Landlords concerned about Ludington’s proposed rental inspection ordinance.

June 3, 2015

By Rob Alway. Editor-in-Chief.

LUDINGTON — The City of Ludington is considering creating a residential rental property inspection program and is looking for input from landlords. The city will hold a meeting on Thursday, June 4, at 3:30 p.m. at city hall, 400 S. Harrison St.

The proposed ordinance is currently at the committee level, being discussed by the Building and Licenses Committee.

Under the proposed ordinance, owners of rental properties will be required to register their property with the city. Following registration, the city will contact the owner and schedule an initial inspection. The initial inspection of the dwelling units will be conducted to determine if the dwelling units are in compliance with the city’s property maintenance code, city code and all other related codes. Once the unit has been found compliant, a three year certificate of compliance will be issued. After that, properties will be registered once every three years or whenever there is a change of ownership.

The proposed initial registration fee is $30 per dwelling unit and a $30 renewal fee per dwelling unit (every three years). In the case of transfer of property, there is a $10 per dwelling unit fee. The initial inspection fee would be $75 per dwelling unit and third and subsequent inspections would also be $75 per dwelling unit. A “no show” inspection fee would cost $75 per dwelling unit and failure to register would be $60 per dwelling unit. There would be a $100 per dwelling unit fee for construction board of appeals.

Some property owners have already expressed their concerns with the proposed ordinance. Melissa Reed, who along with her husband, Pat Patterson, own several rental properties said the fee schedule is excessive.

“Even compliant units with no repairs or upgrades needed will pay $105 per unit every three years,” Reed said. “If the City of Ludington is correct that there are at least 1500 rental units within the city limits, the proposed fee schedule generates at least $157,500 in new revenue to the City of Ludington every three years.  That’s an enormous increase in tax/fee burdens on the backs of a very small group of taxpayers. 

“This is especially egregious since rental units are already taxed at a higher rate than non-homesteaded properties.

“Moreover, the fees snowball if properties are not compliant with costs for no-shows, additional inspections, Construction Board of Appeals, etc.  The result is that even if a property owner is making every attempt to bring a property in to compliance they could pay hundreds of dollars just in fees and penalties on top of the cost of repairs.

Reed said she does not object to safety and property maintenance requirements but finds the proposed “preparing for inspection” and “rental inspection” checklists to go too far.

“For example, rust on an exterior chimney, torn screens, chipped paint or siding and small bedrooms are all specifically listed as items that will render a unit non-compliant,” she said. “Further, some of the items that are listed as ones which would render a unit non-compliant are not controlled by the landlord, such as sleeping in spaces less than 70 square feet for one person or 100 square feet for two people or maintaining the interior in a sanitary condition.”

Reed said the proposal as it stands could result in negative impacts on tenants because property owners may need to charge higher rent.

“My final objection to the proposed ordinance is the disparity between the rights of privacy and quiet enjoyment afforded to those that own their own home and the lack of the same for renters,” Reed said. “I understand that there’s established precedent and a compelling public interest for inspecting the homes of people who rent which is why I mention this last.  But I would be remiss if I didn’t make clear my distaste for a practice that tells one class of citizen that they are entitled to determine how they will live and another class of citizen who is not entitled to determine how they will live but must instead submit to regular government intrusion of their home.

Property owner Allison Anes calls the proposed ordinance a “full-out attack on landords by taxation and fees from the City of Ludington.”

“The sudden and steep fees per dwelling is nothing short of robbery and it unfairly targets a group of people providing a much needed service to our community,” Anes said. “This is more about a huge money-making opportunity for the city than it is about anything else. Landlords already pay much higher taxes on non-homestead properties, and pay increased insurance rates, as well.

“Every homeowner, landlord, and business owner needs to be held to an equal standard if safety is truly the issue, not targeting any one group. A simple solution would be to enforce the rules that are already in place. But it’s not what this is about. It’s about controlling private property and generating hundreds of thousands of dollars of income for an expanding local government. This is greatly going to hurt tenants, as their rent prices skyrocket. And why are landlords being unfairly targeted and being held to a higher standard than anyone else, and being exposed to potentially thousands of dollars in mandatory cosmetic upgrades on their own property?

“We always rent out clean, safe units for our tenants, and tenants do have a say in whether they agree that it’s a clean, safe place for them to live, as well. They are also free to have any additional inspections done if there is a concern. Otherwise, there is no agreement between tenant and landlord. The city can also enforce the current ordinances already in place, with a landlord who continues to be a problem.”

Download the proposed ordinance here.