Legislature(2013 - 2014)BARNES 124
02/28/2014 03:15 PM House LABOR & COMMERCE
| Audio | Topic |
|---|---|
| Start | |
| HB288 | |
| HB213 | |
| HB282 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | HB 288 | TELECONFERENCED | |
| *+ | HB 282 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| += | HB 213 | TELECONFERENCED | |
HB 282-LANDLORD AND TENANT ACT
3:50:08 PM
CHAIR OLSON announced that the next order of business would be
HOUSE BILL NO. 282, "An Act relating to the rights and
obligations of residential landlords and tenants; and relating
to the taking of a permanent fund dividend for rent and damages
owed to a residential landlord."
REPRESENTATIVE HERRON moved to adopt the proposed committee
substitute (CS) for HB 282, labeled 28-LS0930\O, Bullock,
2/22/14 as the working document.
CHAIR OLSON objected for purposes of discussion.
3:51:11 PM
BRENDA HEWITT, Staff, Representative Doug Isaacson, Alaska State
Legislature, reviewed a section-by-section analysis of HB 282.
The first three sections would remove the word "uniform" from
the bill since the language is no longer part of the Uniform
Residential Landlord Act (RTLA). She referred to Section 4,
page 5, lines 7-9, noting "parties" is replaced with "landlord
and tenant" for clarity. Section 5 would allow landlords to
exceed a maximum prepaid rent for a pet deposit, which will be
addressed further in Section 9. Section 6 includes a
[provision] for normal wear and tear, which is defined in
[Section 8] and addressed in Section 9 and Section 13. Section
7 would make a few technical changes and would specifically
require a landlord to separately account for each tenant's
prepaid rent and security deposits and restricts their use for
the intended tenant's unit. She clarified that "separately
accounting for" is a bookkeeping methodology and does not
require separate bank accounts for each unit.
MS. HEWITT referred to page 6, lines 23-25 of Section 8, which
is new language in Version O. This would add language to allow
landlords to have up to 30 days to refund a security deposit if
damage has occurred, and landlords to obtain an estimate of
costs prior to refunding the remaining deposit. Obviously, if
no damages occurred, the deposit could be returned. Section 9
would allow for an additional deposit maximum for pets, defines
normal wear and tear, and brings forward the definition from the
American Disabilities Act (ADA) for service animals as opposed
to comfort animals.
MS. HEWITT referred to proposed Section 10, which requires the
tenant and landlord to sign a premises condition statement. The
language previously read "may" but now reads "shall." This
provision provides protection to both parties. Section 11 would
permit rentals of dry cabins, and Section 12 would allow
landlords to restrict the number of habitants in in a dwelling
as provided by law or covenants. Section 13 would require a
tenant to leave the premise in substantially the same condition,
including, at the landlord's discretion, to require carpets be
professionally cleaned if the carpets were professional cleaned
before the tenancy began. Section 14 would allow for early
termination as a result of domestic violence, sexual assault, or
stalking, and Section 15 would permit a landlord to evict any
tenant engaged in prostitution or other illegal activities.
Section 16 would provide a stronger definition of "transient
occupancy." Section 17 would provide a technical amendment to
remove "uniform," and Section 18 would allow landlords to attach
a tenant's permanent fund dividend (PFD) check for the judgment
of unpaid rent or damage.
3:55:36 PM
REPRESENTATIVE JOSEPHSON, relative to [Section 8] that requires
landlords to refund a tenant's deposit within 14 days unless
damages occurred, asked whether 14 days is meaningful since the
landlord could check on the 29th day for any damages. He
wondered if the landlord would justify this by asserting that
he/she had the right to check on the 29th day even if the
premise did not sustain any damage.
MS. HEWITT deferred to the legislative legal attorney.
3:56:44 PM
DON BULLOCK, Attorney, Legislature Legal Counsel, Legislative
Legal Services, Legislature Affairs Agency, answered that the
bill doesn't address the timeframe but implies that if the
timeframe is normally 14 days, the landlord should inspect and
identify damages, although the bill doesn't specifically state
it. He suggested that the language could read, "If the landlord
discovers the damages within 14 days, the landlord may have up
to 30 days to refund the damage deposit."
3:57:40 PM
REPRESENTATIVE JOSEPHSON asked about the definition of "service
animal," which uses the national ADA language but calls the
animal a service animal rather than a companion. He also
related that numerous dry cabins exist in Alaska. He asked
whether any concerns exist about taking advantage of tenants [by
providing a dry cabin.]
REPRESENTATIVE DOUG ISAACSON, Alaska State Legislature, as
sponsor of HB 282, commented that he once built a dry cabin
himself, which later was converted to water. He offered his
belief that dry cabins are often preferred by the tenants since
the tenants can leave the cabin in sub-zero weather and not
worry about freeze-up. In Interior Alaska, dry cabins are often
used by students and those who enjoy living off the land. He
highlighted that the dry cabin relationship must be stated in
the agreement so tenants will not expect water.
MS. HEWITT responded that the dry cabin provision must be waived
by the tenant. She referred to page 8, [lines 26-29 of Version
O] that requires dry cabins must be waived by the tenant in the
rental agreement.
3:59:52 PM
REPRESENTATIVE JOSEPHSON referred to Section 15 [of Version O],
and asked what type of showing a landlord would need to make
with respect to determining that prostitution was taking place.
MR. BULLOCK answered that the [Residential Landlord Tenant Act
(RLTA)] defines illegal activity. He said it would be helpful
for the landlord to call the police department or for the
landlord to have some evidence to support the conclusion that
these unfortunate circumstances were occurring on the premises.
4:00:58 PM
REPRESENTATIVE JOSEPHSON said he assumed that any dispute in
landlord tenant law could be addressed in a district court.
MR. BULLOCK answered he believed that is correct. He pointed
out that this language is a discretionary provision and the
landlord doesn't have to deliver the written notice to quit but
has the discretion to protect his own interest.
4:01:47 PM
NICK GASCA, Supervising Attorney, Alaska Legal Services
Corporation (ALSC), said he is also one of the senior attorneys
in the housing consumer law team. The Alaska Legal Services
Corporation has had an opportunity to review the bill, and he
described HB 282 as being "mostly positive." For example,
Section 6 [of Version O] describes the types of damages that a
landlord can deduct from a tenant's deposit. Section 9 provides
a detailed description of normal "wear and tear," and there
currently is not a definition in the Residential Landlord Tenant
Act (RLTA), which has often led to litigation, but the courts
haven't really construed this consistently. Section 7 also
makes it clear that a landlord cannot comingle pre-paid rent
with other funds and may not use one tenant's security deposit
to refund another. He said the ALSC agrees with the proposed
change in Section 14 regarding domestic violence and early
termination and related that this provision will be of great
benefit to Alaska's domestic violence victims, of which Alaska
has a disproportionate number. Finally, he indicated the ALSC
supports the definition of "transient occupancy" in Section 16
since this definition has been the subject of litigation and the
proposed amendment will clarify its meaning.
4:03:39 PM
MR. GASCA expressed concern about the PFD priority since tenant
debt doesn't fit with the other debts listed in AS 43.23.065(b),
such as child support, court ordered restitution, and
educational loans. This provision would harm other types of
creditors, including credit card companies, who will need to
"get in line" behind landlords when levying on a debtor's PFD.
Essentially, this provision would make a private debt have equal
judgment over any other private judgment. Additionally, Section
10 doesn't establish a procedure if the landlord and tenant
disagree on the condition of the premises prior to moving in.
Section 12 addresses occupancy limits. Most tenants don't know
the municipal code for how many people are allowed to live in a
building or a unit. This section is actually taken care of
through private contracts since when most people sign leases the
lease will indicate how many people are allowed in the premises.
If the landlord discovers more people, the landlord can move to
evict; however, he was unsure how a tenant is supposed to know
the occupancy limit, at least low-income tenants.
MR. GASCA said the ALSC expressed concern about the security
deposit refund timeline in Section 8 that increases the refund
time period to 30 days. In reality, this provision seems like a
windfall for the landlord. Once a tenant moves out, the
landlord has every obligation and incentive to go into the
apartment and rent it right away due to potential loss of
income. If the landlord can wait 30 days before fixing damages
it equals 30 days of unpaid rent that can be deducted from the
tenant's security deposit and the landlord does not need to
forcefully mitigate damages to get the apartment back on the
market to minimize any loss from loss of rent.
4:06:51 PM
REPRESENTATIVE JOSEPHSON asked for clarification that the
landlord might contrive to find damages and "fuss about
problems" on a shorter timeline.
MR. GASCA responded that the essence of the concern is there
would not be any incentive for the landlord to mitigate damages.
If the tenant leaves on the first, the landlord could go into
the premises on the second, wait until the 14-day limit, but
then wait to fix the damage until the 30 days is up and charge
the tenant for lost income. As it currently stands, 14 days is
adequate time to fix and re-rent the apartment, he said.
4:08:14 PM
REPRESENTATIVE HERRON asked for further clarification on the
last point. He asked if there should be a "carve out" for his
concern. The committee has been suggesting that the inspection
should be held within 14 days and the payment to the former
tenant should be made within 30 days. He asked whether Mr.
Gasca is asking for a "carve out" on his concern.
MR. GASCA answered that he was not necessarily asking for a
"carve out," but if the "carve out" is for the 30 days, then
yes, it would be appropriate. However, he suggested that the 14
days is more than adequate time to inspect the premises, make
the corrections, fix any damages, and refund any remaining
security deposit. He related that ALSC represents many low-
income individuals and waiting 30 days for a security deposit
return could be damaging to tenants. In fact, many tenants rely
on their security deposits to cover the next first month's rent
or to cover the subsequent security deposit. He said 30 days is
a long time to wait, and many people rely heavily on the deposit
being returned timely.
4:10:07 PM
PEGGYANN MCCONNOCHIE, Real Estate Broker, Alaska ACH Consulting,
related that she has been a realtor since 1982, a broker since
1984, has expertise in property management, teaches property
management, and performs property management coaching throughout
the state. In 1973, the state adopted the Uniform Landlord
Tenant Act (ULTA). Over the years, changes have occurred that
have slowly changed the act. The uniform commission met and
identified many things that have changed so this law needs
updating. She said she is very happy with HB 282 since it
balances out the tenant and landlord responsibilities and brings
in new aspects that have not been previously covered. She
offered her belief that this bill is not perfect, but overall it
is better for the landlord and the tenant.
4:11:45 PM
MS. MCCONNOCHIE highlighted some important changes in HB 282
such as adding a provision to cover pet deposits. Alaska has an
inordinate number of people with pets, but landlords are often
unwilling to accept pets due to the current law that allows them
to collect up to two times the monthly rent [for damages caused
by the pet]. This bill would allow the landlord to collect an
extra month's rent to serve as a pet damage deposit.
4:12:26 PM
MS. MCCONNOCHIE related that the current law does not have a
good definition for "normal wear and tear" which is not good for
either party. This bill requires premise condition statements
to be signed by the landlord and the tenant at the time the
tenant moves in. Certainly, having condition statements is
already "best practices" by most good property managers;
however, this would require everyone to sign and agree on the
actual condition of the premises. She stated that HB 282
permits the rentals of dry cabins and although some dry cabins
exist in Southeast Alaska, dry cabins are prevalent in other
communities such as Fairbanks. If the landlord and tenant agree
to the dry cabin, this provision represents a great move
forward. This bill would also allow the landlord to restrict
the number of inhabitants. Unless the landlord is renting a
property financed through Alaska Housing Finance Corporation
(AHFC), an owner cannot restrict inhabitants. The difference in
"normal wear and tear" is significant when the premises house
two inhabitants as compared to seven inhabitants. This bill
would allow for the professional cleaning of carpets if the
landlord professionally cleaned carpets at the time the tenant
moved in. This is a huge change since right now a landlord
cannot require a tenant to clean carpets professionally even if
it had been done prior to the tenant moving in, she said.
4:14:10 PM
MS. MCCONNOCHIE said she supported early termination for
domestic violence occurrences. This makes it easier when there
is a need for victims to move out. The bill also allows for the
attachment of PFDs for nonpayment of rent. She remarked that
landlords deserve their monies, too, and it would be wonderful
to give them the ability to attach the PFD checks. Currently,
the landlord can inspect the premises and determine whether any
damages have occurred. However, trying to get contractors to
prepare estimates within 14 days [and repair damages] is almost
impossible. Her goal, as landlord, is to assist the owner with
an inspection, bid repairs, and to have the property repaired as
quickly as possible. She assured members that if repairs are
not necessary, that as the property manager, she will refund the
deposit to the tenant as soon as possible. However, if
legitimate repairs need to be performed, she has found that
currently 14 days doesn't work. She pointed out that most
states in Pacific Northwest, including Washington, Oregon, and
Idaho, have provisions that allow landlords to refund the
tenant's deposit in up to 30 days. She said this is not done to
harm the tenant, but it helps the tenant, since any costs for
damages are known. She thanked members and thinks HB 282 will
benefit landlords and tenants.
4:16:54 PM
ERROL CHAMPION, Director; Chair, Industry Issues, Alaska
Association of Realtors (AAR), offered support for HB 282. He
also referred to a letter in members' packets from the (AAR).
The AAR consists of 1,600 members statewide, many of who perform
property management. He said that he agrees the bill will
address many of the issues previously discussed today. One
issue has been the collection of pet deposits and how to deal
with pets. He pointed out that landlords often bump up tenant
fees, and the additional pet deposit doesn't affect the ability
of landlords to charge more rent. Still, the deposit will
assist in fixing potential damage that occurs in addition to the
"normal wear and tear." He said landlords can issue deposit
refunds within 14 days for really good tenants; however, if
tenants leave in the middle of night the landlord cannot obtain
repair estimates, do the repairs, and refund the deposit within
14 days. Thus, he advocated for the increase to 30 days which
will allow the landlord sufficient time to accomplish repairs.
He supported the definition of "normal wear and tear." He also
supported requiring tenants to have carpets professionally
cleaned if carpets were cleaned prior to the tenant renting the
premise. He said he is excited about the use of electronic
signatures and although a specific provision is not in HB 282,
he was told that other states allow for electronic signatures.
Electronic signatures represent how business is done today. He
hoped the bill would be adopted soon and integrated into the
best practices since it provides protection for property
managers and tenants. He urged members to adopt HB 282.
4:20:26 PM
REPRESENTATIVE HERRON referred to the tenant leaving in the
middle of the night. In that instance the landlord did not have
an opportunity to do an inspection so he wondered if the
landlord tenant act should have a provision to address this
circumstance. He pointed out that if the tenant has abandoned
the premise the tenant has also abandoned the agreement.
MR. CHAMPION responded that this should be the prerogative of
the landlord or property management, noting that some already
perform background checks, credit checks, or other validation of
potential tenant credentials, and if necessary, some landlord-
tenant documents will indicate that the landlord will evaluate
the condition of the property in the event the tenant vacates
the premise unannounced. He cautioned against putting specific
language in the bill since other better ways to solve this
circumstance exist.
4:21:56 PM
REPRESENTATIVE HERRON thanked him for putting this into the
record.
REPRESENTATIVE JOSEPHSON asked whether it would be satisfactory
to require the inspection to occur within 14 days and either the
parties agree to the damages or dispute it. At any rate, the
landlord would determine whether damages occurred. For example,
if the tenant checks out on the first day and the landlord
examines the property the next day and finds the tenant left the
property in satisfactory condition, then the tenant's deposit
refund should be issued timely, within 14 days. In that
instance, the landlord would not have any need to hold the
deposit for 30 days to accommodate any repairs to the property.
MR. CHAMPION said he couldn't speak for property managers, but
he did not think it was anyone's intent to hold on to the
deposit without a valid reason; however delays can happen. He
said that the 30 days represents the "drop-dead" date, but if a
property manager could accomplish it on the 16th day that most
landlords or property managers would issue the refund.
4:23:39 PM
CHAIR OLSON suggested that during the height of the summer [to
inspect, obtain estimates, accomplish repairs,] 30 days is an
optimistic timeframe for the landlord to refund the deposit. He
suggested that it might be difficult to find a contractor to do
any repair work since contractors have prior commitments. He
offered his belief that it might be more reasonable to have an
emergency provision extending beyond 30 days.
MR. CHAMPION agreed. He suggested that most property managers
and landlords will want at least two bids, which could add more
time. He acknowledged that it is difficult to find someone to
do repairs within 14 days.
4:24:54 PM
REPRESENTATIVE JOSEPHSON related that as a first-time landlord
he once forgot to return the tenant's deposit. He also
represented a pro bono tenant who did not receive his/her
deposit timely so the tenant was eligible for treble damages,
which is why he was alarmed once he realized he hadn't returned
his tenant's deposit. He said his point is that these things do
happen and although scrupulous people will issue the refund
promptly, not everyone will behave that way.
MR. CHAMPION said the bill is a big improvement over current law
and will provide protections for the tenants and landlords/
property owners.
REPRESENTATIVE JOSEPHSON agreed that he likes the bill.
4:26:30 PM
LISA MARIOTTI, Policy Director, Alaska Network on Domestic
Violence & Sexual Assault (ANDVSA), stated that ANDVSA is a
statewide coalition consisting of 23 member programs and
affiliates that provide direct services to victims of domestic
violence, sexual assault and stalking. She asked to discuss the
early termination for victims, which will benefit many people in
the state. She stated that ANDVSA has been working with the
sponsor to improve safety of victims under this bill. She
questioned a comment that this provision puts everyone on the
same page, which is not true. There are nine federal funding
streams that landlords contractually agree to that provide
housing protections under the federal "Violence Against Women
Act of 1994 (VAWA)". Landlords receive funding streams from
rural development funds, low income housing tax credit funds,
and [U.S. Department of Housing and Urban Development (HUD)]
Section 8 vouchers, and landlords must follow the federal laws
which are substantially different than in the bill. One
concern, pertaining primarily to smaller property owners that
use rural development money to build 4-plexes or other small
apartments, is that landlords might look at the landlord tenant
act and require a protective order or police report that is
prohibited under federal law. Federal law provides a list of
acceptable documents, but landlords can't limit the
documentation to two particular documents. She suggested adding
language to inform landlords that if they are receiving federal
funds that these provisions would not apply. This could
potentially limit the impact for outreach and education by the
Alaska Housing Finance Corporation and regional corporations
since they often deal with some of these federal programs.
4:29:26 PM
MS. MARIOTTI cautioned that the consequence of violating
individuals' rights could jeopardize the federal funds. Second,
the bill needs some type of confidentiality provision for
documentation to exercise these rights. For example, the bill
requires victims to provide contact information on where they
are going once they leave the premises and that language raises
significant safety issues for victims. She suggested that
landlords should be prohibited from disclosing this information
to third parties unless they have the written consent of the
victim to do so or to be required by applicable law. She
pointed out that if a landlord calls another for future
reference, landlords are free to disclose that the tenants paid
rent on time and were good tenants; however, landlords are
prohibited from identifying that the tenants were victims of
domestic violence, sexual assault, or stalking. This provision
protects the victim's privacy but it also protects information
about the victim's location to prevent an abuser or perpetrator
from accessing that information.
4:30:54 PM
MS. MARIOTTI expressed ANDVSA's third concern, which is the
change to the definition of "transient occupancy" and limiting
it to less than a 30-day stay, in particular, to a hotel or
motel. The ANDVSA's programs provide services to men and women
and find secure locations in hotels and motels for them. The
ANDVSA's programs work with local providers to provide a safe
place for men with their children [who cannot be housed in a
shelter with women and children]. In those instances, sometimes
the assistance exceeds 30 days. She cautioned against entering
into a landlord-tenant relationship with the hotel owner, who is
not the provider of the assistance. She indicated that ANDVSA
has worked on language that could further clarify this.
4:32:16 PM
REPRESENTATIVE JOSEPHSON acknowledged that Ms. Mariotti's
testimony illustrates how complicated this law is, noting that
he has worked in family law but couldn't have envisioned these
issues pertaining to the landlord tenant bill. He encouraged
Ms. Mariotti to work with the sponsor on language to accommodate
these issues.
REPRESENTATIVE HERRON said he met with the sponsor and Ms.
Mariotti with respect to the language addressing prostitution.
He expressed an interest in addressing society's responsibility
to find ways to address sex trafficking. He said that the
legislature and society should differentiate and recognize that
prostitution and illegal sexual activity is different than human
trafficking. He offered his belief that the sponsor is
sensitive to the need to protect the victims of sex trafficking
and to pursue the promoter. He said that language could be
drafted to address this, but the way the bill is currently
written it is unlikely the profiteer will be prosecuted, but the
victim could be harmed.
MS. MARIOTTI acknowledged that the topic was discussed
extensively. She understood landlords not wanting prostitution
occurring in rental premises and the need to give them the right
to evict people engaging in that type of activity. She agreed a
problem could arise with a tenant being coerced into
prostitution by a sex trafficker. She acknowledged that she has
been considering ways to address this, with one way being to
expand early termination to include victims of sex trafficking
as well as domestic violence, sexual assault, and stalking. She
was unsure that this would necessarily address the issue since
all the crimes have some elements of control and coercion, in
particular, in domestic violence situations, but she thought it
would be a move in a positive direction to include these victims
in this provision, as well.
CHAIR OLSON remarked that most committee members are fathers of
daughters.
MS. MARIOTTI acknowledged that ANDVSA really appreciated the
committee members' support.
[HB 282 was held over.]