Apr 19

 

My wife provides training for professional event decorators, and those who wish to become one through her business, the Event Decorating Academy.  Most of the classes are held at a facility in Hollywood, FL.  However occasionally she does seminars elsewhere. I generally go along on the road trips to lift heavy things.

Earlier this month she held a week long session in Ocho Rios, Jamaica.  We had quite a few students from Jamaica and nearby islands such as Haiti as it is hard for them to get visas to come to the US. ‘

Typically the first stop when doing a tour date is at the local Home Depot or Lowes to pick up pipes, conduit and assorted fittings used to make the frame work for fabric and balloon decor.  There are no Home Depots in Jamaica, but there is a large chain of True Value Building Centres – so we were set.

We were in for quite a culture shock at the local Jamaican building material supply store.

Jamaica_True_Value

 

12 pieces of PVC pipe and two fittings cost us $7,748.91.  Fortunately those were Jamaican dollars which equal $71 USD.  Our driver mentioned this was the first time in his career he was asked to take an American to a building supply store.

Jamaican_HammerFriendly people, but clearly they do not have an equivalency of  OSHA, or traffic cops for that matter as there was a lot of chaos both at the building center and on the roads.

We got back to the upscale resort where the seminar was being held and realized that our staff forgot to pack a hammer.  We asked the hotel if we could borrow one.  “No problem mon” said the head of maintenance as he handed us his hammer. Upon further inquiry this was the best they had.

Moral of the story is we do not realize how good we have it in the States until we venture outside to do something other than a tourist trip.  Boy, I missed Home Depot that week.

Apr 18

A reader of ApartmentAssoc Yahoo Group asks:

A tenant killed himself in an apartment in March. He paid March rent. Is under lease. His mother wants his sec. dep. back. Am I legally obligated to give her the sec. dep? I couldn’t get a new tenant in time for April.

Always look first to the statutes:

§704.165 (1) 

(a) Except as provided in par. (b), if a residential tenant dies, his or her tenancy is terminated on the earlier of the following:

1. Sixty days after the landlord receives notice, is advised, or otherwise becomes aware of the tenant’s death.

2. The expiration of the term of the rental agreement.

(b) Notwithstanding s. 704.19, in the case of the death of a residential periodic tenant or tenant at will, the tenancy is terminated 60 days after the landlord receives notice, is advised, or otherwise becomes aware of the tenant’s death.

(2) The deceased tenant or his or her estate is not liable for any rent after the termination of his or her tenancy. Any liability of the deceased tenant or his or her estate for rent under this subsection is subject to the landlord’s duty to mitigate damages as provided in s. 704.29 (2).

(3) Nothing in this section relieves another adult tenant of the deceased tenant’s premises from any obligation under a rental agreement or any other liability to the landlord.

(4) A landlord under this section may not contact or communicate with a member of the deceased tenant’s family for the purpose of obtaining from the family member rent for which the family member has no liability.

Apr 12

A reader of the ApartmentAssoc Yahoo Group asks:

Has anyone ever had tenants sign a waiver that would prohibit them from suing a landlord in case of a fall?

In the process of creating such a provision you could make your entire lease unenforceable.  Below is the language from Chapter 704 of the Wisconsin Statues.  ATCP 134 contains similar prohibitions.

§704.44  Residential rental agreement that contains certain provisions is void. Notwithstanding s. 704.02, a residential rental agreement is void and unenforceable if it does any of the following:

(7) Imposes liability on a tenant for any of the following:

(a) Personal injury arising from causes clearly beyond the tenant’s control.

Of course you can point out they are liable for failing to do maintenance they agree to under a lease, such as shoveling walks and keeping the yard free of clutter, as long as the wording in your lease cannot be read in a manner that violates the above statute.

Mar 25
Recently AASEW president Joe Dahl created a small firestorm over an invite he sent to a number of property owners, some AASEW members, some not; for a private fundraiser he is hosting for a candidate for the recently vacated 15th Aldermanic District seat, formerly held by Willie Hines.

If you haven’t followed the race here is a Journal overview.  Election 2014 – Five to face off in aldermanic primary to replace Willie Hines

Some members I’ve heard from felt the AASEW has become too politically involved in general, others felt that the candidate Joe is supporting is bad for our industry and still others felt everyone running in the 15th  are liberals and therefore bad for our industry and we should support no one.

Is this fundraiser an AASEW event?  Unequivocally no.  This is Joe’s private fundraiser, not an AASEW sponsored event. Neither AASEW funds nor staff time was used in any part for this fundraiser.  Go if you wish, stay home if you wish, support someone else if you wish or support no one.   The AASEW has a PAC fund that could legally support a candidate, but that is not being used here nor did Joe ask that the PAC become involved in this race.

Is the candidate Joe is supporting a liberal?  Most likely (I do not know nor have met the guy.) If you believe there is a conservative leaning, pro housing aldermanic candidate living near 27th and North you probably also believe in the Easter Bunny.  Pro housing?  In an area that 70-85% of the residents live in rental housing, if you do not support and accept rental housing you cannot say you are pro housing.

Let’s face it, whoever is elected to the seat will be more politically liberal than most of our members.

Does that mean we should have no interest in the race?  Absolutely not.  Some candidates will be less harmful to housing and us than others.  I found the former Alderman from that district, Willie Hines, to be a thoughtful and fair person in some pretty heated legislative debates. While his general views were quite different than mine, he gave us a seat at the table and let our concerns be voiced.  This generally resulted in less intrusive legislation and more effective than the original proposal notwithstanding some pretty strong opposition on the other side.  Our industry would be served best by another person like him.

Is Joe wrong to support this candidate?  I’m know some people with strong feelings either way will not move from their position. That is the way it should be.  Here is my view:

Again, no.  Just because Joe has taken on the arduous task of AASEW president doesn’t mean that he foregoes his rights to support whomever he wishes.   Ask Tristan, ask John Savage, ask Dave Domers, ask me, about how much effort being president took.

We have had board members and presidents who had leadership roles in the Republican party.  We have also had board members who were leaders in the Democratic party. Those of both political orientation represented the Association well.   My company, Affordable Rental Associates, LLC, has had Democratic State Representatives and a Democratic Senator as management clients.   What I learned from this is landlords are landlords and that typically supersedes any political affiliation.

Since becoming president Joe has had one private fundraiser for the Republican Senator who was instrumental in the passage of  ACT 76 and now this private fundraiser for a perhaps liberal candidate in a certainly liberal district.  I think that shows Joe’s efforts are focused towards the industry and not towards a political affiliation.

Joe knows this candidate personally as a former tenant of his.  Joe recently interviewed the candidate  and questioned him on issues that are important to our industry.  Joe believes the guy understands the challenges we face and how certain policies in the city suppress investment.  Joe is a smart, right minded guy.

If you feel that strongly that Joe’s personal political choices are wrong and more importantly wrong for the Association, vote him out of office in November. But I would caution you to find a suitable replacement first.

I see what Joe does for the Association on a closer level than most members.  I fully support him and truly consider Joe an effective and engaged president.  I have been on the board all but 2 of the past  25 years so I have a commitment to the group and would be one of the first to sound the bell if I thought we were headed in a bad direction..   To his credit Joe got us the Home Depot and Sherwin Williams discounts that I never achieve in my decade in the decade of being president.

Who should the Association support in this race?  No one.  We really can’t.  I would love to have the Association host a candidate forum to find out where all the entries in this crowded race stand, plus to give all the candidates an opportunity to learn about our challenges.

Should AASEW members be politically active? Absolutely.  Even if the candidate you support does not get elected your involvement has furthered the debate on our issues  and has shown all the candidates  insights into the challenges our industry faces on a regular basis.

We are one of the largest economic groups within the city.  In aggregate rental property owners in the City of Milwaukee alone spend nearly $100 million in repairs and improvements each year.  We support the City of Milwaukee with $226 million in property taxes, $26 million in special assessments and $32 million in sewer and water– each year!  We employee thousands directly or indirectly, many of whom probably would have a hard time finding stable work .  We are a significant positive force in the local economy.

Yet, despite all of our contributions, we are beaten like a redheaded stepchild by the city of  Milwaukee.

Mar 25

Thomas Russom writes on the ApartmentAssoc YahooGroups email list:

At our  recent monthly meeting [of the Apartment Association of SE WI] Attorney Doug Pessefall presented an overview of the “Recent Trends in Wisconsin’s Property Tax Assessment Process”. Tim Ballering has retained Attorney Pessefall to challenge the City of Milwaukee assessments of sales of foreclosed properties. We all know that there a huge difference between the assessed value of a foreclosed property and its market value reflected in the actual sale. Tim Ballering has a compelling argument that if the property cannot be sold, for cash, at the assessed value, then THE ASSESSED VALUE IS WRONG.

A past member of my church showed up for visit this past Sunday. He is a head assessor in the City of Milwaukee in charge of educating other assessors. I asked him what was the reason for these huge differences in the assessed value of the foreclosed property and the actual market sale of the property.

He replied, ” THESE  SALES ARE NOT NORMAL, they are motivated sales. Banks want to get these properties off their books so they are motivated short sell the properties. If the banks would have kept these properties on the market for a longer selling period of time the sale of the property would have met the burden of the assessment.”

This sounded to me like the liberal nonsense of “if we believe it then it is true” regardless of reality. I pursued the conversation further by telling him of a rural farm house I had to bulldoze. We did not initially follow up on a rehabber offer to purchase the house because a member of the family could not bear to have Grandma’s house turned into a  rental. The house followed the enviable fate of abandoned property- animal entry, vandalized and KOed by a weather event., but that took two years to occur. I said to him” You know that that process occurs much faster in the City”. He replied, “Yes,I know. When they( foreclosed properties) are heavily vandalized they have no value.” When the City’s plan to sell foreclosed properties to only new first home owners and not to rehabbers does not work,they will  beg for bulldozer dollars from the state (taxpayers on the hook) and blame the Governor for not caring about Milwaukee.

Let’s take your (or someone else’)  non foreclosed, non vandalized house in the City of Milwaukee.   Could you sell it for cash or conventional mortgage for the assessed value?  Very unlikely and therefore your assessment is excessive.

Certainly the number of foreclosures has an impact.  In fact Milwaukee’s former chief assessor, Peter Weissenfluh, had won an award from the International Association of Assessing Officers for an article he wrote on how foreclosures suppress the value of nearby  non foreclosure properties

A former long term board member began a slow process of selling off his properties one at a time using a few different brokers.  A smart, knowledgable, diligent guy.  All of the properties were well maintained and occupied.  He was in no hurry to sell.  He was trying his best for top dollar.  Of the sales I am aware of the details it appears he received 30-55% of assessed value.

Of the properties I bought in 2012, one third of these properties were not foreclosures and were exposed to the market on MLS for months.  I did not know the seller, nor the listing broker.  The average price I paid for these was 19.05% of assessed.

The two thirds were indeed foreclosures.  None of the foreclosures we purchased seriously vandalized, most had vinyl siding and vinyl windows, with good roofs etc.  In general they needed little more than had they been vacated by a three year tenant.  Most were ready to rent within a couple weeks.  We paid on average 24.95% of assessed value or more than we paid on average for the non foreclosures

The argument made by the city that the banks were in a hurry to sell has a hole in it as many of the foreclosed properties I bought had been listed on MLS for months.

The city also works hard to hide the truth in valuations.  Of the properties we purchased in 2012 only one appears in their listing of sales data that is posted at:http://assessments.milwaukee.gov/mainsales.html

One would expect that a listing such as this would show all sales or have a disclosure that states that it only includes those sales that supports their assessments.  But it does not.

In 2011 a total of 33 one and two family properties sold in the 12th District.  The average sale price was nearly 35,795 less than assessed. Nearly a$1.2 million less for just 33 sales.   Only two of those sold at or slightly above assessed.  In 2010 it was 38 sales and an average of 26,943 less than assessed value.

The only areas that sales consistently were sold for assessed or more than assessed were the Eastside and one or two assessment neighborhoods in Bayview. This means the most affluent neighborhoods are being subsidized by owners of lower valued properties.

So again I will state, if you could not sell your property within 90 days for cash or conventional financing at assessed value you are being overcharged. 

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