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Maple Heights, Cuyahoga County Treasurer or RITA: Who has a Higher Level of Compliance?

Maple Heights Musters 68% Compliance

According to the 2010 Census Data there were 2,502 rental units in the city of Maple Heights. The City requires rental registration of these properties. As of April 4, 2014 there were 1,704 rental units registered with the city. That is 68.1%. Landlords currently can register before January 1 of each year and have the $75 fee waived or pay the $75 between January 1 and March 31. Starting April 1st the fee triples. (More information about being a landlord in Maple Heights can be found here.)

Cuyahoga County Treasurer Musters 83% Compliance

The collection rate for property taxes (by the county) is 82.8% for taxes collected in 2013. At the informational meeting Toni Jones shared that the City’s share of the 9 million in back taxes owed on Maple Heights properties is $1.6 million. About 56% of that 9 million goes to Maple Schools, 17% to  Cuyahoga County and the remainder to the Cuyahoga County Public Library and Metroparks. (Learn more about your property tax bill here.) In 2013 The City received $1.9 million in property taxes.

RITA

Mayor Lansky claimed that RITA owes the city 2 million in uncollected income tax and an additional 2 million in penalties and fees. According to RITA, there is  $2.4 million (through May 30, 2014) in taxes, interest and penalties that remains to be collected for the City of Maple Heights. This number includes $688,000 not yet in collections, $941,000 in collections (of which $424,000 are being paid through payment plans), $696,000 in litigation, and $90,000 beyond the 3 year statute of limitations. The amount of tax owed in various categories verses the penalties and interest was anywhere from 15% tax-85% penalties and interest to  to 48% tax, 52% penalties and interest. So taking a rough guess I’d say of that 2.4 million “owed” to us by RITA  only about 1 million is taxes, with the remainder being penalties and interest. In 2013, the City of Maple Heights received $6.5 million in income taxes collected by RITA, with almost an additional half a million collected directly by the city. 

Lost Revenue Due to Un-Registered Rental Units

At the end of last year (2013) City Council passed legislation tripling the $75 fee for late rental property registrations (existing rental properties that have failed to register by the March 31st deadline). Based on the numbers of rental properties from the 2010 Census (2,502) and the number of applications currently on file (1,704) there are 798 rental units that have not been registered with the city. If these are all separate units  the city could collect $225 in fees per unit, a total of  $179,550. More recent data estimates that the number of rental units has only gone up since 2010.

The fee schedule for multiple units in one building is different: $75 for the first, and $25 thereafter. Since it is pretty obvious that an apartment building is filled with rental units the building department should have no problem ensuring that all of the apartment and multi-unit buildings in the city are registered.  

Who Can We Blame?

Mayor Lanksy threatened to sue both RITA and the County, at the March 13, 2014 informational meeting about the May income tax levy, for their “poor” job of collecting the taxes owed to the City of Maple Heights but the City has a 68.1% compliance rate for rental property registration?!

The City cannot blame MBIS for the 68.1% compliance rate of rental property registration as this is still handled “in house”. The “slum lords”, as the Mayor likes to call them, could be blamed, but people will break the law when they think they can “get away with it.” This brings us back to the city’s ability to enforce its own laws. It is also likely that there are rental properties where the landlord is oblivious to the rental registration requirements.  For example: mom and dad passed away, the child(ren) inherited the house and either can’t sell the home or decide to make some extra money by renting the property. It looks like the City needs to start running a tighter ship before pointing fingers at RITA and the County about their collection rates.

What residents can do:

Rental properties can be reported to the building department at 216-663-4094. For the landlord to be cited for noncompliance the property must be occupied. Residents can report both suspected rental properties and new tenant(s) in an existing rental property because the landlord must report the change to the city.

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