HUD is reporting

Rental housing markets in major metropolitan areas of the Midwest region are balanced to tight, with rent increases reported in all major markets, continuing a year- long trend of strengthening conditions.

http://www.huduser.org/portal/periodicals/ushmc/winter11/USHMC_4q11_regional.pdf

(The linked document contains rental and housing stats for the entire nation)

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

There is a lot of frustration among owners with changes to the eviction procedures in Milwaukee County.  It seems something changes every month, all to the detriment of owners who just want to get rid of freeloading tenants.

The Apartment Association wishes to quantify what problems are of the greatest concern to owners then see what can be done to correct the problems.  Some will be reasonably easy to fix, some not so.

You can post your comments here or if you are a bit shy email me directly at: Tim@ApartmentsMilwaukee.com

I’ll start the discussion:

The law says ‘the court can’t issue a stay on eviction, without the tenant paying all past due rent.’ *  But the courts give out stays like neighbors give out candy on Halloween.

* Obviously laws are not that concise, what it actually says is:

799.44(3) Stay of writ of restitution. At the time of ordering judgment, upon application of the defendant with notice to the plaintiff, the court may, in cases where it determines hardship to exist, stay the issuance of the writ by a period not to exceed 30 days from the date of the order for judgment. Any such stay shall be conditioned upon the defendant paying all rent or other charges due and unpaid at the entry of judgment and upon the defendant paying the reasonable value of the occupancy of the premises, including reasonable charges, during the period of the stay upon such terms and at such times as the court directs. The court may further require the defendant, as a condition of such stay, to give a bond in such amount and with such sureties as the court directs, conditioned upon the defendant’s faithful performance of the conditions of the stay. Upon the failure of the defendant to perform any of the conditions of the stay, the plaintiff may file an affidavit executed by the plaintiff or attorney, stating the facts of such default, and the writ of restitution may forthwith be issued.

Fellow landlords

What services, tools, resource, supplies, innovations, changes in laws, grants, education, support from fellow owners etc. do you find lacking, unavailable, too expensive, too difficult to obtain, change etc.?

You get the idea…what do you see as the three, four or twenty things that would make your business more successful? Skies the limit. If it has to do with landlording or real estate investing throw it on the list.

Don’t worry if you think it is “doable” or not, Wild Ideas welcome and encouraged. But also don’t put off posting the more pedestrian needs and wants either.

You can leave comments, here or via private email to me at Tim [at] JustAlandord.com (makes sending the truly wild and innovative stuff easier for shy folks like me.)  I’ll compile the list for all to see.

Some will have readily available solutions that will be posted and shared, I’m sure.  Others are things our industry should be working on finding, changing, designing etc.

Some rather thought provocative comments below. Many of these were sent via email or posted on one of the list serves and reposted here as a central collection place. Please throw yours into the mix — Thanks Tim

I was looking over the web stats for the free online Wisconsin eviction forms provided by the Apartment Association of Southeastern WI

In the past 30 days 2506 notices were generated. In the 30 days preceding that 1904 notices generated. The number of unique visitors was up 15.5% from last month, while the number of forms printed were up 24%

May 6th and May 11th were the two highest volume days ever.

So is this an indication that tenants are having more trouble paying rent or just more owners using the site? I do not know.

Attorney Tristan Pettit is presenting the Landlord Boot Camp again this February.  Prior Boot Camps were very well received, with positive feed back from all that attended

Here is Tristan’s letter describing the event.

Improper service of the notice is one of the most common causes of an owner losing an eviction.

There are three basic methods to properly serve a notice. Do it wrong and lose the eviction case.  The proper ways to serve the notice are:

Proper methods of service are defined by Wisconsin Statutes §704.21

1. Personal delivery to someone at the premises (sometimes also requiring sending the notice by regular mail)
2. Service by certified mail
3. Service by tacking the notice on the door and mailing

Tip: Service of an eviction notice on one tenant counts for service on all of them (for example, you serve one of four roommates who share an apartment). See §704.21(4)

Potential Problem: This does NOT apply to service of the eviction summons, where you need to serve all the tenants personally if you want to get a money judgment against each of them.

Potential Problem: Service of the summons and complaint, which will be discussed later, has different requirements.  Don’t get confused

Tip: You can hire a professional process server to deliver the notice to the tenant. This saves you from potential confrontation and usually eliminates errors in service. These services are listed in the yellow pages and in the AASEW member directory.

Shameless Self Promotion: EasyEvict.com, one of our company’s services, provides process service in Milwaukee County for $25 . You can fax or deliver the papers to us and even do the entire process on line.  Do evictions while sitting at home wearing you pink bunny slippers;-)

Personal Service

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Personally handing the notice to the tenant is the most common method. This is not always practical because of safety concerns or because the tenant is hiding from you. The Wisconsin statutes allow you to make in person service of the eviction notice as follows:

1. Give a copy to one of the tenants.
2. Give a copy to a family member at least 14 years old, telling them that this is an eviction notice.
3. Leave a copy with an occupant (e.g., the boyfriend of the tenant) and also mail a copy by regular mail to the tenant
4. Leave a copy with a “competent person apparently in charge of the rented premises” and mail a copy by regular mail to the tenant.

Tip: ANY of the above 4 methods of personal delivery can be used. You don’t have to use “reasonable diligence” by trying to catch the tenant herself at home. For example, you arrive to deliver the eviction notice, the boyfriend says the tenant is shopping and will be home in an hour and you should come back. You can simply serve the boyfriend, tell him what the notice is and drop a copy of the notice in the mail that day. Do it the same day, otherwise the day of mailing counts as the effective day notice was given.

Tip: Many owners find personal service provides the best results as far as collecting or getting the tenant to move on their own. People who are behind on rent may avoid contacting you out of embarrassment. Or, you may find the unit vacant when you go to serve the notice.

Tip: Make sure that the person the notice is given to is a family member or is actually in control of the premises. A babysitter probably does not meet the requirement, while a roommate not listed on the rental agreement meets these requirements. If you are serving on a family member make sure they are at least fourteen. Always try to get their name and make a note of it.  I had one eviction dismissed because I served a tenant’s daughter who said she was fourteen, but in reality did not turn fourteen until a week after the date of service.

Service by Certified Mail

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Potential Problem: This is only for the 5, 14 or 28-day notice. You may not use certified mail for a summons or complaint. If I’m repeating myself, it’s because it is important.

Potential Problem: If you serve the notice by certified mail you must add two days to the time period.

Tip: Many owners find service by certified mail is the easiest. It is also the most difficult for the tenant to challenge in an eviction hearing.

Tip: Often tenants who are behind on their rent do not accept the certified mail. This does not affect your ability to evict. The law requires you to send the notice, it does not require you to prove that the tenant accepted the notice. For this reason we do not use a return receipt as it could raise an issue in court that is not relevant.

Tip: It is also helpful to mail an additional copy by regular mail at the time that you mail the certified copy. This is not required but anything that makes the tenant aware the eviction process has started could prevent the trouble and expense of a court eviction. A lot of people who are having financial problems don’t pick up their certified mail. Tenants that know they are about to be evicted often try to get current on their rent or move on their own, saving you the cost of an eviction.

Post and Mail

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If all else fails and you have used reasonable diligence in attempting to personally serve the tenant, a family member or occupant or person in charge, you may staple or tape the notice to the door and mail a copy by regular mail to the tenant.

Tip: Be sure you mail on the same day as you tack the notice to have that day count as the date of service.

Potential Problem: What is ” reasonable diligence”? Every court commissioner and judge has a slightly different definition. Three attempts at service over three days at three different times is usually a safe bet.

A Final Tip: If the tenant actually received the notice even though you didn’t properly serve it (e.g., you gave it to the 12 year old son) then the notice is effective as of the day the tenant actually got it, but you have to prove this by “clear and convincing” evidence. See §704.21(5)

DIY Eviction Series:

• Overview
• Select the Proper Notice

The following is a basic outline of the steps required for an eviction. These instructions and forms are optimized for Milwaukee County, however most are valid statewide.

Collections & Evictions Overview

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Disruptive tenants only get worse the longer they are allowed to act poorly without intervention. A tenant who is falling further behind in their rent is less likely to be able to pay off their balance as time goes on. Owners who succeed address the problems quickly.  Either the tenant resolves it, moves or the owner evicts.

The problem for a lot of owners is they are intimidated by or unsure of the process.  Here is an overview / outline

• All eviction actions begin with a properly served notice to vacate. In Wisconsin the most common notices are the 5-day, 14-day and 28-day notices. If you use a rental agreement or lease with a longer notice period the 28-day notice is replaced by a notice with the length of time contained in the lease or agreement, often 45 or 60 days. The type of notice you will use depends on the reason that you wish the tenant to vacate and the type of rental agreement that you have with the tenant.
  In a future posts will delve into details such as which form to use.  Todays post is just an overview/outline of the eviction process in Wisconsin.
• After service of the notice it is important to attempt to discuss the problem and possible resolution with the tenant. Physical eviction is expensive for the property owner and unpleasant for the tenant. If it can be avoided so much the better for all, but be careful not to be taken advantage of by tenants who make promises they have no intention of  keeping.
• Once the notice period has expired and the problem isn’t solved, it is time to begin the eviction. This is done by completing the required paperwork, filing these papers with the court and properly serving the tenant. The court fee is $99 and typical fees for serving the paperwork is $15 to $40.
• If you own the property individually you can appear in court yourself.  If you own the property in an LLC or corporation you will be required to have an attorney or full time employee of the entity appear.  A member of an LLC is not considered a full time employee by the courts unless you take your pay as wages, which few owners do.
• At the first court hearing you should receive an Order for Writ of Restitution (a court order for the Sheriff to remove the tenant) . The court  may “stay” the writ for a week or two. You can either take judgment for the money amount at this hearing or schedule  a “second cause” money judgment hearing. Since the tenant has not vacated, it will be difficult to assess the total damages you have suffered. For this reason you may wish to return to court for a second hearing at a later date. This choice is based on 1) you and the tenant agreeing to the amount owed and 2) if you believe you will be able to collect from this tenant and it will be worth the time.
• After you have the order for the writ you must  purchase a Writ of Restitution from the Clerk of Courts for $5 and complete the Writ of Restitution form.
• You are required to hire an approved mover who may require a deposit of $300 to $400. The mover provides you with a letter of intent.  The Sheriff will not accept the eviction without this letter.
• You then give the Milwaukee County Sheriff the Order for Writ, the Writ, and the letter from the mover along with a check for $130. The Sheriff will move the tenant within 10 days.

There are a number of potential errors you can make that can delay the eviction. But, don’t fall for the urban myths. Evictions can occur year round, including winter.  Christmas and other holidays only slow an eviction by a day or two.

Shameless Self Promotion: Like so many other things in life, doing it yourself is sometimes far more expensive in time and aggravation than hiring the work out.  Check prices and services offered by your attorney or if you are in Milwaukee County, take a look at the $249 Easy Evict eviction offered by our company.