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Legislation requiring ‘best practices’ from landlords during rental application process heads to House floor

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A bill aimed at protecting renters from unscrupulous landlords during the application process is headed to the House floor despite a mixed reception from some renters’ advocates. 

HB 617, co-sponsored by Rep. James Ruchti, D-Pocatello, and Rep. Joe Palmer, R-Meridian, aims to require a set of practices for landlords to follow when accepting rental applications for units in the hopes of rooting out bad actors while not capping application fees. If passed, the law would codify “best practices,” such as saying landlords could only accept an application fee for a unit that is available to rent, they must disclose the criteria landlords are using to judge the applications and prospective tenants can only be evaluated one at a time. 

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The bill was supported by a broad coalition of groups on both sides of the issue, including the Idaho Apartment Association, the local chapter of the National Association of Residential Property Managers and members of Boise Renters United. Legislators passed the bill out of the House Judiciary, Rules and Administration Committee 10-4 on Monday afternoon. 

Ruchti, who also co-sponsored the bill aiming to eliminate Boise’s $30 rental application fee cap, said while he doesn’t think government capping fees addresses the problem, putting these industry standards into code will alleviate some of the problems. He said the systemic solution to Idaho’s growing housing crisis is more housing inventory, but it will take years for that to kick in and alleviate the scarcity in the market. 

“I think the vast majority of landlords and property management companies are doing the right thing, but there are complaints throughout the state that application fees are being used as a profit center,” he said. “The way that looks is a property management company or landlord may have 3 apartments, but they take 100 applications knowing the vast majority of the people applying for those apartments won’t have any chance of getting them but they take the fee anyway because they can make money without providing any sort of benefit to the person applying.”

What about enforcement?

Just because the bill got the thumbs up from renters doesn’t mean everyone loves every piece of the legislation. 

The biggest sticking point on the bill for several renters advocates, like Jesse Tree Executive Director Ali Rabe and lobbying group Idaho Asset Building Network, was the lack of an enforcement mechanism in the bill. Nowhere in the language does it lay out any punishment for a landlord who violates the rules by over-collecting application fees. 

An earlier piece of legislation brought by Rep. John Gannon, D-Boise, included such language, but because it didn’t have support from the Idaho Apartment Association and possibly other stakeholders, Ruchti’s bill came up for a hearing while Gannon’s is staying in a drawer. Committee Chairman Greg Chaney, R-Caldwell, said even though Gannon’s version might have been better, he wanted these protections to pass. 

Ruchti acknowledged adding an enforcement clause might have made the bill “neater” and “cleaner,” but an opinion he obtained from the Attorney General found tenants still would have recourse. He said the opinion found even though there is no express wording in the bill laying out punishments for offenders, tenants who feel they have dealt with a landlord running afoul of the rules can take them to small claims court, hire a lawyer themselves for a civil court or file a complaint with the AG under the Idaho Consumer Protection Act. 

But, Gannon and other advocates, pointed out that relying on often low-income tenants to have the funds or knowledge of the system to pursue a court case is not sufficient protection. Gannon also said without the statute saying tenants are liable for damages they might go through all of the trouble of a jury trial, spending hundreds of dollars only to receive their $50 application fee back. This would leave them financially at a loss and not incentivized to go after bad actors, leaving tenants just as exposed as before. 

“I don’t advocate a cap, but you have to have a way that’s easy to use that will deter the bad people and not burden the good people.”

Right-wing Republicans not convinced

Rep. Ron Nate, R-Rexburg, and Rep. Julianne Young, R-Blackfoot, opted to vote against the bill with or without an enforcement mechanism. 

Nate said while the intent of the bill is good, he agreed with Ruchti about the need for more housing supply to address the affordability crisis instead of legislative action. He said by adding requirements for property managers to process their applications only one at a time it could leave apartments unoccupied longer and make rents go up. 

“…What really needs to happen is an increase in the supply in housing and I know it sounds trivial at first, but with 28 to 48 hours to process a background check it could take several days or weeks to rent an apartment and that is more days an apartment is off the market and you have apartments vacant more often and then you’re exacerbating a housing shortage,” Nate said. “While the intent is good, you may actually make the overall problem worse.”

Even after hearing the support from landlord industry groups, Young said the law is regulating business to a level she thinks government should not be involved in. 

“This bill goes beyond just what’s right and what’s fair,” she said. “It gets into the details that are appropriate of best practices as a code of ethics, but not necessarily the kinds of things we should be criminalizing.”

Margaret Carmel - BoiseDev Sr. Reporter
Margaret Carmel - BoiseDev Sr. Reporter
Margaret Carmel is a BoiseDev reporter focused on the City of Boise, housing, homelessness and growth. Contact her at [email protected] or by phone at (757)705-8066.

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