Feb 23

On May 23, 1986 the City of Milwaukee removed tenant responsibility from the code.  The removed section was based on Wisconsin §704.07(3)(a)

Continue reading »

Feb 13

The Wall Street Journal Reports on the dismissal of Manger v. Gallagher:

How far will the Obama Administration go to impose racial lending quotas for banks? Far enough to lean on St. Paul, Minnesota to deny the Supreme Court the chance to rule on whether the government’s actions are legal.

Feb 12

The city of St Paul withdrew their petition to have the US Supreme Court intervene and stop the case over their alleged discriminatory housing code enforcement. This, less than three weeks before the Court was to hear oral arguments.

From an article in the St Paul Star Tribune:

[The plaintiff-landlord] did not respond to requests for comment, but his lawyers have argued in court that he and other inner-city landlords were targeted for aggressive code enforcement primarily because they rent to low-income and minority tenants in aging neighborhoods that some would rather see gentrified. His lead attorney, John Shoemaker, said the effect of the city crackdown was to shut down properties, increase costs and limit the supply of affordable housing in the Twin Cities.

There is a lively discussion of this on Ademocracy, a St Paul based political blog.  If you are interested in the case, you should peruse that discussion

After reading the amici briefs it was clear that St Paul could not be allowed to win at the Supreme Court. To have won would have undone 40 years of Fair Housing and Equal Rights legislation and court cases.  I’m pretty sure someone smarter than St Paul’s current legal staff sat them down and explained all of this to them.

St. Paul now boasts that “it will be successful in defending its code enforcement actions in any court” 

Hmm, if that is so then why did St Paul try so hard to avoid trial by going to the US Supreme Court after a Court of Appeals decision to let the case go forward?  Remember that this case is in its eight or ninth year and has already had a major impact on St Paul’s budget.

Ironically St Paul is now having listening sessions with landlords to try and work out arrears of contention.  Perhaps they should have taken this approach a decade ago.

I predict a settlement is imminent.

Hats off to Frank and the others for having the fortitude to stay the course for all these years.

Feb 07

If you have been a reader for a while you are aware of the St Paul landlords’ case against their city’s code enforcement department.  The case is now at the US Supreme Court.  Here are a few updates and articles:

The following article is from RoofLines

At issue in the case, Magner v. Gallagher, is whether the Fair Housing Act prohibits the full range of discrimination in housing that many Americans still face in the 21st Century.

The case comes out of St. Paul, Minnesota, where a group of landlords who rent affordable homes to racially diverse tenants say the city is driving them and their tenants out of town in favor of less affordable and less diverse owner-occupied housing. The Supreme Court took the case to decide, not whether these facts are true but, rather, assuming they are true, whether the city’s alleged conduct violates the Fair Housing Act absent proof that the city purposefully intended to exclude people of color from its borders.

The Supreme Court Briefs and commentary are posted on Ademocracy

II. Factual Background


This case arises from the City’s adoption of a policy to nonetheless limit its stock of private low-income housing, including by forcing respondents to abandon or sell the housing they provided, in favor of owner-occupied housing. The City pursued that specific policy through the selective and often illegal application of its housing code in a manner designed to produce the closure or abandonment of private low-income rental properties either directly, through condemnation, or indirectly, by rendering the maintenance of the properties uneconomical.

The City’s actions included targeting respondents’ properties for “code to the max” and “forced sale” treatment, falsely labeling those properties as “problem” and “distressed” housing, charging those properties with false code violations, failing to provide respondents with timely notice of claimed code violations, and condemning the properties without a sufficient basis.


Feb 05

Late fees are an important tool to get your rent in before the mortgage is due.  But what is a reasonable or legal late fee?

There is a WI case that found $50 on a $625 rent was reasonable, THREE  & ONE CO. v. GEILFUSS, 178 Wis.2d 400 (Ct.App. 1993) – yes this is the same case that found letting the cat use the house as a litter box constitutes waste. Again, this one of those cases that every owner should keep in their  “toolbox”

As far as the per diem (per day) late fee, that may be another story.  We have never used these, but many owners do.

The Hud “Model Lease” does contain a provision of $5 after the 6th and a dollar a day in paragraph 5.  However private owners use higher per diem rates.

Some tenant advocates here and elsewhere are attacking the per diem late fees on grounds that they run afoul of usury laws. From their prospective for example your late fee has an APR of something like 900%. Assume your tenant misses January’s payment and doesn’t cure it for a year. They would owe $7280 on $800 debt.

The problem with a single fee is once the 5th comes and goes, what  incentive is there for tenants to cure the problem quickly after receiving the late fee other than eviction?

After much consideration our company is considering moving from a flat $30-50 fee to a two step fee. The first late fee that posts after the close of business on the 5th is around 80% of current late fee, with a second late fee posting on the 11th totaling 150% of current late fees

preload preload preload