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Oakland County Real Estate Law Blog

Commercial property owners to create business improvement zone

Location is crucial when it comes to real estate but so is keeping buildings in good repair and the business districts looking nice. Commercial property owners in Detroit have banded together, voting to create a Business Improvement Zone. According to reports, the BIZ would be located in the central business district of Detroit, and the Downtown Detroit Partnership is spearheading the effort fearing that the Clean Downtown initiative will be low on funds after this year.

The BIZ was approved in a unanimous decision by the City Council in March, but it still needed the support of local property owners to go ahead. Eighty-six percent of the property owners voted in favor of the BIZ, which would be funded by a tax assessment on the commercial property owners themselves. The assessment will be just under 10 cents per square foot annually and will be in place for 10 years. Property owners can vote again after that time period to see if they want to renew the tax.

Rental rates rising in Michigan

Those with commercial property investments may be seeing an increase in profits. According to an MPF Research survey on the 100 largest U.S. metropolitan markets, effective rents for new leases rose 3.3 percent on average from 2013 to the first quarter of 2014. Rent prices are also slowly climbing due to a decreased rental inventory, consumer credit scores and the job market.

The study showed that in just the first quarter of this year, effective rents for new leases have risen around 1 percent, and this pace is expected to continue even though there was some leveling off due to the harsh winter weather that kept consumers from house hunting. The vice president of research for MPF Research said that although rental demand is not huge, it is "healthy and substantial" due to the creation of more jobs and more young adults moving out of their parents homes.

Trailer parks seeking investment property are bullying homeowners

Certain Michigan mobile home owners have been suffering from issues relating to the sale of their homes. Recently, unscrupulous mobile home parks have been trying to make an investment property out of their homes on the cheap. The problem is that many of the mobile homeowners are unsophisticated when it comes to the market-value of their property or the legal processes involved in selling their homes. In one recent case, a homeowner was sued by a mobile home park after she did not accept its offer to buy her home for $3,500.

In this case, a mobile home owner sold her residence and was later sued by her mobile home park for $25,000. The park says the woman violated the park's right of first refusal, which assumes that the park has the legal right to try and outbid any interested buyers. According to the owners of the property, however, they never agreed to such arrangements.

Detroit company and city have zoning issues near riverfront

A Detroit, Michigan, company which specializes in providing construction and aggregate materials in bulk quantities is presently seeking permission from the city of Detroit to create piles of bulk material up to 100 feet in height. Current city regulations restrict the stockpiling of bulk materials to eight feet.

Zoning issues between private businesses and municipal authorities occur frequently because both sides rarely share similar goals. In this situation, the company has told the city that it wants to store salt, asphalt, limestone and other materials at a height resembling a 10-storey building on a location near the river and just east of the Ambassador Bridge. That is nine times higher than currently allowed. This request for the variance also comes on the heels of the discovery last year that the same company had been illegally stockpiling petroleum coke or petcoke near at that same location near the waterfront.

Resolution may be coming in Michigan real estate dispute

A three-year-long dispute over a transit center in Troy, Michigan, may finally be coming to an end. According to reports, the publicly funded center has been at the heart of a dispute between Grand/Sawka Properties LLC and the city of Troy. According to reports, the saga began in 2001, when Grand/Sakwa transferred the title on part of the Midtown Square property to the city of Troy. In return, the city has agreed to rezone the area so that Grand/Sakwa could move forward with its development plans on the property.

One of the main components of this agreement was that the city of Troy had to fund the transit center project by June of 2010 or the land reverted back to Grand/Sakwa. According to reports, Troy got together several sources of funding, but the city and Grand/Sakwa disagreed on what exactly "funding" meant. There have also been disagreements between Grand/Sakwa and Troy with regard to the dispute. Other contributing issues that have been named are how the bus routes will affect the shopping center, as well as the operating hours for the transit center.

Detroit landlord's tax scam jeopardizes housing for tenents

A 69-year-old woman who lives on Mansfield, Michigan, is angry with landlords who accept money from state and federal programs to cover rent for poor people, yet fail to pay for city taxes. According to the woman, she paid $2,100 to the city of Detroit last year on a home that she owns on the westside of the city and says such practices from unscrupulous landlords are just not fair.

According to an investigation by Detroit News, at least $5 million in back taxes are owed to the city of Detroit by landlords who receive money to rent to poor families through Michigan's Housing Choice Voucher program. That report goes so far as to say that 1 in 4 Detroit area landlords aren't paying city taxes.

Detroit's commercial property vacancy rate dropping

As the commercial real estate market continues to recover, property vacancy rates are dropping. This is good news for landlords of commercial and industrial spaces. According to an analysis of 20 buildings in the Detroit area, the city's vacancy rate for high-profile office buildings is down to 11.5 percent, a significant drop from the 26 percent shown three years ago.

The report, conducted by real estate managing firm Jones Lang LaSalle, looked at buildings that were either newer than 1985 or had underwent significant renovations since 1985, were over 100,000 square feet in size, were architecturally significant or located in a high-profile location. The analysis showed that almost 1.5 million square feet of office space has been absorbed in the past years.

Michigan apartment complex says no to smoking inside apartments

In 2010, Michigan enacted a tough anti-smoking law that banned smoking in bars, restaurants and many other public places. However, that law stopped short of addressing the issue of smoking in apartments and homes. A recent decision by an apartment complex in Ann Arbor will test those limits in the 2010 law with regards to landlord-tenant disagreements.

Parkway Meadows apartments recently posted signs on its property advising residents that it intends to become a smoke-free facility beginning at the beginning of April. The posted notices also advise tenants of a number to call if they wish to obtain assistance quitting smoking, but that they must be at least 25 feet away from their apartment to smoke.

Detroit complex opens up to development proposals

As Detroit's industrial real estate market continues to attract investors, more and more properties are coming to the forefront. According to reports, the city's Planning and Development Department is now asking for proposals from developers for the old Herman-Kiefer Health Complex that has been empty since October 2013.

The 526,000-square-foot facility is situated on a sprawling 18-acre site near the Clairmount exit off of the John Lodge Freeway. The site is comprised of eight buildings, including several structures designed by George Mason and a main building designed by Albert Kahn. The buildings are mostly brick, and the major selling point appears to be the site's location, according to documents. The buildings are within easy access of the Henry Ford Health System campus and the New Center Area. It is also close to the Virginia Park, Boston-Edison and LaSalle Gardens neighborhoods.

Huge industrial complex sold in Michigan

A large industrial complex was recently sold in Michigan. According to the public details from the sale, the building is around 46,000 square feet, and it is located in Farmington Hills. The complex was sold by 200 Elm Realty, LLC, and the company that acquired the building was JR Investment Properties, LLC.

The location is known as a research area, but it is not clear at this time what the industrial complex is going to be used for. According to the investment firm's website, they specialize in purchasing properties that can then be renovated and resold. They will sometimes manage the properties, renting them out to those who want to use the space, but they would prefer to bring them up to code or modernize them and then sell to other corporations that need them for their business ventures. As such, this could just be an investment opportunity, and it is unlikely that they will use the building for anything themselves.

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