May 15

Sewer, water and municipal service fees have become a major operating expense.  I’m sure these runaway fees have lead to the failure of many newer, under capitalized owners.

Last month the law changed on municipal utility charges, making it more practical to have tenants be responsible for these charges.  We owe a lot of thanks to the work done by Gary Goyke in making this law a reality, as well as the support of the members of the Wisconsin Apartment Association, the Apartment Associations of South Central WI and of course the members of the Apartment Association of Southeastern WI

In addition to the potential financial benefit to owners, there is a societal and environmental benefit as this will certainly result in conservation.  No more walking into a unit, only to see the tenant thawing dinner by running cold water over frozen meat for half an hour.  Remember when you paid for heat and would find windows open on sub freezing days or when you paid for hot water and found your basements being used as a laundromat for friends and family.

The most important aspects of the law effect the 2015 billings.  However there are some things we as owners need to do now to ramp up.

First, you cannot bill tenants directly for utilities that are not separately metered.  This means for multiple unit properties the water needs to be separated and an additional meter added.  In older Milwaukee duplexes this is not going to be a major job.  The two plumbing contractors I spoke to felt it would be a $600-1000 per duplex  to separate the water and install a second meter horn.  Remember that in this style building you only need to separate the cold water to the lower unit faucets and toilet as well as the feed to the lower water heater and possibly laundry facilities.

Older side by sides and four families will take more work, read $, as they typically have a single cold feed to the upper units.

Second, for the benefit of tenants, owner occupants and the city’s ability to collect their utility bills; we must urge the city to go to monthly billings

Attorney Tristan Pettit shared the attached doc from the League of Wisconsin Municipalities that should be the first step in the road map to making the change.

Apr 30

 

Bloomberg reports on a case in CA where  Deutsche Bank is being sued for evicting the tenant of a foreclosure in violation of the federal Protecting Tenants at Foreclosure Act of 2009

Rothschild, legal director at the Western Center on Law and Poverty, said the January ruling established that tenants can take owners who acquire properties through foreclosure to state court for violating protections Congress afforded renters under the 2009 Protecting Tenants Against Foreclosure Act. The law doesn’t give renters the right to sue in federal court.

An attorney for the United Trustees Association states:

The overly broad decision may lead to a proliferation in lawsuits for breach of the lease imposed upon purchasers at a foreclosure sale. With no prior knowledge, a purchaser at a foreclosure sale now may be burdened with a lease with unlimited combinations of potential contractual obligations ranging from unilateral renewal rights to mandatory substantial improvements to the property.

All of this could make buying an occupied or recently vacated unit a dicey situation.

Apr 30

Perhaps not, especially  if your tenant is on a HUD lease such as Section 8.

In an April 11th, 2014 opinion a NY Appellate Court ruled  against the landlord in the eviction case, finding that an arrest for possession

“was insufficient to meet its burden of showing that tenant engaged in “drug related criminal activity,” a term defined under governing federal regulations as “the illegal manufacture, sale, distribution, or use of a drug, or possession of a drug with intent to manufacture, sell, distribute or use the drug” (24 CFR 5.100).”

It is difficult to believe, but the court did not view the tenant’s possession to be an intent to at least use the drugs.

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.

Jan 03

Back in April HUD provided Fair Housing guidance on emotional support animals. These rights supercede any no pet policy and apply to untrained pets in addition to highly trained service animals such as seeing eye dogs. You also cannot refuse the companion animal based on a blanket policy against certain breeds such as pit bulls.

Reading the HUD docs and comments on the emotional support animals I erroneously believed that the companion animal has to comply with local codes that prohibit certain animals, but recently there have been a rash of cases across the county where people are winning the “right” to have farm animals such as pigs and chickens living in their urban homes, condos and apartments. After reading of these cases I jokingly say I’m getting a python because I need a big hug after work.

Kidding aside, tread carefully when making decisions. Basically if the tenant or prospective tenant has a doctor’s prescription for the pet you must allow it.

There is however a whole industry that has sprung up selling vests proclaiming an animal to be a support dog or worse a service dog.  Remember service animals have many thousands of dollars in specialized training. A vest alone is not proof of anything other than the pet owner had the $40 to buy one.

There are even doctors who prescribe emotional support animals over the phone to people who live even thousands of miles away.  Just give them  $99 and away you go.  I believe that you must accept the prescription from an out of state internet doc. Perhaps these docs could improve their bottom line by also writing excuses the next time there are protests at our state capitol building.

Note: I fully support the laws that require acceptance of true service animals, such as seeing eye dogs. If you knowingly reject a service animal you probably deserve whatever legal consequences  you receive.  I also believe in some circumstances that companion animals are legitimate.  The kid with the chicken in the link above is probably one example.  I do however object to circumventing no pet policies in housing and air travel with fake documentation proclaiming a pet to be a service animal and the industry that has sprung up to sell those documents.

Oct 22

A reader of the ApartmentAssoc Yahoo Group questions how the new landlord tenant bill affects leases that attempt to deal with criminal activity.  The new law is:

704.44 (9) Allows the landlord to terminate the tenancy of a tenant based solely on the commission of a crime in or on the rental property if the tenant, or someone who lawfully resides with the tenant, is the victim, as defined in s. 950.02 (4), of that crime.

704.44 (9) is a prohibited lease provision. Therefore a lease is void if it allows you to evict the tenant solely because of a crime that the tenant or an authorized co occupant were the victim of.   The provision was meant to be a protection for domestic violence victims.

As I read this an example would be if the tenant’s door is broken.

  • If the damage was caused by the tenant and you use your lease to evict them for the damage all is good.
  • If the damage occurred during a burglary and you attempt to evict them based on a lease provision, you would fail and possibly be in trouble. It would be wrong even without this law to evict a victim of a crime.  ‘Oh, you were robbed of your tv and radio – well now you are losing your home too because having your door broken during a robbery is a lease violation’. – bad landlord.
  • If the door was broken by the ex boyfriend that they had a restraining order against, you would most certainly be in trouble.  But that is the current law under 106.50 (5m) (dm).
  • On the other hand if the door was broken during a robbery committed by a rival drug dealer and the police report indicated that, then a lease provision such as a crime free addendum would be fine.

I agree it is not the perfect language. However this is far better than the prior prohibition against a lease that permitted you to evict the tenant for a crime they could not have reasonably prevented.

Under the new wording you can evict a tenant if they fail to exercise reasonable control of the property.   An example is if the tenant’s grandson who does not live at the property comes over and sells drugs out of grandma’s unit.  Under the current law you would have a hard time crafting a lease that would be legal and permit you to evict as a means of stopping the drug traffic because it is very likely that granny could not reasonably prevent the activity. The only answer would be wait until the Police send an angry letter about the nuisance activity.  Under the new law your lease will be able to address this because granny is not a victim.

His second question is:

What happens if a tenant gets a Disorderly Conduct ticket, or a ticket for possession of marijuana, or a ticket for… Was there a commission of a crime?

You do not have to differentiate between citations and crimes in the above.  The tenant was not a victim, they were the perpetrator of the act and therefore a lease provision that permits eviction would be valid under both the old and new law. Plus the law acknowledges that criminals are not victims of their own crimes

§950.02 (4) (b) “Victim” does not include the person charged with or alleged to have committed the crime.

However if the tenant was the victim of what could be considered a criminal act, I think you must treat the tenant as a victim regardless if the perp was given a citation or a state charge.  So if in the prior door broken by a burglar example you would be wrong in evicting a tenant even if the guy who did it only received a muni citation.

There will be more on this as a discussion of how to make the Crime Free Lease or addendum work within this new law.

Oct 19

SB179 that passed last week requires language in your leases regarding protections under the law to victims of Domestic Violence.  While the law is not yet in effect, there is really no good reason not to include the language now.  Here is the required language:

NOTICE OF DOMESTIC ABUSE PROTECTIONS

(1) As provided in section 106.50 (5m) (dm) of the Wisconsin statutes, a tenant has a defense to an eviction action if the tenant can prove that the landlord knew, or should have known, the tenant is a victim of domestic abuse, sexual assault, or stalking and that the eviction action is based on conduct related to domestic abuse, sexual assault, or stalking committed by either of the following:

(a) A person who was not the tenant’s invited guest.

(b) A person who was the tenant’s invited guest, but the tenant has done either of the following:

1. Sought an injunction barring the person from the premises.

2. Provided a written statement to the landlord stating that the person will no longer be an invited guest of the tenant and the tenant has not subsequently invited the person to be the tenant’s guest.

(2) A tenant who is a victim of domestic abuse, sexual assault, or stalking may have the right to terminate the rental agreement in certain limited situations, as provided in section 704.16 of the Wisconsin statutes. If the tenant has safety concerns, the tenant should contact a local victim service provider or law enforcement agency.

(3) A tenant is advised that this notice is only a summary of the tenant’s rights and the specific language of the statutes governs in all instances.

You will also need to update your disposal of property language to include the new language on stuff left behind after an eviction, but that can wait until this law is in effect.

Oct 15

I am a strong supporter of both the Apartment Association of Southeastern WI as well as believing all landlords should know as much as possible about our business.  Seminars such as the AASEW Landlord Boot Camp were the foundation that I built my knowledge of rental laws upon.  I encourage you to attend this fall’s AASEW Boot Camp.

This Boot Camp may be more important for those with a good understanding of the laws as it will go into detail on what to expect when the new Wisconsin Landlord Tenant Law passes later this month.

Continue reading »

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/

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