By Glen Zatz, Bodman PLC
Defendant-tenant sought to recover rent paid to plaintiff-landlord under his residential lease on the basis that a city ordinance prohibited a landlord from accepting, retaining, or recovering rent without a valid rental permit. In McMillan v. Douglas (Mich App No. 335166, December 14, 2017), the court in a published opinion rejected plaintiff’s claim and set forth the standards for review.
The court stated that “[a]bsent an indication to the contrary, an ordinance imposing a public duty on a property owner does not give rise to a private cause of action.” Levendoski v. Geisenhaver (375 Mich 225, 228 (1965)). The court further stated that when an ordinance “imposes a new duty unknown to the common law and provides a comprehensive administrative or other enforcement mechanism … a private right of action will not be inferred.” Claire-Ann Co. v. Christenson & Christenson, Inc. (223 Mich App 25, 31 (1997)). The court held: there was no private right of action since the ordinance does not expressly provide for a private cause of action; there is no reference to “tenant” in the provision prohibiting landlord’s rent collection; a rental permit is not a common law obligation; and the landlord is subject to enforcement action by the city.
Interestingly, the court noted that the ordinance might be used as a “shield” by a tenant when being sued for unpaid rent, as opposed to a “sword” to recover rent. The court also noted that the ordinance was not clear as to what the city should do with any rent that it recouped from the landlord because the ordinance didn’t require returning the rent to the tenant.
Practice Tip: Keep this decision in mind when seeking recourse for a property owner’s violation of an ordinance.