Wisconsin’s Act 143 Landlord Omnibus bill has been of great concern to owners that have read the content as well those who have read the Legislative Council memo on the bill.

AASEW Attorney Heiner Geise had researched this a bit and came to the conclusion it is not quite as bad as originally thought.  He received an opinion consistent with his view from the Leg Council.

The first clarification is items not in the Rules (ATCP 143) cannot cause an owner to pay double damages and attorney fees.

Knowledgeable owners should be able to successfully defend attempts to collect consumer protection damages for items not in 134.  The typical owner would not fair as well unless the courts are educated on this.   Unfortunately the way the bill was written it will be an uphill battle educating Commissioners and Judges on the distinction.

We also must be ever diligent to proposed changes to ATCP 134 as the new language makes it permissible to include other aspects of the statute into new rules.

Heiner was also able to get the Leg Council to concur with his reading of the requirements to disclose code violations.

Read Heiner’s letter to the Leg Council and their reply.

Note that none of this clarification changes the need to modify your leases to comply with Wisconsin’s new landlord tenant law.

The following is a pretty good overview of the new law from Margit Kelley, Staff Attorney at the WISCONSIN LEGISLATIVE COUNCIL   The Legislative Council is a nonpartisan research agency of the Wisconsin Legislature.

Read their full analysis

The Act revises certain provisions of landlord-tenant law as follows:

• Allows a landlord to dispose of abandoned property at the landlord’s discretion, except if a landlord does not intend to store personal property left behind by a tenant, the landlord must provide written notice of that intent at the time of entering into, or renewing, the rental agreement. Prescriptions and medical equipment must be kept for seven days. Notice must be provided to the tenant and a known secured party for an abandoned manufactured home, mobile home, and titled vehicle before disposing of that property.
• Allows a landlord to withhold amounts from a security deposit that are reasonably necessary to pay for damages to the property, and for unpaid rent or utilities. A landlord is prohibited from withholding any amount from a security deposit for normal wear and tear, or other damages or losses for which the tenant cannot reasonably be held responsible.
• Requires a landlord to return a security deposit to a tenant within 21 days: after a tenant has vacated the premises on the rental agreement’s termination date; after the landlord learns that the tenant has vacated if after the termination date; after eviction; or, if a tenant has vacated the premises before the termination date, after the rental agreement’s termination date or after a new tenant’s occupancy if that begins before the first tenant’s termination date.
• Requires a landlord to provide disclosure prior to the signing of a rental agreement any uncorrected building code or housing code violations if the landlord has actual knowledge of the violation.
• Requires a landlord to provide at the time of occupancy a standardized check-in sheet for the condition of the premises, to be completed and returned by the tenant within seven days. A check-in sheet is not required for rental of a plot of land that is used for a manufactured home or a mobile home.
• Specifies that certain prohibited provisions of a residential rental agreement render the entire rental agreement void and unenforceable. Also, if any particular provision of a rental agreement is found to be void or unenforceable by a court, or is rendered void or unenforceable by reason of a statute or administrative regulation, the provision is severable from other provisions of the rental agreement that are not affected and that remain valid and enforceable.
• Specifies that damages awarded to a landlord for a tenant who continues to occupy the premises after eviction or beyond the termination date of the rental agreement are mandatory, rather than discretionary.
• Specifies that acceptance of any amount of past due rent by a landlord cannot be the sole basis for dismissal of an eviction action for failure to pay rent.
• Prohibits a city, village, town, or county from imposing a moratorium on eviction actions.
• Specifies that any violation of the statutory chapter on landlords and tenants, including the provisions of the Act, may also constitute unfair methods of competition or unfair trade practices that are enforceable by the Department of Agriculture, Trade and Consumer Protection (DATCP), and by an individual right of action that allows recovery of reasonable attorney’s fees and twice the amount of any pecuniary loss. Regulations by DATCP cannot change any of the rights or duties arising under the statutory chapter on landlords and tenants.

Effective date: Act 143 is effective March 31, 2012. The provisions relating to disposal of abandoned property apply to any property abandoned on or after March 31, 2012, except the required notice of intent not to store abandoned property applies to a rental agreement entered into or renewed on or after March 31, 2012. The provision relating to mandatory damages for failure to vacate applies to an action that is commenced on or after March 31, 2012. The severability of void or unenforceable rental provisions applies to a rental agreement entered into or renewed on or after March 31, 2012.The timing for the return of a security deposit to a tenant who vacates the premises before the termination date of the rental agreement applies to a tenant who vacates the premises on or after March 31, 2012, unless the rental agreement contains a provision that is inconsistent with that procedure, in which case the timing for the return of the security deposit applies upon the renewal of the rental agreement. A prohibited provision that allows a landlord to terminate the tenancy if a crime is committed in or on the rental property renders the entire residential rental agreement void and unenforceable if entered into or renewed on or after March 31, 2012.

The Wisconsin Landlord Tenant Law Omnibus bill was signed into law by Governor Scott Walker around 4 PM March 21st, 2012.  You must be in compliance with the provisions for tenancies  entered into beginning April 1st.

One thing the bill does is add a new prohibited lease provision:

704.44 Rental Residential rental agreement that to contains certain provisions is void. (intro.)  Notwithstanding s. 704.02, a residential rental agreement is void and unenforceable if it does any of the following:
…

(9) 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

For those of us with Crime Free provisions in our agreements this appears problematic.  We discussed this with our attorneys and believe the following underlined change to our crime free lease language may meet the new law.  Note:  This is not underlined in the copy given to the tenants.

Our new agreement also limits activity to that which occurs on the property, rather than near the property.   I still think an owner should be able to evict tenants that are disrupting the neighborhood, but behave at home.  We’ll leave that fight for another day.

Our new provision:

USE: Premises may only be used for residential purposes  Operating a business or providing child care for children not listed on this agreement is prohibited.

Tenant may not permit activities at the premises which unreasonably interferes with other tenants or neighbors.  This includes, but is not limited to loud music and loud parties. TENANT SHALL NOT CONDUCT NOR ALLOW OTHERS TO CONDUCT ILLEGAL ACTIVITIES UPON THE PREMISES INCLUDING BUT NOT LIMITED TO THE SALE OF DRUGS.

Tenant, any member of the Tenant’s household, or a guest or other person under the Tenant’s control shall not engage in criminal activity, including drug-related criminal activity, on or near property premises. “Drug-related criminal activity” means the illegal manufacture, sale, distribution, use or possession with intent to manufacture, sell distribute or use a controlled substance (as defined in section 102 of the Controlled Substance Ace (21 U.S.C.812).

Tenant or members of the Tenant’s household, or a guest or other person under the Tenant’s control shall not engage in any act intended to facilitate criminal activity including drug-related criminal activity, regardless of whether the individual engaging in such activity is a member of the household or guest.

Tenant or members of the household will not permit the dwelling unit to be used for, or to facilitate, criminal activity, including drug-related criminal activity, regardless of whether the individual engaging in such activity is a member of the household or a guest.

Tenant or member of the household will not engage in the manufacture, sale, possession or distribution of illegal drugs on property or premises.

Tenant, any member of the Tenant’s household, or a guest or other person under the Tenant’s control, shall not engage in acts of violence or threats of violence, including but not limited to, the unlawful discharge of firearms, on property or premises.

A SINGLE VIOLATION OF THIS SECTION SHALL BE MATERIAL VIOLATION OF THE RENTAL AGREEMENT AND  GOOD CAUSE FOR TERMINATION OF TENANCY  UNLESS THE TENANT COULD NOT REASONABLY HAVE PREVENTED THE CRIME. Unless otherwise provided by law, proof of violation shall not require criminal conviction, but shall be by a preponderance of the evidence.

A different way of municipalities interacting with property owners

In Washington  D.C. they have  The Housing Provider Ombudsman a information resource for small housing providers.

Blacklisting bad tenants

THE NAMES of 400,000 Australian renters have swelled national blacklists for crimes ranging from pouring concrete down toilets to stealing entire kitchens from properties. [Source]

I’ve spent most of the past 22 years as a director of the Apartment Association of Southeastern WI, yet I feel this is a question that must be asked often so that the Association continues to add value.

In a group like ours every member has a say in the direction it takes.  I became active in the association through John Chitko’s prodding me to do so by saying:

‘This is an all volunteer group. Join, put your ideas out there. If they have merit people will support them, if not you’ll learn something’

Today I urge you to take John’s challenge.

Do I think we are currently doing all that we could or should, No, but I’ve seldom thought that about anything I am involved in.  To do so would be settling.

From my perspective an association of rental property owners and real estate investors should focus on the following three activities (in my order of importance):

• Provide strong advocacy for the industry
• Educate membership on the things they need to succeed
• Provide social / networking opportunities

Advocacy includes addressing legislative, political and the public perception of our industry in a manner that makes it easier for legitimate owners and investors to succeed.

Education is pretty self explanatory, but should include how to run properties as well as how to make money in real estate in a legitimate and honorable manner.

Social and Networking includes our general meetings, trade show, Brewers tailgate party, and the holiday party.

I grade us today as B in education, C on social/networking and an Incomplete on legislative and political advocacy.  Ten years ago I would have given us an A- in advocacy, a B- in education and a C in social /networking opportunities.

Our educational offerings like Attorney Tristan Pettit’s Landlord Bootcamp are well received and add a lot of value for those members who attend.  I see us lacking the “how to make money at this business” aspect and feel that we should add more of this, while avoiding the flim-flam hucksters that some present as education.

Our social / networking offerings like the trade show, Brewers game and holiday party are well attended and these too offer  real value.  I feel that our general meetings could be more engaging.

We really got away from a lot of the advocacy that we did in the past.  We need to return to that as this is our reason for being.  Today we hear from many members that they are frustrated with all the Milwaukee County Eviction Court changes that have allowed nonpaying and disruptive tenants to remain in possession longer than they should.  We also continue to hear from owners of mistreatment at the hands of Milwaukee’s Department of Neighborhood Services (building inspection)

Our November Apartment Association meeting with be the first of at least two on challenges we face in eviction court and how to change them.

Board member Dave Ohrmundt has graciously volunteered to head up a renewed legislative committee.  Another member is considering volunteering to spearhead a statewide legislative effort if he can get others interested.  These efforts will fail if they are just one person.  If you care about what the environment that we work under, then you should become involved.  And involved does not necessarily mean fully committed, although that would be nice.  Little things done by many people have a greater effect than large things done by a single individual.   Attend a hearing at the statehouse, or help write a legislative alert, send us your thoughts on a particular rule or law, or read the pending legislative agendas.  It all helps.

So I want to hear your thoughts and ideas.  Either post them as comments to this piece or email me

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

PUBLIC HEARING on bill AB 340
Thursday, October 1, 2009 10:15 AM
Room 328 Northwest, State Capitol, Madison WI

More details on bill

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