CRIME FREE LEASE ADDENDUM PROPOSAL I. PURPOSE According to the City of Saginaw s 2010 Master Plan, legally registered rental properties compromised of nearly 39% of the City of Saginaw s housing stock. In response to the Master Plan s Survey, Saginaw residents top concerns involved absentee landlords, an abundance of rental properties, and crime associated with these types of properties. Such conduct has a negative effect upon the quality of life of the neighborhood and tends to suppress the value of surrounding properties. Due to budget constraints, the city went from more than 100 sworn police officers in 2010 to 55 sworn police officers in 2013. It has been statistically demonstrated that areas with rental housing are responsible for a disproportionate share of police calls for service. This disproportionate demand upon police services necessitates a disproportionate expenditure of public funds for such properties and impairs the value of these properties, the surrounding neighborhoods, as well as the community as a whole. It is in the public interest to protect and promote the existence of sound and wholesome residential properties and rental units by the adoption of standards that encourage participation in the City of Saginaw s Crime-Free Rental Property Program. Due to budget constraints, the City of Saginaw has to implement creative measures and adopt best practices from similarly situated municipalities. Considering landlords control both the selection of tenants and their eviction for quality of life issues violations, landlords can effectively contribute to the promotion of sound and wholesome residential neighborhoods. II. SCOPE The provisions of this article shall apply to all residential rental properties in the City of Saginaw and all accessory uses thereon, including parking lots, driveways, landscaping, accessory structures, fences, walls, interior and exterior common areas, swimming pools, hot tubs, and spas. This section shall not apply to: (1) Housing accommodations in hotels, motels, inns or bed and breakfast facilities. (2) Housing accommodations in any hospital; state-licensed group homes or adult foster care facilities; convent, monastery, or other facility occupied exclusively by members of a religious order; extended medical care facility; asylum; or on-campus housing accommodations owned, operated or managed by an institution of higher education, a high school, or an elementary school of occupancy by its students. Crime Free Lease Addendum Proposal -Draft (06-11-14) Page 1
III. DEFINITIONS The following words, terms and phrases, when used in this article, shall have the meanings ascribed to them in this section, except where the context clearly indicates a different meaning: Authorized local agent is an individual(s) with legal authority and capable of executing documents for the sale or lease of the dwelling(s) and authority over the proceeds of such sale or lease. Business means and includes all activities engaged in with the object of gain, benefit, or advantage, directly or indirectly, from the operation of rental housing. City means the City of Saginaw. City Council means the City Council of the City of Saginaw. License means collectively, the licenses issued to the owner of either a single family rental property or multi-family rental property pursuant to this ordinance. Each dwelling unit in a multi-family rental property shall be separately licensed pursuant to the provisions of this ordinance. Licensing agent means the city clerk or such other city official or employee as may be designated by the City Manager. Multi-family Rental Property means any structure containing two (2) or more units available for rent, whether occupied or not. Owner means and includes any person having legal title to, or who leases, rents, occupies or has charge, control or possession of, any real property in the city, including all persons shown as owners on the last equalized assessment roll of the assessor's office. Person means individual natural persons, partnerships, joint-venturers, societies, associations, clubs, trustees, trusts, or corporations, or any other individual sharing in the profits of the business; or any officers, agents, employees, factors, or any kind of personal representatives of any thereof, in any capacity, acting either for himself/herself, or for any other person, under either personal appointment or pursuant to law. Quality of Life Violation occurs when the tenant, any members of the tenant's household or a guest or other person under the tenant's control has been issued court appearance ticket, complaint, or citation for any state law or local ordinance on the license premises including but not limited to (a) drug related activity, (b) prostitution, (c) criminal gang activity, (d) assaultive, threating, or intimidating behavior (including but not limited to unlawful discharge of firearms), (e) malicious destruction of property, or (f) conduct that jeopardizes the health, safety, and/or welfare of others. Drug related activity means the illegal manufacture, sale, distribution, possession, or use of a controlled substance (as defined in Section 102 of the Controlled Substance Act, 21 USC 802, and/or Article 7 of the Public Health Code, MCL 333.7101 et seq.). Unless otherwise provided by law, proof of a violation shall not require a criminal conviction but shall require only a preponderance of the evidence. A violation shall be Crime Free Lease Addendum Proposal -Draft (06-11-14) Page 2
deemed to have occurred in the vicinity of a covered property if such violation occurred in the adjacent public right of way in front of the covered property or on any property adjacent to the covered property. Residential rental property means a parcel of real property upon which a residential rental unit is located. Residential rental unit means a rented or leased residential dwelling unit within a single-family or multi-residential building. A residential rental unit includes a single-family dwelling, duplex, or a unit in a multifamily or multipurpose dwelling, or a unit in a condominium or cooperative housing project. Single Family Rental Property means any single-family structure held out for rental, whether or not, also referred to as a covered property. IV. RENTAL HOUSING BUSINESS LICENSE REQUIRED. No person shall operate a residential rental property in City of Saginaw without securing and maintaining an annual rental housing business license as required by this section. Each owner or authorized agent, on behalf of the owner, shall submit an application for a rental housing business license on a form provided by the city clerk's office. V. AUTHORIZED LOCAL AGENT REQUIRED. Whenever any rental business license is required, and the owner is a person domiciled within the City of Saginaw or a 30-mile radius, the owner shall appoint a person who is domiciled within City of Saginaw or a 30-mile radius, to serve as the authorized local agent of the owner and the operator for 24- hour emergency contact information and for service of notices. Notices given to the authorized local agent shall be sufficient to satisfy any requirement of notice to the owner or the operator. The owner shall notify the city clerk of any change of authorized local agent within 15 days of such change. VI. RENTAL HOUSING BUSINESS LICENSE APPLICATION. The application shall contain or be accompanied by the following information: (1) The address of the residential rental property. (2) The unit classification, e.g., single-family, duplex, multifamily, or condominium. (3) The name, address and telephone number of the owner and authorized agent for the premises and any other person designated to be contacted in the event of an emergency at the premises. Crime Free Lease Addendum Proposal -Draft (06-11-14) Page 3
(4) A description of any other business operated or to be operated at the same premises. (5) The name, address, and telephone number of the owner's agent, representative or property manager responsible for management of the rental property, if different from the owner, or if the owner resides outside a 30-mile radius of the City, an owner's agent, representative or property manager who is within a 30-mile radius of the City is required. a. The owner/licensee shall have a continuing obligation to provide the above information as it becomes available and if any information provided changes during the term of the license. (6) The application shall also include an acknowledgement to be signed by the owner/agent/licensee stating that he or she has been informed of the following: a. That the owner/agent/licensee shall be responsible for maintaining the rental property in compliance with all City of Saginaw s codes. b. That failure to maintain the rental property in compliance of the City of Saginaw Code may result in enforcement against the owner/agent/licensee by all means available to the city. c. Violation of this article is a civil infraction. In addition, any violation may result in the revocation of a license under this article. The City of Saginaw shall seek all legal remedies, including obtaining injunctive orders to restrain, correct or abate a violation and the costs incurred by the city in correcting a violation, including attorney fees, shall become a lien on the real property upon which the residential rental unit is located. d. That all tenants are provided a lease disclosure letter which provides information regarding frequently violated city regulations, including: 1. OFFENSES AGAINST PUBLIC PEACE AND SAFETY (Chapter 130) 2. OFFENSES AGAINST PUBLIC MORALS (Chapter 131) 3. DRUG AND ALCOHOL OFFENSES (Chapter 132) 4. OFFENSES AGAINST PUBLIC AUTHORITY (Chapter 133) 5. OFFENSES AGAINST PROPERTY (Chapter 134) 6. PARKING REGULATIONS (Chapter 72) 7. HOUSING REGULATIONS (Chapter 151) e. That each lease or rental agreement entered for the licensed dwelling shall include the following addendum: Crime Free Lease Addendum Proposal -Draft (06-11-14) Page 4
CRIME FREE LEASE ADDENDUM In consideration of the execution or renewal of a lease of the dwelling unit identified in the lease, Owner and Resident agree as follows: 1. Resident, any members of the resident's household or a guest or other person under the resident's control shall not engage in criminal activity, including drug-related criminal activity, on or near said premises. "Drug-related criminal activity" means the illegal manufacture, sale, distribution, use, or possession with intent to manufacture, sell, distribute, or use a controlled substance (as defined in Section 102 of the Controlled Substance Act (21 U.S.C. 802). 2. Resident, any member of the resident's household or guest or other person under the resident's control shall not engage in any act intended to facilitate criminal activity, including drug-related criminal activity, on or near the said premises. 3. Resident or members of the household will not permit the dwelling unit to be used for, or facilitate criminal activity, including drug-related criminal activity, regardless of whether the individual engaging in such activity is a member of the household or a guest. 4. Resident, any member of the resident's household or a guest, or another person under the resident's control shall not engage in the unlawful manufacturing, selling, using, storing, keeping, or giving of a controlled substance or marijuana at any locations, whether on or near the dwelling unit premises or otherwise. 5. Resident, any member of the resident's household, or guest or another person under the resident's control shall not engage in any illegal activity including prostitution, criminal street gang activity, threatening, intimidating or stalking, assault, the unlawful discharge of firearms, on or near the dwelling unit premises, or any breach of the lease agreement that otherwise jeopardizes the health, safety, and welfare of the landlord, his agent or other tenant or involving imminent or actual serious property damage. VIOLATION OF THE ABOVE PROVISIONS SHALL BE A MATERIAL AND IRREPARABLE VIOLATION OF THE LEASE AND GOOD CAUSE FOR IMMEDIATE TERMINATION OF TENANCY. A single violation of any of the provisions of this added addendum shall be deemed a serious violation and a material and irreparable noncompliance. It is understood that a single violation shall be good cause for immediate termination of the lease. Unless otherwise provided by law, proof of violation shall not require criminal Crime Free Lease Addendum Proposal -Draft (06-11-14) Page 5
conviction, but shall be by substantial evidence of the type reasonably relied upon by property managers in the usual and regular course of business. In case of conflict between the provisions of this addendum and any other provisions of the lease, the provisions of this addendum shall govern. This LEASE ADDENDUM is incorporated into the lease executed or renewed this day between Owner and Resident. VII. PROCESSING OF APPLICATION. The city clerk's office shall determine whether the applicant has submitted a completed application for a rental housing business license. An application is complete if it has been fully and properly completed in accordance with this section, the Non-owner Occupied Property Ordinance (Section 151.095, et al) and the nonrefundable fee required pursuant to this section is tendered. (1) Restrictions. No rental housing business license shall be issued until all fees, including water and sewer charges, delinquent personal property taxes and all other unpaid charges required by all city ordinances are paid in full. Further, no unresolved property maintenance issue shall be present if a rental business license is issued. (2) Compliance with all laws. No rental housing business license shall be issued unless the applicant has complied with all city, county, state and federal laws, rules and regulations. (3) Legal under existing law. No rental housing business license shall be issued by the licensing agent where the existing or proposed rental housing unit would be illegal under any law or ordinance of the city. (4) Issuance after review. Upon submitting a completed application and required fee, the application shall be forwarded to the zoning administrator, treasurer's office and assessing department for the purposes of verifying if the rental unit or complex complies with the terms of this article. The clerk's office shall issue a license to the person to commence or continue the business designated in such application if the rental housing business complies with the terms of this article. VIII. RENTAL HOUSING BUSINESS LICENSE FEE. The application for a rental housing business license, including any renewal thereof, shall be accompanied by a nonrefundable fee in an amount established by a resolution adopted by City Council. The fee shall be based on the owner/operator and not the number of dwelling units. The rental housing business license fee shall be used to defray the costs of processing, training and enforcement. Crime Free Lease Addendum Proposal -Draft (06-11-14) Page 6
IX. DURATION OF RENTAL HOUSING BUSINESS LICENSE; RENEWALS; LATE FEES. The rental housing business license issued under this article shall be effective until March 15th. Licenses not renewed the by March due date shall, in addition to the required fee, pay an additional late charge of one hundred (100%) percent of the base fee shall apply and be assessed X. TRANSFER OF RENTAL HOUSING BUSINESS LICENSE. A rental housing business license may be transferred by the holder to any other person upon submission of an updated rental housing business license application. XI. FAILURE TO OBTAIN A RENTAL BUSINESS LICENSE. Failure to obtain a rental housing business license will result in the issuance of a civil infraction citation by the city. (SEE CITY S ORDINANCE FOR BUSINESS LICENSES) XII. LICENSURE Upon filing of a completed registration form and the payment of the registration fee, the City Clerk shall issue a License or renewal to the owner. In the case of a multi-family rental property, city clerk issue a single license certificate whereon shall be listed all dwelling units contained in that property. Each dwelling unit so listed shall be deemed separately licensed. XIII. REGISTRATION VIOLATIONS (1) In the event of any noncompliance with the registration provisions of this article after a license has been issued, the licensing agent may take one or more of the following actions to remedy the violation: (a) The license may be revoked by order of the licensing agent until the noncompliance has been corrected. (b) A civil infraction may be imposed. In addition to a civil infraction all violations shall constitute a nuisance per se and may be abated by injunctive or other equitable relief. Each day that a violation continues is a separate offense. (c) The licensing agent and other departments within the city may develop a written agreement with the owner or the owner s authorized local agent to stay further action while the owner or the owner s authorized local agent addresses outstanding issues. Crime Free Lease Addendum Proposal -Draft (06-11-14) Page 7
(2) The owner or the owner s authorized local agent may appeal all revocations to the City Manager or designee, which, for cause shown, may uphold the revocation, or reinstate the license after giving the licensee reasonable notice and after holding a hearing, at which licensee shall have an opportunity to be heard. (3) In the event of revocation, the license fee shall not be refunded. XIV. RENTAL HOUSING SERVICES PROVIDED BY THE CITY Owners who have obtained a rental housing business license are entitled to the following services by the City: (1) Free crime prevention training by the police department. (2) The city will maintain a listing of all licensed rental housing properties for lease on our website. (3) Our police department and code enforcement officers can assist the property owner through the eviction process. (4) The clerk's office will maintain an emergency contact list for all licensed rental housing properties. XV. OWNER S RESPONSIBILITY No owner shall knowingly permit a tenant to remain in occupancy of a dwelling unit who or whose guests commit repeated quality of life violations. XVI. REPEATED QUALITY OF LIFE VIOLATIONS On each occasion that a tenant in a multi-family rental property or a single-family rental property or such tenant s guest commits a quality of life violation, the City Manager or designee shall send notice of such violation to the owner or owner s authorized local agent. Upon the occurrence and notice of three (3) quality of life violations by one or more tenants or their guests, with respect to any dwelling unit within any 12-month period, the City Manager or designee may conduct a public hearing on notice to the owner or owner s authorized local agent as to why the license to operate a rental property should not be revoked or suspended. In multi-family rental property, license revocation may only be imposed upon the dwelling unit associated with the subject quality of life violation. If the City Manager or designee seeks to revoke or suspend the license, proof that the owner unsuccessfully attempted in good faith to evict the offending tenant, after commission of two quality of life violations, Crime Free Lease Addendum Proposal -Draft (06-11-14) Page 8
shall constitute an absolute defense. It isn t a violation if the owner or owner s authorized local agent reported the violation. XVII. PUBLIC HEARING Public Hearings shall be conducted in conformance with the following procedure. See Section 110.06. (A) Generally. The City Manager may suspend, revoke, or deny renewal of a rental housing business license for Repeated Quality of Life Violations in the manner herein provided. Divisions (A) through (D) of this section shall not apply to denial of new licenses. (B) Definitions. For the purpose of this section, the following definitions shall apply unless the context clearly indicates or requires a different meaning. Quality of Life Violation occurs when the tenant, any members of the tenant's household or a guest or other person under the resident's control has been issued court appearance tickets, complaints, or citations for any state law or local ordinance on the license premises including but not limited to (a) drug related activity, (b) prostitution, (c) criminal gang activity, (d) assaultive, threating, or intimidating behavior (including but not limited to unlawful discharge of firearms), (e) malicious destruction of property, or (f) conduct that jeopardizes the health, safety, and/or welfare of others. Drug related activity means the illegal manufacture, sale, distribution, possession, or use of a controlled substance (as defined in Section 102 of the Controlled Substance Act, 21 USC 802, and/or Article 7 of the Public Health Code, MCL 333.7101 et seq.). Unless otherwise provided by law, proof of a violation shall not require a criminal conviction but shall require only a preponderance of the evidence. A violation shall be deemed to have occurred in the vicinity of a covered property if such violation occurred in the adjacent public right of way in front of the covered property or on any property adjacent to the covered property. Repeated Quality of Life Violations will be considered to be three (3) quality of life violations with respect to any dwelling unit within any 12-month period. (C) Notice. Whenever the City Manager shall have evidence to warrant the suspension, revocation, or denial of renewal of a license, he or she shall send a notice to the owner or the owner s authorized local agent by certified mail to his or her last known address. The notice shall contain a statement of the charge against the owner or owner s authorized local agent and a definite time and place for a hearing of the charge. The notice shall instruct the owner or the owner s authorized local agent to show why the license should not be suspended, revoked, or denied renewal. Failure by the owner or the owner s authorized local agent to appear at the hearing may result in suspension, revocation, or denial of renewal of the license. Unless the owner or the owner s authorized local agent requests a longer time, the hearing shall be conducted within five (5) days from the order of suspension, revocation, or denial of renewal of a license. (D) Hearing. (1) The City Manager shall appoint a Hearing Officer to conduct a public hearing at which the owner or the owner s authorized local agent shall be granted an opportunity to show cause why the license Crime Free Lease Addendum Proposal -Draft (06-11-14) Page 9
should not be suspended, revoked, or denied renewal. The hearing officer may be the City Manager or any officer or employee of the City appointed or assigned to the Administrative Departments as set forth in Ch. 30 of this code. (2) In any proceedings under this section, the Hearing Officer has the power to administer oaths and affirmations and to certify official acts. The Hearing Officer shall proceed with reasonable dispatch to conclude any matter before him or her. Due regard shall be shown for the convenience and necessity of the parties and their representatives. (3) The Hearing Officer shall cause a record of the entire proceeding to be made by tape recording or by other means of permanent recording determined appropriated by the Hearing Officer. A transcript of the proceedings shall be made available to all parties upon request and upon payment of a fee prescribed therefor. The fee may be established by the Hearing Officer but shall not be greater than the cost of making the transcript. (4) The hearing need not be conducted according to the technical rules of evidence adopted for the Courts of Record in the state. (5) The Hearing Officer shall take testimony from the owner or the owner s authorized local agent and any person having knowledge relevant to the suspension, revocation, or denial of renewal of a license. Oral evidence shall be taken only upon oath or affirmation of the party offering the testimony. (6) Hearsay evidence may be used under the following guidelines: (a) Hearsay evidence may be used to explain other direct evidence. (b) Hearsay evidence may be used to support other direct evidence. (c) Hearsay evidence shall not be used in itself to support a finding, unless it would be admissible in civil actions in courts of competent jurisdiction. (7) Any relevant evidence shall be admitted. RELEVANT EVIDENCE shall be defined, for the purpose of this section, as the type of evidence upon which responsible persons are accustomed to rely in the conduct of serious affairs. Such relevant evidence shall be admitted regardless of whether or not it may be admissible in civil actions in courts of competent jurisdiction. (8) Irrelevant and unduly repetitious evidence shall be excluded. Each party shall have these rights: (a) To call and examine witnesses on any matter relevant to the issues of the hearing; (b) To introduce documentary and physical evidence; (c) To cross-examine opposing witnesses on any matter relevant to the issues of the hearing; (d) To impeach any witness regardless of which party first called the witness to testify; (e) To refute the evidence; (f) To represent himself or herself or to be represented by anyone of his or her choice who is lawfully permitted to do so; (g) To make a closing statement at the conclusion of the evidentiary portion of the hearing. Crime Free Lease Addendum Proposal -Draft (06-11-14) Page 10
(9) Failure of the owner or the owner s authorized local agent or his or her representative to appear at the hearing may be deemed to be an admission by the owner or the owner s authorized local agent of the facts set forth in the City Manager's notice and order. (10) At the conclusion of the hearing, the Hearing Officer shall make written findings of fact based upon the competent evidence and testimony admitted during the hearing. (11) The Hearing Officer shall make a finding whether or not the license shall be denied, revoked, or suspended. (E) Appeal upon denial, suspension, or revocation of a license. (1) Any party dissatisfied with the decision of the City Manager or other appropriate Hearing Officer or body shall have a right to appeal the decision. The appeal shall be in writing and shall contain a complete statement of the grounds for the appeal. It must be filed with the City Clerk, together with an appeal fee, within fourteen (14) days after notice of such denial, suspension, or revocation is mailed to the person's last known address. This appeal upon denial includes the denial of a new license. (2) Within ten (10) days of the receipt of the appeal by the City Clerk, the Clerk shall schedule an appeal hearing. Unless waived by the parties, the Clerk shall mail by first class mail a written notice of the time and location of the appeal hearing at least five (5) days prior to the hearing. The appeal hearing shall be an informal hearing held before a panel consisting of the City Manager or his or her designee, the affected department head or his or her designee, and the City Clerk or his or her designee. (3) The factual record made in the hearing, or license or permit application record in case of denial, shall constitute the basic record for the appeal. The appeal panel may, but need not, allow the presentation of additional evidence by a majority vote. Argument as to relevant factual and legal issues shall be permitted. The decision of the appeal panel shall be reached by majority vote and mailed to the parties within seven (7) days of the conclusion of the hearing. The decision of the appeal panel shall be final and conclusive. (4) A party aggrieved by the order or decision of the appeal panel may appeal the decision to a court of competent jurisdiction as provided by state statutes and court rules. (F) Immediate suspension. Where the City Manager shall determine that in the interest of the public health, morals, safety, or welfare an immediate suspension is necessary, he or she shall order the same. In such case, the City Manager shall forthwith send a notice to the owner or the owner s authorized local agent by certified mail to his or her last known address, which notice shall contain a statement of the charge against the owner or the owner s authorized local agent and a definite time and place for a hearing of the charge and shall order the owner or the owner s authorized local agent to show why his or her license should not be suspended for an additional period of time or revoked. Unless owner or the owner s authorized local agent requests a longer time, the City Manager shall conduct said hearing within five (5) days from the order of suspension, at which time and place the owner or the owner s authorized local agent shall have an opportunity to present a defense to the charge and cross-examine any witnesses and examine all evidence produced against him or her. The decision of the City Manager may be appealed pursuant to division (E) above. (G) Fee refund. No fee for any license which has been suspended or revoked pursuant to the provisions of this section shall be refunded. Crime Free Lease Addendum Proposal -Draft (06-11-14) Page 11