Just a Landlord

There was a discussion on the free  Apartment Association listserv about application fees and move-in fees. One member told of how large management companies charge many hundreds of dollars in application and move-in fees.

In WI an owner can charge for a credit check fee up to $25 actual costs and, if the applicant is from out of state, additional actual background costs, up to $25. In WI all other application and move-in fees appear to be illegal.

WI Administrative Code ATCP 134 RESIDENTIAL RENTAL PRACTICES.

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).

coupled with

134.05 (2)(b) A landlord who receives an earnest money deposit from a rental applicant shall do one of the following if the landlord enters into a rental agreement with that applicant:

1. Apply the earnest money deposit as rent or as a security deposit.

2. Return the earnest money deposit to the tenant.

makes it clear that all application and move-in fees, except credit reports and out of state background checks, are illegal in WI.

Owners that try to circumvent this with fancy wording will eventually find themselves in trouble as “any payments or deposits, however denominated or described” is extremely clear.

Legislative committee blocks rule prohibiting landlords from charging late fees on rent

The ban on late fees was determined to be “arbitrary and capricious” yesterday morning by the Joint Committee for Review of Administrative Rules, on a 6-4 vote, and therefore unenforceable.

Just because you can charge late fees, does not mean you should charge late fees, without exception.  Discretion should be given to tenants that are facing hardships.

Think of this like the speed limit. The sign says 70 and you usually do 75 to reach your goal a bit sooner. But trying to even do even close to the limit in a blizzard may well have the opposite effect. We could see an economic blizzard later this year.

The purpose of late fees is to encourage on-time payments by those who can pay, it is not to penalize those who are facing hardships.

My company did not charge late fees in April, even though the moratorium did not exist then, because anxiety was high for tenants.

Even though we can again charge fees, our company will waive late fees for tenants that can provide proof they have not received their unemployment checks or are waiting on WRAP, etc.

We have a list of resources for tenants facing hardship due to COVID or otherwise that you can share with your tenants if you wish.

When does the moratorium on late fees expire under EmR2002, the DATCP emergency rule?

There have been a variety of end dates of the late fee moratorium suggested in the media, anywhere from August 8th to September 21st. However, my opinion is the end date is July 23rd

The Wisconsin Department of Agriculture, Trade and Consumer Protection in April issued an emergency rule that temporarily banned fees on late or missed rent payments. Ti Gauger, a department spokeswoman, said the ban lasts until Aug. 8.

Source

This is a mathematically improbable date. If the Public Health Emergency ended with the May 13th Supreme Court decision, then 90 days is August 11th.

However, EO 12, Governor Evers/Secretary of Health Palm’s PHE order, expired on 4/24. EO 28, which purported to extend EO 12 was invalidated by the WI Supreme Court on May 13th, 2020 in 2020AP765-OA:

By the Court.—Palm’s Emergency Order 28 is declared unlawful, invalid, and unenforceable.

If EO 28 was “unlawful invalid and unenforceable”, then it should have no consideration in the 90 day period of EmR2002. Therefore, did the Public Health Emergency end on 4/24 with the expiration of EO 12? I would believe so.

If the Public Health Emergency ended 4/24/2020, owners that wish to charge late fees should be able to 90 days after, July 23rd.

While I’m not certain I agree, an extreme view is that EmR2002 is invalid in its entirety as it was enacted the day after the Public Health Emergency legally ended.

We need to ask DATCP for clarification of the dates of the moratorium in light of 2020AP765-OA

This is not to suggest of course that you SHOULD charge late fees, that needs to be an individual decision based on the economic and social conditions in July or August.

I urge owners to work with tenants who are struggling due to this unexpected and extreme upheaval in the American economy. If your tenants do not succeed, neither will you.

My company waived all late fees for April, well before the moratorium was enacted. But that was a personal decision and not an unfunded government mandate.

The AASEW has done a lot of great things for the industry and sustainable rental housing.

One that benefited many owners was the change to Sheriff moves to eliminate the mover, which is a large portion of the costs.  

Our attorneys, working against their own personal interest, changed the law to allow LLCs to be represented by a member or agent, rather than requiring an attorney. This saves a lot of money as well as making the case less confrontational.

Here are the laws passed through the work of the AASEW in:

2018  https://bit.ly/3bryZ0Y
2016  https://bit.ly/2Lj7NXM
2014  https://bit.ly/3dCRRM1
2012  https://bit.ly/2zx3NQZ

It is important that we work together as an industry for the betterment of all.

WI DATCP: Emergency Rule 2002 Rule, prohibition on late fees.

https://docs.legis.wisconsin.gov/code/register/2020/772B/register/emr/emr2002_rule_text/emr2002_rule_text

This emergency rule modifies Wis. Admin. Code ch. ATCP 134 to create a temporary prohibition on charging late rent fees or late rent penalties for any missed rent payment or any late rent payment during the current public health emergency and during the 90 days following the public health emergency.

There are questions as to what happens to April late fees that are charged but not collected, as they were incurred during the emergency declaration

A better question is, not if you can legally go after April’s late fees, but should you? I urge landlords not to charge late fees at this time, law or no law. 

Most landlords are not charging late fees, so this will have little impact, other than the length of time after the crises is over.

My way of thinking about this – if the tenant ultimately catches up on the base rent, I consider it a better than the anticipated outcome.  If they leave, owing rent, then you would not have collected the late fee anyways.

There is a mandatory 45 day comment period.  You can also  (politely) comment at:https://docs.legis.wisconsin.gov/feedback/agencyform?cite=EmergencyRules/EmR2002
Please do not make comments that feed into the negative stereotype of landlords

The Wisconsin rules on emergency rules:

Emergency Rules
As noted, certain requirements that apply to permanent rules also apply to emergency rules, including the requirement for gubernatorial approval of the scope statement and of the final draft rule.

Once the Governor has approved a final draft emergency rule in writing, the agency may publish the rule in the official state newspaper, at which time the rule takes effect, unless the rule specifies another effective date.

The agency must also file a certified copy of the rule with the LRB in order for the rule to be valid. On the day an agency files an emergency rule with the LRB that may have an economic impact on small business, the agency must also submit the rule to the SBRRB. Just as for proposed permanent rules, the SBRRB must determine whether the emergency rule will have a significant economic impact on a substantial number of small businesses. If it determines that the rule will have such an impact, the board may submit suggested changes to the agency to minimize the economic impact of the rule.

An agency must hold a public hearing on an emergency rule within 45 days after the adoption of the rule. An emergency rule remains in effect only for 150 days, unless JCRAR grants an extension for up to an additional 60 days. The total period for all extensions granted may not exceed 120 days.
[s. 227.24, Stats.]

The Small Business analysis is at: https://docs.legis.wisconsin.gov/code/register/2020/772B/register/emr/emr2002_rule_text/emr2002_initial_regulatory_flexibility_analysis

The Fall 2019 Apartment Association Landlord Tenant Law Boot Camp is October 26, 2019

Even though I know the law well, we’ve sent our staff. It is good for them to hear the rules from someone else. Plus if they learn one new thing, it more than pays the modest cost.

Wisconsin landlord tenant law has changed dramatically in 2012, 2014, 2016 and 2018 to Wisconsin’s Landlord Tenant Law with Act 143, Act 76, Act 176 and Act 317.

Tristan obviously knows the latest law, but that’s the easy part. He also is one of the most prolific landlord tenant attorneys in Southeastern WI. That gives him great insights into how the courts are ruling today and what the most recent “Gotcha’s” are.

At $189 for members, it is far cheaper than learning from your mistakes. Not only does it help prevent costly errors, you also will learn how to legally screen better, thereby reducing evictions, and other things that will result in profitability.

AASEW Landlord Boot Camp 2019
WHEN: Saturday, October 26, 2019
WHERE: Four Points Sheraton 5311 S. Howell Avenue, Milwaukee, Wisconsin, 53207 (Across from the airport)

Registration opens at 7:10 AM

The seminar runs from 8:30 to 5 PM with a 30 minute break for a complimentary lunch. There will be a one hour question and answer session afterwards, ending promptly at 6 pm. Many will find the Q&A invaluable, therefore you may wish to arrangements to stay until 6 pm.

Updated to include the latest law changes and court rulings!

INCLUDED: 100 plus page manual to help you put what you learn into practice.

More info and sign up at http://LandlordBootCamp2019.com

List of  Wisconsin Landlord Tenant Law changes

There have been a lot of questions lately regarding which Wisconsin landlord tenant laws have been changed in recent years. Below is a list of state law changes since 2011.

The Association’s Landlord Tenant Law Boot Camp is a good way to learn how to implement these changes in your rental procedures.    It is a full Saturday of intense information.  Attorney Tristan Pettit, AASEW Board Member and the guy who drafts the standard forms you get at WI Legal Blank is the presenter.  Tristan sat at the table as a lot of this was drafted.

Many of the changes were promoted by the Apartment Association of Southeastern WI, Inc., which I have been a board member of for all but one of the last 30 years.  You should consider membership so that we can continue these good works. 😉  Join at https://AASEW.org

While portrayed by some as anti tenant, it is the good tenants who meet their obligations who ultimately pay for those tenants that don’t pay or are disruptive.

Some changes were just common sense and benefit both owners and tenants.  Previously, you could only give a month to month tenant a 14 Day notice without right to cure for lease violations.  Now you use a 5 Day Breach to clean up their garbage or get rid of that  one hundred pound Pit Bull – Rottweiler that is chasing the mail carrier down the block. If the tenant complies, their rental continues.

Another example was the change to waiver.  For a while the tenant advocate attorneys would raise the issue of waiver if you had waited until, lets say the 15th, to give a five day.  Then you get tired of constant late payments and issue a five day on the fifth. The argument was raised that by waiting until the 15th that you changed the terms of the agreement.  Owners responded by adopting a no leniency policy, giving everyone a five day on the fifth.  Now that this has changed owners have the option of giving tenants extra time before issuing a notice, remembering that notices appear more confrontational that a note reminding them rent is due.

2017 ACT 317

2017 Wis. Act 317

https://docs.legis.wisconsin.gov/2017/related/lcactmemo/act317

Summary by Tenant Resource Center

2015 ACT 176

2015 Wis. Act. 176

https://docs.legis.wisconsin.gov/2015/related/lcactmemo/act176

Tenant Resource Center Summary of 3/2/16 Changes

2013 ACT 76

2013 Wisconsin Act 76

2013 Wisconsin Act 76 Evictions, Towing Practices, and Prohibitions 

Tenant Resource Center Summary of 3/1/2014 Wisconsin Law Changes 

2011 ACT 143

2011 Wis. Act 143

2011 Wisconsin Act 143: LC Act Memo

Tenant Resource Center Summary of 3/31/2012 Wisconsin Law Changes

2011 ACT 108

2011 Wis. Act 108

2011 Wisconsin Act 108: LC Act Memo

I think this is the full list

I had seen this years ago and then forgot about it until I ran into it this morning while searching for something.

A real wealth of info, of course much of it slanted towards tenants rights. Some of it is outdated, such as the eviction notice grid does not contain 5 Day Breach for Month to Month.

We should work to get eviction prevention (very different than eviction defense) as part of this, as well as more tenant responsibility focused pieces.

Eviction prevention is providing the resources and tools necessary for tenants to succeed. When tenants fail, landlords suffer or fail.

http://wilawlibrary.gov/topics/landlord.php

The Spring 2019 Apartment Association Landlord Tenant Law Boot Camp is February 9th, 2019. (Less than a month away.)

Even though I know the law well, we’ve sent our staff.  It is good for them to hear the rules from someone else.  Plus if they learn one new thing, it more than pays the modest cost.

Tristan knows the latest law, but that’s the easy part.  He also is one of the most prolific landlord tenant attorneys in Southeastern WI.  That gives him great insights into how the courts are ruling today and what the most recent “Gotcha’s” are.

At $179 for members, it is far cheaper than learning from your mistakes.  Not only does it help prevent costly errors, you also will learn how to screen better and other things that will result in profitability.

AASEW Landlord Boot Camp 2019

WHEN: Saturday, February 9, 2019

WHERE: Four Points Sheraton 5311 S. Howell Avenue, Milwaukee, Wisconsin, 53207 (Across from the airport)

Registration opens at 7:10 AM

The seminar runs from 8:30 to 5 PM with a 30 minute break for a complimentary lunch. There will be a one hour question and answer session afterwards, ending promptly at 6 pm. Many will find the Q&A invaluable, therefore you may wish to arrangements to stay until 6 pm.

Updated to include information from Wisconsin ACT 317!

INCLUDED: 100 plus page manual to help you put what you learn into practice.

 

More info and sign up at LandlordBootCamp2019.com

Attorney Tristan Pettit, you know, the guy that writes the standard legal forms for Wisconsin Legal Blank, is doing his landlord-tenant Boot Camp again on Saturday, October 7th. There are still a few seats left.

You get a full day of landlord-tenant law training for the price you’ll spend for 30 minutes of attorney time after you make a mistake in this complex area of law,

All the details are at:
http://www.landlordbootcamp2017.com

But the proof of value is I send my staff to Tristan’s Boot Camps.  Even though I know the laws, it is of great value to have staff learn what they need to be concerned about in a different setting than the office.