Summary of New Tenant’s Bill of Rights

On May 11th, Governor Pawlenty signed a new bill into law.  Although the official name is HF2668, most are calling it the Tenant Bill of Rights.  It is the first change to landlord/tenant regulations and law in over a decade.  As a landlord, you should be aware of these changes as some will come as a surprise.  Some are tougher rules, more are neutral and others are simply clarifying unwritten rules and rumors we all assumed were true.  Most of these changes go into effect on August 1, 2010:

• Tenants living in homes in foreclosure will have the right to stay in the property until the end of the term of their lease or 90 days, which ever is longer.  This brings state law inline with current federal laws.
• Property left behind by a tenant had to be stored by the landlord for 60 days.  This has been changed to 28 days, but now a landlord can be held liable for disposing of the property early in the amount of triple the damages or $1000, which ever is greater.
• Not returning the proper amount of security deposit at the end of the lease has a penalty that is not at $500, up from $200 previously.
• Division of Utility Costs is not very common from what I have seen, but now if the tenant can prove that the landlord has improperly divided the utility costs, the landlord is liable to the tenant for triple the damages or $500, whichever is greater.
• If tenants can be forced to pay Attorney’s Fees if they lose a court case and your lease contains that language; now, if the tenant wins, they can force the landlord to pay the attorney’s fees also.
• Tenant Screening Fees and Criteria have changed. While I thought most of this was already law, it appears they have clarified it further:
  • The landlord must use a clear and consistent screening process for all applicants.
  • Landlords much provide the criteria in written form upon which they will screen applications, prior to accepting and screening fee.   It is thought that if they read the criteria and see something that will disqualify them, they may not then chose to pay the fee and apply.  [In my experience, they will apply anyway!]
  • You must process applicants in sequential order as you cash their check or take their money.  You may NOT take all the applicants money, process all of them and then compare the applicants choosing the best one (and keeping all the money).
  • If the tenant is reject for any reason other than what was specified on the written screening criteria form, the landlord must return the application fee.
• Tenants that knowingly provides materially false information on the application or omits information can be held liable to the landlord for damages plus a civil penalty of up to $500, court filing fees, and attorney fees.  Not sure how you prove this or get the civil penalty charged against them.
• Tenants must be given a receipt if they pay with cash.
• Late fees will now be capped at 8% of the rental amount. This provision begins on January 1, 2011.  You can not charge daily late fees either.

Make sure to start integrating these new changes into your leases and tenant screenings.  You do not want to be the first test case for this new law!

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