Creative Solutions to Avoiding Property Registration

Creative Solutions to Avoiding Property Registration

Member since 2020 路 6 posts 路 3 votes

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!

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Realtor 路 Hanover Twp, PA 路 Member since 2018 路 3k+ posts 路 3k+ votes
4y

@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. 

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  • Realtor 路 Hanover Twp, PA 路 Member since 2018 路 3k+ posts 路 3k+ votes
    4y

    @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. 

  • Investor 路 Boulder, CO 路 Member since 2017 路 304 posts 路 347 votes
    4y

    @Zeb Walters, I live in a very regulated landlord city.  If it weren't for the appreciation and strong rental market, I don't know if I'd be as willing to comply.  We landlords have to have a license to rent and in order to get that license we have to pass an inspection that involves a checklist for energy efficiency.  We had to spend $3k per property for insulation in order to pass the inspection and get the license.  As an agent, I see other landlords who I know are not in compliance on the daily. I am not getting any benefit to these energy upgrades (other than feeling a little warm and fuzzy about doing our part for the planet).

    That being said, I see both sides.  It's too bad when a few bad eggs ruin it for the rest of us.  Sounds like that landlord needs a smack down but it isn't fair to punish everyone. And life isn't fair, unfortunately. I like that you're following the City council. Staying informed and getting involved is an excellent way to influence the outcome. Maybe suggest something a little more reasonable? Like the registration is a one time fee but a required inspection (that meets health and safety regs) is every 2-3 years in order to maintain registration/licensure?

  • Bjorn AhlbladPro Member
    Investor 路 Shelton, WA 路 Member since 2017 路 6k+ posts 路 6k+ votes
    4y

    One of the cities I have property in has done this. I like it. Weeds out any bad apples. 

  • Member since 2020 路 6 posts 路 3 votes
    4y
    Quote from @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. 

    @Kevin Sobilo thanks for the insight! I agree that trying to do an inspection on a yearly basis doesn't seem logistically feasible. Also, thanks for the heads up about the fee for a service. If this passes then that is something I will definitely keep an eye on. Seems to me like they are trying to double dip already with a registration fee AND an inspection fee. Especially when most of the information they want with the registration can be found on a county auditors site.

  • Member since 2020 路 6 posts 路 3 votes
    4y
    Quote from @Shiela R.:

    @Zeb Walters, I live in a very regulated landlord city.  If it weren't for the appreciation and strong rental market, I don't know if I'd be as willing to comply.  We landlords have to have a license to rent and in order to get that license we have to pass an inspection that involves a checklist for energy efficiency.  We had to spend $3k per property for insulation in order to pass the inspection and get the license.  As an agent, I see other landlords who I know are not in compliance on the daily. I am not getting any benefit to these energy upgrades (other than feeling a little warm and fuzzy about doing our part for the planet).

    That being said, I see both sides.  It's too bad when a few bad eggs ruin it for the rest of us.  Sounds like that landlord needs a smack down but it isn't fair to punish everyone. And life isn't fair, unfortunately. I like that you're following the City council. Staying informed and getting involved is an excellent way to influence the outcome. Maybe suggest something a little more reasonable? Like the registration is a one time fee but a required inspection (that meets health and safety regs) is every 2-3 years in order to maintain registration/licensure?

     @Shiela R. $3k per property for insulation to pass the inspection? That is crazy! I think the 2-3 year cadence of an inspection is much more reasonable. How do the landloards that you know are not in compliance skate by? Do they pay a fine and move on or is there no real penalty for being out of compliance?

  • Investor 路 Curtis, NE 路 Member since 2019 路 231 posts 路 140 votes
    4y

    This reply doesn't really address your question, but I think it is relevant. I live in a small town. I am friends with one of the largest landlords in town. His reputation is that of a slum lord. I will grant you that his units are generally D grade properties. He rents nearly all of them to college students. But in a recent conversation with him the topic of his slum lord reputation came up, and he made a very relevant point. Regarding the worst properties in town (regarding appearance and overall shabbiness of the properties) none of his units even made the top 10 of worst condition. As we talked through the various properties (we live in a small town so we know each street and neighborhood) all of the worst properties are owner/occupied. Maybe our town is the exception, maybe not. Seems like landlords are an easy target sometimes.

  • Investor 路 Boulder, CO 路 Member since 2017 路 304 posts 路 347 votes
    4y

    @Zeb Walters,  yeah, depends on the property but +/-$3k.  It is a bit over the top, IMHO.  Plus since then we had a leak in the crawlspace at one of our homes. The water ruined the insulation and it had to be torn out. SMH.  Not sure what action, if any we'll take or need to take when our license needs to be renewed...

    Anyway, to answer your question.  The city claims legal action if no license.  I've heard from other agents that there are fees and possible revocation of the license but I've not seen that first hand. The city also claims the license might be put on "probation" depending on complaints.  This seems to look like  more frequent inspections for the home in question.  Complaints are dependent on the neighbors, really.  We are a college town (CU) so there is a density issue, mostly pertaining to parking. We aren't supposed to have more than 3 unrelated people living at one address but more than a few homes look questionable on that front.  These landlords are busted when neighbors get frustrated with lack of street parking or general disarray of the appearance it seems. Along those lines, as @Bob Willis observed, we are owner occupied on every side of one of our properties and more than half of them (4) are a hot mess and look like fixer uppers with untamed grass, cars piled up along the driveways and/or weeds everywhere.  The city does fine for weeds, but still.

  • Dave PoeppelmeierBusiness Member
    Realtor 路 Maumee, OH 路 Member since 2015 路 491 posts 路 722 votes
    4y

    Most areas make you register your rental properties now in Ohio. Regarding the ordinance, you're lucky they've tabled it and not just rammed it through (cough... Toledo and Cleveland... cough). I would contact other non-slumlords and go to the slumlords as a group and say "hey, let's clean things up before we're all screwed" or something to that effect. The city will do something if the problem is not addressed, and you're likely going to get swept up in it whether you like it or not. I would also attend city council meetings and do your best to get in front of them as the responsible owner and show that not everyone is a slumlord and propose alternatives that aren't as harsh. Jaded people will say "that'll never work!" and frequently it doesn't, but it's your only other option besides complaining about it. Don't be that guy! 馃槃 Good luck. 

    Keller Williams Citywide | Dave Poeppelmeier534 Reviews
  • Nathan GesnerBusiness Member
    Moderator
    Real Estate Broker 路 Cody, WY 路 Member since 2010 路 28k+ posts 路 41k+ votes
    4y

    This is how laws work, unfortunately. We have laws against murder even though 99.9% of us will never commit the crime. Most vacation rental owners are good investors that take care of their property, but we need laws to force the few bad apples to comply or go away.

    It's part of the business and it's only going to get worse. Accept it or invest in something else.

    The DIY Landlord Book4.7247 Reviews
  • Member since 2022 路 1k+ posts 路 1k+ votes
    4y
    Its a scam that has nothing to do with slumlords, though this is what they're saying to gain traction. In Seattle the news stations would play their standard stock footage of a rat running across a floor. Calling landlords slumlords when in fact its the tenant that's a pig. The ordinance got passed. The inspections started out very basic, easy to pass. Now they're looking for moss on the roof, water heater strapping, two railings on stairways, tread depth, window egress, fans and circulation, legal bedroom size. Now, the inspections basically fall in line with all the items needed to pass Section 8 inspection. It's my belief that this is a strong push by HUD because they want more people using Section 8, which many landlords resist. IF you're an older house (not new construction) you may have some problems.
      So you pay your fee. In Seattle it's a joke when you call them. When they pick up the phone it's ALWAYS "hello". Like you just got somebody out of bed. Ask them a question and they sound stupid, like they don't know the business at all.  
      I've raised my rents 20 percent for the registration inconvenience. In Seattle your eviction goes nowhere if you are not registered first. It's the law. So if you have a non-conforming house, you have to fix everything before you can get registered, then evict. Bummer if you have a non-conforming place. I haven't had this issue, but I'm so fed up with Seattle's anti-landlord legislation, my Seattle properties are now going STR. On a side note, I sent in my payment for STR and they replied to tell me  that my permit to provide an array of "Satellite dishes" in under review. My god!!  I would write your city council and tell them how the landlords will be banning together to have that city council voted out. Tell them the disaster that is Seattle. NO AFFORDABLE rentals.   Sorry for the long winded reply.. did I get off topic?  ha ha! Peace!
  • Member since 2020 路 6 posts 路 3 votes
    4y
    Quote from @Dave Poeppelmeier:

    Most areas make you register your rental properties now in Ohio. Regarding the ordinance, you're lucky they've tabled it and not just rammed it through (cough... Toledo and Cleveland... cough). I would contact other non-slumlords and go to the slumlords as a group and say "hey, let's clean things up before we're all screwed" or something to that effect. The city will do something if the problem is not addressed, and you're likely going to get swept up in it whether you like it or not. I would also attend city council meetings and do your best to get in front of them as the responsible owner and show that not everyone is a slumlord and propose alternatives that aren't as harsh. Jaded people will say "that'll never work!" and frequently it doesn't, but it's your only other option besides complaining about it. Don't be that guy! 馃槃 Good luck. 

    @Dave Poeppelmeier Thanks for the reply Dave! Actually the town I am referring to is maybe 45 mins from Maumee/Toledo. I have heard things about Toledo being more strict on landlords, but I wasn't aware they had the registration requirement. We plan to get a small group of investors together to sit down with city council and try to come up with alternatives. Am I overly optimistic/ignornant to think that a positive reinforcement technique could work? For example, cities give company tax breaks to build and invest in their city. To me something like this (on a smaller scale) could possibly motivate everyone (including the slumlords) to keep their properties in good condition. A more realistic example is that my town has a bi-annual "storm water management fee" that they charge all property owners. The fee was only supposed to last like 5 years, but they have kept it alive well after that for who knows what reason. In my mind the city could waive that fee as an incentive for the landlords that pass the inspection and has their places properly registered. Maybe that example in itself wouldn't work, but some sort of postive reinforement techinque to motivate landlords to keep in compliance and even possibly encourage more investors to come into the area instead of a negative reinforcement approach that would do the complete opposite. Not a fully vetted idea on my end yet, but something tells me I am not completely out of my mind.

  • Member since 2020 路 6 posts 路 3 votes
    4y
    Quote from @Henry T.:
    Its a scam that has nothing to do with slumlords, though this is what they're saying to gain traction. In Seattle the news stations would play their standard stock footage of a rat running across a floor. Calling landlords slumlords when in fact its the tenant that's a pig. The ordinance got passed. The inspections started out very basic, easy to pass. Now they're looking for moss on the roof, water heater strapping, two railings on stairways, tread depth, window egress, fans and circulation, legal bedroom size. Now, the inspections basically fall in line with all the items needed to pass Section 8 inspection. It's my belief that this is a strong push by HUD because they want more people using Section 8, which many landlords resist. IF you're an older house (not new construction) you may have some problems.
      So you pay your fee. In Seattle it's a joke when you call them. When they pick up the phone it's ALWAYS "hello". Like you just got somebody out of bed. Ask them a question and they sound stupid, like they don't know the business at all.  
      I've raised my rents 20 percent for the registration inconvenience. In Seattle your eviction goes nowhere if you are not registered first. It's the law. So if you have a non-conforming house, you have to fix everything before you can get registered, then evict. Bummer if you have a non-conforming place. I haven't had this issue, but I'm so fed up with Seattle's anti-landlord legislation, my Seattle properties are now going STR. On a side note, I sent in my payment for STR and they replied to tell me  that my permit to provide an array of "Satellite dishes" in under review. My god!!  I would write your city council and tell them how the landlords will be banning together to have that city council voted out. Tell them the disaster that is Seattle. NO AFFORDABLE rentals.   Sorry for the long winded reply.. did I get off topic?  ha ha! Peace!

     @Henry T. Interesting. Another local landlord brought up that same exact point about a push for HUD properties.

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