Bill requiring ‘reasonable’ rental fees clears Idaho Senate committee

BOISE (Idaho Capital Sun) — A new law that would require fees imposed on residential tenants to be reasonable and in an amount that is no greater than what was agreed to in a rental contract passed out of committee for amendments in the Idaho Senate on Wednesday.

The members of the Senate Judiciary and Rules Committee agreed to send Senate Bill 1039 for an amendment that would state the law would apply to rental agreements signed after July 1. Although Idaho law states new legislation should not be interpreted to be retroactive unless explicitly stated in the bill language, sponsoring Sen. Ali Rabe, D-Boise, said the amendment could add clarity and prevent confusion or concern with existing rental agreements.

In addition to requiring that fees cannot be greater than what was outlined in a rental agreement, the short addition to Idaho Code also states that if a property manager or owner wants to charge a fee that is not included in the rental agreement, notice of the fee must be given 30 days in advance.

According to the 2020 American Community Survey by the U.S. Census, close to 30% of Idahoans rent their living space, while about 71% own a home. The percentage of those who rent increased by more than 8% over the past decade.

Rabe, who is executive director of an eviction prevention organization called Jesse Tree in Boise, told the committee that the sections of Idaho Code relating to landlords and tenants has not been updated in many years and provides minimal guidance about their respective rights and responsibilities. Rabe said Idaho Asset Building Network conducted a survey and found that rental fees were one of the top issues identified by housing-related nonprofit organizations across the state as an issue that causes conflict between landlords and tenants.

“In my day job, I’ve seen some situations where landlords charge a flat $500 late fee,” Rabe said. “I’ve seen other situations where landlords charge tenants $100 a day for rent that is late, and this can really stack up.”

Idaho law also dictates that when late rent is paid, the amount is first applied to the fees, so when a tenant falls behind, it can quickly lead to eviction.

“I saw one extreme example in eviction court where a tenant owed $500 in rent, and on the ledger, they owed $3,000 in late fees,” she said. “That’s just not fair. It should raise a red flag for many of us, and those are the kinds of issues we’re trying to get at by requiring fees are reasonable.”

Rabe said the “reasonable” language in the bill is the same verbiage used in Idaho Code restricting fees and charges for mortgages, and another section that regulates fees for storage facilities.

Idaho Apartment Association says law would provide protection to landlords and tenants 

The committee heard testimony supporting the bill from several individuals in the housing community, including Spencer Henderson, legislative chair for the National Association of Residential Property Managers in southwest Idaho, who said his organization represents more than 30 local property management companies and more than 7,700 rentals in Idaho.

“Unfortunately, the lack of statewide guidelines has led to predatory actors outside of our organization that hurt our industry as a whole,” Henderson said. “There is currently no path for renters to seek basic consumer protection against predatory actors regarding unknown, unreasonable late charges.” 

Henderson said his organization’s position is that the topic is one the state should handle rather than leaving it to individual cities and counties, where different rules can cause confusion among renters and lead to additional administrative costs that are passed along to property owners.

Representatives from Paramount Property Management, the Idaho Asset Building Network and the Idaho Apartment Association also voiced support for the bill at the hearing. Doug Taylor, a lobbyist for the Idaho Apartment Association, said the organization manages close to 30,000 apartment units across Idaho and has been talking to Rabe about the bill for several years.

“It might seem kind of strange possibly that we would be advocating for something that would add a layer of regulation, so to speak, on private property owners and landowners,” Taylor said, but said the bill provides a certain measure of protection for property owners and managers. “As an association, we try to preach best practices to our members about how to have a healthy relationship with their tenants and how to follow the law … so this actually is helpful in that regard.”

Moscow senator is lone ‘no’ vote in Senate committee 

With the exception of Sen. Dan Foreman, R-Moscow, who said he did not see the need for the government to regulate the private marketplace in this way, all of the committee members voted in favor of advancing the bill and expressed hope that it would be quickly amended so it could proceed to the House.

Sen. Abby Lee, R-Fruitland, said she found it especially compelling that the protection already exists in Idaho law for other housing-related industries.

“We have more protections for your storage unit than you have for the place that you live,” Lee said, and expressed support for providing consistency in Idaho public policy around housing law.

Sen. Todd Lakey, chairman of the committee, said he was glad to see consensus from “both sides around the table” for the bill, but said he could change his mind when it comes to the floor for a vote.

If the bill is amended in the coming days of the Idaho Senate’s activity, it will receive a full vote from senators. If passed, it will be sent to the House of Representatives for consideration.