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Real Estate Investors and Property Managers Should Keep Track of this “Bed Bug Bill”

2015-11-05 11.34.56During the school year I mentor students at a local school in the West side of Grand Rapids. This school has a great supportive community behind it – as you can see from the photo I took a few years back.

I recall a conversation with one student whose family was transient – moving quite often and usually under unfortunate conditions.  This student recalled to me the time that he and his mom lived in an apartment for a brief time and had to leave because of bed bugs. The emotion on the kid’s face as he recalled the story was evident.  It was not a pleasant experience.

Last year a class action case against a Real Estate Owner reached a settlement involving payment of over $2 Million to 100 tenants – ABAJournal reported that story here

One of the primary complaints was that “the 26-unit building had a massive cockroach infestation.

Infestations can be an issue that\ every property manager or owner of residential investment real estate may face.

One June 9th Michigan House Bill 4719 was introduced – by Representative Brandt Iden -himself a Developer and Property Manager in South West Michigan. check out the text here – the Bill would amend the Michigan statute governing landlord tenant relationships to include addressing the control of certain pests – including bed bugs.

What the Bill seeks to do:

Impose certain duties on landlords regarding bed bugs:

1. Mandates specifically that the Landlord is to keep the rental space free from bed bugs and provide educational literature about bed bug infestations to new tenants.

2. Prohibits Landlords from renting out space that the landlord knows is infested with bedbugs

3. Provides specific requirements for a landlord to respond to a complaint of bed bugs:

  • within 7 days of receiving a complaint, Landlord shall order an inspection for bed bugs;
  • within 7 days of confirming infestation, Landlord shall begin control and schedule inspections of adjoining rental units.

4. Limits damages against Landlord for infestations unless caused by Landlord’s Negligence.

 

Impose certain duties on tenants regarding bed bugs:

1. Tenant shall inspect for bed bugs when first occupying the space;

2. Tenant shall not move “infested property” into a rental unit

3. Tenant shall notify Landlord within 2 days of notice of infestation.

4. Tenant responsible for damages due to bed bugs caused by Tenant, or guest.

 

 

The bill was referred to the Committee on Law and Justice.

 

My thoughts:

Bedbug infestation is a problem. It can cause tenants problems.  Unhappy tenants who withhold rent can cause landlord problems that end up in court.

 

This type of bill could provide clarity to landlords and tenants on their reciprocal duties and rights in such circumstances.

 

Questions? Comments?

email: Jeshua@dwlawpc.com

http://www.dwlawpc.com

Twitter: @JeshuaTLauka

More Updates on Michigan’s Affordable Housing Crisis

Today is a beautiful day in downtown Grand Rapids. The photo below actually from yesterday. There is something about the sun that just puts me in a good mood.

A few days ago I did not have a sunny disposition. I was in court during a landlord/tenant docket. I’ll be honest – it was a depressing scene.  Many of the people in the courtroom were in a sad condition – one lady was visibly intoxicated.IMG_1570

Grand Rapids’ Housing Crisis

This morning I read an article on how the Rental Housing Market Leads to Homelessness in Grand Rapids

Clearly, Grand Rapids, and other parts of the State and Nation have an affordable housing crisis. I have previously offered my own perspective, both as a lawyer representing real estate developers/investors, and as Board Chairman at Mel Trotter Ministries.

A Community Problem – requires Community Collaboration

Recently Mel Trotter Ministries announced that it was partnering with 3:11 Youth Housing and the NAACP to provide housing for homeless males ages 18-24.

This effort could not have happened without collaboration between community stakeholders. It also couldn’t have happened without real estate owners willing to put “purpose above profit”.

There are other examples of social enterprises taking action to address affordable housing. One community partner is Pastor Jim Davis and his company “Purpose Properties

“The mission of Purpose Properties is to “raise enough money from local foundations and philanthropists to buy market-rate and affordable rental properties in the city.”

It will take all community stakeholders to do their part – businesses, churches, government, and non-profits.

The question we should all ask ourselves: Am I working to build a better community?
Legal Updates – Bills and Lawsuits.

 

A few months back I wrote about a Michigan House Bill introduced that would repeal Michigan’s prohibition on rent control. This Bill seemed to be a “gut response” to the affordable housing crisis that we are facing in Michigan and all across the United States.

Other local governments across the U.S. are exploring legislative avenues to address the housing crisis.

A few days ago, Representative Stephanie Chang introduced a few other Bills on Affordable Housing.

On May 31, 2017 House Bill 4686 was introduced that would allow local government  to “adopt an ordinance to limit the rent paid by senior citizens and individuals with a disability to 50% of their household incomes.”

Tie-barred to that Bill was House Bill 4687  which would prohibit local government from enacting, maintaining, or enforcing “an ordinance or resolution that would have the effect of  controlling the amount of rent charged for leasing private resident.”

Representative Chang also spoke on the issue of Affordable Housing at a Detroit Housing Summit a few days ago at the University of Detroit Mercy School of Law.

 

DOJ sues City of Jacksonville for refusing to allow development of permanent supportive housing for individuals with disabilities.

You can check out the press release from yesterday – Where Cities Can Get in Trouble with Fair Housing Laws

Yesterday, the Department of Justice issued a Press Release concerning an agreement it reached with the City of Jacksonville, Florida. Apparently, the DOJ sued the City concerning “allegations that the city violated the Fair Housing Act and the Americans with Disabilities Act when it refused to all ow the development of permanent supportive housing for individuals with disabilities in its Springfield neighborhood.”

As part of the settlement, the City has agreed to “establish a $1.5 million grant to develop permanent supportive housing in the city for people with disabilities.”

 

e-mail: Jeshua@dwlawpc.com

Twitter: @JeshuaTLauka

 

 

Michigan Entrepreneurs and Small Businesses: Crowdfunding Law Update.

Last year  Representative Tom Barrett introduced House resolution2015-11-26-13-04-02 235 (HR 235)

“to support the (SEC)’s recent adoption of rules…to facilitate small and start-up companies’ access to capital raised through crowdfunding.”

The resolution supports crowdfunding as viable tools for start-up businesses.

The resolution acknowledges:

Businesses in Michigan have greatly benefited from the opportunities created by the…Michigan Invests Locally Exemption (MILE) program. MILE has allowed everyday Michiganders, referred to as unaccredited investors, the ability to play a larger role in growing Michigan’s creative business ventures through Michigan-based crowdfunding platforms while still enjoying investor protections and security in their investments” (Emphasis added.)

 

Is Crowdfunding a Viable Option in Michigan?

Fast forward to today,  MIBiz recently reported that Michigan’s crowdfunding law hasn’t gained much traction

However, it may remain a viable tool for cash-strapped startups and the Michigan legislature has not given up on it.

 

Yesterday the Michigan House passed HB 4035 that amended the Michigan Invests Locally Exemption to Intrastate Crowdfunding.

 

According to yesterday’s announcement from the Michigan House Republican Website:

The amendments contained in HB 4035 “will expand the program so people can also invest in small businesses primarily doing business in the state and allows Michigan’s law to remain active under new Federal regulations

You can check out the House Fiscal Agency’s Analysis Here

The HB now moves to the Senate Commerce Committee for consideration.

 

Entrepreneurs and Start-ups:

 

Proponents of Crowdfunding: access to capital.

A while back Candace Klein Chief Strategy Officer at DealStruck was Interviewed by CrowdfundInsider and talked about how small business might benefit from crowdfunding. She had this to say, in part:

“Most businesses are community-based, and have an immediate impact for those in their community, whether geographic or industry-based.  Crowdfunding brings these companies together with the everyday investors in their communities.”

 

Crowdfunding for Social Enterprise?

I agree. As I’ve previously written about, crowdfunding appears to be a viable tool for community based businesses.

People are willing to invest in projects that will enhance their local community.

This is what makes local equity-based crowdfunding attractive for social entrepreneurs.

This is what makes local equity-based crowdfunding attractive for social entrepreneurs.

 

Questions? Comments?

e-mail: Jeshua@dwlawpc.com

Twitter: @JeshuaTLauka

www.dwlawpc.com

News for Residential Real Estate Investors: DOJ receives Verdict against Landlord Disability Discrimination.

img_1417Here’s a profound truth those in the real estate industry will readily acknowledge:

Owning and Managing Real Estate is uniquely challenging.

I hear it from my Property Owner/Manager clients. I experience it when I am involved in negotiating in landlord/tenant disputes.

I believe that is why, at least in West Michigan, there is an opportunity for good property management companies – and a handful of companies I work with locally do it really well.

 

Some of the pitfalls property owners/managers have to watch out for are illustrated in a recent press release announce by the Department of Justice.

Yesterday the Department of Justice announced that it obtained a verdict in a disability discrimination case against a Landlord

 

 

According to the press release,

The lawsuit, filed in U.S. District Court in Butte, alleged that Jaclyn Katz, the owner and manager of rental properties in Bozeman, discriminated against Kristen Newman, a tenant with physical and psychiatric disabilities, by charging her a $1,000 deposit as a condition for allowing her to keep her service dog, Riley.  At trial, Newman, her treating therapist and an independent expert testified that Riley assisted Newman in living with the symptoms of her disabilities, including providing emotional support, helping to predict migraines, and reducing suicidal thoughts.  Newman also testified that she repeatedly informed Katz that charging a deposit for a service animal was illegal and that Newman understood that she would have to pay for any actual damage caused by her service dog.

 

 

Not good.

A right to a Service animal is legally protected under the Americans with Disabilities Act.

Michigan Law requires a public accommodation to permit the use of a service animal by a person with a disability.

Among other things:

“A public accommodation shall not ask a person with a disability to remove a service animal from the premises due to allergies or fear of the animal. A public accommodation may only ask a person with a disability to remove his or her service animal from the premises if either of the following applies:

(a) The service animal is out of control and its handler does not take effective action to control it.

(b) The service animal is not housebroken” MCL 750.502c

 

Landlords and property owners should heed the warning of General Deputy Assistant Secretary Bryan Greene of the U.S. Department of Housing and Urban Development’s Fair Housing and Equal Opportunity.

“Many people with disabilities require the assistance of an animal to carry out major daily activities,” said  “Complaints alleging disability discrimination now account for the majority of the complaints HUD receives. HUD will continue to enforce the law and educate the public on the rights of people with disabilities in housing.”

.

I wonder, did the landlord/property owner ever consult with legal counsel on its practices?

There are some lessons to be learned for landlords, property owners, managers, and real estate investors.

 

Two takeaways from this news headline:

 

1. It is worth being proactive and engaging legal counsel. 

Issues arise. When in doubt, e-mail or call your attorney.

 

2. Residential Real Estate Investment is highly regulated.

If you are a landlord leasing out “residential” property as opposed to purely commercial property (business tenant), you are under much more stringent regulations. You must comply with Federal laws, like the Fair Housing Act and state laws, like the Michigan Truth in Renting Act. Make sure you are operating lawfully.

 

Questions? Comments?

email: Jeshua@dwlawpc.com

http://www.dwlawpc.com

Twitter: @JeshuaTLauka

Detroit Startup Week Kicks off with Legal Panels: There are Legal Matters Startups Need to Know.

April 18, 2017 Leave a comment

Detroit Startup Week is about a month away.

It is exciting to see the growth in downtown Detroit.  Detroit was recently ranked the No. 4 City where Downtown is Making a Comeback.

It must be an exciting time to be part of the downtown Detroit community.  The city promises to be buzzing during Detroit Startup Week.

 

Working in downtown Grand Rapids, I can’t help but mention some of our local startup groups.

We have some great organizations that support small business and encourage entrepreneurship in West Michigan, including:

Start Garden

Entrepreneurs’ Organization of Grand Rapids

LocalFirst

GRIN

GRAPE

LinkedUPGR

Grand Rapids Chamber

Small Business Association of Michigan

 

Back to Detroit Startup, Week…

You can check out the events schedule, which includes a whole week packed full of valuable events.

I think it no coincidence that the very first day, May 20th, starts out with Detroit’s Small Business Legal Academy.

It seems fitting that a week long celebrating startups begins with education on all the legal ways things can go wrong.

According to the website:

SBLA Detroit will consist of a series of hands-on panels designed to provide practical legal and professional information necessary for new business owners and entrepreneurs to take their businesses to the next level. The panelists will cover legal issues involving real estate, intellectual property, employment, funding, formation, and organizational issues.

 

From the above excerpt, the legal panels look to discuss real issues that entrepreneurs will run into. I hope many take advantage of these panels.

 

The reality is that there are a host of legal areas that can turn into pitfalls for startup businesses – I write on quite a few of those areas:

Terms and Conditions in Contracts

Non-Competition Agreements

Entity Formation and Personal Liability

Personal Guarantees

 

Cash flow is a barrier for startups. This doesn’t mean you should avoid educating yourself on the legal issues affecting your business.

Take advantage of the resources available.

Consult with an attorney – Particularly law firms friendly to startup businesses.

 

 

e-mail: Jeshua@dwlawpc.com

www.dwlawpc.com

twitter: @JeshuaTLauka

 

 

Recent Michigan House Bill Would Repeal Prohibition on Rent Control – A Response to the Affordable Housing Crisis?

April 13, 2017 Leave a comment

2017-03-07 15.13.50

On March 30, 2017 House Bill 4456 was introduced. The Bill would repeal Michigan’s prohibition on Rent Control.

The Bill was presumably proposed in response to the affordable housing crisis in Michigan and all across the United States. Other local governments across the U.S. are exploring legislative avenues to address the housing crisis.

 

 

According to Representative Chang, who introduced the Bill, the current rent control prohibition “makes it increasingly difficult for seniors and some families to find affordable housing, or to stay in the apartments they’ve lived in for many years.”
Representative Chang was apparently referring to the affordable housing crisis in Detroit. From all accounts, Grand Rapids is facing an affordable housing crisis as well.

 

Grand Rapids Housing Crisis

As many of you may know, a few months back the Grand Rapids Chamber hosted an Issue Summit on the Housing Crisis in Grand Rapids.

The Summit brought speakers representing many community stakeholders, including representatives from 616 DevelopmentGrand Rapids Urban League,Rockford ConstructionICCFMSHDA, and many local non-profits, including Mel Trotter MinistriesHQHeartside Ministries, on this lack of affordable housing, what is as Mayor Bliss emphasized, admittedly, “a complex issue”.

I have previously offered my own perspective, both as a lawyer representing real estate developers/investors, and as Board Chairman at Mel Trotter Ministries.

 

Is there an Answer found in Social Enterprise?

A few months back, Jim Harger with MLive posted a thorough article on the affordable housing crisis.

One community partner highlighted was Pastor Jim Davis and his company “Purpose Properties

“The mission of Purpose Properties is to “raise enough money from local foundations and philanthropists to buy market-rate and affordable rental properties in the city.”

According to Jim Harger’s article:

Purpose Properties plans to charge market rates for its properties to those who can afford them and use their profits to subsidize the rents of those who cannot afford market rates.”

We need more businesses and community stakeholders to approach our community problems like Jim Davis and Purpose Properties.

 

Community Partners Collaborating

Recently Mel Trotter Ministries announced that it was partnering with 3:11 Youth Housing to provide housing for homeless males 18-24.

As Mayor Bliss stated at the Housing Summit – the affordable housing crisis presents a complex issue.

It will take all community stakeholders to do their part – businesses, churches, government, and non-profits.

 

The question we should all ask ourselves: Am I working to build a better community?

 

e-mail: Jeshua@dwlawpc.com

Twitter: @JeshuaTLauka

Reflections from the Past-Board Chair at Mel Trotter Ministries.

March 28, 2017 Leave a comment

On Wednesday my year-long term as Chairman of the Board of Directors of Mel Trotter Ministries came to an end.

It truly has been my honor to serve. As I reflect on my year of service, I wamel-trotter-ministries-1122_20111229171415_320_240nted to share a few thoughts.

Who was Mel Trotter?

On Tuesdays throughout the year, Mel Trotter Ministries (“MTM”) hosts Meet The Mission Luncheons. On the back table after the luncheon you can find a book that we gift to our luncheon guests courtesy of Kregel Publishing titled “Man with a Mission.” It is the story of Mel Trotter.

MTM has been demonstrating the compassion of Jesus Christ to the homeless, hungry and hurting in West Michigan for over 117 years. What you may not know is that Mel Trotter was an actual man who lived and started the City Rescue Mission in Grand Rapids- the Rescue Mission that would one day bear his name.

You may also not know that Mel Trotter was an alcoholic, abusive man who squandered his paychecks on gambling rather than provide for his family.

Mel Trotter was intent on taking his own life one cold night when a companion directed him to the Pacific Garden Rescue Mission in Chicago, Illinois.

It was there that Mel Trotter encountered Jesus Christ. He surrendered his life to a Savior who loved him as he was.

Mel Trotter would go on to live a radically changed life. In 1900 Mel Trotter became the first executive director of the City Rescue Mission in Grand Rapids. He started and oversaw 68 other Rescue Missions across the country.

The transforming work that Christ has done in this one man’s life is the foundation of Mel Trotter Ministries.

MTM Today: Serving with Humility.

When I am asked about where I believe Mel Trotter Ministries’ is headed the first word that comes to mind is humility. I am reminded of Philippians Chapter 2:3-4, where Paul tells us to: “Do nothing out of selfish ambition or vain conceit, but in humility consider others better than yourself.”

MTM’s leadership team is, more than ever, committed to serve in humility. MTM has always endeavored to come along side our guests in humility to meet them where they are. But more than ever, MTM is striving to humbly seek out our community partners for the common goal of serving the homeless, hungry, and hurting in our community. As Dennis Van Kampen often says: “we can’t do this work alone.

A great example can be seen from MLive’s article from a few hours ago. MTM has identified a need in our community – homeless male youths. It is no secret that Kent County has an Affordable Housing Crisis.

In response to this need, MTM is partnering with local organizations to provide affordable housing to homeless young men. Echoing Dennis’ words – We can’t do this work alone.

My Call to Younger Leaders. We Need You.

At Mel Trotter Ministries, we are always looking for volunteers. We need people who have a heart for the hungry, homeless and hurting in West Michigan.  As we seek to end homelessness in West Michigan, one life at a time, it is a large task and we cannot do it alone.

This is my call to everyone, but particularly our next generation of leaders – millennials and beyond.

Ask yourself:

How can I serve?

Millennials – I’m reminded of the Bible – 1 Timothy 4:12 –

Don’t let anyone look down on you because you are young, but set an example for the believers

The fact remains – the millennial and younger generations are our future leaders.

Now is the perfect time to get plugged into one of the many opportunities to serve and lead.

Please take this as your personal invitation from me –

Take the initiative.

Get engaged.

Just show up.

 

e-mail: Jeshua@dwlawpc.com

Twitter: @JeshuaTLauka