Creative Solutions to Avoiding Property Registration

[Zeb Walters]

Hi BP! I own some properties in a small city in Ohio that is looking to institute an ordinance that would require a landlord to register each property they own within city limits. Along with the registration, the ordinance calls for a registration fee ($35-$100, depending on different criteria) per door. Finally, the ordinance would require all investment properties (each unit) to be inspected every year by a city approved inspector and all expenses would be incurred by the landlord. The reason the city is trying to pass such an ordinance is there are a few landlords that have allowed their properties to deteriorate to the point of becoming severe eye sores and unsafe to live. The Health Department has tried to visit the properties to inspect them, but the tenant/landlord doesn't allow them to enter the premises. I understand where the city is coming from, but I don't agree with the approach. City council has agreed to table the ordinance for now, but is looking for other solutions to this issue. Does anyone have any creative ideas of how a city and local investors can work together to ensure that all properties are safe, habitable and reasonably well-kept without instituting such a harsh, blanketed ordinance meant to keep some of the 'bad apples' in compliance? Has anyone else had any experiences like this?

Any ideas are very much appreciated!

Thanks!

[Kevin Sobilo]

@Zeb Walters, these kinds of ordinances came into existence in my market (northeast PA) a decade or so ago. Most every municipality near me has an ordinance like you describe.

A few but not many have an annual registration fee or sell an annual landlords license, but most just collect fees from inspections. 

In my area some municipalities do regular inspections like every 2 years. Every single year is harsh and also difficult for the municipality to logistically manage.

A more typical scenario is to require an inspection every time a unit turns over. So, that they can inspect for habitability and also for safety issues. Its annoying, but isn't anything you should need to worry about if you are keeping properties in decent condition.

The municipalities also want to know who the tenants are when you register or inspect a property. This way is there are emergency calls such as Police, they can in theory determine who should be there because many times they will get different stories from whoever is present.

One area where you CAN push back if needed is that in most states a municipality can ONLY collect a FEE to provide a SERVICE! So, if they collect SOOOO much in fees that they grossly exceed the department's budget they can be sued for levying an illegal TAX. The city of Scranton, PA was charging something crazy like $150 for a rental inspection until they got sued for this because they were bringing in 3x the department's budget in fees.

In general, this is just the way things are going. More regulation on our business at the local level.