Rental regulations ruled unconstitutional in present form

Judge Kricken ruled Laramie has a legal right to pass rental regulations, but the current ordinance is too vague on the topic of enforcement. She found no issue with the health and safety standards.

Laramie’s City Rental Housing Code might have to be altered following a court order declaring the enforcement provisions of the code “unconstitutionally vague.”

The rental housing code has not been struck down, landlord registration remains open, and the same order also declares that the city does in fact have the legal authority to enact rental regulations.

But Albany County District Court Judge Tori Kricken ruled that the city’s rental regulations ordinance is too vague about the consequences for a landlord accused of violating the new health and safety standards.

“The Court finds that the plain language of the Ordinance as written is unconstitutionally vague,” Kircken writes. “The Ordinance fails to clarify: whether any hearing before the municipal court would be civil or criminal in nature: what rules, trial procedure, and appellate procedure apply: and whether a failure to comply with the city manager’s notice and order is, itself, a per se violation.”

But landlords had also argued that the City of Laramie lacked even the legal standing to issue any sort of rental regulations, vague or otherwise, because state statutes already briefly address the legal relationship between tenants and landlords.

Citing case law, Kricken rejected that argument and sided with the city.

“The weight of authority favors a finding that municipalities, within the exercise of their statutorily granted authority, may enact rental housing codes,” Kricken writes. “‘The general rule is that where a local law merely enlarges upon the provisions of a state statute by having stricter requirements than the statute, there is no conflict between the two where the legislature has not preempted regulation of the field.’”

The Rental Housing Code and its discontents

The Laramie City Council passed its rental housing code in January. The code details minimum health and safety standards for rental units — and requires landlords to register those units with the city.

The standards require that landlords outfit rental units with smoke detectors, carbon monoxide detectors and fire escapes. They require that rental units be free of mold and pests, and that significant heating, plumbing and electrical work is performed by licensed professionals. The code also requires rental units be structurally sound and weatherproofed.

Many in the landlord community — including the Laramie Board of Realtors — opposed the new rental regulations, offering forceful denunciations of the requirements and warning of the code’s alleged illegality.

“I think this ordinance has the potential to decrease the number of affordable housing units in the city (and) potentially small business owners and landlords choosing to take their properties off the market, not wanting to deal with the bureaucratic process that this ordinance creates,” said local landlord Andrew Arnold during the council’s Jan. 4 meeting. “Or potentially landlords choosing to increase rental prices and costs across their properties to account for increased costs and risk associated with the ordinance.”

Just weeks after councilors passed the regulations with a 7-2 vote, the rental company Bell Leasing sued the city. Bell Leasing owns 64 rental units across the city, including the Canby Street complex, where tenants just saw an $80 a month rent hike. (Bell Leasing blamed the new landlord registration requirement among other issues for the hike, but the math for that hike doesn’t add up.)

The lawsuit originally argued that the rental regulations ordinance would violate landlords’ constitutional rights, interfere with private contracts and would constitute an illegal foray by the city into an area of law preempted by the state.

“It’s unfair,” said Jeff Van Fleet, an attorney for Bell Leasing. “It seems to take one class of person who fits into this narrow rule and give them rights that nobody else has. And at the same time, removing the rights a landlord has statutorily. This creates a special class of citizens with special rights that exceed anybody else who is not in their financial classification – and it also deters landlords from entering our market. This ordinance is unconstitutional for its lack of due process, its invidious nature and the fact that it is preempted by state statute.”

Both the landlord and the city filed motions for summary judgment. Judge Kricken presided over a hearing in mid-July during which Van Fleet argued on Bell Leasing’s behalf and attorney Mark Stewart offered counterarguments on the city’s behalf.

Kricken issued her ruling this week.

Judge: Laramie free to go beyond state law

During council meetings at the time and during the July hearing, defenders of the ordinance argued that the state law does not go far enough.

The relevant state law is known as the Residential Rental Housing Act, which now occupies Wyoming State Statutes 1-21-1201 to -1211. The act outlines the duties landlords and tenants have to one another; it requires the landlord to provide living quarters that are “reasonably safe, sanitary and fit for human occupancy,” but does not venture into specifics about what qualifies as “safe,” “sanitary” or “fit for human occupancy.” The act details how a tenant seeking a remedy can go about holding their landlord accountable: the process involves serving notice to the landlord twice — once by certified mail — and then bringing the matter to court.

Poor tenants, desperate for shelter in a town with limited housing, frequently find this process unworkable, ineffective and — depending on their specific landlord —  potentially dangerous.

So the state law does outline remedies for tenants being mistreated by landlords, but it places those remedies beyond the reach of most renters, said attorney Mark Stewart, who is representing the city.

“A poor college student who has a landlord that won’t make a repair — under the act, his only option is to hire an attorney and sue his landlord,” Stewart said. “He’s got to gather evidence, present evidence, he’s got to prove beyond a reasonable doubt that his unit is not ‘reasonably safe for human habitation.’ That’s a high bar for a college student that can’t afford a lawyer and has to do it pro se.””

This was the argument made by city councilors, nonprofit directors and rental tenants during council deliberations. Previous local reporting has also highlighted dismal living conditions in some Laramie rentals, the powerlessness of young, inexperienced renters, and the deficiencies in the current legal remedies technically available to tenants. When tenants go to the extraordinary lengths required to bring their landlord to court, they come face-to-face with the economic inequality dividing those who own property from those who must rent their shelter.

By contrast, the new local regulations outline a complaint process run through the city manager’s office.

If a tenant believes their unit falls below the standards of the city’s rental regulations, they must first notify the landlord and ask for a remedy. If no remedy is made, the tenant can file a complaint with the city and the city manager’s office will investigate. If the city manager finds that the rental does indeed fall below the standards of the new regulations, they can issue an order to fix whatever problem they find. That order comes with a deadline; if the landlord misses the deadline, they could be fined repeatedly until the issue is resolved.

Van Fleet argued this was a problem, as it goes beyond the resolution process outlined in state statute and favors one party in the tenant-landlord dispute.

“The (state) act is balanced in that it addresses the needs and issues of both tenants and landlords; the ordinance is one-sided,” Van Fleet said. “Only a tenant can file for relief. It’s not a landlord-tenant resolution program. (But) under the statute, both the tenant and the landlord have a detailed resolution process … if neither side can obtain the relief they seek, the statute states they will file in circuit court.”

Judge Kricken asked Van Fleet why the city would feel the need to intervene if the state statute already detailed an adequate remedy.

“It probably is in response to parents of students here,” Van Fleet said. “I have represented a number of property managers and it’s not uncommon for a parent of a 20-year-old to call and demand to speak on behalf of their child who has entered into a legal contract … this may just be the city’s response to all the complaints that each of my clients get.”

The city argued the provisions of the local ordinance do not conflict with the procedure of the state act — nor have state lawmakers explicitly stated that rental regulations are the exclusive domain of the state government.

That means the city has “home rule,” and is able to make more stringent laws about the topic outlined in state statute.

“What the ordinance does is it imposes higher standards,” Stewart said.

Kricken agreed.

“The Act does not permit something explicitly prohibited by the Ordinance, nor the reverse,” Kricken writes. “Nothing in the Act explicitly states the Legislature’s intent that the Act offer the exclusive remedy to landlord-tenant claims, and the Wyoming Supreme Court’s holding in Merrill (v. Jansma) indicates the opposite. Similarly, nothing in the Ordinance would preclude a tenant from exercising his/her rights under the Act rather than under the Ordinance.”

So, the City of Laramie does indeed have the right to issue rental regulations, according to Judge Kricken. But the specifics surrounding those regulations’ enforcement will have to be clarified before enforcement begins on Jan. 1, 2023.

Civil or criminal? Code “unconstitutionally vague” on consequences for landlords

Kricken sided with Bell Leasing on the question of constitutionality. Bell Leasing argued that the ordinance was too vaguely worded and therefore interfered with a landlord’s right to due process.

For example, imagine the city manager investigated a tenant complaint and found that a landlord’s plumbing was, in fact, not being maintained properly. The city manager would then issue an order directing the landlord to fix the plumbing and set a deadline for that fix to be made, taking into account the complexity of the work needed, the availability of licensed professionals, and the necessity of the fix to the tenant’s immediate health and safety.

The city ordinance states that the city manager “may initiate a prosecution in municipal court alleging a violation of the City Rental Housing Code” if a landlord refuses or fails to comply with the city manager’s order.

But the ordinance states that “failure to comply” with an order from the city manager “shall constitute a violation.”

So, does the municipal court determine if a violation has occurred? Or has the landlord already committed a violation by failing to comply with the city manager’s order? What behavior, specifically, is being punished — failing to keep rental units up to code, or failing to follow the city manager’s order?

Those were the questions posed by Bell Leasing’s lawsuit.

Stewart, speaking for the city, said the procedure is akin to receiving a traffic ticket, which you are free to challenge in court.

“This is no different than when one of our local Laramie Policemen issues a traffic citation,” Stewart said during the July hearing. “If you get a citation, you can either pay it, or you can challenge it in municipal court. You get an order for a repair, the owner can say, ‘I don’t think it’s substandard, I’ll challenge it in municipal court.’ It’s no different. The city manager will be tasked with proving the violation occurred. And we’ve got very objective standards the court can look at.”

But this was unconvincing to the court. In the order, Kricken cites Wyoming case law outlining why vagueness in the wording of laws is dangerous.

“‘ … a vague law impermissibly delegates basic policy matters to policemen, judges and juries for resolution on an ad hoc and subjective basis, with attendant dangers of arbitrary and discriminatory application,’” the order quotes.

This was indeed the nature of Bell Leasing’s objection.

“It seems that what the city’s done here is created a continued opportunity for government mischief,” Van Fleet said. “If we were to get the wrong city manager in there and they had this unchecked, unfettered authority, it could be a nightmare.”

Further, Kricken writes it is not even clear, from the text of the ordinance, whether a violation of the City Rental Housing Code would lead to a civil or criminal procedure in municipal court.

“Section 8.80.050 allows for fines and/or equitable relief as punishment,” Kricken writes. “Equitable relief as an optional remedy implies that proceedings would be civil in nature. However, the language in Section 8.80.040G.1.e permits the City Manager to ‘initiate a prosecution in municipal court’ which implies criminal proceedings, as does the imposition of potential fines.”

This lack of clarity led Kricken to conclude that the ordinance, as written, is “unconstitutionally vague” because it fails to state whether proceedings against a landlord would be civil or criminal in nature — and because it fails to outline whether those proceedings stem from failing to follow the health and safety standards or whether they stem from failing to follow an order from the city manager.

The city council could, in theory, amend the language of the rental housing code to clarify these points. But as the matter is still under litigation, Mayor Paul Weaver would not comment on that possibility.

The new ruling from Albany County District Court does not immediately impact the city’s implementation schedule. The new health and safety standards are not yet in effect, no complaint portal for tenants has been launched, and no complaints can even be filed until the first day of 2023.

Because the rental housing code will only be enforced through that complaint process, no enforcement has yet occurred and no enforcement can occur until at least 2023.

The online registration portal for landlords remains open.