Government Affairs Updates: State and National

Landlord Tenant Legislation
During the 2011 session, at the request of the NC Association of REALTORS® and the NC Apartment Association, Representatives Julia Howard (R-Davie), John Blust (R-Guilford) and Shirley Randleman (R-Wilkes) introduced House Bill 493 (Landlord Tenant Law Changes), http://www.ncga.state.nc.us/Sessions/2011/Bills/House/PDF/H493v2.pdf. The North Carolina Association of REALTORS® has worked with legislators and stakeholders to advocate for this bill, which will amend the laws related to the landlord-tenant relationship. It is our goal to address several items of importance to our members including the eviction process timeline which is often extremely lengthy and greatly increases the landlord’s costs which will subsequently continue to increase the cost of housing.

After an exciting round of events in the House, the legislation passed and was sent to the Senate Judiciary II Committee.   The bill passed the Senate Judiciary II Committee unanimously yesterday. It will now go to the Senate Floor Monday night.      

N.C. House Approves Budget
The N.C. House approved a $20.3 billion state budget on Wednesday night after a lengthy, sometimes heated debate.  Once again, five conservative Democrats (Reps. Bill Brisson of Bladen County, Bill Owens of Pasquotank County, Dewey Hill of Columbus County, Jim Crawford of Granville County and Tim Spear of Washington County) joined the Republicans to approve the spending plan. The support of the five Democrats is expected to again provide the three-fifths majority needed to override a veto. The budget bill now goes to the N.C. Senate for consideration.

Congress Raises Concern About Lease Accounting Proposal
Reps. Sherman (D-CA) and Campbell (R-CA) recently sent a bipartisan letter signed by 58 other lawmakers to the Financial Accounting Standards Board (FASB) and International Accounting Standards Board (IASB), urging the accounting standard setters to conduct a comprehensive economic analysis of its recent lease accounting proposal before making a final rule.
Under the proposal, U.S. companies that lease commercial space would be required to capitalize the costs of that lease — similar to as if they purchased the property — instead of recognizing the true costs of the lease transaction.  It is estimated that under current terms, businesses would be required to capitalize over $1.1 trillion in leased real estate assets onto their balance sheets.  For businesses leasing space, especially small businesses, this will change these leases into a major liability.
FASB and IASB will likely be ready to vote on a method to account for real estate leases in June 2012, along with expectations of finalizing their lease accounting overhaul by the end of this year.

Read the Letter