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Mount Dora's new rental licensing ordinance - Smart idea or a can of worms?

By
Real Estate Agent with Sand Dollar Realty Group, Inc. BK627826

The City of Mount Dora recently passed an ordinance requiring all owners of rental property to obtain "Rental Licenses".  This new license requires the property owner to have city inspections once every 3 years and every time a new tenant moves in.  It also requires the property owner to pay annual licensing fees. You can read more on this on the City of Mount Dora's website and in the Orlando Sentinel.      

    The intent of this ordinance besides to generate more revenue to the city is to keep slumlords in line.  I do not know if an ordinance like this will do that though.  The problem is not just with the slumlords, but also with the tenants that they rent to.  Even nasty people have to live somewhere.  It does not take into consideration that some landlords do a fine job of maintaining their rentals and some owner occupant homeowners allow their home to fall into disrepair.  Some of the nastiest run down homes I have seen are owner occupied properties. At least a landlord has some financial incentive to keep the tenants from tearing up his property. Remember the Seminole County "Junk Man", he was an owner occupant.

The big issue is how to enforce this ordinance.  How does the city know when a tenant turnover occurs?  Considering that in most cities about 20-30% of all properties are non-owner occupied rentals or businesses, the city will have to police thousands of rental properties in order to enforce this ordinance.

The Lake County Association of Realtors and many local landlords fought this ordinance's approval, but it was passed and is now in effect. This is a major negative blow to real estate investors and Realtors in Mount Dora because of the increased fees and regulations that this will cause.

Similar ordinances have already been passed in the cities of Deltona and Cocoa during 2007.  The cities of Orlando and Winter Park have rejected similar proposals because the policing of them would be to burdensome. It will be interesting to see how this will play out, but it definitely is not a good thing from a real estate investment point of view.

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(Copyright © 2008. Sand Dollar Realty Group, Inc. All rights reserved.)

Rob Arnold, ABR, CPL, CRB, GRI, Managing real estate broker, Licensed mortgage broker, Notary Public

407-389-7318 / 1-877-389-7318    www.SDRhouses.com/   www.WeBuyHousesFlorida.com/

Your full service and investor friendly Realtor in Orlando. Learn to invest in Central Florida real estate and Orlando real estate. Investor mentoring and counseling available. I also provide flat fee MLS listings, For Sale By Owner, and menu-based services in most parts of Central & South Florida, the Space Coast, and the Treasure Coast including Orlando, Tampa, Miami-Dade, Fort Lauderdale, West Palm Beach, Ocala, Volusia, and Brevard.

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Joe Davis
Indiana Commercial Realty - Crown Point, IN
We've had this in Hammond Indiana where rentals were becoming out of control and people were renting out any space.  It's a good idea to ensure that a proper criteria is followed.
Feb 25, 2008 09:58 AM
Lynda Eisenmann
Preferred Home Brokers - Brea, CA
Broker Associate ,CRS,GRI,SRES, Brea,CA, Orange Co

Hi Rob,

Yikes, looks like everyone is looking to generate more incomes. Has your Assoc. been any help on this issue?

Feb 25, 2008 10:03 AM
David Spencer
Keller Williams Northland - Kansas City, MO
Show Me real estate in Kansas City

Illinois and Florida (the last I knew) are the only states that permit blind trusts. So what bank trust departments will put up with this? The only individuals that will suffer are the small landlords. In Illinois, we get around the problem by imposing fines for building violations which affect trustees.

Your local city fathers are barking up the wrong trees. Its a lot cheaper to chase building code violations than people. 

Feb 25, 2008 10:05 AM
Lisa Spalding
Casa Latino Four Corners, REALTOR, CDPE - Longwood, FL
REALTOR, CDPE
Wow.  How can they keep up with this? 
Feb 25, 2008 10:22 AM
Terry & Bonnie Westbrook
Westbrook Realty Broker-Owner - Grand Rapids, MI
Westbrook Realty - Grand Rapids Forest Hills MI Re
And they want affordable rentals. Our rentals with the higher non homestead taxes, inspection fees and tenants that don't pay or trash the property make it very difficult to hold on to these properties when the values are not increasing. Thanks for your info on the are you live in.
Feb 25, 2008 10:25 AM
Rob Arnold
Sand Dollar Realty Group, Inc. - Altamonte Springs, FL
Metro Orlando Full Service - Investor Friendly & F

Joe - There are already zoning and code enforcement laws in place that could easily be enforced if people are renting out space illegally.

Lynda - Unfortunately this is not in my association's territory it is just across the county line.  The local association in that county vehemently opposed the legislation, but still could not stop its passage.

David - Our local code enforcement laws go after the property and the person.  The trustee by law is not affected in their personal capacity, so they would be immune to any lien except for that 1 property.

Lisa - Our tax dollars at work once again. What can I say?

Terry - You already cannot get most single-family houses or duplexes to bring a positive cash flow.  What this sort of ordinance might cause is a bunch of abandonned buildings.

Feb 25, 2008 11:12 AM
Jimmy McCall
JimmyMcCall.com - Cunningham, TN
The Ex-Mortgage Consultant

I have too many thoughts to even think about commenting on this.  but I will give a few.

  • County has to hire new employees to do the inspections.
  • What are the fee?
  • How long can the government keep someone from moving in because of delayed inspections?
  • What is the critia for being an approved rental?
  • If you are in voilation how long do you have to fix repairs?
  • Who is responsible for filth of longer term renters?
  • I assume the fees will be passed on to renters, thus, raising rent.
  • Higher rent makes buying look more attractive.
  • What are the exemptions?
  • Think of the moving hassles of people moving in and out on the weekends when I am sure inspections will not happen.
  • Do potential renters have possible lawsuits because of delayed moveins because of voilations?
  • Can potential renters backout because of expectations not meet?
  • Will less people rent properties?
  • Non refundable cleanup fees/deposits passed on to renters.

Okay, I am done but I am sure there are more. 

 

Feb 25, 2008 11:18 AM
Rob Arnold
Sand Dollar Realty Group, Inc. - Altamonte Springs, FL
Metro Orlando Full Service - Investor Friendly & F
Jimmy - I haven't read the entire ordinance, but I believe most of this is addressed in the ordinance.
Feb 26, 2008 11:06 AM