Category: Evictions

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Evicted - Matt Desmond Evictions Housing policies

Rent eats first?

Desmond and others have a nifty little saying “Rent eats first” that implies landlords get paid at the expense of people eating.  The truth is food stamps (SNAP/Food Shares) are given to most people and families under the poverty level while housing assistance is given to very few.  That’s why we read about evictions and homelessness and not about starvation.  In a country as wealthy and great as America, we should not be hearing of either.

One workable voucher program could be similar to food stamps where all people and families below the poverty level, in addition to food stamps, would receive a housing allotment that can only be spent on housing.

The recipients would have a choice of renting from anyone without the government saying, for example, ‘you have two small kids so you are only eligible to rent a two bedroom in the $630 price range and we will pay $500 of that’   Instead the recipient would receive a $500 housing allotment.  They then could rent a $500 place and pay nothing out of pocket or decide they want to rent a $750 three bedroom in a different neighborhood and must figure out how to pay the other $250 themselves.

Such a plan would help stabilize the private housing industry while at the same time would allow the recipients much more freedom of choice in their housing decisions.  It would also be less costly to manage than Section 8.  To achieve this the payments would have to be available to all rental owners except of course those banned due to fraud or similar.

Some of the money could come from adjusting the current W2.  As the vouchers would earmark monies for housing the volume of evictions should subside.

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Evicted - Matt Desmond Evictions Our industry

EVICTED: Matt Desmond Interview on NPR

On March 7th, 2016 Matt Desmond, author of EVICTED was interviewed on the Diane Rehm NPR show, guest hosted by Tom Gjelten.  I was privileged to be an invited guest on the show.  I do not feel I did as well as I wished but am sharing it as this show was a good overview of the issues presented in the book.

EVICTED will have a huge impact on our industry for many years.    Whether that impact is positive or negative to rental housing is up to us and how we react.

Listen to NPR’s Diane Rehm Show EVICTED Interview with Matt Desmond

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Evicted - Matt Desmond Evictions

Slate Magazine on Desmond’s Book “EVICTED”

Slate magazine has a large interview with Matt Desmond, author of Evicted. You should read the article, heck you should read the book, but I’ve taken a snip from the article that I think accurately portrays Desmond’s view of owners. It is a view that I’m sure will be lost upon many as the community reacts to his writings.

It is our job, for the sake of our industry as well as for tenants, to ensure this does not happen. Much anti-landlord sentiment out there is really an anti-tenant sentiment. But we are a more politically appetizing target.

Slate:

You don’t demonize the landlords. You really emphasize how difficult the business is and how close to disaster many of these operators frequently are when they get an unexpected bill. What do you think is the most useful way for reform-minded readers, who might be tempted to villainize these people, to understand these actors?

Desmond:

I think we are letting ourselves off easy if we just say, “Oh those landlords they’re so greedy,” or “Oh these tenants are so irresponsible.” If we as a nation are going to house the vast majority of our low-income families in the private market, landlords have to be at the table. We have to understand their perspective; we have to understand their incentives. The book does not shy away from moments where landlords have massive discretion over families’ lives or where landlords drive their properties into the ground. But it also documents when landlords work with families and let them slide sometimes.

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DIY Evictions Evicted - Matt Desmond Evictions Housing Stats Industry stats Investing Legislative Milwaukee Our industry

Journal Editorial: Housing is at the heart of poverty

The Milwaukee Journal Editorial based on Matt Desmond’s new book Evicted builds upon some misperceptions about the rental industry.

A NYT reader’s comment on Desmond’s Evicted more closely follows what typical owners see when trying to run lower income housing.

The Journal editorial echoes Desmond’s advocating for legal representation for tenants in most evictions.  If you frequent eviction court you seldom see a day without Legal Action representing tenants.  ATCP 134 provides enticement for attorneys to represent tenants  tenants tin cases where the owner is doing wrong.

Implying tenants need legal representation simply perpetuates a myth that wrongful evictions are common and owners somehow benefits from an eviction. In fact by the time it is over the owner has lost two to three months rent and often more.  Legal representation for tenants in evictions seldom does more than simply let the tenant get another month of nonpayment before leaving.
 
In an average month eviction judgments in Milwaukee County exceed $847,000 – every month.  But this is but a fraction of the losses suffered by property owners.  Of those evictions, only a third of the cases had money judgments other than the court applied fees.  Was this because the tenant did not owe rent?  No, more likely because the owner did not want to waste more time chasing a judgment they will never collect.  Those in our industry as well as those outside of the rental business will tell you that less than a quarter of uncollected rent ends up in eviction court.
 
This is money removed from housing and increases costs for the rest of the tenant population. While some tenants may use the money for real needs like shoes for kids, some use it for other things that further harm the community.
 
Then there is the comments about constructive (illegal) evictions.  While statements like this flame the fires of hatred against landlords, such acts seldom occur and when they do there is adequate remedies for the tenant.  I own two duplexes that a guy walked away from his 1/3 down and eight years of payments after he spent a weekend in jail because he threw the tenants’ belongings out on the front yard and changed the locks.  Seems the tenant did not pay rent and when he went to find out why, he also found they broke the front picture window.  His first stop after getting out of jail was my office to see if I would buy them for the remaining mortgage.  Small owners take these things too personally…
 
Desmond’s book has brought the issue to the forefront. And this is good.  Its is our industry’s job to make sure this does not turn from what it is, the bringing a real problem to light, into yet another excuse to bash the rental housing industry.
 
The part of the discussion that would be helpful to the overall community is increased housing vouchers.  Universal food stamps for people in need was a good first step many years ago. Housing and utilities vouchers for those who need them the most would be a good next step.
 

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Code Enforcement crime Evictions Legislative

AB 568 is now law, WI ACT 176

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.
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5-Day Notice crime Evictions Legislative Our industry

A response to the new WI landlord Tenant Law

Yesterday I wrote about 2016 revision to the Wisconsin Landlord Tenant Law.  Over on FaceBook Brian Peters, whom I respect, responded.  I thought the discussion warranted bringing it over here for those who do not follow me on FaceBook.

Brian Peters Unfortunately, those changes, along with other changes in past, allow for abuses by bad landlords. Which is why I’ve been calling them the Slumlord Protection Acts.

For example, you mentioned drugs. I doubt people who do “white collar” crimes will find themselves tossed out. This will impact some people more than others.

This provision is also dangerous as it makes it easier for a landlord’s prejudices to come into play.  

Finally, do you really want landlords to be in that position? You once told me about how community prejudices would cause calls to building inspectors. Do you really want calls from neighbors claiming they saw suspicious activities and demanding you evict the person?

My response to Brian was as follows:

While you and I often agree on many issues, I think you have this one wrong.   

The notion that landlords enjoy or profit from evictions is a myth perpetrated by those with a bias against landlords or rental housing.  The typical eviction costs the owner at least two months rent, court fees and damage to the property. I have yet to meet an owner who enjoys the process or comes out ahead. Landlord’s prejudices, although rare today, most likely appear in the application selection process.   This law will not add to nor prevent this.
 
Owners already face demands by neighbors and city officials to evict for activity where there has been no arrest or even credible evidence that the tenant is engaged in wrong doing.  This provision will not add to nor prevent this as it is the result of the neighbors’ prejudices that elected officials willingly participate in hopes of getting reelected.  This is a nationwide issue. Google Minority Threat Theory to read many scholarly articles on this, or read the work of Matt Desmond that was based on his work in Milwaukee. Matt will be in Milwaukee for a book signing on Tuesday.  I will email you a copy of our HUD complaint.
 

The new law does not allow for eviction for use or simple possession, which actually makes it harder to evict by invalidating the Cobbs case, which permitted eviction for simple possession or use in Section 8 Housing 

The change in the law however allows owners to act when there is a major problem.  I would expect that you would want an owner to address rampant drug dealing or the violent person next door to your home.  This change allows that to happen easier, but contains protections for the tenant.

One change included that I wanted is the one that permits the use of 5 Day notices to address lease violation in month to month tenancies.  The law, as it was, only permitted the use of a 14 Day termination without the tenant having the right to cure when a month to month tenant violated the rental agreement.  Now we can give the tenant a 5 Day to address things like the pit bull they brought home.  If the tenant removes the dog, then they cannot be evicted and everyone wins.
Brian replies:

How does it benefit the tenant to not have the opportunity to cure the violation?

I was imprecise with my language earlier, BTW-good that you clarified it for anyone reading this.

Tim:

You have this backwards. The new law ADDS a right to cure notice for month to month breaches where none existed before.

We championed the addition of the right to cure notice because our industry wants to avoid evictions when possible, but we also want disruptive removed as soon as possible if they will not make the correction. Remember all evictions are costly to both landlord and tenant.

Brian:

I realize that. I guess you see the bad tenants while I see the bad landlords so we both have our perspectives.

Tim

Actually I see very few bad tenants. While some fail due to economic fragility, I would not call them bad. Out of approx a thousand tenants last year, it looks like we evicted 7 during the year that would be considered bad.

Tenants and landlords need each other just as Clownfish and anemones need each other. A quick view of this is at the post: The enemy of my customer is…. Of course it is more complex than that.

Both sides need to be careful not to be played by people who try to create strife between us only due to their dislike of tenants for reasons unrelated to housing.
Categories
crime Evictions

Tenant growing pot and the Police will not arrest

A reader writes:

I was in one of my units the other day working on a plumbing problem. I noticed a strong smell of Pot, as I was walking from the kitchen to the bathroom I could smell the pot even stronger. I noticed There was an extension cord going into the living room closet. I looked inside the closet and there was a heat lamp a grow light and aluminum foil around the walls with a nice big plant of pot.

I called the police, when they came they advised me that there was nothing they could do since I found it with an illegal search. I explained to them that I have the right to inspect my units for damage or illegal activity. They said there was nothing they could do except watch the place and tell inspectors about the activity.

The police were wise not to make an arrest based on your discovery. The search would be invalid for the police to make an arrest, but that does not mean you did anything illegal as long as you properly noticed the tenant that you would be entering the property. Although seeing that you were there for plumbing you may wish to say you thought you smelled a strong sewerage odor and instead pot. 😉

 

The reason is a published Wisconsin Supreme Court case on landlords allowing police to search their tenants unit without a warrant, State, v. KIEFFER

¶ 45 For the foregoing reasons, we conclude that Garlock [the landlord] lacked actual authority to consent to a search of the defendant’s living area.   In addition, we conclude that the police made insufficient inquiry and thus could not reasonably rely upon Garlock’s apparent authority to consent to a search of the loft area.   Our conclusions on the Fourth Amendment questions render the initial entry and search constitutionally invalid, and thus avoid a need to address the other issues raised by the defendant.

You, assuming of course that you gave proper notice prior to entering the property, can evict based on this accidental finding.

Categories
5-Day Notice Collections Evictions

Can I accept payment and still evict?

A five day notice for payment is a “pay or quit” or right to cure. If the tenant presents the full amount within the five day period the notice is void.  Remember if you serve via certified mail, you must add two days.

The law changed with 2013 ACT 76, effective in March 2014.

799.40 (1m) Acceptance of rent or other payment. If a landlord commences an action under this section against a tenant whose tenancy has been terminated for failure to pay rent or for any other reason, the action under this section may not be dismissed solely because the landlord accepts past due rent or any other payment from the tenant after the termination of the tenant’s tenancy serving notice of default or after commencing the action.

If the tenant pays a portion but not all the rent due, the notice is probably valid.  The tricky part here is if you the tenant felt that you agreed to waive the notice if they made the partial payment.  This turns into ‘he said, she said’  To avoid that issue we have the following at the bottom of our notice:

“Non Waiver: If you make a  payment  of less than the $xxx.xx required by this notice, you will still be in default and SUBJECT TO EVICTION  unless the Owner agrees in writing to cancel this notice.”

Our system also prints the following on receipts of tenants with active five days:

“Non-waiver: This partial payment will be applied to past due rent owed and that by accepting same owner is not waiving his right  to proceed with an eviction based on the 5-Day notice dated xx/xx/xxxx unless tenant enters into a written payment agreement for the balance and owner agrees in writing to vacate the notice.”

Just because you CAN do something doesn’t mean you SHOULD.  Don’t be a jerk about it.  If the tenant owes, let’s say $900, and pays, let’s say $820, with a promise to pay the balance with next month’s rent and you quietly accept the money and then file the eviction that would meet my definition and probably the Court Commissioner’s definition of being a jerk.  Court Commissioners can find some pretty creative ways around jerks. 😉  However in the same scenario the tenant gives you $200 and promises to be back on Friday to pay the balance on Friday and fails to, then by all means evict.

Finally the reader asked about payment in full of rent and late fees.   The law does not currently permit late fees on five day notices for month to month tenants and inclusion of those on a five day will cause the eviction to fail in some counties.  The Apartment Association is working to change this law in the current session.

Categories
Code Enforcement Evictions Fair Housing Tenant Screening

Hoarding and Housing

The Diagnostic and Statistical Manual of Mental Disorders describes hoarding as a mental disability and therefore most likely covered by the Americans with Disabilities Act and the Federal Fair Housing Act.  As such property owners are required to make reasonable accommodations. I would concur with this.

However there is also the health and safety exception to the reasonable accommodation requirement. This is where it gets difficult for the property owner, those doing social intervention and of course the person with the hoarding behavior. Hoarding can contribute to issues like insect and rodent infestations. Hoarding also can create fire hazards. Often hoarding is a violation of the local housing codes.

In response to a reasonable accommodation request an owner would have to balance the actual risk to health and safety to determine if the request was reasonable or not. Note actual risk and not potential risk that are not directly related to this tenant or applicant.

The ability for an owner to address the situation in a manner that does not involve eviction is often hampered by DNS’ response of placarding or threatening to placard buildings due to clutter and housekeeping. A few years ago I had a long term (~15 years) tenant who always kept her house immaculate until her son was murdered. After that she would not get rid of anything. We had to evict her due to the threat of placarding.

In my view, especially after that case, is hoarding is a disability. Having some sort of intervention available other than homelessness is the right thing.

There is the newly formed Milwaukee County Hoarding Task Force. I think this is a great potential resource not only for those with the disability but to help people in our industry make proper decisions in response to finding hoarding and or clutter at the properties.

I invited the Task Force to submit an article for the Apartment Association newsletter as well as speak at a future meeting if they wish and/or distribute informational materials at our meetings.

Categories
Evictions Housing Stats Industry stats

Sad State of Evictions in Milwaukee

I extracted the data from the 28,835 Milwaukee County eviction cases between 1/1/13 and 2/28/15.

Landlords who went to court  lost $22,677,299.01 in these 26 months.  

Remember this was only Milwaukee County And only a small fraction of cases end up in court or are pursued to a money judgment.  Most owners I’ve spoken to tell me that less than a quarter of their non paying tenants end up in eviction court. 

Some sad facts:  

  • Only half the cases resulted in a money judgment against the tenant (14,424 of the 28,835)
  • 12066 were dismissed either by the court or on stip
  • Largest judgment  $243,255.95 (commercial)
  • Largest residential eviction judgment:  $24,348.00
  • Smallest judgment $1.30
  • 4,020 judgments under $200
  • 6,846  judgments over a grand ($1,000-243,255)
  • 4,194 judgments over two grand  ($2,000-243,255)
  • 2,106 Judgments over three grand ($3,000-243,255)
  • 1,068  Judgments over four grand  ($4,000-243,255)