District 7 Albuquerque City Councilor Tammy Fiebelkorn is sponsoring two new city ordinances that are targeting the city’s apartment industry. One ordinance is entitled the “Residential Tenant Protection Ordinance” and targets what Fiebelkorn deems “deceptive” practices and “unreasonable” fees. The second is the “Residential Rental Permit Ordinance” that mandates a permitting system to operate residential rental properties.
Fiebelkorn’s two new city ordinances are being proposed after the City Council voted down her city council resolution asking the New Mexico Legislature to repeal a state law that prevents cities throughout the state from implementing rent control. Fiebelkorn argues her new ordinances are a “logical progression” of the discussion on rent control. She proclaims her Residential Tenant Protection Ordinance is a “relatively painless way” to help Albuquerque residents living on the margins to deal with soaring rental housing costs.
Since being elected to City Council on December 7, 2021, Fiebelkorn said renters have alerted her to fees being charged she did not even know existed. Fiebelkorn claims she has heard from too many renters who have told her they have ended up paying a lot more for their rental housing than they expected. She asserts the new ordinance will give renters a better understanding of the total cost of their monthly rent be before they sign a lease and move in to their rental home.
While Fiebelkorn says she believes most landlords are not overcharging tenants, she says her proposals will keep some bad actors at bay and she said this:
“I think that there is always a role for regulation so that we can protect those that are most vulnerable in our community.”
NEW MEXICO OWNERS-RESIDENT RELATIONS ACT
In 1975, the New Mexico Legislature enacted the Owners-Resident Relations Act. The purpose of the Uniform Owner-Resident Relations Act is to “simplify, clarify, modernize and revise the law governing the rental of dwelling units and the rights and obligations of an owner and resident, and to encourage the owners and the residents to maintain and improve the quality of rental housing in New Mexico.” (47-8-2 Purpose) The act outlines regulations and the rights, obligations and provides for remedies of both owners and tenants.
Under the Uniform Owner-Resident Relations Act, “the principles of law and equity, including the law relating to capacity to contract, mutuality of obligations, equitable abatement, principal and agent, real property, public health, safety and fire prevention, estoppel, fraud, misrepresentation, duress, coercion, mistake, bankruptcy or other validating or invalidating cause supplement its provisions.” (47-8-4 PRINCIPLES OF LAWAND EQUITY) In other words the purpose of the act is a codification, consolidation or reference to all aspects of the law dealing with owner and tenant relations, rights and remedies.
The Owners-Resident Relations Act is state law that supersedes and negates the need for Fiebelkorn Residential Tenant Protection Ordinance. Over the decades since its enactment, there have been literally hundreds of cases litigated and appellate decisions issued interpreting the act and enforcing the rights and remedies available under the act.
The link to review the entire act is here:
RESIDENTIAL TENANT PROTECTION ORDINANCE
According to Fiebelkorn, her Residential Tenant Protection Ordinance does not involve rent control nor does it attempt to tackle rent prices or increases. She claims its intent is to alleviate financial pressure on low-income households by reducing or eliminating fees. The proposed ordinance is 5 pages long, and the operative provisions of the proposed ordinance is 3 pages. The exact, mandatory provisions contained in the ordinance merit quoting and analysis. The operative provisions of Residential Tenant Protection Ordinance are as follows:
[WRITTEN DISCLOUSURES MANDATED]
“A landlord must make the following written disclosures to potential applicants for a unit before the applicant applies to rent a unit, either in the advertisement for the unit or any other written communication, including electronic:
Information that could appear on a background check that would disqualify an applicant for approval, if any;
The minimum credit score required for approval, if any;
Minimum income requirements, if any, subject to the provisions of the City of Albuquerque Human Rights Ordinance, which provides that if an applicant receives a housing voucher, only the portion of rent that the tenant is personally responsible for paying may be used to calculate a minimum income requirement
A list of all Application Fees charged by the landlord and all Tenancy Fees provided for in the lease agreement.
A Tenant shall not be subject to Application Fees or Tenancy Fees not included in the written disclosure required.”
“Application Fees and Tenancy Fees charged by landlords to tenants must be reasonable.
An Application Fee or Tenancy Fee is reasonable when it is no greater than a landlord’s actual cost paid to a third party associated with the action or process for which the fee is imposed.
A Tenancy Fee for late payments is reasonable when it does not exceed the amount described in the New Mexico Owner-Resident Relations Act.
A Tenancy Fee for a returned check is reasonable when it does not exceed the landlord’s actual cost paid to their financial institution. In no event shall an Application Fee exceed the landlord’s actual cost, per application.”
A landlord shall process applications in the order they were received and shall process no more than 10 applications for each rental unit at a time. If none of the applicants qualifies to rent the unit, the landlord may process up to 10 new applications.
Application fees shall be held by the landlord until the application is processed or until any tenant’s application for the unit is approved, whichever occurs first.
If an application is not processed and the unit is rented to another tenant, the application fee must be refunded to the applicant within 15 days.
In the event that a Landlord rejects an Application without providing a reason in writing, the Landlord shall refund the Application Fee collected.
A landlord may not charge a fee on the basis that the tenant intends to keep a pet. A landlord may require an additional pet deposit if permitted by state law, and for leases less than one year, may charge monthly pet rent not 22 to exceed $15 a month, regardless of the number of pets.
A landlord may not charge any other fee, other than the late fees and attorney’s fees described in the New Mexico Owner-Resident Relations Act.
At the time any fee is charged, the landlord must provide to the tenant the invoice or other documentation evidencing the cost for which the fee was imposed.
[PAYMENT OF RENT]
“A landlord shall not refuse to accept payment of rent on the basis 30 that the payment is made by cash, personal check or money order, nor shall any residential lease prohibit a tenant from paying rent by cash, personal check or money or
A landlord shall not charge a fee for payment of rent on the basis that the payment is made by cash, personal check, money order, or via an online payment portal, nor shall any residential lease provide for such a fee.”
[RENTER’S INSURANCE REQUIREMENT PROBHIBITED]
A landlord shall not require a tenant to obtain any insurance as a condition of renting a residential unit.
You can review and read the unedited proposed Residential Tenant Protection ordinance at this KOB news report link:
ANALYIS OF RESIDENTIAL TENANT PROTECTION ORDINANCE
The ordinance is a clear attempt to regulate any and all fees that are a part of the application process and contracts. The Residential Tenant Protection Ordinance would prohibit landlords from charging tenants more than their own costs for processing applications to rent or for any other fees they required beyond rent or a deposit. The bills seeks to eliminate fees that are for-profit charges. Fiebelkorn proclaims rent is where profits should made by landlords and not from hidden fees charged to tenants, yet she provides no specifics. She admitted that apartment owners could simply raise rent prices if they lose other revenue from fees assessed.
The ordinance requires landlords to disclose to potential applicants all application and other fees provided for in the lease agreement. The ordinance goes so far as to mandate that each time a property owner imposes a fee, they will be required to supply documentation proving their costs to the tenant. Fiebelkorn said she wants to ensure that fees being charge are not for profit making. She wants tenants to understand fully the fees being charged and why they are being charged.
The bill requires landlords to post and make public a list of application fees, minimum income and credit score requirements and items on a background check that could disqualify a rental applicant. Under the new ordinance, landlords would have to disclose up front and in writing the minimum income and credit score required to qualify for a rental unit.
The ordinance would dictate elements of the application process to rent. The ordinance goes so far as to mandate how many applications can be processed at a time and would allow only 10 applications for a single rental unit at a time and a landlord could not move on to another group of 10 unless none of the first 10 qualifies. Whose going to enforce such a trivial application process requirements and why are they needed in the firstplace?
Landlords would be required to refund application fees if they never actually processed a potential tenant’s paperwork before renting the unit to another or if they reject an application without providing a written reason. The ordinance calls for application fees that are no larger than the landlord’s cost to process them. The legislation’s language also asks landlords to return fees for unprocessed applications.
It also sets a cap of $15 a month for people who own any number of pets. The particular provision mandated by Fiebelkorn should come as no surprise to anyone seeing as she is an avowed animal rights activist.
The ordinance would prohibit apartment owners and managers from assessing fees for paying rent by cash, personal check, money order or via an online portal. Apartment owners could not refuse to accept cash, checks or money order and would require landlords to disclose to potential applicants all application and other fees provided for in the lease agreement.
The propose legislation would bar landlords from charging a pet fee, except when the lease is under a year. Landlords could still charge a pet deposit, but the deposits would be refundable if the landlord incurred no costs associated with the animal.
Fiebelkorn said this about her Residential Tenant Protection Ordinance mandating the disclosure of fees:
“Most of the landlords in our city are fair, transparent, very clear with what folks are going to get. It’s the few that are making it really hard. … What we’re trying to do is make it real clear and transparent for people who are like looking for a rental unit. … Having some specifics on what kind of fees can be charged and making sure they’re just the passage of actual costs to a property owner seems like a small, easy way we can provide some kind of cost stabilization for low-income people. This is something we can do right now that wouldn’t have any potential negative impact on landlords, but it would certainly help, particularly low-income people who are trying to find a place or stay in a place.”
RESIDENTIAL RENTAL PERMIT ORDINANCE
The second ordinance Fiebelkorn is proposing is new permitting process for all rental units which would include various annual fees for landlords and property owners. Those fees start at $50 for a single unit and go as high as $700 a year for a 250-unit apartment complex. The permit ordinance also imposes daunting disclosure requirements that are a repetition of information contained in documents already on file and easily accessible or in the possession of the city, county and state government.
Fiebelkorn said her goal with the permit ordinance is to give city leaders a better idea about how many rental units are available in the market. These are statistics the city already has. She said this:
“We certainly aren’t doing anything here to make money for the city. This is really just to cover the cost of setting up that registry.”
PERMITS WILL BE REQUIRED
Fiebelkorn’s “Residential Rental Permit Ordinance” provides as follows:
No person shall operate any residential rental property without a Residential Rental Property Permit (RRPP) from the City of Albuquerque. An RRPP may cover multiple units, but data shall be required for each individual dwelling unit. In addition to any other necessary information, the City shall require submission of the following for each residential rental property:
DWELLING UNIT INFORMATION
The permit ordinance will mandate the following dwelling information:
Physical address of the property;
Date the unit was built;
The number of units with details about the number of bedrooms, the square footage, and the maximum occupancy of the units;
A statement of compliance with the housing code;
Whether the dwelling unit is owner occupied;
The number of units that are ADA accessible.
Any other information as determined by the City.
The permit ordinance requires the following “tenancy Information” if the property has a current tenant:
Whether the unit is vacant or occupied by a tenant(s)
Term of the current lease(s);
Security deposit amount(s)
A list of any additional fees charged;
A list of utilities, if any, that are included in the monthly rental rate.
OWNER AND MANAGEMENT INFORMATION
The ordinance will require the following Owner and Management Information:
The name, phone number, email address, and mailing address of the property owner;
The name, phone number, email address, and business address of the property manager/agent/operator(s) who will be available to [address] issues or complaints regarding the operation or occupancy of the dwelling unit;
The RRPP number issued by the City must be included on all marketing materials and rental agreements for each respective dwelling unit;
Any change to the information required must be updated with the City within thirty (30) days of the change to the information … including but not limited to … entering into a new lease or lease renewal, when a unit becomes vacant, and updating tenancy information if the property is vacant at the time the RRPP is issued.
Residential rental property owners would be subject to the following fees, based upon the number of rental dwelling units owned by the property owner:
“Initial owner permit fee:
Single dwelling unit: $70
2-10 dwelling units: $140
11-50 dwelling units: $350
51-250 dwelling units: $490
More than 250 dwelling units: $700”
There is no explanation as to how the fees were determined nor as to reasonableness.
ANNUAL RENEWAL FEE FOR THE YEARS FOLLOWING INITIAL OWNER PERMITTING:
“Single dwelling unit … $50
2-10 dwelling units … $100
11-50 dwelling units … $250
51-250 dwelling units … $350
More than 250 dwelling units… $500.”
EDITORS NOTE: There is no explanation as to how the fees were determined nor as to reasonableness.
WAIVER OF PERMIT FEE:
“Permit fees shall be waived for the following residential rental properties:
Owned in whole or in part by or leased and operated by a local, state, or federal governmental agency;
Owned or leased and operated by any organization that has been exempted from federal income tax as a nonprofit organization in good standing under … the United States Internal Revenue Code [for nonprofits] , and has been designated as income-restricted housing; and
Affordable housing projects that are constructed with the support of any combination of federal, state, or local financial resources, including 3 private activity bonds, tax credits, grants, loans, or other subsidies to incentivize the development of affordable housing, or properties where the tenants are recipients of low-income housing assistance and that are restricted by law, contract, deed, covenant, or any other legally enforceable instrument to provide housing units only to income-qualified households where 80% of the total units are income restricted.”
ENFORCEMENT AND PENALTIES.
“The City shall investigate any complaints or notifications about unpermitted residential rental properties. Upon verification that the unit is unpermitted the City shall issue a letter of compliance to the unit owner. If three letters of compliance are issued to the owner and the owner does not remedy the violation, the owner shall be assessed a fine of $100 a week until the unit is brought into compliance. If the unit is not brought into compliance after 6 months from the date of the last letter of compliance, the unit will not be eligible for a permit for two years, and it shall be unlawful for the owner to operate the unit as a rental property.]”
You can review and read the unedited proposed Permit Ordinance at this KOB news report link:
ANALYIS OF RESIDENTIAL RENTAL PERMIT ORDINANCE
Under existing city ordinances and state law, residential apartment owners are required to have licenses to do business and they are a mandated by law to renew each year and pay a fee. Simply put, there is no need and no reasonable justification to require permits for business that already are required to apply and pay for licenses to do business within the city. Property owners are required to obey all applicable city ordinances, including code enforcement ordinances dealing with substandard housing mandating inspections, maintenance and repairs They are also required to pay gross receipts taxes and property taxes and they are required to have a tax identification numbers.
There is no explanation as to how the fee structure was determined nor as to reasonableness. Despite Fiebelkorn’s statements to the contrary, the fee structure is arbitrary and capricious and ostensibly created to generate revenue for the city. The fees paid do not mandate the city to perform services to those who pay the fees.
The Dwelling Unit Information required by the permit ordinance is information that is already on file with the city’s Planning and Zoning department and or the County Assessors office. The Tenant Information required by the permit ordinance is private contractual information and should not be a matter of public record. The Owner Management Information is already provided to the city in the city license to do business.
The enforcement provisions fail to provide the manner and method of enforcement and fails to identify what city department will enforce the ordinance with no appropriations.
APARTMENT INDUSTRY REACTS TO ORDINANCES
Steve Grant, the president of the Apartment Association of New Mexico told the City Council that his organization is “adamantly against” Fiebelkorn’s Residential Tenant Protection Ordinance. Grant told the city council this:
“Are we going to be the city that wants to continue growing in a positive direction, with new job growth, new company expansions and, yes, future housing, or are we going to be a city that is so hard to deal with that businesses and future investors decide not to deal with Albuquerque and run away from us?”
Chuck Sheldon is the CEO of T&C Management. Sheldon agrees with transparency during the rental process is a good idea but he does draw a line. Sheldon had this to say:
“I’ve been in this business a long time, and so you know, we need to make it so, so it works for everybody. … There’s no reason not to be advertising years of qualifications to get into this apartment. Here’s, here are the fees associated with that. … The pushback is we’re going to have fewer owners, fewer people that want to manage and go through this array, fewer people constructing here.”
Damon Maddox is a managing member at Maddox Management LLC. They oversee 788 residential units in Albuquerque. Maddox takes a dim view of a few issues in the proposed legislation with regards to fees charged and requiring renters insurance. Maddox had this to say:
“We charge the fees that need to be charged, not to make a profit. You know, these are things to help our properties run, grow, get good quality tenants and make sure they have a good experience. … Insurance has helped us as a company three times in the last five years. It’s for their protection as much as it is for the homeowners of protection. … If she wants to have the Realtors’ Association and property managers at the table to help her write some good legislation that might actually help. We would be happy to sit at the table with her.”
The links to quoted news sources are here:
COMMENTARY AND ANALSIS
The title of the ordinance “Residential Tenant Protection Ordinance” is pure politcal posturing and spin by City Councilor Tammy Fiebelkorn. Her ordinance should be called the “Rental Industry Crush Ordinance.” Fiebelkorn proclaims her new ordinances is a “logical progression” of the discussion on rent control. It is not. It’s a reflection of Fiebelkorn’s resentment or downright hostility towards property owners and the apartment industry that resists rent control.
Fiebelkorn herself said this:
“Most of the landlords in our city are fair, transparent, very clear with what folks are going to get. It’s the few that are making it really hard.”
What Fiebelkorn is essentially saying with her sponsorship is she wants to make the entire apartment rental industry miserable with city fees and bureaucratic mandates because “It’s the few that are making it really hard.”
She proclaims her Residential Tenant Protection Ordinance is a relatively painless way to help Albuquerque residents living on the margins to deal with soaring rental housing costs. The truth is, there is absolutely nothing “painless” about the ordinance when it comes to real property owners and how it imposes on their property rights and their right to contract.
The only logical progression is the fact that Fiebelkorn is a self-proclaimed activist and who is considered the extremist on the city council who became upset with the City Council rejecting her politcal agenda to ask the New Mexico Legislature to repeal the state law that prevents cities throughout the state from implementing rent control.
The way the ordinances are written, they are a blatant attempt to usurp and contravene provisions of the New Mexico legislative enacted state Owner – Resident Relations Act. The Act mandates written ‘‘rental agreements’’ or leases and provides that all agreements between an owner and resident and all rules and regulations required under the act must be embodied in the terms and conditions of the written agreement concerning the use and occupancy of a dwelling unit or premises. (47-8-3, P, Definitions.)
The state law mandates written lease agreements that are enforceable contracts in a court of law. The act allows the parties to negotiate contract terms of any rental lease, including payment of fees. Tenants have the right to object to the fees as being unreasonable and landlords and owners who retaliate by failing to rent because of refusal to pay fees expose themselves unfair trade practice accusations that can result in damages and payment of attorneys fees and costs.
Under the state law, no rental agreement may provide that the resident or owner agrees to waive or to forego rights or remedies under the state law. (47-8-16 Waiver of rights prohibited.) If an owner deliberately uses a rental agreement containing provisions known to be prohibited by law, the resident may recover damages sustained resulting from application of the illegal provision and reasonable attorney’s fees. (47-8-17 Unlawful agreement provision.)
The remedies provided in the Uniform Owner-Resident Relations Act are administered by the courts to allow and aggrieved party to recover damages as provided in the Act. It is the district, magistrate courts or metro courts that have jurisdiction to enforce the lease over any person or with respect to any conduct or claim prohibited under the Act. (47-8-10 Judicial jurisdiction.) If the court, as a matter of law, finds that any provision of a rental agreement was inequitable when made, the court may limit the application of such inequitable provisions to avoid an inequitable result. (47-8-12 Inequitable agreement provision)
The written lease agreement must delineate all the terms and conditions and parties performance requirement under the contract. Consequently, under the act, property owners are already required to make full disclosure of fees charged to be enforceable.
Simply put, Fiebelkorn wants rent control in the city and she refuses to take no for an answer. If the New Mexico legislature will not allow rent control, Fiebelkorn wants to try and accomplish it indirectly through city ordinance by eliminating any and all fees paid by a tenant, regardless of legitimacy or need.
Fiebelkorn wants to force the rental industry to pay permit fees to the city that are arbitrary and an unreasonable and to inundate the industry with requirements to compile information and statistic the city already has or should have. The data Fiebelkorn says she wants can be found by the city’s Planning Department in such documents as approved building permits, approved architectural plans, yearly licenses to do business, tax assessments, city zoning maps and corporate and partnership documents filed with the Secretary of State. A simply survey by the city’s Planning Code enforcement division of the city’s apartment inventory can compile the data.
The “Residential Tenant Protection Ordinance” is defective on its face in that there is no enforcement provisions, no penalty provisions and no funding for enforcement. The “Residential Rental Permit Ordinance” is nothing more than retaliating against an entire industry that is opposed to rent control. Both new ordinances amount to nothing more than overreaching by the city while ignoring existing state laws that provide for specific remedies and penalties.
The proposed ordinances have been referred to the City Council’s Finance and Government Operations Committee. Their next meeting is December 12. Ultimately, the City Council should vote 1-8 to kill both measures.