The Paletz Law Blog

What Michigan Landlords Need to Know About the New Rental Inspection Legislation

Until recently, municipalities had broad authority under Michigan law to inspect rental properties for compliance with local ordinances and state law. This often resulted in municipal overreach in the frequency and cost of inspections and was especially evident during and after the Great Recession.

Landlords have now been given more options with respect to how they want to address municipal rental inspections. On November 28, 2017, Governor Snyder signed into law Senate Bill 107, which amended MCL 125.526 (http://legislature.mi.gov/doc.aspx?mcl-125-526) and took effect on February 19, 2018. Primarily, the law was amended to state that, absent some exceptions, municipal inspections cannot occur without a tenant’s consent, further reinforcing a tenant’s Fourth Amendment rights.

Some of these exceptions are:

• If the rental unit is vacant;
• If the municipal inspector is responding to a tenant complaint; or
• If the municipal inspector has a warrant for the inspection.

Unless one of the exceptions apply, the landlord must make a “good faith” effort to obtain consent from the tenant. The law does not specifically state what constitutes a good faith effort, so this interpretation will vary by jurisdiction. However, in order to meet this requirement, the landlord should either:

1. Seek the tenant’s consent via a written letter to them once the landlord has been contacted by the municipality about an inspection;
2. Seek the tenant’s consent via a written letter to them at the outset of their lease agreement; or
3. Seek the consent within the lease agreement itself, whereby the act of the tenant signing the lease is considered their consent.

If the landlord is in a jurisdiction where they have been subject to prior municipal overreach and wants to take an aggressive posture in protecting their property from this occurring, option (1) or (2) would likely be preferred. Either of these options may result in less inspections on the property, and more closely comport with the spirit and intended purpose of the new law in granting more individual protections.

Landlords must still though be mindful that although it may be advantageous in the short-term to limit inspections and therefore possible overreach, this could have a potentially retaliatory effect as it could make dealing with the municipality more difficult in the long-term. However, there are some multi-family operators who believe the risk of this is outweighed by the saving of time and money, and prevention of potential municipal intrusion, when inspections are limited. Regardless, municipalities still ultimately have the authority to get administrative search warrants to inspect the units where consent is not given.

If a landlord elects option (3), the lease would include a term that would state that the tenant, by signing the lease, is giving their consent for the rental inspection. This approach may put less of an administration burden on the property staff since they would not have to maintain a record of consenting tenants. It also may keep the landlord in relatively good terms with the local inspector, which may be beneficial. With that said, the local inspectors still need to be mindful of the tenant’s Fourth Amendment rights as supported by the new legislation.

Regardless of which option is elected, the letter or the lease should contain language that requires that any fees related to the inspections are the tenant’s responsibility, and that they are deemed and collectible as rent if unpaid. Although some jurisdictions may nonetheless rule that a tenant should not be responsible for this fee as it may have a “chilling” effect on the tenant’s willingness to consent to the inspection, having the language gives the landlord the option of seeking the fee.

Finally, although the law does not specifically address rentals of manufactured homes, the homes themselves should still be considered as dwellings under the law. As such, if the home is rented, in addition to the site itself, these changes in the law may also apply.

The Bottom Line: As with any new law, it may take years to see the full impact of the change. However, for the immediate future, the landlord’s relationship with their respective municipality should be the primary factor in how it wants to act in light of this amended legislation.