HB 731 Factsheet
HB 731 – broadening the exemption for occupancy contingent on employment, and concerning sale of a tenant’s abandoned property
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HB 731 would negatively impact renters in Montana. It includes three changes, each addressed below.
I. Re-wording the exemption from coverage for employee housing
Section 70-24-104 sets out eight exclusions from coverage by the Montana Residential Landlord and Tenant Act, for various housing relationships. Section -104 (7) currently excludes from coverage by the Act “occupancy by an employee of a landlord whose right to occupancy is conditional upon employment in and about the premises”. HB 731 would strike the words “in and about the premises.” (p. 2, lines 1-2).
A person residing in housing who is covered under the Act is much more protected than one whose housing is not covered by the Act. Protected persons are entitled to various protections including written notice before being terminated from housing (70-24-422), to maintenance by the landlord (70-24-303), and to the due-process protections of a court action before they can be evicted (70-24-427). If the housing is not covered by the Act, none of the provisions of the Act apply, and the person occupying the housing can be summarily forced out.
Currently, subsection (7) means that an employee (usually of a motel or ranch or resort) who lives and works in the same place (the motel or ranch or resort) is not covered by the Landlord and Tenant Act (Title 70, Ch. 24, MCA). That means that if that employee’s job ends for any reason, the employer/landlord can require the former employee to move out of the employer-provided housing immediately. The former employee is not covered by the notice requirements or any other protections of the Act.
HB 731 would broaden the exemption in (7), to say that the employee’s job duties need not be in and about the premises that they occupy. This would mean that if a restaurant owner in Big Sky (for example) employs Joe and allows Joe to live in a house in Bozeman owned by the employer, then Joe’s housing would not be covered by the Act. If the employer fires Joe, even for no reason, the employer could require Joe to vacate immediately from the house in Bozeman. Under the current wording of (7), Joe would be covered by the Act after the firing at the Big Sky restaurant because he is not employed “in and about” his Bozeman housing premises. If HB 731 passes, he would not be covered and the employer could force him out of the housing immediately upon firing him.
II. Abandoned property: Removing the requirement of a public or private sale authorized by state law
Under current law, if a landlord takes control of a tenant’s abandoned personal property and ends up selling the abandoned property, the landlord must conduct the sale according to one of two provisions of Montana law. (p. 3, lines 23-24). HB 731 would remove the requirement to conduct the sale according to one of those two Montana laws. A landlord would still be able to dispose of the property by “selling all or part of the property at a public or private sale” (p. 3, line 8), but that sale would not have to be conducted under one of the two statutes cited at 70-24-430 (7). The amendment proposed by HB 731 would give landlords free rein to decide how to hold a public or private sale of the tenant’s property, and the tenants would not have as much assurance that the sale would be held according to Montana law.
III. Abandoned property: Removing the requirement for landlord to deposit with the county any proceeds from the sale of tenant’s property, when tenant cannot be found (p. 3, lines 27-28)
Under current law, if the landlord sells property left behind by a tenant, the landlord can deduct from the sales proceeds the landlord’s costs such as storage, sale, rent, and damage. Then the landlord must remit to the tenant the remaining sales proceeds. If the tenant cannot be found, the landlord must deposit the remaining proceeds with the county treasurer. HB 731 would remove the requirement of the deposit with the county. The requirement that the landlord “remit to the tenant the remaining proceeds” (p. 3, line 26) would remain in the law, but not the deposit with the county if tenant can’t be found. It is unclear under HB 731 what the landlord is supposed to do with the remaining proceeds if the remittance to the tenant is not successful. Presumably, the landlord would mail the proceeds to the tenant’s last known address, then if that letter is undeliverable, it would be returned to the landlord. Since HB 731 doesn’t specify what happens then, the landlord would likely keep the sales proceeds. This would result in a windfall to the landlord, because the landlord would have already recouped all of its costs from the sales proceeds before sending the payment to the tenant. It’s better public policy to require the landlord to deposit any remaining proceeds with the County.