Lansing landlords have recently received notices asking them to provide proof of insurance covering tenant relocation costs or sign a city form acknowledging their potential responsibility for those costs. That wording has caused understandable confusion. Many landlords have contacted us asking what policy they need to purchase, whether their current insurance complies and whether signing the form puts them at significant financial risk.
The insurance coverage described by the ordinance is not currently available as a standard insurance product in the marketplace. In practice, landlords will need to sign the city’s written acknowledgment. The landlord is not waiving the ordinance or avoiding responsibility. The landlord is acknowledging that the city may seek reimbursement in the limited circumstances covered by the ordinance. The good news is that responsible landlords who maintain their properties and promptly address safety concerns should not panic.
What does the ordinance require?
When a landlord applies for or renews a rental Certificate of Compliance, Lansing requires either:
- Proof of insurance covering tenant relocation costs; or
- A signed written acknowledgment accepting the potential reimbursement obligation.
The ordinance expressly allows the city to issue the Certificate of Compliance when insurance is unavailable, provided that the owner signs the acknowledgment.
Why can’t my insurance agent provide the required policy?
The ordinance describes an insurance policy that would pay tenant relocation costs when the city declares a rental property unsafe and uninhabitable. The problem is that this is not a standard coverage offered under typical landlord, dwelling fire or commercial property policies. We are not aware of an insurance product currently available in the marketplace that is specifically designed to satisfy Lansing’s requirement. This is also not the same as:
- Loss of Rents coverage;
- Ordinance or law coverage;
- General liability insurance; or
- A tenant’s normal renters insurance.
Those coverages serve different purposes and should not be represented to the city as relocation coverage. Because a qualifying insurance product is not available, landlords will generally need to sign the city’s acknowledgment in order to receive or renew their Certificate of Compliance.
When could a landlord actually be charged?
Signing the acknowledgment does not mean a landlord is automatically agreeing to pay whenever the property receives a code violation. Several things must happen before the relocation fee applies:
- The Lansing Office of Code Compliance must declare the rental property unsafe and uninhabitable.
- Tenants must be ordered to leave for health and safety reasons.
- The property must have been legally occupied.
- The city must pay for immediate temporary replacement housing.
- The landlord must not have qualifying relocation insurance.
Only when all of those conditions are met can the city seek reimbursement from the owner. A routine maintenance issue, inspection item or correctable code violation does not automatically trigger the relocation fee.
How much could a landlord owe?
The current tenant relocation fee is limited to $85 per day for no more than 30 days, creating a maximum potential charge of $2,550. The city also cannot charge the owner more than it actually spends on temporary housing. The fee is intended to reimburse the city for temporary replacement housing that it has already provided. It is not an automatic fine simply because a property has a code issue.
Should Lansing landlords be concerned?
Landlords should understand the requirement, but most responsible property owners should not be overly concerned. This ordinance is aimed at serious situations in which a rental property becomes so unsafe that the city requires tenants to leave. It is not designed to punish a landlord over every loose handrail, peeling paint complaint or minor inspection issue. The best protection is the same as it has always been:
- Keep the property properly registered and certified.
- Perform regular inspections.
- Respond promptly to maintenance requests.
- Correct code violations within the required timeframe.
- Document repairs and communication with tenants.
- Never ignore conditions that could affect health or safety.
A landlord who maintains the property, responds to concerns and works cooperatively with Code Compliance is far less likely to encounter the circumstances that would trigger this ordinance.
What if the tenant caused the unsafe condition?
The ordinance includes a possible exemption when the condition that caused the property to be declared unsafe and uninhabitable was directly attributable to the tenant. The landlord must submit written evidence to Code Compliance within 10 days after the property is vacated. The city requires clear and convincing evidence and reviews the request with the City Attorney’s Office. This makes documentation important. Landlords should retain photographs, inspection records, maintenance requests, tenant communications and records of any attempts to gain access or correct the condition.
The Bottom Line
Lansing’s ordinance refers to tenant relocation insurance, but a policy designed to satisfy this requirement is not currently available in the standard insurance marketplace. Landlords should therefore expect to sign the city’s written acknowledgment. That acknowledgment does not mean the landlord will automatically owe money. The reimbursement obligation applies only in the serious situation where Code Compliance declares a legally occupied rental property unsafe and uninhabitable, orders the tenants to leave, and the city pays for their temporary housing. For landlords who keep their properties in good condition and promptly address health and safety concerns, the ordinance should not create a significant new day-to-day concern.
This article provides general insurance information and is not legal advice. Ordinances, city procedures and available insurance products may change. Property owners should contact the City of Lansing regarding compliance requirements and consult legal counsel when they have questions about their specific obligations.