LLC Bill Passes Out of House
For the first time in 20 years, the RPOA of Michigan’s bill to enable LLC’s to represent themselves in court has passed the first hurdle of the legislative process. House Bill 4463 was passed out of the Michigan House on Wednesday, September 27 and moved to the Senate Judiciary Committee.
The bill addresses an issue that arises in some local district courts during landlord-tenant eviction cases. In many cases, local judges will not allow a member of an LLC to represent the LLC in court, requiring the LLC to retain counsel. Simple eviction cases are tantamount to small claims court cases where attorneys are excluded. More often than not in these cases a single member LLC or “mom and pop” LLC are evicting an individual or small group of individuals on one lease.
The cases are typically for possession only or possession and a small amount of money. In fact, a large percentage of these cases become default judgments due to the tenant’s absence at the hearing. For most of the remaining cases, the tenant often admits guilt and the case proceeds in favor of the landlord. The use of an attorney is an unessential expense that simply adds to the cost of evictions and the cost of housing overall.
The RPOA –M has spent the last several years negotiating a version of the bill that addresses the concerns others have had about allowing LLC’s to represent themselves in district court. HB 4463 addresses those concerns by limiting the cases to those possession case or cases equal to or less than the small claims limit and to single member or husband/wife member LLC’s.