Faceless Behind A Mask: A Nation’s Landlords Dodge Responsibility

blurry image of two masks and a face
Mask photo by Mike T is licensed under CC BY-NC-ND 2.0
Tenants and city councils struggle to identify 'slum landlords' and hold their feet to the fire.

The Mask? A U.S. legal entity called a Limited Liability Corporation (LLC) is becoming a favourite tool of slum landlords. LLC laws prevents the owners from being sued over their investment in one or more rental buildings.

A feature of this ownership structure can make it difficult to find anyone responsible for the rental building. ‘Anyone’ includes tenants, desperate for essential repairs to be made, and municipalities responsible for the health and safety of its individual citizens and the community as a whole.

LLCs provide legal protection like a corporation, and are particularly attractive because they provide the tax benefits of a partnership.They are becoming so popular that when an LLC’s business strategy is to maximize rents and dodge repairs, these ownership forms become a significant impediment to a community’s development and the maintenance of affordable housing.

Worse, an LLC owns an LLC owns an LLC  (and so on). Tenants and municipalities laboriously peel away one mask only to find another behind it.

These days, more and more states are looking for ways to legislate transparency and sway the owners of LLCs to exercise community responsibility. There is pushback against these state initiatives, which comes as no surprise. Read more in Pew Charitable Trusts: States Try To Ferret Out Unnamed Landlords