HELENA — Landlords would be able to send their tenants to a collections agency for unpaid rent and other charges without a court ruling under a bill introduced to the Legislature.
Sen. Roger Webb, R-Billings, is sponsoring Senate Bill 184, which amends the Residential Landlord Tenant Act. The changes would also allow landlords to charge their tenants fees if they break their lease agreement.
Webb is a landlord himself and said he owns about 100 properties and represents more than 500 landlords as president of the Billings Landlord Association.
Webb said the idea for the bill came out of a district court decision in Missoula, Galbraith v. Professional Property Management, INC., in which Judge Leslie Halligan ruled it was illegal for a landlord to send a tenant to collections, as well as charge them additional fees when they break their lease agreement.
“The Residential Landlord Tenant Act was intended to largely displace the ability of landlords to act as the arbiter of disputes involving money and possession,” Judge Halligan wrote in her decision.
Webb said he doesn’t want the case to set a precedent for the whole state, and this bill is necessary to clarify what a landlord can and cannot do.
“That’s just one person’s opinion,” Webb said.
A memo sent out by the Montana Association of Realtors in July 2018 informed its members of the decision and advised them to not send any of their tenants to collections, as well as to limit fees they charge their tenants until the decision was overruled by the Montana Supreme Court or the act was amended through legislative action.
Chris Mockel with the Helena Association of Realtors was one of 10 supporters during the bill’s public hearing Thursday. He said when landlords can’t collect debts from previous tenants, they transfer the cost into increased rents or higher security deposits.