News Story

Proposed court rule could deny Michigan landlords standing to evict, critics say

Proposal would make permanent several pandemic-era court rules; public comment is open through Nov. 1

A proposed court rule in Michigan could lengthen the eviction process and make it more costly for landlords, critics say. Through Nov. 1, the public has the chance to offer public comment, as the State Court Administrative Office considers making a pandemic-era administrative order permanent.

Several proposed changes worry landlords. Pre-pandemic, when a tenant didn’t show at an eviction hearing, an eviction order was “must-issue,” meaning that it was automatic. The proposal turns it into “may issue,” and that change might become permanent. 

A second change would eliminate a judge’s ability to order an eviction when a defendant skips court.

A third change would allow a judge to adjourn the trial for at least seven days, if a default judgment is not entered.

A fourth would stay an eviction case, if a tenant has applied for rent assistance. Landlords are concerned this will equate to additional months with no rent money coming in.

Taken together, landlords argue, these rules would give property owners little certainty that tenants who don’t pay and don’t show up to court could be evicted in a timely fashion.

The Michigan Supreme Court was allowed to weigh in on the proposed rule change. Justice David Viviano wrote in dissent of the proposed changes. 

“Proposed MCR 4.201(G)(5) would no longer allow a default judgment to be entered in a case involving nonpayment of rent if the defendant fails to appear at the initial court date unless he or she was personally served,” Viviano wrote. “I fail to understand why a landlord or landlord’s attorney should be forced to return to court a second time to secure a judgment of possession if the tenant was properly served by some method other than personal service yet fails to appear at the initial hearing.”

Viviano questioned the rental assistance-related stay on constitutional grounds.

“This blanket-rule requirement would strip district court judges of their discretion over whether to adjourn landlord-tenant proceedings granted to them by MCL 600.5732,” Viviano wrote.

According to the U.S. Census Bureau, about 29% of Michigan housing is rentals. A little less than one in three Michiganders is a renter.

Landlords who left comment warned of unintended consequences, and that what appears as leniency for tenants will hurt them in the long run.

Jason Pool, of Optimum Properties LLC, warned:

Covid practically killed off small landlords. Housing is not ‘free.’ We have to pay to buy it, pay to maintain it, pay property taxes and income taxes. We are not a straight up charity. If the government wants to provide housing that people can stay in for months free then that’s great. But we can’t afford someone using loopholes and delays to stay in our properties rent free for several months or more. If these proposed changes occur it will slowly drive small landlords to get out and sell off rentals. Bigger players will likely take over, resulting in less desirable units in many cases and large corporations that operate solely on the need for profit and shareholder sentiment. Rents and deposits will be driven upwards in anticipation of abuses of time frames from tenants.”

Landlord Ethan LaVigne added: “Making it easy for tenants NOT to pay their rent and making it harder for good landlords and businesspeople to collect on monies owed them is ludicrous.”

Said Stephen Bentley: “No one wins by making the process of eviction more costly through delays and processes increasing the work to evict. The previous processes already favor the tenants greatly and they are well protected by the courts.”

Aaron Cox warned that the rule could be read as denying landlords the standing to pursue eviction, and it could put landlords and tenants at cross-interest in cities where Certificates of Occupancy are required for rentals.

What happens if a landlord simply omitted the local ordinance obligation? What happens if a landlord’s compliance was not renewed due to the fault of the tenant? What happens if a landlord cannot financially comply with the requirements necessary for compliance? Are they barred access to the courts because of the mere lack of a ministerial certificate from a local unit of government? Wouldn’t this incentivize unscrupulous tenants into precluding the landlord’s compliance?

The public comment period is open through Nov. 1.

John Nevin, a spokesman for the State Court Administrative Office, said there will be another opportunity for public comment on Nov. 16, at an administrative hearing. The rule could be approved, declined or amended that day, or action could be deferred to a future day.

Michigan Capitol Confidential is the news source produced by the Mackinac Center for Public Policy. Michigan Capitol Confidential reports with a free-market news perspective.