Just A Landlord

Question:  If there is a  material falsification of information provided by a tenant on the  rental application, what are your options? (Granted a good screening process should have caught it).

Once you accept a tenant you must allow them to move in, even if they  materially falsified the app. This is covered under the ATCP 134:

ATCP 134.09(6) (6) FAILURE TO DELIVER POSSESSION. No landlord shall fail to deliver  possession of the dwelling unit to the tenant at the time agreed upon  in the rental agreement, except where the landlord is unable to  deliver possession because of circumstances beyond the landlord’s  control.

An interesting question would be if they lied about who they were,  i.e. gave a false name, could you refuse to let anyone but the person named on the lease to move in?

Preventing this? Hard. If you ran a credit report, that should have show other names used. A pre-acceptance home visit may have exposed the inconsistencies and extra adult.

This one bit us in the butt a few years ago. We were evicting a woman because her two adult daughters had moved in with her and were  performing prostitution in the basement of the building. We had an applicant for a different address who we accepted. One of my managers saw the woman we accepted in the waiting room and asked what she was doing her as she was the prostitute daughter of the tenant we were  evicting from Walker street.

We refused to allow the woman to take the other unit and gave her back all of her money. She got an attorney and they won the  argument in court. We were required to give her  $500 in addition to her earnest money, which we had already given back.

There was a discussion on the ApartmentAssoc@YahooGroups.com (link to home page) discussion list regarding charging a fee to a tenant who breaks a lease.

Liquidated damages, as they are referred to, are permitted in some states. For example in Florida you may give the tenant an option to be liable for the balance of the lease subject to mitigation or they can agree to liquidated damages up to two month’s rent. Most tenants seem to prefer the liquidated damages option because they know up front what they can expect if they must move before the end of the lease as opposed to needing to move to another locale and face owing perhaps eight or ten months rent.

However liquidated damages are not permitted in Wisconsin.  In fact having such language in your WI lease probably invalidates the entire lease. Why is this?

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Seems like a way to increase revenue a bit but there is one big gotcha to be aware of.  In WI if parking is charged separately or an additional charge then you must collect and pay sales tax on it.

A couple of years ago the Wisconsin Department of Revenue went around checking for owners who were charging extra for tenants to park or offering a lower rate to those who did not want parking.   The landlords involved had to pay sales tax that they should have collected plus interest and penalties.

Tax 11.48 Landlords, hotels and motels. (1) LANDLORDS.

(b) The sales price from providing parking space for motor vehicles and aircraft and from providing docking and storage space for boats are taxable. If a separate charge is made for the parking, docking, or storage space, the charge is taxable. However, if a separate charge is not made and the price of a rental unit includes a charge for a
parking, docking, or storage space, and if similar units are rented at a reduced price if the parking, docking, or storage space is not utilized, the difference between the rental price of the 2 similar units is taxable as a charge for parking, docking, or storage.

A thread from one of the rental property email list I subscribe to begins with a question regarding a lease that was invalidated due to a provision requiring the tenant to pay the landlord’s attorney contrary to  Wisconsin ATCP 134. Below is a follow up question:

So if the tenancy is disolved and i can not enforce the lease but shouldnt i be able to enforce the damages they did? otherwise this allows tenannts to be sneaky. not pay rent and damage and walk away better.

My response was as follows (cleaned up a bit from the original):

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A question posted to one of the email lists that I participate in: