Put this down as an unintended consequence of busybody politicians interfering in the marketplace.
State Sen. Julia Ratti, D-Sparks, sponsored Senate Bill 151, which made it harder to evict renters who don’t pay their bills. One provision of the law gave tenants more time to pay past-due rent before being evicted. Renters now have seven business days to meet their obligations, up from five days.
What happened next was perfectly predictable. As the Review-Journal’s Michael Scott Davidson reported, property management companies are reducing the grace period for those paying their rents late. At least three companies have told tenants that their rent is now overdue if received on the second day of the month. Advanced Management Group, which oversees dozens of apartment complexes, previously allowed tenants to pay their rent without penalty through the third of each month.
This is especially concerning to those relying on federal programs. Some receiving Social Security get their payments on the third day of the month. For renters living paycheck to paycheck, this change could cause them to incur monthly late fees.
Property owners say the move is necessary because of the extended timeline to remove nonpaying tenants and a cap of 5 percent that SB151 placed on late fees.
“Based on the fact that the late fees are going down and the time to stay in an apartment without paying rent has gone out further, we’re having to tighten our procedures,” AMG President Bret Holmes said.
It is important to note that property owners can’t legally take these actions if a grace period is built into an existing contract. But most renters are on six- or 12-month leases. These changes are coming sooner or later. As landlords cut back on grace periods, SB151 will likely increase the expenses for tenants who pay their rent consistently but slightly late each month.
Rather than take responsiblity for this, co-sponsor Sen. Yvanna Cancela, D-Las Vegas, was outraged.
“What these landlords show is the potential abuse of power that landlords can hold over tenants,” she said.
Sen. Cancela appears not to grasp the importance of property rights in this equation. Of course landlords have “power” over tenants. They own the property, for goodness sake. Bureaucratic interventions that make it more difficult for landlords to make productive use of their properties will inevitably have ramifications for the rental market — ramifications that might not be in the best interest of those seeking shelter.
The fact that this apparently comes as a shock to Sen. Cancela speaks volumes.