ACAR Submits Comments to South Euclid on Proposed Rental Policy

By Jamie McMillen posted 03-04-2021 11:10:11 AM

  

Thanks to NAR's Land Use Initiative program, the Akron Cleveland Association of REALTORS (ACAR) was able to secure a legal analysis of a proposed ordinance that would create a "pay to stay" rental regulation in the City of South Euclid. Based on the legal analysis, ACAR submitted comments to South Euclid's Mayor and City Council. When looking at ordinances, ACAR does so through the lens of the property owner, and that is reflected in the comments.   Similar legislation has also been introduced in Lakewood. Portions of the submitted letter are below. 

"On behalf of the Akron Cleveland Association of REALTORS® (ACAR), thank you for the opportunity to comment on proposed Ordinance 01-21, creating Chapter 1415, which would enact a policy commonly referred to as “Pay to Stay.”  

"As you know, REALTORS® support policies that encourage housing opportunities, while protecting the quality of life that has made northeast Ohio a desirable place to live.

"We subscribe to the policy of Fair Housing and are committed to the proposition that it is illegal to discriminate in the sale or rental of housing on the basis of race, color, religion, sex, familial status, ancestry, military status, disability, or national origin. In fact, the REALTOR® Code of Ethics goes a step further stating, “REALTORS® may not refuse to cooperate on the basis of a broker’s race, color, religion, sex, handicap, familial status, national origin, sexual orientation, or gender identity.” People are entitled to exercise and enjoy the benefits of ownership without undue encroachment or intrusion by government or individuals.

"Either by choice or other circumstance, some persons may not want to or be able to purchase a home. Rental property owners offer a valued service to provide housing to those individuals and families.

"Pay To Stay ordinances enable tenants to avoid eviction for nonpayment of rent, giving them the opportunity to pay past due rent with reasonable late fees and court costs. This is an interesting policy in that, on the surface, it appears to be a win-win situation for all involved. The housing provider receives owed rent and presumably avoids a vacancy, and the tenant remains in the home.

"However, ACAR believes there are a few areas for concern that the City should carefully consider before enacting such an ordinance.
  • First, the City may be opening itself to potential lawsuits from property owners claiming the ordinance is not a valid exercise of home rule authority. We encourage the City to review this, as well as assessing the costs associated with defending the ordinance.
  • Next, there is concern that this ordinance is unjustified interference with a private, contractual relationship. Specifically, if the ordinance does not exempt pre-existing rental agreements, the City may again be exposing itself to legal challenges by affected housing providers. ACAR recommends the City revise Ordinance 01-21 to apply only to those rental agreements entered into after its effective date.
  • The proposed cap on tenant late fees arguably is arbitrary and would reduce a significant incentive for tenants to pay their rent on time. This particular provision appears to impose a cap on tenant late fees in all residential rental agreements. The amounts set forth in the ordinance may not compensate the housing provider for actual damages incurred due to late rent payments. ACAR encourages the City provide evidence supporting the proposed limitations on late fees, demonstrating how it relates to the damages and costs that the housing provider would incur because of late payment.
  • Regarding section 1415.04, ACAR encourages the City to amend the ordinance to define “court costs” and require tenants exercising their right to pay-to-stay to pay reasonable attorney’s fee incurred by the housing provider. In Ohio, attorney’s fees are not generally included in court costs.
     
    "W
    e must remember that housing providers are a crucial part of our communities and offer a much-needed service – housing – to those that may not want to or be able to purchase a home. Finally, it is important to note, in general, this type of policy is enacted at a state level due to its impact on eviction law. As such, ACAR encourages our city leaders to refer this to the Ohio General Assembly for action, which would ensure fairness across the state and eliminate layers of confusion at the local level."

    Since submitting this letter, ACAR's Board of Directors has recommended that Ohio REALTORS take up the issue at the state level. ACAR will continue to monitor this ordinance for future action. To learn more about ACAR’s advocacy efforts or to become a community watchdog, please visit: https://www.akronclevelandrealtors.com/members/advocacy.

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