What’s in President Biden’s Renters Bill of Rights

President Biden proposed a Renter’s Bill of Rights to grant renters more legal protections. It is not currently the law of the land but could impact future real estate investments.

The proposed bill has five principal objectives.

Objective 1: Provide Renters Access to Safe, Quality, Accessible, and Affordable Housing

1. The bill calls for the government to inspect and verify the quality of housing offered for rent.
2. It also wants to limit housing costs to 30% of a tenant’s income and place restrictions on rent increases.

Objective 2: Landlords Must Provide Clear and Fair Leases

1. Leases: The proposed bill would determine what landlords can and cannot include in leases. Restrictions may prohibit mandatory arbitration clauses or hidden fees and prevent statements or language that is not legal in the state or jurisdiction.
2. Deposits must be placed in interest-bearing accounts for the lease term with clear instructions on how a tenant may get the funds returned when they move.
3. Only allow lease termination for just cause.
4. Landlords must provide reasonable notice for lease termination, generally regarded as a minimum of 30 days’ notice, even if termination is for non-payment of rent.

Objective 3: Education Enforcement and Enhancement Rules

1. Expand discrimination classifications to include the source of income: The goal is to force landlords to accept tenants receiving housing vouchers or housing assistance. It also could include a provision preventing lease termination that penalizes victims of abuse due to the actions of their abusers.
2. Background checks must be fair and non-discriminatory. Because many reports contain errors, the property manager must ensure the accuracy of any pre-screening checks. As well as, certifying algorithms used are not discriminatory.

Objective 4: Right to Organize

1. Encourage tenant rights groups in multifamily complexes.
2. Require landlords to provide access to public areas for demonstrations and meetings.
3. Property managers could not harass, retaliate, or terminate leases due to participation in a tenant rights organizations.

Objective 5: Eviction Protection, Diversion, & Relief

1. Provide resources for tenants to help them avoid eviction, including the right to legal counsel.
2. Only permit just cause evictions
3. Require alternative procedures before legal actions, which might include grievance proceedings, negotiation, mediation, or arbitration.
4. Require 30 days’ notice of eviction before legal proceedings begin.
5. Give tenants the right of discovery and the ability to appeal convictions without bond requirements.
6. Judges must seal filings and executed judgments for minors, tenants who prevail, and tenants who reinstate tenancy after judgment.
7. Only report rent debt to credit agencies if there is clear evidence the tenant owes the debt.

The Renters Bill of Rights is unlikely to pass in its current form. However, states more focused on tenant rights than landlord rights could pass legislation making it more challenging to profit from multifamily investments.

At McKee Capital group, we target landlord-friendly states that do not impose unrealistic restrictions and additional legislative burdens on landlords. To learn more about real estate syndications and how we choose property locations to protect investors, watch our introductory video.