Wednesday, January 25, 2012

Open Letter To All Virginia Senators and Delegates Asking For Help

I am writing you regarding an issue that is very important to small business owners across the state.

As I know you are aware, the Water Authorities in Virginia have recently been billing landlords for tenants unpaid water bills. Apparently this has become such an issue that the Virginia Housing Commission hosted a conference with the following associations in an attempt to develop a solution to the issue.

The Apartment and Office Building Association
The Home Builders Association of Viginia
The Northern Virginia Apartment Association
The Virginia Apartment and Management Association
The Virginia Association of Realtors.

Unfortunately they invited associations that aren’t directly impacted or are impacted in a very limited manor regarding this issue to the conference. Real Estate Investor Associations (REI’s) are all across this state. There are REI groups in most cities in Virginia. REI groups consist of single family to small multi family property owners. These large apartment complexes that the apartment associations represent do not typically have their water split up with individual meters on each apartment so this issue does not affect them as they pay the water bill, not the tenant.

REI groups across the state are very concerned with the new proposed legislation HB 567 that the Housing Commission and Associations that have no stake in the issue have suggested.

Us small property owners simply can not afford to guarantee any portion of a tenants delinquent water bill along with all of the other costs involved with running our businesses. We are also fearful that this legislation will be the last nail in the coffin allowing new legislation to be passed where the property owner will be guaranteeing all utility bills including gas and electricity. The power company in our area is already attempting to tell property owners that they will also not allow the power to be turned on unless the previous tenants delinquent bill is paid.

Quite frankly we do not feel it is moral or ethical for a third party to be responsible for a product or service that we had no beneficial use of.  This is a violation of contract law and if this violation is continued to be allowed our rights will be dramatically impacted.

A landlord does have the ability in Virginia to collect up to 2 months security deposit however during these trying times people quite simply don’t have it. If we are able to get one full month of security deposit that security deposit is most often gone anyway because tenants often like to skip out on the last month of rent and there are almost always damages that have to be taken care of to get the property back in good condition.

I see no reason why a small property owner with single family or small multifamily properties should be responsible for someone else’s actions. Peoples accountability for their own actions is a very important thing in our society. And the Water Authorities accounts receivable should be collected strictly by the deposit they receive when the tenant contractually agrees to set up an account with them and their special ability that they presently have to collect directly from their tax return if they have not paid.

I would like for you to strongly consider voting against HB 567 or any package of bills that it is in.

Here is a brief overview of items we object to within this bill:
-    New requirement for a landlord to send in a written authorization allowing a tenant to put the water in their name in an attempt to show that the tenant had no previous right to use the water in a property without a landlords written consent. This new provision legally positions the Water Authorities in a manor that they are not breaking contract law as the service is provided as a benefit to the landlord and not the tenant. By using this form we are signing our rights away.
-    The Water Authority has been given the right to shut off the water after one month of non payment and 2 additional months. After 3 months total they can put a lien on a landlords property if the tenant doesn’t pay. Tenants are already starting to figure out that they can move out and not pay their bill and it will go on the landlord. The Authority has the right with this bill to add 20% to the lien to the landlord.
-    The Water Authority with this new bill will no longer have to file a judgment against the tenant. They can simply go directly after the landlord. And landlords will have no way of determining whether or not a tenant they are renting to has previous delinquent water bills as we check tenants credit and if there is no judgment than we have no way of telling.
-    The Water Authority does not have to collect a deposit from a Section 8 tenant and still has the right to give a landlord the full lien.
-    If there is an existing lien from an unpaid tenant bill the Water Authority has the right to shut off the water at the house essentially shutting down our small business.

Please stand behind the small business owner by voting against HB 567 as this is an issue that is very important to us.

Please feel free to contact me if you have any questions or concerns.

Best Regards,

Dallas Powell
CMO - Real Estate Investors of Virginia


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