Ald. Terry Witkowski
Press Release

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”

By - Jan 18th, 2017 04:51 pm

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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2 thoughts on “Council approves move to study property problems caused by LLCs”

  1. That will be the day says:

    Who are we kidding? You’ll study the issue and not do a thing. We can lie, cheat and steal and you’ll never turn your back on us rich folks.

    http://www.jsonline.com/story/news/local/milwaukee/2016/12/18/landlord-games-baird-executive-fails-disclose-rental-firms/95478892/

  2. Mama says:

    The rental owners lobby is pretty powerful. Puh-lenty of city landlords who operate as LLCs donate a lot of money to local election campaigns. I find it doubtful that this will be shut down. Plus, it would take a change in state law to make it illegal for homes to be purchased by a LLC. Good luck getting our legislature to enact that law anytime soon. And if the city tried to pass a municipal ordinance along those lines, they’d be sued left and right.

    Yes, the scams suggested in the press release do happen all the time. But I agree with That will be the day – the issue will be “studied” and nothing will be done – once the rental property lobby starts coming around.

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