Vermont Legislature SmartTranscripts:

[Sen. Alison Clarkson (Chair)]: Back to the senate economic development housing and general affairs, some of us had to go up and honor Topper MacFawn, one of our great legislators who's retiring today, and so we had to do it, give him do honor. So and this is plastic, had to particularly but we now are lucky to have both the chair of the committee that brought forth h seven seventy two and the reporter of the bill with us to answer a bunch of the questions that have come up and to and to address the intent and the work that has gone in behind a lot of this work. So without further ado, Mark Mahaly and the president, we welcome you. And Mark, if you would take it away, we have a lot of questions, but I really would love to have you address both the intent and the work behind our getting to this moment.

[Mark Mahaly]: Sure. Mark Mahaly, pleasure as always to be with you guys. Thank you. Thank you for attending tonight on this Yeah. This controversial and difficult. This bill is kind of the result of about about of almost a year's work. Your chair and I, in the summer and fall, met with Attenden and landlord advocates, and sometimes together, actually put them together and talked through a lot of the issues. And what came out of all of those discussions was this bill which was attempting to balance concerns. I'll get to it later, but believe me, we did not address all of the concerns on either side of this bill. It's an attempt to move us forward in a status quo, which is not particularly desirable and really is seems to be pretty bad for everybody. It's the I I think that maybe one way to look at this is what's in the bill for each group of advocates, and maybe what's not in the bill. The problem for landlords, we have a problem which is Vermont is not like a lot of other states, in many respects. But one of them is the small size of the bulk of our landlords. They're not we do have large landlords, and the largest landlords are our nonprofits, but smaller landlords dominate particularly in rural Vermont, people with two, three, four, five units, etcetera. And their situation is that they're very discouraged by the status quo because it is so long and so complex to go through an eviction of a tenant who isn't paying or a tenant who is stolen property or a tenant who is selling drugs on the property. In fact, our process is two to three times longer than our neighboring states. Really have the we're an outlier among states in how long it takes to go through the eviction process here. I don't think it changes things in the sense that someone who isn't paying eventually ends up out, but they just end up out two months or three months later than they would at at at a greater cost. But the fact that small landlords are discouraged to the point where that some of them are leaving the business, others are doing short term rentals, and others are considering just not renting their units out after one bad experience is a problem because they're the providers of rental housing that people need. So that's a real problem. One of the difficulties of this film is that all the problems are real problems. It's not as if one side's right and one side is wrong. That's the truth. On the other side, obviously, there's one other aspect that I'm not gonna characterize as a landlord. I think it's just a problem for both landlords and tenants, which is, as you know, we are suffering from an addiction problem in Vermont, and it's gotten a lot worse. And so we're having situations where one tenant is selling drugs on the property or being violent or and causing real problems for other tenants. And the other tenants are demanding, why can't you do the? So we have a lot of correspondence from such tenants. And, of course, the landlords are also frustrated as well. So on that side, what this bill does is the following. It's I have to say, I I would I don't take it as a compliment, but I think that the things that this bill does, if it's somewhat exaggerated, it's not it's not as much as it's been conveyed. On the issue of the tenants, the concern about the length of the process, right now the courts estimate their target is that it should take six months, you know, to go through the process. And as I said, other states are sort of in the two, three, or maybe four months range. But this puts in one suggested deadline, which is to say that from the time you file your plate, the time till the time of the hearing is ninety days, three months. It was, in our draft, sixty days, but it was extended in judiciary to ninety. I wanna add something process wise so you guys know what we went through. We produced the bill, and it it judiciary took it and held two days' worth of hearings and included extensive consultations with the court, the chief judge of the courts. And they were concerned that the bill, as it came out of our committee, would consume resources that they didn't have. And so the judiciary changed it and eliminated the entire part of our bill that would have kept confidential proceedings until the landlord, one, that's gone. And the other was extending it from sixty to ninety days and putting in every deadline that we did this. Judge Zonay came to our committee and really had spent a lot of time going page by page through the bill. And we made every change he suggested. The biggest one was that all of the deadlines are now They're a deadline except for just cause, or due cause. So the court can always extend a deadline. And so after Martin, along with others worked with Judge Zommey in that committee, he withdrew his objections about it being too difficult a process. So we now have the suggested deadline of ninety days. Without that, I would say this bill doesn't do very much to address the problem that landlords face, except for one thing, and this is the other area that I'm gonna call the dangerous tenant. Okay? This is a big problem. I'm sure you'll hear from the nonprofits and from other landlords that they suffer from, but it's a tenant problem too. So what do we do there? What we've done simply is put in a process that a landlord, if they think this is an issue, when they file their complaint, they have to put together an affidavit under penalty of perjury setting forth exactly why they think it's a problem. You know? How do they know it? What if how do they find it out? Etcetera. And then there has to be then the defendant tenant has an opportunity to either do a or state stat that or to appear and as they already do and generally give their merchant either orally or in writing. And the only difference is it's faster. The court has to hold a hearing within twenty one days. There's no suggestion how long it's taken to make a decision here. We can't, by the way, separation of Howard? You know what I mean? The judiciary's a separate branch. We can establish deadlines Yep. For hearing. We can't order them to make decisions, so we don't. We just put a deadline in, and that deadline is ninety days generally and twenty one days for the faster process unless there's just due cause, and then they can extend it. So there's flexibility built in, and that's what the judiciary wanted, and that's what we did. So there's one other thing we did. It's kind of a wrinkle, I hate to take you into the weeds, but I guess you're in the weeds. An additional problem is what happens when there's a tenant? I'm gonna use the direct dealer, but the language we use causing endangering the health or safety of other tenants on a continuing basis that they're likely to going forward. Okay. That's the way. But I'll use the drug dealer as an example. What happens if the drug dealer is evicted but comes back and says to some tenant, Hey, I'll keep giving you drugs if you let me operate out of your apartment, or I'll blow you away. Or they never were a tenant, they just come in. What do you do? Well, was a Vermont court case that said, they interpreted our existing law saying, Well, there's nothing you could do. Invitee, if it's an invitee of the tenant, you gotta let them to the bar. So we work with that here and in a way that judiciary and the courts are comfortable with, which is to say that the landlord's trespass authority includes someone in that situation as long as the tenant didn't want them there and said so, or they are clearly violating the law, doing something illegal.

[Sen. Alison Clarkson (Chair)]: Right. That was the Decker Towers chapter. The Decker Towers. We get to have heard

[Mark Mahaly]: so much about that. Unfortunately, it happens a lot in Vermont. But those are the only ways that this bill addresses that whole side of things. There's nothing else in here that I can think of. So then there's the question, okay. So keep in mind those two deadline changes. Oh, we extended the time a little. There are other minor changes to deadlines. The answer is due like it always was in twenty one days. There's one when the landlord if remember, the whole thing starts before you go to court, you gotta give notice and say, I'm terminated. Are you with me? In other words Yes. Think of it as two phases. The landlord starts by saying, I wanna terminate. It gives notice. And then if then if the person doesn't leave, then

[Sen. Alison Clarkson (Chair)]: they gotta file. So Pass this. Pam just produced this for us, which was very useful. Right.

[Unknown (Reporter of H.772 / Study Committee Chair)]: It says on

[Mark Mahaly]: She had the deadline. So some of the deadlines are changed a little bit in terms of the notice. But on the other hand, we linked this a little bit because the mail looks no longer reliable. Sure. So we changed the three presumption that after three days, it's presumed received to five. But I have to tell you, these are minor in the overall scheme of how long things take you. Okay. So what about the tense side of this? I wanna clarify one thing to start because there are terms being thrown around like no cause, just cause, and I'd like to just break those apart because I don't think they're particularly helpful and they're riddled with exceptions. Think of it this way. Why would what are the different ways that a landlord would give a notice to terminate? Some of them are what I call the tenant is the moving party or the cause. It may not be their fault. And that would be nonpayment of rent for the dangerous tenant. Okay? All the others are in the glandulars' control. I want to convert it to a condo. I want to remodel it completely, and you can't be in it well every month. I want to use it for my family. I want to sell it. Right? The lease is over and I just don't want to renew it. So all of those are in the control of the landlord. All this bill allows the landlord to it doesn't change the status quo. The landlord can non renew a lease for any of those reasons. What it does is it puts conditional. And I wanna say parenthetically, the Just Pause ordinances, both in that were adopted as chartered but not approved by the legislature here, but around The United States, they're identical to the bill as it is except in two respects. One is these ordinances take that one thing I mentioned, which is I wanna let the police run out. That one of the cards and says you can't do it. If I enter into a twelve month lease with you, you're my landlord, I enter into a lease that says twelve months. As long as I pay, it's not twelve months, it's forever. Under that approach, okay? That's under just cause. Under what's called just cause. But everything else in the just cause ordinances is usually allowed, and it is in Vermont. In other words, if I wanna convert it for my family, I wanna sell it, I wanna all those things, I can do. But the one difference is letting the lease run out. Fortunately or unfortunately, it's a reality that those aren't very meaningful ordinances unless there's a rent cap or rent control. They kind of go together. Because think about it, if you have a law that says the landlord can't, as long as the tenant pays, the landlord has to let them stay, but there's no limit on what they can charge. If I was you were my landlord, you could say, sure. You can stay. Hey. That's a grand a month or whatever. So they're always paired with some sort of branch out. But we have we don't have that. We don't have that now. And under this bill, we didn't do that. Okay? So let me tell you first what we did do and then what we didn't do and some thoughts on it. What we did do say, you know, in those circumstances, what I'll call conversion, the landlord. In other words, not not payment, but just the landlord wants to change their plans. The landlord is in control. So the requirements that we put in were, one, you gotta give them three months' notice. Ninety days' notice. That's one thing. The second thing we said is, forty five days before the end of your term, you gotta give them at their deposit back again, net of damage they've done. But I'm thinking of the good tenant that isn't doing damage. They're paying their rent. They're a good tenant. It's just the landlord who's decided to change their plans. And we've said, you have to give them half their deposit back. Why? So they have some money to roll over to the new and, you know, find a place and roll over into a new. So that's what people do. Now we don't have we didn't put in just cause. The rest of it. We did put in a provision that says not only do you have to give notice, and not only do you have to you know, give, add the money back, but you just can't let them can't term anything. Why? Well, I mean, I I guess it's important to speak the truth as the obvious of politics. You know, it's a question of getting it out of my committee, getting it out of the house, and getting it signed by the governor. But the second is a real problem. There are two real problems. One is why do landlords let a lease run out? I mean, after all, all the landlord wants is a good tenant is paying. They don't wanna kick out tenants who are fine tenants. The reason is very simple, and I imagine you can hear this from others. It's so expensive and so long and so difficult to evict a tenant that they just think, I'm not gonna do it. I'll just live with it and let the let the lease run out, even if I don't get paid for six months. It's still cheaper, or eight months, or a year. It's still cheaper than going for eviction. So I think, personally, that's the primary reason that landlords don't release is they just it's all they can do. I think that if we found a way to have an altogether different process, maybe we could figure a way around that. And I'm perfectly supportive of the idea of studying very carefully other court systems like the Maine. Maine has a landlord tenant court. I'm really open to that. That's something that should be done carefully. You know, what are they doing? How are they doing it? What's it look like? Would we do it? How much would it cost? Does it cost? But anyway, we don't have that provision. And I have to say, if we were ever to look at these just cause provisions, think we'd have to be very careful. Like for example, in New York, the New York just state, just cause there's four states I know of, maybe more, that have these kinds of ordinances that say you can stay forever as long as you're in bank release and bank rent. And they all have caps of some sort. In New York, it only applies to the named urban areas. The entire world of New York is exempted. I think, you know, they recognize how difficult that is to impose on small landlords in rural areas. The other problem is, and I think we'd have to think through, there's a problem with rent caps. California, for example, has a rent cap. It's CPI plus five, which means eight, nine, and maximum of 10%. Landlords under those regimes almost feel compelled to mark to 10% every year or eight or whatever it is. And you know you have three years of that and suddenly you're a lot more. Slots of force, once a tenant leaves, they can mark to market. And so there's, I think, an incentive that isn't it's contrary to a good landlord tenant relationship. You know? It's sort of like, you were smoking. You're out. You know? I don't think that's a good thing. But I think all of that could be looked at. It's not in the spill. The spill is not that adventurous. We were just trying to do something that would work for both sides. The other thing we do for tennis two things that I can write off the top of my head. One, what we do is write you know, this habitability problem? Landlords you know, there are bad landlords. There are bad tenants. But there are bad landlords. One of the problems you have always when you're doing legislation is if you make it for the worst case, you tend to sort of mess up things with people who are in the middle. You don't wanna do that. But anyway, one problem is habitability. Landlord who should be, you know, like no heat or something like that. Believe it or not, there's a fair amount of that. Right now, if if the tenant wants to do something about it, it's up to them to do something about it. They have to assert a habitability claim and stop payment of rent. There's all kinds of requirements. What this bill does is add a new way of dealing with that, which is to say, if a landlord files an action against the tenant for nonpayment of rent, if they have an outstanding, uncured code violation that is serious and we list what serious is, that's grounds for dismissal right there. It's the end of the case. It doesn't apply if the tenant caused the problem, and it has to be an outstanding problem at the time you file the complaint. But that's one thing you did. It's an absolute defense to the judgement. The second is, I think, me, not so dramatic, but it's really important. Money. I guess it's my view, our view perhaps, that the best way to address the risk of homelessness, which is a difficult one to find. In other words, we know we have a terrible problem. Some people assert that shortening these times will cause more evictions. I'm not convinced that's true. There are studies to the contrary. It doesn't matter. We don't know. We don't know. We're just not gonna know. But I guess our view is that if we wanna we wanna try to prevent homelessness, the way to do it is to break through programs that do that and funding them, not by maintaining maintaining a kind of overly burdensome and kind of inadequate system that discourages landlords from staying in the business that produces the amount of housing they have. And so that's why in our bill, as it originally came out before our appropriations committee got their hands on it, $1,000,000 for the rental arrears program. That is an important program. It means it's run by the housing authorities, and it's authorized by us here at the legislature with a sentence or two, but it's mostly administrative, and I think we'll be loosened up a bit. But, basically, what it says, it's aimed at the tenant who's ultimately capable of saying it, but something bad happened. Like their car broke or was stolen or they, and they can't get to work or they lost their Or they had a drastic valuation,

[Sen. Alison Clarkson (Chair)]: the market got damaged. We're running through this because we put that in play.

[Mark Mahaly]: Right. And so piece is They're very gonna run out of money in April. It has run out. It's almost run out of money, and so we put a million in there for that, and that made it into our It's There's all about other stuff we wanted to do. One is we wanted 200,000 for CBOEO to run programs for small landlords and tenants on what rights, responsibilities, and duties are. $600,000 to see in order to have what I'll call kind of non boots people, landlord tenant, of mediators in all of the cap agencies. That we just put, you see what we're trying to do? We're trying to prevent the eviction. Trying to prevent the homelessness, if you will. And then we put $100,000 in for the treasurer to run, remember the whole credit reporting thing?

[Unknown (Reporter of H.772 / Study Committee Chair)]: A rental credit reporting.

[Mark Mahaly]: Yeah. So that's in there. I guess could we do more? Sure.

[Sen. Thomas Chittenden (Member)]: Yeah. Rental piece that came up earlier, we were cur we were we're recalling why that didn't make it last time. Do you remember?

[Mark Mahaly]: Yeah. I know why. We were stupid. Oh. I've never been so bluish. What happened is there was all of this remember it was in the housing bill. And then we had two housing bills here. Okay. Your chair and I thought we had it nailed down. I was we went back and forth and back. It literally fell out. It's all. It's all it was. So it's back in there. The treasurer wants a $100 to administer it. Could we do more? Sure. And also, of course, then there's the whole issue, what are we doing about homelessness generally? And that's we just the house has just passed a bill, which I think has a lot of good in it. It's not perfect. What happened I said, that I should say?

[Sen. Alison Clarkson (Chair)]: I just want

[Unknown (Reporter of H.772 / Study Committee Chair)]: to quickly, I want questions, but I just wanna back this up to remind your committee, I don't know if it's a rep, I'm like, was not for the record, that, we had the landlord tenant study committee,

[Sen. Alison Clarkson (Chair)]: which we have on our website.

[Unknown (Reporter of H.772 / Study Committee Chair)]: Which I was chair of, and we produced a report, and as we know in this body, we want to follow through on the work and not just have study committees. So, you know, this building for many years, I've been here since 2013, has been wrestling with this topic and as Senator Ram Hinsdale mentioned, she's had those. So, this was really, we felt the time to tackle this issue because in our study committee, the status quo was found to not be working. And so, our committee took a lot of time, testimony from so many, you know, we had six different bills in front of us, right, to blend, to come up with this. And as Chair Mahal has said, this is not perfect for everyone, but it's what we came up with that we found to be, the needs of of both a step forward, because it's clear that Vermonters want us to act on this policy and that the time is now and it's another, thing to address in the housing crisis for various reasons. So, I just wanted to back this up in that. So, while we had the report that didn't come out with the specific legislation, numerous bills came out of the report information and made it on our walls.

[Mark Mahaly]: We had six bills on our wall. Were looking at Yeah, I have to finally just say, I've got to just say it, I feel a little bit like I'm living, that this bill is sort of like living on a razor's edge. Uncomfortable. But also kind of like I'm not saying you shouldn't film with it, you might guess, but just because we were trying for a balance that each and and, you know, there's a lot of mutual negative fantasies on both sides of this. And when you have that situation where, you know, you have such history, distress built up, the advocates on both sides, it's it's a difficult situation. There it is. Yeah.

[Sen. Alison Clarkson (Chair)]: Kesha had a question, and I know Tom and David do as well.

[Mark Mahaly]: And I've got Hey, Kesha.

[Sen. Kesha Ram Hinsdale (Member)]: Hi. Mira, say hi.

[Sen. Alison Clarkson (Chair)]: Hello, Mira.

[Unknown (Reporter of H.772 / Study Committee Chair)]: Hi, Mira.

[Sen. Kesha Ram Hinsdale (Member)]: Did you all look so we there's a mention of housing review boards in the bill. I'm not sure if that came from judiciary or committee. Housing review boards function in maybe a handful of municipalities as like a landlord tenant court, a mediation environment for these very specific issues that touch many areas of the law and affect someone's basic rights to housing. Did you look at states that have a landlord tenant court or ask for a housing review board to exist in most major municipalities? Did I you mean, this is a lot of trying to affect the judiciary and not just giving them the resources to have a separate channel to manage these concerns.

[Mark Mahaly]: One of the bills on our wall is to create a housing clerk. I guess my feeling on that is, first of all, I think it's a really interesting idea. I don't think it should be done lightly. I, for example, if let's say you decided you wanted to study it, we'd wanna talk to Maine in-depth. Right. That is Maine practitioners on both sides, Maine, the Maine, you know, people who run the court, what their budget if there's gonna be a real budgetary impact. One of the things I find per I'm speaking for myself, not like you did. I find attractive about that idea is the possibility that we really just change up the whole process and make it, you know, a better process for everybody, and that we fund advocates for tenants that aren't necessarily legal aid. I mean, I'm a lawyer, but it doesn't have to be lawyers. Right? It could be specialists who are just available to know, less expensive alternative to navigate the process. So, Kesha, I think it's an interesting idea. It was before us. We don't feel like We prioritize the things that we I suggested to you about funding that was directly aimed at the homeless. We didn't wanna spend We just didn't think we had the resources right now for a court.

[Sen. Alison Clarkson (Chair)]: Well, I mean, I I think in all fairness, we haven't done the work of figuring out what this would look like, and we should take the time that I think putting in a study, a a task force to actually address it would be a great I love that.

[Sen. Kesha Ram Hinsdale (Member)]: So if I could just say, I mean, we the bill really impacts the court by putting timelines in that you're expecting that they can accomplish emergency hearings and, you know, affect people's really basic rights based on what sounds like hearsay about activity in apartments that might affect the health or safety of individuals, that's gonna have a huge impact on the courts without any funding in this bill, is what I understand. I

[Sen. Alison Clarkson (Chair)]: believe they addressed this, but Zonay signed off on all these timeframes. Yeah. I don't have to go up

[Mark Mahaly]: and do another topic. I do wanna mention, I don't think yeah, first of all, Zonay, you should have Martin's labonde here. Well,

[Sen. Kesha Ram Hinsdale (Member)]: should also have Judge Zonay because I don't know what it means to sign I off on these

[Mark Mahaly]: think that if they, it's quite likely that if they run into trouble, we're gonna see the timeframes not change that much on the ground. I just don't know. It is, yes.

[Sen. Randy Brock (Vice Chair)]: Have you looked at how things are being done here, how they're being done in Maine? Did you look nationally at how things are done, and does anybody get it right now? You know, I think

[Mark Mahaly]: we know and we had testimony of what's happening in California and Oregon and Maine and New Hampshire and a few other states. I wouldn't call what we did a thorough what we had, whether they quote, and quote, got it right. And one of the problems is, it's important to decide whether they got it right. You can't just hear from the judge. Mhmm. You gotta hear from the landlord attorneys and from the legal aid or the under defense advocates, and you're gonna likely hear different stories. It's not impossible, but it's But not certainly are nonprofit groups

[Sen. Randy Brock (Vice Chair)]: that represent both parties that are national in nature. Right. There are. You reach out to them, for example. Yeah. Because that might be a way to at least get a picture, because this is not an uncommon problem nationally, and certainly every state.

[Mark Mahaly]: I would add that I don't think it changes anything. We I I will say, I don't think if anything changes from a due process perspective because just by allowing it to be initiated by a landlord by a sworn affidavit doesn't change the fact that the court has to find that there's adequate proof. Mhmm. And so it means that the landlord has to make the case. The tenant has to reply. And whether they do that orally or through in writing doesn't change anything. It's just if it's an alleged that it's a dangerous tenant, then you're gonna have a faster process. But it's no different than the existing process.

[Sen. Kesha Ram Hinsdale (Member)]: I mean, no trespassing someone from a place they might be on the lease is a big change.

[Mark Mahaly]: The no trespass ordinance applies now to someone who's on the lease. What we added, and that's current law, what we added were two things. One is we added a provision that allows the trespass laws to be aimed at someone who is no longer on the lease but is a danger to other tenants. But the other is we added a whole long provision to deal with protecting the victims of abuse. Here's the problem. What does the landlord do? What does the landlord do if there is the dangerous person is on the lease? And let's say it's one of the members of a pair of people, and they are beating up on the other pair, but also other tenants. What do they do? Well, right now, under current law, they only have one thing they can do. They can eject. Right? But that means you eject the victim. Right? If it's an abuse situation, you're ejecting the victim.

[Sen. Kesha Ram Hinsdale (Member)]: No. That's a relief from abuse sort of process.

[Mark Mahaly]: Right. But in addition to that, to protect them, we gave the tenant the right to divide the lease, and then the landlord could just eject the perpetrators. That is not an existing law. Well, Mark, where we are right now, we've got about four minutes. Sorry, had to so. Before we have to break and be on the floor.

[Sen. Randy Brock (Vice Chair)]: Right. If I work Right. Here by virtue of the role that you're playing in kind of bringing us up to date of the issues that you face, the problems that you face, how you dealt with them, and the end result, is there any way that you wanna summarize your recommendations to us?

[Mark Mahaly]: I think that overall it's a good package. I think it's a start. I think that there are some major things that we could think about in the future, but I think they need some study, and this is a good base to start with. It's giving tenants I would seriously consider the funding that we lost in our appropriations. I think that funding for preventing homelessness is really important. What was the amount What was the amount involved? Well, 1,000,000 plus 100,000 plus 600,000 would be 2.7 plus 2.9, no, 1,900,000.0. So that's otherwise, good luck. If I can be of assistance in any way, I'm happy to do that. I'm happy to do that, and condemn her in this situation, everybody's right. Any particular people that you

[Sen. Randy Brock (Vice Chair)]: think we should hear from that you want to bring to our attention? Well,

[Mark Mahaly]: there's no one that you wouldn't obviously hear from. I mean, you're going to hear from The United States, and you're to hear from the Landlords Association. You're to hear from the non profits, like Chittenden Housing Press. They're one of the biggest landlords. I think that you'll get a pretty good picture there, I think, to Judge Zoney. But I do think if you're gonna listen to Judge Zoney, you should listen to Martin. I really think Martin brought up me before you because they had as much they had a lot to win with in front of me. And they were great. They were really good. They made it better. Well, again, thank you very much for coming down.

[Sen. Randy Brock (Vice Chair)]: My pleasure. Been very, very helpful.

[Mark Mahaly]: Thank you guys for even taking this on. Before

[Sen. Randy Brock (Vice Chair)]: we adjourn for the day, go upstairs, anyone wants to bring a patient,

[Mark Mahaly]: we are adjourned for the day.

[Sen. Randy Brock (Vice Chair)]: Thank you very much.