'Afraid the whole building was going to collapse:' Bills would fight negligent landlords

·10 min read

Past midnight on a Friday this January, the ceiling of the Lakeside Pointe apartment Javier Araujo Nava shares with his brothers collapsed, sending a deluge of water into his living room.

“We were afraid the whole building was going to collapse,” he said. “We didn’t want to get electrocuted. We moved out as fast as we could.”

The family lost everything — furniture, clothes, possessions.

Despite a history of frequent fires, gun violence, and severe neglect at the property, the city said it was restricted in taking action against the property owners owing to Indiana law, which restricts what the city can do against predatory or negligent landlords.

Two new bills introduced this legislative session could alter that, proposing changes that would strengthen enforcement of basic habitability standards for rental properties that many Hoosiers call home.

“Indiana needs to have more clear laws that provide rights to tenants to respond when they’re living in substandard conditions,” IU law professor and housing law expert Fran Quigley said.

The first bill, Senate Bill 230, is “surgically” tailored to address negligent landlords who create unsafe buildings that harm tenants, said the bill’s author, Sen. Fady Qaddoura, D-Indianapolis. After working to bring the Lakeside Pointe case to the attention of the Attorney General’s office, who filed and lost a lawsuit against the owner last year, Qaddoura was motivated to draft SB 230.

The bill would also create for the first time in Indiana law a right to withhold rent to force repairs and a ‘right to repair and deduct.’ Housing advocates say that tenants currently have insufficient enforcement mechanisms to ensure their home meets basic habitability standards, resulting in rampant unsafe conditions.

Indiana is one of only five states that does not have at least one of those rights.

The city of Indianapolis said they support both new bills, SB 230, and a bill filed in the House that would return legal authority to cities to pursue nuisance claims against negligent landlords. House Bill 1400 would strike a prohibition on using 911 calls or fire calls as evidence that a landlord is responsible for illegal nuisances.

“These changes would bring Indiana closer to the national standard for tenant protections and would correct a major gap in tenant protections in Indiana’s current landlord-tenant law,” said city spokesperson Mark Bode.

More: Tenants at Lakeside Pointe suffered years of neglect. Then, their homes caught fire.

More: Renters in other states have laws to protect them ... that's not the case in Indiana.

SB 230 would also require landlords to deal with breakdowns in electricity, gas, heat or water, within 24 hours. At properties like Lakeside Pointe, residents told IndyStar they have gone months without hot water in the past.

Lastly, SB 230 would allow the city to claim damages against a landlord, owner or tenant for a nuisance that requires law enforcement assistance, such as fire calls or 911 calls.

“My bill does not impact responsible landlords because responsible landlords already take care of their tenants,” Qaddoura said. “My bill is specifically focused on negligent landlords, negligent, corporate out-of-state landlords who tend to come to our state and exploit Hoosier families.”

Both bills face an uphill battle in the GOP-controlled General Assembly.

Fady Qaddoura, an Indiana Sen., at a Democrats’ tour called Small Town, Indiana, in Cicero, Tuesday, Oct. 26, 2021. The series of events, targeting each of Indiana’s 92 counties, is an attempt by the party to find new voters in many politically red counties.
Fady Qaddoura, an Indiana Sen., at a Democrats’ tour called Small Town, Indiana, in Cicero, Tuesday, Oct. 26, 2021. The series of events, targeting each of Indiana’s 92 counties, is an attempt by the party to find new voters in many politically red counties.

Right to withhold rent and 'repair and deduct'

In the status quo, a tenant faced with a landlord who refuses to or fails to make necessary repairs has a few options, Quigley said. Their primary recourse is to call the health department to report unsafe conditions but doing so can invite retaliation from the landlord, which is illegal but common, law professor Quigley said.

SB 230 would put Indiana in step with the 45 other states that have some mechanism for tenants whose landlords fail to make necessary housing repairs to withhold rent or make repairs themselves and deduct the cost from the next rent payment.

Tenants would have to inform the landlord at least 30 days before the next rental payment of the nature of the landlord’s violation of their obligations and give a good faith estimate of the repair cost. If the landlord fails to do so, the tenant can withhold the next rental payment and use a portion of it to make repairs themselves, according to the estimate of the cost.

Through litigation, courts can also order the tenant to make the rental payments to the court in a trust account to be disbursed to either the tenant or landlord, depending on who wins the case.

“You’re talking about folks living in standing water, with black mold, rodent-infested apartments, with dangerous electrical wiring problems,” Quigley said. “I fear that Indiana is just biding our time before we have some real tragedies in these dangerous rental conditions of folks getting hurt or worse.

Where the bill is headed

For SB 230 to stand a chance to become law, it first has to be heard in the Senate local government committee to which it has been assigned.

Sen. Jim Buck, R-Kokomo, chair of the committee, said he would need to read the bill more closely before deciding if it should receive a hearing. But, he added that he likes the bill on first glance.

The Jan. 27 deadline to do so though is fast approaching for a committee that meets a limited number of times.

Another member of the committee, Sen. Mike Bohacek, R-Michiana Shores, criticized the bill.

“I think the bill is a little vague, goes too far, and I think it’s going to have the unintended consequence of forcing more folks to get out of the rental industry,” he said, adding that it is expensive to be a landlord.

“The resale market's real hot right now. I mean, you're almost better off liquidating than being a landlord.”

Bohacek said he is a landlord himself, renting out six single-family properties including one Section 8 property.

Mike Bohacek
Mike Bohacek

He disagreed that only irresponsible landlords would be affected by this bill because he said any landlord can get involved in a situation where there are maintenance problems.

“If I have an outlet that fails to work, does it mean my tenant can withhold rent until I fix it? Or what if it’s a supply chain issue and I can’t get the parts?” he said, adding later, “If it’s the tenants fault, how do I prove it’s the tenant’s fault?”

When asked what legal recourse tenants have if landlords refuse to and neglect to make repairs, Bohacek said tenants can call the local building officials. Or, they could withhold rent, go to the eviction hearing, and counter-sue the landlord.

“It’s pretty ironic that a member of the General Assembly would say (calling the local health department is) the right action for a tenant to take,” law professor Quigley said, “because last session, the GA made it impossible for city of Indianapolis to protect tenants from retaliation if they call the health department.”

Lawmakers passed in a bill in 2020 that prevented city governments from enacting their own, stronger protections for tenants, including against retaliation for calling the local health department.

An IndyStar investigation previously found that four lawmakers who helped advance landlord-friendly legislation in 2020 were financially invested in or employed within the real estate industry. Furthermore, IndyStar found that the Indiana Apartment Association donated more than $1 million to Indiana Republicans from 2015 to 2020.

Restoring local government power to tackle problem landlords

The second notable habitability enforcement bill this session, HB 1400, seeks to tackle negligent landlords in a different way: by restoring power to cities to use 911 or fire calls as evidence in nuisance cases.

In 2017, riding on support from the Indiana Apartment Association and Indiana Association of Realtors, the Indiana legislature passed a bill that banned cities, including Indianapolis, from using law enforcement calls as evidence in a nuisance case.

Together with 2020 legislation that banned Indianapolis from regulating landlord-tenant relations, current law restricts the city’s ability to take action against problem landlords.

City spokesperson Mark Bode told IndyStar that although the law does not explicitly prohibit cities from enforcing the nuisance statute against problem landlords, it has been interpreted by some Indiana appellate courts as preventing cities from using emergency calls for service, such as police, fire, or EMS calls, as either evidence of the nuisance, or as a measure of damages the city can recover as a remedy for the nuisance.

“This interpretation has greatly undermined the utility of the nuisance statute as an enforcement tool,” Bode said, even though it was not the intention of the General Assembly to do so, he added.

Previously, one of the few tools the city had against irresponsible landlords was the state’s nuisance laws, which define nuisances as indecent, injurious, offensive and obstructive acts that prevent free use of property. It gave the city a “nuclear option” against the worst of the worst properties.

The bill would repeal the 2017 prohibition on city's using that power.

Current law also drains taxpayer dollars, said bill author Rep. Justin Moed, D-Indianapolis, as the city is disallowed from recovering costs for public safety responses as damages for a nuisance.

Bode said that a significant volume of taxpayer dollars are spent responding to repeated fire, police and EMS calls to problematic, neglected properties. This bill would allow the city to better protect the community from public nuisances.

State not in best position to intervene

On one hand, the city of Indianapolis said its are restricted by current law to deal with problem landlords.

“That’s why we supported the Attorney General’s action back in the summer,” Bode said in an email in December, “since we’re hampered in our ability to use the fires or the public safety concerns as proof of a nuisance, their lawsuit represented a legal action that had more viability and greater force than what the city currently has in its toolkit.”

But on the other hand, the state doesn’t always have the power or capacity to intervene either, lawmakers said.

That's partly why Attorney General Todd Rokita lost the lawsuit against Lakeside Pointe’s landlord last September.

Qaddoura said the city, rather than the state, is best suited to dealing with problem landlords.

“I think the good government is the closest to people and local government is closest to the people,” Qaddoura said. “The state is not in a position to intervene with local is not positioned or staffed or has the capacity to be intervening on a daily basis with cases across the state of Indiana, and local governments should be more empowered to address these issues.”

The Attorney General’s office spokesperson Molly Craft also told IndyStar, “Because of the nature of those governments, municipalities are in the best position to know what is going on with problematic landlords and problematic properties on a day to day basis.”

Until the state empowers the city to take on problem landlords or empowers tenants to do so themselves, tenants like the Navas will be left out in the cold, quite literally. The night that their apartment’s ceiling collapsed, they slept in their car in the sub-20 degree winter.

They moved into a hotel paid for by the Red Cross but are worried about finding a new permanent place to live.

"I don’t know how people can rent places like that and never take care of them," he said.

Contact IndyStar reporter Ko Lyn Cheang at kcheang@indystar.com or 317-903-7071. Follow her on Twitter: @kolyn_cheang.

This article originally appeared on Indianapolis Star: Negligent landlords: Indiana bills would empower cities