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A Flathead County renter identifying her landlord as the wife of U.S. House candidate Rob Quist says she had to move this spring to make way for Quist, and is now fighting to get her full deposit back.

Stephanie Michalzik said she was told the Quists would be moving into her apartment in May. A single mother, Michalzik had hoped to renew her lease, but was told the couple needed the space.

Michalzik’s story comes as Quist, a musician turned Democratic candidate, tries to distance himself from the multi-unit rental property. The candidate has reported no income from the rentals. Payment records provided by renters show rental payments to Quist’s wife, Bonni, for the past three years.

Property tax records make no mention of living quarters at the site, listing four outbuildings and no dwellings. The distinction matters because the Department of Revenue generally recognizes apartment units as more valuable than barns, regardless of zoning. Rental properties typically generate more tax dollars than outbuildings.

Quist’s campaign issued the following statement from the candidate:

“Bonni and I paid our fair share of taxes this year and every year. One of the reasons I got in this race was to go to Washington and fight for tax cuts for people in Montana who work for a living, not transplanted New Jersey millionaires,” Quist said.

Flathead County District Court records show that Quist has let several years lapse before paying his property taxes for individual years, the longest stretch being nine years, from 2007 to 2016. Quist is current on his taxes. Quist’s New Jersey millionaire remark is a reference to his Republican opponent, Greg Gianforte, who moved to Montana 20 years ago and launched a successful software business.

Last week, Quist explained his long history with the property and told The Gazette there were no renters. He did so as his campaign staff attempted to end the recorded interview.

“The thing is, we used to, for many years we had it as an event center,” Quist said. “We quit doing that. We haven’t done that for a long time. So, my son’s living there. That’s not a rental property. It’s just something that’s kind of family owned.”

Michalzik said there were two rental units occupied this month, in addition to the unit occupied by Quist’s son, Guthrie. Leases provided to the Gazette for Michalzik and three other renters put the monthly rental income at $2,450 a month. That’s rental income Quist hasn’t listed on the Schedule A of this U.S. House financial disclosure form required of candidates. The candidate also hasn’t listed rental income on his tax filings for 2015 and 2016, according to tax documents provided by the Quist campaign to the Associated Press.

Speaking to the media this week, Quist has further distanced himself from the apartments, no longer calling them “family owned.”

“This is a property that I am not an owner of. So for The Billings Gazette to bring this up, this is out of my hands. I don’t own that property,” Quist told the Bozeman Chronicle editorial board. “That fact that they’re saying I don’t show income from it, I wouldn’t. I don’t get income from that property.”

Leases provided by renters to The Gazette list Quist’s wife, Bonni, as the landlord. Michalzik and the other renters say they made their payments directly to Bonni Quist, whose income is reported with the candidate's on House financial forms and tax returns.

“She makes $950 a month out of the one I was in,” Michalzik said. “And there are units she’s getting $750 each for.”

Michalzik came forward after having trouble getting all of her deposit back from Bonni Quist, who issued Michalzik a $200 payment May 5, but kept the remainder. When the payment to Michalzik didn’t clear Bonni Quist’s personal account at Glacier Bank until May 11, Michalzik said she’d had enough.

Property in question

The Gazette asked that the Quist campaign provide records of the rental income being transferred from Bonni Quist to Quist’s daughter. Those transfers would confirm Rob and Bonni Quist weren’t profiting from the rentals. The campaign refused.

Though she doesn't hold title to the property, Bonni Quist has power of attorney, which would allow her to conduct business as a landlord or on behalf of the property owner. The Gazette obtained leases and checks from renters, showing money going to and from Bonni Quist's account. The Gazette asked for receipts or records on several different occasions during the past week showing the rental money went to the property owner, Halladay Quist. The campaign refused.

The Gazette also asked to speak with Halladay Quist, the property owner, and the campaign refused, saying that candidates' children were off limits in political reporting.

The title for the property Rob Quist last week described as “family owned” has been transferred between family members more than once, most recently in 2013 when the title was twice transferred between Quist’s wife and daughter, Halladay, with Bonni Quist retaining power of attorney and Halladay finishing the transactions with the title.

Flathead County property records show those transactions between mother and daughter occurred, a few months after a foreclosure notice was filed against Rob and Bonni Quist to collect $348,214 in debt. The couple had missed several mortgage payments. Records indicate all property is currently in the clear. 

The Quists' intention was to divide their property into separate lots, with some real estate being sold to satisfy the couple’s debt. In March, Quist told The Gazette, “Our whole goal is to sell the ranch house and 10 acres and move over into the old barn."

In addition to the apartments, the 9.19-acre property includes three other buildings, none of which are listed as dwellings on state tax records. Michalzik and one other renter say one of the other outbuildings has been converted to living quarters, also. Quist earlier told The Gazette that in the 1990s he began converting the barn to an event center and three apartments.

Department of Revenue officials told The Gazette the state relies on records of required permits for electrical and septic work to determine when improvements are made to a property. Those permits are required by state law. Tax assessors monitor those permits looking for changes that signal an increase in a property’s taxable value, said Mike Kadas, DOR director. These permits are required by law, but it’s up to the state to notice the changes.

“We closely track building permits and so when there is a building permit drawn we will put that on our list and then, usually after the construction, will go and look at it and inspect it,” Kadas told Lee Montana. “If people in the neighborhood tell us there’s construction we definitely go look, put it on a list. We don’t get to this tomorrow.”

There were no Quist property permits for plumbing or electrical work on file with the state Department of Labor and Industry. DLI keeps the records for only seven years, leaving open the possibility that the Quists had state-required permits that fell off the books. The Quist campaign says Rob Quist had the necessary permits for the apartments he constructed. The Gazette asked for them, but the campaign did not provide them.

Flathead County handles septic permits, which are required for commercial, single-family and multifamily septic systems. The records start in 1969. There is a 1999 septic permit for Rob and Bonni Quist to accommodate the barn apartments. That permit would make the apartments about 18 years old.

Tax issues

Ed Caplis, DOR’s tax policy and research director, said any errors in how the apartments are recorded will be corrected in January and reflected in future taxes.

Whether back taxes are collected depends on the Flathead County Commission, said Adele Frantz, Flathead County Treasurer. The Department of Revenue will make a recommendation if tax information hasn’t been captured.

It wouldn’t be until after the May 25 election for U.S. House that the Flathead County Commission decides whether to pursue back taxes on the Quist apartments, said commissioner Phil Mitchell. Flathead County has a real problem with under collected taxes, particularly in rural areas where the permitting trail isn’t as strong as it should be, Mitchell said. 

It’s difficult to pay for public services when properties aren’t taxed at their full value, Mitchell said.

Lee Montana reporter Jayme Fraser contributed to this report. 

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Agriculture and Politics Reporter

Politics and agriculture reporter for The Billings Gazette.