(Source: Alicia Petska The News & Advance, Lynchburg, Va. (MCT) — Confusion over a new utility deposit law is affecting some of Lynchburg’s poorest residents, who are meant to be exempt from the sizeable fees.
Starting July 1, the city raised its required utility deposit for renters from $75 to $180 to comply with a new state law.
Since then, the Lynchburg Redevelopment & Housing Authority reports the heftier fee has been a burden on public housing and Section 8 tenants. In some cases, public housing applicants were prevented from moving in because they couldn’t afford the higher fee.
But under state law, those tenants are supposed to be exempt from the new deposits. The law, passed this year, specifically waives the charges for those receiving need-based housing assistance.
Lynchburg officials said the complexity and newness of the law led to some confusion locally.
But they add they are working to clear it up and correct any errors.
“All of this is new. We call it a work in progress,” the city’s billings and collections manager, Lynn Watson, said.
She said the city would “absolutely” be speaking with stakeholders to untangle any misunderstandings.
“I think we definitely need to do that,” Watson said. “Our goal is to not impact any of the agencies providing need-based housing.”
This year, in an effort to protect landlords from collection claims, the state changed the rules governing water/sewer account deposits charged by localities.
Under the new regulations, deposits for renters must equal at least three months worth of average billswhich inLynchburgamounts to $180 for residential rental properties.
The deposits are held as long as the account is open, and can be applied against delinquent bills if a tenant splits without paying. The system is designed to protect landlords, who can be on the hook for overdue bills and subject to property liens.
Localities could avoid the higher deposit requirements by waiving their right to use liens to collect in such cases. Lynchburg City Council declined to take that route.
The new requirements only apply to renters whose water/sewer accounts are in their own names; accounts opened in the property owner’s name are not affected. In addition to the higher deposits, tenants must get written permission from their landlord to open a utility account and landlords will be notified if a tenant falls behind on payments.
Since the new requirements took effect, the city said it’s fielded many questions from landlords.
“We’ve met some landlords in our office for the first time after dealing with them for 10 or 12 years,” Watson said.
Those struggling with the transition include the housing authority, which has been applying the higher deposits to its tenants.
Only one of the authority’s three public housing complexes requires tenants to maintain their own water/sewer accounts (the other two operate on a single meter system).
But since July, four applicants for that complex were charged the $180 fee and another three were unable to move in because they couldn’t afford it, which put them back on the waiting list, officials said.
Public housing rules require tenants to pay all associated fees before moving in.
The state requirements carve out an exemption for renters receiving “need-based local, state or federal rental assistance.”
The Virginia Municipal League said the language was intentionally made as broad and inclusive as possible, and would include all public housing and Section 8 tenants.
Local officials expressed varying levels of familiarity with the exemption. Housing authority staff said they’re arranging a meeting with city officials to clarify the requirements.
“We’re going to be discussing it with the city to see how we might resolve things,” Executive Director Deb Guyot said.
Housing authority clients will not be charged utility deposits in the meantime, she said.
Watson said awareness needs to be raised so landlords and tenants know the requirements and can file the proper paperwork for an exemption. Those seeking an exemption must provide supporting documentation proving they are in an eligible housing program.
“If we know someone is in Section 8 housing, we do not require a deposit,” Watson said. “But if they don’t tell us they’re in Section 8 housing, we have no way of knowing and we would just follow our normal day-to-day process.
“I think one message we would like to get out there is to encourage people to ask us questions and to initiate conversations as to whether a home or a tenant qualifies for need-based assistance.”
Watson added the city’s procedures will “continue to be fine-tuned” as the transition to the new system progresses.
She said those who were erroneously charged a deposit will be considered for refunds or credits against future bills.
“I can tell you this has made our jobs much more complex,” she said of the state law. “But again, it’s a work in progress.”
©2012 The News & Advance (Lynchburg, Va.)
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