The LandLord Advocate April 2012

In last month’s newsletter, we discussed the pending beg bug legislation being considered in Connecticut, and recommended that landlords and property managers join a landlord organization with strong, active membership and a presence at the State Capital to ensure that your voice is heard [click here to access last month’s article]. However, many existing and new laws and regulations affecting landlords happen at the local level, not just at the state or federal governments. Will your landlord organization be present at the local level? It depends on the significance of the subject, but the likely answer is “no.”

So, if the ball is in your court, how do you start making an impact at the local level?

First, you know that there are usually building, fire, housing, and health codes that apply to your apartment or commercial buildings – go get a copy and read them. We recommend that our clients read these publications at least once to familiarize themselves with the “rules of the road” for their city or town.

A word of recommendation before you begin – do not set yourself a standard of “expertise” while reading; instead, read for simple understanding and awareness. This is important, because if you expect full comprehension when you are reading, there’s a possibility you will never get through the material.

You may be amazed at what you find in these documents – that unauthorized occupant or hoarding problem you are having may violate a local housing code and, as the landlord, you (yes, you) can call the housing department to have a city inspector handle the matter for you. As one client recently learned to their astonishment with a tenant’s housing code violation, the housing inspector can order the tenant to remedy the issue immediately or face arrest (yes, arrest). As you can imagine, the threat of arrest can make a substantial difference in the likelihood and speed with which a tenant remedies the issue.

Do you have a pest management company offering you a “new” approach to eradicating bed bugs? Well, you may find that the approach they are pursuing may require a special permit or approval, or it could violate a local health ordinance. Either way, hiring the contractor blindly could result in your being in even deeper trouble than having bed bugs in the first place.

In short, reading your local codes and regulations will help you manage your business and properties, both operationally and with code compliance. Indeed, it will help you deal with the code inspectors if they are ever at your property. Remember, you do not have to tell them that you read the code (unless it helps you), but having a familiarity or understanding of the topic always helps in communication and resolution of matters.

Second, ask your local government offices whether they are considering any code or regulation changes. You may agree with what they are trying to accomplish, and then can become an advocate for the changes. You may disagree, and then hopefully you will have given yourself a chance to impact the discussion and perhaps the resulting change.

Be prepared for responses from local officials that start with amazement or incredulity, and be ready to assure the person that you are sincere. Indeed, if you engage effectively with them, the government officials may even ask you if there is a subject or code that concerns you. You do not need to have an answer ready at that moment, but take advantage of the opportunity at some point.

Finally, keep in mind the interpersonal aspect of dealing with your local government. The power of introducing yourself to local government and its laws lies in the person-to-person interaction that takes place. City officials are human and are oriented to be more patient and understanding with those landlords and property managers that they know, and who have shown an interest and willingness to comply with the law. They realize that local codes and ordinances are not the first thing that companies look at when running their businesses, and you will be a breath of fresh air when you do so.

Contact your landlord attorney if you are looking for a good place to start with local government engagement, or if your review of local codes and regulations raises a legal or operational issue for you.

Quick Tip:

Apartment smoking bans moving to CT.

We are often asked by clients about instituting smoking bans in their multi-family housing communities. Logically, the answer to that question should seem simple – you own the property, you make the rules. Well folks, sometimes it’s just not that easy.

While you technically “own” the property, we are all aware of the legal limitations and rules imposed on that “ownership”, and the ramifications you can face by not adhering to those limitations. In many instances, a landlord can not simply ban a particular practice or behavior from his property simply because he decides to. However, with the help of a larger, ground-swell movement by others, landlords may find the battle much easier to win. Such a ground-swell is taking place right now across the nation – and right here in CT – regarding smoking.

It was recently announced that the Bristol Housing Authority (BHA) will implement its smoke-free apartment policy on July 1. This initiative is based both on HUD’s push to implement such policies and BHA’s own perspective that the smoking ban will positively impact the health of its residents and its own bottom line.

This is good news for those landlords who have been looking for a way to implement a smoking ban. As mentioned, it’s your right to establish rules for your property, but the fight can be difficult. Luckily, the policy support brewing in the public housing arena regarding this subject may now make it easier for you to implement and force adherence to a non-smoking policy.

However, beware. It certainly won’t be a yellow-brick road all the way to Oz. The business and customer service aspects of such a policy have been debated within the rental housing industry for probably a decade. So, consider all the angles before you contract to install outside cigarette receptacles in the designated “smoking zones” around your property. Without the right approach, you may find that you create as many problems as you resolve.

Quick Tip:

Inspections can be for any reason, including just to inspect.

Last month, we discussed how inspections can help a landlord improve its relationship with a tenant, increase the likelihood of keeping that tenant on renewal, and reduce the property’s operating expenses [click here to access last month’s article]. It raised the question from a number of our clients as to whether they had to have a “reason” to inspect the unit. The short answer is, “no” – or, perhaps better, “yes, but it simply can be just to inspect.” You own the property, and the law gives you rights to help protect your business.

Your lease typically outlines the rules regarding unit inspections, and if missing, there is a statute that you can rely on in the absence of lease language. Remember, your lease can expand or restrict your rights under the statute. However, if your lease is more restrictive than the statute, you should tread carefully before seeking to rely on the statute.

Under the statute, a landlord can enter the unit to:

• Inspect the premises;
• Make necessary or agreed to repairs, alterations, or improvements;
• Supply necessary or agreed to services; or
• Exhibit the unit to prospective or actual purchases, mortgagees, tenants, workmen, or contractors.

However, despite the rights provided by this statute, some landlords still choose to by-pass regular inspections. Allow us to share a pair of recent, real-life scenarios that will hopefully drive home the importance:

• First, a landlord learned that the tenant had decided to disassemble a car engine in his bathtub. Of course, as the tenant moved the various pieces into and out of the bathroom, he dripped oil all over the carpeting resulting in substantial property damage.
• Second, a landlord found that a tenant family (for reasons unknown) had used the bathtub as the toilet, creating a real health and safety issue along with increased turn expenses on the unit.

Two of many stories we’ve heard. Could these have been caught or minimized by an earlier inspection? You bet, and the landlord could have done the inspection for no other reason then to inspect.

Contact your landlord attorney to assist you with the inspection process, evaluate your lease to ensure that it does not restrict (and expands) your rights under the statute, and create an effective inspection regime.

Quick Tip:

Criminals – The next protected class?

The Connecticut Legislature is presently considering Raised Senate Bill No. 453, “AN ACT CONCERNING CERTIFICATES OF RELIEF FROM BARRIERS RESULTING FROM CONVICTION OF A CRIME”. For almost three years, LLF has been advising property owners and managers at Fair Housing seminars around the state that something like this was likely to come. While we were actually hoping to be proven wrong, it doesn’t appear as if that will be the case. While it does not currently create a new protected class for previously convicted criminals, it can certainly start CT down that path.
The proposed bill is currently limited to public housing authorities, who are vehemently opposed to this potential new law. However, as landlords and property managers in the multi-family housing industry are well aware, forced housing policy is often germinated in the gardens of public housing communities. This could cause a shockwave that will be felt by all.
While the proposed law is actually in conflict with federal regulations for PHAs, it would not be surprising to see this conflict somehow circumvented in future proposals, should this one be successfully rebuked.
What is most important to recognize is that the federal regulations that make it illegal for the state to pass and apply this law to public housing authorities, may just leave CT lawmakers intent on finding a new garden in which to grow this new policy.
This is certainly something worth everyone’s attention. We will be sure to advise you of any further news or announcements on the subject.

Quick Tip:

Apartment leases excluded from lease accounting rules.

Commercial landlords and apartment building owners, recently won a temporary victory with the accountants of the Financial Accounting Standards Board (“FASB”) and International Accounting Standards Board (“IASB). Originally, FASB and IASB wanted to require that landlords immediately account on their balance sheets for the entire projected income of all leases exceeding one (1) year. The kicker was that the proposed standard would have defined the lease term as including optional renewal periods, so a large number of leases would have been covered.
This posed two (2) major issues for landlords:

• First, landlords would have had to track and capture data about their leases in a different way to meet the proposed standard – which would have meant a greater expense burden for compliance.
• Second, it would have created the “two different standards” situation – one for leases under a year, and one for those longer – that most business owners hate.

A new draft standard is expected soon, with a projected implementation date in 2015. In a related article this month, we recommend that you get involved with your local governments, because of the potentially immediate and lasting impact that they can have on your properties. While most of us may not be accountants, every landlord has one on retainer, so here is a great chance to speak directly with them to ensure that they (or their accountant organization) are keeping an eye on this subject and making sure that the new proposed standard does not adversely impact landlords.
Contact us if your accountant is unclear about the proposed standard or for how to learn more about it.

DISCLAIMER:

The reading of this newsletter does not form an attorney-client relationship. The contents of this newsletter are for informational purposes only and do not constitute legal advice. Nothing in this newsletter is intended to imply or predict the outcome of any legal matter that you may be considering or be involved in. The Landlord Law Firm makes no warranties of any kind regarding the information contained in this newsletter.