Exploiting Low-Income Tenants in Michigan

How legally exploitable are lower-class tenants in Michigan? It’s an empirical question, and one that has not been thoroughly researched (as far as my scan of Google Scholar can tell). Even so, it’s not difficult to imagine how landlords, in concert with unscrupulous attorneys, could shake down tenants for extra cash even if they are not substantially behind on their rent.

Consider, for instance, a tenant who may be lagging a week or two behind on their rent payments each month. Perhaps the landlord allows for a grace period, imposing a late fee on the tenant, or not. Either way, should the tenant fall outside of the grace period, even by a day, they could be subject to a landlord-tenant claim whereby the landlord, through their attorney, attempts to collect not only back rent, but the costs associated with the case, including statutory attorney’s fees, typically $75.00. See MCL 600.5759(1). That may not sound like much, but attorneys, sometimes representing multiple landlords in a particular area, will go into court on a given day with 10-15 tenant defendants and proceed to mow through them, picking up $750-1,000+ in attorney fees for approximately an hour or two’s worth of work. Not too shabby.

Granted, some of those cases will be for a legitimately concerning amount of back rent, but they needn’t be. Some tenants will show up to court, already paid up, and still be pressured into signing consent judgments that leave them on the hook for the costs associated with needless litigation, including attorney fees. Few, if any, of these tenants will push back and almost none hire a lawyer. If the average cost and attorney fees in, say, cases involving demand for possession come out to no more than $200, most will pay that amount in order to avoid the situation escalating. Of course, some, in doing so, put themselves back in the hole down the line and once again find themselves the subject of an arguably frivolous action where, once again, they will find themselves liable for costs and fees.

Again, $200 (which includes the $75 attorney fee) may not sound like much, but for lower-income tenants whose rent may not amount to more than $400 a month, it’s a big deal. Moreover, regardless of the capacity to pay, the idea that landlords and their attorneys can effect game the system to generate cheap revenue should offend anyone’s sensibilities. It is not what the legal system is for and the district courts quickly lose their character as “the people’s courts” and instead become forums for exploitation.