Author: Tim Ballering

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Collections DIY Evictions Evictions

What is wrong with the Milwaukee Eviction court?

There is a lot of frustration among owners with changes to the eviction procedures in Milwaukee County.  It seems something changes every month, all to the detriment of owners who just want to get rid of freeloading tenants.

The Apartment Association wishes to quantify what problems are of the greatest concern to owners then see what can be done to correct the problems.  Some will be reasonably easy to fix, some not so.

You can post your comments here or if you are a bit shy email me directly at: Tim@ApartmentsMilwaukee.com

I’ll start the discussion:

The law says ‘the court can’t issue a stay on eviction, without the tenant paying all past due rent.’ *  But the courts give out stays like neighbors give out candy on Halloween.

* Obviously laws are not that concise, what it actually says is:

799.44(3) Stay of writ of restitution. At the time of ordering judgment, upon application of the defendant with notice to the plaintiff, the court may, in cases where it determines hardship to exist, stay the issuance of the writ by a period not to exceed 30 days from the date of the order for judgment. Any such stay shall be conditioned upon the defendant paying all rent or other charges due and unpaid at the entry of judgment and upon the defendant paying the reasonable value of the occupancy of the premises, including reasonable charges, during the period of the stay upon such terms and at such times as the court directs. The court may further require the defendant, as a condition of such stay, to give a bond in such amount and with such sureties as the court directs, conditioned upon the defendant’s faithful performance of the conditions of the stay. Upon the failure of the defendant to perform any of the conditions of the stay, the plaintiff may file an affidavit executed by the plaintiff or attorney, stating the facts of such default, and the writ of restitution may forthwith be issued.

Categories
Evictions

Turning an eviction into a federal case

On August 25th we evicted a tenant.  The court stayed the writ (a court order for the Sheriff to remove the  tenant) until August 28th.  On September  6th we turn the eviction into the Sheriff, who performs the move on September 14th.

The day following the move we receive notice that the tenant has filed bankruptcy on the 7th – the day after we turned in  the writ.  This was followed the next day by a notice that she is demanding a hearing in Federal Court, seeking sanctions against us alleging we violated the  automatic stay granted by bankruptcy by not stopping the move.

So what is the law?

Continue reading “Turning an eviction into a federal case”
Categories
Fair Housing

HUD sues neighbors for forcing Black tenants out

 

As you read the case Ryan Richardson and Ryan Smith are the neighbor defendants.  Neil Hilfinger was the owner/landlord.

Here is a HUD Fair Housing case where neighbors used complaints to the city and landlord to try and force a Black family to vacate.  Well, actually the neighbors succeeded in forcing the family out, which probably was to the neighbors greater detriment.

The neighbors now are facing fines of $16,000 per violation each.  

Continue reading “HUD sues neighbors for forcing Black tenants out”
Categories
crime Tenant Screening

Why Airbnb was destined to have problems

There is this online company, Airbnb, that lets you rent your house to complete strangers for hundreds of  dollars a week.  The company has a $1.3 billion dollar valuation.  Well at least they did until last week. I think the name stands for air (as in online) bed and breakfast.

The company became big news when, surprise, surprise, news breaks that some tenants trash homes.

It seems Airbnb’s business model was based on the idea that most people respect the place they are renting

The vast majority of our community members genuinely respect and protect each other 

I guess they should have had a few actual landlords in their focus groups as they set up the business model.  Every landlord would have foreseen this.

Categories
Filling Vacancies Tenant Screening

Using a screening criteria

A question was raised on one of the email list I subscribe to:

I need a set of screening criteria to use so I can weed out unpotential renters. Does anyone have a set they use. Also I am in Wisconsin, are their things you can and can not include?


In WI you cannot include any of the “Seven Deadly Sins” i.e. violations of ATCP 134.08. An overview of prohibited WI  lease terms can be found here.

A screening criteria is not  one size fits all.  Rather you must formulate it match your property, the community the property is in (college neighborhoods have a different set of concerns from an upper income condo, which is different from rural farm housing, which is different from lower income urban areas…) , your management style etc.
A properly written and enforced screening criteria can save you some hassle if fair housing questions are raised.   A poorly written criteria or one that is not evenly enforced will aggravate your problems if a fair housing complaint is filed.

For example a husband and wife who happen to be the same ethnic background as you apply.  Your criteria is income must be 3 times rent.  They make $2500 a month and want to rent your $950 three bedroom unit.  You like them, they seem like nice people.  So you accept their application even though they should earn $2850 to meet the criteria.

A month later a little green man from mars applies.  His job with NASA pays $1200 a month.  He wants to rent your $500 one bedroom.  You say “Sorry, our criteria is income must be three times rent.  You would have to make $1500 to qualify”  Uncle Martin (the Martian from my favorite Martian)  goes to HUD to complain.  Through their investigation they uncover that you bent your rules for those applicants that looked and talked like you, but refused to do so for little green people from Mars.  You are now facing a much bigger problem than had you had no screening criteria at all.

As to income criteria make certain that you don’t violate fair housing as to lawful sources of income.  For example requiring a recent pay stub to document income is troublesome as there are many lawful sources of income that do not provide pay stubs.  SSI, W-2, Child Support if applicant wishes to include it, retirement benefits,  and many more.  You must also include food stamps n.k.a SNAP in any income based criteria.

You can change your criteria at will, however all those screed after the change must be held to the same standards.

Our company’s criteria for rejection includes:

  • First time tenants may be required to have a collectable cosigner
  • Evictions within past 3 years
  • Felony drug or violent crime convictions in 5 years
  • Misdemeanor drug or disorderly charges in past 3 years
  • Non verifiable income or insufficient income
  • Non verifiable rental history or bad reference from any prior landlord


We have debated our criteria with neighborhood groups who would want a one strike and your out policy that would reject someone for having a misdemeanor possession charge twenty years ago, and with tenant advocacy groups that feel Charlie Manson and Attila the Hun both should be accepted.   Neither group likes them, but neither could find legal fault with them either.

NOTE: Our criteria would be illegal in Dane County and Madison due to criminal background being a protected class in those communities.

Categories
Investing Strategy

Is it time to be aggresively buying right now.

A member writes on ApartmentAssoc@YahooGroups:

I’m curious how many of our members are aggresively buying right now.  I just did a quick check of Milwaukee neighborhoods I already own in and there are lots of decent looking properties out there cheap.

You are correct, there are a lot of very cheap properties on the market.  The lowest prices I’ve seen in my career (1977 to date)  Money is also the cheapest I’ve ever seen. Vacancies are very low as well.  The best time ever to buy… perhaps not.
So why aren’t these things flying off the market into the hands of new owners as soon as they are listed?
There are a few reasons.
  1. If you buy a foreclosure DNS (building inspection) will make you get an occupancy permit.  Somehow this always  turns into a painfully expensive experience, with you having to do a bunch of things that result in really limited benefit to anyone.  We had one occupancy permit that the plumbing inspector made us replace the 1 1/2 drains with 2″.  These were clearly original or near original pipes as they were steel with cast iron fittings.  So $2200 later the tenant can drain their bathtub 10 seconds faster?
  2. Another issue for most owners is that it is a cash market today.  Many banks will not even accept an offer that includes any financing contingency.  If you can’t show you have all the funds in the bank the day you make the offer, oh well take a walk.This is all over the nation.We bought a commercial property in Florida last month.  Original asking was 450,000, which was lowered after six months to $395,000. In the month prior to us purchasing the bank had an offer of $375,000 with the bank financing 70%, another offer of $350,000 with a 14 day third party finance contingency also based on a 70% loan.  Both offers were rejected.  We paid $210,000.  So the bank could have gotten $165,000 more if they financed or $140,000 more had they waited 14 days for someone to get a loan commitment.
  3. Rental housing is harder than its ever been. This, despite some of the best occupancy rates in the last 25 years and as a result, rents that are finally rising a bit. Why?
    Cost just keep spiraling out of control.  I was talking to a good friend today who has been in the business for twenty years.  Neither he nor I could figure out how any owners that have much of a mortgage could survive today.Look at a water bill on a duplex with NO USAGE.  Today, it is 131.75 for three months.  Add some sewer and water and your quickly up to $300 or $400.

    Let’s say you pay $40,000 for the house.  You’ll be taxed as though the house was worth $100,000-$140,000 or more.  I bought one in 2009 for $20,000.  The place was listed with a broker .  I never met the seller prior to closing and have never seen him since.    I appealed the $112,000 assessment.  They lowered it to $104,000, claiming it was not an arm’s length transaction.

    Maintenance costs have gone up as well.  For example a couple of years ago you replaced one or two smoke detectors at $5 a piece.  Today they have to be the more expensive hush units and you have to add a CO detector or two or three.  But these are one time costs… right.  On an average unit prep we have to replace far more than half the detectors.

  4. “Smart” economist are say the bottom in our market still is six months to a year away.
Categories
Office Effectiveness Strategy

Finally… a Jott replacement that works

Many of you know how I raved about JOTT.com, a service that allowed you to call in from your cell phone and leave yourself a message.   When you returned to your office you had an email with a fairly accurate text of the note you just left yourself.

This was one of the greatest boost to my field effectiveness in years.  No more little scraps of paper, no more forgetting something – it was near perfect.

Then Bam! They discontinued the service as of May 3rd.  I felt like I lost half of my brain.

Over the weekend I tried a new service.  ReQall.com.  I like it.  In fact I like it a lot. It’s like having the other half of my brain back!

Categories
Property Taxes

What is wrong with our assessments?

Tax assessment appeal period will close on Monday the 16th at 4:45 PM.

You can get paper forms at the Assessor’s office Room 507, City Hall 200 E Wells, by phone at 414-286-3651or via the web by visiting: http://city.milwaukee.gov/assessor

On the bottom of the left hand panel click on “Ask the Assessor’s Office.” Then entire the name of the entity which owns the parcel, if different than your own name.Enter the address of the property, your email address, and in the “Question” box type “please send me an assessment appeal form.”  You will get the form back via email, usually within one day.

I recommend all owners who feel their assessed values are above what they could sell today for the assessed value to file a timely objection.

Continue reading “What is wrong with our assessments?”

Categories
Property Taxes

Could you sell your property for the current assessed value?

Could you sell your property today for cash at the current assessed value?  If not then you should consider appealing your assessment. 

“An exercise in futility!” you scream, knowing the Board of Review is generally a rubber stamp for the Assessor’s Office.  In general that may be the case. However our attorney and a few other smart lawyers believe the current MIlwaukee assessment process may be flawed as the Assessor refuses to factor the impact on values of the massive number of foreclosure, defaults and short sales in many neighborhoods.  This raises the potential for a class action suit to remediate an intentionally flawed process.

Continue reading “Could you sell your property for the current assessed value?”
Categories
Foreclosures

Milwaukee’s latest answer to foreclosure crisis

New rule to help Milwaukee monitor foreclosed properties – JSOnline

Some of the highlights from the Journal article:

Under the new rule, which the Common Council passed Tuesday, the bank or financial entity involved must notify the city as soon as the foreclosure action is started. That way the city can more closely monitor and inspect properties to prevent problems from growing, Dahlberg said.

Once a property becomes abandoned, the owners will be required to post the name of the responsible party outside the property so people know whom they can call, Murphy said.

 

My comments:

Foreclosed, boarded buildings are indeed a drain on the neighborhood. 

Continue reading “Milwaukee’s latest answer to foreclosure crisis”