A measure allowing utility companies to ask courts to appoint receivers over certain landlords behind on their utility bills passed unanimously out of an Indiana Senate committee Thursday.
Senate Bill 114 stems from shutoffs to hundreds of residents at several Indianapolis complexes last year after the landlord failed to pay its bills.
“A lot of litigation ensued from that, from which we learned there wasn’t a real good remedy for that situation,” author Sen. Eric Koch, R-Bedford, told the Senate Utilities Committee on Thursday.
“While it’s everybody’s hope that we never see something like that again, it is certainly possible and likely,” he continued, “particularly in Marion County and even our university communities around the state where there’s multitenant housing.”
Citizens Energy Group briefly cut off water to hundreds of tenants at two Indianapolis affordable housing complexes last February, both owned by Ohio-based not-for-profit JPC Affordable Housing. The landlord had collected utility payments as part of its rents but hadn’t passed it on, racking up an unpaid bill above $1 million.
Four JPC-owned properties — and their 2,000 residents — fell under shutoff risk again in August and September that year, averted only by a deal requiring that JPC sell the properties. It was nearly $2 million behind on bills at the time.
Such shutoffs of essential services risk mass displacement: If a health department declares a residence uninhabitable because there’s no water, residents would be forced out.
Indiana Attorney General Todd Rokita filed a lawsuit against JPC leaders seeking to appoint a receiver but was rebuffed by the Marion Superior Court for lack of standing.
Senate Bill 114 would allow courts to appoint receivers when not-for-profits, limited liability companies and other entities are dissolved, are insolvent or nearly there, or have forfeited their corporate rights. That currently only applies to corporations under Indiana Code.
And the bill would let utility companies request receivers if a multifamily property owner hasn’t paid bills for at least 90 days or is at least 60 days behind on a payment plan.
It applies only to properties of four units or more, and landlords who collect utility payments as part of rent — not cases in which utilities bill tenants directly.
Koch’s bill earned widespread support from Indianapolis faith-based advocates, apartments, utilities, insurers and bankers in a speedy 15-minute hearing.
“This small step will help send a message that Indiana is no longer ripe for do-what you-want property owners,” said Rabbi Aaron Spiegel, who leads the Greater Indianapolis Multifaith Alliance.
Spiegel also noted the higher-than-average percentage of out-of-state landlords in Indiana and called for more rights and recourse for tenants.
Citizens Energy Group Government and External Affairs Manager Bridget O’Connor said the company supported the legislation, calling it an “additional tool” for utilities.
“The current options for the utility are very limited,” O’Connor said. “… This receiverships tool will provide needed protections for utilities, residents of the apartment complexes, and the remainder of the utility’s customer base.”
The committee approved it 11-0, with several Democrats asking to be added to the bill. It will now head to the Senate floor for a second reading.
The Indiana Capital Chronicle is an independent, not-for-profit news organization that covers state government, policy and elections.