Detroit May Require Landlords to Provide Annual Tenant Rosters

Tax CalculationsAre you a landlord in Detroit? Soon, you may be required to provide annual tenant rosters to help the city identify potential income-tax dodgers. The proposed regulation would apply to apartments and lofts with monthly rents of $750 or more.

Last year, the city of Detroit filed a lawsuit against the owners of two properties because it alleged that many tenants were living there using relatives’ or friends’ suburban addresses to avoid city income-tax liability and obtain lower auto insurance rates. In the lawsuits, the city sought residents’ personal records, including addresses and Social Security numbers.

Landlords who voluntarily comply with the city’s requests for information will not face legal action.

Some, including Council President Pro Tem Mary Sheffield, have concerns. “Before passing such a measure,” she said, “I would want to ensure that there is not an intrusion on individuals’ rights to privacy, the information collected is protected and remains confidential, that it would not result in disparate negative impact on residents in subsidized housing and that it would not place an undue burden on landlords.”

As part of Detroit’s post-bankruptcy management plan, the Michigan State Treasury Department began processing the city’s income taxes in January 2016. If the proposed regulation passes, the city’s tax compliance branch will receive and analyze tenant rolls, with added help from the state treasury office.

What does this mean for landlords? Extra paperwork for sure, especially if your property has frequent turnover. Landlords would have to file every time a new tenant moves in. If you don’t file, you could potentially be sued by the city.

Whether or not the regulation passes, the Law Offices of Aaron D. Cox are here to help landlords with any legal issue they face. Call us at (734) 287-3664 today to learn more.

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