Council approves move to study property problems caused by LLCs
“We are talking about landlords who own properties in some of Milwaukee’s most vulnerable neighborhoods, and they have been gaming the system”
The Common Council today overwhelmingly approved legislation directing the Special Joint Committee on Redevelopment of Abandoned and Foreclosed Homes the task of evaluating and making recommendations for addressing problems caused when properties are owned by LLCs—limited liability companies.
The approved substitute resolution (see attached) – authored by Alderman Terry L. Witkowski – aims (in part) to look at landlords who use LLCs to hide their identities specifically to avoid paying delinquent property taxes and code compliance fines for their properties. The Special Joint Committee will take a deeper look at the problem and recommend new laws and solutions to address the issues.
Alderman Witkowski said the issue is multifaceted and affecting neighborhoods already facing serious challenges. “We are talking about landlords who own properties in some of Milwaukee’s most vulnerable neighborhoods, and they have been gaming the system,” he said.
“By purchasing properties in their LLCs’ names, landlords try to avoid paying delinquent taxes and fines for their properties, all the while collecting rent from tenants who are forced to live in squalid conditions,” Alderman Witkowski said. “Eventually, the city is forced to foreclose upon the property for nonpayment of taxes, after which it goes up for auction on the cheap…and many of those same landlords start the whole cycle over again, buying those foreclosed properties for cash.”
The resulting neighborhood neglect has caused serious problems throughout the city, Alderman Witkowski said. “It is time to put an end to this game, this vicious cycle that is hurting Milwaukee,” he said.
The file was recommended for approval on a 5-0 vote by the Judiciary and Legislation Committee on January 9.
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