City, County & Local Affairs Committee - Senate and House

OK, Senator Rice, you're recognized there well no you've already disclaimed you're not a lawyer, but Clarify for me when you're saying tenant, you're only talking about. The pain or. One that has an agreement to rent. That you're not calling a squatter a tenant, are you OK, no, no, that, and that, that again Rice is another reason that we're doing two different bills. We want the squatter to be defined and and that uh uh has has its ramifications and then we have the tenant defined as someone, it would be someone who has paid rent, but just, just, uh, for Representative Richardson mentioned that, uh, Sebastian County, I think that may have a better. Grasp on their area because I had somebody told me that they had property in multiple counties. In fact, two states, and they commented Sebastian County was much better about getting squatters out. When the other ones just don't want to touch anything without getting a a judge's order and and you know that the other one, the tenant basically they can't do anything without a judge's order based on a court ruling here in Little Rock here in Pulaski County we we had some, uh, couple of people that, that took over some one of these realtors that gathered property up over decades and it just ran down wouldn't, wasn't livable. But uh they bought all this one lump sum in an estate and cleaning up her town. Had a house right by the courthouse, half tore down had one room left in it. And they couldn't get squatters out of it and were threatened to be put in jail if they finished tearing it down and, and. Finally got it done but it the expense should not be there. Well, and, and there's many people, uh, much like the lady I described earlier that inherited a house from her mother-in-law, and she didn't have the money to repair. She didn't have the money to, to, uh, hire an attorney, you know, she called the county sheriff and, and to be honest with you today, he's helpless. We do need clarity statewide. Thank you. Thank you. Any other questions? Seeing Senator, uh, I did a little research this, uh. Past summer and. And uh BLR told me there was no specific laws addressing squatters and our local government back home, uh, they encouraged some kind of legislation to be passed. Uh, they felt the same way that they would like it clarified so I appreciate you taking this task on. Thank you. And again, everyone is invited when you get the notice to to attend. uh, Mr. Chairman, thank you, committee. Thank y'all. All right. Up next is, uh, uh, Representative Richard McGrew. He'll be talking about property management legislation. You may proceed. Thank you, Ms. Chairman. And we'll be discussing exhibit E in your packet, which is a bill that, uh, was drafted last session but never run. Little background on the bill. It's a bill that I started on property management. It was handed to, uh, uh, uh, licensing attorney who got with the real estate commission, they added about 20 pages to this bill and got it to where it is today. Uh, so that's some background to give you some information because this is about getting a class. Not growing government, not growing the commission, but putting a different classification for property management broker. Today, to manage someone else's property. Uh, for instance, let me give you an example. Let me also under your disclosure, I am a landlord. I used to have over 400 units. I'm down to under 100 now. I'm getting old and tired and just wanting to slow down a little bit and so, uh, but at my peak, I've, I've managed over 400 units for over 20 years. If my brother or my sister or my neighbor across the street wanted me to manage their property and I did it. I could be convicted of a felony for doing that. And so that's, that's one thing on this bill that fixes, but the other thing to currently get a license to proppy to, to manage that neighbor's property. Currently, you can manage your own property that you own. But if you manage someone else's, you have to be licensed by the state of Arkansas. Currently for that to happen, you have to take 60 hours of education and I have took this and it's own cells. You take 60 hours of sales education pass a test, then you take that license and you place it with the licensed broker for the period of 2 years while taking continuing aid on basically sales at the end of that two years, also during that 2 years, if you have any rental property, you have to share that property with that broker. During that time period. At the end of that two years, you have to take 60 more hours of education towards the broker's tests. I took that education too. There's a very, very, very small part on there that had to do with property management. It mainly had to do with the trust account and with the Fair Housing Act had nothing to do with best practices. And at that you're licensed to be a sales broker or broker. So today in Arkansas, To manage property, you can get a license to manage property through the real estate commission with absolutely zero knowledge of property management and zero experience in property management. The biggest, uh, rewards that come from the recovery fund have been for mismanagement of property management. In my opinion, because they don't teach and don't require anything about property management. Now, full disclosure, they do have some faith and they just put it out this year that I've seen that is on your, uh, continuing ed that there were some things that were labeled property management. I took that, again, it was a trust account with anything about best practices, in my opinion, it really didn't help you as as a landlord or property manager. So what this bill does, it sets up where And let me also like Mr. Carl, Senator Caldwell said, this is the beginning, although it's drafted in it's very close. There's a few things in it that I think we need to change. Currently in this bill, it says that if you have 2 years of experience. Uh, in managing. Residential property and I think it's only 4 units. I think it needs to be higher than that and a little more restrictive. Needs to be up to at least 12 or 15 properties. But if you have that experience, And you take 60 hours of education specifically designed for property management and pass a test, then you can be licensed as a property manager. If you have no experience, you can be hired as an associate, take 30 hours of education on property management in both positions, you have to take continuing a on property management. Uh, to get your, keep your license current, and if you're an associate, you can, you can do that for 2 years and then be eligible to take the test to become so it's like an apprenticeship. What this bill does is it, it does multiple things in my opinion. One of the most important things does it finally requires knowledge and education from property managers, so that they'll know how long they can hold the deposit. They'll know best practices of how they should treat a tenant. And what works best. It will increase the knowledge in property management. It sets up a way where a landlord can get education even without getting the license if they wanted to. But the main thing is that it requires then once you get that license that you can manage property. So it provides a path by where a regular Arkansan that wants to get in the field of property management is not forced to be a sales broker for 2 years. I, uh, I know of a, of the gentleman in Hot Springs that wanted. To do this, uh, the way that I wound up getting a broker's license was through the waiver that the Restate commission gave me. I think I was number 7 in the history of the state to get it. So it's not something they, they get to decide whether you get it or not, and they're, uh, pretty restricted from it, which I think maybe they should be, because now I'm licensed because of that waiver to be a sales broker, which I have no experience and knowledge in. And the gentleman that also worked to get that waiver, I called him before I came in here today because he's gotten the waiver and so now he's managing property. He's over 400 units in less than a year. Some of those units he was man, his wife manage managed from out of state. Um, property managers. We have a lot of out of state property managers that came in to come in to manage property in Arkansas, especially some of the bigger. Complexes, and I believe if we had more Arkansas property managers that, that they could serve that community. And there's many people, we have a huge shortage of property for low income. A lot of that lower income outside of, of, of HUD and housing is done by mom and pop operations. And if they had the ability to expand and grow, then they could more cater to that orient and hopefully. Provide more housing in there. So, but that's what this bill does. It provides a path where someone who has knowledge and experience in property management. Can become a pro licensed property manager without being forced to go to 2 years of sales and become a sales broker. To me, my trade growing up was electrician. They never told me, you got to go to 2 years of carpentry school to become an electrician. So forcing me to go to 2 years of sales school to be a property manager. The, in my opinion, the, uh, What you, the, the traits of being a property manager have nothing to do with sales. And so this again, more clearly defines that. It allows a path by where someone who wants to get into property management, can do that without being forced to go into another field. And, uh, and I'll be glad to take any questions. Excuse me, Represented, I see no one. So, uh, you are dismissed. Thank you. OK, is there anybody in the audience that would like to speak on either one of these issues that we've spoke on today. Seeing none. This will probably be my last time to be in the chair and city county local. I, I've enjoyed. I've been in it for 6 years and I've enjoyed it immensely. This, uh, last, uh, session we had a great session and Uh, y'all were well behaved and y'all took on a. Yeah yeah Uh And I will miss you, but I will not miss the job. Having nothing else come before us, this meeting is adjourned.