Owners and operators should be aware that Indiana law prohibits localities, such as towns, cities, or counties, from regulating many aspect of the landlord-tenant relationship (Ind. Code 32-31-1-20.) This includes, but is not limited to:
- The tenant screening process;
- Security deposits;
- Lease applications,
- Leasing terms and conditions;
- The rights of either party to lease;
- Disclosures concerning the property, lease, or rights and responsibilities of either party, and;
- Any fees charged by the landlord.
This statute does not apply to private properties that receive government funding for the express purpose of providing reduced rents to low or moderate-income tenants. A locality may only impose regulation(s) of the landlord-tenant relationship if it has first obtained explicit permission for the proposed regulation from the Indiana General Assembly via enacted legislation. Any local ordinances of this sort that were passed before the spring of 2021 are void and no longer enforceable.
Municipalities and counties are also prohibited from adopting or enforcing a land use or planning ordinance that has the effect of (a) controlling either the amount of rent charged or the purchase price agreed upon for a transaction pertaining to the lease or purchase of privately-owned residential or commercial real property, or; (b) requiring real property to be designated or reserved for lease or sale to a group of occupants, owners or residents classified by income or assets. (Ind. Code § 36-1-24.2-1.)
Moreover, no municipality or county can require the owner of private property to agree to:
- A requirement that would have the effect described in (a) or (b) above, or;
- The payment of a fee in place of a requirement described in (a) or (b) as a prerequisite to the approval or consideration of any building or land use permit, any land use petition including, but not limited to, variances, special exceptions, conditional use permits, zoning ordinances or rezoning ordinances, or any primary, secondary or revised plats. (Ind. Code § 36-1-24.2-2.)
However, the owner of private property can voluntarily agree to a requirement that would have an effect described in (a) or (b) above in exchange for incentives or grants provided by the county or municipality. (Ind. Code § 36-1-24.2-4.)
Finally, no local government is allowed to adopt or enforce an ordinance that requires (or would have the effect of requiring) an owner or operator to participate in a federal Section 8 program or a similar such program. (Ind. Code 36-1-3-8.5.)