State Supreme Court Considers Constitutionality Of Rental Fee Caps

The Indiana Supreme Court could overturn a state law that bars cities from charging more than $5 in annual fees to landlords for their rental properties.

Those fees typically get passed on to renters themselves. And Thursday’s court hearing focused on exceptions to the law.

The legislature in 2014 said cities couldn’t charge landlords a rental/inspection fee of more than $5 per property. Three cities were exempt – Bloomington, West Lafayette, and Hammond.

It appears lawmakers didn’t mean to include Hammond; they took away the northwest Indiana city’s exemption a year later.

Attorney Bryan Babb represented Hammond and says the state still gives the other two preferential treatment, and the state constitution bars so-called “special legislation.”

“Don’t give the legislators a license to carve out special treatment with respect to fees statewide,” Babb says.

Attorney Steven Shockley represents Hammond rental property owners. He says Bloomington and West Lafayette have unique housing markets – which makes the special legislation OK.

“Because of the percentage of rental housing in Bloomington [and] West Lafayette, far higher than any place else in the state,” Shockley says.

There’s no timetable for the court’s decision.