City Council Discusses Rental License Late Fees

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By Terry Rogers

On Monday, June 12, 2017, Milford City Council discussed recent late fees issued to rental property owners who had not renewed their license by January 31, 2017. City Planner Rob Pierce said that the past due rental license fees were discovered as the Planning Department worked to establish a better tracking system regarding rental properties in the City.

“In late 2016 into 2017, we performed a complete review of rental properties as we were trying to upgrade our data,” Mr. Pierce said. “We are still finding rental properties that have not been registered. We developed a procedure that can be reproduced annually to effectively and efficiently assure accurate record keeping. Letters were mailed to all registered rental property owners as a courtesy, reminding them that their license would expire December 31, 2016. The notices stated that the owner must renew the license prior to January 31, 2017 to avoid a $25 per month per unit penalty for non-registration.” Mr. Pierce explained that the late payment penalty was part of City Code Chapter 180 and that almost 1,500 rental units registered with the City before January 31.

City Councilman Owen Brooks said that he had been approached by Mr. Mark Davis, a rental property owner in Milford who felt he was not given adequate notice about the penalties.

“Mr. Davis owns 30 rental properties in Milford,” Councilman Brooks explained. “He received two envelopes with letters about the renewal, each had 15 property letters in it. He paid one set but set aside the envelope for the other half and forgot about it. Then, three months later, he got a bill with over $1,800 in late penalties. He said that if he had received a second notice a month later, he would have paid it right away, but he didn’t get notified until after three months of late charges had accrued. He is a good owner, keeps his grass cut, pays his bills on time and I don’t think it is fair that we charged him such a high late fee with no notice.”

Mr. Pierce explained that there was a delay in sending out reminder notices due to other projects that are ongoing in the Planning Department. He said that other rental property owners who were sent the past due notice had paid their rental fees as well as the late fees without question, informing Council that the City had collected $3,200 in late fees since the second letters went out.

“We are trying to clean up our records when it comes to rental properties,” Mr. Pierce said. “It has been a time consuming process. I don’t know if this was done before I came two years ago, but the law has been on the books since 2008. As a courtesy, we did not charge late fees for those we found had not renewed prior to this year since this is a new process. We did require that they pay the license fee for past years to bring their licensing up-to-date.” Councilman Jamie Burk expressed concerns that the City waived late fees for those rental property owners but would not for those who had been following the rules up until now. Mr. Pierce explained that those property owners who had not paid fees prior to this year and paid after January 31 were required to pay the late penalty for 2017. He also explained that, in order to charge the penalty, staff would have had to research whether the property was actually rented during the entire time it was unlicensed and penalties could only apply to dates when there was a tenant in the building.

“It can be done, but it would be very time consuming,” Mr. Pierce said. “If someone does not pay the fee at all, we certainly don’t want to go evict the tenants, but there has to be a deterrent for not paying. That was the main purpose of adding the late fees in the first place.”

Councilman Doug Morrow also expressed concerns that the late fees were not citizen friendly. He said he understood that the City needed to get rental properties registered, but since this was a fairly new process, it may have been better to waive late fees until the process was in place. Councilman Burk suggested that an appeals process be included in the rental licensing fee code to address hardships and other issues that may come up like the one they were discussing.

Mayor Bryan Shupe suggested that the process be referred to the Community Affairs Committee for refinement and Council passed that recommendation unanimously. Councilman Morrow made a motion to waive the late penalties for three rental property owners who complained about the fees and to return the $3,200 in late fees already paid to the property owners who had paid them. That motion failed with a vote of four to three with one abstention. Councilman Chris Mergner abstained as he felt he did not have enough information to vote on the matter.

“When you own a rental property, you own a business,” Councilman Archie Campbell said. “It is your responsibility to know what licenses are due and when they must be paid. He admitted he made an error by misplacing the envelope. I vote no to the request to waive his fees and to return the other fees that have already been paid.”

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