Landlords who collect utility payments from tenants but fail to submit the money to utility providers could face prison time, fines or both, under a new law signed by Gov. Tate Reeves.
The change comes months after tenants in some Jackson apartments were forced to move out of their homes because water was shut off after their landlords accrued thousands of dollars in unpaid bills.
Rep. Shanda Yates, an independent from Jackson, authored House Bill 1404.
“We have apartment complexes and other landlords across the state who are apparently charging for utilities as part of the tenants’ rent, they are collecting this from the tenant and they are failing to remit payment for those utilities,” Yates said during a House discussion of the bill in February. “These tenants are then being faced with having their utilities turned off despite the fact they have paid for their utilities as part of their rent.”
Louisiana enacted a similar law last year to address issues there, Yates said.
Mississippi’s new law took effect as soon as the Republican governor signed it Wednesday.
A person who collects and then fails to remit over $25,000 in utility payments from tenants’ rent can face up to 20 years in prison and a fine of up to $50,000, if convicted under Mississippi’s new law. If the amount is less than that but at least $5,000, the person can face up to 10 years in prison and a fine of up to $10,000. The law also includes smaller penalties for smaller misappropriations. Additionally, offenders will have to pay restitution to anyone who suffered a financial loss as a result.
The law specifies that it doesn’t apply to delays resulting from a tenant’s late payments or from errors on the utility’s side.
Last July, JXN Water, the capital city’s third-party water and sewer system operator, shut off water to Blossom Apartments after the landlord ran up more than $400,000 in unpaid bills. Shortly after, tenants there were forced to move after the Mississippi Home Corporation labeled the property unfit to live in.
The utility also shut off water to the Chapel Ridge apartment complex around the same time. JXN Water estimated last year that the city’s multi-family complexes were collectively behind over $7.5 million on their water bills.
The owner of Blossom Apartments, Tony Little, and JXN Water later sued each other after Little disputed the amount he owed. Those lawsuits are continuing. Recently, a bank that loaned money to the complex asked a Hinds County judge to appoint a receiver to run the property, WLBT reported.
The Senate amended an earlier version of the bill to say that the misuse of utility payments must be done “knowingly, willingly and unlawfully.” The bill then passed in the House by a vote of 100-14, after passing in the Senate without opposition.
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