Last summer North Carolina’s legislature passed a new law that would limit the ability of municipalities to enact rental registration and inspections ordinances. The city of Raleigh is considering changes to its PROP ordinance as described in a recent issue of NAA’s Hotsheet:
The Raleigh City Council is considering amendments to its existing Probationary Rental Occupancy Permit (PROP) ordinance program. The changes, based on recommendations from the City Attorney’s office, would increase permit fees significantly and would allow the city to revoke an owner’s permit to operate, prohibiting the owner from renting out an entire property for the violations of a single unit.
A property owner is required to have a PROP permit if the property receives repeated violations, such as nuisance, occupancy, or inspections violations. In the program’s current form, a property owner may apply to have violations removed—to avoid the PROP permit requirement—if he or she evicts or removes the problematic tenant(s). The proposed revisions would limit an owner’s ability to contest violations. Other onerous provisions include:
- Expanding the types of violations included in PROP, such as failing to register a rental property, underage drinking, or if a tenant is otherwise engaged in several forms of criminal activity;
- Revocation of owner’s PROP permit if a unit receives 3 violations within a 24 month period; and
- Permit fee increases from a $200 administrative fee, a $300 permit fee for the first year and $500 for any additional year to a $500 non-refundable deposit and tiered system of permit fees ranging from $1,000 for 1 to 4 dwelling units to $10,000 for 20 or more dwelling units.
The City Attorney’s office has been charged with rewriting the PROP ordinance to comply with a newly enacted state law. The new law, Senate Bill 683/Session Law 2011-281, limits the ability of cities and localities to enact rental registration and inspections ordinances. The city of Raleigh claims that the law would reduce revenues from the PROP program. The City Attorney’s revisions would increase the number of properties flagged by PROP, raising revenues and offsetting the shortfall created by the new law. The Triangle Apartment Association plans to work with the City Attorney’s office as it plans further revisions.