Around Louisiana: An Attempted Landlord Crackdown in Shreveport Residential Multi-Family Rentals
Landlords Face Scrutiny and Possible Citations Over Blight in Shreveport, Louisiana
The Stow Firm actively monitors real estate, property, and construction legal issues and events throughout the State in our Around Louisiana blog articles. Today, we explore the City of Shreveport’s attempts to regulate or oversee what it views as problematic multi-family residential rental units and landlords.
Understanding Shreveport's Rental Registration Property Program
In response to apparently poor conditions at some multi-family rental buildings, in December 2022, Shreveport implemented a Rental Registration Property Program. Per the Shreveport-Caddo Metropolitan Planning Commission, “[p]ursuant to Ordinance 195 of 2022, no individual, corporation, business trust, estate, trust, partnership or association, may rent, or offer to rent, to individuals or households any rental dwelling unit until the residential rental property has been registered and a Certificate of Registration has been issued by the Office of the MPC. Residential rental properties include any single-family, two-family, triplex, fourplex, manufactured homes, townhome, condominium, and/or apartments being offered to rent.” Despite requiring these rental units in the parish to be registered before being offered for rent, compliance was minimal and the program was altered to extend the deadline by three more months, to March 31, 2024. According to the Advocate, as of August 2023, only about 200 apartments had registered–less than 1% of the eligible rentals.(1) The registration program was amended to exempt landlords with only one to two properties. The goal of registration is to provide the City with owner information and for landlords to also be required to provide information for a local designee or property manager.
For more information about the Rental Registration Property program, visit: https://www.shreveportcaddompc.com/about-us/services/applications/rental-registration.
The City's Escalation: From Registration to Criminalization?
In late 2023, the city announced its plan to cite the landlords of some multi-unit residential rental buildings for ignoring local housing ordinances involving building upkeep and rental unit standards. This escalation, involving the potential for fines or even jail time, was described in the local paper as: “Struggling with ways to improve living conditions at a number of apartment complexes around the city where property owners are difficult to find and unresponsive to demands, the City of Shreveport plans next to try bringing cases against them on charges of criminal blighting of property in the first part of 2024. The city administration hopes bringing local ordinance enforcement to the level of criminal prosecutions will send a message to slumlords [that] the city is serious about forcing them to put their properties in order.” (2)
LLCs and Property Ownership Challenges
This extreme near-criminalization of landlords was brought about because the City claimed that it could not ascertain the true owners of delinquent properties due to the use of limited liability companies and the unavailability of on-site management with authority to make repairs or correct issues. A limited liability company, otherwise known as a LLC, is a type of business structure that is permitted by statute in Louisiana (and in other states). In Louisiana, the requirements for LLCs are contained in Title 12, Chapter 22 of the Revised Statutes (RS 12:1301 et seq.) In general, a LLC is a business organization structure that protects its owners, called members, from personal liability for the debts of the business. The profits or losses of an LLC may be passed on to the individual LLC members, not actually taxed to the LLC directly. In Louisiana, LLCs must provide the name and address of a registered agent (usually a Louisiana resident or law firm) who can accept service of process for the company. See RS 12:1308.
Last month, the Shreveport City Attorney Marcus Edwards announced that the City’s initial attempts to issue citations to the targeted landlords had failed. Specifically, the City “attempted service via long-arm service of the owners of the property and the certified mail returned undeliverable” despite being “sent to their registered address.” This seems to suggest that these landlord LLCs have failed to follow the LLC requirements outlined in Title 12 or the City has failed to correctly ascertain the correct registered agent for these landlords.
Can Shreveport Property Managers be Held Responsible for City Blight Violations?
In response to this failure, Shreveport intends to serve these citations on the management companies instead. According to City Attorney Edwards, "[b]ecause [city officials] were unable to serve the owner, the next step is going to be action against some of these property management companies. That’s what we're now trying to get to the bottom of — trying to figure out who are the property managers or manager, because they're going to be local obviously, and then directing that same citation to them.” Shreveport claims that the city blight ordinance is written in a manner that allows “the owner or anyone in control of the property” to be held responsible. It remains to be seen if a management company, or individual property manager, can truly be held responsible for conditions or elements of a property that may be outside of their contracted control.
The Stow Firm represents landlords, property managers, and investors in a variety of real estate, government, and landlord tenant issues in Shreveport and across Louisiana. If you find yourself or your property being targeted by the government for blight citations or other ordinance violations, get in touch to see if we can help.
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