May 21

Perhaps I wasn’t clear in the original post.

This law only affects separately metered municipal utilities in tenant occupied units. Nothing has changed in how you handle utility cost for joint metered utilities. What you are doing now is permitted as long as disclosed in advance of signing the lease.

With the enactment of this legislation separately metered municipal services can now be directly billed to the tenants by the local governments, similar to how separate gas or electric accounts are billed to tenants by WE Energies*. This makes it more practical to have tenants pay their own sewer and water with less potential that you will find their unpaid bills on your property taxes*.

This change will initially affect many single family rentals where owners already have tenants responsible for their own sewer and water bills. With minimal costs owners of duplexes can take advantage of the new law by having a plumber separate the water supply and install a second meter. Then those duplex tenants could be billed directly by the municipality.

I would be surprised if many multi unit owners will incur the costs of this work, at least initially. But just like separating gas and electric, duplexes were the first to be retrofitted followed by more and more multi unit buildings

The net result should be more conservation, that ultimately results in more rate increases. ;-(

“The additional revenue is needed to offset declining water sales in the face of rising costs, officials said.”

*This is now similar, but not exactly the same as how a WE Energies account is handled. The new law does NOT completely eliminate the ability of the municipality to place the charges on the property.

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.

May 11

Wolf Richter writes:

 

Steps in the Fed, and trillions of dollars get printed and handed to Wall Street, and asset prices become airborne, and Wall Street jumps into the housing market and buys up hundreds of thousands of vacant single-family homes, drives up prices, and armed with free money, shoves aside first-time buyers and others who would actually live in these homes, and turned them instead into rental units. Now in over 1,000 cities, prices are, or soon will be, as high as they were at the peak of the last housing bubble.

The difference? Last time, all that craziness was called a “bubble” with hindsight. This time, it’s called a “housing recovery.”

If you are planning to buy now and catch the rising market you should read this and think 2006…

May 01

Long time AASEW member, Attorney Cheryl Baraty passed away yesterday after a difficult battle with cancer.  Many times I thought she would win the fight.

Cheryl represented quite a few of our members in eviction court and other actions, as being active with the Association in some legislative battles.  She was a close friend to former board member Kim Queen.

One of her more interesting achievements was finding that the Department of Neighborhood Services (building inspection) court section was “robo signing” court docs  long before anyone noticed that banks were doing it also.  That resulted in a number of cases being dismissed.

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.

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