New Orleans Rental Registry – What is it and is it legal?

On January 18, 2017, the New Orleans City Council’s Community Development Committee submitted proposed rental regulations to the City Council in an effort to regulate rental properties.  The proposed rental regulations are now before the City Council for final passage.  The matter is currently deferred (in the six months since the Committee sent the proposal to the Council, the ordinance has not yet made it to the Council floor).

The proposed rental regulations, first proposed in 2013, include creation of a rental registry and require regular inspections of properties.  A registration fee and inspection fee would be involved, with the amount of the fees being dependent on the number of units rented through each property.  Properties which pass the initial inspection would next be due for inspection three years after the initial inspection.  If a property or unit fails the first inspection, then a more frequent—every two years—inspection schedule, along with a re-inspection fee, would be imposed for that property or unit.  As currently proposed, landlords unable to comply with the inspection criteria will be barred from renting the unit.

As with nearly any type of proposed regulation, arguments have emerged across the spectrum as to the need for, usefulness and/or effectiveness of, and legality of a rental registry, as well as required inspections.  One of the legal issues related to the proposed rental registry is whether or not the proposed registry – – or any registry involving inspections – – violates the Fourth Amendment of the United States Constitution.

Constitutional Implications of a Rental Registry

The Fourth Amendment ensures the “right of the people to be secure” in their homes “against unreasonable searches and seizures.”[1]  This blog is not the forum for a deep dive into Fourth Amendment search law; however, generally, a warrant is required for a search and a warrant is only supposed to be issued to conduct a search upon a showing of probable cause.  The basic purpose of the Fourth Amendment “is to safeguard the privacy and security of individuals against arbitrary invasions by government officials.”[2]  The function and purpose of the Fourth Amendment may be generally known and/or intuited in the criminal context (e.g., when the police get a warrant to search a house for evidence of a crime).  The question with a potential rental registry is what protections does the Fourth Amendment provide in the context of an administrative search pursuant to an ordinance with the stated purpose of protecting the health and safety of a city’s citizens?[3]

In 1967, the United States Supreme Court set the stage for attempts by cities to create rental registries and allow inspectors inside individual homes.[4]  In Camara, the Supreme Court held that a San Francisco building ordinance permitting warrantless, unconsented to inspections to enforce the city’s housing code was unconstitutional.[5]  The Camara Court found the searches to be a significant intrusion upon Fourth Amendment interests and held that “such searches when authorized and conducted without a warrant procedure lack the traditional safeguards which the Fourth Amendment guarantees to the individual.”[6]

A pair of cases out of an Illinois federal court – – Hometown Co-op. Apartments v. City of Hometown[7] – – are illustrative in their examinations of the constitutionality of an ordinance that required owners to consent to an inspection prior to selling or leasing property.  The Hometown cases articulate the balancing involved in the constitutionality determination of potential registries.  In Hometown I, the court found the ordinance in question unconstitutional under Camara because the Hometown I ordinance essentially left the owner no choice: either consent to a search or be fined for leasing or selling the property without a certificate of inspection.

Hometown II examined the ordinance after it was amended.  The Hometown II ordinance included a procedure for obtaining a warrant in instances when the owner refused to consent to an inspection.  The Hometown II Court found that the amendment “remedied the fatal flaw in its earlier point of sale inspection ordinance.  [Under the Hometown II ordinance t]he property owner is no longer forced to choose between consenting to a warrantless search or subjecting himself or herself to substantial fines for failure to procure an certificate of inspection.”[8]  Therefore, the Hometown II ordinance was upheld as constitutional.[9]

A key finding of cases which allow for administrative inspections of homes is that an ordinance may not force a homeowner to choose between 1) allowing an inspection to take place or 2) a fine.  An ordinance may pass the test if there is a procedure in place for inspectors to procure a warrant when an owner refuses to consent to the search.

The proposed New Orleans rental registry ordinance would allow code officials to enter “land, structure, or premises in the City . . . at any reasonable time” to enforce the code. [10]  Prior to any entry, the inspecting official would be required give notice of intent to enter.  If after proper notice a person “fails to arrange for, denies, or unduly delays the entry” of the code official, the warrant provision is triggered.

The warrant provision of the proposed ordinance gives inspectors the right to request “the right of entry to authorize entry for the inspection.”   Prior to granting, the court must find that: (1) the required notice has been given and (2) the petition “establishes probable cause that an inspection will reveal violation(s) of this code.”

Conclusion

The ordinance currently before the New Orleans City Council does allow for a consented search as well as requiring a warrant if consent is withheld (as opposed to the “either consent to search or be fined” scenario previously found unconstitutional by other courts), but the proposed ordinance may not be clear enough to survive a Fourth Amendment challenge.

Although the language of the ordinance may be enough to overcome a Fourth Amendment challenge, such a challenge may never arise.  The ordinance is currently deferred and municipal elections in November 2017 may change the composition of the City Council, which could, in turn, change the likelihood of the creation of a rental registry.

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[1]           U.S. Const. Amend. IV.

[2]           Camara v. Mun. Ct. of San Francisco, 387 U.S. 523, 528 (1967).

[3]           See Crook v. City of Madison, 168 So.3d 390 (MS, 2015) (collecting cases).

[4]           Id.

[5]           Id.

[6]           Id. at 534.

[7]           Hometown Co-op. Apartments v. City of Hometown, 495 F.Supp. 55 (N.D.Ill. 1980) (“Hometown I”) and Hometown Co-op. Apartments v. City of Hometown, 515 F.Supp. 502 (N.D.Ill. 1981) (“Hometown II”).

[8]           Hometown II, 515 F.Supp at 504.

[9]           Id.

[10]          All proposed changes to existing ordinance and the creation of a rental registry can be found here: http://nolacitycouncil.com/resources/resources_chapters626.asp