Investor · idaho falls, ID · Member since 2008 · 83 posts · 78 votes
Dear fellow Idaho landlord,
I was contacted tonight by Senator Doug Ricks to see my thoughts about a bill idea that Senator Rabi is trying to put together that would hamper landlords. The bill idea includes:
1. Making Idaho law state that landlord's late fees to tenants are capped at 10% of one months rent.
2. Landlords will have a cap ( maybe $20?) of what they can charge for a rental application fee.
I feel this is the first step to make Idaho landlord law similar to California law and is a potential gateway to rent controls at the like. The sponsor is a 1st term Senator from Boise with a very impressive resume and I am sure is a delightful person. However her bio is a bit disturbing, at least to me, which reads in part: Senator Ali Rabe (1st Term Boise) executive director of Jesse Tree, a Treasure Valley nonprofit dedicated to preventing eviction and homelessness
Senator Ricks asked me to solicit other landlords input, and have them email him directly their thoughts on the state mandating caps on late fees, and caps on application fees.
If you feel inclined, would you email your thoughts to Senator Ricks at the email below?
As a caveat- I am not a fan of legislators dictating how business is done, and for the most part, Idaho has been great about this.
That said- the property management profession is completely unregulated in Idaho and there are a lot of PMs out there who have no business managing tenants or real estate. In Idaho you don't need any certification or license to be a property manager, literally anyone can be a property manager today and know nothing of tenant landlord law or have an ethical bone in their body. It' been getting better, but Idaho was known for a while for people throwing together "discount" PM companies, spending a year rounding up a few hundred management contracts, collecting deposits and then disappearing in to the ether with their tenants and clients money. All you need to do is spend five minutes on your town's Facebook marketplace and you will see multiple fair housing violations on available rentals posted there for all to see.
This is an industry where as a consumer- the tenant- doesn't truly have the ability to shop for service or an ethical PM. If a certain PM manages a property that you like or want to live in, that's it. You are forced to deal with that PM- bad policies, poor management, whatever. If you have a vacancy and screen multiple tenants so that you have a pool of applicatants to choose from, you are doing it wrong.
Heck- my property management company doesn't advertise and we turn potential contracts with property owners away all of the time, but our phone rings constantly with property owners who have terrible PMs and are looking for anyone who can do better and operate with some modicum of ethics- and a few who are annoyed at their PM because the DO have ethics and want someone to be their slum lord by proxy.
All of this to say- would't it be nice if we could collectively just do the right thing so that legislation like this wasn't even on the radar of our lawmakers? Seriously- if all of us read the Idaho Landlor Tenant laws and knew them well, and followed the HUD tenant selection process, there would be no need for this discussion at all. I am a firm believer in NARPM, which offers education, data, training and support for PMs so that our industry is held in high esteem. If you are a PM and aren't affiliated with NARPM, I highly suggest checking them out.
The fact is, there are LOTS of bad landlords out there who take advantage of tenants and the lack of housing- it's wrong and predatory. I think in many cases, the landlords who are making us look bad aren't doing it out of malace, but likely out of ignorance, not knowing that what they are doing is, at the very least, not a best practice. I am not saying I want legislation, quite the opposite, but we can do better. Let's regulate ourselves so the state doesn't have to.
You might suggest to those trying to help protect the less fortunate that they could start with usury laws. If tenants weren't paying 78% interest for payday loans, maybe they could pay their rent on time.
Late fees aren't interest. They are a service charge for cost of collection--which has costs independent of rent. Subsequently linking it to rent amount as a percentage makes no sense.
Application fees are tough. I understand that an application and credit check for every adult can add up, particularly if rejected. But to cap it at a flat rate doesn't make sense either. It shouldn't be a profit center for landlords (although I've been tempted with a couple of my units in Ogden). Perhaps like RESPA and security deposits, there could be some sort of rule that these services have to be billed at actual cost?
You might suggest to those trying to help protect the less fortunate that they could start with usury laws. If tenants weren't paying 78% interest for payday loans, maybe they could pay their rent on time.
You might want to start a pay-day loan office and offer 10% loans. Sure you'll get a landslide of apps.
So sad, sounds like ID is catching the OR and CA flu.
You guys should've clamped down on move-ins from Cali - It's just the start.
Portland started with simple laws to "help" the poor and then each election cycle candidates needed to protect the tenants ever more. Vote-buying pure and simple.
Thanks for the info Brian! Certainly good to know to keep an eye on our Idaho legislators who start pushing this type of agenda! I'm thinking this type of info would be great to share with many of the REIA's and similar Facebook groups around the state. I think they have a pretty broad user base of landlords and property owners that would love to know about this, and many are invested enough that they'd be inclined to take some action and let their opinions be known.
We don't charge extra for application fees because we think it is bad practice. We don't want to sell our reputation for a few extra dollars on the backs of hopeful consumers who we already know won't be a good fit. However, those decisions are the business of the individuals entering into voluntary agreements.
There surely is a strong trend to legislate away the ability to make decisions for oneself. Not too thrilled that it is seeping into Idaho.
As a caveat- I am not a fan of legislators dictating how business is done, and for the most part, Idaho has been great about this.
That said- the property management profession is completely unregulated in Idaho and there are a lot of PMs out there who have no business managing tenants or real estate. In Idaho you don't need any certification or license to be a property manager, literally anyone can be a property manager today and know nothing of tenant landlord law or have an ethical bone in their body. It' been getting better, but Idaho was known for a while for people throwing together "discount" PM companies, spending a year rounding up a few hundred management contracts, collecting deposits and then disappearing in to the ether with their tenants and clients money. All you need to do is spend five minutes on your town's Facebook marketplace and you will see multiple fair housing violations on available rentals posted there for all to see.
This is an industry where as a consumer- the tenant- doesn't truly have the ability to shop for service or an ethical PM. If a certain PM manages a property that you like or want to live in, that's it. You are forced to deal with that PM- bad policies, poor management, whatever. If you have a vacancy and screen multiple tenants so that you have a pool of applicatants to choose from, you are doing it wrong.
Heck- my property management company doesn't advertise and we turn potential contracts with property owners away all of the time, but our phone rings constantly with property owners who have terrible PMs and are looking for anyone who can do better and operate with some modicum of ethics- and a few who are annoyed at their PM because the DO have ethics and want someone to be their slum lord by proxy.
All of this to say- would't it be nice if we could collectively just do the right thing so that legislation like this wasn't even on the radar of our lawmakers? Seriously- if all of us read the Idaho Landlor Tenant laws and knew them well, and followed the HUD tenant selection process, there would be no need for this discussion at all. I am a firm believer in NARPM, which offers education, data, training and support for PMs so that our industry is held in high esteem. If you are a PM and aren't affiliated with NARPM, I highly suggest checking them out.
The fact is, there are LOTS of bad landlords out there who take advantage of tenants and the lack of housing- it's wrong and predatory. I think in many cases, the landlords who are making us look bad aren't doing it out of malace, but likely out of ignorance, not knowing that what they are doing is, at the very least, not a best practice. I am not saying I want legislation, quite the opposite, but we can do better. Let's regulate ourselves so the state doesn't have to.
@Corby Goade Thanks for that link to the HUD guidelines. I wasn't aware that that was even a thing.
From what I hear, it's only a matter of time before IREC starts requiring PM's to have licenses.
The real problem is that it's really appealing politically to beat up landlords. Communities hate deadbeat tenants and think that all landlords have no regard for anything but the mighty dollar at the expense of habitability and property upkeep. The voting public doesn't understand that that's bad management, not a business model. ....so they try to regulate.
Our only defense is to be part of the discussion and educate these legislators of the role of landlords: to provide housing for their constituents! Thank you @Brian Stutzman and all you other engaged Idaho landlords for helping these politicians understand that we are providing a service at least as valuable to their communities as any other small businesses.
@William Hochstedler, Idaho used to have a requirement to license property management companies, but that was a lot of years ago. A few people keep trying to get it up and going again.
I am not a fan of overreaching government intervention, but anytime someone has a business that is responsible for others people's deposit, there should at least be some oversight.
One major problem here in the Boise area is that landlords and property managers do not compensate for tenants so each place requires a new application fee and probably their own credit check. A person with borderline decent credit can get it trashed due to a number of credit inquiries from different sources.
We have such a shortage of available units right now, that a property manager can hide behind their email account and wait for someone with no kids, no pets, no . . . and an 800 plus credit score.
I don't see a problem with an unregulated marketplace for property managers. If they are not good, they will suffer the consequences of the bad reputation they will develop - something easily enabled by the many online review options for displeased clients/tenants. After all, what really does licensing entail? Passing a test and paying administrative fees? In my view it is an annoyance that provides little value to the consumer, and opens the door for special interests to gain at the expense of competitors/consumers (ie. my anecdtodal evidence about Illinois below which should surely be fact checked =p)
It is already illegal to steal people's deposits. If that is the concern and the threat of prison is not deterring that behavior, I don't think the threat of losing a state license will be effective.
My partner is from Illinois. If I am not mistaken, if you want to manage properties that you do not own there, you need to be licensed and work under some sort of master real estate agent. It develops into paying fees to the state for the license, and then ridiculous kick-backs to this master real estate agent. Prices are passed on to the consumer not only directly, but also indirectly from the limited competition caused by this new barrier to entry.
Does anyone have the Bill# that was proposed or an updated status of whether it was ever voted on? Also can anyone please send a link or where to find current Landlord/Tenant Laws for Idaho? New to the area and any information is greatly appreciated.