2.5Enforcement of the Housing Law of Michigan (HLM)
The governing body of a city or village to which the HLM applies by its terms, or the governing body of a city or village that has adopted the provisions of the HLM, “shall designate a local officer or agency which shall administer the provisions of the [HLM].” MCL 125.523.
The HLM expressly authorizes remedies that include injunctive relief, repair and deduct orders for tenants, costs of repairs charged to an at-fault tenant, demolition, and receiverships. See MCL 125.534(5); MCL 125.535.
A.Affirmative Suits to Enforce the HLM
1.Private Right of Action
MCL 125.534 also authorizes an owner or occupant to bring an enforcement action in his or her own name.1 MCL 125.534(2) states:
“(2) An owner or occupant of the premises upon which a violation exists may bring an action to enforce [the HLM] in his or her own name. Upon application by the enforcing agency, or upon motion of the party filing the complaint, the local enforcing agency may be substituted for, or joined with, the complainant in the discretion of the court.”
In addition to the private right of action authorized in MCL 125.534(2), tenants may also rely on MCL 125.536(1), which provides:
“When the owner of a dwelling regulated by [the HLM] permits unsafe, unsanitary or unhealthful conditions to exist unabated in any portion of the dwelling, whether a portion designated for the exclusive use and occupation of residents or a part of the common areas, where such condition exists in violation of [the HLM], any occupant, after notice to the owner and a failure thereafter to make the necessary corrections, shall have an action against the owner for such damages he [or she] has actually suffered as a consequence of the condition. When the condition is a continuing interference with the use and occupation of the premises, the occupant shall also have injunctive and other relief appropriate to the abatement of the condition.”
“MCL 125.536(1) plainly applies to areas ‘in’ the dwelling.” Holder v Anchor Bay Investments, Inc, ___ Mich App ___, ___ (2024). Accordingly, a trial court did not err by “dismissing plaintiff’s statutory claim under MCL 125.536” because the exterior “stairway was not ‘in’ the dwelling.” Holder, ___ Mich App at ___.
“Remedies under [MCL 125.536] shall be in addition to such other relief as may be obtained by seeking enforcement of the section authorizing suits by a local enforcement agency. The remedies shall be concurrent. When several remedies are available hereunder, the court may order any relief not inconsistent with the objectives of [the HLM], and calculated to achieve compliance with it.” MCL 125.536(2).
In all actions for enforcement of the HLM, whether brought by the enforcing agency or by the tenant, a copy of the complaint and summons must be served upon all “[o]wners and lienholders of record or owners and lienholders ascertained by the complainant with the exercise of reasonable diligence[.]” MCL 125.534(4). “The complainant shall also file a notice of the pendency of the action with the appropriate county register of deeds office where the premises are located.” Id.
The court with jurisdiction of the action “shall make orders and determinations consistent with the objectives of [the HLM].” MCL 125.534(5). According to MCL 125.534(5):
•The court may enjoin the continuation of any unsafe, unhealthy, or unsanitary conditions or any violations of the HLM.
•The court may order the owner to abate the conditions by making the necessary repairs or corrections.
•The court may authorize the enforcing agency to remove or make repairs to the building.
•If the occupant is not the cause of the condition or violation and is the complainant, “the court may authorize the occupant to correct the violation and deduct the cost from the rent upon terms the court determines just.”
•If the occupant is the cause of the condition or violation, the court may authorize the owner to repair or correct the violation and to assess the cost against the occupant or his or her security deposit.2
Removal of a building or structure is authorized under the HLM when “the cost of repair of the building or structure will be greater than the state equalized value of the building or structure[.]”3 MCL 125.534(6). “If the expense of repair or removal is not provided for, the court may enter an order approving the expense and placing a lien on the real property for the payment of the expense.”4 MCL 125.534(7).
The enforcing agency may bring suit against an owner or occupant who does not comply with an order in a notice of violation. MCL 125.534(1). MCL 125.534 states, in part:
“(1) If the owner or occupant fails to comply with the order contained in the notice of violation, the enforcing agency may bring an action to enforce [the HLM] and to abate or enjoin the violation.
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(3) If the violation is uncorrected and creates an imminent danger to the health and safety of the occupants of the premises, or if there are no occupants and the violation creates an imminent danger to the health and safety of the public, the enforcing agency shall file a motion for a preliminary injunction or other temporary relief appropriate to remove the danger during the pendency of the action.”
The HLM may be enforced through the court’s appointment of a receiver to manage a building or structure not in compliance with the HLM. MCL 125.535. Whether to appoint a receiver is in the court’s discretion. See generally, Heritage Hill Ass’n v Kinsey, 146 Mich App 803, 807-808 (1985). The statute governing receiverships, MCL 125.535, states, in part:
“(1) When a suit has been brought to enforce [the HLM] against the owner the court may appoint a receiver of the premises.
(2) When the court finds that there are adequate grounds for the appointment of a receiver, it shall appoint the municipality or a proper local agency or officer, or any competent person, as receiver. In the discretion of the court no bond need be required. The receivership shall terminate at the discretion of the court.
(3) The purpose of a receivership shall be to repair, renovate and rehabilitate the premises as needed to make the building comply with the provisions of [the HLM], and where ordered by the court, to remove a building. The receiver shall promptly comply with the charge upon him [or her] in his [or her] official capacity and restore the premises to a safe, decent and sanitary condition, or remove the building.”
The receiver acts as the court’s agent. According to MCL 125.535(4):
“Subject to the control of the court the receiver shall have full and complete powers necessary to make the building comply with the provisions of [the HLM]. He [or she] may collect rents, and other revenue, hold them against the claim of prior assignees of such rents, and other revenue, and apply them to the expenses of making the building comply with the provisions of [the HLM]. He [or she] may manage and let rental units, issue receivership certificates, contract for all construction and rehabilitation as needed to make the building comply with the provisions of [the HLM], and exercise other powers the court deems proper to the effective administration of the receivership.”
Committee Tip:
The receivership statute has been utilized with great success in Detroit, where community organizations have used the law to remove control of poorly managed multifamily rental properties from landlords and/or managers to prevent further deterioration and arrest abandonment. Generally, once the flow of rental income to the owner is diverted to a receiver, the owner is anxious to convey the property. For this reason it may be prudent to include in receivership orders an express provision requiring court review of any sale or transfer of the property, in order to deter any attempts by property owners to evade the effect of an order by transferring ownership of the building to a straw purchaser. Court review of these transactions will assure that the conveyance is not sought for fraudulent purposes.
If a receivership’s expenses are not otherwise provided for, the court has authority to approve the expenses and place a lien against the real property for payment of the expenses.5 MCL 125.535(5).
The HLM requires that “[u]nits in multiple dwellings or rooming houses . . . not be occupied unless a certificate of compliance has been issued by the enforcing agency.” MCL 125.529(1). A certificate of compliance may be issued even when there exists a violation of the HLM, but a certificate must not be issued if an inspection of the premises reveals any conditions hazardous to the health and safety of the dwelling’s occupants.6 MCL 125.529(2).
“An owner shall apply for a certificate of compliance. Inspection and issuance of certificates shall be in accordance with the requirements of [the HLM] and with procedures established by the enforcing agency.” MCL 125.531(1). Temporary certificates of compliance may be issued under certain circumstances. See MCL 125.531(1).
“Before entering a leasehold regulated by [the HLM], the owner of the leasehold shall request and obtain permission to enter the leasehold.” MCL 125.526(11). An owner may enter a tenant’s dwelling at any time in cases of emergency; emergency includes, but is not limited to, “fire, flood, or other threat of serious injury or death[.]” Id.
The enforcing agency must keep records of all inspections, and “[t]he enforcing agency shall make available to the general public a checklist of commonly recurring violations for use in examining premises offered for occupancy.”7 MCL 125.528(2)-(3).
If an inspection of the premises reveals a violation, the enforcing agency must notify the owner in writing “if the violation constitutes a serious and imminent hazard to the health or safety of the occupant.” MCL 125.532(1); MCL 125.532(2). “The notice must state the date of the inspection, the name of the inspector, the nature of the violation, the specific section of [the HLM] that was violated, whether the violation constitutes a serious and imminent hazard to the health or safety of the occupants, and the time within which the correction must be completed.” MCL 125.532(2). Further, the notice “must be provided in a manner reasonably calculated to give actual notice of the violation to the owner and the occupant.” Id.
“If an inspector determines that a violation constitutes a serious and imminent hazard to the health or safety of the occupants, under circumstances where the premises cannot be vacated, the enforcing agency shall order the violation corrected within the shortest reasonable time.” MCL 125.532(3). The owner must notify the enforcing agency of having begun compliance within three days, and all other violations must be corrected within a reasonable time. Id. The enforcing agency must reinspect the premises “after a reasonable time to ascertain whether the violation has been corrected.” MCL 125.532(4).
“If an inspector determines that a violation constitutes a serious and imminent hazard to the health or safety of the occupants, the enforcing agency shall notify the [Department of Health and Human Services] within 48 hours. MCL 125.532(5). “The notice must state the date of the inspection, the name of the inspector, the nature of the violation, the specific section of [the HLM] that was violated, whether the violation constitutes a serious and imminent hazard to the health or safety of the occupants, and the time within which the correction must be completed.” Id. The Department of Health and Human Services must “check the address of the premises against the list of rent-vendored family independence program recipients.” Id.
If an occupied building does not have a certificate of compliance or has had its certificate of compliance suspended, payments to the landlord are suspended, and the enforcing agency must establish an escrow account for rents collected from tenants.8 MCL 125.530(3)-(4).
Suspension of rent payments does not occur “until the owner has had a reasonable time . . . after notice of violations to make application for a temporary certificate[.]”9 Id. Additionally, rent payments are not suspended when “the owner establishes that the conditions which constitute a hazard to health or safety were caused by the occupant or occupants.” Id. The rent is again payable to the landlord according to the terms of the lease when repairs are made and the building qualifies for a certificate or temporary certificate of compliance. Id.
“When the certificate of compliance has been suspended, or has not been issued, and the rents thereafter withheld are not paid into the escrow account, actions for rent and for possession of the premises for nonpayment of rent may be maintained, subject to such defenses as the tenant or occupant may have upon the lease or contract.” MCL 125.530(5).
D.Inspections and Constitutional Concerns
Procedural due process requires that an individual be provided “some form of hearing . . . before an individual is finally deprived of a property interest.” Mathews v Eldridge, 424 US 319, 333 (1976) (emphasis added). “The fundamental requirement of due process is the opportunity to be heard ‘at a meaningful time and in a meaningful manner.’” Id., quoting Armstrong v Manzo, 380 US 545, 552 (1965).
A tenant may not be evicted from his or her residence without prior notice and a hearing, unless exigent circumstances exist to justify the immediate displacement of the tenant. Flatford v City of Monroe, 17 F3d 162, 167 (CA 6, 1994),10 citing Fuentes v Shevin, 407 US 67, 82 (1972). In cases where exigent circumstances do exist, a tenant who is displaced from the premises because of those circumstances is still entitled to a prompt postdeprivation hearing to justify his or her continued eviction from the residence. Flatford, 17 F3d at 167. In other words, local building codes that permit the removal of a tenant must provide prior notice to the tenant unless circumstances exist that justify eviction without a predeprivation hearing. A tenant removed without a predeprivation hearing must be afforded the opportunity of a postdeprivation hearing to determine whether eviction was proper. Grayden v Rhodes, 345 F3d 1225, 1237-1238 (CA 11, 2003). The tenant must be given notice at the time of eviction of his or her right to challenge the eviction at a postdeprivation hearing. Id.
In general, a local government is authorized to conduct rental unit inspections (periodic, area-based, complaint-based, etc.) consistent with the Fourth Amendment, so long as an administrative warrant process is available to inspectors when an occupant denies entry to the individual conducting the inspection. Camara v Muni Court of City & Co of San Francisco, 387 US 523, 539-540 (1967). See MCL 125.527 for information about the HLM’s warrant requirements.
An administrative warrant does not require the same standard of probable cause as does a criminal search warrant. Camara, 387 US at 538-539. Probable cause to issue an administrative warrant to inspect exists “if reasonable legislative or administrative standards for conducting an area inspection are satisfied with respect to a particular dwelling.” Id. at 538. These standards include “the passage of time, the nature of the building (e.g., a multifamily apartment house), or the condition of the entire area, but they will not necessarily depend upon specific knowledge of the condition of the particular dwelling.” Id. “The warrant procedure is designed to guarantee that a decision to search private property is justified by a reasonable governmental interest. But reasonableness is still the ultimate standard.” Id. at 539.
A warrant to inspect a landlord’s property or a tenant’s residence is not required in cases of emergency. Camara, 387 US at 539.