HomeMy WebLinkAboutBill 12-16 Landlord Registrationj vgpt,7N6EM
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The South Bend Common Council
227 West Jefferson Boulevard, Room 441
Downtown South Bend, Indiana 46601
574.235.9321 TDD 574.235.5567
March 9, 2016
The South Bend Common Council
4"' Floor County -City Building
South Bend, Indiana 46601
Re: Proposed Landlord Registration Program
Dear Council Members:
Following a series of discussions with representatives of the City Administration representing the Code
Enforcement Department, the Law Department, the Police Department, and the Human Rights Office, as well as
with input from individuals involved in the real estate used for renting, and neighborhood groups and
organizations, we are pleased to introduce for your consideration and approval a proposed ordinance which
would create a Landlord Registration Program in the City of South Bend.
We have reviewed landlord registration best practices implemented throughout the country. We have also
studied landlord registration programs which have been in effect in several Indiana communities. Two
ordinances in particular were carefully studied - Indianapolis and Evansville — in light of the fact that they were
passed after the new Indiana state laws were enacted in 2014. We also reviewed Elkhart's ordinance which was
updated in 2007; Goshen's ordinance which was last updated in 2006; along with rental registration regulations
in effect Bloomington, Gary, Hammond, Elkhart, and Valparaiso.
A common theme in all of these regulations focused on landlords as "responsible stewards of their property,
working with the municipality to ensure safe, clean neighborhoods ".
It is acknowledged that the Indiana General Assembly has restricted the ability of a municipality to regulate in
this area. The proposed regulations are believed to be consistent with the governing state law regulations which
are believed to be in the best interests of the City of South Bend. We look forward to receiving your input and
seek your support. Thank you.
Most sincerely,
Tim Scott, 1 s' District Council Member
South Bend Common Council
Karen L. White, Council Member at Large
South Bend Common Council
Attachment
Filed in Clerk's Office
MAR 0 0 7016
KAREEMAH FOWLER
CITY CLERK, SOUTH BEND, IN
BILL No.
ORDINANCE NO.
AN ORDINANCE OF THE COMMON COUNCIL• OF THE CITY OF SOUTH BEND, INDIANA,
AMENDING CHAPTER 6 OF THE SOUTH BEND MUNICIPAL CODE BY THE INCLUSION OF NEW
ARTICLE 10 ENTITLED LANDLORD REGISTRATION PROGRAM
STATEMENT OF PURPOSE AND INTENT
The South Bend Common Council, in collaboration with the City Administration, believe that the following
landlord registration program is in the best interests of the City of South Bend. The regulations have been
carefully drafted to comply with the new governing Indiana state law. In 2014, the Indiana Association of
Realtors (IAR) worked with the Indiana General Assembly to pass HEA 1403 which "caps the amount a local
unit can charge for landlord registry fees at $5.00..." Some of the benefits of having such a local program
which would incorporate best practices focus on:
• Acknowledging data from the U.S. Census Bureau last revised on December 2, 2015 which reported that
43.3 % of housing units in the City of South Bend are rental units
• Developing positive and improved communications and exchange of information among landlords,
tenants and the community
• Maintaining a registration program which assembles accurate information and which is informative for
landlords, tenants and the general public
• Enhancing housing quality and neighborhood stability through an improved informational system on
rental properties
In the preparation of the proposed regulations, several ordinances and best practices were carefully reviewed
with a particular emphasis on two (2) city ordinances which were passed after the new state law took effect.
These included the Indianapolis landlord registration regulations, which took effect on January 1, 2015, as well
as the rental registration program in Evansville which was approved on September 8, 2014, when their Council
passed Ordinance No. G- 2014 -29.
Annual registration of property owners with the Department of Code Enforcement along with a fee of
$ 5.00 per property owner will be required. Failure to register would result in a $500 fine.
The City of South Bend's government website maintains a "Ten Tips Every Landlord Should Know" program
in the interest of furthering collaboration between landlords and tenants. The City believes that the proposed
registration program will enhance such opportunities throughout South Bend. The City's website will be
updated to include information on the Landlord Registration Program as part of its proactive outreach to the
community.
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Section I. Chapter 6 of the South Bend Municipal Code is amended by the inclusion of new Article 10
which shall read in its entirety as follows:
Article 10. Landlord Registration Program.
Sec. 6 -40 Establishment of Landlord Registration Program.
Ordinance Addressing Landlord Registration Program
Page 2
(a) Effective June 30, 2014, political subdivisions in the State of Indiana were authorized to establish and
enforce registration programs for rental units within their jurisdiction, subject to certain conditions and
limitations.
(b) The South Bend Landlord Registration Program is established pursuant to the authority granted by the
state.l
Sec. 6 -41 Definitions.
(a) For purposes of this Article, the following definitions shall apply:
(1) City means the City of South Bend, Indiana.
(2) Commercial domicile has the meaning set forth in Indiana Code § 6 -3 -1 -22.2
(3) Department means the Department of Code Enforcement established and addressed in Section 2 -13
of the South Bend Municipal Code.
(4) Landlord has the meaning set forth in Indiana Code § 32- 31 -3 -3.
(5) Owner has the meaning set forth in Indiana Code § 32- 31 -3 -4.
(6) Person has the meaning set forth in Indiana Code § 32- 31 -3 -5.
(7) Rental unit has the meaning set forth in Indiana Code § 32- 31 -3 -8, except that an owner - occupied
structure that:
i. Has no portion of the area thereof promised for the use of a residential unit; or
ii. Has a single sleeping unit being rented to a tenant shall not be considered a "Rental
Unit ".
(8) Rental unit community has the meaning set forth in Indiana Code § 36- 1- 20 -1.5.
(9) Tenant has the meaning set forth in Indiana Code § 32- 31 -3 -10.
(b) All definitions referred to in this section which incorporate the state law definitions shall reflect the
most recent version of the state law definitions.
' Indiana House Enrolled Act 1403 (2014) added Indiana Code §36- 1- 20 -1.5 defining "rental unit community "; amended Section 1 of
Indiana Code §36- 1 -20 -2, amended Indiana Code §36- 1 -20 -3; added new sections Indiana Code §36- 1- 20 -1.5, Indiana Code §36 -1-
20-4.1, Indiana Code §36- 1 -20 -5, and Indiana Code §36- 1 -20 -6.
2 This definition is from Indiana's tax regulations which requires the identification of the "principal place from which the trade or
business of the taxpayer is directed or managed ".
Ordinance Addressing Landlord Registration Program
Page 3
Sec. 6 -42 Registration Required and Elements of the Landlord Registration Program.3
(a) Beginning September 15, 2016, all owners or landlords of rental units within the city must begin to
register with the Department of Code Enforcement via a method or form prescribed by the department.
However, to assist in the first -time implementation of the regulations under this Article, for calendar
year 2016 only, registration shall be extended to December 30, 2016. The registration form shall include
the following:
(1) The name, telephone number, and the commercial domicile address of the owner's physical business
location. Additional listing of a secondary address which is not required to be physical, may also be
given when used for availability to the public;
(2) The name and address of:
a. The person(s) residing in Indiana authorized to manage the rental unit; and
b. The person listed as the "responsible party" with the Internal Revenue Service; 4 and
c. The person who is authorized to act as agent for the owner for purposes of service of process and
receiving and receipting for notices and demands on record with the Indiana Secretary of State's
Business Services Division; and
d. The property manager, if any, licensed by the Indiana Real Estate Commissions
(3) Real property tax identification key number of each rental unit and /or rental unit community which
the owner or landlord is submitting for registration purposes under this Article;
(4) An affirmation of whether or not the rental units, the real property of which the rental units are a
part, and any other rental unit property owned or registered by the owner in the city, are subject to
any un- remediated citation or violation of the state and local codes and ordinances;
(5) An affirmation of whether or not there is more than one (1) delinquent payment of real property
taxes, assessments, or penalties (other than those that are the subject of an ongoing appeal or
bankruptcy proceeding) with respect to the property or any other rental unit property owned or
registered by the owner in the city;
3 All landlords and owners are also required to comply to the applicable provisions of the City of South Bend's Human Rights
Ordinance which are codified in South Bend Municipal Code § 2 -126 through § 2- 132.1., as well as applicable provisions of federal
and state laws which include but are not limited to the Fair Housing Act which is Title VIII of the Civil Rights Act of 1968 codified at
42 United States Code § 3601 et seq.; the Architectural Barriers Act of 1968 codified.at 42 United States Code § 4151, et seq.; Title II
of the Americans With Disabilities Act of 1990 (ADA), codified at 42 United States Code § 12131, et seq.; and the Indiana Civil
Rights Act codified at Indiana Code § 22 -9 -5.
4 The Internal Revenue Service requires the disclosure of the "name and taxpayer identification number of the true responsible party
for the entity requesting an Employer Identification Number (EIN) ".
s Indiana Code § 25 -34.1 sets for the Real Estate Brokers and Salespersons state law. Property management is covered under the
broker and salesman's licenses by including renting, leasing, and managing covered activities. Limited exemptions are provided for
such as "owners who only regulate activities are in relation to a maximum of 12 apartment units located on a single or contiguous
parcels of land may rent them without a license ".
Ordinance Addressing Landlord Registration Program
Page 4
(6) A statement of the number of rental units on each separate parcel of real property covered by the
registration.
In the event of affirmation that the owner or landlord acknowledges that he or she does have real property with
un- remediated citations as addressed in sub - paragraph (4) and /or more than one (1) delinquent payment of items
addressed in sub - paragraph (5), the applicant shall be required to work with the issuing Department or Agency
to amicably resolve such matters.
(b) Beginning September 15, 2016, an owner or landlord of a rental unit must pay to the Department of
Code Enforcement an initial registration fee of five dollars ($5.00), with all such fees deposited into the
Landlord Registration Fund. However, to assist in the first -time implementation of the regulations under
this Article, for calendar year 2016 only, registration shall be extended to December 30, 2016. Only one
(1) registration fee is required for all rental units in a rental unit community. If a rental unit is not part of
a rental unit community, a separate registration fee must be paid for each separate parcel of real property
on which a rental unit is located, unless they are all registered at the same time.
(c) In the event of a change of ownership, the new owner or landlord must, not later than thirty (30) days
after the change of ownership, pay the registration fee of five dollars ($5.00) and provide updated
registration information to the Department of Code Enforcement. The effective date of new ownership
will be the date the property was transferred or the date the deed was recorded, whichever occurs earlier.
(d) Registrations must be renewed annually with the Department of Code Enforcement. The renewal fee
shall be five dollars ($5.00), with all such fees deposited into the Landlord Registration Fund.
(e) The owner or landlord must notify in writing the Department of Code Enforcement within thirty (30)
days of any changes to the registration information.
Sec. 6 -43 Landlord Registration Fund.
A special fund designated as the "Landlord Registration Fund ", Fund No. 221, is created. It shall be
a continuing, non - reverting fund, with all balances remaining therein at the end of the year, with such balances
not reverting to the City's General Fund. All fees assessed and collected under this Article shall be deposited
into this fund, with such monies being dedicated solely to reimbursing the costs actually incurred which are
related to the South Bend Landlord Registration Program. This fund will be subject to annual appropriation by
the South Bend Common Council.
Sec. 6 -44 Enforcement and Penalties
(a) This Article shall be enforced by the Department of Code Enforcement or an authorized designee.
(b) Failure to register as required by Section 6 -42 of the South Bend Municipal Code is subject to a civil
penalty of five hundred dollars ($500.00) for each rental unit or rental unit community in violation.
(c) Submitting an incomplete registration form is subject to a civil penalty of one hundred dollars
($100.00).
Ordinance Addressing Landlord Registration Program
Page 5
(d) Providing any false, material misrepresentation or false statement on each filing of a registration
form required in Section 6 -42 is subject to a civil penalty of two thousand five hundred dollars
($2,500.00).
(e) Failure to update the registration within thirty (30) days of a change in ownership and /or registration
information, as required by Section 6 -42 of the South Bend Municipal Code, is subject to a civil
penalty of five hundred dollars ($500.00).
(f) Failure to renew the registration as required by Section 6 -42 of the South Bend Municipal Code is
subject to a civil penalty of five hundred dollars ($500.00).
(g) Civil penalties paid in response to violating this Article shall be deposited into Fund No. 221. Such
civil penalty monies shall be kept segregated from fees deposited into this fund for accounting
purposes, and shall be subject to appropriation by the South Bend Common Council for the
replacement of curbs and /or sidewalks which may be located contiguous to a property registered
under this program. Location determination shall be based on a public safety priority need basis, as
determined by the City's Department of Public Works Director.
(h) The penalties allowed under subsections (a) through (e) of this section may not be imposed until
after:
(1) A notice of violation has been issued to the owner or the owner's designee by personal service or
by first class United States Mail, postage prepaid;
(2) Passage of thirty (30) days from receipt of the notice, which must be stated in the notice, for the
violation to be cured; and
(3) Failure of the violation to be cured within the time stated in the notice.
See. 6 -45 Performance Measures and Reporting.
As part of the annual report, the Department of Code Enforcement shall measure the success of the Landlord
Registration Program using the following performance measures, which may be supplemented with additional
performance measures:
(a) Number of landlords registered under the Program;
(b) Number of parcels identified by their individual real property tax identification key number under the
Program;
(c) Number of fines and civil penalties issued, the number and amount of fines and civil penalties collected,
the number and amount of fines and civil penalties unpaid and the status of their collection with such
data being organized by the category of the civil penalty identified in the notice of violation; and
(d) Status of balances of the Landlord Registration Fund, Fund No. 221 identifying fees and civil penalty
dollars transactions separately.
Ordinance Addressing Landlord Registration Program
Page 6
Section II. If any part, subsection, section, paragraph, sub - paragraph, sentence, clause, phrase or word
of this ordinance is for any reason declared to be unconstitutional or otherwise invalid by a Court of competent
jurisdiction, such decision shall not affect the validity of the remaining portions of this ordinance.
Section III. This ordinance shall be in full force and effect on September 15, 2016, from and after its
passage by the Common Council, approval by the Mayor, and legal publication.
Tim Scott, 1St District Council Member
South Bend Common Council
Karen L. White, Council Member at Large
South Bend Common Council
1� yxelll:
Office of the City Clerk
6Uiciaa dby me to Pete Buttigieg, the Mayor of the City of South Bend, Indiana, on the day of
2016, at o'clock _. m.
Office of the City Clerk
»�ae�G��uG6�iae«Gby me on the day of
1 * READING
PUBLIC HEARING
3rd READING
NOT APPROVED
REFERRED
PASSED
2016, at o'clock _.m.
Pete Buttigieg, Mayor
City of South Bend, Indiana
Filed in C "'lice
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