May 12

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.

Aug 18

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

Jul 23

In essence, once a standard is included by reference into a law, does that standard becomes public domain. As we discussed with the NFPA and IFC fire codes incorporated by reference into the carbon monoxide detector code, it should.

Public.resource.org wins appeal on right to publish the law [pdf] (uscourts.gov)

Ever operated a tank barge and wondered what power source you would need for your cargo tank’s liquid overfill protection system to comply with the law? Probably not. But if you did, you might consider thumbing through the Code of Federal Regulations, where you would discover that one option is to hook up to an off-barge facility, provided that your system has “a 120-volt, 20-ampere explosion-proof plug that meets . . . NFPA 70, Articles 406.9 and 501-145.” 46 C.F.R. § 39.2009(a)(1)(iii)(B). Dig deeper and you would learn that NFPA 70 is not some obscure rule or regulation or agency guidance document but is instead another name for the “National Electrical Code,” a multi-chapter technical standard prepared by the National Fire Protection Association (the eponymous “NFPA”), detailing best practices for “electrical installations.” Complaint ¶ 66, American Society for Testing & Materials v. Public.Resource.Org, Inc. (ASTM), No. 1:13-cv-01215 (D.D.C. Aug. 6, 2013) (“ASTM Compl.”), Dkt. No. 1, Joint Appendix (J.A.) 86. Parts of NFPA 70 have been incorporated into the statutes or regulations of at least forty-seven states and, as we have just seen, the federal government. American Insurance Ass’n Amicus Br. 5.

A bunch of good comments:
https://news.ycombinator.com/item?id=17579742

And a good summary of the issue:
http://www.dailyreportingsuite.com/ip/news/IPLD20180718

Underlying dispute. The district court had addressed motions and cross-motions for summary judgment brought in two separate but related cases brought by SDOs against Public Resource. In one case, the American Society for Testing and Materials (“ASTM”), National Fire Protection Association, Inc. (“NFPA”), and American Society of Heating, Refrigerating, and Air-Conditioning Engineers (“ASHRAE”) (collectively “ASTM Plaintiffs”), sued Public Resource for both copyright and trademark infringement, based on Public Resource’s copying and dissemination of 257 standards developed by the ASTM plaintiffs that have been incorporated by reference into federal law. Public Resource admitted that it purchased hard copies of each standard, scanned them into PDFs, added a cover sheet, and posted them online. Public Resource also retyped the plaintiffs’ standards and posted them online. The summary judgment motion related to nine of the allegedly infringed standards.

https://www.theregister.co.uk/2018/07/17/appeals_court_copyright_fair_use/

Y’know… Publishing tech specs may be fair use, says appeals court
Expect this one to be argued all the way to the Supremes
In a victory for those supporting open access to technical specifications, the US Court of Appeals for the District of Columbia Circuit on Tuesday vacated injunctions [PDF] that prohibited Public.Resource.Org (PRO) from publishing copyrighted technical standards online.

 

Jul 13
Below is the Apartment Association of Southeastern WI’s legislative alert regarding a proposed Milwaukee County Rent Abatement ordinance

Dear AASEW Members:
  .
The Milwaukee County Board is considering a proposal that would permit your tenants to abate rent for maintenance issues not addressed within 24 hours.
  .
For example, your tenant calls on Friday morning to say the bathroom faucet is not working correctly.  You go out and fix it on Sunday, 50 hours after the call came in.  This proposal would allow that tenant to deduct $200 from the rent – Yes! Under this proposal, the tenant can deduct TWO HUNDRED dollars even though you made a timely repair of a minor item that does not affect health or safety. 
  .
  .
There will be a hearing on this proposal at 9:00 AM Monday, July 17th, 2017 at the County Board Committee Hearing Room at the Milwaukee County Courthouse, 901 North 9th Street, RM 201B, Milwaukee, WI 53233 Phone: 414-278-4222.  Ironically this is two floors below the eviction courtroom where the legitimacy of each deduction will be decided.
  .
I encourage you to attend.  If you cannot attend you can still make an impact by reaching out to your County Supervisor and/or County Executive Chris Abele to let them know the potential negative impact of this proposal on both you as the property owner and on your tenants.  If you live in one of their districts please make an extra effort to contact your supervisor and attend.  Constituents of the supervisors make a bigger impact when in attendance.
  .
Who represents me?
           Here is the link to look up your County Supervisor:
           Here is the link for County Executive Chris Abele:
  .
Here are some talking points to help you get started when making your call.
  • How is maintenance even directly related to evictions?
  • Who will be responsible for verifying maintenance issues?  At what cost? In what time frame?
  • What is the plan if the issues are deemed inaccurate?
  • Cost of these abatements and the court costs to fight them will be passed on to good tenants
  • There is a risk of tenants seeing these types of abatements as a means to avoid paying legitimate rent.
  • This proposed system is just another layer of cost to the city
  • There are already programs in place to protect tenants through the Department of Neighborhood Services (DNS).  Why add this? If the current system is not working, why not improve what we have rather than create a new layer of bureaucracy and cost.
  • Evictions are not a result of non-repair, but a result of non-payment
  • This proposal will increase evictions, not decrease them.
Many of the tenants featured in the news surrounding the Eviction Defense Project (Milwaukee) are serial evictees.  This type of evictee increases the rents of good tenants; repeated court costs, employee time, and loss of rent will cause rents to rise.
 .
There are bigger issues to be addressed regarding evictions in Milwaukee.  We need to be looking at ways for landlords to be better landlords and tenants to be better tenants.  Many want to blame housing for all the problems in our communities.  A better approach for both housing and for the tenants that find themselves in eviction would be to look at the underlying cause of the tenant’s failure to pay rent and have both financial assistance and social intervention to make their future tenancies successful. Housing isn’t the problem, it’s part of the solution.  The money would be better spent on education, neighborhood programs, and increased police protection.
  .
The AASEW applauds efforts to reduce evictions as they are time-consuming and costly for the owners as well as negatively impacting the housing stock and the tenants.
Take action today; contact your supervisor or attend the meeting on Monday (7/17/17).
 .
Sincerely,
Ron Hegwood
AASEW President
Feb 09

I previously wrote about problems with Milwaukee’s DNS computer system.  They now have their new system online.

I spoke to a couple of people that have attended a recent DNS presentation on the new property information system.

At this presentation, the attendees were told that DNS was prevented from collecting contact information, such as phone numbers, through property recording due to ACT 176.  This is not accurate but is just more “Fake News”  that our industry has been subjected to so much lately.
 
ACT 176 explicitly permits the collection of the contact information for the authorized contact person for the property. This exclusion was supported by the Apartment Association as most owners find value in having people be able to contact them or the people they have managing their properties so that they may address small problems before they become big problems. We also find it useful to be able to contact other owners during screening.
 
Here is the law as enacted by ACT 176:
 
66.0104 (2) (e) No city, village, town, or county may enact an ordinance that does any of the following:

1. Requires that a rental property or rental unit be inspected except upon a complaint by any person, as part of a program of regularly scheduled inspections conducted in compliance with s. 66.0119, as applicable, or as required under state or federal law
.
2. Charges a fee for conducting an inspection of a residential rental property unless all of the following are satisfied:
a. The amount of the fee is uniform for residential rental inspections.
b. The fee is charged at the time that the inspection is actually performed.

3. Charges a fee for a subsequent reinspection of a residential rental property that is more than twice the fee charged for an initial reinspection.

4. Except as provided in this subdivision, requires that a rental property or rental unit be certified, registered, or licensed. A city, village, town, or county may require that a rental unit be registered if the registration consists only of providing the name of the owner and an authorized contact person and an address and telephone number at which the contact person may be contacted.
Jan 07

Recently the Milwaukee Journal ran a series “Landlord Games” that inaccurately portrayed LLCs as being used simply to avoiding paying property taxes and fines.  The result is the Milwaukee Common Council is creating a committee to study LLCs and rental housing. Text of proposal. The rental industry is again, noticeably absent from those invited to the table.

View as formatted pdf with footnotes

Let’s agree that all property owners pay a cost when someone fails to pay their taxes or their property is foreclosed and abandoned.

The Apartment Association does not support bad actors. None of those owners featured in the Journal article are members of the Association.

Rather we see the importance of the city, and private investors working together to make rental housing, and therefore neighborhoods, succeed for the mutual good of both.

Rental housing is an important and integral element of Milwaukee. About 58% of the residents of Milwaukee are tenants. In some neighborhoods, such as 53233 the number of renters exceeds 97%. The success or failure of neighborhoods and rental housing are closely tied.

Rental Housing is the largest small business in Milwaukee with over $7 billion invested in Milwaukee. (MPROP assessor records October 2015) Rental properties account for well over a half billion dollars a year of economic impact, starting with $190 million in property taxes, sewer and water charges, maintenance, insurance and everything else that goes into running rental housing. The Census Bureau found the yearly median operating costs per unit for multifamily rental properties vary between $3,600 per unit for small properties and $5,170 per unit for large properties, adjusted to 2016 dollars. These numbers exclude interest and mortgage servicing.

Providing rental housing in older, poorer neighborhoods is difficult, challenging and unappreciated work. Many have failed, some are opportunists or worse, but the majority were simply overwhelmed financially and mentally by the task at hand.

Owners are impacted by the financial and social problems of their tenants, the high costs of maintenance and lack of capital to address those problems. It is not the owner’s lifestyle that contributes to insect infestations or broken windows, yet it is the owner and not the occupant that is accountable both financially and recently in the media.

Not only do private owners suffer these burdens. One only needs to look at the long history of failure among Milwaukee’s nonprofit housing providers. (see excerpt below) These groups had every advantage over the small private investor. They had significant financial resources, typically through Block Grant and other government funding and grants; they had well-paid and well-educated staff; they often obtaining properties without costs, and they had access to the best tenants on Rent Assistance. Nearly all of Milwaukee’s nonprofit housing providers failed financially.

These groups had every advantage over the small private investor. They had significant financial resources, typically through Block Grant and other government funding and grants; they had well-paid and well-educated staff; they often obtaining properties without costs, and they had access to the best tenants on Rent Assistance. Nearly all of Milwaukee’s nonprofit housing providers failed financially.

Or one could look at the Milwaukee’s Housing Authority budget to see the costs they incur housing low-income Milwaukeeans. Here too is an organization that gets Rent Assistance tenants, tenants who risk losing their housing subsidy if they fail to comply with the rules or pay their rent. HACM does not rent to the populations with bad histories, leaving the segment most in need of housing to the private sector.

Milwaukee should strive to encourage a successful private rental housing market in this once great city, but since the mid-1980s’ the city adopted a culture of hatred towards private rental owners. That has not produced positive results, but instead, discourages the right people from participating.

If Milwaukee rental housing became more sustainable, where people willing to invest their time and money were to make reasonable profits, it would be harder for the few charlatans to exist because of increased competition for available properties. An added benefit is more interest in investing in Milwaukee’s rental housing will result in an increase in values and therefore an increase in the tax base.

Alderman Witkowski, who is the co-author of this proposal, created a Local Business Action Team to help small business succeed. Rental housing is the largest segment of small business within the city and one that may have the greatest impact on the well-being of the city. With our half billion dollars a year of economic impact, a similar effort should be undertaken towards making private rental housing more successful.

Let’s look at the recent Journal Sentinel series on landlords.

This investigative reporting – using easily available public records – showed that the individual owners behind LLCs could be revealed and that other properties owned by these individuals or different LLCs could also be exposed. Changes in the LLC laws are not necessary, contrary to the assertions of Aldermen Murphy and Witkowski that bad landlords are operating in secret. The City Attorney’s office has recently been successful in having a receiver appointed for the various ownership entities used by inner city landlord

Within existing laws, the city could have caused most of the featured landlords out of business, through docketing and enforcing code enforcement fines, and foreclosing f tax delinquencies. For whatever reason the city allowed these owners to continue unabated.

Perhaps most troubling is the relentless attack on James H. Herrick, who works for Baird, that went as far as the Mayor calling for the guy to be fired. He is not a member of the Association nor known to us.

The Journal reports that inspectors show up and find basement doors illegally padlocked. In the article, the owner’s manager states he did this in an attempt to keep drug dealers from entering the property.

There is no argument that inoperable fire doors are an unreasonable risk to occupants. Clearly, this was a novice mistake made by someone who did not understand fire codes.

The correct response by DNS would be for the inspector to explain the problem and demand the owner’s rep immediately remove the padlocks. If the owner did not comply, the Department of Neighborhood Services has an essential services program where the city can contract a repair and then bill the owner.

Instead, the inspection supervisor chose to placard the building and force 50 families out onto the street. Closing a 50 unit building would not have been the DNS response had the property been located on the Eastside, Bayview or the Southwest side. In these more affluent neighborhood they would have compelled a solution that kept the tenants safely in their homes.

But this building is in a poor, minority neighborhood.  The city’s response was harsh as it typically is in these neighborhoods. The DNS employees who acted out of spite towards the owners and a disregard of the tenant population, instead of attempting to protect the homes of 50 low income, primarily minority tenants, should lose their jobs.

The 50 unit building remained closed for a couple of months. It is no surprise that the building ended in foreclosure and sold at a distressed price due to this.

The owner’ use of single property LLCs, in this case, were an advantage to the city. Because the owner had his properties in separate LLCs, this allowed only this one to be foreclosed upon, instead of all 13.

It is a lending industry practice in larger real estate deals to require single asset entities to separate liability from one project and others with a similar ownership interest.

It would actually be in Milwaukee’s best interest if every investment property was in a properly segregated LLC. That way a failure at one property would not have a domino effect and bring down perhaps dozens or more other properties that are under similar ownership.

Then the Journal and Mayor put pressure on Baird, Herrick’s employer, placing his job in jeopardy. What advantage does the city receive in this? If he loses his job, his remaining properties will likely fall into financial problems as well, resulting in more boarded buildings, displaced tenants, and distressed sales.

Similarly, what did the city gain by the public attack on NBA basketball star Devin Harris? While it may have been expedient in causing the payment of some fines and taxes, overall it sent a clear warning to others with capital “Do not invest in Milwaukee. If you fail, you will be ridiculed and perhaps lose your career.” Similar results could have been obtained with a private conversation with Harris, thereby not discouraging outside investment.

Journal article on non-profit failures

West End joins a list of other nonprofit housing organizations that have failed in the last 10 years, including Walker’s Point Development Corp., East Side Housing Action Coalition and Community Development, and the Westside Conservation Corp.

 

Oct 27

An update:

The bookmarked link we used yesterday, the one we used for years to look up DNS records no longer works today.  The link from the Assessor page to DNS no longer works in a meaningful manner.  Using the city site to find owner information for screening purposes does not return the phone number, just the information found on the Assessor’s site.  Plus it takes a lot of clicks to get to.

Yesterday we called an inspector who met with us two weeks ago to sign off an order because the order showed as open in the city computer system.  First thought – the inspector failed to sign off the order.  It has happened before with this inspector.

 
The inspector’s response was enlightening, if not scary.  It seems DNS recently replaced their computer system with a new one that works so poorly that they must do everything by hand, as in paper and pencil by hand.
 
I asked ‘What was wrong with the old system?’  His answer, ‘Nothing, it worked fine.’
 
So then I asked the obvious why.  His answer – The Mayor demanded the change. I thought it odd that a mayor would be dictating database software, sounds more like the job for IT. The inspector speculated that the purchase of the new, nonfunctional system was the Mayor returning a political favor.
 
Glad to see the original HeathlCare.gov* programers landed on their feet. 😉
 
Seriously though if you have completed orders from the City of Milwaukee you should check to make sure the status in the city system is correct.  If not, call 414-286-2268 and ask that a supervisor fixes the problem. You do not want to have an open order for say a smoke detector,complete the order and then have a fire with that order remaining open, or you fixed a broken step but it remained open and now someone tripped there.
 

* The GAO report on the failure of the original HealthCare.gov

http://www.gao.gov/assets/670/668834.pdf

Jul 03

A reader writes of the frustration he was having after being charged by the city for mattresses dumped at his property that were not from his tenants.  With the ever exploding bedbug problems in urban areas, there are a lot more mattresses hitting the garbage.

We had a similar problem with properties in Milwaukee.  At one property mattresses would appear behind it once a month or so even though there were no move outs.  We would the get gigged for the $100 repeat litter fine even though we had our clean out crew drive past the property every couple of days and remove any trash well before getting notified by the city.   Somehow it seemed the city inspector was there the day the mattress was dropped off each month.

I wanted to catch who ever was dropping the mattresses in the act so I bought a trail camera and mounted it to view the garbage area.  Mattresses quit appearing immediately after that.  We have since installed trial cameras or wifi cameras at a number of locations.  The problems generally stopped upon installation (deterrent effect)  In one case we caught a neighbor who is a small contractor dumping.  He quit after being given a picture of him unloading his truck in the garbage cart area of our property.  I’m sure he is now dumping at someone else’s property to avoid paying the construction debris fees at the self help dump.  Most bad happens after dark so Infrared (IR) technology is important for night vision.

An example of a trail camera that uses an SD memory card to record images.  We have a number of the Moultrie cameras.  In fact they were being sold in the sporting goods section of Wal Mart at a similar price to Amazon.

A 64GB card holds a lot of images.  Set it to overwrite when full and then retrieve the card when there is a problem.  These can be mounted anywhere as they are battery powered. A set of batteries lasts three months or so.

If you have a cooperative tenant with internet or provide internet to your building, the other choice is wifi enabled security cameras.  The under $100 ones need to be building mounted for the power, but you can upload to cloud storage and keep a month’s worth of images or movies.

Netgear makes a battery powered wifi camera system that intrigues me, but haven’t bought any yet.

Why do my Amazon links start with smile instead of www?  AmazonSmile donates a portion of the sale to any charity you select.  I chose Children’s Hospital of WI, but there are a million 501 (c) (3) organizations that you can choose from.

 

Mar 01

Governor Walker signs AB 568

AB 568 was signed into law on 2/29/2016 as WI ACT 176
 
Present at the signing were Attorney Tristan Pettit, to your left, WI Governor Walker’s right. Tristan presents the AASEW Landlord Tenant Law Boot Camp.
 
To your right, Governor’s left, is Joe Murray, the AASEW lobbyist.
 
Tristan and Joe, along with AASEW Attorney Heiner Giese and folks from the WAA, led by Gary Goyke, did a lot of work on this bill.
Feb 27

Governor Walker is scheduled to sign AB568 into law on Monday 2/29/16.  Link to the text of the new 2016 Wisconsin Landlord Tenant  law, ACT 176   This is the third major revision to WI Landlord Tenant Law in three years.

It will take a while to digest all the implications of the new bill, even for those of us who watched it go through the legislative process over the last six months or so.

Some of the highlights:

  • The new law allows the termination of a tenancy for criminal activity. Drug dealing is one of the crimes you can evict for, but simple possession or use of drugs is not. Politically, allowing possession was necessary. But it is still disappointing that owners that wish to, still cannot expect drug free housing.  With this new tool to address problems  year leases are practical in more situations than they are today. An advantage of leases is less turn over and that should make neighborhoods more stable. Keep in mind that the Wisconsin protections for domestic abuse victims remain in place.
  • Another change affects month to month tenancies – The ability to use 5 Day notices for breaches.  Now when the tenant shows up with a pit bull you can respond with a 5 Day instead of a 14 Day.  An advantage to the tenant is they can correct their mistake and not lose their home.  This may also permit the including of late fees and other charges that the tenant owes on a 5 Day notice.  I will get clarification on this.

There are a bunch of changes that should help keep local governments a bit more in check.  This legislation:

  • Prohibits  rental property inspections except upon a complaint or as part of a program of regularly scheduled inspections conducted in compliance with state or federal law.  Think fire inspections.
  • Dramatically changes “Reinspection Fee” by limiting the the escalating fee scheme as well as allowing fees only when there was an actual, physical inspection of  the property.  Currently these fees double every 30 Days until they are six times the original fee, plus often there is no actual inspection associated with the fee. This is important as many of the abandoned and foreclosed homes in my neighborhoods appear to have ended up in that state in part due to fees imposed by Milwaukee.  The fees imposed these properties also make it harder for someone to come in, buy the property and put it back in service.
  • Prohibits rental property certification or licensing  schemes unless the requirement applies uniformly to all residential rental property owners, including owners of owner-occupied rental property.
  • The law still allows for programs such as Milwaukee’s Property Recording Ordinance, but most likely they will no longer be able to charge a fee.
  • Prohibits an occupancy or transfer of tenancy fee on a rental unit.

Time of Sale protections

  •  The bill prohibist local regulations with respect to taking title to or occupancy of property.

The new law also changes things with regards to sprinklers, historical buildings, trespass and towing.

Stay tuned as we get more information on what these changes mean to us and what lease language will be updated.

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