Real estate company launches lawsuit against rental regulations

Bell Leasing is suing the city of Laramie, seeking to halt the recently passed health and safety standards for rentals. Bell Leasing argues Laramie cannot lawfully enforce its new rental housing code.

A Laramie real estate company has filed a lawsuit in Albany County District Court, seeking to overturn the city’s new rental regulations.

The lawsuit comes less than a month after the Laramie City Council approved the City Rental Housing Code and decided on registration fees for landlords.

Bell Leasing, LLC — which owns more than 30 rental properties within the city of Laramie, including a cluster on South Second Street — is suing the city, Mayor Paul Weaver and City Manager Janine Jordan. Bell Leasing is asking the court to declare the rental regulations unconstitutional and to issue a temporary and permanent injunction that would render the rental housing code unenforceable.

Vice General Manager Richard Bell, who is bringing the lawsuit on behalf of the company, could not be reached for comment.

Laramie’s new rental housing code outlines basic health and safety standards for rental units, and directs the city manager to set up enforcement infrastructure in the coming year. Enforcement would work through a complaint system. Tenants who believe their home falls below the new health and safety standards, and who have sought a remedy directly from their landlord, would be able to file a complaint with the city manager. The city manager is empowered to investigate the complaint and order fixes.

The lawsuit makes six arguments in support of its allegation that the rental regulations are unlawful. The first of these arguments alleges that the rental regulations violate the due process clauses of the U.S. and Wyoming Constitutions.

“The Ordinance has no opportunity for the property owner to be heard prior to the City Manager conducting their own investigation and passing judgment against the property owner,” the lawsuit states. “And the Ordinance authorizes the City Manager to issue a notice and order determining her findings without a hearing.”

The lawsuit further alleges that the rental regulations impose an unlawful tax.

“The Ordinance creates a one-way path of taxes, fines and constitutional infringement against property owners, while elevating the legal standing of tenants to a position not supported by law,” the suit alleges. “The Defendants, by the Ordinance, have unlawfully subjected Plaintiff to the levying of taxes, excises, fees or any other charges not prescribed by the state legislature.”

Similarly, the lawsuit alleges that the rental regulations inappropriately favor tenants over landlords, violating the equal protection clauses of the U.S. and Wyoming Constitutions.

“The Ordinance places the rights of tenants above and before property owners,” the lawsuit states. “The Ordinance empowers the City Manager to have both absolute or arbitrary power over private legal disputes of tenants and property owners.”

The lawsuit alleges that the rental regulations violate the Fourth Amendment of the U.S. Constitution, which prohibits “unwarranted searches and seizures.”

“The Ordinance authorizes unwarranted searches by the City Manager of tenant premises owned by property owners,” the lawsuit states.

Before the city manager can inspect a rental property, a tenant would have had to note a problem with their unit, requested a remedy from their landlord, given the landlord adequate time to make that remedy, and filed a complaint with the city manager. The city manager would not be able to enter the unit without the tenant’s permission.

But the lawsuit contends that permission for entry or for a “search” should come from the property owner or landlord, rather than the tenant.

The lawsuit also echoes an allegation raised during some city council meetings — that the city is interfering in private contracts, especially by requiring that out-of-town and out-of-state landlords identify a local agent.

“The Defendants have no authority to interject terms into legally binding contracts between Plaintiffs and its tenants,” the lawsuit alleges.

Finally and relatedly, the lawsuit argues that the city lacks the statutory power to pass rental regulations of this sort.

“The Defendants do not have jurisdiction to usurp the jurisdiction of the judiciary over leases and rental agreements between property owners and tenants,” the lawsuit alleges. “The City of Laramie Municipal Court, a court of limited jurisdiction, does not have authority to enforce the provisions of the Ordinance.”

Several landlords objected to the rental regulations in council meetings during which the topic was discussed. Many said that tenants who did not like their apartments could rent elsewhere and that tenants already had adequate protections under state law.

“A great many of the issues tenants are reporting could be remedied using existing state laws,” said Brenda Whitman, representing the Laramie Board of Realtors. “After speaking to the majority of the brokers in our membership, I can report that our brokers are unequivocally against the ordinance as written. As you can imagine, it is uncommon for a group this size to have a consensus of opinion and yet, in this, we do.”

But proponents of the regulations argued that asserting one’s rights under state law would involve costly court filings unobtainable for Laramie’s poorest renters. Using the courts is also time consuming, said local defense attorney Linda Devine.

“I can tell you to get into court to address (an) issue can take two to three months,” Devine said during the meeting. “First of all, you have to serve someone — if you can find them. They then have 20 days to respond, and then after that there can be negotiations back and forth. But it can take two to three months to even get into court.”

Councilor O’Doherty said that’s an unacceptable wait time if a tenant’s issue with their landlord involves a busted appliance or some other problem affecting health and safety.

Other commenters pointed to the power imbalance between landlords and tenants, arguing that the two are not equal parties and that many tenants, desperate for housing, agree to terms or living conditions they wouldn’t if they had more power or freedom.

Bell Leasing LLC is represented by Kermit Brown and Jeffery Van Fleet, both of Brown & Hiser. Brown is a former legislator and current member of the University of Wyoming Board of Trustees. Van Fleet recently served on the city’s Police-Community Relations Working Group; his wife, Wendy Van Fleet, owns Prism Real Estate.