Author: Tim Ballering

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Act 143 Omnibus Bill ATCP 134 Leases & Rental Agreements WI L/T law

Landlord Omnibus Bill signed into law

The enrolled version of the bill (a copy with all the amendments  incorporated and as signed by the Governor)  was released late yesterday.

As you look at the part of your lease that addresses criminal activity I am thinking that adding “… unless the tenant could not reasonably have prevented the crime”  should keep your lease valid, but have not reviewed this in depth with our attorneys.

Now go modify your leases to take advantage of the benefits and to avoid running afoul of the other changes.  That is what we will be working on for the next ten days before a new lease is required.

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Act 143 Omnibus Bill crime Leases & Rental Agreements WI L/T law

WI’s New Landlord Omnibus Bill requires lease changes

The Landlord Omnibus bill was fast tracked, being introduced on 2/13/12,  passed by the Senate on March 14th, adopted by the Assembly on March 15th and will be signed into law on Mar 21st (tomorrow).  While the bill addresses many issues in a positive manner for landlords, it also is going to require revisions to your future rental agreements.

The changes required that I see so far are:

Continue reading “WI’s New Landlord Omnibus Bill requires lease changes”
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Marketing Selling

Ideas for Self Marketing Properties

A buddy of mine is attempting to sell a couple of his Milwaukee  multi-families.   He listed it with a broker, but was frustrated when he did not receive any reasonable offers or much interest.  This despite the sale would have generated a $70,000 commission.

Years ago the two of us owned a small carpet store, primarily to get wholesale carpet for our properties, but we did some marketing for the store that turned out pretty well.  So we decided to try our hand at some self marketing of his property.

Short version: Basically for a few hundred dollars he got listed on the largest commercial listing site in the nation,  printed material was mailed to potential buyers and a website with pictures and a video walk through was put up (www.630Hawley.com)

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Code Enforcement Government Behaving Badly Milwaukee Tenant Responsibilities

“Your trash ain’t nothin’ but cash” for the City of Milwaukee

With apologies to the Steve Miller Band for the title …

This past week we received a notice of  a $52.05 “fee” being assessed for “improper care of a discarded electronic device” at one of our properties.  Wow! They revert to five dollar words to say you put a radio in the garbage can.

Upon review it seems  our tenant put a radio/CD player in the green garbage cart.   Either a scavenger or DPW took it out of the cart and left it in the alley.

City of Milwaukee fee for electronics disposal.

As I drove around the Southside this weekend I noticed a bunch of small electronics laying next to garbage carts with little orange stickers. So despite the bill saying the property was posted, it appears the only posting were these stickers that mostly face away from the house.  To make it worse the property owner does not get notice by mail until the fee is assessed.

This must be one helluva profit center for the city.

I really wish city officials were there to hear the tenant’s reaction to having this charge passed on to them.

Milwaukee Code:

79-2-13-b. No person may place an electronic device in mixed municipal solid waste or discard or otherwise dispose of an electronic device except by delivery to an electronic device collection or recycling facility.

State law that defines what an electronic device that is prohibited from being placed in the garbage:

1. A peripheral, as defined in s. 287.17 (1) (j).
3. A facsimile machine.
4. A digital video disc player.
5. A digital video player that does not use a disc and that is not a camera, as defined in s. 287.17 (1) (a).
6. A video cassette recorder.
7. A video recorder that does not use a cassette and that is not a camera, as defined in s. 287.17 (1) (a).
8. A covered electronic device, as defined in s. 287.17 (1) (f).
9. A telephone with a video display.
10. Another kind of electronic device identified by the department under s. 287.17 (10) (i).
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crime Government Behaving Badly Strategy

It’s so bad that you can’t even leave your house outside at night.

File under “Buying Single Family Rentals Has a Downside”

Our crew shows up to work on a vacant property this morning and finds the siding and storm windows gone. It was an okay looking place yesterday. Now it needs to be resided.

 

 

 

 

 

 

At least this time they did not steal the plumbing and electric wiring.

A year ago a similar thing happened.  A tenant that lived in another of our homes a couple doors away saw the neighbor stripping our property and called 911.  The police said ‘have your landlord file a report so he can file an insurance claim’ and did not send out a squad.  By the end of the weekend the neighbor had stripped all the plumbing, heating and electric wiring from the house.

I sent the police and the DA photos my tenant took showing the neighbor loading the siding on to his car.    We ended up razing the property as the damage was so extensive.

No one was ever prosecuted, even though the damage exceeded ten grand.

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Government Behaving Badly Tenant Responsibilities

What happened to Tenant Responsibility in Milwaukee?

On May 23, 1986 the City of Milwaukee removed tenant responsibility from the code.  The removed section was based on Wisconsin §704.07(3)(a)

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Code Enforcement Fair Housing Government Behaving Badly Magner v. Gallagher

Obama pressured St Paul into withdrawing Supreme Court Case

The Wall Street Journal Reports on the dismissal of Manger v. Gallagher:

How far will the Obama Administration go to impose racial lending quotas for banks? Far enough to lean on St. Paul, Minnesota to deny the Supreme Court the chance to rule on whether the government’s actions are legal.

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Code Enforcement Fair Housing Government Behaving Badly Magner v. Gallagher

Update: St Paul Abruptly Withdraws Supreme Court Petition

The city of St Paul withdrew their petition to have the US Supreme Court intervene and stop the case over their alleged discriminatory housing code enforcement. This, less than three weeks before the Court was to hear oral arguments.

From an article in the St Paul Star Tribune:

[The plaintiff-landlord] did not respond to requests for comment, but his lawyers have argued in court that he and other inner-city landlords were targeted for aggressive code enforcement primarily because they rent to low-income and minority tenants in aging neighborhoods that some would rather see gentrified. His lead attorney, John Shoemaker, said the effect of the city crackdown was to shut down properties, increase costs and limit the supply of affordable housing in the Twin Cities.

There is a lively discussion of this on Ademocracy, a St Paul based political blog.  If you are interested in the case, you should peruse that discussion

After reading the amici briefs it was clear that St Paul could not be allowed to win at the Supreme Court. To have won would have undone 40 years of Fair Housing and Equal Rights legislation and court cases.  I’m pretty sure someone smarter than St Paul’s current legal staff sat them down and explained all of this to them.

St. Paul now boasts that “it will be successful in defending its code enforcement actions in any court” 

Hmm, if that is so then why did St Paul try so hard to avoid trial by going to the US Supreme Court after a Court of Appeals decision to let the case go forward?  Remember that this case is in its eight or ninth year and has already had a major impact on St Paul’s budget.

Ironically St Paul is now having listening sessions with landlords to try and work out arrears of contention.  Perhaps they should have taken this approach a decade ago.

I predict a settlement is imminent.

Hats off to Frank and the others for having the fortitude to stay the course for all these years.

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Code Enforcement Fair Housing Government Behaving Badly Magner v. Gallagher

Fair Housing in the 21st Century

If you have been a reader for a while you are aware of the St Paul landlords’ case against their city’s code enforcement department.  The case is now at the US Supreme Court.  Here are a few updates and articles:

The following article is from RoofLines

At issue in the case, Magner v. Gallagher, is whether the Fair Housing Act prohibits the full range of discrimination in housing that many Americans still face in the 21st Century.

The case comes out of St. Paul, Minnesota, where a group of landlords who rent affordable homes to racially diverse tenants say the city is driving them and their tenants out of town in favor of less affordable and less diverse owner-occupied housing. The Supreme Court took the case to decide, not whether these facts are true but, rather, assuming they are true, whether the city’s alleged conduct violates the Fair Housing Act absent proof that the city purposefully intended to exclude people of color from its borders.

The Supreme Court Briefs and commentary are posted on Ademocracy

II. Factual Background

…..

This case arises from the City’s adoption of a policy to nonetheless limit its stock of private low-income housing, including by forcing respondents to abandon or sell the housing they provided, in favor of owner-occupied housing. The City pursued that specific policy through the selective and often illegal application of its housing code in a manner designed to produce the closure or abandonment of private low-income rental properties either directly, through condemnation, or indirectly, by rendering the maintenance of the properties uneconomical.

The City’s actions included targeting respondents’ properties for “code to the max” and “forced sale” treatment, falsely labeling those properties as “problem” and “distressed” housing, charging those properties with false code violations, failing to provide respondents with timely notice of claimed code violations, and condemning the properties without a sufficient basis.

 

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Collections

$20 a day late fees?

Late fees are an important tool to get your rent in before the mortgage is due.  But what is a reasonable or legal late fee?

There is a WI case that found $50 on a $625 rent was reasonable, THREE  & ONE CO. v. GEILFUSS, 178 Wis.2d 400 (Ct.App. 1993) – yes this is the same case that found letting the cat use the house as a litter box constitutes waste. Again, this one of those cases that every owner should keep in their  “toolbox”

As far as the per diem (per day) late fee, that may be another story.  We have never used these, but many owners do.

The Hud “Model Lease” does contain a provision of $5 after the 6th and a dollar a day in paragraph 5.  However private owners use higher per diem rates.

Some tenant advocates here and elsewhere are attacking the per diem late fees on grounds that they run afoul of usury laws. From their prospective for example your late fee has an APR of something like 900%. Assume your tenant misses January’s payment and doesn’t cure it for a year. They would owe $7280 on $800 debt.

The problem with a single fee is once the 5th comes and goes, what  incentive is there for tenants to cure the problem quickly after receiving the late fee other than eviction?

After much consideration our company is considering moving from a flat $30-50 fee to a two step fee. The first late fee that posts after the close of business on the 5th is around 80% of current late fee, with a second late fee posting on the 11th totaling 150% of current late fees