Our clients who are residential landlords should be aware of some significant changes in Connecticut law, many of which became effective October 1, 2023.
There are amendments to existing laws and new legislation which impact tenant onboarding, impose limitations on late fees and alter the timeframe for the return of or accounting for residential security deposits.
Limitations Re: Tenant Onboarding
Public Act 23-207, which was adopted in July of 2023, places new limits on rental application-related fees. As of October 1, 2023, a landlord may collect nothing other than a security deposit, first month’s rent, a deposit for a mailbox key or key card or some other special equipment and fees for a tenant screening report. You may no longer collect “first and last months’ rent.”
The laws as to the amount of a security deposit which may be collected remain unchanged. Security deposits may be no more than two months’ rent, unless the tenant is over the age of sixty-two, in which case it is limited to the equivalent of one month of rent.
The provisions as to tenant screening reports are new and are also effective October 1, 2023. A landlord is now limited to charging a tenant $50.00 as a pass-through expense for obtaining a screening report. This amount is subject to cost-of-living adjustments going forward, subject to determination by the Commissioner of Housing. Landlords must share this report with the tenant or inform the tenant how they may request a copy from the service provider that produced the report and furnish the tenant with a copy of the receipt for the report. The legislation is silent as to how this policy will be enforced, but presumably could surface as a claim against a landlord by a disgruntled tenant in a small claims or housing discrimination matter.
Also new, as of October 1, 2023, is that a landlord may not charge a move-in or move-out fee.
Limitations On Late Fees
The new legislation also provides new limitations on late fees on rent. The pertinent portions of the Connecticut General Statutes are repealed and replaced with new provisions providing that in rental agreements containing written language addressing late charges, the late charge may not exceed the lesser of (1) $5.00 daily, up to $50.00 or (2) 5% of the delinquent rent. In the case of a tenant receiving Section 8 or other housing assistance, the late fee may be no more than 5% of the tenant’s share of the rent. Again, this provision is effective October 1, 2023.
Shorter Window For Return Of Security Deposits
One of the more significant impacts for landlords is the acceleration of the timeline for a landlord to return a tenant’s security deposit to the tenant. Upon termination of a tenancy, a landlord must now return the security deposit and accrued interest to the tenant or provide an accounting for damages within 21 days, rather than 30 days, or be subject to double damages. This accelerates the need to assess vacated units, obtain estimates and initiate repairs. It may be wise to exercise your option to enter and inspect the condition of the unit prior to the tenant’s departure, to put vendors and service providers in place in anticipation of damage that needs to be addressed.
Pre-Occupancy Walkthroughs Upon Tenant Request
Interestingly, this new legislation has tasked the Department of Housing to generate a uniform pre-occupancy checklist that may be used to assess the condition of a unit. This paperwork is required to be made available on the Department of Housing website by December 2023. It is meant to support the new law, effective for any tenancies under rental agreements after January 1, 2024, that allows a tenant to request a pre-occupancy walkthrough of a dwelling unit with the landlord or his designee. The checklist is meant to document the move-in condition of the unit, and to reduce security deposit disputes, as a landlord will be prohibited from retaining security deposit money for any condition documented on the checklist once the tenant vacates.
There have been some very recent and very significant changes that impact residential landlords’ responsibilities in Connecticut. They alter the way that landlords have done business for many years. This is an important juncture for our clients who own or manage residential rental units in Connecticut to review their application paperwork and policies, the language of their leases and their move-out practices, to make sure that you are compliant with the new statutory scheme going forward.
If you’re a landlord that has questions about how these laws could affect you, contact Willinger, Willinger & Bucci, P.C. today to schedule your consultation for tailored legal guidance.