be concerned, not panicked.

There is plenty of time to work together for an acceptable bill. There are some concerns raised by the Senator and his constituent that we can likely compromise on as long as their goal is like ours - to maintain balance.

The industry has worked very hard to have a balanced landlord tenant process in Utah. Balance to us means that if a landlord or a tenant violates the contract, the opposing party can serve a three day notice to comply and receive a quick remedy."

For tenants that means if certain things like plumbing or heat or hot water break and repairs aren't made, they can serve a three day notice to the landlord. If the landlord does not comply they can repair themselves (or hire it out) and deduct the cost from future rent, or they can break their lease, move and get their prepaid rent and deposit back. That is a quick remedy.

For landlords it means if rent isn't paid or there's contract violations they can serve a three day notice and if the tenant doesn't comply or move they begin an eviction. That is also a quick remedy (although the eviction does take another three weeks).

The opportunity to cure in both cases is three days. That should be sufficient time for a landlord to get a furnace repair ordered or for a tenant to get rent paid or move.

Utah's philosophy on this currently is quick resolution for both sides. Neither party can take advantage of, or continue to damage, the other party very long.

And that's good public policy in our opinion.

Smith said, "one potential area of compromise is over the service of notice for serving three day notices, which hasn't been updated in 40 years.

The UAA already says only use two of the four legal options. These folks want to change the rule that allows service to be made on only one roommate if there are multiple. There is a good reason for this, since each roommate is jointly and individually liable and it’s not feasible to track them all down separately. We are open to discussing modern ways of serving notice.

We are not likely to support extending the eviction process by any length of time. The eviction process averages 21-25 days, which we think is already long enough. We also would fight an effort to repeal treble damages provisions.

Treble damages currently are another example of balance. If a landlord damages a tenant, they also must pay treble damages. I'm aware of a case where a landlord violated the abandoned property law and threw away a tenant's possessions. The itemized value was $11,000. Utah law imposed treble damages so the landlord had to pay the tenant $33,000.

Likewise, if a tenant doesn't pay and stays, forcing a landlord to do a costly legal action to get the apartment back, they will have to pay triple the damages they cause. One of the most important components of the unlawful detainer process nationwide is the concept of punitive damages. A tenant receives a notice that they need to fix a problem (like to get rid of an unauthorized pet or pay their rent) within three days or move or they will incur punitive damages of three times rent.

"We feel stripping that provision that is common nationwide, would send the message that complying with your rental contract wasn't really important and lead to many, many, times, more eviction actions and losses to landlords."

According to Smith extending the eviction time actually hurts everyone. The judgment against the tenant will be bigger. The neighbors who are often burdened with criminal activity or peaceful enjoyment issues have to wait longer.

The landlord is out more money for the additional time.

"For us there's no balance in giving someone who is in violation of their contract, whether it's a landlord or tenant more time," Smith said.

Text REALESTATE-ROI to 44222 to receive a digital copy of this year's Real Estate Opportunities in Investing (ROI) Finding Investing Success in Today's Housing Market 6

Rental Housing Journal Utah · August 2016

Rental Housing Journal Utah

Health Department Changes Rule ...continued from page 1

cut” testing, but after researching and finding not a single other state health department allowed it, the state has issued a rule clarifying that testers must use the “averaging” method, which is more fair.

The “compiled” method will now be banned. This method allowed where several places to be tested and all the scores were all added up. Scores from three or four areas that would not have failed on their own, were tested and the cumulative score compared to the amount allowed in one area not four.

“It was a really abusive practice,” says Brad Olsen with Dimension Realty Services, who dealt with meth contamination issues several times last year. “I had several properties I was brokering fail on the compiled composite that would not failed in any other state because the Salt Lake Health Department allowed testers to use this kind of

testing. My owners had to pay tens of thousands of dollars to clean up trace amounts of meth contamination that were so small they would never have been a health threat and most importantly, wouldn’t have failed had they used real science.”

“At this point even though the rule won’t take effect for a month or two, we are advising owners to start insisting that testers stop this practice now,” say Kirk A. Cullimore, attorney who worked with the UAA on this issue.

Kirk says he is very appreciative of the state checking in after Salt Lake County refused to fix the problem.

“This was a big win for us.”

Advertise in Rental Housing Journal Utah

Ask the Attorney ...continued from page 1

children under the age of 18. It's still fine in student housing to say no more than four unrelated single adults.

It would still be okay in a studio apartment to say only one person allowed unless there are children under the age of 18 in the household – in that case we allow three total occupants.

There are still many people who have the standard of two persons per bedroom. Because of recent lawsuits in Indiana and other places where are industry is losing, it's time now in Utah for everyone to change their standards.

Everyone now needs to go to 2+ one standard. The reason for this is that our national group suing landlord's and testing landlords on this issue. So you may receive a phone call or someone may go to your website online. If they find you still have the two per bedroom criteria, they will file a lawsuit against you and probably win a fair housing complaint.

So transition now to the New World. Change your standard to the 2+ one for all of your units. You will avoid trouble this way.

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