Wilmington Mayor John Carney vetoed an ordinance Friday that would have allowed the city to hold funds in escrow for renters.
Delaware law allows renters to withhold two-thirds of their rent if their landlord doesn’t address a lack of heat, water, hot water or electricity.
Wilmington City Council passed an ordinance 10-1 with two absent earlier this month that would allow constituents to hold those funds with the city.
Carney vetoed the ordinance Friday. He said in a letter to Councilmembers the program would cost too much with a $300 thousand price tag that is not currently budgeted.
“The high cost stems from requiring city staff to administer the program,” Carney wrote. “Removing this burden could make the proposal financially viable.”
Carney added the program could come with legal liabilities.
Carney’s Chief of Staff Cerron Cade said Carney supported a similar measure at the state level during his time as governor.
“I think the question is, is this the responsibility of the city of Wilmington?” Cade asked. “And can it be fashioned in a way that is more in alignment with the City of Wilmington's responsibilities, versus putting us in a position where we're doing something that probably should rest at the state level?”
Cade emphasized tenants already have the right to withhold rent under the Landlord-Tenant Code, and Carney’s veto didn’t change that.
If a renter has reason to withhold rent, they must give the landlord written notice and 48 hours for the landlord to address the issues.
Carney also said in his letter the bill was too broad.
“We must avoid such ambiguity,” Carney wrote. “... The bill could expose the City to liability by allowing participation in the program for matters outside the provision of the essential services identified in Title 25, Section 5308 of the Delaware Code. This means the City may be placed in a situation where it is holding funds from landlords beyond what is provided for in the State’s Landlord Tenant Code, or based on potentially fraudulent complaints. Such a scenario is unacceptable.”
Carney encouraged Councilmembers to revise the ordinance to better serve the city. Cade concurred and said he thinks there are better ways to help renters.
“What this would do now [is] take those exact same steps [of withholding rent] but also add another layer of bureaucracy to a right that already exists…” Cade said. “So this just seems like it's a solution in search of a problem in the way that it's written, which also creates other legal liabilities.”
Wilmington City Councilmember Yolanda McCoy sponsored the escrow ordinance.
Councilmembers also passed a second earlier this month ordinance that McCoy presented as part of a package with the escrow ordinance. It requires landlords to provide renters with a full copy of tenants’ rights in their leases. That ordinance passed 11-0 with two absent.
