Landlords Win Reprieve From Controversial Rental Regulations

by | Mar 20, 2011 | Rental Property Management Tips

Cities across the country appear to be taking a page from the same playbook when it comes to noise complaints.  Out-of-control student partying is prompting college towns across the country to look to landlords to stop the noise, trash and disruption that occurs in otherwise quiet neighborhoods.

But one city’s efforts may have gone too far.

In Duluth, Minnesota, a battle has been brewing for the past several months after the city council passed a number of rental restrictions that greatly impact landlords who rent to students.   

Last week, a judge granted landlords a temporary restraining order prohibiting the city from enforcing these measures, which were due to kick in March 14, until a court determines if the laws are overreaching.

One of the first efforts the Duluth city council took was to draw a line in the sand–literally, by marking a perimeter around neighborhoods where students at the local college campuses would look for housing. If a property fell within the perimeter, a property owner could not convert the residence to a rental if there was a existing rental within 300 feet.

This moratorium earned an angry response from the rental community, and even some city officials believed it may be unfair to punish everyone. So the city council began passing a series of more targeted “disincentives”– measures aimed at discouraging property owners from becoming landlords.  

For instance, the city is trying to impose a fee for converting a residence to a rental property. The fees are significantly higher – $3,500, if the landlord is planning to rent to roommates or multifamily.  The intent is to encourage landlords to rent only to single families, or better yet, not to rent at all. Additional fees are calculated based on the number of bedrooms.

Even more controversial however, are new regulations regarding parking. The measures require landlords to pay the city for use of street parking, or create their own off-street parking.

The city already passed a nuisance law that makes landlords accountable for students behavior, which includes late-nightgatherings, swearing, excessive pedestrian or vehicle traffic, and rowdy assemblies — apparently referring to protests or rioting.  Over Labor Day weekend last year, Duluth police stepped up patrols of off-campus activities.  They reported 26 party interventions, 25 underage consumption tags, 3 open container violations, 2 arrest warrants, a disorderly conduct, and someone caught urinating in public.  

A group of landlords in Duluth hired legal representation to fight the regulations, which some fear could force them out of business. Faced with the reality of a lawsuit, the council repealed the 300-foot moratorium rule, but intends to enforce the remaining rules including the rental fees and retain a moratorium on any new development of rental housing until an overall neighborhood plan is developed.

As the effective date for the regulations approached, the attorney for the landlords filed for a temporary restraining order to postpone enforcement. A judge approved the order, and the city has suspended rental licensing until the matter is resolved, either by settlement or in court.

The granting of the restraining order could be a sign that the judge detected merit in the landlords’ claims.

This post is provided by Tenant Verification Service, Inc., helping landlords reduce the risks of renting with fraud prevention tools that include Tenant Screening, Tenant Background Checks, (U.S. and Canada), as well as Criminal Background Checks, and Eviction Reports (U.S. only).

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Disclaimer: The information provided in this post in not intended to be construed as legal advice, nor should it be considered a substitute for obtaining individual legal counsel or consulting your local, state, federal or provincial tenancy laws.

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