Dec 12

SB 179 was signed by Wisconsin Governor Scott Walker today and is now Wisconsin 2013 ACT 76.

The legislation affects evictions, towing, municipal ordinances, responsibility for bed bugs and other insects.  Most importantly it allows for crime free lease addendums. I believe that the effective date for most of the statute is March 1st.

We will need to modify our leases to comply with or receive the advantage of some of the provisions.

Oct 16

Late yesterday the Wisconsin Senate approved an Assembly amendment to SB 179.  This law, which should be in effect around the first of 2014, makes sweeping changes to Wisconsin Landlord Tenant Law.   The bill was a combined effort of the Apartment Association of Southwestern WI, The Wisconsin Realtors and the Wisconsin Apartment Association.

The Legislative Council Memo on SB 179 puts the changes in fairly layman terms. AASEW past president Attorney Tristan Pettit worked extensively on the bill.  He will be providing information on the changes at the AASEW Fall 2013 Landlord Boot Camp.

Highlights of the bill taken from the Leg Council Memo are, and this is my analysis of what is important and not a legal opinion by an attorney because as you know I am Just A Landlord:

Restrictions on Local Ordinances [Sections 1 to 4]

Municipalities are currently prohibited from enacting or enforcing ordinances that:

  • Imposing a moratorium on eviction actions
  • Places certain limitations on what information a landlord may obtain and use for screening.

New law adds prohibitions against ordinances that:

  • Limits a tenant’s responsibility, or a landlord’s right to recover, for any damage or waste to, or neglect of, the premises that occurs during the tenant’s occupancy of the premises.
  • Limits a tenant’s responsibility or a landlord’s right to recover for any other costs, expenses, fees, payments, or damages for which the tenant is responsible under the rental agreement or applicable law.
  • Requires a landlord to communicate to the municipality any information concerning the landlord or tenants unless the information is required under federal or state law or is required of all residential real property owners.

Leases [Section 18]

Under current law, if a lease is void and unenforceable if it contains a provision that allows the landlord to terminate the tenancy of a tenant if a crime is committed in or on the rental property, even if the tenant could not reasonably have prevented the crime.  [s. 704.44 (9), Stats.]

The new law allows for Crime Free Lease Addendums as long as you include  a specified notice, in the lease agreement or an addendum to the lease agreement, of certain domestic abuse protections available under ss. 106.50 (5m) (dm) and 704.16, Stats.  The first of these sections prohibits a landlord from evicting a tenant because of the tenant’s status as a victim of domestic abuse, sexual assault, or stalking.  The second of these sections provides that a residential tenant may terminate his or her tenancy if the tenant or a child of the tenant faces an imminent threat of serious physical harm from another person if the tenant remains on the premise

 

Timing of return of Security Deposit with regard to evictions [Sections 15 and 16]

Under current law, if a tenant is evicted, a landlord must return the security deposit to the tenant, less any amounts that are appropriately withheld, within 21 days after the date on which the writ of restitution is executed or the date on which the landlord learns that the tenant has vacated the premises, whichever occurs first.  [s. 704.28 (4) (d), Stats.]

Under Senate Bill 179, If the tenant is evicted before that date, the landlord must return the security deposit within 21 days after the lease terminates or, if the landlord re-rents the premises before that day, the date on which the new tenant’s tenancy begins.  If the tenant is evicted after the termination date, the landlord must return the security deposit within 21 days after the date on which the landlord learns that the tenant has vacated the premises or the date the tenant is removed by eviction.

Service of Summons in Eviction Action [Section 22]

Allows courts to permit service of eviction summons by Certified Mail.  This will be on a county by county basis.

 

Allows LLC to appear by member or agent, rather than requiring attorneys [Section 21]

Under current law, in any small claims action, a property owned by an LLC must use an attorney or full time employee of the LLC

Senate Bill 179 eliminates the requirement that the employee be a full-time employee and also allows any small claims action by a member of the person, an agent of the member or an authorized employee of the agent.  This provision applies to all small claims actions, not only evictions.

Disposition of Property Left on Rental Premises After Eviction [Sections 9, 10 and 29 to 46]

Under current law, in Milwaukee County, the sheriff must remove and store the tenants’ property. In all other counties, the landlord may choose to be responsible for the removal and storage of the property.

Under Senate Bill 179, if a tenant is evicted and leaves property on the rental premises, the landlord is not required to store the property unless the landlord and tenant have entered into a written agreement which provides otherwise.  If the landlord does not intend to store personal property left behind by a tenant, the landlord must provide written notice either when the tenant enters into or renews the rental agreement. If this notice is provided, the landlord may dispose of the property, other than prescription medicine or medical equipment, in any manner that the landlord determines is appropriate.

Towing of Vehicles [Sections 5 to 8]

Under current law, a vehicle that is parked on a private parking lot or facility without the permission of the property owner may not be removed without the permission of the vehicle owner, unless a traffic or police officer issues a citation for illegal parking, or a repossession judgment is issued.

Under Senate Bill 179, a vehicle that is parked without authorization on private property that is properly posted may be towed immediately regardless of whether a parking citation is issued.

This final one is the most complex of the changes and requires some Administrative rules to be created.

There is also a change regarding Mobile Home Parks, but I am not impacted and therefore did not review them.

Oct 12

A reader of the LandlordAssciation Yahoo Groups asks what can they do about a Wisconsin tenant who harrasses everyone that moves in above them into moving.  The owner is using a generic lease that is silent on the subject.

In WI absent a conflicting provision in a lease, §704 applies.  In particular, for this problem §704.05 (3).

http://docs.legis.wisconsin.gov/statutes/statutes/704/05/3

704.05  Rights and duties of landlord and tenant in absence of written agreement to contrary.

(1)  When section applicable. So far as applicable, this section governs the rights and duties of the landlord and tenant in the absence of any inconsistent provision in writing signed by both the landlord and the tenant. Except as otherwise provided in this section, this section applies to any tenancy.

…..

(3) Use of premises, additions or alterations by tenant. The tenant can make no physical changes in the nature of the premises, including decorating, removing, altering or adding to the structures thereon, without prior consent of the landlord. The tenant cannot use the premises for any unlawful purpose nor in such manner as to interfere unreasonably with use by another occupant of the same building or group of buildings.

This also works to get rid of drug dealers etc if your lease does not have such a provision.  The fact that this is statutory probably gives you better footing for an eviction that simply being in your lease.

But before you rush off and draft a crafty lease of your own, remember that in Wisconsin if your lease violates one of the “Nine Deadly Sins” contained in §704.44, the entire lease is void as to the landlord enforcing it, but a tenant may enforce the remaining parts they like.

 

Oct 08

Our world is full of traps for rental owners… Fail to document the deposit return letter when was sent and a $300 deposit turns into $5,000 with attorney fees. Try to be helpful and not rent the third floor walk up to a person with a bad leg and pay $10,000 in a Fair Housing claim. Likewise tell the person with the companion dog that there is no way you are renting to a person with a Pit Bull and pay another ten grand. Give the tenant with a year lease a 14 day for disturbing the neighbors and breaking your windows or the tenant with a month to month a 5 day for the same reason and you will have to start your court case all over again. The list of pitfalls is endless and growing.

So how do you collect your rent, fill your vacancies and evict tenants without getting in trouble or having expensive do-overs?

You could throw your arms in the air and give up, but that probably is not the most effective approach. You can go through life figuring these are things that only happen to the other guy or to”bad” landlords. That works for a while until you become the other guy. You could hire an attorney to be along side you for every decision, but that probably is not financially effective.

The only viable answer is to know the laws that affect us well enough to either know the answer or know when you need help. You can venture out and learn as you go through your own mistakes, usually a very expensive education – there is a reason they call it the school of hard knocks, or you can get as much education as practical before you find yourself on the losing end of a legal battle.

I started with the learn as you go method. It cost me three grand in 1982 dollars when a tenant that snuck out in the middle of the night sued for their deposit. I lost because I did not know the law well enough to make the proper argument that the 21 days did not start on the day they skipped out, but rather on the day I found they moved. So my letter sent seven days after I found a vacant apartment was proper, but laws only work for those that know them.

My next education was a Bob Smith Landlord Tenant Law course at Marquette. Much more informative and less expensive. A couple of years later Bob condensed this into a full day landlord tenant law for the Association. It cost somewhere around two hundred dollars and included his book “Landlord Defense: Eviction and Collection manual” that had most of the forms needed. For those who want to stroll down memory lane, here is a Sentinel article with a really young picture of Bob:

The Association continues to offer the best landlord tenant law course out there. The Landlord Boot Camp gives you the fundamentals in a full day Saturday class. It is updated to include the latest law changes and includes a 100 page plus manual. It is presented by Attorney Tristan Pettit who writes the standard landlord tenant forms for Wisconsin Legal Blank. Tristan also worked on SB179 that may become law later this month. If it does pass he will have an insiders view on how this law can be best utilized by owners.

The next Boot Camp is Saturday October 26th 8:30 AM to 5;30 PM. Costs is $159 for AASEW members and $249 for non-members.

Learn more or sign up at:
http://landlordbootcamp2013.com/

Aug 02

Over on the ApartmentAssoc YahooGroups email list a member asks:

I heard that a very large rental company in the area has a Non Standard Rental Provision included with their Rental Agreements that lists each item to be cleaned and how much the tenant will be charged per item if they are not clean upon vacating.

Is this legal?

My reply:

Assuming WI and assuming we are talking about normal cleaning and not the house that was left with dog manure on the living room carpet:

There are actually  three questions presented:  First is it okay to charge a tenant for routine cleaning; Is a list of liquidated damages legal and if so; Can you take these charges out of a security deposit.

It seems pretty clear that you can have a lease that requires a tenant to return the property in the same state of cleanliness as they received it.  A list of charges for cleaning is probably legal.  BUT I do not believe you can take those charges out of a security deposit.  Therefore you would have to give them back the deposit and then sue them for the cleaning if they did not pay.

ATCP 134.06 (3) (c) “This subsection does not authorize a landlord to withhold a security deposit for normal wear and tear, or for other damages or losses for which the tenant cannot reasonably be held responsible under applicable law.

Note: For example, a landlord may not withhold from tenant’s security deposit for routine painting or carpet cleaning, where there is no unusual damage caused by tenant abuse.”

In other areas of the country liquidated damages in residential leases are legal and customary.  I believe that liquidated damages can be a benefit to both parties.  For example in FL the standard one year residential lease has a two months rent clause as liquidated damages for early termination.   There is no arguments over whether the landlord tried hard enough to mitigate the loss and there is no risk to the tenant that they could be on the hook for 11 months rent due to a job change.

This all changes if the cleaning necessary reaches a level of being “waste”.  Then you are entitled to double damages.  The case on waste is:

Three & One Company v. Geilfuss, 178 Wis. 2d 400, 504 N.W.2d 393 (Ct. App. 1993), the Wisconsin Court of Appeals found that tenants who allowed their cats to use the unit as a litter box committed waste. If waste is found the owner is entitled to double the damages pursuant to Wis. Stat. § 844.19.

Law on deposit withholding:

http://docs.legis.wisconsin.gov/code/admin_code/atcp/134/06/3?view=section

Liquidated damages

http://en.wikipedia.org/wiki/Liquidated_damages


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