Council’s attempt to dictate lease terms // Brian Hagan

While we’re mindful that the general public is not always sympathetic to issues involving landlords and the city, we think it’s important to provide some perspective on Ordinance 1444; which will appear on the council’s business agenda at it’s meeting tomorrow (Tuesday, 12/4) night.  This ordinance is an example of council involving themselves in the contractual dealings of a private business.  Whether you’re business owner or not, you should be concerned that our council feels they have the right to do this.

For reference; these are the 2 stories previously published by ELi regarding this issue.
https://eastlansinginfo.org/content/stephens-moves-against-illegal-landlord-practice
https://eastlansinginfo.org/content/landlords-push-back-attempts-limit-rental-periods

Attached is the letter submitted to council prior to last council meeting by the attorney representing several landlords as well as a section of “Michigan Lease Drafting and Landlord-Tenant Law” that applies to this issue.

Several different attorneys have been consulted on this issue and they all agree that collecting rent in periods of more than 1 month at a time is not violating any state law as council suggests.  The information in the attachments as well as the following excerpt from MCL 554.134 support the landlords position.

MCL 554.134 provides in part, “(1) Except as provided otherwise in this section, an estate at will or by sufferance may be terminated by either party by giving 1 month’s notice to the other party. If the rent reserved in a lease is payable at periods of less than 3 months, the time of notice is sufficient if it is equal to the interval between the times of payment. Notice is not void because it states a day for the termination of the tenancy that does not correspond to the conclusion or commencement of a rental period. The notice terminates the tenancy at the end of a period equal in length to the interval between times of payment.” 

The council is overstepping by attempting to get involved in dictating terms of a contractual agreement between a business and a customer.  To imply landlords are discriminating in order to justify their overstepping is ridiculous and we resent that claim.  There is no evidence to support that claim and the landlords deserve a public apology from council for the implication.

Comments made in the original ELi article that landlords were not only violating the law, but were collecting additional money that was not rightfully theirs  (“…A lot of money has gone into their coffers that should not have”) were inaccurate, misleading and disrespectful.  Regardless of the when rent is collected, the total cost is the same.  Collecting by installment does not change the total price.

The ordinance language itself even says landlords are discriminating “…requiring multiple months rents to be paid in advance discriminates against and disadvantages those that would otherwise be able to afford rental housing in the City”.  So apparently it’s discrimination now if someone can’t afford something?

I find this pretty ironic seeing as this council has approved millions in tax breaks for high end apartment projects; all of which then turn around and charge the highest rents in the city.  Rents only a tiny segment of the population can afford.  That’s ok apparently because they collected their rent monthly??

The landlords are not the bad guys here as council would have you believe.  Leasing documents are made available to all prospective tenants (and their parents) in advance of any lease signing.  Landlords provide utility information, local ordinance information and many other helpful links.

On top of the resources provided by landlords, Community Relations Coalition, the city’s website, MSU, etc.; let’s not forget MSU students also have access to FREE legal services through ASMSU (https://asmsu.msu.edu/services/legal-services/).  They also have FREE access to the MSU Rental Housing Clinic.

The point is; prospective tenants are not being taking advantage of or somehow tricked into signing something they don’t understand.

Like in any business, customers have a choice.  You have a choice where you want to eat, what type of car you buy, and of course where you live.  However; when you go to a restaurant, a car dealership, etc. those businesses will have certain terms you will be subject to if you choose to do business with them.  If you don’t like those terms, you are free to go elsewhere.

The same is true here.  There are many different housing companies, housing types and of course, payment collection methods.  If prospective tenants choose not to rent from landlords who collect rent by installment, those landlords will have to respond accordingly.

Beside the fact that what the landlords are doing is legal, we believe council is attempting to solve a problem that doesn’t exist.  We personally have received little to no push back on our collection schedule.  Tenants/parents like the system.  They’re used to it from the dorms.  If they have student loans it helps them budget easier and the disbursement schedule is usually similar to the rent collection schedule.  They’re less likely to incur a late fee from missing a more frequent monthly payment.  There are several reasons why this method makes sense.

We acknowledge, not every single person will like it or be able to afford to pay that way, however it has been an overwhelmingly positive response in our experience.  As stated at the previous council meeting; the practice of collecting by installment has evolved over time.  This would not have happened if it was not received well by tenants/parents.

To summarize; no laws are being broken, customers are happy, so stay out of our business 😊

 

Brian Hagan
Hagan Realty, Inc.

Michigan Lease Drafting & Landlord Tenant Law 2017

Ordinance 1444 – attorney response

1 thought on “Council’s attempt to dictate lease terms // Brian Hagan”

  1. Nice try Brian. MCL 554.134 does not control the issue. MCL 554.601 et seq, The Landlord AndTenant Relationships Act (LTRA), does. And Ordinance 1444 does not require any landlord to change any lawful process they may follow. In fact, all the Ordinance does is incorporate by reference the LRTA so that it can be enforced as part of our rental ordinances. You may be referring to Section 1006.5. That section will be clarified. It is not intended that a tenant be prohibited from voluntarily agreeing to pay rent in advance in exchange for a discount or other valuable consideration. It is intended that a landlord be prohibited from requiring more than one month rent be paid in advance; a practice already prohibited by the LTRA.

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