WHAT'S HAPPENING AROUND THE STATE OF MICHIGAN - APRIL 2008
by Don Eichstaedt, Secretary, RPOAM

Finally, something other than budget woes are being discussed at the State Capitol. In the month of March, we have seen, several bills and proposed bills that could have a positive impact on the real estate investment and rental property industries. Several of these bills are the result of proactive efforts on the part of your state organization, the Rental Property Owners Association of Michigan (RPOAM).

House Bill 5206 was passed unanimously out of the House Intergovernmental Affairs Committee. The bill, if made into law, would enable local municipalities to go to four (4) and six (6) years between inspections. (Grand Rapids will automatically go to two (2) and four (4) years between inspections once the bill passes. The current timeframe is two and three years.) The bill was written by RPOA member and House Representative Michael Sak from Grand Rapids.

Several bills are being presented to deal with the metal theft.

As many of us know, theft of copper from homes, utilities and other sources is rampant. Other thefts are also becoming common, including theft of metal from tombstones and from catalytic converters. All the bills take a different approach. The RPOAM was the first out of the box to work with a legislator to develop a bill to curtail "hot metal" scrap sales. The RPOAM worked with Senator Gleason from Genesee County to put restraints at the point of sale of scrap metal. Other bills would require scrap metal dealers to be licensed. A workgroup is proposed to work out a comprehensive bill to address the problem. The lobbyist for RPOAM. Karoub Associates, believes that something could yet be worked out by the summer break.

THEFT of COPPER PLUMBING in VACANT HOUSES - It has been suggested that property owners with vacant houses paint your metal plumbing lines red and blue to appear to be the newer plastic tubing. Maybe in the dark of night the potential thieves will think the lines are plastic and not bother to remove them!

Another bill proactively pursued by RPOAM is House Bill 5430. The Bill would enable rental property owners to file a water affidavit to provide relief from liens on their property where a tenant is paying the water bill on a month-to-month lease. Currently, the affidavit can only be used on fixed-term/one-year leases. The bill was scheduled to be heard on the same day as the inspection bill but was postponed due two entities in 'opposition. We are still hopeful that this legislation can be moved once the purpose is understood.

Other legislative activities include potential property tax relief and other financial relief regarding real estate transactions. The purpose is to remove barriers to home sales. Bills being drafted would put a moratorium on the "pop-up tax," which results from a home sale. (When a property is sold, the assessed value is adjusted up to the new market price.) The pop-up tax increases the cost for new home owners or those looking to upgrade-thereby, putting a damper on an already slow real estate market. The elimination of the increase would remove one hurdle for the home buyer. Other recommended fixes include not enabling property taxes to increase in a year where the property values have declined. Some of these plans also include provisions giving homeowners more time to appeal their property tax assessments and the elimination of the real estate transfer tax.

EAST LANSING ANTI-RENTAL ZONING ORDINANCE - Recently the city passed an Ordinance 1097 that allows residential districts within the city to adopt “overlay” Zoning that will PROHIBIT rental property within the district. A citizen  sued the city to void this ordinance. The city prevailed. The citizen’s position was denied  on appeal to the Michigan Court of Appeals. Several member associations agreed to have their names added to an Amicus (‘fiend of the court”) brief in support of a property owner’s appeal to the state Supreme Court

MICHIGAN FORECLOSURES - In Lansing, Detroit lawmakers, Senator Hansen Clarke and Rep. Shanelle Jackson, announced new legislation that will establish a 2-year freeze on all mortgage and tax foreclosures in Michigan. The bill will allow the Michigan State Housing Development Authority  (MSHDA) to issue bonds that can be used to guarantee residential mortgage payments during the foreclosure moratorium period.

Governor’s Lead-Based Paint Committee - Our Executive Director, Mr. Clay Powell is currently a co-chairman of the committee. He may become the lone chairman in the near future. This would give us stronger representation and a voice in limiting liability for Rental Property Owners.

FORECLOSURE BILL in Washington - RPOAM agreed to oppose Congressman Kohl’s “Foreclosure Consultant/Fraud Bill” aimed at curbing the rise of foreclosure “rescue scams”. The proposed bill: 1) bans leaseback to owners, 2) bans up front foreclosure consultant fees, 3) bans all “Subject To” transactions, 4) has limitations on investor’s ability to purchase or take an equity interest in a home in default, 5) bans all advertising related to “Saving Homes From foreclosure”, 6) has restrictions on real estate seminars. The proposed bill exempts all licensed people (?) - ie, lawyers, bankers, realtors, agents, etc.

RPOAM MEMBERSHIP - We need more associations around the state to join us at the state level. This will give us more “clout” and increase our effectiveness. The Board voted to reduce the dues 50% (to $.50 per member per month) for one year for any association joining or rejoining.

 Websites To Check:

RPOAM WEBSITE: Check at: http://reiawaynecounty.org/rpoam_michigan.html
Also: www.karoubassociates.com
Also: www.michiganlegislature.org

Next RPOAM Meeting: Monday, May 12 , 2008 at Karoub and Associates Office, 121 W. Allegan St, Lansing, Michigan at 12:00 PM for lunch.