May 04

Attorney Tristan Pettit recently posted on the most recent in a series of attempts to restrict access to Wisconsin online court records. Current proposals would hide from public view both dismissed criminal cases as well as stipulated dismissals of evictions.  These attempts to restrict access to or hide records is detrimental not only for screening tenants but to families that want to make sure people they hire to work in their homes or care for their children are safe to be around.

Current proposals would create rules to hide from public view certain dismissed criminal cases as well as stipulated dismissals of evictions.

The latter is the troublesome part as stipulated dismissals of evictions are often the most expedient and polite way of getting your property back while avoiding the costs of a Sheriff move.  Evictions are expensive and time-consuming. Owners do not evict on a whim.

These attempts to restrict access to or hide records is detrimental not only for screening tenants but to families that want to make sure people they hire to work in their homes or care for their children are safe to be around.

One member asked, “What can we do to stop this?”  The Apartment Association is working on state legislation to keep these records available. As that process moves forward it is important that we reach out to our elected officials and let them know how important it is to you to be able to access court records.

First, you should reach out to those who represent you – where you live.  Then you should reach out to those who represent the areas where your properties are located, letting them know that such attempts restrict your ability to avoid renting to those that will be disruptive or cause financial losses that will limit your ability to provide the best housing possible.

But, who are my elected officials you ask?  Two websites quickly provide the answer.

Fastest, for state legislators only is Find Your Legislator This site allows you to simply click a button to use your current location to find those reps.

If you want local officials as well as available social media contacts for all your elected officials, then I recommend Who Are My Representatives.  They do not list Milwaukee Aldermen, however, which is odd given the number of officials they do provide info for.

 

Feb 09

For the past couple of years, we have sold out both the spring and fall sessions of Attorney Tristan Pettit’s AASEW Landlord Tenant Law Boot Camp.

It looks like we are on track to do the same for the upcoming February 18th, 2017 Boot Camp.

Last fall I waited too long to sign up my new staff members and could not get them in. I signed up three staff people very early for this one. 😉

You may ask ‘Why would Tim pay $537 plus wages to send three people to Boot Camp when he knows the laws so well?’

The answer is easy: One small mistake or missed opportunity will cost us far more than this. It is important that my folks know the law as WI landlord Tenant Law is not always what a reasonable person would assume it to be. And this is ever evolving, with both new laws, new interpretations by courts and new tricks by tenant advocates*. This is not the first time we’ve sent staff either.

This course is presented by Attorney Tristan Pettit. Tristan’s law practice focuses on landlord-tenant law, he is a current board member of the Apartment Association as well as former president, and drumroll please, he writes all the standard landlord tenant forms for Wisconsin Legal Blank.

If you want to go, now that my seats are secure ;-), you can sign up online or call Joy at the Association 414-276-7378 and reserve a spot.

http://www.landlordbootcamp2017.com

* Most “tenant advocates” only advocate for tenants that break the rules. This ultimately costs the rest of the good tenants more in increased rents and decreased service or more noise and disruption… but this is another story for another day.

Jan 19

The follow-up question:

Thanks Tim,
Can we charge a “general ” application fee to the prospective tenant to cover our office costs to process an application and keep the fee? Other people are doing it. How?
No, the law is clear on this.  If you do not accept the tenant, then all the money collected except for the actual amount you paid for a national bureau credit report, must be refunded.
 
If people are charging a non-refundable application fee in excess of what they paid for a credit report or more than $20, they are in violation of ATCP 134.05 (2)  Some owners try to be clever by calling the earnest money by some other name.  That fails.(See the legal definition of Earnest Money below)
 

However, if the prospective tenant fails to pay the balance and move in, you may retain the earnest money to cover and costs and lost rents you incurred due to their failure to take possession. In fact the prospective tenant could owe a lot more than the earnest deposit. See ATCP 134.05(3)(b) below.

 
Earnest Money is legally defined as:
 
ATCP 134.02 (3) ”Earnest money deposit” means the total of any payments or deposits, however denominated or described, given by a prospective tenant to a landlord in return for the option of entering into a rental agreement in the future, or for having a rental agreement considered by a landlord. “Earnest money deposit” does not include a fee which a landlord charges for a credit check in compliance with s. ATCP 134.05 (3).
The requirements to refund the earnest deposit if the tenant withdraws the app or the landlord rejects the app either explicitly or by nonaction:
 
ATCP 134.05 (2) Refunding or crediting an earnest money deposit.
(a) A landlord who receives an earnest money deposit from a rental applicant shall send the full deposit to the applicant by first-class mail, or shall deliver the full deposit to the applicant, by the end of the next business day after any of the following occurs:
1. The landlord rejects the rental application or refuses to enter into a rental agreement with the applicant.
2. The applicant withdraws the rental application before the landlord accepts that application.
3. The landlord fails to approve the rental application by the end of the third business day after the landlord accepts the applicant’s earnest money deposit, or by a later date to which the tenant agrees in writing. The later date may not be more than 21 calendar days after the landlord accepts the earnest money deposit.
 

Law permitting witholding of Earnet Money for failure to take possession:

 

ATCP 134.05 (3) Withholding an earnest money deposit.

(a) A landlord may withhold from a properly accepted earnest money deposit if the prospective tenant fails to enter into a rental agreement after being approved for tenancy, unless the landlord has significantly altered the rental terms previously disclosed to the tenant.

(b) A landlord may withhold from an earnest money deposit, under par. (a), an amount sufficient to compensate the landlord for actual costs and damages incurred because of the prospective tenant’s failure to enter into a rental agreement. The landlord may not withhold for lost rents unless the landlord has made a reasonable effort to mitigate those losses, as provided under s. 704.29, Stats.

 
Jan 16

A reader asks

[C]an I charge a flat application fee ( $20-25) to prospective tenants that includes the cost of the checking them out, labor etc. in our office, this may not include a credit check. Do I have to give it back if I don’t accept them?

No, you can only charge the actual amount you paid for a national credit bureau report.  Any amount collected above the cost of the credit report must be refunded if the tenant is rejected or applied to the amounts they owe if they are accepted.

For us the cost of the report in minimal (less than ten bucks) and the requirement of the law to provide a copy of the report to the applicant violates our terms of use with the bureau we use, so we do not charge a fee.

We do require a $50 deposit to hold the unit while it is being processed.  If the tenant is accepted the money is applied to their move in money.  If the tenant is rejected, the $50 money order is returned to them.  If they are accepted, but then fail to take the unit and we lose rent because of this, the earnest money is used to offset part of the lost rent they owe under ATCP 134.05 (3).

The law:

ATCP 134.05 (4) Credit check fee.
(a) Except as provided under par. (b), a landlord may require a prospective tenant to pay the landlord’s actual cost, up to $20, to obtain a consumer credit report on the prospective tenant from a consumer reporting agency that compiles and maintains files on consumers on a nationwide basis. The landlord shall notify the prospective tenant of the charge before requesting the consumer credit report, and shall provide the prospective tenant with a copy of the report.
(b) A landlord may not require a prospective tenant to pay for a consumer credit report under par. (a) if, before the landlord requests a consumer credit report, the prospective tenant provides the landlord with a consumer credit report, from a consumer credit reporting agency that compiles and maintains files on consumers on a nationwide basis that is less than 30 days old.

Note: Paragraph (b) does not prohibit a landlord from obtaining a more current consumer credit check at the landlord’s expense.

ATCP 134.05 (3) Withholding an earnest money deposit.

(a) A landlord may withhold from a properly accepted earnest money deposit if the prospective tenant fails to enter into a rental agreement after being approved for tenancy, unless the landlord has significantly altered the rental terms previously disclosed to the tenant.

(b) A landlord may withhold from an earnest money deposit, under par. (a), an amount sufficient to compensate the landlord for actual costs and damages incurred because of the prospective tenant’s failure to enter into a rental agreement. The landlord may not withhold for lost rents unless the landlord has made a reasonable effort to mitigate those losses, as provided under s. 704.29, Stats.

Note: See Pierce v. Norwick, 202 Wis. 2d 588 (1996), regarding the award of damage claims for failure to comply with provisions of this chapter related to security deposits. The same method of computing a tenant’s damages may apply to violations related to earnest money deposits.
Jul 29

There was a recent question about the legality of imposing a non-refundable $40 application fee in Wisconsin even if the prospective tenant was providing their own, current credit report.

ATCP 134.05(4)

(4) Credit check fee.

(a) Except as provided under par. (b), a landlord may require a prospective tenant to pay the landlord’s actual cost, up to $20, to obtain a consumer credit report on the prospective tenant from a consumer reporting agency that compiles and maintains files on consumers on a nationwide basis. The landlord shall notify the prospective tenant of the charge before requesting the consumer credit report, and shall provide the prospective tenant with a copy of the report.

(b) A landlord may not require a prospective tenant to pay for a consumer credit report under par. (a) if, before the landlord requests a consumer credit report, the prospective tenant provides the landlord with a consumer credit report, from a consumer credit reporting agency that compiles and maintains files on consumers on a nationwide basis that is less than 30 days old.

Note: Paragraph (b) does not prohibit a landlord from obtaining a more current consumer credit check at the landlord’s expense.

Here, the $40 fee fails on two points.  1) It exceeds the $20 cap, and 2) You can’t charge a fee at all if the tenant is providing a copy of their credit report that is less than 30 days old.  Could the tenant forge a copy of their report that they are providing … sure.  So I would not rely on that report, but would run my own at my cost.  I would also compare the two copies as an honesty check.

How about if you call the fee something else like a processing fee?  Can you keep the money then? Again the Wisconsin landlord-tenant law is clear.

ATCP 134.02
(3) ”Earnest money deposit” means the total of any payments or deposits, however denominated or described, given by a prospective tenant to a landlord in return for the option of entering into a rental agreement in the future, or for having a rental agreement considered by a landlord. “Earnest money deposit” does not include a fee which a landlord charges for a credit check in compliance with s. ATCP 134.05 (3).

Some owners feel that they can ignore this and charge the fee to offset the rerental costs. What tenant will go after you in court because you kept 20 or 40 bucks that you may not have been entitled to?  The risk here is that if a tenant does sue,  you owe the tenants’ court fees and attorney’s costs.  So you are risking perhaps thousands of dollars to keep a couple of bucks here and there.

Personally, I find it more important to attract tenants and quickly fill vacancies with the best applicants than it is to recover the minimal amount of a credit report.  If I were looking for an apartment I would start with the ones that do not have an app fee.  That makes those owners charging the fees less competitive and they will lose more than the fees charged.  The old saying pennywise and pound foolish kind of fits here.

 


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