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Hey there, Nate with Keyrenter Property Management here, giving you 10 Utah legislative proposals for 2019, impacting real estate investors or really anyone involved in real estate, which is a lot of people. As a part of the Government Affairs Committee for the Utah Apartment Association, we discuss legislative things that are coming up.
As you know, we’ve got a session coming up here in just a couple weeks, and there’s a number of bills and proposals that are going to be put on the floor or potentially heard in this legislative session that I feel like it’s important that you’re aware of. So if you’re one of our investor clients, and we manage some of your properties, and you donated to the Utah Apartment Association PAC through Keyrenter, those funds are going towards the efforts of combating negative landlord and real estate legislation, and also to push positive legislation.
So, thank you for your donations if you are donating to the PAC this year. I’m going to go right into these 10 items here for you. I’m not going to explain each one in depth simply because I want to keep this brief, and not all of these are going to be heard this year. Not all of them are going to be passed. It’s still up in the air as to what’s going to happen, and I’ll give you updates as I have more information as it’s going along.
But the first one is a proposal to ban or cap application fees. So if you’re a landlord and you charge a tenant an application fee, there’s a proposal to have those banned or capped this year. A proposal to require a landlord to refund application fees if a tenant is denied. So if you have three applicants, you deny two of them before you approve the third one. You may have to refund those tenants their application fees, which could be challenging if you have hard costs associated with their applications, screening and all those things.
Proposal to add sales tax on rent collected. This can be a big deal for a lot of people. Rent that’s collected may be taxed if this is approved. More on this to follow. This is a big one this year. This is even bigger. This is a proposal to add sales tax on services including fees or commissions from realtors, attorneys, accountants, property management, et cetera. So service-based businesses may be subject to collect sales tax on their services.
The businesses are involved in selling products, have been taxed for years and years on their products, their goods, and the state’s looking at this as a way of potentially decreasing some of those taxes and having a lower tax across the board for services and goods. So, this is something to be aware of and to follow as well. Number five, proposed sales transfer fees to fund affordable housing. If you sell a property, there may be, if this is passed, a fee to go towards affordable housing as a transfer fee from that sale.
Calls for inclusionary zoning. So what this would be is if there’s a development in an area where, say, it’s higher level properties, three, four, $500,000 development homes in that development, there may be a requirement to include three or four or five depending on what’s passed and what’s discussed. They’re lower-income housing in that development. We’ve seen this in other states, and it can be challenging, so watch for this as well.
Air quality measures, which would require upgrades to rental properties. If this is passed and you have some old HVAC or old appliances or even your property isn’t up to code in certain areas … They can can cause issues in potentially polluting the air … you may be required to upgrade those, which can be very costly to many investors and landlords.
Number eight, prohibitions on landlords calling doctors to verify assistance animal requests. So if you have a tenant applying for a property or a current tenant that says, “We have an assistance animal,” and you want to verify that through the medical practitioner or whoever signs off that they do have, in fact, a legitimate reason for an animal or an assistance animal request. Then you may not be able to call a doctor anymore to verify. That’s similar to having a tenant come to you and say, “Hey, I have great credit. Here’s my credit report that I pulled myself,” and you may not be able to do your own report. It’s a similar thing but just with assistance animals.
Number nine, increased penalties on anyone who falsely claims they qualify for an assistance or ESA animal. This is a good thing. So if you have a tenant coming to you saying, “We have an assistance animal.” You can remind them that, if this is passed of course, that it’s potentially a Class B misdemeanor for them to falsely claim they have an assistance animal or they qualify for one.
Currently, the law is in place for a service animal. So if someone falsely claims they qualify for a service animal, it currently is a Class B misdemeanor, which, let’s be honest. It’s not a huge deal, but it will deter quite a few people from trying to play the system and weed out those ones that are fraudulent and allow for those that really have the need to rise to the surface and be better accepted.
All right, number 10, eviction court rules to changes to allow landlords to choose where to file evictions. Currently, there is a problem in the court system where the courts can dictate where those evictions are filed, and it can be challenging because of the timelines in the court processes vary from court to court, and we want to be able to choose where we want to have that eviction filed, especially if the property resides in a certain city or jurisdiction.
So those are the 10 proposals that could impact you as an investor, real estate owner, so I hope this is helpful. We’ll continue to give updates on these as the session starts and as it’s progressing. Again, some of these may not even be brought to the surface, and some of them will die pretty quick, others may be approved or passed. So, we’ll see on that, and I appreciate you, and thanks for watching.