Vermont Legislature SmartTranscripts:

[Senator Alison Clarkson (Chair)]: We are live. Good morning, everybody. Welcome on this rainy day to Senate Economic Development, Housing, and General Affairs. It is Friday. It's Good Friday. It's Friday, April 3, and we are here primarily discussing landlord tenant issues. But first, we're going to confirm Campbell Smith, I hope, and we would then have it we're all keyed up for that to be on this order. One of you can sit here because Cam is there. And, Chad, that's my bed. Okay. Oh, that's good. I appreciate that. So we have Kendall Smith, as you know, is the new commissioner of the Department of Labor. She I have known Kendall since she started to work in Vermont. And since she graduated from American University, grew up in Dallas and Berry, Came back just because she missed Vermont and wanted to make her life here. That was such a great active choice. And she immediately was hired by Betsy Bishop, who, of course, many of us work closely with at the chamber. And she worked I first knew her when she was being government affairs person for the chamber here in the building. And then she went on to run the be the executive director of the Vermont Future Project. And then from that, she was hired to be the government affairs and policy person for governor Scott, which she did incredibly well for eight years. I mean, she has had a terrific and in that time, she and I worked very closely on a lot of economic development issues, primarily workforce development. She and I managed to get our workforce, our our proposals through the legislature. And then through the two year meeting of the special oversight Committee on Workforce Development, we created the Office of Workforce Strategy and Development, which is we're very proud of that, you know, through director Turner and Savannah Haskell who are gonna now be the umbrella for in the funnel for all workforce in the state. She then, last January, was appointed deputy commissioner of labor and then assumed and was appointed to be commissioner in in October, September, October this fall. She loves her job. She is she and what I think I'm proud of something she got so excited about workforce and labor through our work and with her work with the governor. So I'm pretty I'm really so proud of her. She is one of the most I don't know if any of you have had a chance to work closely with Kendall. She's incredibly well organized. She's very thoughtful, incredibly creative thinker, thinks outside the box, compassionate, empathetic, very focused on public service. I mean, she is really models public service in a great way. But most importantly, and I'll say this on authority, she is she's terrific listener, and she is trustworthy. You she is and she right walks a very tight line on that in this building. And to me, that that is, you know, that's gold in this building and in life. So I she already has she has articulated her vision for the department, which I'm happy to pass around, but she has, and she's very excited that we're gonna get the new UI system up and running, we're gonna be invited to see that at the May. Hopefully, that will happen. She is I mean, I her her vision for the her vision, and she has short term, long term vision. She has, she is really wanting to, once she has the successful launch of the new UI system this spring, she, which is gonna create better user experience for claimants. Morale of the department is critically important for her to work on and the public perception and trust in the Department of Labor. So she is very clear on that. Her long term goal is when this new system has successfully been launched, this will also create more capacity for the aspirational work of the department across our other three divisions. This includes providing more prominent leadership roles, supporting job seekers and employers across the state, creating bridges with our education and training system, and anticipating needs, job market demands, and ensuring we are appropriately supporting and protecting employees as the nature of work evolves. So, again, thinking forward, gee, this is the right person, in my whole opinion, running Flavor at this moment.

[Senator Randy Brock (Vice Chair)]: Assume you're painter.

[Senator Alison Clarkson (Chair)]: I'm a painter. And so I would with that, I would ask our clerk to full roll on. And Kesha is joining us. Great. Kesha, welcome.

[Senator Kesha Ram Hinsdale (Member)]: Thank you.

[Senator Alison Clarkson (Chair)]: And we're sorry. I hope your nanny feels better soon.

[Senator Kesha Ram Hinsdale (Member)]: Well, thanks. You know, it's one of those Fridays where the kids are sick. I think I'm sick. So it's probably just better I'm not there.

[Senator Alison Clarkson (Chair)]: Sorry, Thomas.

[Senator Thomas Chittenden (Member)]: I just want to echo everything you said about Kendall. She's phenomenal. I also have the honor of serving with her on the New England Board of Higher Education in her capacity and she's just a remarkably thorough and responsive professional. So I'm really happy to, to vote for and support her for confirmation.

[Senator Alison Clarkson (Chair)]: I didn't realize that you two served together. That's great. That's great.

[Senator Kesha Ram Hinsdale (Member)]: Who are we confirming? Sorry.

[Senator Alison Clarkson (Chair)]: Kendall Smith as Commissioner of Labor.

[Senator Kesha Ram Hinsdale (Member)]: Oh, great. Yeah.

[Senator Thomas Chittenden (Member)]: There might be a oh, the chair's kind of edging.

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

[Senator David Weeks (Clerk)]: Senator Brock? Yes. Senator Chittenden? Yes. Senator Ram Hinsdale?

[Senator Kesha Ram Hinsdale (Member)]: Yes.

[Senator David Weeks (Clerk)]: Two weeks. Yes. Senator Clarkson? Yes.

[Senator Alison Clarkson (Chair)]: Thank you. You're the reporter? I'm the reporter, and I we have a rule suspension with Brian to do it. So we're we'll steam ahead, and I will take this off at our Right.

[Senator Kesha Ram Hinsdale (Member)]: Madam chair Yeah. If I leave and come back, it's Wesley, say hi. Say hi.

[Senator Alison Clarkson (Chair)]: Hi, Wesley. Say hi.

[Senator Kesha Ram Hinsdale (Member)]: He's cheersing you with his apple juice. He likes to close the computer and say, all done. He's about to do it right now, and then it leaves Zoom. So I will do my best to be here.

[Senator Alison Clarkson (Chair)]: Do your best. That's all we can that's all anyone's can do.

[Senator Kesha Ram Hinsdale (Member)]: Thank you.

[Senator Alison Clarkson (Chair)]: So we are gonna right now, we're gonna pivot back to landlord tenant issues. Thank you. Just I'll take this a moment. And we are going to finish walking through the bill. You now have a copy of the as passed bill from the house. It finally passed last whatever. When did it finally pass? Anyway, it finally passed. And we now have it and can officially. And, Cam, would you pick us up where we left off?

[Cameron Wood (Office of Legislative Counsel)]: Yes, ma'am. I'd be happy to. Thank you. For the record, Cameron Wood, office of legislative council. As mentioned, the the bill has passed. It passed last Friday, so you have an as passed by house version that has cooperated the amendments from the judiciary committee, from the appropriations committee. There's floor amendment from representative Krasnow, Warren Kesha Ram Hinsdale that was incorporated as well. There were a few other amendments that were were not agreed upon by the body. Happy to talk about those if you all would find value in that. But you at least have the the document together in one place so we're not flipping back and forth between multiple different documents.

[Senator Alison Clarkson (Chair)]: So Can

[Senator Kesha Ram Hinsdale (Member)]: I ask a question? Yep. So my understanding, though, is it's there's a lot of judicial questions in here, so it's committed to senate judiciary.

[Senator Alison Clarkson (Chair)]: Correct. And they're beginning it, and then it's coming down. So this is all good work. Nader and Martin have coordinated, and there are and the house judiciary committee had it for a bit and made some significant changes, which I think we'll talk about at camp.

[Cameron Wood (Office of Legislative Counsel)]: I think that's roughly where we are is is Yes. I I think that's picking up. That is where we were at regarding conjecture actions. Okay. I'll get there. Just one second. I wanna a few quick things. I'm gonna pass out something I pulled together quickly at your request. I'm not gonna go back to this necessarily unless you would find value in this, but this is at least it's a side by side of the Did you send the Fiera? Yeah. Okay. Okay. Just finished it 15 ago. Okay. This is just the termination notice period.

[Senator Alison Clarkson (Chair)]: Oh, yes. This is what we asked for.

[Cameron Wood (Office of Legislative Counsel)]: Right. Right. So if you remember when I was going through my initial discussions with the bill, you have the residential rental agreements, and the residential rental agreement has to be terminated where the landlord is providing the tenant notice that the agreement will terminate on x date, and the statute governs how much notice period the landlord has to provide to the tenant. And the notice periods are being amended in July. So this is a simple comparison of what the notice period excuse me, what the termination is for on the far left. So nonpayment of rent in subsection a, subsection b one and b two are slightly different. Then you have the the remainder, what the current statutory notice period is, and what is being amended to in July, and then a few notes here on the far right column to keep it on. Oh, thank you, Ken. This is very helpful. The reason I highlighted the first three blue is because these are what are, you know, referred to as the just cause evictions. So nonpayment of rent of your lease, if you're breaching the lease terms, doing some sort of activity that's threatening the health or safety of other individuals, those are kind of the what gives a landlord kind of the, quote, just cause to terminate the rental agreements.

[Senator Alison Clarkson (Chair)]: Or I think in this building, it's called the for cause. So these are

[Cameron Wood (Office of Legislative Counsel)]: these are not terms of art. I mean, they're just they're just terms that are kind of used to distinguish between circumstances where a landlord is terminating the agreement for no reason because the landlord simply doesn't want the individual to be there anymore, and people refer to that as no cause eviction. So the remainder of these kind of c, d, e, and h are you know, I don't think that they fit exactly within kind of no cause definition, but, you know, I think just for simplicity and ease, I think you can consider those within in that bucket. So I just highlighted them for that so you at least have some sort of visual distinction between. Okay. Second comment I was gonna make. I'm working on and I'm I'm done with an abbreviated section by section summary. I just want to print it and proofread it one more time.

[Senator Alison Clarkson (Chair)]: Right. That will be

[Cameron Wood (Office of Legislative Counsel)]: with you today. Yeah. It's six pages. It's abbreviated, and it's still six pages. Six pages. Right. Just so you know, it doesn't include every single amendment that's in here. It's really intended to be kind of a very succinct highlight of the substantive changes in the bill. So as soon as I can get back to my office, I'll print this. I'll read it one more time just to make sure I haven't missed anything, then I'll share this all with you. Happy to print for you this afternoon if you want to pick it up. That would be great. Yeah. So just wanted to from our last conversation, those were the two pieces of documents that you had requested that you thought would be helpful, and so I'll have this one to you today as well. Okay.

[Senator Alison Clarkson (Chair)]: Thank you. That'll be helpful. And just in terms of a weekend work, I hate to add too hard, but I'm hoping, and I I failed to I'll touch base with Patrick and Ted today. But as you saw, I forwarded you Andy's letter to all of us. It it's a huge task to review all the appropriations that have been made in the big bill with our entire jurisdiction. That is it's huge. But I've asked Ted and Patrick if they're able to give that to us to review, and we can prioritize some of it. I think what I'd really like to focus on is try against walking through the monies we proposed, the appropriations considered, and really prioritizing those in a final document. Yes, the initial document we sent. But I'd really like to prioritize our spending and then prioritize the entire budget as much as we can actually get a handle on all those things. So just that's another piece of weekend and Monday work. I'd love to because I'd love to be able to really work on that.

[Senator Randy Brock (Vice Chair)]: We're gonna get in touch today Hopefully. The document to use to do the bill.

[Senator Alison Clarkson (Chair)]: Yes. And but we already have all the work from our bills, but but we could so thanks. Sorry. But all subject, but preparation work. That's okay.

[Cameron Wood (Office of Legislative Counsel)]: Ask a question

[Senator Alison Clarkson (Chair)]: about Yeah. Yeah.

[Senator Thomas Chittenden (Member)]: So, Kesha, I'd say reading this that it seems like the overarching intent of this bill, telling you if this matches or doesn't track with what you have interpreted in these discussions, to shrink the amount of time it takes to evict or reject somebody for for cause and to standardize and almost lengthen the amount of time that people have when it's a not necessarily no cause eviction, but otherwise, it's that it's just the general intent of the bill.

[Cameron Wood (Office of Legislative Counsel)]: I will say that is what the bills were accomplished. K. Let's say that's what the intent is. I know there were some bills that, you know, the the house general committee when they initially started, I had a a five bill side by side because there were more than five bills that were introduced that addressed the the landlord tenant relationship in some capacity. Some of those bills shortened every notice period apparently, not just the the for cause reasons. Some of the bills shortened the for cause reasons and and lengthened the the no cause reasons. Some of them remove the the ability to evict for no cause entirely. And so that's what you've seen in some of the charter provisions that have passed in some of the municipalities, for example Or haven't. Have passed with the voters, I should say. My apologies. Have not passed this body, obviously. And that would remove the ability to to evict someone unless there was cause. And so a lot of different versions and and desires of different sponsors of fills, etcetera. So but I agree with you. That's what the fill is doing. It's gonna a bit shorten the time frame for the the top three.

[Senator David Weeks (Clerk)]: So

[Senator Alison Clarkson (Chair)]: that is why we're having Mark Mahalik come in after we finish the doctor. Was a really really talk about what they were trying, what we are trying to accomplish in this bill, and the razor's edge balance that are trying to be balanced between provisions for both.

[Senator Thomas Chittenden (Member)]: And I refer to the white sections as no cause receipts.

[Cameron Wood (Office of Legislative Counsel)]: I think that's fair enough. Yeah.

[Senator Alison Clarkson (Chair)]: And I again, another piece of frustration is we need to look at the problem, which is really well stated in last year's landlord tenant report that the task force did, that Emily Krasno and and Richie Wesmers did last year. They did not make recommendations to the legislature, which is why Mark Mahaling and I went forward to try and see if we could craft a balance on how to improve things. So that is what this work is. It's taking The problem was clearly stated in that landlord kind of task force reporting and trying to move forward with a balanced solution, some balanced solutions. And so Mark is gonna come and speak to what you're asking, Thomas, which is what what what would be really, what's the intent and what are we trying to accomplish and how how tough it's been.

[Cameron Wood (Office of Legislative Counsel)]: Where are we? So I'm going to bring you to page 17.

[Senator Kesha Ram Hinsdale (Member)]: Can I I have miss Rachel in

[Senator Alison Clarkson (Chair)]: the? Hi.

[Senator Kesha Ram Hinsdale (Member)]: If I'm if we're on the section about ejectment, right, that you're

[Senator Alison Clarkson (Chair)]: Well, let's see where he's taking us. Where are you taking us?

[Cameron Wood (Office of Legislative Counsel)]: That is that is where I was going to start. What section is It is technically section two, but it's on page 17.

[Senator Alison Clarkson (Chair)]: Yeah. I was gonna say.

[Cameron Wood (Office of Legislative Counsel)]: But if there's a if there's a question, I'm happy to

[Senator Alison Clarkson (Chair)]: Yeah. Pause. Kesha, what's your question?

[Senator Kesha Ram Hinsdale (Member)]: No. I I was I I wondered if you were speaking to the transition into this section, and I just wanted to make sure we had some some history here that this. This was originally proposed. By senate judiciary last biennium perhaps in biennium prior to that. Our committee raised significant concerns about the legality of accusing someone of some kind of infraction or or some kind of behavior and then removing them from housing on that grounds. So I do I know you said the chair of housing might come into here to talk about that, but I've always seen that as a judicial question. That's a very much taking someone's rights away.

[Senator Alison Clarkson (Chair)]: And it is in that these sections were rewritten by house judiciary.

[Senator Kesha Ram Hinsdale (Member)]: Okay.

[Senator Alison Clarkson (Chair)]: So what you're looking at Kesha has been rewritten by house judiciary.

[Senator Kesha Ram Hinsdale (Member)]: Okay.

[Cameron Wood (Office of Legislative Counsel)]: Yeah, so

[Senator Alison Clarkson (Chair)]: And what what Nachor is considering at Senate Judiciary next week.

[Senator Kesha Ram Hinsdale (Member)]: Yeah, so maybe we don't get too deeply into these sections until judiciary has done their work because they're straight judicial questions of people's rights.

[Senator Alison Clarkson (Chair)]: Correct, but I think we need to understand them. So that's at least what's brought through what house judiciary did.

[Cameron Wood (Office of Legislative Counsel)]: So as as I mentioned, and I'll I'll start again, these these things do go hand in hand in that you have a residential rental agreement. The landlord has to terminate that agreement. That is the first step that has to happen if you're wanting to remove someone from the location. The rental agreement has to be terminated. And so depending on the reason you're terminating the agreement will depend on how much notice time you have to give the individual. Okay. So the individual remains after you've terminated the rental agreement. What do you do then? And the statutory language says you can bring an ejectment action to get a court to order that you landlord or tenant have the right to possess the property. If the landlord is deemed to have that right, they get a writ of possession issued to them by the court. That writ of possession is then served on the individual by the sheriff. And then at some point later, depending on the statutory section that issued the writ, could be five days, seven days, fourteen days later, the sheriff will show up and physically remove the individual if they still remain. So that's the process that the landlord has to go through. What we're moving into now here on page 17, starting to talk about adjutment, that is the second phase of the process. So we've talked about the termination, the notice periods, etcetera. Now individual remains and landlord is wanting to proceed with the court case to eject the person. That's what we're gonna move into here. And so the house general committee did pass language. They had their own new statutory construct here regarding injectments, and the house judiciary committee reviewed that and then offered an amendment on the house floor to make changes to what was proposed by house general. So what you have is, matter of chair, if you mentioned what the house judiciary committee worked through. So the first piece here, and I I I believe we touched on this last time, but I'll I'll back up a little bit so we can kinda keep it together and talk about it holistically. You have a section that's being added in that says that when a motion is filed for alternate service of process, the court has to rule on the motion prompted. This is a circumstance where, you know, as you know, you're you're going through through the court process. You have to have, you know, you have to have the things that are filed served on the other party. What do you do when you can't perpetuate service on the other party? There is a rule in your rules of civil procedure that allow you to go into court and request an alternate service of process. One of those could be attack order. And so this section is stating that when that motion for alternate service is filed, the court needs to rule on it promptly. Now we're moving into, in section three, we're gonna talk, as you can see there on line 16, we're moving into chapter 169 in title 12. Sorry, just curious, do we define promptly anywhere? Promptly is not defined, and as I mentioned last time, the bill that came out of House General had a specific time frame I on think it was like three days. It was three or five days. And the judiciary is testified that you are beginning to if you if you require the court system to rule on something within a specific time frame, you are beginning to tread on core judicial functions, the separation of powers that exist between this branch and the judicial branch. Yes, that's I appreciate it was the subject of some discussion, but it would be interesting for us to

[Senator Alison Clarkson (Chair)]: explore what promptly means as a result of no specific case.

[Cameron Wood (Office of Legislative Counsel)]: A question for the judiciary. So section three, so as I mentioned, we're in for procedure title 12, chapter 169. This is the chapter that governs ejectment actions that are brought. And so as you can see, subchapter three, superior for ejectment. There already exists a process to bring an ejectment action against an individual under a termination of a rental agreement. And so what this will do, these next few sections, it makes some small changes to the current process, but then it creates an entirely new subchapter to govern the ejectment case that's brought or a termination under a or b or a kind of, quote, just cause termination. For late payment of rent or failure to allow access. For late payment of rent or just as a global thing breach of the terms of the renter. That's how the statute

[Senator Alison Clarkson (Chair)]: And the new statutory language is

[Cameron Wood (Office of Legislative Counsel)]: It's gonna be a few pages down. I'll get there in just a second. So first thing this does is in the current process, there is a rent escrow section where the the or the landlord can request that rent be paid into court during the period of the ejectment case. There's a technical amendment here at the beginning to fix the fact that there are currently two subsection As in the statute. Removing one of them. The key pieces here are gonna be on subsection d. So when the landlord has filed this motion to have rent paid into court during the process, the court can order, here on lines 15, will or partial payment into court. This amendment would remove the court's discretion there and would require the court to order full payment of court, full payment into court if the court determines that it's owed. There is a subsection g on page 19 that allows a tenant to file their own motion to request for that amount to be reduced. At one point, g was struck, and it was just full payment only, no partial. And the judiciary committee wanted to keep g because they felt that it may be appropriate for a tenant to request partial. And then lastly, there's the inclusion of this new language in subsection I, which says the parties may come to an agreement at any time by motion filed to have that amount reduced. That's the first amendment there.

[Senator Alison Clarkson (Chair)]: Thomas.

[Senator Thomas Chittenden (Member)]: I raised this before. I I have concerns with this section, and, I'd like to hear from advocates at some point as to what the attendant the intent is. I I don't wanna take away the judge's ability to use his judgment. He is a judge and could you take partial payment and all of this I see is requiring more legal fees, lawyer fees, and renters having to file a motion. That's $3,500 so that how much are we talking about with the actual money on hand. So I have I have concerns with this section, and I don't support it, but I'd love to hear your advocates as to why this

[Senator Randy Brock (Vice Chair)]: is It

[Senator Alison Clarkson (Chair)]: would be good to hear why why the judiciary has judiciary changed. Okay.

[Cameron Wood (Office of Legislative Counsel)]: This next section is about what do you do with the property that remains in the dwelling unit after the individual tenant has been removed. How long does the landlord have to maintain that property? And I will say I've had to learn a little bit about the language in this section. There was some confusion, and the intent of this amendment was to try to clean up confusion. And to be honest with you, there may be a a better way of doing that. It will also change this. The the core question is the landlord has gone terminated the rental agreement. Now the landlord is going through the ejectment action in court. The landlord gets a writ of possession, giving them, you know, equal rights to possess the property and to have the the tenant removed. And the question is, is how long should the landlord have to maintain any property that remains after the landlord has issued the writ of possession? K? That's just the question. And do you all determine, hey. Here's how long we think the landlord needs to maintain that, and that's what this section is intended to be. You just said the property could contain you mean the stuff in the Individuals Yes. Individuals' personal possession. This section said what was on line 15. The landlord had to maintain the property fifteen days after the writ of the possession is served. So as I mentioned a second ago, the sheriff has to serve the writ of possession once it's issued, and then depending on circumstances of the case, the sheriff has to wait specific time period before the sheriff can come back and then physically remove the individual. So landlord gets the writ of possession. It's served. The court could order that the sheriff have to wait a certain time frame beyond what's required in statute, but statute mandates at least a minimum of depending on the circumstances, and the spill could be five days, seven days, fourteen days. Sheriff delivers the writ, has to wait five days, come back, remove the individual. Deliver the writ, you wait seven days, come back, remove the individual, could be fourteen days, like I said, depending on the circumstances. Initially, the statutory section here says the landlord had to keep the property fifteen days after the writ of possession is served. Later on, it was amended to then add this language on lines sixteen and seventeen, or fifteen days after the cert or upon the landlord being legally restored to possession of the dwelling bed, which could be beyond fifteen days. There was some confusion, including on my part, as to whether the fifteen days applied to both of those conditions, fifteen days after the writ of possession is served, or fifteen days after the landlord is being legally restored to the property. I think we've cleared up some of that confusion. What this would do is this would say that the amendment here would say that the landlord can dispose of the property immediately upon being legally restored to the possession of the property. That could be as short as six days after the writ of his act is served on an individual. So you could, based on this amendment, you could be giving an individual potentially five days to pack up their things and be able to remove it from the property before the sheriff comes back, physically removes the person, and then the landlord would have the legal ability to dispose of the property. And so it could be real quick, senator, it could be that short. It could also be fifteen days because under the the standard the the kind of default statutory section is the sheriff shows up, issues the writ, and can't revoke the person for another fourteen days. So the standard could be fifteen days based on this amendment, but it could be much shorter. And so I think for you all, how I would describe this section, if you want to make your own, If you want to change this to to react what you want is how long do you think the individual should have, and then you can we can we can specify that

[Senator Thomas Chittenden (Member)]: I don't see a definition or parameters around the act of disposing. So does that mean they can toss it to the curb? Does that mean they can keep it and sell it to try to recoup some what does dispose translate to in actuality? Big landlord gets to do whatever they want with it, they can put it in their truck and bring it home?

[Cameron Wood (Office of Legislative Counsel)]: In theory, yes. That's my understanding. There is a Supreme Court case that says that if the landlord turns around and sells the property, it could be an unjust enrichment, and they may have to provide the proceeds of that sale over to the dependent tenant. So there there is still potentially some restrictions on what the landlord

[Senator Thomas Chittenden (Member)]: could do with the property. Do find those restrictions anywhere in statute? I think

[Cameron Wood (Office of Legislative Counsel)]: you could define it further. Yes. We don't currently.

[Senator Thomas Chittenden (Member)]: Current statute doesn't define for disposing stranglings. Do you have to say when you're gonna put it

[Cameron Wood (Office of Legislative Counsel)]: in the curb or anything? In this statutory section, in this chapter, no. It doesn't say anything. It just says the landlord may dispose of the property. I think the landlord did not clarify it. I would say it this way. It it depends on it depends on what your intention would be. As I read this and my understanding, if the landlord comes in and and you have individuals who practice in this area that's, you know, maybe able to help, you know, flush out if they have specific cases where they've had to deal with this, My understanding, landlord can dispose of the property without liability to the tenant. So if the landlord comes in and backs up a dumpster, throws everything in the dumpster, and gets rid of it, no liability to them. The court case that I was referring to was circumstance where the landlord took all of the property of the individual and then went and was selling the valuables, and then there's an argument that that landlord was unjustly enriched based on them selling someone else's property. It says you can dispose of the property. It doesn't say that the landlord now owns the property. Right? So if the landlord then turns around and sells it and receives a lot of money for selling someone's valuables, there's a a legal question of whether they've been unjustly enriched by the

[Senator Randy Brock (Vice Chair)]: the court said. Yes. Landlord incurs expense having to collect the material and then dispose of it.

[Cameron Wood (Office of Legislative Counsel)]: And the court did allow the landlord to in a case that I'm talking about, the court did allow the landlord to deduct from some of those proceeds things like of those expenses. Also, keep in mind that the landlord may have damages or back rent owed to them based on a court case. So I think a landlord could deduct the necessary expenses, deduct the things that are owed, etcetera. My point is simply that if the landlord were to take possession of the property and then turn around and try to sell it and then just pocket all the cash, the tenant does have a claim against the landlord.

[Senator Randy Brock (Vice Chair)]: I think what was being done by not addressing the issue of being responsible for what, we have created a situation that invites litigation, which I we have enough litigation now. I think it would be much, much simpler to express clearly what we intend and what should happen. So I

[Senator Thomas Chittenden (Member)]: agree. Just maybe for the advocates and the people on the on the ground, how does this usually translate to what actually happens? So we'll

[Senator Alison Clarkson (Chair)]: get to that

[Senator Randy Brock (Vice Chair)]: as we when

[Cameron Wood (Office of Legislative Counsel)]: we have it. Okay. So Sorry. Go ahead. Sorry. Move to page 20, the bottom of page 20. Okay. So this is the noodle ejectment process that I mentioned. There currently exists an ejectment process. This would create a new subchapter, and then section 4,861 says most of this language is just gonna be standard to what currently exists in the statutory section, just authorizing the landlord to bring an action in superior court to restore them to possession of the property. Key thing here, though, is this language here on line 15, after termination of the lease under nine BSA four four six seven a or b. So what does that mean? That means that if you're terminating the rental agreement for any of these other kind of, quote, no cause reasons, you have to follow the current statutory structure. Current statutory structure only provides for expedited process, quote expedited process, there is an unlawful occupant on the premises, or conceivably, if the landlord asks and files the motion to have rent paid into court and the judge orders rent paid into court and then the individual tenant fails to comply with that order, the statutory language does provide for kind of an expedited writ to be issued in that circumstance. But as a general matter, the current statutory framework, unless it's one of those two circumstances, unlawful occupant threatened to court. There's not really any time frame built onto when the court needs to hear a hearing or when the court needs to issue a writ or make a final judgment, etcetera. So what this subchapter four would do is it creates this new process, but only for termination under A or B. Now section 4,862, standard language describing that the what the landlord has to provide as part of the complaint, copy of the rental agreement, the notice to terminate, including the affidavit with wires. If you remember way back last week, the week before, we talked about if the landlord is terminating a rental agreement under subsection b because there's a breach of the rental agreement or there's some sort of activity that's threatening other people, the landlord has to provide that individual with an affidavit, setting forth particular facts with sufficient detail describing the events, that has to be included as part of the complaint. That's what that section is for. What information has to be included as part of the case when it's filed.

[Senator Alison Clarkson (Chair)]: Am I correct in understanding that this new section is in part designed to deal with the trespass issue that was that we all heard about with Decker Towers. Was We will

[Cameron Wood (Office of Legislative Counsel)]: get to that. That'll that'll come up after this. That's not really there is a a section in here about trespass at the end, but I would say that's gonna be dealt with in a section coming up after the objection. Okay, so this is not

[Senator Alison Clarkson (Chair)]: to deal with it.

[Cameron Wood (Office of Legislative Counsel)]: So we get to section 4,863 here, beginning on line nine, answer to the complaint is filed. Upon receipt of the answer to the complaint, the court shall set a final hearing date not later than ninety days after filing of the complaint absent good cause. So this is, as I mentioned, different than the current statutory framework for rejectment because this is saying that under these circumstances, the court shall set the final hearing not later than ninety days after the complaint is filed. Sub two there says that the timeline doesn't apply when the plaintiff is already in possession or has already received a writ of possession from court. Presumably, if the landlord already has possession of the property, there isn't as much need for an expedited process of hearing. It's so interesting that the word tenement is still used. Yes, ma'am, and that's just being consistent with the current chapter framework. So then we get to a default four eight six four, keeping kind of standard language that already exists, allowing for a default motion to be filed in the event that the defendant doesn't file an answer, or ask a rule on that motion promptly, that's on line two. Okay, so now 4,865, now you get to this kind of expedited hearing process. A few things that I will mention, I'm not necessarily gonna walk through it line by line unless you would find value in that for a few reasons. This is based off the current expedited hearing for an unlawful occupant. So most of the language that's here is simply copied over from the current statutory structure. So that's the first thing. It allows for the landlord to file the motion, and then the dependent can respond to the motion. It has a requirement when the hearing be made, and then it has information about if the individual does participate, etcetera, that's kind of the statutory framework here. Second thing I'll mention, this is limited to only, this is on lines four and five, this is limited to only action brought because of a termination under 4,400

[Senator Thomas Chittenden (Member)]: sixty

[Cameron Wood (Office of Legislative Counsel)]: seven(two). So as I mentioned, the whole new subchapter you could bring for any of these reasons, a, b one, or b two, this expedited hearing section is only for b two. What is B2? If you remember, that is the individual terminating their rental agreement because of some sort of activity that is threatening the health or safety of other individuals. The domestic violence Anything that threatens the health and safety of tenants. Of other residents, the landlord, the landlord's agent, or neighbors. That's changed in the statutory section. It's adding in landlord, landlord's agent, or neighbors. That's different. And then it's also there there are some changes to that section. It's it's kind of It's expanding the ability to terminate under that section because of other activity. Other activity isn't defined, but it is conditioned in that the activity has to threaten the health or safety of other people, which is the current statutory framework for that section. It's Where

[Senator Thomas Chittenden (Member)]: do we define and I just lost track of the bill. Where do we define what's threatening the health and safety of others? Is that, like, throwing darts in the hallways and being drunk and busting walls up in in common areas?

[Cameron Wood (Office of Legislative Counsel)]: It's not defined in that way. If a landlord is going to have to if they terminate the rental agreement, the landlord is going to have to provide the affidavit to the individual describing what the event is, and then they're going to have to get a court to uphold it if they get to that point. But termination is making threatening the health and safety of others. Right. So Where is that, like, breach of rental, so the subsection b two?

[Senator Thomas Chittenden (Member)]: It's because it's not here. Right? This is the process. This is for the executive process. Right.

[Cameron Wood (Office of Legislative Counsel)]: So it's going to be on page eight. Thank you. Currently, that section is it needs to be criminal activity, illegal drug activity, or acts of violence that threaten the health or safety of other people. So I look down on, lines sixteen, seventeen. Page eight? Yeah. Here, can go there and we can pull it

[Senator Alison Clarkson (Chair)]: up real quick. Step number two. Okay. Line 16. So

[Senator Thomas Chittenden (Member)]: current laws, criminal activity, illegal drug activity, we're proposing to change to damage of the dwelling unit or premises or other activity.

[Cameron Wood (Office of Legislative Counsel)]: Right? So this is a change in that currently it's criminal activity, illegal drug activity, or acts of violence, which threatens the health or safety of other residents. This is being changed, so it would be acts of violence, damage to the dwelling unit, or other activity which threatens the health or safety of other residents. So you're saying that the activity at this point, the other activity doesn't have to be terminal, doesn't have to be drug activity, but it does have to threaten the health or safety of other people. So that So that could

[Senator Alison Clarkson (Chair)]: be possible. That's a conscious shot. So it it

[Senator Thomas Chittenden (Member)]: Breaking bottles of glass out in the hallway that that's threatening the neighbors. People could step on it, but it's not necessarily illegal, but that would qualify in this case. You're drunk. You smash a bottle without the broken glass, people cutting their feet.

[Cameron Wood (Office of Legislative Counsel)]: I think there's an argument to be made that that's activity that threatens ill

[Senator Alison Clarkson (Chair)]: My guess is it would have to be regular activity for it to be

[Cameron Wood (Office of Legislative Counsel)]: So so two things there, and this is important because it's gonna bring me back to the ejectment section that we were just reviewing. It doesn't have to be a repeated activity based on this. The termination language doesn't require there to be anything ongoing. It could

[Senator Alison Clarkson (Chair)]: be one Okay. Could be 1%. Well, one violent incident would be Right.

[Cameron Wood (Office of Legislative Counsel)]: It has to be activity that threatens the health or safety of other people, but it could be one activity.

[Senator Alison Clarkson (Chair)]: And then It could be a domestic violence. It could be a

[Cameron Wood (Office of Legislative Counsel)]: But when you so this was leading me to one of the other pieces I wanted to comment on this section, this expedited hearing process is that the landlord is arguing that they need an expedited hearing. The plaintiff may file a motion. Plaintiff is entitled to immediate possession on the grounds that the line seven, defendant's continued occupation is threatening the health or safety of other residents. So this is different language. So this is saying that you can terminate the rental agreement because of one activity of violence or one activity that threatens the health or safety of other individuals, but you would only be able to file a motion for this expedited hearing if you were making an argument that the defendant's continued occupation of that place threatens other people. And so what does that mean? That means the landlord could still move forward with the objectment action, but on if the defendant's continued occupation isn't threatening the health or safety of other people, they had an episode where they were violent against someone else, and the landlord's wanting to move forward with determination, but the individual subsequently has sought medical attention and isn't now an ongoing threat to other people. Based on the language, the landlord wouldn't be able to request an expedited hearing because the individual's continued occupation is no longer threatening at that. These are all going to be very fact specific scenarios. Yes. Individuals are going to be able to argue cases that are going to be on the extreme ends and in the gray area. And, ultimately, it will be up to the courts to determine whether a given fact pattern meets this section to all.

[Senator Alison Clarkson (Chair)]: It's a good

[Cameron Wood (Office of Legislative Counsel)]: idea to hear it. And so I'm just commenting to you all that last time, senator, is that as you all know, you these are very fact specific, and that's going to depend on what the circumstances are. It's gonna depend on what could be bargain improvement in court based on they get facts. Right.

[Senator Alison Clarkson (Chair)]: Yeah. I think she had a question.

[Senator Thomas Chittenden (Member)]: My point on this, I just want to flag, think Senator Weeks has had his hand up for a while. I'm seeing this change from criminal activity, illegal drug activity towards threatens the health and safety is creating more gray area with less fact specificity because I think that is much more open to interpretation whereas criminal activity, illegal drug activity, seems like a bright white line that you can cross it, you know, what it is. Yeah.

[Senator Alison Clarkson (Chair)]: But I think you've talked about other threatening things that might not be reached the level of criminality but have big impact on others. David and then Kesha. So I'll defer to Kesha. Okay. Kesha. And then David.

[Senator Kesha Ram Hinsdale (Member)]: I appreciate that, David, just because I already have some noise in the background. So I would would just this is just my suggestion, and I've made the suggestion to senate judiciary as well and the chair. I can't see any value in getting into the specifics of how we might tell the court to treat any of this activity, how we might wordsmith any of these details. Most of the bill and probably particularly sections, I would recommend that we work with judiciary to look at a landlord tenant courtroom or pathway in court. I think it is a fool's errand to believe that we can determine what activity will otherwise rise to the level of removing someone from their rented premises. These are very delicate areas of the law and the courts simply don't have the capacity to do this right now. The only way they would have the capacity is a court that's dedicated to these matters which are very very specific areas of the law. I even encourage us maybe to have in those who might have municipalities that might have a housing review board. We have one in Burlington and they get very good at looking at and understanding local landlord tenant ordinances as well as the state law around landlord tenancy and they are much better at handling these matters in some kind of mediated setting. I just think, would, for most of this, think it would be a waste of time for us to get into the details than to just wait and see if Senate judiciary would be willing to entertain a landlord tenant court.

[Senator Alison Clarkson (Chair)]: Thank you very much. I think that might even stress court resources further, but hey, let's explore it.

[Senator Kesha Ram Hinsdale (Member)]: Well, definitely funded. That was discussed in house judiciary, although they didn't, I don't think set an appropriation, but it could be studied. It's just we were gonna study these matters in a landlord tenant study, and it never happens. This just isn't careful language, and I deeply

[Senator Alison Clarkson (Chair)]: I don't think that's fair to say it's not careful. The house judiciary worked pretty hard on this, so I'm not I wouldn't attribute anything to it. I think if if if we I think that the idea of the court is an interesting one for us to explore. And, David, do you have a question?

[Senator David Weeks (Clerk)]: I I do. So you mentioned that the language between ejectment, a page, advanced page eight, that excludes acts of violence, etcetera, and expedited hearings on page 22, they're purposely different. One thing I see is that are missing is on page 22 is property damage as grounds for expedited removal. I'm wondering if the House Committee had touched that and why that property damage was as significant as threatening neighbors and such for a landlord's perspective why that

[Senator Alison Clarkson (Chair)]: fell I thought it

[Cameron Wood (Office of Legislative Counsel)]: was mentioned earlier. You can terminate the cause of damage to the unit that is threatening the health or safety of other people. Right. The expedited hearing language is the defendant's continued occupation of the lands is threatening the health or safety. I think you could probably make an argument if they're continuing to destroy property while they're there.

[Senator David Weeks (Clerk)]: But if they're But it's internal to the apartment, it's not threatening anybody else on. Agreed and understood. Yeah. I'm just wondering why that

[Cameron Wood (Office of Legislative Counsel)]: The the the house general committee initially had a different construct here, and it was that if there was a termination under b two so could include damage to the welling contest, there would be an initial show cause hearing where the parties could submit written affidavit evidence, and then that would be a no requirement of live testimony. And then if the court felt that there was live testimony needed, then it would move to a final hearing, which would be within a specific time frame of the initial hearing. There were a lot of concerns about the structure of that process, both relying on out of state written testimony without having the ability for live testimony across examination at the initial hearing. There were concerns from the judiciary about about the the workability and the ability to implement that kind of system. So that's getting me all the way around to Yeah. I don't know how much discussion the house general committee had on this because this was this language here that you see under this expedited here when it was really worked out in judiciary. And I don't recall that having come up in judiciary when I was there, but I wasn't in the room the entire time.

[Senator Alison Clarkson (Chair)]: So I have a question, and and David's for Mark when Mark comes and join us. Mark is coming to spend some time answering exactly this kind of question. So Kesha, I've got a pin in your court question, and David wanted yours and Tom's some of yours too.

[Cameron Wood (Office of Legislative Counsel)]: And so I think, you know, for you all moving forward, questions would be, you know, do you feel that there should be an expedited hearing process? First question, yes or no. If you feel there should be some sort of expedited hearing process, then it's for what reasons? Are the reasons for termination that should fall under that expedited hearing umbrella? And then how long do you want to provide in that circumstance? So that leads me kind of to the last point I was going to make regarding this section is, as I mentioned, it's based on something that's currently in law. I mentioned the difference between the language regarding the termination notice and the continued occupation here that was intentional. And then the last thing I was going to comment specifically or highlight is in subsection b, which is that the hearing has to occur not later than twenty one days after the motion is filed. So that's a pretty that's a pretty pretty quick turnaround from from the court and so, you know, when the motion is filed, so it could be filed with the the complaint in which case there is a very quick turnaround time between complaint being filed, the defendant has twenty one days to answer, technically the hearing needs to be held within twenty one days, absent good cause, I imagine the court would extend that out because they're going to want to provide the other party the opportunity to file the answer. And so that may be some things that you want to think about as you're discussing what should the time frame be for the expedited hearing.

[Senator Alison Clarkson (Chair)]: This judiciary is what meant. Yeah. Kesha?

[Senator Kesha Ram Hinsdale (Member)]: I'm not on senate judiciary, but we you simply can't make the court do anything as we determined in many of our housing bills.

[Senator Alison Clarkson (Chair)]: A court has advocated for itself very heavily in house judiciary, and this is where house judiciary landed. All we're doing is hearing this for the first time. And as you know, senate judiciary is addressing these sections.

[Senator Kesha Ram Hinsdale (Member)]: Yeah. So I I would just say, I don't think it's our place to hear anymore except from the courts about how impossible this would be to do. Well,

[Senator Alison Clarkson (Chair)]: anyway, let's finish. Okay.

[Cameron Wood (Office of Legislative Counsel)]: So, the Sub C allows the dependent to oppose the motion in accordance with the rules of civil procedure. If the dependent fails to appear at the hearing or to file a response, then the plaintiff is entitled to a judgment by default. If the court finds, sub two here, if the court finds the defendant's continued occupation as a threat to the health and safety of others, then the court orders a judgment in favor of plaintiff. And then it has here where the sheriff so if the writ is issued, the sheriff has to serve sorry. This is line 16. Serve the writ upon the defendant, and not sooner than five days, put the plaintiff into possession. This is what I was referring to earlier. The time frame between when the writ is served and then when the writ is executed on by the sheriff it's different depending on the circumstances. This would have it at five days. So plant landlord gets the judgment. The writ's issued. The sheriff delivers it. Five days later, they're gonna come back and be able to remove the defendant from the property, and then again, keep in mind the change above about the landlord being able to dispose of property then immediately thereafter, it's a shorter time frame than what exists as the default under statute, which is fourteen days. Okay, cost judgment of the plaintiff, section that allows the plaintiff to have judgment and also rents due, including damages and costs, and if the written rental agreement provides, the court can award reasonable attorney's fees. So this is what I mentioned as the default, the writ of possession. Oh, see. Highlight. Page 24, lines two and then four, if the writ of possession is issued, the sheriff serves, and then no earlier than fourteen days after the writ of serves, put the plaintiff in possession. I know the default is fourteen days. The expedited hearing would be five days. So

[Senator Randy Brock (Vice Chair)]: By way, there are lots of dates in here. Yes, Is there comfort that people involved, sheriffs, or still can adhere to these dates, unreasonable dates? Some of

[Cameron Wood (Office of Legislative Counsel)]: the dates exist in current statute. The fourteen days, that's kind of the default under the current ejectment process. I was not in the room when the sheriffs the the house general committee did have one of the the county sheriff's office come in. I don't know if it was the sheriff that came in and testified. You know, it's it's not sooner than or not earlier than, so it could be after that. And, you know, I think, generally speaking, my understanding is the sheriff will bid a death, you know, when they do. And I think they do my understanding is they do adhere to the time frames for most part, but it's also gonna depend if they're able to, you know, locate the individual at that time. You know, they show up on the property as the individual there in Central but I don't remember there being any that I was aware of or made aware of any significant concern about the sheriffs about that thing, but but I was We ought to ask Yes, sir.

[Senator Randy Brock (Vice Chair)]: As this other piece takes back originally.

[Cameron Wood (Office of Legislative Counsel)]: Yes, sir. Okay. Last two sections there. Again, property remaining, similar language to what you have above regarding immediately after being legally restored, so keep that in mind if you want to make amendments to the sections above. We would make corresponding amendments here. Trespass order, after being legally restored to possessions of the dwelling unit, the plaintiff may issue the defendant an order against trespass for the entire premise subject to the ejectment action. It has to be done in accordance with 13 PSA 3,705, which is where we're gonna transition into from here regarding trespass. Section four is a purpose statement stating that the next section, the intent of it is to overrule the Vermont Supreme Court decision in state v Dixon, which was issued in 1999 and allow the landlord of a dwelling unit to obtain a no press no trespass order prohibiting a tenant's invitees or licensees from entering the dwelling unit in common areas if the invitee or licensee subject to the order has violated the terms of a lease agreement. Then we're gonna I'm gonna I'm just gonna walk through this language, and I'm gonna pull back, and we'll talk about trespass kinda globally. Then section section five amends the criminal statute regarding unlawful trespass, adds in a sub g one, which says that a landlord may cause to be served in order against trespass, prohibiting attendance, invitees, or licensees. I'm just gonna refer to them as guests at this point. That's the statutory language. They're an invitee. They're licensees. They're guests. From trespassing in a dwelling unit or any of the dwelling unit's common areas if the tenant responsible for the guest consents to the order, so the tenant agrees the order against trespass being served. The invitee or the licensee subject to the order is violating the terms of the lease agreement, or the guest is violating state or federal law while on the premises. So then I'm gonna pause it because that's the there's a definition of dwelling unit in tenant which simply refers back to the same definition to the resident for regulars or unit chapter. So I'm gonna pause here and talk about kind of trespass for a minute. You have this case, State versus Dixon, the trying to remember the exact circumstances the individual who had a criminal case brought against them for criminal trespass was in the common areas of a given location. I don't remember exactly the department building, but they're in the common area. The common area being, you know, could be the lobby, the stairwell, the elevator. They were going they had been issued a no trespass order, but they were a guest of one of the tenants who lived at that location. And because they were a guest and had been invited, the tenant who has the lawful right to occupy that place, they have a constitutional right to have guests and to, you know, bring individuals they want into their property. And so, you know, the court said based on common law that you couldn't prohibit that individual from being in the common areas because they were a guest of somebody who had lawful rights to occupy part of the premises. Right? So you couldn't couldn't uphold the the trespass order against the individual in that circumstance. What this language is intended to do is to say that adding in statutory language here that if the tenant consents to it or if the individual is violating the lease agreement or violating state or federal law that the landlord does have the right to issue a new trespass against that individual and exclude them from the common areas. Despite the fact that the tenant may be inviting the person to the property. And so it is intended to overrule the Supreme Court case in State V Dixon. The Supreme Court case was not based on some sort of constitutional argument. It was based on a common law right and based on the language in the statutory section that exists in the sub a. And so there is a discussion point that you should have and you should hear from advocates about concerns that this language may inappropriately give a landlord authority over who it is able to invite onto their property or not. Be happy to come back to talk further detail but just flagging for you that, you know, this was a point of concern on the house side. You may may hear from, sure that you will, but you may hear from advocates about this section in particular and about how it intersects with the tenants rights to to invite on their property and the state he takes the case and I

[Senator Randy Brock (Vice Chair)]: assume you're at Menzel.

[Senator Kesha Ram Hinsdale (Member)]: Can you remind me the definition of a landlord in this bill?

[Cameron Wood (Office of Legislative Counsel)]: One second. I don't it it there is a definition of landlord defined in the residential rental agreement chapter which is the owner, lessor, or where applicable sublessor of a residential dwelling unit or the building of which it is part is the definition of playing for.

[Senator Kesha Ram Hinsdale (Member)]: So not a property manager?

[Cameron Wood (Office of Legislative Counsel)]: The definition doesn't include a property manager. No.

[Senator Kesha Ram Hinsdale (Member)]: So for a nonprofit housing organization, I don't know if that means they're board or set like, I'm thinking of Burlington Housing Authority. Would it mean the manager of Burlington Housing Authority or the who owns the building?

[Cameron Wood (Office of Legislative Counsel)]: Yeah. I I I don't know what your concern is specifically, but I imagine, you know, a property manager acting on behalf Right. Acting on behalf of a landlord. If you're worried about this dress cast piece in particular, I imagine if the property owner is acting on behalf of the landlord, there wouldn't be an issue there. And I think senator Ram Hinsdale may have left.

[Senator Alison Clarkson (Chair)]: There's a chance for signing

[Senator Randy Brock (Vice Chair)]: the judge.

[Senator Kesha Ram Hinsdale (Member)]: Yes. As soon as she gets back in, I will admit her. I will admit her.

[Cameron Wood (Office of Legislative Counsel)]: I don't you know, the fact that the statutory section says that, you know, the landlord may cause to be served in order against trespass. I'm not aware of any legal issue or concern of a property manager acting to behalf of the landlord in this activity.

[Senator Randy Brock (Vice Chair)]: Okay.

[Cameron Wood (Office of Legislative Counsel)]: So let's track fast. Next, the positive rental payment pilot program. So if you all recall, we did work on this last session, so I'm not gonna walk through each of these sessions line by line. It is the language that you all ultimately passed out of committee. It didn't pass ultimately at the end of the session, this gives the state treasurer the authority to do a two year pilot program to work through a third party administrator to connect with it's intended to be not less than 10 landlords, hopefully enrolling not fewer than a 100 participant tenants to be able to report their rental payments to credit reporting agencies to help those individuals build credits. It's a voluntary program, it's not mandatory. It does have provisions that authorize the ability to remove participants if they fail to make payments, if they're not paying their rent, etcetera. Happy to answer any questions that you may have about it. I'm not gonna walk through, like I said, line by line. It does have the reporting requirements, an interim report and a final report. The last thing I'll mention is there was language added in from the House Appropriations Committee there on the top of page 31. Duty to implement the section is contingent upon an appropriation. The treasurer's office was asked for $100,000 in order to conduct a two year study. My understanding is that the DOM may get in the House's final budget. So we accept a question, older English section.

[Senator David Weeks (Clerk)]: So we are pretty familiar with this language. Yeah. Where where did it die in the the last session? I thought it be helpful for us to understand the political landscape.

[Cameron Wood (Office of Legislative Counsel)]: Yeah. I honestly do not remember. It was in the senate bill as it passed out and went over to the house. My recollection is it was not in the house bill as the house came over to the senate. And then there was yeah. I can't remember which bill ended up moving forward. You know, my recollection is it didn't make it in the budget. So at some point, it was just removed entirely at that point in time and just was never a a conversation moving forward after that.

[Senator Randy Brock (Vice Chair)]: What that bill, know part of the discussion on that bill here was that the reporting was only going to be a favorable results, but it will not be an unbiased rating of people who sign up as to whether good, bad, or indifferent. Is that your recollection?

[Cameron Wood (Office of Legislative Counsel)]: Yes, sir. There was a lot of discussion in this committee in particular about that point. Senator was, you know

[Senator Randy Brock (Vice Chair)]: I know, you discussed it from Yes, sir.

[Cameron Wood (Office of Legislative Counsel)]: Know, concerns about exactly what you you just identified, only reporting the positive information, not reporting information if somebody is is not paying. My understanding of where you all landed, and and I only say landed because the bill passed out of committee. I don't remember what the individual vote was on on that particular piece, but there was language that was added in to specifically remove individuals if they did not pay, you know, if they weren't making timely rental payments. So there was some, so that is in this version, but yes, there was

[Senator David Weeks (Clerk)]: a lot of discussion.

[Senator Randy Brock (Vice Chair)]: Okay. Questions on any of these points before we move on?

[Cameron Wood (Office of Legislative Counsel)]: Please. Okay. Last few things here, then. So there's a security deposit transition period, so if you remember up above, there is the cap on security deposits. Landlord cannot charge more than two months for a security deposit in addition to the first month's rent. Two things I'll comment. One and just let me let me get up to the statutory director.

[Senator David Weeks (Clerk)]: Is this the bill that's got the 45 k thing? Yes, sir. So

[Cameron Wood (Office of Legislative Counsel)]: security deposits. Okay. So this is all the way up on page four and five. This has the cap, the landlord may charge us. You may not receive a security deposit exceeding an amount equal to two months' rents in addition to the first month's. Sub three allows for a pet deposit, and then Senator, just to your point you just made, down here on the sub two requires that half of the security deposit be provided forty five days before the termination notice if the termination is under sub e, which is one of the the no cause terminations. I should say E or E. Two things I want to mention about this and then about the section below. This came up on the floor. There is a subsection G in the security deposits section, and I'm going pull that up so we can talk about it. Okay. This is the current statutory section regarding security deposits that's being amended in this bill. There is a Yes, sir.

[Senator Randy Brock (Vice Chair)]: Wait, read it.

[Cameron Wood (Office of Legislative Counsel)]: There we go. A town or municipality may adopt an ordinance governing a security deposit. The ordinance shall be supplemental to and not inconsistent with the minimum protections of the provisions of the section. The ordinance may not limit how the security deposit is held, and it may authorize the payment of interest on a security deposit. There was a concern that was brought up on the house side because the the tab that's being put in this bill is you can charge more than two points for security deposit and there are some municipalities that have a lower amount that's authorized. My understanding, I think it's Burlington in particular, and it may be maybe Brattleboro. Not Brattleboro? That that that's okay. So there could be municipalities that have a lower balance. I don't remember exactly which one's off the top of my head and how many. The question then becomes, given the subsection g, are those municipal ordinances that are have a a smaller limit or a lower limit on the amount of a security deposit that can be charged? Are those going to be struck down or made ineffective by the language that's being put in h seven seven two? And I see senator Ram Hinsdale is our end of mister chair, but I'm gonna make one one comment real quick just to to round out the thought. The key question is the second sentence in a section. The ordinance has to be supplemental to and not inconsistent with the minimum protections. Current statutory language doesn't have a path, So I don't know that any of those municipal ordinances have been challenged, but I assume they're going to be upheld because it's not inconsistent with the statute because the statute doesn't have a cap. So there's nothing to be inconsistent with in that sense. If you put in a cap to say, a landlord shall not charge more than two months rent, that's the threshold. And then municipality comes in with an ordinance and says, a landlord shall not charge more than $1,000,000. Is that now inconsistent with the minimum protections of the section? I can't tell you what a court would say, but I think it's an argument that could be made that it is now typically, you know, you know, lower levels of government can can provide greater protections than than what is provided. But is a court going to determine by the fact that you all put into statute a cap that is listed as two months rent? Does that mean that municipalities must then subsequently follow that Possibly. And so that maybe something you want to discuss. There was an amendment on the floor to add in some language that would allow specifically a municipality to to have a a smaller cap if they so choose, but it was not agreed to by the body. And then mister chair, I see that Senator Ram Hinsdale. Senator Ram Hinsdale. Hands up.

[Senator Kesha Ram Hinsdale (Member)]: Thank thank you, mister vice chair. So, I just wanna highlight and Cameron can correct me if I'm wrong, but the last time we opened security deposit law was my first bill, 2009, 2000 was that yeah, 02/2010. We changed it to allow someone to go to court and argue for a portion of their security deposit back while they were still debating the rest of the security deposit that might've been withheld. So essentially that check is a commercial instrument and cashing the check otherwise becomes a tacit consent to ending the transaction. So we had in that bill to open the Uniform Commercial Code to exempt security deposit checks from other laws governing checks as financial instruments. So, just say that because we have not opened security deposit law in a long time. I think we need a UCC attorney. At the time, it was Carl Lisman. But this is like not this is not a easy area of law to just open up or to say that municipalities can kind of do other things. That is that most of these are governed by the Uniform Commercial Code because this becomes a major question of what it means to be satisfied with part of this transaction and still have the ability to argue in court for the rest.

[Cameron Wood (Office of Legislative Counsel)]: So I would just comment. I'm I'm that's not my understanding, happy to look into this further. And I know this is brought up earlier on during the initial walk through, and I just haven't yet had the time to to go and deep down that, but happy to to come back and discuss that further with the with the community. So

[Senator Kesha Ram Hinsdale (Member)]: So you didn't find the language in the uniform commercial code that that we put in that exempts security deposits from the UCC?

[Cameron Wood (Office of Legislative Counsel)]: I have not done a deep dive on it. I would say my understanding is the Uniform Commercial Code does not govern anything related to a residential security deposit. Property laws are typically governed almost entirely at the state level, and so I'm just not aware of anything in the uniform commercial code that would make that code applicable to a residential security deposit. But, again, but but centered to your point, I just haven't had the chance to go back and look into what you're referring to. So if something was added there that you were specifically referring to, it could exist. I just I wanna go spend some time to try to check.

[Senator Kesha Ram Hinsdale (Member)]: It was the last bill that passed in 2010 Go in case you wanna go look. I believe that's the last time we opened up security deposits as a as a commercial instrument if and they have to be done by check for that very reason.

[Cameron Wood (Office of Legislative Counsel)]: Okay. And then that's helpful. That narrows it down. Can go I can go take a look. So okay. So that that brings me back to the bill because there's one other piece I want to comment on regarding security deposits. So we just talked about the the cap, the state cap. I mentioned the concern that was raised about the municipal ordinances and whether there's potentially a conflict there, so that may be something you all want to keep in mind and possibly address if you wanna make it explicitly clear. If you're wanting to authorize municipalities to have some sort of separate provision or separate standard, if you will. And then you have the section eight notwithstanding nine VSA four four six one a, so that's notwithstanding the cap. A landlord may retain a security deposit that exceeds an amount before two month rent provided that the residential rental agreement was in effect prior to 07/01/2026. Here, I will put in another plug for possibly clarifying the language further than what I initially drafted up simply because I don't want there to be any confusion. You may want to tweak the word retain. This is not something that I've seen anyone throw it up, at least when I was in the room, so I'm bringing it up myself. The intent here is not to allow the landlord to keep that security deposit and not provide it back to the tenant when this tenant leaves. And I don't think that that's what the language necessarily reads, but it's possible somebody's gonna interpret it that way. The point here is that if the landlord has a security deposit already in hand that exceeds the cap that you're putting into place, the landlord doesn't now immediately have to return some of that money when the cap goes into place. It's intended to be that the landlord can keep the amount that they've received as security above the two month threshold and then obviously follow the statutory law when that tenant leaves. So not for the landlord to keep the security deposit for themselves to simply state that if they already have an amount that exceeds the threshold, they can keep that amount after the threshold goes into effect conditioned upon with person leaving, complying with extension to ascension. May I ask a question, mister Chittenden?

[Senator Thomas Chittenden (Member)]: I do have a question generally on this cap of the security deposits. With fair housing law that governs us from the federal context, are landlords currently able to assess risk of a tenant and have differing security deposit amounts based on that assessed risk? Be it that they don't have your references or credit checks or does fair housing law require tenant landlords to have the same security deposit requirement regardless of determinable risk of the tenant.

[Cameron Wood (Office of Legislative Counsel)]: I don't know the definitive answer to that off the

[Senator David Weeks (Clerk)]: top of my head. I would want to implode where

[Cameron Wood (Office of Legislative Counsel)]: I gave you a definitive answer. I will say if a landlord is charging separate security deposits, they are opening themselves up to some sort of, you know, discrimination claim against the the the individual tenant. And so I would strongly advise the landlord to not do that. There's nothing from a standpoint that will prohibit that currently. Again, I think it's gonna depend on what the reasons are for. And, you know, are you basing it on some sort of, you know, objective factor or are you basing it on the fact that the individual somebody could come in and argue that you're discriminating against them because they are, you know, poor or, you know, not as financially well off, and, know, you I think that could be a sufficient argument to make. So and, again, I I just I wanna go

[Senator David Weeks (Clerk)]: I would wanna go double check. I'm I'm I

[Cameron Wood (Office of Legislative Counsel)]: have not reviewed any cases or that area of the law in particular, so I just

[Senator Thomas Chittenden (Member)]: So so on that point, as we I think we are planning to dive deeper into this bill, which I do have other concerns with. I I will definitely want to have a greater clarity, and I can do some googling too. But if you could help inform a camp, what can landlords do with the decision to rent or not? Again, what is legal discrimination? Because discrimination as a is a loaded word, but there is there are types of discrimination you can apply. Right. Like, if the ref they can't provide any reference checks, I can choose to not rent them. My next question is if you can't, can I use can landlords I don't I'm not a landlord? Use other levers to adjust for that lack of qualification. And that's a question I'll have a lot because it'll tie into whether or not I'm supportive of shrinking these timelines. I feel like if we we could have the landlords define in contract that we can that you have less rights at the end of

[Cameron Wood (Office of Legislative Counsel)]: the term because you didn't

[Senator Thomas Chittenden (Member)]: meet these certain circumstances. That seems like almost a better answer that doesn't involve as much of the state, but I also know there's federal overseeing laws, but we're

[Cameron Wood (Office of Legislative Counsel)]: can't do it landlords' context. So, yeah, can tell you right off the bat, you can't discriminate against somebody not rent to them because they are the recipient of some sort of, you know, housing program voucher. But, you know, you can have, you know, thresholds built in to say that, you know, you need to have you know, you need to be able to demonstrate this level of of, you know, financial income to be able to rent a given a given unit. So you see that. You know, you see landlords saying you need this, you know, minimum credit score or you need to have demonstrated this minimum amount of income. And then, obviously, it's just gonna depend a lot on factual circumstances. You know, if you're if you're using that to try to exclude certain populations of people based on some sort of protective

[Senator David Weeks (Clerk)]: characteristic. But I will Sure. Go pull some stuff together. So I don't think any of us are suggesting those those kinds of risks. They were This we're talking about are they tore up the last apartment. Know it from the previous landlord. They didn't pay rent. You know, they were just kind of very pragmatic. You know? That's like knowing risk. Right. It's not not being discriminatory. Anyway, think that might be something to work.

[Senator Thomas Chittenden (Member)]: Totally understood. I'm trying based on that assessed risk. I don't know if they had at all.

[Cameron Wood (Office of Legislative Counsel)]: And I will I'll do some research and see if there's anything that's been put in there, if there's any cases that exist where a a landlord has has made that argument.

[Senator Randy Brock (Vice Chair)]: So there's a case law. We had representative Mahali, the chair of the other committee, coming down to discuss the issues that they saw. He's due in at about five minutes. We've escorted off till ten. It's time for us to take a ten minute break and watch the security deposits out of our brain. And

[Cameron Wood (Office of Legislative Counsel)]: this will take me thirty seconds, and you'll be done with the entire walk So I mentioned the transition period. Then you have a technical training section that requires CVOEO to provide educational and technical assistance to landlords and tenants. There is similar language in about the duties to implement that contingent on appropriation. I can't remember off the top of my head how much money they were requesting to do this training, but that did not make it in the budget either. So from your awareness, as the bill sits right now, CBOEO would not be required to implement this section because there's no funds appropriated. So

[Senator David Weeks (Clerk)]: this is a new section. It's a new requirement.

[Cameron Wood (Office of Legislative Counsel)]: Yes, sir. Yeah. Nothing exists now. Understanding is they've done some similar types of training in the past. So you can see on the b one, training for tenants shall include training under the preferred vendor certification program. So my understanding is they've done similar types of, you know, services provided in the past, but ongoing requirement for them to do those. Sir. At least not in Vermont. There may be some funding piece you gave them money previously that had conditions for that, but at least, you know, in the statutory section, there's no longer a requirement. Okay. Gonna pick up rates right now. 07/01/2026 is effective. Okay?

[Senator Randy Brock (Vice Chair)]: It was ten minutes. We'll be back, and hopefully, our representative will back to the issues of the in fact, different issues of the house dealt with making specific.