ACT 176: Governor Signs New Landlord-Tenant Bill Into Law

On Monday, February 29, 2016 Governor Scott Walker signed a new landlord-tenant law bill into law. The new law entitled 2015 Wisconsin Act 176 ("Act 176") was published on March 1, 2016 and went into effect the following day - Mach 2, 2016 - which means I am late in drafting this blog post since the new law is almost 1 week old already.

The passage of Act 176 was a culmination of years of work by many groups, including but not limited to, the Apartment Association of Southeastern Wisconsin, Wisconsin Apartment Association, Apartment Association of South Central Wisconsin, and the Wisconsin REALTORS Association.

So let's explore the new law and the changes to landlord-tenant law in Wisconsin.

Criminal Activity:

With the passage of Act 176 a landlord may now terminate a tenancy for criminal activity and/or drug-related criminal activity by serving the tenant (regardless of whether they are under a lease for a specific term or a month to month tenant) with a non-curable 5 day notice. This is a very important change allows a landlord to remove a tenant who has engaged in criminal activity much sooner than they were able to do under old law.

Under the old law, if a tenant was under a lease for a specific term and engaged in criminal activity, the landlord's only option was to serve the tenant with a 5 day notice giving the tenant the opportunity to cure the breach and continue his/her tenancy. The tenant was deemed to have cured the criminal activity merely by not doing it again during the cure period. Pretty simple to do.

So under the old law, a landlord would have to wait until the tenant committed a second criminal act (within the next 12 months) before they could serve the tenant with a 14 day notice terminating their tenancy. It was kind of difficult to protect your other tenants and your property when your hands are tied like that.

There are certain breaches that are so serious that a tenant should not be afforded the opportunity to cure them and remain a tenant -- such as engaging in certain types of criminal activity. At both public hearings before the Senate and Assembly committees I provided testimony of horrible crimes that were committed at my client's properties by tenants which endangered other tenants' lives and caused damage to property. I explained to the committees how legally all my client could do under those circumstances was serve a 5 day notice and wait for the tenant to commit the next crime (and injure the next tenant and damage more property). It was ridiculous not to mention increasing a landlord's liability exposure.

This new law applies to criminal activity or drug-related criminal activity engaged in by the tenant, a member of the tenant's household, or a guest or other invitee of the tenant or a member of the tenant's household, that occurs after March 2, 2016.

While criminal activity is not defined in Act 176 it includes activity that threatens the health, safety or right to peaceful enjoyment of the premises by other tenants, and/or persons residing in the immediate vicinity. It also includes activity that threatens the health and safety of the landlord or an agent or employee of the landlord.

Act 176 defines drug-related criminal activity as any criminal activity on or near or near the premises that includes the manufacture or distribution of a controlled substance. Unfortunately, we were unable to get "use" or "possession" of drugs included in the definition. As such, a landlord will not be able to serve this new non-curable 5 day notice on a tenant that is smoking marijuana in his apartment or one that has crystal meth sitting on his kitchen table.

It is important to know that it is not necessary that the tenant (or their guest, family member or invitees) be arrested or convicted of the criminal activity or drug-related criminal activity in order to serve this new 5 day notice. Many opponents of Act 176 were up in arms about this fact which I didn't entirely understand as even prior to Act 176 becoming law a landlord could evict a tenant for engaging in criminal activity even if they were not arrested or convicted of a crime. All Act 176 did was speed up the process to remove the tenant --- it didn't remove some prior requirement that there be an arrest or conviction. As I stated at the public hearings, this provision mirrors federal law (in section 8 subsidized housing projects) and properly accounts for the realities of crime in larger cities --- police do not have the time to arrest all people who engage in criminal acts and most of the time it is even difficult to send a squad out to the apartment complex to investigate.

This new non-curable 5 day notice for criminal activity has many requirements in order to be valid. Specifically, the notice must include the following:

1. A description of the criminal activity
2. The date on which the criminal activity took place
3. The identity or description of the individual/s engaged in the criminal activity

The notice must also advise the tenant of the following:

1. That they can may seek the assistance of legal counsel, a volunteer legal clinic, or a tenant resource center
2. That they have the right to contest the allegations in the notice before a court commissioner or judge if an eviction action is filed.

If the notice does not contain the aforementioned disclosures and the required detail of the criminal activity there is a strong likelihood that any eviction based on the notice could end up being dismissed.

5 Day Notices for Non-Rent Breaches in Month to Month Tenancies:

Those of you who have attended my Landlord Boot Camp in the past are aware that Wisconsin law prior to Act 176 did not provide a landlord of a month to month tenant with the ability to serve a 5 day notice with a right to cure if the tenant engaged in a non-rent related breach. Under the old law, a landlords only option in that scenario was to serve a 14 day notice terminating their tenancy or ignore the breach altogether. This was just not practical. Not all landlords want to terminate the tenancy of their month to month tenant that engages in a non-rent breach. If a month to month tenant decided to have a loud party, sometimes a landlord would just want to serve a 5 day notice telling them to not do it again but Wisconsin law prior to Act 176 did not allow for this.

With the passage of Act 176, a landlord of a month to month tenant now has the option of serving the tenant who has engaged in a non-rent breach with a 5 day notice with a right to cure OR a 14 day notice terminating their tenancy. This change should also benefit tenants and prevent them from being evicted for smaller-type non-rent breaches.

Service of a 14 Day Notice:

Act 76 made a small change regarding the service of a 14 day notice for a non-rent breach. Under the old law, a landlord had to serve the 14 day notice prior to the tenant remedying the breach. Technically speaking this meant that if a landlord wanted to serve a 14 day notice on a tenant for having a loud party, that notice had to be served before the party was over. Or if the tenant was smoking in a non-smoking building, the landlord had to serve the 14 day notice prior to the tenant finishing his cigarette.

The italicized language has now been removed so that a landlord may now serve the 14 day notice terminating tenancy after the breach has occurred.

Trespassing:

Act 76 created several laws pertaining to an individual that is trespassing on a rental property. I am not a big fan of this change. I am concerned that this will be a trap for the unwary landlord and will end up causing more problems than good, nonetheless I will attempt to summarize the changes.

A "trespasser" is now defined as a person who is not a tenant and who enters or remains in a residential property without the consent of the landlord or another person lawfully on the property (i.e. a tenant).

The crime of trespassing has been modified such that whoever intentionally enters or remains in the dwelling of another, without the consent of some person lawfully upon the premises, or, if no person is lawfully upon the premises, without the consent of the owner of the property that includes the dwelling, under circumstances tending to create or provoke a breach of peace, is guilty of a class A misdemeanor.

Act 176 also requires that a law enforcement agency shall have a written policy regarding the investigation of complaints of trespassing and that the policy shall require that a law enforcement officer who has probable cause to arrest a person for trespassing, remove the person from the dwelling.

The new law also states that if a trespasser is removed from a residential rental property and leaves personal property behind, that the landlord must hold the trespasser's personal property for 7 days from the date of discovery. After the 7 days have passed, the landlord may presume that the trespasser has abandoned the personal property and dispose of it in any manner that the landlord determines is appropriate. A landlord must promptly return the property to the trespasser if the trespasser requests its return prior to disposal.

I am concerned that this new law will cause problems for landlords as I fear it will be relied upon by landlords to remove people that are residing with a tenant (either known or unknown by the landlord) rather then evicting the tenant and their unauthorized guest. I foresee landlords defending themselves against illegal eviction lawsuits or the disposal of personal property lawsuits as a result.

For example, what if a tenant has allowed her boyfriend to move in with her -- whether known or unknown to the landlord -- and then they have a fight and the tenant calls the landlord and being less than truthful states that the boyfriend does not reside with her but came over Saturday night and now refuses to leave. The landlord decides to call the police and have the boyfriend removed as a trespasser. But then, as so often happens, the tenant decides that she cannot live without the love of her life and is mad at the landlord for calling the police and tossing out the "trespasser's" personal property and a lawsuit is filed against the landlord. Whether or not the landlord is able to get the lawsuit dismissed or not is only part of the issue - it will still cost him time and money defending the case and could potentially result in a judgment against him.

Prohibitions Against Local Government:

Act 176 also attempts to curb local government's intrusion into the life of landlords by:

1. Prohibiting the inspection of a rental property unless there was a complaint made about the property or the inspection is part of a program of regularly scheduled inspections conducted in compliance with state or federal law.
2. Prohibiting rental licensing ordinances (i.e. "Landlord Licensing") unless the ordinance applies to ALL residential rental property owners - including owners of owner-occupied rental property.
3. Prohibits an occupancy of transfer of tenancy fee for rental units.
4. Limits the ability to charge re-inspection fees.

While I believe I have addressed all of the landlord-tenant law changes from Act 176 in this blog post, I have by no means addressed all of non-landlord tenant law changes so I encourage you to read the actual law.

NOTE: The changes created by Act 176 will result in some changes to the rental documents that I draft for Wisconsin Legal Blank and will include the need to create of a new 5 Day Notice for Criminal Activity. When those revisions and new forms are ready and available at Wisconsin Legal Blank, I will let you know on this blog.