Democrat Maxwell Frost, US Congressman from Orlando, has called landlords “money hungry,” and has proposed two pieces of legislation to screw them over.
The first of these is the End Junk Fees for Renters Act. This proposed law would
- banning application and screening fees;
- require that late fees apply as credit to next month’s rent
- Prohibits credit score screening in the rental application process
- Requires that landlords disclose in the rental contract:
- Past and present litigation with tenants
- Ongoing pest and maintenance issues
- Rent increase percentages year after year over the last ten years
- The total amount that will be due each month, prohibiting surprise fees like utilities, bounced check fees, and late fees
This is what the commies had to say:
Credit scores were never intended to gauge whether someone will be a good tenant. They’re designed to predict whether someone will be late paying a loan, not rent, which is a much higher-priority bill than a credit card. Given the current rental housing crisis, this practice makes a bad situation worse.
Renting a home IS a loan. I am lending you a quarter of a million dollars in real property in exchange for your paying rent on time. The rental business is risky enough, but not allowing me to minimize the risk of a tenant stiffing me, doing $20k in damages to my property, or both means that I have to raise rents for everyone in order to make up for that risk.
The good Congressman also has this to say:
If we want a future where everyone has access to stable, secure housing, then we must end junk fees. We must end discriminatory credit screenings. We must make housing a right, not a luxury.
Nothing that requires the labor or property of someone else is a right. My tenants just moved out. I grow weary of dealing with them. This last tenant was late four times and had a payment declined once. Under this law, there would be nothing I could do about that, and landlords would have no idea that they were coming.
Residential renting is a moderate to high risk. Two tenants ago, I had to repair nearly $10k in damages that the tenants had done. You mitigate some of that risk through screening your tenants, and penalties for late and dishonored payments. If those tools are taken away, you will see higher deposits and higher rents to offset that. Since you are asking me as a landlord to lend you a quarter million dollars when a mortgage bank won’t do so because it’s too risky, then I need to generate returns that are far higher than I can get in the stock market.
Over the past 5 years, I have earned an average return of 7 percent or so in the market. My rental properties need to beat that by a fair margin, or the risk simply isn’t worth it.
My prediction is that this bill won’t pass. If it does happen to become law, rents will have to rise to compensate for risk.
I would raise rents by at least 10 percent, and would have to at least ask for 2 months rent as security deposit. Or perhaps we would take a page from Disney and charge a 13 months rent up front, but let you finance it at 0% interest, with approved credit.
