Senate advances receivership authority for persistently unsafe rental properties after amendment battles
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Summary
Senate Bill 20—authorizing receiverships for multifamily properties with repeated warranty-of-habitability violations—passed after floor amendments and close debate on who should be able to trigger receivership and what safeguards owners should have. Sponsors said receivership is a last resort for serial "slumlord" patterns; opponents raised pr
The Senate passed legislation creating a receivership tool for multifamily residential properties where a pattern of warranty-of-habitability violations persists and local governments or the Attorney General seek court intervention.
Sponsor Senator Cyndi Gonzales said the receivership mechanism is narrowly targeted to address “egregious” and serial failures by property owners when other remedies have failed. On the floor Gonzales said the mechanism was meant for a limited set of extreme cases and that most landlords and tenants would not be affected.
During floor debate senators proposed and considered multiple safeguards for property owners. Senator Pelton (R) offered an amendment (L003) that would have raised the evidentiary standard for appointing a receiver from preponderance of the evidence to clear and convincing evidence; the amendment failed in the Senate. Other producer‑sponsor changes accepted in committee shortened minimum receivership duration and clarified what liens the receiver must resolve. Senators also discussed bonding and the priority order for payments of rents by the receiver, including utilities and service contracts.
Why it matters: The bill gives local governments an additional remedy to address buildings with repeated, serious habitability problems that can harm tenants’ health and undermine neighborhoods. Sponsors say it’s a narrowly tailored last‑resort tool for extreme cases; opponents warned it risks overreach and can impose significant costs on property owners.
What’s next: The bill passed the Senate; sponsors and opponents expect further negotiations and technical cleanup as it moves to the House, including bond and lien handling, the evidentiary threshold for receivership and mechanisms to allow owners to regain control after remediation.
Ending: Senate Bill 20 passed after floor votes on competing amendments; sponsors said the tool will be used sparingly and aims to protect vulnerable tenants while preserving property-owner rights where remedies exist.