The Secret about Detroit Certificates of Compliance that Property Managers Don't Want You to Know

The Secret

The secret is it’s much easier than people think to obtain a Certificate of Compliance (C of C) if the property has a Section 8 tenant. But you need to understand the process and understand why is is property managers don’t seem to know this.

How to Obtain a Detroit Certificate of Compliance

  1. Register the house on the BSEED website.

  2. Have a lead paint test and turn it in.

  3. Pass a city certification inspection and turn it in.

Registration Process

Using that link, the landlord or the property manager will go on the BSEED website and declare themselves as the new owner of the house (or fess up to being an old owner!). It also has a place to fill in for the property manager. This is the address the city uses to send tickets and your actual Certificate of Compliance.

Important to know: The registration follows the owner. The lead test and the city inspection test follow the house.

Here is what the registration looks like:

And with that registration, BSEED sends a letter stating I now have 60 days to turn in my lead test and my passed city inspection report. But look at the highlighted part. Why do they say this, when it’s not true? I will tell you my theory as you read through this.

The Lead Paint Process

The lead paint test runs around $500. The city has their own inspectors or you can email my guy, Kevin McNeill. kjmcneill@msn.com.

In Detroit the houses were mostly built before 1978 which means they all were painted with lead paint. In order to pass a lead paint test, you just need to prove the paint was “abated.” That means that it was painted over with the new paint that doesn’t have lead in it. Every three years you need a renewal test. The lead inspector comes out and says, “Yep, no new chips. All good.” He still has to test all the paint and send it to a laboratory, but he doesn’t have to remeasure your house so the charge is typically $100 less.

Our lead guy Kevin comes to the property and checks inside and outside for chipped paint. The biggest issue comes with old windows. When they go up and down, paint dust settles. If that paint dust has lead in it, then you fail the inspection. Kevin lets us know if he suspects a house will fail anywhere so we can know what to fix before he comes back. Fortunately, we’ve never had to go through that whole lead abatement process where you have to follow a bunch of environmental procedures of taping and tarps and — I don’t even know what. I’ve just heard it can be a $10,000+ issue if your lead person fails you. We typically have all new windows in our houses or we make sure any old ones are freshly painted before Kevin gets there. Another part that can fail is the exterior. We try to wrap the trim in aluminum so paint doesn’t chip in the future with our harsh Michigan weather. When we renovate houses, the interiors are all freshly painted so chipped paint has never been an issue for us.

Once you get that report (2” thick"), just email that to BSEED at pm@detroitmi.gov.

The City Inspection Process

On the BSEED website you can link out to find an inspection company to come do a city inspection. We like that these inspectors are NOT city workers. They actually follow the book. The inspections are very predictable. For a single family home it costs $159 ??? to have the inspector come two times. The first time, he will tell you what to correct. The second time he will affirm it was all corrected. Once that second test is done, it’s submitted to the city at pm@detroitmi.gov.

By the way, don’t expect anyone to answer inquiries through that email address. I’ve tried. But I’ve submitted passed inspection reports and about a month later a Certificate of Compliance comes in my email and then they mail it again in snail mail.

Here is the direct link to the inspection company we have always used.

The Section 8 C of C Process

Let’s say you buy a house with a Section 8 tenant in it. In order to be compliant, all you have to do is go on the BSEED website and register so they know you now own it and they know who your property manager is. Remember, the registration follows the owner.

Then you send them the page from Section 8 that states that you passed the inspection. Use that email pm@detroitmi.gov. “Here is my Section 8 proof that I passed the inspection. Will you please send me a Certificate of Compliance”?

AND THEY DO! No city inspection. No lead paint test. BAM!

Here is what the Section 8 passed inspection report looks like:

I sent them that form and about a month later they sent me this:

Where it Gets Tricky and Property Managers Capitalize on Owners

Let’s say I sell you a house that already has had the city inspection and the lead paint test and it even has the C of C. So you do what you’re supposed to do and register it. The city needs to know who owns the house.

Wouldn’t you think the city would take an extra step and say, “Oh, I see, here, you have a C of C.”

No, the city doesn’t do that. They see a new registration, wait 60 days, and pick up the phone and call their inpsectors, “Hey, got one for you. Go ticket this one for not having the C of C.”

If you buy a house with a Certificate of Compliance you need to CALL BSEED and tell them to please attach that C of C to your new registration. They won’t do it unless you specifically ask them.

The trick: You have to ask a SUPERVISOR. The receptionist who answers the phone regularly gives false information and never seems to comprehend my questions being asked. You have to get past her to a supervisor. Good luck with that. She gets MEAN if you ask her for a supervisor.

I believe property managers don’t bother, don’t know, or would rather not know all this. I believe they see a new owner, they register the house, they automatically start the C of C process (scheduling thelead inspector and city inspector) and BILL THE OWNER for all the time they have to spend doing this. I’ve seen anywhere from $500 to $1,100 to schedule these things to be done. And you better believe you also have to pay the $160 city test and the $500 lead test on top of the property manager’s fees to coordinate the process.

And why on earth would anyone know or care to find out that simply sending a passed Section 8 inspection letter to BSEED will result in a C of C? The property managers don’t know or don’t want to know because they have nothing to gain knowing this. How can they bill you from $500-$1,100 for something as simple as typing in a registration (10 minutes max) and emailing that passed report (another 1 minute)? Or maybe they don’t know because they got that same letter I did that states clearly Section 8 does not remove you from the other requirements.

Why Does the City Hide this Gem?

I have a personal theory. I used to be on the board of the Real Estate Investors Association of Oakland. We invited BSEED Director David Bell to come talk to us about this new initiative about a year ago that will take a passed Section 8 report in lieu of a city and lead test. He loves coming to our meetings and letting everyone know, “There’s a new sheriff in town and it’s ME and you better get in compliance or I WILL TICKET YOU.”

This time though he almost didn’t show up to our meeting even though he was our star guest. He came in late though and he seemingly reluctantly told us about the program. Then he said something like this, “I was hoping I could go to the Section 8 housing commissions with this wonderful new program and in exchange for making it easier for landlords to be in compliance, the housing commissions would give me a list of who all their landlords are,” basically so he could look up our names and send inspectors out to find our properties and ticket us, “but the Section 8 offices said they won’t violate the tenants’ privacy. Isn’t that ridiculous?”

It took us a minute to digest what he was saying and then we all had questions about how to get his office to acknowledge our passed test results. What do we do, Mr. Bell? His reply, “I’m not taking any questions. I have another dinner engagement I have to get to. Bye.”

My Final Words

I had to see it for myself. On that house at 4390 Marseilles, my own rental property, I was getting tickets. I found out my lawyer will take those tickets to court and do pretty well. I let him know I have a passed Section 8 inspection letter. What do I do? My lawyer went to bat for me and he got my tickets waived. I just had to email in the passed Section 8 letter. It worked! So I tried it again without my lawyer’s muscle. I chose another one of my Section 8 properties. This other one though hadn’t been inspected since since 2021. But I found out from the supervisor at BSEED that I spoke with that at the time they are accepting passed inspection letters dated all the way back to March of 2021. I think that’s what he said. But they took my old passed letter and a month later I received the C of C in the mail.

My advice to owners is to take matters into your own hand. Do the steps YOURSELF. Talk to the property manager about the fee to get a house city certified. Ask if there is a reduced administrative fee if the tenant has Section 8. Then follow up again and again and again until you have that C of C because YOU DO NOT WANT THOSE TICKETS!