City of Detroit Sues Three Owners Who Combined Control 1K-plus Blighted Properties

The City of Detroit’s law department has filed complaints in Wayne County’s 3rd Circuit Court against three owners who combined control an estimated 1,000-plus blighted properties.
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lead hazard tape
Detroit’s law department has filed complaints against three real estate owners who are accused of not improving properties and renting them in “deplorable” conditions and without lead clearance. // Stock photo

The City of Detroit’s law department has filed complaints in Wayne County’s 3rd Circuit Court against three owners who combined control an estimated 1,000-plus blighted properties.

Steve and Stephen Hagerman of West Bloomfield Township, Michael Kelly of Grosse Pointe Woods, and Salameh Jaser of Dearborn, the suits allege, have bought up large portfolios of real estate in Detroit without any intention of occupying or improving the properties they hold.

To support the carrying costs of their speculating businesses, the suits claim, these landlords rent the properties in “deplorable” conditions, without obeying the laws on renting, especially those concerning lead clearance, “putting children at risk of lead poisoning.”

In many instances, says the city, these property owners “create sham land contracts in an attempt to avoid the regulations on rental property.” The lawsuit is designed to put an end to that practice.

“Our lawsuits mark the beginning of a new effort to address the grave danger of lead in Detroit, among other housing related issues,” says Lawrence Garcia, corporation counsel for the city. “They have demonstrated no respect for the safety of the persons living on their land, and their business model presents an unreasonable danger to the renting public in Detroit. Detroit’s citizens deserve better.”

In the suits, the city asks the court to declare the business model a public nuisance, compel the owners to properly maintain their properties, and prohibit them from directly or indirectly purchasing or controlling additional properties until they come into compliance.

The three property owners have amassed thousands of tickets from city building safety inspectors.

In a related move, Mayor Mike Duggan and Chief Health Public Officer Denise Fair have issued a Declaration of Public Nuisance over the issue of “invest-and-neglect” speculators and landlords.

“When a child is exposed to lead, irreversible damage is done,” says Fair. “Their ability to learn, talk, hear, and grow is at risk. At the Detroit Health Department, we are an advocate for reducing lead in homes. It is so important that the city of Detroit continues to hold landlords accountable to ensure that a family’s basic right to safe and secure housing is not violated.”

The declaration begins: “The city of Detroit has a crisis – thousands of children living in the city suffer elevated blood lead levels as a result of living in properties with lead hazards. Federal, state, and local laws require property owners to take precautions to protect against childhood lead exposure. Many landlords do not comply with these laws, and the failure to abate lead hazards has created this crisis.”

Under § 16-2-4 of the Detroit City Code, and § 125.486 of Michigan’s Compiled Laws, the city’s public health director and mayor may declare any business pursuit or property a public nuisance.

“In the opinion of the mayor and the chief public health officer, the invest-and-neglect business pursuit is a public nuisance,” the declaration continues. “Slumlords who fail to comply with applicable housing laws and regulations, in particular with lead abatement laws and regulations, at the many properties they possess or control, significantly interfere with the public’s health, safety, peace, comfort, and convenience. Similarly, property speculators who fail to maintain their properties also significantly interfere with the public’s health, safety, peace, comfort, and convenience.”

The declaration, which is included as an exhibit in each lawsuit, was given immediate effect. Copies of the lawsuits and the full declaration can be viewed here.

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