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Rental ordinance case still unsettled

Recently, Judge John Melbye handed down a decision in the small claims actions that 13 landlords filed against the city of Bemidji in Conciliation Court. Judge Melbye’s decision stated that the landlords “argued that the city essentially ‘took’ the money that they had paid for their registration permit.” That, in the law, is called Regulatory Taking. Therefore Judge Melbye ruled “As such, this matter is too complex to be handled in conciliation court and should be heard in district court.”

The article in the Pioneer implied that the city had won. The city of Bemidji did not win. The case was referred to district court.

The case seemed simple. Landlords did not question the constitutionality of the new rental housing ordinance or the authority of the city to adopt it. However, when a citizen or business pays a governmental agency a fee for a license or a permit and is issued a license with an expiration date, everyone should be confident that unless you violate a requirement of that license, it will not expire until the date on the license. It should not matter if it is a driver’s license or rental permit.

What would happen if the state of Minnesota decided it needed more money and cancelled all drivers’ licenses at the end of 2012? On Jan. 1, everyone has to pay for new license good for one year only. I might be OK, my license was about to expire anyway. You may have just renewed yours. You are not offered any compensation for paying for two licenses within a few months of each other. Not fair. You bet people would be outraged.

Effective at the end of 2011, all prior three-year rental permits were cancelled with no compensation for the remaining period of the permits. The new ordinance went into effect and a new annual fee was required on Jan. 1. The city offered no proration or compensation. Because permits could expire in any month of any year, every rental property owner was impacted differently. Some landlords paid a full permit fee in October that paid for less than three months before a new one was required.

There was not equal treatment. The landlords asked only for fair treatment in the form of reimbursement for the unused portion of the fee they paid for the permit.

The Headwaters Landlords Association will continue to be a watchdog on local matters that affect housing.