Interior Inspections and Rental Licensing

Let’s face it, our local cities are facing hard times.  Their expenses are continually going up and their funding is not necessarily going up.  They could raise “taxes”, but they may not be elected to the city council next time up.  So they are getting creative.

These same officials are facing aging housing stock where the homes and apartments need to be repaired and updated, maintained and even replaced as time goes on.  And while home owner work hard to maintain what they own, there are some who do not have the time, money or ability to maintain their homes.  Some just don’t care and also do nothing.

In an effort to make sure the housing in their city is safe, they have long had rules and regulations on the books that require inspections to make sure the building is up to code and meet city codes rules and regulations.  But now with the aging stock and the need for more funds, more and more cities are creating new rules and regulations that require the at least the landlord property owners to get a license of some sort, generating income.  And in an effort to keep properties maintained, they are creating new inspection rules to go along with those licensing requirements.

All well and good, except for something called the Fourth Amendment to the Constitution that prohibits warrantless inspections of homes without the occupant’s consent.

This past year in 2015 in a precedent-setting win for personal freedom and tenants, the U.S. District Court for the Southern District of Ohio in the Baker v. the City of Portsmouth, the court rules that “the Portsmouth [Ohio Rental Dwelling Code] violates the Fourth Amendment insofar as it authorizes warrantless administrative inspections.  It is undisputed that the RDC affords no warrant procedure or other mechanism for pre-compliance review.  As in the above cases, the owners and/or tenants of rental properties in Portsmouth are thus faced with the choice of consenting to the warrantless inspection or facing criminal charges, a result the Supreme Court has expressly disavowed under the Fourth Amendment.

What does that mean for everyone else not in Portsmouth Ohio, well the next step was to see if the city in question would appeal the ruling, which they did not.  Next up would be for other’s to take suit against their own cities to get similar rulings.

In another case in Colorado where a rental inspection program was started to cut down on slum lords and make sure every resident has a habitable place to live, a tenant ended up in court for refusing to allow inspectors into his home.  In that case the city manager ordered a stay on interior rental inspections on single family homes until they could be removed from their inspection program.  Although they are still maintaining the inspection rules for multi family.

Meanwhile, cities in Kansas and Missouri keep creating new interior inspection laws for their cities.

In the State of Kansas, The Associated Landlords of Kansas and their President Ed Jaskinia was successful in getting HB @665 that was eventually combined with SB 366 and several other bills passed and signed into Kansas Law on May 17, 2016.  This new Kansas Law says 4 important things:

1) No residential rental licensing program operated by city or county governments may do an INTERIOR inspection without the consent of the lawful occupant. They must ask, and the Tenant must agree, or the inspection is not allowed to happen. There is an exception to this law for mixed use buildings, such as a building with both commercial and residential Tenants.

2) This law does NOT make any changes to the Landlords right to enter as defined in the Kansas Landlord-Tenant Law (58-2557).
3) Local government may continue to do inspections when building permits are required.

4) The law reserves the right of a Tenant to request an interior inspection from the local government, as already defined in the Kansas Landlord-Tenant Law (58-2572).

TALK Lobbyist Ed Jaskinia worked very hard on this bill for almost a year, fighting off multitudes of attacks. He asked for and received much cooperation and support from the Realtor Lobbyist and many others, without whom this legislation might not have passed.

Effective July 1, 2016, this new law is a giant step forward in preserving the rights of both property and privacy for the citizens of Kansas.

Many cities are still doing interior inspections on rentals when they are vacant between tenants or when they are able to obtain and administrative warrant, so we will need to watch and see how cities across Kansas deal with this aspect.

Most recently the city of Independence Missouri voted to amend city code to add interior inspections every two years on rental property.  To get around the 4th amendment issue, the city has decided they will not do the inspection, but rather provide the list of qualified inspectors and require the landlord to order and pay for their own inspections.

The landlords in Independence collected signatures in attempt to get the ordinance put to the vote but were un-successful.

So, where is this all going?  Well, here at MAREI, our belief is that the more you regulate the rentals, the costs will go up for landlords.  They will then choose to go out of business or pass the expense on to the tenant resident.  However, the slum lord, which the cities concede is a miniscule portion of all landlords, well, we are pretty sure that they don’t care about their properties, their tenants or even the rules and why would even more rules make them do anything different.

So what can we as landlords, investors and property owners in Missouri do?  We highly encourage you to be part of some or several organizations who monitor what is going on and respond as best they can.  First join MAREI and be sure to subscribe to our email newsletters and / or follow MAREI on social media.  Next, join the Landlord organization(s) in the cities where you hold rentals.  As each and every city is going to have a different set of rules and regulations, your local landlord group is going to be your best first line of defense.

In Kansas most landlord groups are already a part of their state Organization The Associated Landlords of Kansas.  In Missouri, there is no state Organization.  Please know that this is a major issue that the National REIA is keeping an eye on, but it may be an issue that is going to have to be dealt with on a State by State basis.

It takes coordinated effort to show the general public, that 99.9% of all Landlords are good people, with great properties, who take care of their tenants.  The public only sees that 0.1% of the bad landlords as bad press sells generates more viewers that the cute feel good stories.