Written by Forrest Wall, CAE, Staff Vice President and Industry Relations
During the 2011-2012 state legislative session, AAM successfully lobbied on your behalf on a wide array of multifamily rental property and business proposals. The completion of the session means that all legislation proposed but not enacted will need to be reintroduced to be considered by the new legislature, which will begin its work this month. Below is a recap of a few key apartment industry issues from the session:
Tax Appeal Interest Rate
This was one of AAM’s top legislative priorities for the session. House Bill 5340, requested by AAM and International Council of Shopping Centers, amended the statutory interest rate in the Tax Tribunal Act to a new floating rate based on the Prime Rate. The impetus for this legislation was based on the fundamental fairness problem when you compared the low rate on tax appeals (averaged just over 1 percent in recent years) to the high rate on delinquencies (can be up to 18 percent), and, the lack of incentive the low rate provided to a local government to seek expedient resolution of cases. The bill passed the legislature with the new floating rate set at Prime plus 1 percent, and with Governor Snyder’s signature became Public Act 220 of 2012.
Nonrecourse Loans
Senate Bill 992 corrected problems with the interpretation of nonrecourse loan carveouts by prohibiting a post-closing solvency covenant from being used as a nonrecourse carveout or as a basis for any claim against a borrower, guarantor, or other surety on a nonrecourse loan, and, by specifying that a noncompliant provision in loan documents would be invalid. The legislation applied to the enforcement and interpretation of all nonrecourse loan documents in existence at the time or entered into in the future. AAM worked in concert with many real estate interests to obtain quick passage of the bill, now Public Act 67 of 2012. The legislation was needed in response to two court cases in Michigan which essentially provided for personal liability within nonrecourse loans in the event of foreclosure. AAM also participated in an amicus brief initiated by Building Owners & Managers Association (BOMA) in one of the cases to aid in the effort to reverse the court decision.
Apartment Inspection Reform
Senate Bill 1168, introduced at the request of AAM, proposed significant reforms to the Housing Law of Michigan. The legislation included limits on inspection fees, extension of the inspection cycle timeframe, caps on registration fees, and inclusion of townships under the law.Although the clock ran out for movement of this bill due to the extended election season and major initiatives moved during the lame duck, it will be introduced again at the start of the 2013-14 session and is AAM’s top priority.
Property Disposal
Legislation requiring the use of large moveable containers for tenant property in the foreclosure eviction process. AAM initially opposed the legislation, and then amended it to exempt rental property.
Foreclosure Notification
AAM successfully opposed this legislation, which proposed to add a number of unnecessary foreclosure notification requirements on the rental housing industry, as well as additional mandatory rental agreement language.
Rent Control
Senate Bill 195 allowed limited local rent control and inclusionary zoning. AAM opposed this bill and it was not acted upon by the legislature.
I want to extend a special thank you to the AAM Officers, many of whom contacted legislators, represented the industry in work groups, testified before legislative committees, and provided me with the input needed to formulate and present our positions. AAM is truly fortunate to have such dedicated and thoughtful leaders who give so willingly of their time on behalf of the industry.