Rental Property RegistrationBy Denise Supplee and Cassandre Juste

Landlords in Williamsport, Pennsylvania are objecting to Mayor Campana’s new proposal that landlords and tenants be required to register by providing proof of their identities.  Nor are they alone in their grumbling: more cities nationwide are enacting ordinances similar to this one, requiring landlords to register their rental properties, obtain occupancy certificates and of course pay the fees associated with each.  While the specifics vary greatly from one state to another, ignoring these ordinances can result in hefty penalties for landlords.

A certificate of occupancy (or occupancy permit) is simply a document stating that the specified unit can be inhabited by people and defines how the building can be used (e.g. a single-family home or a multi-family property). The certification is often required for selling or refinancing a property, or after substantial renovations.

So what happens when a landlord rents a property without obtaining an occupancy certificate first?  The tenant can often sue the landlord as well as receive reimbursement for repairs made to the property.  The tenant can also sue for reimbursement for filing costs along with cost of service process and interest.  In the state of Connecticut, if a landlord is found to have rented a property without having a certificate of occupancy, they can be fined for up for $20 per day, per unit.

To maintain the certificate of occupancy the property must be inspected periodically to ensure that the property is in a condition to be inhabited.  If the rental unit is not in proper condition and the certificate of occupancy is revoked there can be a variety of penalties, none pleasant for the landlord.  In the state of Texas if a certificate is revoked and the tenant has not broken the lease agreement, the landlord may be responsible for the full amount of the tenant's security deposit, the prorated portion of any rental payment the tenant has paid in advance, the tenant's actual damages (including any moving costs, utility connection fees, storage fees and lost wages), court costs and attorney's fees arising from any related cause of action by the tenant against the landlord.

Rental RegistrationRegistration ordinances, on the other hand, require a landlord to register their property with the local government, and in some cases provide copies of the registration to the tenant.  According to New Jersey attorney Michael Mirne, “Compared with the Certificates of Occupancy, the registration statement application places relatively little burden upon the landlord.  Registration Statements do not require inspections and do not need to be repeated upon the arrival of new tenants."  But they still usually come with a registration fee, and, of course, paperwork.

Some states require landlords who do not reside in-state to register a local "resident agent" for the property.  The state of Rhode Island, for example, requires landlords who are not residents of Rhode Island to register an agent that is a resident of the state, a for-profit corporation, limited partnership, limited liability company, limited liability partnership, non-profit corporation or an attorney qualified to conduct business in the state.

Landlords who fail to obtain necessary permits and certificates are often discovered when they go to file for a judgment for possession in rent court.  While not having the proper registration or certificate of occupancy that may be required may or may not result in a dismissal of the eviction action, it can delay the process up to 90 days.  In short, in cities or states that require a certificate of occupancy or registration, beware all ye who fail to comply, and be prepared for fines, penalties, eviction delays and a host of headaches.