If you own residential rental property in Detroit, you need to review how the recent changes made to Detroit’s Rental Property Ordinance, Chapter 9 of the Detroit City Code, may affect you.
The full extent of the changes is beyond the scope of this article but here are a few that are worth noting.
One, the changes update penalties and fines for a violation of the Detroit Property Maintenance Code.
Two, the changes allow the City to suspend or deny a property’s certificate of compliance when (a) the owner fails to comply with a blight violation notice for the property; (b) property taxes are delinquent for one year or more; or (c) if the owner fails to respond within 60 days after written notice of a required inspection.
Three, provisions relating to the appeal of a denial or suspension of a certificate of compliance have been expanded and updated. Requests for hearings must be submitted in writing within seven days of the suspension or denial. If a request is not made within seven days, the suspension or denial is deemed final.
Four, changes have been made in how often certificates of registration of a rental property are required. Generally, it will be annually. However, if a property owner has owned the property, stayed current on property taxes, and remained violation-free since January 1 of the preceding year, the owner only needs to renew the certificate once every three years for one and two family dwellings and every two years for multi-family dwellings. But a property owner who has not remained current on their taxes or who has been issued one or more notices for blight violations for the property must renew the certificate annually for a three-year period.
Five, the Buildings Safety Engineering and Environmental Department has been directed to maintain a registry of all rental properties for which a certificate of compliance has been issued and make that registry available on the City of Detroit website.
Finally, and perhaps most significantly, the ordinance now prohibits landlords without a valid certificate of compliance from collecting rent and provides that tenants of these properties shall pay rent into an escrow account established by the Buildings Safety Engineering and Environmental Department. If the landlord does not obtain a certificate within 90 days of the first escrow payment, the escrowed rent is returned to the tenant, minus a Dept. handling fee. This process continues every 60 days until the landlord obtains a certificate of compliance. If the landlord obtains a certificate within 90 days of the first escrow payment, the escrowed rent is paid to the Landlord, minus a Dept. handling fee.
There are more updates and changes that you should review or make sure that your property manager reviews.
At Seglund Gabe Pawlak & Groth, PLC, our real estate attorneys are experienced in all aspects of the ownership and leasing of rental property, both residential and commercial. Contact us if you find yourself needing to consult with or retain an experienced real estate attorney.
Seglund Gabe Pawlak & Groth, PLC
28345 Beck Road, Suite 301
Wixom, MI 48393
Phone: (248) 869-0030
Fax: (248) 869-0039
***The information provided in this article is for informational purposes only and is not legal advice.