‘Reasonable’ rental fees bill receives support in committee

BOISE — A bill to require rental fees be “reasonable” received no negative testimony at its hearing and earned mostly supportive comments from the Senate Judiciary Committee on Wednesday; however, it needs another step before it can move on to a full Senate debate, as members voted to hold off sending it to a full vote for a “friendly amendment.”

Sen. Ali Rabe, D-Boise, presented SB 1039 to the committee, which voted 8-1 to amend it to include clarification that the bill would not apply retroactively to leases. Only Sen. Dan Foreman, R-Moscow, opposed.

The bill would require that any fees imposed on rental tenants be “reasonable,” which is generally interpreted in small claims or eviction courts to mean that damages must relate to actual costs, said Rabe, who is also executive director at the housing assistance nonprofit Jesse Tree.

The legislation also prohibits charging a fee, fine or other cost that’s more than what was agreed upon in the lease without providing 30 days written notice.

“Recent reports are showing that half of renters in our state are already living paycheck to paycheck, month to month, strained by rising rental costs. So those fees can really impact someone’s ability to stay in their home,” Rabe said.

State code has in place requirements for reasonable fees for mortgages and storage units, Rabe said.

Sen. Abby Lee, R-Fruitland, said she found the information provided about the other laws requiring reasonable fees especially compelling when considering the proposed legislation.

“You have more protections for your storage unit than you have for the place that you live, and so I think that those are analogous in our public policy discussions,” Lee said.

Rabe told the committee of instances where she’s seen tenants being charged late fees of $500, $100 a day, or in one extreme case, $3,000 in total late fees for $500 rent.

“Most landlords that I work with in my day job are decent and many try to work with tenants through difficult situations, whatever it is. But there are some bad actors that could use some guidance here from our state,” Rabe said.

She said current state code is vague in this matter and that landlords she’s worked with have shown support for creating more clarity on the issue and protecting them from unnecessary litigation.

Representatives from Idaho property managers, the Idaho Apartment Association, the Idaho Asset Building Network and Jesse Tree testified in favor of the bill.

Doug Taylor, representing the apartment association, said the group feels the legislation provides useful guidance for how to structure rental agreements. He said it also favors handling the issue at the state level.

“We’re concerned about a patchwork approach to regulating property managing and rental housing across the state,” Taylor said.

Sen. Foreman questioned Rabe if it was the state’s place to get involved in a private sector contract.

Rabe said in her experience in landlord-tenant disputes, she’s found state code and case law don’t provide guidance on what a fee can be.

“There are many cases right now where fees are exorbitant,” she said. “This provides a deterrent for potential bad acting landlords, so they’ll know that fees must be reasonable, related to actual costs and provides tenants something that they can use in the case of those bad actors.”

The bipartisan bill is co-sponsored by Sens. Doug Ricks, R-Rexburg; Chris Traken, R-Caldwell; and Rep. Edward Hill, R-Eagle.

A similar bill passed the Senate in 2021 but died in a 28-40 House floor vote with no debate.

Guido covers Idaho politics for the Lewiston Tribune, Moscow-Pullman Daily News and Idaho Press of Nampa. She may be contacted at lguido@idahopress.com and can be found on Twitter @EyeOnBoiseGuido.