WHAT’S HAPPENING AROUND THE STATE OF MICHIGAN - June 2007
by Don Eichstaedt, Secretary, Rental Property Owners Assoc. of Michigan (RPOAM)

LOBBYIST REPORT -

SB 554 ( Senator Whitmer) - A proposal to require the seller of a property to
put information on the deed about any non-recorded road that exists on the
property. This requirement may exist in current law.
STATUS: Working

INSPECTION BILL (Senator VanWoerkom) - The proposed change will allow cities to
increase the time between inspections from a maximum of 3 years up to 6 years.
Most municipal groups are opposed.
STATUS: Working

SB 509 (Senator Scott) - Proposed legislation will require the rental property
owner to certify if the property has or does not have lead in the soil. This
bill would require rental property owners to test the soil at their properties.
S! TATUS: Delayed

HB 4394 (Rep. Steil) - Bill requires the departing tenant to send his
forwarding address by certified/registered mail. 3 tenant groups and the
attorney general oppose based on the cost to the tenant. The attorney general
will not allow the proposed reference to the Security Deposit. If the attorney
general opposes the bill it will not pass.
STATUS: Hearing soon - to vote out of committee

SB 379 (Senator Whitmer) - Bill to define when a rental property owner can enter
their tenant’s residence. Director Clay Powell has reworked their proposed
legislation.
STATUS: Being drafted by the Legislative Drafting Bureau

Senator Gleason - Legislation to control the theft of copper and other metals
from vacant properties. The bill proposes to require the scrap seller to provide
ID at the time of sale.
STATUS: Being drafted

GRAND RAPIDS - In May the Association met with the City to resolve rental
housi! ng issu es. In preparation for this meeting, the Association had surveyed
its members to determine what problems the members had been having with the
City. The survey data was used to develop position statements on many
problematic issues. These issues and position statements were presented to the
City at a meeting in May attended by 3 Housing Dept. staff, two City
Commissioners and the mayor. The City was keen to understand each of the issues
and asked many questions to clarify the Association’s positions. The City agreed
that they should address each of these issues and vowed to work with the
Association on their resolution. A working group was established to work on
rental housing issues.

The next meeting with the City was scheduled for May 18. The agenda for the
meeting was focused on the City’s responses to the Associations positions and
request for action. The Association will continue to meet frequently with the
City unt! il all of their issues have been resolved satisfactorily.
(This could be a very good model for other associations around the state to
follow to attempt to resolve issues you may have with your City and its Housing
Dept.)

PONTIAC - The city has increased its rental registration fee to $250.00 per year
from $100.00 per year. The REIA of Oakland Pontiac Sub-group is trying to decide
what course of action to take regarding this change of policy.

WAYNE COUNTY - Back in February a Wayne County judge granted class-action
status to a lawsuit filed against the mayor and the city for the imposition last
year of a $300 annual trash fee on homeowners. Judge John O’Hair certified the
class action to include any person or entity in the city that suffered the
imposition of the fee. The plaintiffs claim the added cost is an illegal fee
disguised as a tax. They say that because the fee was never put to a vote, it is
unconstitutional. Anyon! e inter ested in joining the suit can call the plaintiffs
attorneys at the Macuga and Liddle law firm at 313-392-0015.
 

WHAT’S HAPPENING AROUND THE STATE OF MICHIGAN - MAY 2007 b y Don Eichstaedt, Secretary, RPOAM

LEGISLATION

Representative Steil’s BILL - Proposed legislation to require the departing tenant to give their forwarding address by certified or registered mail.

Senator Gleason’s Bill - Proposed legislation to control the theft of copper and other metals . Stolen property can be sold to scrap and salvage yards without penalty.

Senator Whitmer (SB 379) -Legislation to define when a rental property owner (RPO) can enter his tenant’s residence  - The Senator has accepted our concerns. She has requested that our Executive Director draft a new bill; basically the bill describes what is generally normal practice. A RPO must give the tenant 24 hours notice prior to entering the property for any reason. Emergency entry is still allowed. The rental agreement shall include these provisions.

LEAD -CONTAMINATED RENTALS - Senator Martha G. Scott (D-Highland Park) introduced legislation that would require the rental property owner (RPO) to notify new tenants if the soil on their rental property is lead-contaminated. SB 509 would let tenants bring civil damages of up to $5,000 against a RPO if they fail to tell the tenants about the lead.

COMMERCIAL PROPERTY TAX BILLS -  We voted to oppose the bills as written. We support lowering commercial property assessed values due to vacancies but there is an issue of this being unconstitutional since Proposal A was an amendment to the State Constitution.

HOMESTEAD EXEMPTIONS - The House Commerce Committee voted recently to send to the full House legislation allowing a homeowner to receive two principal residential exemptions on two homesteads. The legislation (HB 4215) would permit a person who moves to another home in Michigan to apply for a principal residence exemption to their former homestead if it is unoccupied and on the market. The measure is intended to reverse the “windfall effect” that occurs when the housing market slows down, people move and are hit with higher property taxes on their unoccupied home because it lost the homestead exemption.

RPOAM PROPOSED LEGISLATION -

INSPECTIONS - A proposal to allow cities to increase the time between inspections to 6 years for good properties. (current limit is 3 years)

WATER AFFIDAVITS - A proposal to allow for periodic  and fixed-term leases for the water affidavit.

SMOKE ALARMS - Effective March 14, 2006, battery powered smoke alarms must have: a) a non-rechargeable battery with a minimum of 5 year life or, b) a rechargeable battery, with proper charging, able to power the alarm for 5 years and shall be automatically charged by an AC circuit of a commercial light and power source. Issued by the State Office of Administration, Hearings and rules, Dept. of labor & Economic Growth. Tel: 517-241-9313

OTHER STATE INFORMATION - A public hearing on proposed changes to the Michigan Building/Residential Rules and the Michigan Rehabilitation Rules was held on May 31, 2007 @9:30 AM by the Bureau of Construction Codes in the Forum, Michigan library and Historical Center, 702 W. Kalamazoo St, Lansing, MI, 48909. The proposed rules will adopt the 2006 International Building Code, the 2006 International Residential Code and the 2006 International Existing Building Code with amendments, deletions and additions deemed necessary for use in Michigan.

For more info: www.michigan.gov/bcc or

Tel: 517-335-2972

MAKE YOUR RENTAL UNITS LEAD-SAFE - State Money is available to make your rental units Lead-Safe. The Michigan Dept. of Community Health is currently operating its Lead Safe Home program funded by the U.S. Dept. of Housing and Urban Development and state tax dollars. The program is committed to making 300 homes lead-safe throughout the state starting in 2007 through fall of 2009.

You may be able to take advantage of this opportunity. The Program will provide funding to cover about half of the project cost - from $2,500 to $4,000 for each rental unit. Rental property owners will pay the remainder. The Program can initiate a 40% loan for those who qualify.

CONTACT: Carin Rock, Lead-Safe Home Program Coordinator, P.O.Box 30195, Lansing, MI, 48909. Tel: 517-335-9833; email: ReckCa@Michigan.gov; website: www.michigan.gov/leadsafe

ANNUAL CONFERENCE - The 2007 Annual RPOAM Conference and Expo will be held on Sept. 28/29 in Ypsilanti with 2 national speakers speaking on “short sales” and landlording. Our lobbyist will present 2 sessions  - 1) Lobbying in Lansing and 2) Grassroots Lobbying. Some local investors will also present some interesting topics.

 ASSOCIATION PRESIDENTS and NEWSLETTER EDITORS - Do you find this short newsletter about real estate investing useful to your members and association?

If so please send me an email requesting your continued receipt of this newsletter.

Thank you,  

Don Eichstaedt

May 2006

LLC BILL (HB 4732) - on hold, Michigan Bar President has no interest, waiting for an opportunity to make a deal.

DAMAGE RECOVERY BILL (HB 4171) - passed the House and Senate, waiting for the Govenor¹s Signature. Will allow a rental property owner or a tenant to collect money from the other party money for repairs made with their labor; this would include tenant damages OR essential habitability repairs a tenant has requested in writing and the rental property owner FAILED to do! This will only come up during a Landlord/Tenant court case for eviction  and damages.

EMINENT DOMAIN ABUSE - THE House & Senate passed a joint resolution that puts the burden on LOCAL government to PROVE a property they want to take over is ³blighted² rather than the current arrangement where the owner has to prove that the property IS NOT BLIGHTED! This bill is currently on the House floor. The main issue is the definition of "blight". Michigan voters in November will be considering an amendment to the State Constitution that will codify the Michigan Supreme Court¹s Hathcock Decision which overruled the ³infamous Poletown² case and will make it tougher tocondemn and acquire so-called ³blighted² property. This is in part due to the efforts of The Institute for Justice. (http://www.ij.org).

MOVING COSTS - A bill has been proposed to provide $5200 for moving costs to the parties being moved out of their property under Eminent Domain. ABANDONED PROPERTY BILL (HB 5571) - A bill has been introduced that would provide that the city designate a storage facility for the placement of the Tenant¹s abandoned property. (RPOAM is opposed to this bill)

EARLY LEASE TERMINATION - A bill has been proposed that would allow victims f domestic abuse, OR those in the Reserves or National Guard who have been called to Active Duty to terminate their leases early. RPOAM¹s position is "Who is going to make the remainder of the lease payments?"

SECURITY DEPOSIT CASES IN SMALL CLAIMS COURT (HB 5625) - the proposed bill would allow a licensed Realtor or an appointed agent to represent the owner in a Small Claims Court case on Security Deposit Claims.

REVISIONS to the INSPECTION LAW - Major improvements will be difficult to achieve currently. Due to term limits, there is a turnover of legislators in Lansing. Many of the newer ones are coming from local government and have more clout. They do not want to make changes in the Inspection Law which will affect the cities they came from. We may be able to make one small improvement in the law after the election this fall.

ASBESTOS LITIGATION - All asbestos manufacturers are now bankrupt because of litigation. The legislature is looking for a method to reasonably handle asbestos claims without bankrupting every company or activity that has ever had anything to do with asbestos - as that is almost everyone. Suit aftersuit could seriously damage the economy without really solving the main problem of health care.

GRASSROOTS EFFORTS - Our lobbyist, reiterated the strong effect of ³grassroots² efforts in getting our legislation passed. We all need to keep in touch with our local Representatives and Senators. Donate 25.00 to their campaign, go to a coffee meeting or a breakfast; just to get to know them and they you, (not to push a piece of legislation at that time); this will help build a personal relationship. Then when you do call them to ask for support on a bill, they will take your call, or return it,and you can provide them with some input.