CORRECTION APPENDED: The previous version of this article stated that properties qualify for PROP if infractions occur within a four-year period. Properties qualify if four infractions occur within a two-year period.
Repeated loud parties, overgrown grass, junk cars and appliances in the yard along with structural issues such as exposed wiring and faulty plumbing are the meat and potatoes of Raleigh’s Probationary Rental Occupancy ordinance. Now in its fifth year, here’s a look back at the goals of the PROP and how it is working out.
First passed in 2005, the PROP was designed to provide relief after residents and tenants complained repeatedly about “problem properties.” Relief for neighbors when laissez-faire landlords did nothing to halt repeated loud parties or allowed tenants’ trash, old appliances and junk cars to collect in their yards. Relief for tenants suffering from unlivable rental unit conditions because of structural issues. And relief for landlords trying to rid themselves of problem tenants.
People often confuse rental registration and the PROP permitting program, but while all rental properties must register, PROP is only for problem rental properties.
Properties only end up in the PROP when problems repeatedly occur at the same address within a two-year period. At best, landlords are made aware of problems and move quickly to ensure they do not recur, whether the infraction is the tenant or the landlord’s fault. At worst, the city can make it illegal for a property owner to rent the property, although this has yet to happen in PROP’s five-year history.
City Housing Inspector Bryce Abernethy, who heads up the program, said only 29 properties have had a PROP permit issues since 2005, but another 260 have been made eligible at one point or another.
The ordinance has changed during the past six years. The most recent change includes adding another infraction, criminal activity, to the 10 current ways property can become eligible for a PROP permit.
Eligibility begins when one of the 11 infractions is confirmed by the housing inspection department or by the Raleigh Police Department. If four infractions occur at the same property in two years, the property becomes eligible for the PROP permitting program. The low number of PROP permits issued, according to Abernethy, is because “the ordinance is set up to give property owners ways to protect themselves from bad tenants.”
One way is to include compliance with city ordinances in leases signed by tenants. This allows landlords to more easily evict unruly tenants and avoid stacking up enough infractions to enter the property into the PROP.
However, PROP violations are issued to a given address, so evicting tenants does not clear the violations. As Raleigh’s PROP website states, “Ultimately, the condition of the rental property and the activities of the tenants must be closely monitored by the property owner. Property owners are expected to write clear expectations of tenant behavior relative to neighbors into leases, and take action to encourage tenants to comply with these expectations or seek evictions for problem tenants.”
Tenants benefit from the program. Anything from bare wiring, holes in the walls and broken windows can qualify as a PROP violation, so landlords now have greater incentives to keep properties in better condition.
Neighbors of problem properties also benefit. Abernethy said the most common violations involve public nuisance complaints.
“They can range from trash in the yard, furniture outside, putting mattresses or appliances outside,” he said. “Noise violations can get a $100 ticket. If a property gets three in 24 months, regardless of if the tenants change, they will automatically go into PROP. This is new and so far, two are in the process of going into the program.”
But some of those who manage properties aren’t sure they reap the same benefits experienced by tenants and neighbors.
“I just don’t see that any property owner out there is going to see PROP as helpful to them,” said Steve Deaton, of Deaton Investment Real Estate. “Many of the violations that can occur are completely out of control of the property owner. They are tenant created and unless the landlord is living there 24-7, he or she can’t possibly control all the actions on the part of their tenant. You can certainly educate them, but it doesn’t mean they are going to listen and act accordingly.”
Once in the program, property owners must pay a $200 processing fee and – if found eligible – an annual $300 permit fee that raises to $500 the next year. Fines and civil penalties start at $50 but can reach $500, although the PROP permitting process allows for appeals, especially when corrective actions are taken.
Even if the property is sold to someone else, the 24-hour month timeline is not affected because violations are attached to the property, not the owner.
Deaton said despite the longevity of the program, not everyone is familiar with it or knows what it means.
“It’s just another disclosure item from a broker standpoint,” he said. “It’s not something that obvious unless you research it, and I bet very few real estate brokers out there even know what a PROP violation is or what the program is all about.”
While PROP remains a source of confusion for many, Abernathy said it has made a difference.
“When it was first introduced a lot of the major landlords, people who own 30-plus properties, they started getting rid of properties. Many landlords are scared of PROP and it has made them a lot more proactive in how they manage and handle their properties. I have landlords call me weekly to say, ‘A tenant got a noise violation. I don’t want the property to go into PROP, I want to know what to do to avoid that.’ We want property owners to take that proactive approach and PROP helps with that.”
Abernathy said landlords who want to learn more about it can take the city’s optional landlord training.