Vermont Legislature SmartTranscripts:

[Marc Mihaly (Chair)]: Good morning, everyone. You are watching the house committee on general and housing, and today is Thursday, February 5. So what's gonna happen this morning is the following. We are working on our landlord tenant initiatives, and we have five bills before us, and, actually, there's extra bill that didn't come to this committee that's relevant. Sorry,

[Ashley Bartley (Vice Chair)]: excuse me.

[Marc Mihaly (Chair)]: Yesterday, we had the beginning of a brilliant walkthrough by our council, which is a side by side comparison of the five bills plus, and also is a way for us to be addressing the whole issue, learning the whole issue. And we got partway through that process and are now going to continue it. Then we're going to start taking testimony. And this is a process that's going to go through the day. We're going to start, you know, we're going to have three witnesses, and then take a break from landlord tenant late morning and deal with another bill, five forty eight, is a bill relating to adding a mediator position to the office of the Vermont Labor Relations Board. And then after lunch, after looking at another act, by 01:30 we'll be back, patient testimony on landlord tenant, so that's where we're at. So we're beginning with a continuation of our walk through by our counsel of the bills, and we have side by side material. Take it away, sir.

[Cameron Wood (Office of Legislative Counsel)]: Yes, sir. For the record, Cameron Wood, Office of Legislative Council, just to kind of reorient and remind where we are as the chair mentioned, we have this side by side where I pulled together all the provisions of these bills related to the proposed residential rental agreement chapter. So this isn't every piece of the bill is included, but bill's purpose helps us kind of walk through at least those sections related to that chapter. Representative Pezzo, that's what this very large document that

[Marc Mihaly (Chair)]: was on your desk was for. And this is available online?

[Cameron Wood (Office of Legislative Counsel)]: Yes. Yeah, on our committee webpage. This is a little cheat sheet that I created because as you can see this document is 23 pages and deals with many, many different sections. One of the primary or largest sections where there is a lot of divergence between the two bills is related to the termination notice periods for a residential rental agreement. So I tried to create a little cheat sheet for the date changes for that section. So

[Marc Mihaly (Chair)]: Also, we did just excuse me for interrupting, but, Gayle, you weren't here. One of the things that I described is that in July, I made an error, which I discovered last weekend. Well, for me it was an error, but I no longer control the bill because it's now for the committee. The error was my intention with respect to terminations that were not for non payment rent, were kind of in the control of the landlord, repurposing the unit for another purpose or non renewal of the lease, I wanted to increase the notice period, not decrease it. I made the mistake of decreasing it. I thought I was I didn't want there's a difference between month to month rents and twelve month contract, you know, I didn't That's advance. Well, it's an existing law, it's treated differently, and I don't think that makes So I just wanted to increase the notice period for all of them, ninety days, but I went the other way and decreased them, you know, and it was just a mistake. But I'm sorry to interrupt. I clarified that yesterday, but I didn't you weren't here.

[Gayle Pezzo (Member)]: Thank you.

[Cameron Wood (Office of Legislative Counsel)]: I need to make one correction of an error that I made yesterday to start with. So I'm going to bring us back to section four thousand four and sixty seven, which is it starts on page, top of page six but if you recall we ended on page 15 so six to 15 are all the changes related to those sections that one section starting with this document we're on page I'm going to start on page six but then I'm going to point to a specific subsection where I've made an error. I'm just going to pause here because if you all recall our conversation, this section four thousand four and sixty seven is about the termination periods that an individual has to provide when they're terminating a rental agreement. And we talked about the subsection A is for non payment of rent, subsection B is for, what's the term I want to make sure I get it right, complying with material terms of the rental agreement or with obligations imposed. Then there's a subdivision B2 about if there's criminal activity, etc. When we were looking at three ninety nine and four forty, and if you all recall, I was kind of commenting those two bills, the kind of broadest topic of what they're doing is they're kind of removing the no cause termination. So both of those bills state specifically that the expiration of a rental agreement is not cause for termination, and they narrow the circumstances in which you can terminate a rental agreement if it's not for a non payment of rent, personal activity, etcetera. So if you look at page nine, and if you recall that under the 4B, I commented that four forty allows or would require for reasonable relocation expenses of one month's rent. I mentioned that it was the only bill that included that and I made an error because March includes that as well. When in March, so if you look at the top of page nine, so just you're on nine already, just look up at the top at three ninety nine. If the termination is due to renovation requirements, then in that instance

[Marc Mihaly (Chair)]: There's relocation.

[Cameron Wood (Office of Legislative Counsel)]: There's a relocation expense.

[Marc Mihaly (Chair)]: Which is not it's true in both cases. Well, on three ninety nine, there's no limit to it.

[Cameron Wood (Office of Legislative Counsel)]: It just says adequate. Adequate rent and And four forty defines it as one month.

[Marc Mihaly (Chair)]: Well, it says reasonable relocation expenses of at least the equivalent. Correct.

[Cameron Wood (Office of Legislative Counsel)]: So I just wanted to clarify that, 3 99 is a little more narrow because it's only when there's a renovation, but I mentioned yesterday that four forty was the only one, I noticed that when I was reviewing again last night. Okay, so if you recall, I'm going to back up just a second because I gave I think $7.72 a very quick run through at the end of the day and I just want to mention, you know, if we circle back to where we were talking about, the seven seventy two,

[Marc Mihaly (Chair)]: really

[Cameron Wood (Office of Legislative Counsel)]: if you look at the statute now, as I mentioned, get failure to pay rent, you have failure to comply with material terms, criminal activity, And then you have under subdivision C, it's if there is no written rental agreement, and then you have to go to Subdivision E if there is a written rental agreement to look at what the termination periods are. Seven seventy two gets that distinction and moves all of that down into what will then be a subdivision. This is on page 11. So instead of making a distinction of whether there is a written agreement or not, it has a consistent time period if there's a termination. And as the chair mentioned, those days should be sixty and ninety instead of thirty and sixty. So it keeps the duration if you've been there for two years or less or greater than two years, but it doesn't make a distinction of whether you have a written agreement or not. So that's one of the key clarifying things I would say in July. Please jump in and correct me if you're like, where the hell were we at in relation to yesterday? Please jump in and say, no, this is complicated. So what you just said was that this extension to 60 to 90 applies to tenants that are greater than two years? So currently, there is under current law, if you remember I mentioned yesterday, it depends on is there a written agreement or not and how long a person has been there. This gets rid of distinction between whether it's in a ruling or not. But it just makes it more more than two years less than two years? Yes, sir. Sir.

[Marc Mihaly (Chair)]: For reasons that I don't fully understand, It was was one of them 90?

[Cameron Wood (Office of Legislative Counsel)]: Yeah. So if you do not Under existing law. Yes, sir. If you do not have a written agreement and you've been there for greater than two years, it's ninety days.

[Marc Mihaly (Chair)]: Yeah. Under existing law. So we just made it 90 across the board. I don't under I never did understand the sanctions. It seems to me we're trying to simplify, so we just treat them all the same.

[Cameron Wood (Office of Legislative Counsel)]: So yours would consolidate them and treat them the same, but keep the distinct affinity

[Marc Mihaly (Chair)]: between less than two and more than two. Yes, sir. Saudia. Saudia, what's your question or comment?

[Saudia LaMont (Member)]: Thank you. I just wanna I'm just trying to wanna understand and clarify my understanding. So is there a distinction between what what would the distinction look like if it's after twelve months and let's say you had a written agreement for twelve months, but then afterwards there's no longer a written agreement and you've been there another year, would that fall in the same category as not having a written agreement?

[Cameron Wood (Office of Legislative Counsel)]: I would argue yes. I'm not aware of a court case that would say otherwise.

[Marc Mihaly (Chair)]: It's it becomes my understanding, Saudia, is that when a lease expires, it just automatically turns into a month to month rent.

[Unidentified Committee Member]: Okay, thank you.

[Cameron Wood (Office of Legislative Counsel)]: Joe, did you have a question? No. Yes,

[Gayle Pezzo (Member)]: wait. I apologize because I'm gonna ask these questions because I wasn't here. So you have thirty days. If you don't pay your rent by thirty days, then you have another thirty days and then you will get an attorney's letter of possibility of eviction. Doesn't that add on another thirty or sixty days?

[Cameron Wood (Office of Legislative Counsel)]: Are you talking about for rental agreements? There's nothing in statute that could Rent is payable without demand. So you owe it as the tenant, you owe rent at the specified time that has been determined in your agreement with the landlord. And there is no statutory grace period, it's not in the law that there is any grace period for that rent. So you owe it when it's due without the landlord having to demand it, and if you fail to pay it, the landlord can terminate your agreement. It has to provide you with fourteen days notice for failure to pay rent, that in fourteen days your rental agreement is terminated. At that point, if the tenant remains, you have to get an ejectment action. Review.

[Marc Mihaly (Chair)]: Gayle, what you didn't see is that, believe it or not, there's the first 23 pages that we have is literally half the problem. The statute has two chapters. One is dealing with what can be part of rental agreements, what's in them, and that's what we're dealing with so far. Subsequently, he's got another handout for us, which he's going to give us, which is what happens when the landlord believes that you are no longer occupying the unit legally after notice, and then files a lawsuit, and that's what we'll deal with separately. So you're going to hear about all those deadlines in a few minutes.

[Gayle Pezzo (Member)]: I'm sorry, missed it because all

[Marc Mihaly (Chair)]: the laws are different. Yes, a good

[Cameron Wood (Office of Legislative Counsel)]: point for me to mention. The process for eviction from a mobile home park is excluded from this chapter. So I know you have another bill where you're talking about manufactured homes and manufactured home communities, etc. None of what we're talking about here is going to be applicable to a mobile home manufactured home community. Okay, go ahead. Okay, I'm going to move us to the bottom of page 13. Because here's where I believe we kind of left off, and apologies that the gates don't align anymore, I'm not quite sure what happened there at the last minute. But when you're looking at G, there is a section saying that if you are converting to a condominium, if the building is being converted to a condominium, you need to comply with specific provisions in 27 NSA chapter 15 which is related to that, not going to go into that at this point. Just acknowledging it here, no changes across the board from these prospective bills. H, I mentioned very quickly at the end of the day yesterday, this is for a shared occupancy. The current, so over here on the far left, the current statute is that if it is payable monthly, if your rent is payable monthly in a shared occupancy, it's fifteen days. If it's payable weekly, it's seven days. The two bills that make changes here are going to be $6.88, you can see there on the bottom of page 13, it keeps fifteen days for monthly and reduces to three days for weekly. And then seven seventy two on the top of the next page, gets

[Marc Mihaly (Chair)]: rid

[Cameron Wood (Office of Legislative Counsel)]: of the fifteen days and makes it seven for either. So kind of making it consistent whether it's a monthly or a monthly.

[Unidentified Committee Member]: Does the current statute apply regardless of any other contract like if you're in home sharing like a home shareable lot say like if there's a

[Cameron Wood (Office of Legislative Counsel)]: I don't know enough about the home share program and how it works, so I'd probably want to dig into this.

[Unidentified Committee Member]: But in theory, if they had a different contract, which applies? Does this supersedes any other contracts?

[Cameron Wood (Office of Legislative Counsel)]: So what's interesting, and I would have to look into it, I mean, have a section related to, let's a written rental agreement, this is an entirely separate subsection related to shared occupancy. So let's say you have a written rental agreement for a shared occupancy, which subdivision is going to control in that instance? And I assume it's going to be H, but I would wanna go check, see if there's any case law. I think if you didn't ask somebody You to can ask somebody to

[Marc Mihaly (Chair)]: I assume home share arrangements are covered by the home share contract, not by landlord tenant law, but I'm not sure

[Cameron Wood (Office of Legislative Counsel)]: We must have a separate carve out because page one has the whole no rental agreement shall contain any provisions to attempt to try and get out of It's not excluded from the chapter. So unless there's something in statute related to the administration of I would argue it's probably not excluded. Be It subject to some sort of rental agreement.

[Unidentified Committee Member]: Like we had to get an extra statute to exclude, to exempt home shares incomes from suddenly Okay, becoming like

[Marc Mihaly (Chair)]: that's what I think is we don't know. Gayle.

[Gayle Pezzo (Member)]: Karen, does this all apply only to rent arrears or rentals, or does it also apply if there's bad behavior or there's issues with the tenant? Do these laws, are they specific to that as well?

[Cameron Wood (Office of Legislative Counsel)]: So there is a subdivision if you go all the way to age six under B, the current law states that a landlord can terminate for failure to comply with the material term of the rental agreement or with obligations imposed. I think it's going to depend on what you mean by well, to it's depend on what police is and what you mean

[Marc Mihaly (Chair)]: by bad behavior. But there is, in this law, obligations

[Cameron Wood (Office of Legislative Counsel)]: of

[Marc Mihaly (Chair)]: the tenant include not endangering the health and safety of the tenant.

[Cameron Wood (Office of Legislative Counsel)]: Are obligations of the tenant create non compliance of health safety regulations of the unit, they can't destroy the unit, they can't, as was mentioned, impact the peaceful enjoyment of other tenants, etc. And if they are, then there is a section that allows the landlord to terminate based on that. Okay, so we talked about shared occupancy so we're all the way back down to the page 14. There's a section here regarding multiple notices, it's not really any amendments or changes, there's a change in March, just stating that it has to specify the date. I don't know it's necessary, so yes ma'am.

[Ashley Bartley (Vice Chair)]: That was going be my question. I guess I'm confused by that. If someone is receiving multiple notices, which it looks like is current law and is in all of these except for July, so that's something different. Wouldn't that notice have to have a termination date? All the notices are supposed to have a termination date, so You don't know if this being a specific problem, this is trying to solve something?

[Cameron Wood (Office of Legislative Counsel)]: Not to my knowledge. Okay.

[Marc Mihaly (Chair)]: Jenna? No. Oh, thank you. Saudia.

[Saudia LaMont (Member)]: Thank you. I'm sorry y'all moved on too quick before I could answer, I could ask my shared occupancy question. Just curious because it just says shared. So I understand, like, the the home share company organization. But if it's not a home share situation and it is just like a roommate situation, cost of living has folks in a bind right now. And so there, you know, people are sharing spaces and apartments and like sharing rooms and a roommate situation. What what does does that cover, is that under? Would that be considered a shared occupancy? If it's a roommate situation but there's one person, let's say it's a three bedroom apartment, one person is on the lease and they are subletting, would that be considered shared occupancy?

[Cameron Wood (Office of Legislative Counsel)]: I don't believe so. I think it's a great question. When you look at Subdivision H, so we're back at the bottom of 13, you go all the way to the left, so we're looking at the current statute, it says where a person rents to another individual one or more rooms in the person's personal residence that are included in the shared use of any common living spaces. So if you have two individuals that are renting separate rooms from one landlord, that's not going to fall under this definition of a shared occupancy. So it would really depend on what are the factual circumstances there. If you have, I mean my understanding is this would be more of a circumstance where you have a home and you're renting out a room in your home, your primary residence to one individual. So it really is, I think home share probably would fall under this subdivision. But it wouldn't be two people renting rooms from the same landlord.

[Saudia LaMont (Member)]: Or well, I'm I'm not solving I'm so I'm separating the landlord here and saying if there is one tenant, so this is like a so subletting is not covered in this at all is what I'm because I think that it would be constituted as subletting if a tenant who is renting a primary space and their name, they're under the contractual agreement, but are, have recruited roommates to help them like, you know

[Cameron Wood (Office of Legislative Counsel)]: get to be covered? No, I think, I think it's a great question. It's a very back specific question that I don't know the answer. I think, is it the person's personal residence? I don't think it's required to

[Marc Mihaly (Chair)]: be the personal residence. It just means one, if I rent from you, so I have ownership under a lease,

[Cameron Wood (Office of Legislative Counsel)]: Right.

[Marc Mihaly (Chair)]: Right?

[Saudia LaMont (Member)]: Yeah.

[Marc Mihaly (Chair)]: Then I rent, I bring in two other people. Wouldn't I be covered? It says a rental arrangement whereby a person. Right.

[Cameron Wood (Office of Legislative Counsel)]: So let's back up. Yeah. You're renting from a landlord.

[Marc Mihaly (Chair)]: So I'm the only one

[Cameron Wood (Office of Legislative Counsel)]: on the lease. It's a four bedroom house. First question is, do you have permission to sublet the unit? Supposing I do. Supposing that you do. Now you sublet to someone else. You're the landlord in that instance. And so are you going to be able to argue that you're under a shared occupancy? I don't know because the statute limits this section to rooms to another individual in your personal Personal residence. Yeah. And I don't know if in that instance, a court would determine that to be your personal residence or is it the landlord's personal place? Is there an exclusion there? Maybe there's some case law that I just I'm not aware of. I don't know

[Marc Mihaly (Chair)]: the Saudia, do you get it? In other words, the answer is we don't know.

[Saudia LaMont (Member)]: Okay. Yes. Thank you. That's that's I just wanted

[Marc Mihaly (Chair)]: One more time.

[Saudia LaMont (Member)]: I just Okay.

[Marc Mihaly (Chair)]: And I'm just trying to move us along because I know you got a long way to go.

[Saudia LaMont (Member)]: Thank you.

[Cameron Wood (Office of Legislative Counsel)]: You're welcome. I think it's a great question. Okay, we're going all the way down to page 14. So you know we've talked about this up above as well regarding termination for non payment of rents. This subsection is titled payment after termination. So you've provided the termination notice in accordance with one of these subsections above. The landlord's acceptance of full or partial payment of rent by or on behalf of a tenant after the termination or at any time during an ejectment action shall not result in the dismissal of an ejectment action or constitute a waiver of the landlord's remedies to proceed with an ejectment action based on any of the following, the tenant's breach of the terms under b, breach of obligations under a, b, c, no cause, pursuant to it just lists all the subdivisions. So what is any change here? They don't want change in this section. It's all the way in July where these things are struck. I don't even know why these things are there because it lists every single method by which somebody can be terminated. So it just doesn't make sense to me to break them out in this way. You accept payments, it doesn't jeopardize your ejectment action that you're bringing against someone regardless of why you're bringing it. So I, in July, these are proposed to be struck. There's no from my perspective, you may MAD hear gets appeal differently, but legally as I read the language you don't need any of these subdivisions. Okay, then you have commencement of an ejectment action. So what is this section? This is saying that a termination is insufficient unless a judgment of eviction proceeding is commenced not later. This is current law, so we're on the left here. Sixty days from the termination date. So you've terminated someone. We talked yesterday about the fact that you send a termination notice, you've terminated the rental agreement, you're asking the tenant that they need to vacate the premises. They do not. What do you then do? Now you have to bring an ejectment action to get a writ of possession for that location to then have them evicted. So you have to bring that action within sixty days from the termination. Yes.

[Marc Mihaly (Chair)]: Yes.

[Unidentified Committee Member]: Alright, I don't want to go

[Gayle Pezzo (Member)]: in the weeds, but I live there. If that's something like Lisa, If the original person that is renting from the landlord should leave and that sublesser is there, Do we know what happens then as far as being able to get the person

[Cameron Wood (Office of Legislative Counsel)]: removed? If it's a circumstance where the initial tenant has the authority from the landlord to sublease the units and then the initial tenant abandons the property,

[Gayle Pezzo (Member)]: Just what's leaves, pay them rent and they're ready to go.

[Cameron Wood (Office of Legislative Counsel)]: There's Does the landlord then assume the sublease agreement? I don't know the answer to that. I mean, assume, my assumption would be the landlord would have if it's in writing and the person is that subleasing the unit is under a written agreement that is in compliance with the landlord's initial agreement with the tenant, I assume the landlord's going to have to abide by that agreement at least until the end of the written term, and then at that point could terminate based on this section. If you can validly sublease, that is a lot of Validly.

[Marc Mihaly (Chair)]: Validly sublease. And then the new, the sub lessor is just like a tenant.

[Gayle Pezzo (Member)]: Only thing I Yeah, bring up is the

[Marc Mihaly (Chair)]: what I wanna caution everybody, I don't know any other way to put this. We have thirty minutes left. Okay. And we have a lot to cover. So Okay. Suggest is if you really have things you don't understand that are basic to what he's talking about, ask it. You have something that you admit, hypotheticals, let's save them up and we'll ask them at another time, or just ask him personally. Okay.

[Cameron Wood (Office of Legislative Counsel)]: Okay, so very quickly, that commencement of the ejectment action, June extends it to ninety days, and then July is going to lower it to thirty days if it is a termination for non payment of rent or for criminal activity or failure to comply with material terms, etcetera. So if it's one of the first two, it's going to shorten it to thirty days under seven seventy two and leave it at sixty days for the other pieces. Okay, this last is an affirmative defense to an ejectment action. So this is all new language that seven seventy two is proposing to put into this section and it says that for any eviction action based and that should probably say ejectment action, that's on me, but for an ejectment action based on failure to pay rent pursuant to subsection A, it shall be an affirmative defense of the tenant that the ejectment shall be dismissed, excuse me, it's an affirmative defense and the ejectment shall be dismissed if there exists a serious health and safety code violation, which shall include and then it lists a number of things here, I'm not going to go through all of them. The things I will highlight is this is just for non payment of rent. So it's not a defense that there's a serious violation if you're conducting criminal activity.

[Marc Mihaly (Chair)]: I add three things. One is, it was the intention here that a tenant can't defeat an ejectment action if they're the

[Cameron Wood (Office of Legislative Counsel)]: one that caused the problem. And that is in the section?

[Marc Mihaly (Chair)]: That's in the section, and we received a number of letters from landlords wanting us to make sure that's in there. The second is, we want to make sure, and it's not in here yet, but it's my intention to propose it, that it really applies to situations where it's pre existing. That is, we don't One of the complaints is that we don't want a situation where no one has notified the landlord, there's no outstanding what's it called? Building, there's no outstanding violation. And the landlord has no way of knowing about the problem. So it's got to be an outstanding violation.

[Ashley Bartley (Vice Chair)]: Can I just confirm my understanding of current state statute? Is that currently a tenant cannot withhold payment if there are these issues, is that correct? Or did I make that up?

[Cameron Wood (Office of Legislative Counsel)]: I know that they can, I'm just going to quote statutory language, I know specifically for minor defects and repairs that the tenant can withhold, so that section's four thousand four fifty nine. Okay, they can't just don't remember off top of my head for habitability issues. Yes, the tenant may withhold payment of rent for the period of non consent.

[Marc Mihaly (Chair)]: Okay, thank you. Do they have to put it like in some kind of escrow account, like they have their rent, but they're going to withhold it until

[Cameron Wood (Office of Legislative Counsel)]: Looking at, we should probably pull these up at some point if you have these types of questions so I can show you because there are requirements here. So if the landlord reading, if the landlord fails to comply with the landlord's obligations and habitability and after receiving actual notice of the non compliance from the tenants and is required to provide notice here and its actual notice, which if you recall has a definition, a governmental entity or qualified independent, me, receiving actual notice of the non compliance from the tenant from a governmental entity or qualified independent inspector, the division of fire safety has given the notice. The landlord fails to make the repairs within a reasonable time and the non compliance materially affects the health and safety, the tenant may. It says withhold payment of rent for the period of non compliance, it doesn't say anything about putting it in an escrow and giving it back to the lender. Next section here, maximum increase in rents as you can see as we discussed yesterday there is no current limitation or cap on current maximum increase. It's a period that the landlord has to provide notice if they're going to increase rents. What this would do, as you can see, March and April are somewhat similar. Landlords should not increase rent during any twelve month period in an amount greater than $3.99 is 1% above US consumer price index or 5%, whichever is less. Four forty is shall not increase during a twelve month period in an amount greater than 3% plus consumer price index or 8%, whichever is lower. So it's a little bit higher in April, March, a little more restrictive. A landlord, and then there's some notice requirements here. And then it actually changed it to ninety days prior than the date that it should take effect. And that's probably a draft error of me and probably should have amended the section that specifically references the notice period as opposed to putting it in here so there's not a contradiction. So if you want to put something like that in, I would suggest us tightening it up a little bit.

[Unidentified Committee Member]: Where is that?

[Cameron Wood (Office of Legislative Counsel)]: Sorry. When you look at C at the bottom of that page 17, it says that the landlord shall notify a tenant of an increase in rent not less than 90 There's already a section that provides a notice period for increase in rent so that's probably just a drafting error on my part. If you're going to put something like that, if you want to increase the notice period, you should probably put it where it currently is and amend it as opposed to new language. Sorry, I'm trying to keep going. Seven seventy two, the landlord shall not increase rent more than once in any twelve month period. So that's slightly different. Where eight ninety nine and four forty don't say anything about how many times. It just says during any twelve month period, you can't increase an amount greater than this. This says no more than once in a twelve month period or in any amount deemed excessive or unreasonable. Those terms are not defined, just as a highlight there.

[Gayle Pezzo (Member)]: I'm not understanding that, the distinction between once a year and what you read just before that. So

[Cameron Wood (Office of Legislative Counsel)]: the two sections say a landlord shall not increase rent during any twelve month period in an amount greater than x.

[Gayle Pezzo (Member)]: Okay.

[Marc Mihaly (Chair)]: Right?

[Cameron Wood (Office of Legislative Counsel)]: So if it's less than that, B under seven seventy two, so you have it to say you can't increase the rent more than once in a twelve month period notwithstanding that upon purchase of a dwelling unit, a landlord may raise the rent in accordance with section four thousand four and fifty five of this title. In the event a landlord raises rent upon the purchase of a dwelling unit, the landlord shall thereafter be subject to subsection A. So current landlord raises the rent, somebody buys it and then they raised the rent three months ago, you can raise the rent again. You're not subject to that twelve month period, but after that you are then subject to twelve month period. So you wouldn't be able to raise it for another twelve months.

[Unidentified Committee Member]: And this is regardless of who the tenants are, if it's the same tenant, if it's like if you're in a month to month, doesn't It's just how much time takes a landlord to act regardless of towards what thing. So

[Cameron Wood (Office of Legislative Counsel)]: now then the sub two here is a limitation of what that landlord can raise the rents that just purchased the property. So the two, the B1, excuse me, B1 person buys the property, you can raise the rent. B2 says if you're going to do that, you shall not increase the rent more than three percentage points above the consumer price index. And then subsection three on the next page, In the event rent was raised within six months prior to the purchase of a dwelling unit and calculating the rent increase under Subdivision 2, a landlord shall calculate the increase based on the rental amount that was charged prior to those recent increase in rent. What does all this mean? I am the landlord. I own the building. I raise the rent. I'm not subject to anything. There's no limitation other than I can only raise it once in a twelve month period if this were the statute. I raise the rent. I then turn around and I sell the building. New person who bought the building can raise the rent. They're not subject to this twelve month limitation. However, they are subject to this limitation in two. They can only raise it three percentage points above consumer price index. So we are going to cap that. And then how do you determine what to base that percentage on? If you just raise the rent, So that's what subsection three is saying if the previous owner had raised the rent within six months prior to your purchase, we're going to go all the way back to what the rent was before that increase to determine what the new landlord, where they base their calculation off of, see what I'm saying? If rent was 500 and it gets raised to 600, I buy the building, I'm gonna raise, am I basing it off to 500 or am I basing it off to 600?

[Unidentified Committee Member]: If

[Cameron Wood (Office of Legislative Counsel)]: it was raised within six months prior to your purchase, you go back to what it was prior to that. So in that instance, 500 not 600.

[Marc Mihaly (Chair)]: The intention here, just to be clear, 04/4399 have across the board limitations on rental increases. Seven seventy two does not have an across the board limitation on rental increases. It's aimed only at the situation where the property is sold. And the six month deal comes from someone pointed out, I think, that we didn't want a buyer and a seller polluting where the seller and the buyer agree that, okay, since you're going be limited once the thing is sold, we'll raise the rent right now first. Otherwise, that's the intention regardless of what one thinks of a cat altogether. Yes?

[Ashley Bartley (Vice Chair)]: I want to bring up one of the things I brought up the other day, Chris, so I make sure. This would be regardless of the work that is put in when somebody buys a new

[Marc Mihaly (Chair)]: lease, correct? Is, yes. So if I

[Ashley Bartley (Vice Chair)]: buy a unit to rent out from another landlord and I put $100,000 into unit and make work, that doesn't matter.

[Cameron Wood (Office of Legislative Counsel)]: Is there a current test there?

[Marc Mihaly (Chair)]: Yes. That's right.

[Cameron Wood (Office of Legislative Counsel)]: So I would say it's going to apply.

[Marc Mihaly (Chair)]: In other words, if we wanted to address the problem that Ashley just alluded to, and we still wanted a cap, we would have to say that the cap would not allow the rent to be raised more than the costs, including the mortgage or other financing for the improvements. So

[Cameron Wood (Office of Legislative Counsel)]: for example, the mobile home lot section, there is a separate thing about surcharges for infrastructure improvement that isn't included in the mobile home lot cap, the increase in mobile home lot rent cap, you could

[Marc Mihaly (Chair)]: do something like that. Okay, thank you.

[Cameron Wood (Office of Legislative Counsel)]: Okay to end this we are on page 18 so you look at three ninety nine, three ninety nine adds in a tenant right to purchase property, I'm not going to go through all this language, you have it, you can review it, happy to answer any questions, just understand that that's there and then I'm just going to point out page 23 where I just wanted to be clear there's a lot of provisions in these bills that are not included here. I'm not walking through each of them but you know just wanting to recognize there's a lot of stuff. Okay. I'm going to pass this out and then I'll do lightning rounds.

[Marc Mihaly (Chair)]: Well, think that you should do lightning round, and I think we can have you back to go deeper into it. It's just that we have three people lined up for ten, twenty, and we'll need a loop break for them.

[Cameron Wood (Office of Legislative Counsel)]: Totally understood. I think this one as you can see this is only 12 pages not 23 so we're not going have any questions. We should be able to do this in twenty minutes.

[Ashley Bartley (Vice Chair)]: Sorry, real quick. Saudia, are you gonna send somebody to Never mind, ignore me. Ignore me.

[Unidentified Committee Member]: Okay.

[Cameron Wood (Office of Legislative Counsel)]: So as you can see in this one, there's only four bills instead of five because four forty did not make any changes to the ejectment process. So I did not include that. Okay, so that one is missing. What you can see at top here, this one only includes provisions related to ejectment actions. So the gray is for the residential rental agreement, the blue here is for stuff related to ejectments, and then at the very end, at the very last page, you will see I included at the bottom other things that are not included because there are still other provisions in bills that are not included here. Trying to be as transparent and faithful as I can. First thing, three ninety nine, adds in a tenant's rights advocate at the Department of Housing and Community Development contracting with a nonprofit organization. I'm not going to go through everything here, just understand that I feel like that is relevant to whether you make changes to the attachment pieces. There was tenants rights advocates, and then also at the bottom, or midway through on page three, there was a statutory inclusion of the right to counsel. So defendants in an action brought under subchapter three of this chapter, which is the chapter currently could be for rejectments, yes, superior for an injectment, they have the right to counsel. Do you

[Marc Mihaly (Chair)]: know if there was a, was there around $3.99, $3.39 in appropriation?

[Cameron Wood (Office of Legislative Counsel)]: It does say $3.39, I'm sorry, it's supposed to be $3.03

[Marc Mihaly (Chair)]: $90.99 9. Is Is there an appropriation?

[Cameron Wood (Office of Legislative Counsel)]: Do not recall off the top of my head. I believe that there was and give me

[Marc Mihaly (Chair)]: that's okay yeah okay don't worry all right

[Cameron Wood (Office of Legislative Counsel)]: So, right to counsel. Now we get to the next piece, six eighty eight, there is a change regarding alternate service of process. Before I move forward, I also just want to provide a conditional statement here. We're moving into areas that are not within my jurisdiction, if you will. They're not within my portfolio. There's a little bit of overlap between myself and Eric Fitzpatrick on our judiciary team because we're moving into judicial process here. We're moving out of the chapter that governs residential rental agreements and landlord tenant relations, and we're talking about bringing court action against someone for ejectment. So those are judicial court processes, which are primarily under the purview of our judiciary team. So I'm just commenting that I can talk about conceptually what's on the page here. If you have specific legal questions about judicial process, it's probably something that I would defer to our judiciary team. Our judiciary team is aware of these bills and helped even draft one of them in June, but given introductory deadlines, etcetera, I drafted some pieces of it. When you get to six eighty eight, we're looking at the bottom of page three, have an alternate service of process. When the court orders that alternate service of process be made in a civil proceeding the order shall remain in effect and apply to all subsequent service of process in the same proceeding including post judgment proceedings. Top of page four this section shall apply to orders issued pursuant to the Vermont rules of civil procedure permitting ethical service of process by publication or by leaving a copy at the defendant's dwelling house or unilateral court of abode or to orders permitting alternate service of process of any other person of law. So typically when you're serving somebody you have to follow the Vermont rules of civil procedure. You can't just take your complaint and go attach it to somebody's door and leave it there and that's not effective service. And so what this is saying is that if you get from a court an order that authorizes you to do an alternate service of process, that order will last through the remainder of the proceeding including first judgment proceedings. So you don't have to go every time you have to serve something to the defendant in the case and get an order authorizing you to do an alternate service, it would have caused an entire proceeding, which would allow you under this language, if you get the order, to then go and attach these documents to the individual's door.

[Marc Mihaly (Chair)]: Just to clarify, I think you answered this. The notice provisions in the prior part, the provisions related to residential rental agreements, they don't apply. Right?

[Cameron Wood (Office of Legislative Counsel)]: Correct. When you talk about the definition of actual notice, yes, that is not in this section.

[Marc Mihaly (Chair)]: So all of the rest of the bills are silent, should they just leave it the way it is?

[Cameron Wood (Office of Legislative Counsel)]: Well they're going to be governed by the rules of civil procedure. Yeah, that's what I mean. I'm talking about court action. Yes, for the remainder of the committee, because we're talking about court process now, these notice requirements are going to be governed by rules of civil procedure, which govern how you communicate and provide notice to parties in a judicial decision. Can I ask a very basic question?

[Unidentified Committee Member]: Did I miss? What is meant by an alternate servicing process?

[Cameron Wood (Office of Legislative Counsel)]: As I mentioned, one of them is specifically mentioned in here, leaving it at the defendant's lowing house, so people would place a vote. Know infamously in all the movies when somebody gets served, some random person walks up to them and says, 'hey is your name Tom Charlton?' you take this document from me and then I say you've been served?

[Marc Mihaly (Chair)]: Yes.

[Cameron Wood (Office of Legislative Counsel)]: Is that it?

[Marc Mihaly (Chair)]: That's that's serving. Okay. It's because sometimes it's thought you were saying alternative to going to court. No. Sometimes it's hard

[Ashley Bartley (Vice Chair)]: to Is what you talked to? Yeah.

[Marc Mihaly (Chair)]: Right. Locate them. You go into court and say, your honor, I couldn't do it this way, this way, and this way, and the best I could do is this way, and the judge says okay.

[Ashley Bartley (Vice Chair)]: Is that called attack? Look at me, I've been spending a lot of time in judiciary so I'm learning.

[Cameron Wood (Office of Legislative Counsel)]: Okay, so now we're on page four, we're moving into this next section here. Before I jump in, I just want to mention a few quick things. What you have here on the far left is the current statute, which is subchapter three, which is the current subchapter related to ejectments. So this is the language that attorneys and landlords are going to have to follow when they're bringing an ejectment action against someone. So you've terminated the rental notice, the person remains, you're wanting to remove them, you have to follow these sections. Six eighty eight and seven fifty six keep the current structure pretty well the same, there's some significant alterations, shortening of time frames, etc. Seven fifty six creates a new expedited hearing for specific circumstances and I'll cover it and get there. What seven seventy two does is it creates a new sub chapter. I tried to keep them somewhat aligned but just understand that current statute six eighty eight and seven fifty six are really aligned together because they amend the same language whereas seven seventy two is kind of creating a new avenue, a new process. So it doesn't align perfectly. So don't think of seven seventy two as amending the same things as the other two. So I'm just going to take six eighty eight for starters here. What you have here is when you're bringing an objectment action, this is a section that says the process may issue as a summons or a writ of attachment requiring the defendant to appear an answer to the complaint of the plaintiff, which shall state the defendant is in possession of the lands or tenements in question which the tenant holds unlawfully and against the right of the plaintiff because they've been given the termination rights. Okay, so then you look under this page five subdivision B, C, and D, it's adding language here into this section and it says that notwithstanding any other provision of law or rule, the defendant shall file an answer within five business days after receiving the complaint. The computation of the five day period shall include the day on which the defendant receives the complaint. That is shortening the time frame by which the defendant, in this case the tenant, has to answer the complaint of objectment that the landlord has brought against them should be twenty one days down to five days and it's stating that the date that the individual receives the complaint counts as a day. Subsection C, when the court sets the date for the initial hearing on the complaint, dates shall also be set for consideration of lease violations and for payments into rent into court if a motion for such payment was filed. What you'll see is a few sections down, a landlord can file a motion to have rent paid into court during the process of the ejectment action. You should hear from witnesses that practice in this area about how this operates on the ground. Technically, those hearings can happen at separate times. Hearing related to payment of rent into court versus hearings related to whether or not someone should be objected. This section of saying when the court sets the initial hearing, it also set the date for the provision of the payment of rent. And then there's a subdivision there saying the parties may consent to mediation of a case at any time during the proceeding. What you can see in seven fifty six, similar language. Okay, so I'm gonna keep moving. Service of process, this is just in addition based on the change to alternate service that you had above in June. So it's saying that unless otherwise provided by law, process shall be served and notice given as in other civil actions. So again, we're kind of deviating from the Vermont release civil procedure. So this section is saying authorizing that deviation based on the section above.

[Marc Mihaly (Chair)]: But just to go to the basics, right now under existing law, if you're sued, a tenant sued, they have to file an answer within fourteen days? I believe it's twenty one. Twenty one days, okay. Six eighty eight and seven fifty six, shorten that to five. Business days,

[Cameron Wood (Office of Legislative Counsel)]: not calendar Business

[Marc Mihaly (Chair)]: days. And seven seventy two shortens it to seven.

[Cameron Wood (Office of Legislative Counsel)]: Well, seven seventy two doesn't amend any of the current process, so if somebody is bringing an ejectment under sub chapter three, then the current process is going to exist, seven seventy two creates an entirely new process, which would then reduce it to, if you found it before I did, it's It's what seven I 77. Answer. Yes, seven days. I meant to highlight these and I did not get the chance.

[Marc Mihaly (Chair)]: So it's seven days. I'm just trying to get to what really, you know, plus all three, the current statute and six eighty eight and seven fifty six allow a trial by jury and seven seventy two does not.

[Cameron Wood (Office of Legislative Counsel)]: Well, so here's the thing on the committee you all need to be clear on. Seven seventy two keeps the current section. So the landlord, if seven seventy two were to go into law, the landlord is going to have the option. Anyone bringing the action for argument's sake, it's going to be the landlord. The landlord is going to be able to bring it under current statute, in which case the person could have a trial by jury or if you bring it under this new section, you wouldn't have a trial by jury. So that would be a distinction between two separate avenues.

[Marc Mihaly (Chair)]: I I just wanna mention this is something that we will have to work on. The reason is that the individuals that are the individuals who were basically on the landlord side who were addressing this in July, had the idea that we should create this new faster process, but leave the old process and let it let landlords decide what they wanna do. I'm not sure it's worth having two side by side processes because it only, in my mind, confuses things. And if we were, which I don't know that we will, go with July, my feeling would be we should just make that the way

[Cameron Wood (Office of Legislative Counsel)]: you do. Okay, so some very quick points because I know you want to wrap up for a break. A few things that you need to be aware of additional changes, when you're looking at page five, look at the far left four thousand eight fifty three, why is this highlighted orange? Then you look at the top of the next page and why is that highlighted orange? Technically in statute you currently have two subtyponase and it's not clear which one actually controls. It was an error that was made many, many years ago where the section was amended in two separate bills and they were not reconciled. So technically there are two subsections there and I would advise you to clean that up. Six eighty eight, what this is doing is it's short as it shortened with the answer period, it had a significant reduction of the answer period, it has a reduction in the time periods that the court has to hear motions. So when a motion, this section is a motion of paying rent into court, the motion shall be held after three days notice instead of fourteen days notice. And then it says the court shall not enter a judgment by default unless the tenant fails to file a written answer and it goes back to five business days in accordance with the section above, tries to make consistent there. The computation of the five day period includes the day in which the defendant receives the complaint. Okay moving down to page seven, the next thing you need to know is if the tenant fails to pay rent into court on the amount and on the dates ordered by the court, the landlord is entitled to judgment for immediate possession. The court shall forthwith issue a writ of possession directing the sheriff to serve the writ on the defendant not later than twenty four hours after the writ is issued. You're on page nine. Page seven, towards the bottom of seven. So this is saying it would be changing it from okay you get the writ from the court, now it has to be served or you know kind of issued to the defendant by the sheriff and what this is saying is it's changing it from not earlier than seven days after the writ is served to not later than twenty four hours after the writ is issued, sheriff have to go to the property and remove the individuals. Okay, one other thing that I will comment on this section six eighty eight does, currently the statute allows the court to say I file a motion, I want the tenant to pay rent into court, and the section says the court can order full or partial payment into court, and this section would remove the partial payment. So it would only allow the court to say full payment into court.

[Marc Mihaly (Chair)]: Can I

[Unidentified Committee Member]: ask you a basic question again? And all of these things are regardless of whether we're talking about, is this only talking about non payment of rent or is this?

[Cameron Wood (Office of Legislative Counsel)]: That section would, no, it would be if there's an ejectment action brought, the tenant is still living in the property, so it could be based on criminal activity, it could be based on the no cause, could be based on you know the lease is expiring, I've given you termination and you're remaining, so I'm bringing the ejectment action and I'm saying you're gonna remain on the property while proceeding you need to pay rent in

[Marc Mihaly (Chair)]: the court. Okay

[Cameron Wood (Office of Legislative Counsel)]: so the last thing I'll mention is on this is on page nine similarly it just makes a change to say that if the writ is issued it has to be served within the twenty four hours by the chair. Okay now 56 look at page eight. What seven fifty six does is it keeps most of the current structure it just adds an expedited hearing when the ejectment is based on subdivision B, which if you recall was violating material terms of the agreement or criminal activity. So what you can see on the far left here is there is currently a statutory section related to unlawful occupant and there's an expedited hearing for that. Seven fifty six creates an expedited hearing if there is a termination based on that limited subset under B. I'm not gonna walk through the language, know you're trying to wrap here. So what I will just say is then going back to seven seventy two, what it does is it creates this new sub chapter as I mentioned key differences are going back to page five and moving down, Cherry mentioned it, no right to trial by jury answer period is shorter it says that if the complaint is based on non payment of rent the defendant can hear that during the answer period. So you haven't paid rent, I terminate you based on non payment of rent, you remain in a premises, I bring action during the period that you have filed that answer you can come in and say here's all the rent that I owe you and then at that point the individual plaintiff can accept that and dismiss the case or ask for dismissal of the case. Okay, then you have default and then what you have here, look at the bottom of page five moving to the top of the next section, is this concept of a show cause hearing. Wait, before you get there, this also has, because one of the complaints has been that even when you get the whole

[Marc Mihaly (Chair)]: thing going, the hearing takes forever to get a hearing date. This requires the hearing to be set no later than sixty days from the filing of the complaint.

[Cameron Wood (Office of Legislative Counsel)]: Yes, yes, thank you for the subchapter. Okay, so another key piece I will mention at the bottom of page five is if the defendant fails to provide a written answer as provided in the subchapter, the plaintiff is entitled to possession of the press.

[Gayle Pezzo (Member)]: Mediator?

[Cameron Wood (Office of Legislative Counsel)]: They would have to still get the writ from the court, but you may want to talk to the individuals who practice how that deviates currently. Individual doesn't file an answer and the plaintiff automatically is entitled to a bit could be a significant deviation from current practice. So I'll mention the show cause hearing on page five and the top page six. So this is if the complaint is based on a termination under four thousand four and sixty seven(two) which this is (two) is limited to criminal activity, illegal drug activity, etc. So not not compliant to material terms, just the criminal activity. It says the court sets a show cause hearing within seven days after an answer is filed, so pretty quick turnaround And then it says, at the show cause hearing, the defendant shall prove a substantiated defense to the termination claim. So we talked yesterday about what if the landlord is saying that you're doing something illegal, how do you defend yourself? You can remain after the termination period. The person brings the ejectment action. Here, you can go into court in the show cause hearing and provide your defense as to I'm not dealing drugs out of my apartment, etcetera. The parties may rely on affidavit evidence during the show cause hearing made under the pains and penalties of perjury. If the defendant makes a credible showing that live testimony is required or upon the court's own determination, a final hearing may be ordered. In the event a final hearing is ordered to resolve the complaint, the final hearing shall be set within thirty days.

[Marc Mihaly (Chair)]: I just don't want to add without saying it's perfect by any means. This was an attempt to deal with the problem where, of the drug dealing individual, of somebody threatening other tenants, etcetera. And I heard from a lot of people that this was a problem that we just had to address. So this is an attempt to do it by saying the landlord oh, and the problem is, of course, that other tenants it's hard to prove because other tenants are terrified. They don't want to testify. So here, the landlord can submit an affidavit under penalty of perjury in their complaint saying what it is with details, and if there's no rebuttal, then it's deemed that they are violating the terms of rules. If there's rebuttal that's substantial, then it goes to a hearing. Is that updated? It's writing. Right. Can the name be only known to the landlord, so it remains confidential, that would encourage more people. What you'll see is that the entire proceeding under seven seventy two, the entire proceeding is confidential to judgment.

[Cameron Wood (Office of Legislative Counsel)]: There are sections in three ninety nine and seven seventy two about expungement or ejectment of records. They're not included here because side by side would go longer. Okay, very quickly because I know you want time. So look at page six. I'm not going through the all of this language I just want to mention towards the bottom there it says property of tenant remaining on the premise. I should have bumped that down because there's also a change on six eighty eight but I'll walk through this real quick. Top of page seven, landlord may dispose of any personal property remaining in the dwelling unit or lease premises without notice or liability to the tenant or owner of the personal property on the landlord being legally restored to possession of the dwelling unit or lease premises presuming subchapter. Similar language in six sixty eight, we can go to page 10. This is the current section related to the property of the tenant remaining after the eviction. Current language is the landlord can dispose of the property remaining.

[Marc Mihaly (Chair)]: So

[Unidentified Committee Member]: if you get rid of if you're the landlord and it's it's the court gets ruled in your favor, now you can you can empty out the apartment. And so here it says without liability to the tenant or owner.

[Cameron Wood (Office of Legislative Counsel)]: So, junk, yes.

[Unidentified Committee Member]: So like, so that is that just saying, like, if if you get rid of stuff that belonged to somebody else other than the tenant, the tenant isn't gonna suddenly be held liable nor is the landlord.

[Cameron Wood (Office of Legislative Counsel)]: But this is still about the landlord. Tenant.

[Unidentified Committee Member]: Well, but it says tenant.

[Marc Mihaly (Chair)]: See the

[Unidentified Committee Member]: tenant move

[Marc Mihaly (Chair)]: the okay. So yes, yep.

[Cameron Wood (Office of Legislative Counsel)]: And I guess in theory it has happened. Guess if the tenant owned something that belonged to somebody else and then it gets removed, the tenant wouldn't be liable for that.

[Marc Mihaly (Chair)]: Yeah, that might be something

[Cameron Wood (Office of Legislative Counsel)]: you want to look at. So what I'll bring you to is page 10 because this is really where that section, I should have bumped that section all the way down here to correspond to these other sections because currently the landlord has to keep the stuff for fifteen days. And so that's what you can see in June, it's being changed to immediately under the current section And so this new language in July is kind of similar to what is being proposed in June, where immediately after being put in possession of the property, then the landlord can dispose of whatever is remaining and they would not be held liable for that. And that does say tenant, and I'm assuming they do that to address the situation that you've identified.

[Marc Mihaly (Chair)]: What I would suggest, and there's also what isn't covered here, there's, or I don't know what is covered, but listed, there's a whole thing about trespass. It's the

[Cameron Wood (Office of Legislative Counsel)]: bottom of page 11, or it is on page 11. We're out

[Marc Mihaly (Chair)]: of time, but the issue there is, how does a landlord deal with somebody who's been ejected, one situation, they've already been ejected, and they come back as a guest, and they're doing things that are difficult? The other would be a tenant who's rightfully a tenant invites a stranger into their apartment who's doing things. Those two things are the subject of various bills, including here. What I would suggest, since we're going to break for five minutes, come back, we're going to start testimony at 10:20, so maybe 10:22, I would suggest, counsel, that perhaps you might think about a cheat sheet It's like this cheat sheet that talks about timeframes, the different timeframes. Just limits itself to how long you've got to answer, do you have a right to jury, trial by jury, how soon is the hearing, you know, really basic procedural steps. Okay, thank you so much. I'm not going to remain with you this

[Cameron Wood (Office of Legislative Counsel)]: morning, but I will be listening. I have other amendments

[Marc Mihaly (Chair)]: to And figure you are, of course, doing both at the same time. Know that you Yes, could

[Cameron Wood (Office of Legislative Counsel)]: but you can whisper into the camera and or to your committee assistant and tell me to show up.

[Marc Mihaly (Chair)]: Thank you so much. It gives us a very basic understanding of things that we'll keep in mind as we hear testimony starting in, let's say, be hereby giving yourselves just time for a bio break and come back. Our witnesses are due at 10:20. Jessica will be in person, if you get it at Ames, it's gonna be in person. Yeah, and Angela will be vibrating over. But