What the Heck is a “Privilege” Fee?

take aimWhile landlords in Fayetteville, N.C. were none too happy to learn they owed money to the city for the “privilege” of renting out properties there, the biggest surprise came from city council members: they didn’t know about the law, either.

According to a report in the Fayetteville Observer, the bills to landlords and property managers came from an auditor hired to track down unpaid fees for the city.  The auditor decided to apply an existing ordinance that allows for “privilege fees” on some businesses to rental property owners and managers.  Only after the phones lit up did the city council get involved.

The city has never before collected the fees against landlords and property managers, according to the report.  But that didn’t stop the auditor from assessing back fees and penalties in addition to the original fees.

City council members have expressed concern over the ambush, and want to look at the law more closely, especially as it applies to the large population of military personnel in the area. Nearly half of Fayetteville housing is rentals, according to the report.

One council member, also a landlord, told a reporter that the law was “news to me.”  He claims to have paid the fee.

Other businesses are subject to the privilege fee according to the report, including morticians and tattoo artists.  However, many professional services have remained exempt, including other real estate professionals.

The auditing company reportedly works on commission.

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