Calling all owners of rental property in Connecticut! In October 1st, 2023, Senate Bill 988 took effect and strengthened renter’s rights and protections here in Connecticut. Let me give you a run-down on these new acts affecting housing and real estate and what you NEED to know:
Everyone wants to have a tenant who can pay their rent, who will take care of the property, and who will be a responsible and respectful neighbor. We, as housing providers, do our best to screen tenants, gathering any lawful source of income info, doing a credit & background check (meaning, do they have a history of not paying bills, which would affect their credit), checking to see if they have a history of getting evicted for not paying rent, and we check references– including the housing providers who rented to them in the past. This takes time, time is money, and so an application fee is usually charged by many housing providers. This bill limits the rental application fees. There can be a charge for a tenant screening report of up to $50 plus an inflation adjustment. But housing providers may not charge ANY OTHER fees, charges, or payments before the tenant moves in (no move-in or move-out fees), with only a few exceptions: Security deposits, advance payment for first month’s rent, deposits for a key or other special equipment, and fees for a tenant screening report. And as we said, that screening fee is capped.
Sometimes, tenants aren’t able to pay exactly on the day rent is due. Life happens, right? Connecticut law gives tenants a 9-day grace period in which they can turn in their rent without penalty )also known as LATE FEES). So if rent is due on the 1st, a tenant can turn in rent on the 2nd, the 7th, or even on the 10th of the month without a late fee tacked on. (this is a 4-day grace period for those who have week-to-week tenancies). But on the 11th, under the act, if a rental agreement contains a valid written agreement to pay late charges after the grace period, the charges cannot exceed the lesser of (1) $5 per day, up to a $50 maximum, or (2) 5% of the overdue rent or 5% of the tenant’s share of the rent in the case of rental agreements that are partially paid by a government or charitable entity. So if you The act also prohibits rental agreements from requiring tenants to agree to late charges that exceed these limits and prohibits housing providers from assessing more than one late charge on an overdue rent payment. So if you used to charge $20 per day to discourage late payments, you can’t do that anymore. Of if you had a late fee imposed for Section 8 tenant who pays $50 out of pocket per month, you can only charge $2.50 per day starting on the 11th. So if they pay their rent that was due on the first of the month, on the 28th, their late fee is $45. And you are set up to go through the anxiety of “will they be able to pay the next month’s rent?” all over again in a couple of days.
Beginning January 1st, 2024, housing providers must give an opportunity to tenants to request and do a pre-occupancy walk-through of the place they are to dwell after or at the time of entering into a rental agreement. We have always done pre-move in inspections, just before the tenant moves in, so this isn’t a process change for us. We will again invite the tenant (if they choose) to walk though jointly with our team member as we note on video (and in person) the unit’s existing conditions, defects, damages if any, using a Department of Housing checklist. We save this video, do another after the tenant has moved out, and we compare the condition. This act prohibits the housing provider from keeping any portion of the tenants security deposit or seeking payment for a condition, defect, or damage noted in the preoccupancy checklist. We at Ironclad would never charge a tenant for damage or defects that were there when they moved in. We expect the dwelling to be returned to us in the same condition it was received.
So let’s talk about security deposits.Under the previous law, after tenancy was terminated or ended, housing providers had the greater of these two options to return the tenants security deposit, or the balance if any, plus accrued interest: either 30 days or 15 days after receiving written notification of the tenant’s forwarding address. The act reduces this 30-day deadline to 21 days. The act also requires housing providers to pay interest annually on tenants’ security deposits. This went into effect October 1st, 2023.
Let’s talk about income and expense statements. By law, municipal assessors may REQUIRE rental property owners to file annual income and operating expense statements to assist in their property valuations. The legislature passed a law that extends the deadline for taxpayers to request a filing extension from May 1st to June 1st. It also allows filings and extension requests that are postmarked on or by the due date to qualify as timely, regardless if the municipality received it by that date or not. For late filings, the law sets time limits for municipalities to mail or deliver new bills incorporating the penalty and for bill payments to become due.
The legislature also enacted a law the requires the Department of Housing commissioner to develop standardized rental agreement forms that tenants and housing providers MAY use. This helps if you are new to rental real estate and need somewhere to start from!
When selling your rental property, a new law requires the seller to provide a one-page disclosure on housing discrimination and FEDERAL and STATE fair housing laws at the closing for any residential property, not just closings for properties with 2 or more units.
If you are house hacking, which means living in a property where you either rent out a room, or where you live in one unit and rent out the others in a multi-family property, you previously had the right to not accept someone based on their sexual orientation. The current act eliminates this exemption, and in doing so subjects such an owner who violates the state’s anti-housing discrimination law to a class D misdemeanor, punishable by up to 30 days in prison… a fine of $250, or both.