Certificate of compliance

[Eli Kim]

So I’m purchasing my second property in Detroit and I was wondering if you absolutely have to get the certificate of compliance? My current property in Detroit does not have the certificate and it has a tenant in it. If I were to get it certified now, do I have to pay penalties for the time it was occupied and not certified?

[Michael Smythe]

@Eli Kim Detroit's statutes require a rental property to have Certificate of Compliance to collect rent. 

If a landlord does not get the CofC:

1) The Building Safety Engineering & Environmental Dept (BSEED) inspectors may issue the following tickets:
- No property registration
- No city inspection
- No lead-based paint inspection
- Renting without a CofC

2) A landlord can then attend a Department of Appeals & Hearings (DAH) to challenge the tickets, but unless you have an active eviction, your chances are slim.

3) Technically, if you start an eviction against a tenant, the court may throw out your case if you do not have a CofC. 

4) At any time, a tenant can deposit their rent with the 36th District Court and the landlord will have 90 days to get the CofC. Failure to do so will result in the court releasing the escrowed rent to the tenant and the process may start all over again. A landlord cannot pursue this lost rent.

Initial tickets can easily add up to $1500. They can then keep doubling if not addressed.

REALITY: in our experience, the city is too unorganized to stay on top of properties without a CofC. Detroit has an estimated 40,000 1-4 family rentals and less than 25% have a CofC.

Landlords get "caught" in one of two ways: serious blight at their properties leads to inspection and tenants calling city to request a rental inspection.

Feel free to reach out with other questions:)