This past year Independence Missouri proposed their Rental Ready program that requires a business license and inspections. There was a public hearing but only registered voters in Independence were able to speak and it seems that none of the comments were considered. The program was approved and is soon to be implemented.
It was rumored then that other metro cities have similar programs coming.
This past week we have learned about Kansas City Missouri’s potential program, Healthy Rental Homes that is their new version on licensing, inpsections and fees that is going to be put to the public with a Special Election on August 8th. MAREI was provided a copy of this ordinace by Attorney Bob Wise, but we can’t seem to find any reference to it online.
In speaking to one landlord on the Kansas side, Ed Jaskinia, his comment was “it sounds like Kansas City is declaring war on the Landlord”
As a former landlord in Kansas City Missouri that has sat in on numerous action committees regarding the problem of vacant houses and ways to address these problem properties, I have to ask, why the city would want to make life tougher on the Landlord when they want anyone and everyone to buy and fix up their vacant rental properties.
The more licensing, fees and inspection, the higher the costs are going to be for the landlord. Those costs are going to be passed on to the tenant. However, the market is only going to be able to handle so much rent increase.
Despite the glamorous image the public has of the huge boatloads of profit that the landlord makes, the average rental property that may make $100 to $200 a month in profit at the time, has to save that profit to cover for when the unit is vacant, to cover when tenants don’t pay or must be evicted, to cover damages that happen, to cover normal wear and tear, to cover when the property needs a new roof or furnace. Once you put away a portion of the profit for all these other expense, there is not much rental cash flow left over to live on.
So what does this mean?
As cities increase the licensing and the inspections and the fees one of two things are going to happeen.
(1) Rents are going to go up, across the city . . and / or
(2) Being a landlord is going to become a non-profitable business and they are going to sell out, or worse yet get so under water that the home gets foreclosed on and becomes a vacant bank owned property. And I thought the city had a problem with vacant houses already ?
Besides the above issues, MAREI has a few other questions to ask:
(2) As a landlord and real estate investor, I already have to obtain a business license and pay the Kansas City Missouri One Percent Earnings Tax. But we need a new business license for rental property?
(3) And as property owner, I can make a complaint to the city about run down property next door to mine. And as a tenant, I can let anyone into my home to inspect deplorable conditions from the city and or public media in an effort to get my landlord to fix something. And if a home is in such poor repair, why would I have rented it in the first place.
So the question is, why do we need a new oridinace on top of existing rules and regulations.
Next, up the 4th Amendment.
So many of these new ordinances are requring interior inspectons of rental property with an existing tenant. As landlords we have been told we must force our tenants to allow the city personel into the home to inspect the home for the tenants own protection. No warrant required.
Big deal right?
Let’s look at the Kansas City Ordiance
First the property owner needs to apply, pay a fee and submit to an inspection.
But what if the tenant does not want to let the inspector who works for the city into their home? Do they not have protection against warrantless searches? Not if this ordinace gets passed and not in Independence where a similar ordinace is going into effect in a few weeks. A Similar ordinace in Ohio was taken to the Ohio Supreme Court and found to be a violation of the tenants 4th Amendment rights.
The Kansas City Ordinance States
The Director is authorized and directed to endorse on the Rental Permit such conditions and requirements which in his or her best judgment and discretion are necessary for the protection of the health and safety of the persons utilizing such property and which carry out the scope, purpose and intent of this Article. Such conditions and requirements shall conform as closely as possible to the rules and regulations promulgated by the Director, but shall not be so strictly construed as to operate hardship upon any applicant.
So we don’t have a definition of conditions and requirements, its in the persons best judgment and discretion and whose to say that the directory wants in the house to see something other than the wiring or the furnace.
To keep a rental license after registering, paying a fee and helping the city Violate the tenant’s 4th amendment rights in Kansas City, the landlord must do the following to maintain the license.
Allow representatives of the Director access to the rental property for inspections and in emergencies when an imminent health hazard may exist;
The Director in Kansas City will also be given authority to make the rules up as they go along, never a good idea with laws, rules and regulations, especially a regulation that is being voted on now, but can be change later without a vote.
(a) Scope of authority. The Director shall formulate rules and regulations for implementing the provisions of this ordinance to include inspection process, method and guidelines. Such rules and regulations shall be filed with the city clerk, and, when so filed, shall be in effect as part of this ordinance. Such rules may be modified or superseded by other rules and regulations filed by the Director from time to time.
(b) Scope of regulations: The Director shall have power and authority to make provisions in such rules and regulations for health, sanitation and adequate rental housing standards as such rules and regulations may appertain to each and every holder of a permit under this ordinance; and such provisions, conditions or requirements shall be subject to modification, deletions, additions or other change or alteration as to any holder of a permit as the Director may find and determine at any time.
If we as landlords in Kansas City under this proposed ordinance cannot gain the inspector access, the city can get a court order or a warrant or suspend the license.
A Big Question here is if an inspector shows up to a property and the occupant refuses access, how are we as landlords supposed to enforce entrance and inspection by a city official with out a warrant. Our only option would be to evict the tenant and in talking to an Eviciton Attorney, it would be tough to evict a tenant on the grounds that they would not submit to a warrantless search . . but of course this law allows the city to obtain a warrant for the just cause of providing the landlord with a rental license?
One other issue arises in that the majority of landlords in Independence and Kansas City Missouri do not live there. They are not voters, so they are not able to have a say in these ordinances being enacted. At least in Kansas City Missouri they are proposing an election, in Independence, no one had any say in the matter.
What can we do if we can’t vote? The answer lies in a voter registration drive to get our tenants registered to vote. Educate them on their 4th Amendment Rights. And get them to the polls in Kansas City Missouri to vote against the proposed ordinance and in Independence to vote in a new city council.
We invite you to share your thoughts and comments here.