Sunday, June 1, 2014

Legislative Update 6/1/2014 - News about HB1409 Anti-Discrimination

This Legislative Update has been provided by Nick Norman, Director of Legislative Affairs, RPOA.

Howdee everyone,

Important Updates:SB347, Fines related to Landlord Agent Registration
Signed by Governor

HB1532, Radon Results Notification
Died in Committee of Conference

HB1409 Anti-discrimination, Died in Committee of Conference.
I went to the Committee of Conference meeting. Here’s the short and skinny of what happened:
1.    The House side offered to take Section 8 out of the bill and only leave VASH (The veterans program), & Domestic violence.
2.    The Senate side stood firm on their position that the bill had too many concerns to put forward legislation without studying it further with all stake holders present.  They also said they had received a very large response from property owners expressing many concerns.
3.    The two sides got into rather heated discussion about it.  It became obvious that the Democrats from the House side seriously wanted to pass something.  They were at a stalemate.
4.    Then the Senate side suggested the House side talk privately to see if they would consider moving forward with a study commission.  If so they had some changes recommended for the commission.  There was also talk about the awkwardness of extending the study commission past November when we would have elections.
5.    The House side did take about 5 minutes to discuss it, came back and asked what the recommended changes were.
6.    The Senate side suggested having 5 landlord representatives 2 large (>30 units), 3 small (<=30 units) & not tied to any landlord organization.
7.    The House side said they thought there would not be enough time for anything meaningful before November.  They said perhaps next year someone would put forward a bill for a study commission with a longer time frame.  Meanwhile the House side vote Non-Concur which stops the bill from moving forward.

So a HUGE thank you to all that contacted legislators.  They heard from many stake holders on each side of the issue and made what we feel is a well informed decision that HB1409 had too many concerns to move forward with it.

Lessons from this experience for us to take notice.1.    Legislators need and welcome our input.  They do not understand the ramifications of legislation with out us contacting them.
2.    There is a major push in the USA for changes on issues of Domestic Violence & acceptance of Rental Assistance.
3.    This issue is not likely to go away.  Expect more in years to come.

Personally I think it would be a good idea if several of us volunteered to work with “the other side” to help them solve the issue.  We are the business problem solvers, so let’s help out.  Perhaps we could help solve the issue rather than have it forced upon us in ways that simply hurt our business and doesn’t solve the real issue at all.

Please let me know your thoughts on this idea.

Action items this week:
None -  we all deserve a break!

See more info in Summaries & Full Detail for each category further below.(to jump right to bill summaries & detail, use Control-F, Find).

This week:None scheduled so far

Next week:None scheduled so far

Further below is:Bills Updated Status summary:  Several status changes
Full details on all bills above
(Which includes property owner position, contact info, talking points, and more)

Love & Light,
Nick Norman
RPOA Director of Legislative Affairs
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We only list the committee reports on the most important bills affecting the real estate business.  If you want to get the committee report on one of the other bills contact me & I will show you how to get them on line.  Its not terribly hard to get but not straight ahead either.
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Bills Updated Status summary:We only list the committee reports on the most important bills affecting the real estate business.  If you want to get the committee report on one of the other bills contact me & I will show you how to get them on line.  It’s not terribly hard to get but not straight ahead either.

HB1196, Special Circumstances To Waive Interest On Unpaid Taxes    
Title: (2nd NewTitle) relative to applications for abatements and authority to abate prior years’ property taxes.
Property Owner Position: LimitedImpact; You Decide
House Status: CONCURRED
Senate Status: PASSED / ADOPTED WITH AMENDMENT

SB347, Fines related to Landlord Agent Registration    
Title: relative to municipal enforcement of land use ordinances.
Property Owner Position: Against
House Status: PASSED / ADOPTED
Senate Status: PASSED / ADOPTED WITH AMENDMENT

HB1532, Radon Results Notification    
Title: (New Title) relative to notification of radon and arsenic levels.
Property Owner Position: You Decide
House Status: CONFERENCE COMMITTEE
Senate Status: CONFERENCE COMMITTEE
The conferees were unable to agree. In amending this bill, the Senate removed language that the House believes is crucial to the intent and goal of the bill. The Senate was not willing to consider alternative language proposed by the House

SB368, Increase Max Fine Re: Lead Remediation    
Title: increasing the maximum fine for lead remediation.
Property Owner Position: Against
House Status: PASSED / ADOPTED
Senate Status: PASSED / ADOPTED

SB267, Extend  Effective Date Integrated Land Permits    
Title: extending the effective date for integrated land development permits.
Property Owner Position: You Decide
House Status: PASSED / ADOPTED
Senate Status: PASSED / ADOPTED

HB1283, Rights on Revival of Condo Charter    
Title: (New Title) relative to revival of a charter by a voluntary corporation or association.
Property Owner Position: LimitedImpact; You Decide
House Status: CONCURRED
Senate Status: PASSED / ADOPTED WITH AMENDMENT
Ought to Pass with Amendment, Vote 5-0.

HB1409, Antidiscrimination Section 8, Domestic Violence    
Title: expanding the law against discrimination to prohibit housing discrimination against recipients of rental assistance and victims of domestic violence, sexual assault, or stalking.
Property Owner Position: Against
House Status: CONFERENCE COMMITTEE
Senate Status: CONFERENCE COMMITTEE
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Full details on all bills above:HB1196, Special Circumstances To Waive Interest On Unpaid Taxes
04/01/2014 at 09:15 AM    SH 103
Title: Title: (2nd NewTitle) relative to applications for abatements and authority to abate prior years’ property taxes.

Summary: This bill would grant authority to local governing body of any municipality to waive a portion interest accrued on unpaid taxes upon request of the person liable for the taxes, when the governing body determines that there are special or extraordinary circumstance that require such a waiver.

Property Owner Position: LimitedImpact; You Decide

Link to Committee Info:

Email to Committee:
To:
Subject: HB1196

Link to Bill Text: http://www.gencourt.state.nh.us/legislation/2014/HB1196.html
Analysis Stated in Bill:

Talking Points:
The bill does not give any guidance as to what are special or extraordinary circumstances, not does it specify what portion of the taxes can be waived.

There are circumstances where the interest should be waived, for instance the tax bill was wrong and the property owner was over taxed, and the property owner paid the correct amount of the tax.  It is not at all clear if the financial circumstances or health of a property owner would be such special circumstances.  Because the bill is so unclear, we do not feel that we should support it.  We also do not think that we should oppose it, as one of us could end up benefiting by such a bill.  You decide.
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SB347, Fines related to Landlord Agent Registration
04/01/2014 at 10:30 AM    LOB 301
Title: Title: relative to municipal enforcement of land use ordinances.

Summary: This bill amends the statute dealing with municipal citations so that any defendant who fails to respond to a citation is subject to fines and penalties set forth in RSA 676:17 ($275 for the first offense and $550 for each subsequent offense, as well as daily fines, attorney fees and more).
It also makes any person who fails to file a statement of a designated agent pursuant to RSA 540:1-c subject to a fine not to exceed $100.


Property Owner Position: Against

Link to Committee Info:

Email to Committee:
To:
Subject: SB347

Link to Bill Text: http://www.gencourt.state.nh.us/legislation/2014/SB0347.html
Analysis Stated in Bill:

Talking Points:
This is less than the house bill of $500, and just like the house bill does not state who enforces it, nor who receives the fine.  Further, if a landlord is new, doesn't even know about this requirement, and does not register he/she is subject to these fines.  That landlord should be given notice to register by the city or town and a grace period before being subject to the fine.  Should the broker who sells a building to a landlord be required to inform the landlord of the registration requirement?  Should there be some notice or form at a property closing? Perhaps the City or Town must be held responsible to notify all property owners of this law.

There have been several attempts to repeal this Landlord Agent requirement. Many towns do not even know the requirement exists.  They can look up assessment records/purchase records to find address for service.
This law that should not even exist.
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HB1532, Radon Results Notification
05/22/2014 at 02:00 PM    LOB 302
Title: Title: (New Title) relative to notification of radon and arsenic levels.

Summary: This bill would require sellers to disclose the results of any radon test of the air in the lowest level of the building for sale, that they know about, to buyers prior to entering into a purchase and sales agreement.

Property Owner Position: You Decide

Link to Committee Info:

Email to Committee:
To:
Subject: HB1532

Link to Bill Text: http://www.gencourt.state.nh.us/legislation/2014/HB1532.html
Analysis Stated in Bill:

Talking Points:
The current law is that the sellers or their agent have to disclose the possibility of radon, but not test results. If this passes, similar to lead paint, if the building was tested, the test results have to be disclosed.

For the buyer's prospective, the buyer should be provided this information. It allows the buyer, including members of our group additional information that the buyer can use to make an informed decision.  Since only tests that have been done previously have to be disclosed, there is no additional cost to the seller. If the seller has this information, and does not disclose it, a buyer may have recourse against the seller for fraud under current law.

Some of our members say that radon does not have any scientific evidence of causing any immediate or potential health hazards.  There are no standardized testing locations listed.  A home will have higher levels of radon in basement than on second or third floors. This could lead to these tests leaving our homes/rentals as undesirable because there is radon present even though radon is also present is current outside air that we breathe.

An argument against the bill is that it is one step closer to requiring all buildings to be tested for radon, and eventually lead, and be remediated before sale.  Since we think that this argument would not be appreciated by the legislature we leave this one up to you.
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SB368, Increase Max Fine Re: Lead Remediation
04/29/2014 at 10:30 AM    LOB 202
Title: Title: increasing the maximum fine for lead remediation.

Summary: The current maximum fine, pursuant to the New Hampshire  on lead paint, RSA 130-A is $2,000 for each violation of the law.  This bill would increase the fine to $5,000. Violations of the law include failure to allow inspections, failure to remediate if an order is issued, failure to relocate a tenant in certain circumstances and more.

Property Owner Position: Against

Link to Committee Info:

Email to Committee:
To:
Subject: SB368

Link to Bill Text: http://www.gencourt.state.nh.us/legislation/2014/SB0368.html
Analysis Stated in Bill:

Talking Points:
You decide talking points on this one.
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SB267, Extend  Effective Date Integrated Land Permits
04/10/2014 at 10:30 AM    LOB 305
Title: Title: extending the effective date for integrated land development permits.

Summary: Extends  the effective date from January 1, 2015 to July 1, 2017 for integrated land permits.  This is related to RSA 489 titled Integrated Land Development.

Property Owner Position: You Decide

Link to Committee Info:

Email to Committee:
To:
Subject: SB267

Link to Bill Text: http://www.gencourt.state.nh.us/legislation/2014/SB0267.html
Analysis Stated in Bill:

Talking Points:
none developed so far.
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HB1283, Rights on Revival of Condo Charter
04/15/2014 at 02:00 PM    LOB 101
Title: Title: (New Title) relative to revival of a charter by a voluntary corporation or association.

Summary: This bill does not directly affect private landlords, unless the landlord is renting out a condo in a community where there is a home owners association. Given the limited number of our membership that would be affected by the bill we leave this to you to decide if it affects you and how is best for you to respond.

Property Owner Position: LimitedImpact; You Decide

Link to Committee Info:

Email to Committee:
To:
Subject: HB1283

Link to Bill Text: http://www.gencourt.state.nh.us/legislation/2014/HB1283.html
Analysis Stated in Bill:

Talking Points:
Limited Impact, no talking points developed.
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HB1409, Antidiscrimination Section 8, Domestic Violence
05/28/2014 at 02:00 PM    LOB 208
Title: Title: expanding the law against discrimination to prohibit housing discrimination against recipients of rental assistance and victims of domestic violence, sexual assault, or stalking.

Summary: Proposed and drafted by NHLA (tenant advocates) expanding the law against discrimination to prohibit housing discrimination against recipients of rental assistance (any kind of assistance including Section 8) and any one who claims to be a victim of domestic violence, sexual assault, or stalking.  Note: merely making an unverified call to the police or violence center would constitute some one now in a protected class.

Property Owner Position: Against

Link to Committee Info:

Email to Committee:
To:
Subject: HB1409

Link to Bill Text: http://www.gencourt.state.nh.us/legislation/2014/HB1409.html
Analysis Stated in Bill:

Talking Points:
WE NEED EVERYONE INVOLED.

This bill makes two significant changes by adding two distinct and separate categories to RSA 354-A.

The first addition to RSA 354-A the protected classes (protected from discrimination) is for people who receive rental assistance..

The second addition to the protected classes (protected from discrimination) is a person who has a current, final protective order under RSA 173-B:5 or RSA 633:3-a, III-a or who had such an order within the previous 5 years.

We met with NHLA about this bill and were told two of the reasons NHLA put forward the bill are:
1. NHLA was told that people in these classes have difficulty finding apartments. However, NHLA has not provided any statistics to back this up.  Further people have 60 days to locate an apartment that can be extended up to 120 days.  If they work as hard at finding an apartment as the members of the legislature do during a session they should be able to locate an apartment within the allotted time frames.

We were told the victims of domestic violence sometimes have trouble getting apartments because these tenants have bad landlord references.

2. The second reason is that NHLA feels all tenants should be able to live where they want (despite their bad landlord references) and that these classes of tenants would  have a better chance of improving their situations if they could live in better areas.

Does this mean that all public housing that concentrates poor people in one project should be eliminated?

Note that rental assistance vouchers have rental amount limits as to how much can be spent on rent.

Some terms:
Section 8 Lease:  Actually there is a  lease & a contract. The landlord and tenant come to agreement on whatever is their normal lease AND the Section 8 program requires a separate contract called the HAP contract, Housing Assistance Payments, between the owner and the Housing Finance Authority.

This HAP Contract is called loosely the Section 8 lease but that is techinically incorrect.

There are so many problems with this bill it is crazy.  Here goes a listing of some.

1. Misguided solution to Section 8 issue.
Presently a good number of landlords accept and many do not accept the Section 8 program.
The issue is sometimes a tenant receiving Section 8 assistance contacts a landlord who does not accept the Section 8 program. The landlord doesn’t accept the program because it is essentially bad for landlords and costs more time and money.

Instead of working to make the Section 8 program more palatable to landlords, HB1409 attempts to solve the issue by making it illegal to discriminate based on Section 8.

In plain words, rather the fix the program, HB1409 attempts to ram it down our throats as is.

Later in this testimony I will present many of the things that make Section 8 bad for landlords.

2. Isn’t it illegal to be forced to sign a government contract?
If you have an existing tenant that finally makes it to the top of the Section 8 waiting list you would be FORCED to accept the Section 8 program or be guilty of discrimination.
In this case, it is clear that HB1409 would force the landlord into signing the HAP contract, a government contract.

3. Many provisions of the Section 8 HAP contract are troublesome, illegal or unconstitutional.

A.    Part A section 7, The housing authority can and does change the amount of monthly assistance during the term of the contract. This happens when the tenant's household income varies.  It causes extra book keeping and errors tracking the ever changing rental split between housing and tenant.

B.    Part B section 2 c.    "The lease between the landlord and the tenant must include word for word all provisions of the tenancy addendum required by HUD.  One of our landlords provided the following:
“I have been able to include the wording on my leases by incorporating the HAP Contract by reference. Below is one sample of what I have to incorporate into the lease:

We agree to accept payments from the Somersworth Housing Authority under the Section 8 Housing Program as part of your rent.  You agree to pay the difference between the amount paid by the Somersworth Housing Authority and the $750.00 rent for the apartment on or before the first of each month.  This amount will be determined by the Somersworth Housing Authority, and is subject to adjustment at least yearly. The amount that the Somersworth Housing Authority will pay at the beginning of this lease is $610.00 per month, and you will therefore pay $140.00 per month pursuant to this lease until such time as this amount is adjusted.

            All parties to this lease agree to execute any addendums to this lease required by the Somersworth Housing Authority.  Said addendums, where required, are incorporated herein and are a part of this lease.

If a landlord fails to do this, the landlord will not receive rent from the housing authority until the lease is amended to conform to this requirement.  Something people without a legal background could miss.”

C.    Part B section 4b(2).  The housing authority (PHA) "may terminate payments for any grounds authorized accordance with HUD requirements." The problem is that if the family does something like drugs, and the landlord is evicting, the housing authority could cut off funds for the landlord, and since the family is poor or they would not be receiving section 8, the landlord would not have anyone to go after for lost rent.

D.    Part B section 4 b (3)  If the family moves the HAP contract terminates automatically.  So if a family breaches the lease and "flys by night" the lease is meaningless and the authority can stop paying.

E.    Part B section 4 b (5) The HAP contract can be terminated if the PHA determines per HUD requirements, that there is insufficient funding to support the continued assistance.  Here HUD itself shows it has funding concerns .

F.    Part B section 4 b (6) The HAP contract terminates automatically upon the death of a single member household, including single member households with a live-in aide.  So, no rent but how do we get rid of the live-in aid, and who has to incur the lost rent while the live-in aid is being evicted?

G. Part B section 10 a (2) it is a breach of the HAP contract if the owner has violated any obligation under any other HAP contract. So, for landlords with multiple buildings, if there is a problem in one building that is a breach then all section 8 payments could stop. With one very bad tenant, who lies this could be a major problem

Also subparagh (5) it is a breach if the owner engaged in any violent criminal activity. So, no defending yourself against a tenant who threatens you with bodily harm. This applies to all tenant and not just the section 8 ones.

H.  Part B secion 11. (a, b, and c but particularly b) The owner has to give "full and free access" to HUD, PHA, and the Comptroller General any and all information, records, computer files, accounts that are relevant to the HAP contract. HUD HAS DECIDED THAT THEY DO NOT HAVE TO COMPLY WITH THE FOURTH AMENDMENT TO THE CONSITUTION OF THE UNITED STATES. (Illegal search and seizure or need for probably cause).

If someone wants to challenge this, then they are in breach of the HAP contract and rent stops.  (You do what we want or we will bankrupt you).

I.    Part B section 13.  Any public official, members of a governing body, or State or local legislator, who exercises function or responsibilities with respect to the program can not participate in the program.  So, public officials will be barred from being landlords if HB1409 passes and landlords should not participate in government to avoid this provision. (Although this provision can be waived by HUD)

J. Part B section 14. PHA can keep the sale of the property from going through by refusing to let the new owner take over the lease.

K. Part B section 14 (e) PHA will not allow assignment of HAP contract, sale of property, to an immediate relative.

L. Part C section 5 (d) Owner cannot evict tenant for failure of the PHA to pay rent which gives PHA
Tremendous leverage over the owner.

M. Part C section 8 (e) 1 & 2 The apartment can be destroyed & all neighboring tenants harassed & endangered but the owner cannot evict if it's connected with Domestic Violence. 

4. Perpetrators allowed back in by victim.
Many times the victims allow the perpetrator into the new apartment. Are other tenants to be in danger if new tenant who is victim of DV lets abuser back into their living space?  What if one of the tenants are harmed by the perpetrator.  Can the landlord now be held somehow liable because the landlord could not do anything to eliminate the perpetrator?
If this happens, landlords have limited ability to evict unless they are witnesses to new abuse or disturbance of the peace.  The eviction requires a 30 days notice plus all the time the courts take so it could take 2 to 3 months at a minimum to evict the perpetrator.  Mean time all the other tenants in the building who are subject to the fights, generally are reluctant to call police, and may move on account of the continued problem.  Now the landlord is only left with the troubled unit and will likely have trouble rerenting because of the troublesome unit.

5. Section 8 tenants are more costly for landlords although landlords by HUD rules can not charge more for them.
a. more paper work.  The Section 8 lease and contract is very large with an extreme number of clauses.  Does this mean you have to except all the provisions that this government body dreams up and the landlord as no control over.
b. must take time for initial inspection
c. annual inspections
d. annual financial reviews of the tenants if not more often, which changes the amount paid by the housing authority and the tenant.  Increases bookkeeping time and chances of errors.
e. More regulations, and different standards such as with lead paint renovations which would now have to meet more stringent HUD rules.

Did you know that having a housing assistance tenant forces you to follow HUD RRP rules instead of EPA RRP rules.  The HUD rules are more restrictive and expensive to follow which will absolutely increase your expenses and create more vacancy.  Some of the extra HUD RRP rules:
    1. Under EPA you can have one RRP certified worker supervising other works.
        On HUD Section 8 job ALL workers must be RRP certified.
    2. Under EPA the RRP renovator may do an official “Cleaning Verification Procedure” to release the job back to the occupant.
        On HUD Section 8 job several dust wipes performed only by a dust wipe technician, Lead Inspector or Risk Assessor must be performed sent to a lab and the result proven to be <40 and="" br="" contractor="" dust="" foot="" for="" hud="" if="" job="" lab="" lead.="" meets="" micrograms="" more="" must="" nbsp="" not="" pay="" reclean="" requirement.="" square="" the="" then="" until="" wipes="">    3.  Under EPA there is no prohibition to work on a windy day as long as you can meet containment.
         On HUD Section 8 job you must shut down the job on a windy day (>20mPH).
    4.  Under EPA you are required to meet RRP rules only if disturbing more than 6 square feet.
        On HUD Section 8 job you have to invoke HUD RRP rules if disturbing more than 2 square feet.
There are several more restrictions. HUD Section 8 jobs are always more restrictive in their rules.

f. Need housing authority approval to raise rents, and there are limitations on rent increases based upon what is allowed by HUD
g. Sec 8 is funded by what has been a dysfunctional  Congress.  Who knows what they will continue to fund.
h. Landlords should not be forced to have too many sec 8 tenants, if funding is reduced the landlord could face financial ruin.
i. This will open all our rental properties to having to be up to government (HUD) codes including at least annual inspections, not just current building code.

The bill gives people on sec 8 & any type of housing assistance greater rights than people who work and pay rent from their paychecks.

6.  Limited ability to screen new tenants.
To protect yourself from discrimination suits you will be likely need to give preference to accept Section 8 & domestic violence tenants.  You will not be allowed to deny someone your apartment if they have bad landlord references or bad credit if those references and credit are "caused" by the domestic violence, sexual assault, or stalking.  Maybe this could be stretched to say the reasons that cause a tenant to be eligible for Section 8 are the reasons for their bad credit.  If so landlords could not refuse a Section 8 tenant because of their bad credit.  Could that be extended to say they could not be refuse because of bad past rental payments.

If you have an existing tenant that finally makes it to the top of the Section 8 waiting list you would be FORCED to accept the section 8 program or be guilty of discrimination.

Isn't it unconstitutional or illegal for government to force a private business person into a government contract?

7. More legal battles to fight.
It happens often that a landlord who never had any intent to discriminate winds up spending hours and hours and thousands of dollars in an effort to convince an investigator of their innocence.  This could easily open up “frivolous” lawsuits against landlords.

8. Potential issues with property insurance
Some insurance companies won’t do insurance if Section 8 is more than 20%-50%.
See
http://www.distinguished.com/Our-Programs/Real-Estate/Affordable-Housing.aspx#.U1MhTVVdWSo

Standard Insurance companies research shows that if there is a majority of a building rented to Section 8 occupants there tend to be more liability claims and less maintenance is done on the building.  We have been told by insurance agents that it is their right not to insure the building in that situation and that insurance rates would likely go up if a landlord had large amounts of section 8 tenants in their building.

9. Depressing effect on value of multi-families and real estate market.
In the investment markets something that provides a stable return is valued higher than something uncertain.  HB1409 creates a huge amount of uncertainty as to what a property owner can expect depending on how many Section 8 tenants with accompanying expenses he/she happens to be required to accept and how much damage and loss of rents caused by associated domestic violence plus the uncertainty of property insurance costs or even obtaining insurance.  All of this would cause multifamily investment property to be less valuable.

This is a terrible bill for landlords. Stay tuned, contact you legislators and ask them to vote against HB1409 as amended.
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