In the dynamic world of property management, staying ahead of legislative changes is a cornerstone of success. Stonelink Property Management brings you a comprehensive update on the new laws impacting landlords in Rhode Island, including the new lead laws. These laws present a pivotal shift, introducing stricter penalties and robust enforcement mechanisms that directly impact landlords and real estate investors alike. As a landlord or an investor, understanding these changes is crucial to the success of your real estate investment. Non-compliance may result in substantial fines, penalties, and potential legal disputes and costs that could reach into the tens of thousands of dollars. This would impact your financial health and the safety of your tenants. Importantly, the lead laws align with our shared goal of ensuring the safety of our community, particularly the youngest members who are most vulnerable to lead poisoning as well as ensuring the properties we manage are compliant with all local, state, and federal laws.
List of new laws impacting rental properties and landlords in Rhode Island
https://www.youtube.com/watch?v=rD6rBPhzhp0#1. Escrow Account Bill - What does the bill say?
Having gone into effect January 1, 2024, this new law provides residents occupying. properties built before 1978 that do not have a lead certificate to place their rent in an Escrow account established within the Rhode Island courts. While a hearing must be held and a judge may ultimately award a landlord one hundred (100) percent of the rent placed in escrow, rent due and owing to you may be reduced by costs. incurred by the tenant to force landlord compliance. These costs may include but are not limited to filing the petition to establish the escrow account, repairs to the premises, attorney’s fees, and other related costs or penalties (i.e. landlord retaliation for tenant’s actions ensuring lead compliance).
If a tenant successfully petitions the court to deposit rent(s) in the registry of the court, they do not lose the right to pursue any other right or remedy available to the tenant at law or equity.
When filing an eviction, a lead certificate must be filed as an attachment to the 5-Day Demand Notice.
HB 6238/SB 729 allows tenants to pay their rent into an escrow account when there are unaddressed lead hazards in their homes. These bills ensure that tenants remain current on their rent obligations, and that landlords won’t be able to access the funds until they address the lead hazards.
What does this mean for me as a landlord? Will I still collect rent?
It underscores the need to ensure that your property and all units therein have a valid lead conformance certificate and that risk mitigation efforts are taken effectively to deal with any lead hazards.
Release of funds within the registry of the court. Money deposited within the registry of the court shall be released to the property owner, or designee, upon the court’s determination of compliance by the property owner with the applicable risk reduction standard and state lead poisoning prevention laws.
By not acting immediately to successfully obtain a lead conformance certificate, you are putting yourself in violation of the law, putting residents at risk, and undermining your ability to collect rent and ensure tenant compliance with normal landlord/tenant procedures.
Immediate Alert: Rhode Island's New Escrow Law for Lead Compliance Effective Now as Per Attorney General Guidance
According to the latest Guidance on the New Lead Laws released January 11, 2024, by Attorney General Peter F. Neronha – He is interpreting the "Escrow Law" as being in effect immediately.
Per Michael Crane, our landlord/tenant attorney - this means that the Attorney General believes starting January 1, 2024, if you do not have a Lead Conformance Certificate for individual unit(s), a tenant can petition the court to establish an escrow account where they can pay rent until you have obtained the certificate.
The rent will be released to you minus any costs/fees once you have obtained the certificate.
Many people were hoping the interpretation was that the Escrow Law went into effect on the same date as the Rental Registry penalties, October 1, 2024.
To establish an escrow account, the tenant would have to petition the court and the court would have to grant the petition to place rent in escrow. In addition, this is guidance from the AG and the actual statute is still open to interpretation by a judge.
In addition, the Attorney General is holding a Lead Summit at Rhode Island College on February 2, 2024, from 9-3.
#2. All Rental Properties Must Comply with The New Lead Laws In Rhode Island.
This new law removes Lead Compliance Exemption for Owner Occupied 2-3 Family Homes. ALL rental properties must now comply with lead laws. Previously an owner-occupied two or three-family home was exempt from the lead laws. This exclusion HAS been removed. Do not assume your property is an exemption.
#3. Statewide Mandatory Rental Registry
The legislatures have created a mandatory requirement that all Rhode Island Landlords register each rental UNIT individually in a newly created database.
Important Information:
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- June 20, 2024, is the deadline for the database to be created.
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- Database shall be created only upon funding being provided.
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- Rhode Island shall fine Landlords for failure to register each rented unit.
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- Registration requires providing a lead conformance certificate for each
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- registered unit.
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- Fines and penalties increase for failure to register AND / OR obtain a lead conformance certificate.
- Prohibits eviction when not in compliance with the new lead laws in Rhode Island.
Owners / Landlords must register the following information within the registry:
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- All responsible for leasing to a tenant under RI Landlord Tenant Act
- Active business address, PO Box or Home Address (whichever is applicable)
- Active email address
- Active phone number for communication
- Any agent for the property (service agent, PM…)
- Prohibits eviction when not in compliance with the new lead laws in Rhode Island
All contact information (phone#, email, valid address )
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- Information to identify each dwelling unit.
The Department of Health is tasked with creating the online database which, as stated, is contingent upon available funding.
What Is the Deadline for the New Mandatory Rental Registry?
The deadline to submit all the information is: September 1, 2024
What Is the Deadline For Lead Certificates?
To be compliant with the new lead laws in Rhode Islands, lead paint certificates must be submitted by October 1, 2024
What are the penalties for non-compliance with the rental registry and new lead laws in RI?
If an owner of an investment property fails to provide the information to register by the September 1, 2024, deadline, there is a $50.00 fine per month.
If an owner fails to obtain a lead certificate by the October 1, 2024, deadline, there is a minimum $125.00 fine per month.
The Attorney General may file for injunctive relief for anyone who fails to register properties, the penalty for which is $50.00 per unit failure. If the AG determines that this is a repeated failure by a landlord/owner to obtain a lead certificate, they can issue a $1000.00 fine per violation.
What Should Landlord Do to Be Compliant with the Rental Registry and New Lead Laws in Rhode Island?
1. Prepare for Your Lead Inspection
The priority is to get your lead certificates for all your properties, including the individual dwelling units. You can follow this lead pre- inspection checklist.
Lead pre-inspection checklist: Lead Safe RI
2. Schedule Your Lead Inspection
Partner with a certified Lead Safe Inspector registered with the State of Rhode Island. During the inspection, the certified lead inspector will meticulously scrutinize both interior and exterior spaces, paying special attention to signs of peeling paint.
Once this is completed, you can file your Lead Conformance certificate with the state, register with the Statewide Rental Registry, and comply with the law. You will also then be able to file for eviction for nonpayment of rent should the need arise.
Additional Resources:
How To Obtain A Lead Certificate of Compliance: Lead Safe Renovation, Repair, and Painting
Search Rhode Island Lead Properties, Violation and License Records
#4. Banning of Application Fees in Rhode Island
The landlord or property manager cannot collect an application fee any longer for the processing of an application. The Landlord/PM is still allowed to require a background/credit check and charge only the out-of-pocket costs back to the applicant.
If the applicant provides a credit check that is within ninety (90) days of the date of application, the landlord cannot charge to run a new credit check.
If the applicant does not provide a credit check the landlord/PM can charge the actual cost, they incurred and must provide a copy of the report to the applicant.
#5. Sealing of Evictions in Rhode Island
An eviction for Non-payment, Non-Compliance, Holdover/Termination “may be sealed upon motion by any party…at least 30 days after the expiration of the appeal period.” The court considers whether the eviction was dismissed by motion, resolved by a stipulation and the terms have been satisfied and monies paid, or if there was no prosecution of the case.
The new law applies to the following Evictions:
Important Note: Termination of Tenancy does not apply in this case:
Actions arising under the above may be sealed by the court upon motion by any party or parties filed at least thirty (30) days after the expiration of the appeal period following the conclusion of the underlying civil action.
Court may seal only if:
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- Underlying action dismissed because of motion to dismiss
- Action resolved by stipulation and the defendant has complied with all terms.
- Action dismissed for lack of prosecution after five (5) year period.
- All parties must be notified.
- Party may only have one (1) matter sealed within a five (5) year period.
- No clarification if the ability to seal is retroactive.
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What impact will the sealings of evictions have?
At the time of this writing, no precedent has been set because no petitions have been filed by any party to seal their case. Also, a person must file this motion to seal the records; and we don’t know how diligent or relevant this will be for individuals.
While Eviction history is a key component in reviewing any application for tenancy, there are several factors we consider. Stonelink has already reviewed this law, compared it to our process, and is adjusting to ensure we continue to have a best-in class screening process for our clients.
#6. New Law Increasing Amount a Tenant Can Do for Self-Help Repairs
“The Self-help for limited repairs” law increases the amount of money a tenant can spend for self-help repairs from $125.00 to $500.00 per year.
What does this mean for landlords?
When looking at RIGL-34-18-30, one of the key stipulations to allow for self-help repairs states:
“The landlord fails to comply within twenty (20) days, or fails to demonstrate ongoing, good faith efforts to comply, after being notified by the tenant in writing; or, in the case of emergency, the landlord either cannot be reached by the tenant, or the landlord fails to comply as promptly as conditions require;”
RIGL-34-18-30
#7. Consumer Guide for Landlords/Tenants to Be Written
A guide for consumers is to be written for Landlords and Tenants which will be updated every two years. It will be created by the Secretary of Housing and provided. in both English and Spanish.
The Rhode Island Center for Justice, in collaboration with HousingWorks RI, Rhode Island Legal Services, and other partners, has provided a preliminary draft of the Landlord Tenant Handbook. The Department of Housing will be accepting comments on this document, to create a comprehensive guide for consumers relating to the rights and duties of landlords and tenants, by R.I. General Laws § 42-64.34-2.
Written comments can be sent to Nicholas Freeman at Nicholas.Freeman@housing.ri.gov until 2/29/24. Additionally, a public meeting will be held at the end of January 2024 to receive feedback and comments on the draft document.
What Impact Will This New Consumer Guide for Landlords/Tenants Have?
As the guide has not yet been created, we are actively monitoring the new law for developments and will immediately update our clients on any status changes. Once the guide is created, it will offer direction and guidance for both tenants and landlords.
Reference: Residential Landlord/Tenant Act
Conclusion:
These seven new laws mark significant changes in the Rhode Island rental property landscape, particularly in terms of lead compliance, tenant rights, and landlord responsibilities. Navigating these legal waters can be challenging, but staying informed and compliant is crucial for the success and sustainability of your real estate investments.
At Stonelink Property Management, we are dedicated to helping landlords and investors like you adapt to these changes seamlessly. Our team of experts is well-versed in the latest regulations and is committed to ensuring that your properties not only meet but exceed these new standards. Don't navigate these changes alone.
Contact Stonelink Property Management today to ensure your properties are compliant, your investments are secure, and your peace of mind is intact.
Let us be your partner in navigating the dynamic world of property management in Rhode Island.
