An Oregon judge has sided with landlords over the city of Eugene’s attempt to cap tenant screening fees at ten dollars ($10), according to reports.
Two property management groups had sued the city over a city-imposed ten dollar ($10) cap on rental applicant screening fees. Thorin Properties and Jennings Group, Inc., charged in the lawsuit that Oregon law grants landlords the right to collect applicant screening charges sufficient “to cover the costs of obtaining information about an applicant.”.
Lane County Circuit Court Judge Erin Fennerty, ruled in favor of the property management groups. She said state law allows landlords to charge for the actual cost of the background checks and that supersedes the city ordinance.
“Operation of the Ordinance ultimately defeats the purpose of applicant screening charge, as a landlord cannot recoup its average actual costs as provided for by (state law) while complying with the Ordinance’s cap on recouping actual costs above ten dollars ($10),” Fennerty wrote in her opinion.
The Eugene City Council voted last summer in favor of a tenant screening cap and put a ten dollar ($10)cap on the amount that property owners could charge prospective renters for a background check.
“We were confident from the outset that this policy was unlawful,” Multifamily NW Deputy Executive Director Gary Fisher, told KLCC.org. “Despite sharing our perspectives and experience with the city council, the policy passed last year. While a legal challenge is always a last resort, we are pleased that Judge Fennerty upheld the law.”
A spokesperson for the City of Eugene said the city is reviewing the court’s decision.
Thorin Properties is an Oregon Limited Partnership. It owns 16 properties in Eugene, Oregon, consisting of 82 apartment units and six stand-alone rental homes.
Jennings Group, Inc., is an Oregon corporation which is licensed as a property management firm. It manages 1,595 residential department units in the City of Eugene.
John Triplett is with the RentalHousingJournal.com, an interactive community of multifamily investors, independent rental home owners, residential property management professionals and other rental housing and real estate professionals. It is the most comprehensive source for news and information for the rental housing industry. Their website features exclusive articles and blogs on real estate investing, apartment market trends, property management best practices, landlord tenant laws, apartment marketing, maintenance and more.