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Though there are a lot of issues facing rental property owners that make providing housing for a large share of Michigan residents cumbersome and less cost effective, four issues stand out among the rest: 1. Inconsistent Housing Codes...Currently each community in the state can have—and often does have—a custom code that varies widely from community to community. Property maintenance codes are designed to establish the minimum level of maintenance and design necessary for healthy, safe, and structurally sound existing housing. These minimums are the same, regardless of where a property is located in the state. A statewide code would enable more effective management of properties across municipal boundaries and require all property owners to adhere to minimum standards developed by the respected Building Officials and Code Administrators International. Michigan currently has a statewide building code for new construction authored by BOCA. The RPOA-M supports the adoption of the BOCA International Property Maintenance Code (IPMC) at the state level to set consistent standards for property maintenance in each community throughout the State of Michigan. 2. LLC Legal Representation...Currently, court opinion holds that a property owner would be acting illegally as legal counsel for an Limited Liability Companies (LLC) if they represented their LLC in summary proceedings. A great number of LLCs are composed of part-time real estate investors that often represent the ownership of less than ten units. Furthermore, most of these summary proceedings are less than the small claims court limit of $3,000. Ironically, LLC officers can represent themselves for small claims. The requirement of legal representation literally results in an LLC expenditure exceedingly disproportionate to the amount of damages claimed which—in the case of a possession judgment only—is zero. In other words, LLCs frequently face paying attorney fees that are twice the amount or greater than any possible judgment. The RPOA-M supports legislation to enable property owners with an LLC to represent themselves in summary proceedings (evictions). 3. Abandoned Tenant Property...Often times tenants vacate a rental unit and leave personal property that may or may not be of value. There is no law in the State establishing the criteria to determine when property has been abandoned by a tenant or how a rental property owner can dispose of abandoned property—except through a writ of restitution via an eviction. Because of this, property owners can be exposed to litigation for wrongful disposal of a tenant’s alleged valuable possessions. Current laws exist for storage facilities and abandoned property. The RPOA-M supports the establishment of criteria and procedures for the lawful disposal of a tenant’s abandoned property. The State plays a critical role regarding property ownership and investment. State policies and laws can either help or hinder the effective and rewarding ownership of rental property.
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