In KJK’s prior alert, “Residents First” Proposal Introduced to Cleveland City Council, we discussed the City of Cleveland’s (the “City”) proposed legislation affecting Cleveland’s residential landlords. Since then, legislation passed in 2024, and the City will be enforcing these new laws. Here are key highlights of the new legislation to keep in mind:
Local Agent in Charge
All non-owner-occupied residential units must designate a “Local Agent in Charge”. If the property owner is an individual and resident of Cuyahoga County or a contiguous county (i.e., Lorain, Lake, Geauga, Summit, and Medina Counties), then the Local Agent in Charge may be the owner. However, other owners who do not qualify under the foregoing requirements must obtain a Local Agent in Charge who does. This means out-of-state owners or those residing outside of Cuyahoga County and its neighboring counties must obtain a Local Agent in Charge.
When owners of non-owner-occupied residential properties register their properties with the City, both the owner and Local Agent in Charge must sign an affidavit acknowledging their relationship. A significant change from previous requirements is that the Local Agent in Charge accepts responsibility for any potential criminal, civil, or administrative liabilities related to the maintenance and management of the properties, along with the owner.
The City’s form also includes a provision requiring the owner to indemnify the Local Agent in Charge for any responsibilities or liabilities. Furthermore, the City is required to make a good faith effort to hold the owner exclusively accountable for the maintenance and management of the properties. It remains unclear if the City will attempt to hold Local Agents in Charge liable. If the owner is unresponsive or otherwise neglectful in maintaining its property, then the City will have the option to pursue the Local Agent in Charge.
While onerous for many property owners, this new legislation aims to address long-standing concern of the rampant purchasing of residential properties in Northeast Ohio by out-of-state or foreign buyers who are neither present to maintain the City’s housing stock, nor readily available take accountability. With this new requirement to have a warm body associated with a property, the City hopes that property owners will be more attentive to property maintenance and tenant concerns.
Rental Registration, Certification, and Inspections
Owners must register their non-owner-occupied units and pay registration fees for each property. There is a $70.00 fee for each unit, but the fees for one owner are capped at $30,000 per calendar year. Untimely registrations include late fees of $100.00.
Upon registration, owners will have to identify their Local Agent in Charge, lead safe compliance, make sure all outstanding fees and bills owed to the City are paid, resolve any violations, and be current in their property taxes.
Buildings that have four or more rental units – common to apartment complexes – have additional requirements. These include making sure utilities paid for by the owner are current and certifying that the HVAC system is inspected annually by a licensed HVAC contractor.
Vacant residential properties must also be maintained to the City’s standards. Owners of vacant residential properties will have to submit a vacant building registration annually, which will include the property address, owner identity, identity of the Local Agent in Charge, complete basic upkeep, and have a City inspection upon any transfer.
Key Takeaways
Overall, this new legislation imposes additional requirements on property owners in Cleveland. The City has already filed lawsuits against owners who fail to obtain lead-safe certificates, and additional lawsuits related to new registration requirements are likely. The new City ordinances are available here.
If you are a property owner in Cleveland and need assistance with registration or if you’ve been named in a lawsuit by the City, then please reach out to Jeffrey Vaisa at JRV@kjk.com or James J. Scherer at JJS@kjk.com or a member of KJK’s Real Estate team for assistance.