Milwaukee Common Council Approves Legislation Requiring Lead-Safe Certification Before a Property can Be Rented To Public

On July 7, 2020, the full City of Milwaukee Common Council approved legislation to create a program certifying that rental properties are lead-safe before they can be rented to tenants.

Authored by Alderman Ramsey, this resolution directs the Department of Administration-Intergovernmental Relations Division to seek the introduction and passage of state legislation that would permit the City of Milwaukee to create a program requiring rental property owners to certify that rental properties are lead-safe before they can be rented.

Alderman Rainey in his press release, stated that many properties rented for residential use in Milwaukee are believed to have significant lead-poisoning hazards that can be contained or abated by regular and conscientious maintenance, yet many renters are not aware of the existing lead hazards and how they pose a serious risk to the health and safety of anyone (especially children) living in these residential units.  "A person renting and living in a residential property has a right to presume the property being rented is a healthy and safe environment, free from risk of sickness or injury," he said.

"A lead-safe certification program would compel landlords to contain or abate lead poisoning hazards, thus ensuring that stable value of these properties and the surrounding neighborhoods, and improving the quality of life for residents, " Alderman Rainey said.  "Even though COVID-19 remains a top health priority, we must continue to do all we can to combat the dangerous lead issues that exists in Milwaukee" Rainey said. 

HT to AASEW Owner (July 2020)

GUEST POST: Views on "Landlords Games" Series and the City of Milwaukee's Task Force on LLC's

This is a Guest Blog Post authored by Tim Ballering

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 of Southeastern Wisconsin (AASEW) 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 to go out of business, through docketing and enforcing code enforcement fines, and foreclosing of 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, which 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 reported 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 order 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 neighborhoods DNS 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's use of a single property LLCs, in this case, was an advantage to the city. Because the owner had his properties in separate LLCs, this allowed only this one building 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 Journal and Mayor call for Herrick, the owner to lose his job. 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

By Tim Ballering

City of Milwaukee Looking to Expand Its Residential Rental Inspection Program (a.k.a Landlord Licensing)

The Department of Neighborhood Services (DNS) of the city of Milwaukee is looking to expand its Residential Rental Inspection (RRI) program to additional parts of Milwaukee. Simply put the RRI program is "landlord licensing" at its heart and it may very well be coming to your neighborhood.

As background, the RRI program was created in December of 2009 as a so-called "pilot" program. It allowed the city to enter a landlord's rental unit (without a warrant and without requiring a tenant to make a complaint) and inspect it. If a rental unit did not pass muster it would not receive a certificate (license) from the city and could not be rented out. If the rental did pass inspection then the landlord was either issued a 4 year certificate or a 1 year certificate. Landlords were charged $85 per inspection. It was only implemented in the Lindsay Heights area and the eastside of Milwaukee near UWM.

DNS is now requesting that those two pilot areas become permanent. DNS is also requesting to expand the program. The proposed expansion would involve two phases. Phase One of the expansion would include the neighborhood around the Basilica of St. Josaphat. Phase Two of the expansion would include Washington Park, Metcalf Park, Amani, Triangle, and Clarke Square neighborhoods.

Back in 2009 the RRI program was downplayed by DNS as a short-term "pilot" program just to help those two areas. DNS also told us that the RRI program was only concerned with serious safety issues like attic bedrooms, decrepit 2nd floor porches, and extension cord wiring. Ask the owners of rental properties in Lindsay Heights and the UWM area how many building code orders they received for non-serious safety issues.

I hope that all Milwaukee landlords have now come to the realization that the plan all along has been for this to be a city wide program. Many landlords who didn't own properties in the two pilot areas chose to bury their heads in the sand because the program did not affect them. That is no longer the case, the RRI program will encompass the entire city of Milwaukee if landlords allow it.

If you would like to read more about the plan to expand the RRI program read the Commissioner of DNS' 9/24/14 memo to the Zoning and Development Committee and Milwaukee Common Council.

If you would like to learn more about the details of the RRI program please refer to my blog posts on this topic.

I urge all landlords in Milwaukee to contact their Alderman on this issue immediately. Also if you are not a member of the Apartment Association of Southeastern Wisconsin (AASEW) you should consider joining. For only $99 a year you will not only learn a lot about how to be a more effective and profitable landlord, but a portion of your dues will go to fight legislation like the RRI program.

ACT 76 - Wisconsin's New Landlord-Tenant Law - Part 3: Speeding Up the Eviction Process

Several of the provisions of Wisconsin's New Landlord-Tenant law, Act 76 (SB 179), were created or amended to speed up the eviction process. Evictions are supposed to be summary proceedings and per the Wisconsin Supreme Court (Scalzo v. Anderson, 87 Wis. 2d 834 (1979)) there are very limited number of issues permissible in an evictions action. Nonetheless, tenants were finding ways to delay the process. Hopefully Act 76 will resolve much of that delay.

First, Act 76, amends sec. 799.12, Wis. Stats. to allow circuit courts in the various counties to decide via local rule whether or not to allow service of an eviction summons via certified mail. Current law does not allow service of an eviciton by mail and requires that an eviction summons be served personally, or after reasonable diligence has been made, via substituted service or posting and mailing.

If a county allows service via mail, then the clerk shall mail a copy of the eviction summons to each defendant at their last known address. Service of the summons will be considered completed when mailed, unless the envelope enclosing the summons has been returned unopened to the clerk prior to the court date.

I personally think that service of an eviction summons via mail will cause logistical problems. I can tell you right now that Milwaukee and Dane counties certainly will not agree to service by mail in eviction actions but possibly it will work in smaller counties.

Second, Act 76 amends sec. 799.05(3)(b), Wis. Stats. and states that the return date (initial appearance) in court can be no less than 5 days and no more than 25 days after service is issued (i.e. the tenant is served with the eviction summons). Current law requires the return date be held no less than 5 days and no more than 30 days after service.

It will be important that landlords make sure that their process servers are aware of this law change starting March 1, 2014 otherwise it could result in their evictions being dismissed if the return date/initial appearance is scheduled more than 25 days after service is effectuated.

Third, sec. 799.206 and sec. 799.20(4), Wis. Stats, have been amended to require that all contested hearings in small claims actions (evictions, garnishments, replevins etc.) must be scheduled within 30 days of the return date/initial appearance.

Even more important to landlords is that all residential evictions trials on the first cause of action (i.e. return of the premises) must be held and completed within 30 days of the return date/initial appearance. This law new law applies to both trials to the court and jury trials.

I personally feel that this change is the most important part of Act 76 in terms of speeding up the eviciton process. While many evictions are not contested and the landlord obtains a default judgment, those that are contested can take a long time to get to trial. Many tenants and their advocates have been requesting jury trials on eviction matters. By doing so - at least in Milwaukee county - these cases are rotated to a large claims judge handling civil matters (as the small claims judge does not handle jury trials) and result in a lengthy delay. In some of my contested eviction cases, it was taking 2 months to even get before the judge for a Scheduling Conference and the jury trial itself was not being scheduleded until 6 months after the return date.

While tenants are entitled to their day in court -- which includes a jury trial if they wish -- they should not be given a 6 month reprieve just by requesting a jury trial. During those 6 months the landlord often is not receiving any rent payments and/or the "good" tenants in the building are stuck putting up with the actions of the breaching tenant. In my opinion, requesting a jury trial in an eviction action is nothing more than a delay tactic. Tenants and their advocates have been successful in buying more time and in making the eviction process more expensive for the landlord by driving up his/her costs and fees. Of all the jury trials requested by tenants in eviction cases that I have been involved in (which number over 20 - most of which occurred this past year) not one of them actually went to trial. So I am very happy to this new law hopefully put a stop to this abuse of the system. Tenants will still get their trials but they can no longer stretch it out for months and months. How the courts will assimilatate these jury trials within the 30 day time limit will be the key issue moving forward.

If you missed my prior posts on Wisconsin's new landlord-tenant law you can click on the links below

Part 1 - Background and Overview

Part 2 - Restrictions on Local Ordinances

ACT 76 - Wisconsin's New Landlord-Tenant Law - Part 2: Restrictions on Local Ordinances

As I mentioned in Part 1, the soon to be new law contains new provisions as well as some corrective provisions (which will correct unintended consequences from last year's new law Act 143). In this blog post I will talk about one of the new provisions of the law which will restrict a local municipality from creating and/or enforcing certain local ordinances.

The new law will creates sec. 66.0104(2)(c) and (d), Wis. Stats., which says that a municipality may not enact or enforce an ordinance that:

a. Limits a residential tenant’s responsibility, or a residential landlord’s right to recover for damage, waste or neglect of the premises, or for any other costs, expenses, fees payments or damages for which tenant is responsible under law or under the rental agreement.

b. Requires a landlord to communicate to a tenant any information that is not required to be communicated under federal or state law.

i.e. City of Madison’s ordinance that requires landlords to distribute voter registration information to new tenants will not be enforceable under this new law.

c. That requires a landlord to communicate to a municipality any information regarding the landlord or tenant unless:

(1) Information is required under federal or state law.

(2) Information is required of all residential real estate owners (not just landlords!)

(3) Information will enable a person to contact the owner, or agent of the owner.

Note: This subsection does not apply to an ordinance that has a reasonable and clearly defined objective of regulating the manufacture of illegal narcotics.

So what will the net effect of this new provision of the law curtailing local municipalities from enacting and enforcing certain ordinances? According to one tenant advocate SB 179 will eliminate over 20 Madison ordinances. SB 179 should also eliminate Milwaukee’s Residential Rental Inspection (RRI) pilot project in the UW-M and Lindsay Heights neighborhoods.

It should be noted however that the new law will not eliminate "rental recording" in various municipalities as earlier versions of SB 179 had. Under the final version of the law, landlords will still have to provide their ownership and contact information to the municiaplity since doing so would fall under the above exception since the information will enable a person to contact the owner or agent of the owner.

To learn more on the background and overview of Wisconsin's new Landlord-Tenant Law read my prior post.

GUEST POST: Is the Apartment Association of Southeastern Wisconsin Against the City of Milwaukee?

Is the Apartment Association against the City of Milwaukee?

After a recent meeting I received an email from an irate member who was offended by some of my commentary regarding the city of Milwaukee, it seemed the association had an anti-Milwaukee tone to its messages. Having committed much of my career to making Milwaukee, especially its central core, a better place to live I was initially surprised by the feedback, nonetheless it is a legitimate question and one deserving of a response.

First let me remind everyone that the association is an all-volunteer organization and we welcome the participation of all landlords (in fact we will be holding officer elections soon so please email me if you are interested). I would encourage anyone unhappy with something we are doing or saying to speak up and be heard. Write an article in the Owner, email me, or better yet join a committee or board of directors. We are an organization of almost 1000 members and the diversity of our perspectives and experiences is a strength we should draw from. That being said I will address this issue head on after first making the obligatory disclaimer that the thoughts expressed below are solely mine and in no way constitute an official position of the AASEW.

I am not against the City of Milwaukee, however I have significant concerns with its view towards residential property owners/investors. Having lived in the city my entire life I have witnessed first-hand the deterioration of many of our communities and the City’s inept response to address this crisis. A common refrain cited for this decline is absentee landlords who allow their properties to fall into disrepair and if only we could force them to be accountable our problems would be solved. While there is some truth to this it would be tantamount to saying our City’s larger decline is due solely to shifting macro-economic trends that decimated American manufacturing. While it is certainly part of the issue, a narrow focus on either cause over simplifies the problem at hand and leaves one ill equipped to develop effective solutions to address the problem.

Are absentee landlords who neglect their properties an issue in many communities? Absolutely but maintaining your property and being responsible to your neighbors should be a standard imposed on every property owner including owner occupied buildings. Focusing exclusively on landlords obfuscates the true nature of the problem and does nothing to solve it. This is a fundamental flaw in the thinking at city hall and has done as much to harm property values in the city as the financial crisis.

In my early 20’s I bought a house in Lindsay Heights that I did a first rate renovation on and was proud to call home. After years of battling with neighbors from hell, who were owner occupants, and receiving no succor from DNS, my alderman, or anyone else at city hall I rented out the property and moved to the suburbs. Ironically had this very property been subjected to the same standards of compliance as non-owner occupied properties in Lindsay Heights, I would probably still be living in the city of Milwaukee.

Further evidence of the City’s “tolerance” for landlords is their response to their growing portfolio of tax foreclosed properties. City hall has proposed a variety of creative solutions to deal with this problem including allowing tenants to use their Section 8 check to pay the mortgage the city would carry. Ironically very few of their solutions involve investors and established landlords within the city. Ponder this, our association alone as the wherewithal to buy every last city owned property and turn them back into productive assets, yet the city has not reached out to us once to have a serious conversation about how to make that happen.

It is clear to me as an investor that the city does not view our industry as a strategic partner in which to work hand and hand to deliver low cost, high quality housing to its residents. It is a position that has led to disastrous results in many of our neighborhoods; one can only hope they understand the definition of insanity: doing the same thing repeatedly yet expecting a different result.

In conclusion Joe Dahl loves the city of Milwaukee and will stand next to any person and compare my investment and efforts to make it a better place. However I am very troubled by our leadership and its “tolerance” of landlords. It is my desire to see Milwaukee thrive, yet I am not naïve enough to ignore what happened to our counterpart in Michigan. It is my sincere hope the city recognizes it needs all hands on deck to achieve the former and avoid the latter……and yes city hall that includes landlords!

Joe Dahl

President AASEW

GUEST POST: The Importance of Rentals In Milwaukee

Below is a very thought provoking guest post from fellow blogger (and friend and fellow AASEW Board Member) Tim Ballering:

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

The Journal is reporting:

Over the next three years, Barrett said raze orders in the city are expected to grow to 1,600 homes, with a cost of $24 million. ”We have a very severe problem right now,” Barrett said.

No kidding we have a “severe problem ” This a problem that continues to grow rather than moderating. The number of abandoned and foreclosed houses was bad nine months ago and with fresh snow on the ground you can see even a greater number of unoccupied properties than ever before. At least here on the Southside of Milwaukee these numbers are far worse than what is being reported by the city.

How much of the $24 million of anticipated razing costs could be avoided by making it more favorable to rehab properties and restore them to the tax rolls?

Perhaps the city would do better by working with, instead of against people willing to invest their own money, time and effort into putting foreclosures back in service. I’m not even suggesting a hand up, just not the current beat down attitude. Not only would there be less spent on bulldozing, but more of the tax base would remain plus the positive economic impact for the community due to spending by owners to maintain and operate this housing.

Between taxes and the sewer and water bills the city gets at least $5-6 million per year from 1600 functional properties. In the three year period Barrett defines this is a potential of $18 million in city revenue if the buildings were returned to occupancy. Add this to the $24 million to bulldoze and you are north of 40 million dollars.

Can every property that is deemed to be worthy of razing able to be salvaged, of course not. But many that are in the pipeline today can be. Every day that a property sits unattended is a day closer to the wrecking ball being the only option for that property. There are many properties sitting vacant today that are worthy of repair, but will not be so six months or a year from now.

Additionally every time someone like you or I take on the challenge of putting properties back in service the local economy sees a benefit through the wages and materials we pay to get the job done. All but one of my employees live in the city. While the money you spend at the Home Depot doesn’t stay in Milwaukee, the person who is employed by the Home Depot lives in the area and spend their wages here.

A downside for us, but an upside for the community is a greater amount of housing stock available holds rents down. A more competative market also forces owners to do more to properties to get and keep them rented.

Once the property is back in service ongoing maintenance similarly impacts the local economy in a positive manner. It is estimated that repairs and improvements to rental properties represent $90 -120 million a year in the city of Milwaukee alone. (These numbers are derived from our company’s experiences, the experiences of other long term owners that I’ve discussed this with and data from the Census Bureau’s Property Owners and Managers Survey. Our data and that of many other owners indicate a slightly higher number than the Census)

Our company has the capacity and had the will to do 10-12 such projects a year without any government monies. Heck if the environment was more favorable I could see us doing two properties a month. We have not made an offer in MIlwaukee since November due the unfavorable policies adopted by the city. See my prior post on buying foreclosures in Milwaukee. I talk to a lot of other owners with similar capacities that say the same thing.

Milwaukee acts like they are the only girl at the dance – as though real estate investors need to accept their petty obstructions and poor treatment because they are the only game in town. But there are many other places to invest that treat owners much better. One of our members is doing a big rehab in Beloit. When I asked his project manager how it was going with the city he said they were unbelievably nice and truly seem they want to see the project succeed. We are actively looking at the South Florida market today.

A few notes:

These 1,600 properties must be city owned or near to being city owned. If they were bank owned the city could and would force the banks to demo the properties on the bank’s dime. A growing trend is banks that simply walked away from the mortgage rather than be subjected to the bad side of city regulations and fees. In another instance I spoke to an owner who the bank sued- he thought he lost the properties to foreclosure only to find out later that it was a money judgment only suit. This adds to the zombie housing effect. And you though only borrowers walked away. ;-)

Our police chief is in the news speaking about the link between foreclosed and abandoned housing and crime. I am certain he is correct on this. But the Milwaukee Police do not do what they should in cases of property vandalism. See my prior post on property vandalism and the lack of police response. This vandalism accelerate the rate of properties that are no longer viable for rehab.

You Will Not Want To Miss AASEW's Fourth Annual Landlord Boot Camp on Saturday Feb. 25th

Landlording can be pretty complex, with a seemingly never ending myriad of paperwork, rules, landlord-tenant laws and simple mistakes that can cost you thousands of dollars.

The Apartment Association of Southeastern Wisconsin's Fourth Annual “Landlord Boot Camp” can help you navigate these treacherous waters and teach you how to run your properties with greater profit and less hassles.

I have given similar landlord-tenant law seminars to fellow attorneys, landlords, and property manager organizations throughout the state for other state-wide semianr companies that charge attendees $300-$400. This is your opportunity to learn all of the same information at a huge discount through the Apartment Association.

Who: Taught by Attorney Tristan R. Pettit (who drafts the landlord tenant forms for Wisconsin Legal Blank)

When: Saturday, February 25th, 2012. 8:30 am – 5 pm

Where: Clarion Hotel 5311 S. Howell Avenue, Milwaukee [Map]

Included: 100 plus page manual/outline to help you put what you learn into practice plus helpful forms.

Cost: $159 for AASEW members and $249 for non-members. If you are not a member of AASEW but are a member of another landlord/apartment association the cost to attend will be $199.

Specials: Not a member? Pay just a dollar more and enjoy a 2012 AASEW membership.

Wisconsin landlord-tenant laws are constantly changing. To help keep you up to date we offer prior attendees a $50 discount.

Sign up by going to the AASEW's Landlord Boot Camp landing page where you can sign up online and pay via PayPal.

What you will learn at the Apartment Association's 2012 Landlord Boot Camp

Landlord Boot Camp covers everything that you need to know about residential Landlord Tenant law in Wisconsin, including:

1. How to properly screen prospective tenants.
2. How to draft written screening criteria to assist you in the selection process and protect you from discrimination complaints.
3. How to comply with both federal and state Fair Housing laws including how to handle with “reasonable modifications” and “reasonable accommodations” requests.
4. How to legally reject an applicant.
5. What rental documents you should be using and why.
6. When you should be using a 5-day notice versus a 14-day notice, 28-day notice, or 30-day notice and how to properly serve the notice on your tenant.
7. Everything you wanted to know (and probably even more than you wanted to know) about the Residential Rental Practices (ATCP 134) and how to avoid having to pay double damages to your tenant for breaching ATCP 134.
8. When you are legally allowed to enter your tenant’s apartment.
9. How to properly draft an eviction summons and complaint.
10. What to do to keep the commissioner from dismissing your eviction suit.
11. What you can legally deduct from a security deposit.
12. How to properly draft a security deposit transmittal / 21 day letter.
13. How to handle pet damage.
14. What to do with a tenant’s abandoned property and how this may affect whether or not you file an eviction suit.
15. How to pursue your ex-tenant for damages to your rental property and past due rent (and whether it is even worth it to do so).

. . . and much more. There will also be time for questions and answers.

You get all this for less than you would pay for an hour of an attorney's time.

Last year’s AASEW Landlord Boot Camp was filled to capacity and we even had to turn a few people away. So call early to reserve your spot.

Call the Association at (414) 276-7378, email membership@apartmentassoc.org or go to our Landlord Boot Camp landing page to sign up online and reserve your spot.

Remember that “landlording” is a business — so take the time to educate yourself on how to better manage your business and avoid costly errors!

For Those of You Who Thought The Installation of A Smoke Detector Was Simple . . . READ THIS.

AASEW Board member Tim Ballering wrote the City of Milwaukee Department of Neighborhood Services (DNS) back in June to ask for clarification about the proper placement of smoke detectors in his residential rental units in the city of Milwaukee.

Ballering was prompted to write to DNS becasue he felt there was some confusion among DNS inspectors as to where smoke detectors should be installed.

Below is the entire text of Ballering's email to DNS:

> Subject: Smoke Detectors

> There is some confusion among DNS inspectors as to where smoke detectors belong.

> Most code enforcement inspectors are of the opinion the detectors should be outside the bedroom, within 6' of the door. Some are of the opinion that having the detector only on the inside of the bedroom does not meet code.

> Your code seems to be worded in a way that supports installing detectors outside the door at 214-27: "For floor levels containing a sleeping area, the required detector or alarm shall be installed within 6 feet of the sleeping area."

> However construction inspectors believe the smoke detectors are required to be inside the bedrooms and units installed outside the bedroom door do not meet the code.

> The DNS Smoke Alarm brochure seems to say either is okay:

> "Either in each sleeping area of each unit or elsewhere in the unit within 6 feet of each sleeping area. If the unit contains 2 or more separate sleeping areas, each sleeping area shall be provided with a smoke alarm."

> It obviously doesn't matter to the property owner where the detectors are put as long as a second inspector doesn't come along afterwards demanding they be relocated.

> So which does the code require, inside the bedroom or outside?

> And if the code doesn't care, then which is most effective in saving lives?

> I will have the Association publish the response so more owners are knowledgable as to what you require.

> Thanks

> Tim Ballering

The City of Milwaukee emailed its 8 PAGE response to Ballering on October 21, 2011. Here is the letter response from DNS.

While I know your time is valuable --- I beg you to read the entire 8 page answer. I want to see if you can finish reading it all the way through. Afterwards, I would like to know if you are able to tell me where you should place the smoke detectors in your City of Milwaukee rentals. I like to think that I am moderately intelligent person ---- and I read and review statutes, case law, and ordinances several times a week as a lawyer ---- but after reading this 8 page response my eyes glazed over and my brain went to mush.

The drafter's of these codes, ordinances, statutes, regulations etc. need to realize that if they want landlords -- or anyone, for that matter -- to understand them and be in compliance, they need to make it a bit more simple to understand and follow. One should not be required to be a brain surgeon to know where to install a smoke detector and you shouldn't have to synthesize 4 different laws in order to arrive at an answer -- thank you Todd Weiler for doing that for us. It is a relatively simple question: where should I install a smoke detector in my rental property to best protect my tenants. It shouldn't take 8 pages and many hours -- which I am sure Weiler had to spend compiling the answer -- to answer.

But don't fret, you probably will never have to re-read that 8 page answer again. Instead just turn to the city's recently revised brochure on smoke detectors. Sometime during my reading of the brochure, my eyes regained focus, my grey matter firmed up a bit, and I felt as if I actually knew where to install smoke detectors in my rentals again. Thank God for brochures : ).

Don't Miss the 2nd Annual East Side Landlord Think Small Conference on Wednesday November 9, 2011

I will be the featured speaker at the upcoming East Side Landlord Think Small Conference on Wednesday, November 9, 2011 from 3 pm - 6:30 pm at UW-Milwaukee, Chapman Hall located at 2310 E. Hartford Avenue, in the Regent's Room on the 2nd floor.

This conference is FREE to any and all interested landlords, with a special focus on Milwaukee's East Side landlords.

This conference is composed of 3 componants:

1. Featured Speaker - I will be speaking on the issues of "Causes for Eviction and Termination of Tenancy" and "Notices Terminating Tenancy." You will learn about the 4 basic notices that can be served on a residential tenant in Wisconsin (5 day, 14 day, 28 day and 30 day notices) and when you should be using each notice and why. While no one wants to have to evict a tenant . . . sometimes it is necessary. At the very least, landlords need to become comfortable with the various notice that can be served on a tenant when a tenant breaches his/her rental agreement or the landlord wants to terminate the tenant's tenancy. I will also discuss the proper way to serve a tenant with one of these notices. I will be handing out a detailed 11 page outline on this topic that attendees can take home to refer to when needed in the future. Examples of properly drafted 5 day, 14 day, 28 day, and 30 day notices will also be distributed.

2. Round Table Discussion - This discussion will include a panel of UW-Milwaukee staff, City of Milwaukee staff, myself, and others and will focus on local topics and common problems that East Side landlords encounter.

3. Panel of Experts - The panel will be comprised of members of the Milwaukee Police Department, Campus Police Department, Department of Public Works, Department of Neighborhood Services, and UW-Milwaukee Department of Neighborhood Housing and who will field any questions that you may have.

There will also be time to network with other landlords.

If you are interested in attending please RSVP to Heather Harbach, UW-Milwaukee Neighborhood Relations Liason at (414) 229-4451 or harbach@uwm.edu. You can also register for the event by clicking here.

I hope to see everyone there!!

New Report States What Landlords Already Know - That Milwaukee's Regulations Hurt Businesses

This past weekend I read a very interesting report which was drafted by the Institute for Justice as part of its City Study Series entitled Unhappy Days for Milwaukee Entrepeneurs: Brew City Regulations Make It Hard For Businesses To Achieve the High Life.

The report is 40 pages long (excluding footnotes) but I encourage everyone to read it. The report touches on the following issues:

- How the city rigidly restricts the ability of entrepeneurs to operate businesses from their homes

- How the city abuses the custom of aldermanic privilege in order to deny businesses licenses and permits thus preventing businesses from opening and operating

- How the city imposes restrictions on food-related businesses that make it next to impossible to get a business started

- How the city overburdens successful businesses with so many rules and fees that many businesspersons are contemplating moving out of the city

- How the city arbitrarily enforces building codes and historic preservation provisions making it too costly to rehabilitate old buildings

- How the city severely limits a businesses ability to place signage on its storefront

- How the city requires an expensive license in order to go out of business.

While landlording is not specifically discussed in the report several of the topics addressed clearly affect landlords. One that comes to mind is the arbitrary enforcement of certain building code provisions - what landlord has not dealt with that? Additionally I believe many landlords would agree that the city overburdens them with so many rules and fees that many are contemplating leaving the city. I know of several landlords that have sold off all of their Milwaukee rental properties and now only own and manage rental units outside of the city. I know of even more landlords that would love to do that very same thing if only they wouldn't lose their shirt (and their pants, belt, socks and underwear) by selling their rentals in this poor climate.

Landlording is one of the most regulated areas that I am aware of, if you don't believe me just take a look at this memo that was published by the AASEW board of directors on the topic.

The city's new Residential Rental Inspection ordinance is another example of the city making it difficult for landlords to survive.

The Journal Sentinel's Patrick McIlheran wrote about how difficult the environment in Milwaukee is for landlords not too long ago, which I blogged about.

According to the Institute for Justice's report, landlords are not the only businesses that Milwaukee is making life, success, and survival, difficult for.

Business Journal Article Addresses Fallout of the City's RRI Ordinance To Date

I was recently interviewed by Business Journal reporter Sean Ryan regarding the fallout of the dismissal of three landlords' lawsuit against the City of Milwaukee regarding the unconstitutionality of its Residential Rental Inspection (RRI) program. My most recent post on the subject can be read here.

On October 1, 2010, The Business Journal published its article entitled "Judge Upholds Milwaukee Home Inspection Program. Reporter Sean Ryan spoke with the primary plaintiff, Joseph Peters, Alderman Nik Kovac (sponsor of the ordinance), Todd Weiler (of the Department of Neighborhood Services) and myself for the article.

I found Mr. Weiler's comments to be very noteworthy. He was quoted as saying that to date DNS has inspected over 800 properties in the two target areas (Lindsey Heights on the north side and the UWM-area on the east) and that during those inspections 8,550 violations were found. Apparently 1/2 of the the properties inspected -- or 400 -- had no violations at all.

I wonder if all 8,550 of the violations that were found -- and which the landlords were cited for -- pertained to life-safety issues? If you will recall, life safety issues were the "alleged" original impetus behind the ordinance being introduced.

In speaking with several landlords that I know who own proeprties in the target areas, I was informed that the violations that they were cited for involved very minor issues -- such as peeling paint on the outside of a building, torn screens, and failure to paint some wood that had been properly sealed but not painted. The lead plaintiff, Jospeh Peters, was quoted in the article as saying that the Orders To Correct that he received on his 10 buildings also involved very minor repairs - such as torn screens.

Just how many of the 8,550 violations dealt with life safety issues? How many illegal attic bedrooms were found? How many poorly maintained second story porches that could collapse at any minute were identified? Don't forget the overloading of circuits by the improper use of extension cords - how many of those were found?

If you will recall the testimony that was offerred by both Alderman Nik Kovac, who sponsored the ordinance, and Art Dahlberg, Commissioner of the Department of Neighborhood Services, at the public hearing before the ZND Committee way back when, the focus of this program was to make these affected properties safe and prevent unnecessary deaths.

I'm not sure how many lives have been saved as a result of the RRI ordinance to date, but at least we wont have to worry about any of those deadly torn screens, inherently dangerous unpainted wood, and the lethal peeling paint on the outside of a duplex.

Not sure about you but I feel a lot safer already.

This ordinance is now being shown for what it really is -- not an attempt to save lives and improve properties -- but rather an way for the city to get inside one's private property without the need to obtain a warrant or even receive a tenant complaint, a way to make additional money (through the required filing fees and reinspection fees), and a way to further harass landlords that are having a difficult enough time making ends meet.

Sometimes I just wish that all of the landlords in the city of Milwaukee had the ability to just walk away from their rental properties. I wonder if the city would then realize, once all the landlords are gone and there is no one to own or operate rental housing, that we provide a much needed service and that most of us do a good job of providing that service. Would they try to work with us then . . . . ?

Landlords Lose Lawsuit

On Wednesday, September 22, 2010, Judge Timothy Witkowiak denied three landlords' motion for summary judgment against the City of Milwaukee and granted the City's cross motion for summary judgment against the landlords, with regard to constitutionality of the city's new RRI ordinance. This ruling effectively ended the lawsuit.

The lawsuit dealt with the City's new Residential Rental Inspection (RRI) program/ordinance that went into effect on January 1, 2010. The RRI ordinance requires all landlords in two areas of Milwaukee (the UWM-area on the east side and Lindsay Heights on the north side) to register any and all rental units, pay a fee to the city, allow for the Department of Neighborhood Services to conduct an interior inspection of the rental units, pass the inspection and obtain a rental certificate, in order to continue to be able to rent the rental unit to a tenant. Any rental unit that does not pass the inspection would be denied a rental certificate and as such the lanldord would no longer be allowed to rent out the unit until such time as a rental certificate could be obtained.

If you are unfamiliar with the RRI program and/or the lawsuit you should review my past blog posts on the subject to get up to speed.

The plaintiff landlords had four main arguments. I will summarize the arguments and then summarize the court's ruling on each.

1. The Ordinance Is Too Vague

Landlords' Argument:

The plaintiffs' argued that the ordinance contains terms and phrases that are so vague that they do not properly notify landlords who own rental properties in the two designated areas as to what specific conditions will result in a denial of a residential rental certificate or the revocation of a certificate. The ordinance gives the DNS Commissioner and his inspectors the subjective power to determine whether the conditions in a rental unit constitute a denial or revocation of the certificate. This subjective power will result in a non-uniform application of the ordinance.

The plaintiffs cited 7 examples within the ordinance where a landlord does not have sufficient notice as to what specific conditions or number of conditions will trigger a denial or revocation of a rental certificate by the city.

Court's Ruling:

The court ruled that the plaintiff landlords did not meet the burden that was required of them in order to prove that the ordinance was so vague that it was unconstitutional. The burden that the plaintiffs were required to meet was quite high.

Under Wisconsin law, a ordinance is presumed to be constituional. In order to prove an ordinance unconstitutional the attacker must establish its invalidity beyond a reasonable doubt. Specifically, the plaintiffs had to prove beyond a reasonable doubt that the ordianance posessed no rational basis to any legitimate objective. In other words, the landlords had to show that the ordinance was unconstitutionally vague in all aspects and incapable of any valid application.

The typical burden of proof in a civil lawsuit is "a reasonable certainty by the greater weight of the credible evidence" which essentially means that if you tip the scale (of justice) slightly in your favor then you have met your burden. The burden of proof in criminal matters is "beyond a reasonable doubt" which is a much higher and more difficult burden to meet. In order to meet this higher standard you essentially have to tilt the scale (of justice) all of the way in your favor.

In order to show that an ordinance is unconstitutional on its face the plaintiffs had to meet the higher (criminal-type) burden. The court ruled that the ordinance as written was not unconstitutionally vague because the plaintiffs failed to demonstrate that the ordinance was impermissibly vague in all situations. The court added further that just because certain words and phrases in the ordinance were never defined that that alone does not make them vague because if a word or phrse is not defined then one should resort to the common meaning of the word.

The court held that some valid application of the ordinance can be found so as a result there can be no finding that the ordinance was unconstitutionally vague.

The court added that the burden of proof is lower in an "as applied" challenge, or post-enforcement attack, on the validity of the constitutionality of an ordinance and that the court's ruling under such circumstances could be different. Essentially, this means that if a landlord was injured (i.e. denied a rental certificate and was forced to evict his/her tenant and lose rental income) by the application of the RRI ordinance, that landord would have a lower burden of proof, in that context, in proving that the ordinance was unconstitutional.

2. The ordinance contains fatal defects

Plaintiffs' Argument:

This argument was that the ordinance as written contained terms which were unclear, had no definitions, and failed to set forth clear standards for when a rental certificate would be granted. As a result the application of the ordinance by the city would be fatally flawed. Additionally it was argued that the ordinance gives the DNS Commissioner and his inspectors the arbitrary power to grant, deny, or revoke a rental certificate without providing specific standards as to how that discretion should be used.

The plaintiffs provided nine examples within the ordinance where significant terms were not defined or were unclear. It was argued that the standard as to what will cause the issuance of a rental certificate is a subjective standard contained only in the minds of the Commissioner and his inspectors and such standard will most likely vary from one inspector to the next.

This argument also focused on the fact that the ordinance allows for the DNS Commissioner to draft rules or regulations which have not been made a part of the ordinance. This means that the Commissioner could change the rules at any time and without providing owners prior notice of the changes. The rules and regulations are not required to be made publicly available since they are not contained in the ordinance itself.

Court's Ruling:

Disclaimer: I was unable to attend the entire ruling of the court on this issue as I needed to get across town to give a seminar at the AASEW Tradeshow. However, I was present for the first part of the court's ruling on this issue and I spoke with people in attendence at the hearing later in the day with regard to the remainder of the court's ruling.

The court felt that the plaintiffs' 1st argument (vagueness) and its 2nd argument (fatal flaws) were very similar and contained much overlap. As such, the court applied the same analysis as it did on the vagueness claim and ruled that the plaintiffs did not meet their burden of proof.

The court also addressed the plaintiffs' argument that the ordinance does not provide landlords with sufficient notice becasue it refers to standards that are not incorporated into the ordinance itself, which allows DNS to add these standards at a later date and/or change them over time etc. The court ruled that regulations can legally be added to an ordinance at a later date and are not required to be included in the wording of the ordinance itself. The court pointed out that it is often the case that administrative rules are created to interpret statutes and ordinances at the federal, state and local levels, and therefore this subset of the plaintiffs' argument is moot.

3. Failure to provide impartial review

Plaintiffs' Argument:

Under the ordinance as written if a landlord does not agree with the decision rendered by the city inspector, the landlord can appeal that decision to the Commissioner of DNS -- the employer of the inspector that made the initial decision. The plaintiffs argued that any ordinance that allows a boss to review the decision of his employee (to deny a landlord a rental certificate) cannot be impartial. The plaintiffs argued that Wisconsin Statutes Sec. 68.11(2) requires that all municipalities provide an "impartial decision-maker . . . who did not participate in making or reviewing the initial determination" to preside over any review. While the RRI ordinance does eventaully allow an impartial review by the Standards and Appeals Board at a later point in the procees, the plaintiffs argued that the requirement that the initial decision first be reviewed by the commissioner, will delay a review by an impartial body by almost a month at a minimum.

Court's Ruling:

The court stated that the ordinance did provide for an impartial review of the building inspector's decision by the Standards and Appeals Board and that the requirement that the Commissioner be allowed to review the initial decision, before it could be appealed to Standards and Appeal Board, added no appreciable delay.

4. Interference with a landlord's constitutional right to contract with a tenant

Plaintiffs' Argument:

The plaintiffs argued the denial of a rental certificate would interfere with the landlords rental agreement with his/her tenant. According to the ordinance, if a landlord does not obtain a rental certificate then s/he cannot continue to rent out the unit -- thus implying that the tenant must vacate or if the tenant refuses to do so, be evicted. First, the plaintiffs argued that the city does not have the authority to remove a tenant from a rental unit which is denied a rental certificate. The city does not own the property and therefore is not legally allowed to bring an eviction action against the tenant. Second, the plaintiffs argued that while a landlord has the right to bring an eviction action against his/her tenant generally, said eviction must be predicated upon a breach of the rental agreement by the tenant (unless it is a month to month tenancy). It was argued that, under a scenario where a rental unit that is inhabited by a tenant is denied a rental certificate, and the tenant has done nothing wrong, a landlord has no legal basis to evict the tenant, and to require a landlord to evict his tenant under such circumstances is an interference with the landlord and tenant's contractual agreement.

Court's Ruling:

The city argued, and the court seemed to tacitly agree, that if a rental certificate is not issued for a specific unit, that the landlord has in effect breached the rental agreement because the landlord is in violation of a city ordinance. Such a violation of a city ordinance, and brach of the lease, renders the rental agreement void and could thus be the basis for an eviction.

NOTE: I will have to devote another post to my analysis of this aspect of the ruling because I promise you this will be a huge problem in eviction court should this ever get pushed that far.

Hearing on Landlords Lawsuit vs. City To Be Held This Wednesday, September 22nd

The hearing on both the Landlords' and the City's cross motions for Summary Judgment will be held this Wednesday, September 22nd, at 10 am. The hearing will take place before Judge Timothy Witkowiak at the Milwaukee County Courthouse.

This hearing could be the final hearing on this lawsuit (barring any appeals) which involves three Landlords suing the City and asking the Court to declare the Residential Rental Inspection (RRI) program unconstitutional as currently written.

Both parties have completed their briefing on the issues. I have reviewed all of the briefs (hundreds of pages, trust me : ) and am looking forward to attending the hearing at which the judge could issue an oral decision.

If you are interested in attending and want to get up to speed here is a link to all of the posts that I have written on this subject.

FREE Seminar on Evictions - Saturday, August 14th

I will be presenting a free seminar on the topic of evictions for the City of Milwaukee's Landlord Training Program on Saturday, August 14th. I am presenting this seminar on behalf of the Apartment Association of Southeastern Wisconsin (AASEW).

The Seminar will run from 9 am - 12 noon and will be held at Alverno College's Wehr Theater which is located at 3441 S. 39th Street. I was informed that there is a parking lot located at 40th & Morgan for attendees to use.

I will cover three topics:

1. Causes for Evictions - I will explain the different types of notices that can be served on a tenant and explain under what circumstances you should use the different notices)

2. Notices Terminating Tenancy - I will explain what must be included in a proper notice and how to properly serve a notice), and

3. The Judicial Eviction Process - I will cover the "nuts and bolts" of what you must do to file an eviction lawsuit and what to expect once you arrive in court).

The attendees will receive copies of my detailed outlines on the above topics plus examples of various forms.

If you are interested in attending the seminar you must register in advance by calling (414) 286-2954 or email jhagne@milwaukee.gov.

Hope to see you there!

CITY'S MOTION TO DISMISS LANDLORDS' LAWSUIT DENIED BY THE COURT - LAWSUIT CONTINUES

On May 21, 2010, Judge Timothy Wotkowiak, denied the City of Milwaukee's motion to dismiss the lawsuit filed by three Milwaukee landlords who sued the city as a result of its newly enacted ordinance requiring mandatory rental inspections of rental housing in two areas of the city.

For background information on the ordinance that went into effect on January 1, 2010, please read my November 24, 2009 post. For background information on the lawsuit that was filed against the city you can refer to my December 31, 2009 post. And for information about the city's motion to dismiss and arguments both for and against the motion I would direct you to my May 4, 2010 post.

As stated in my earlier post, the plaintiff landlords made three key arguments as to why it was not necessary for them to serve the city with a formal Notice of Claim prior to initiating the lawsuit. Judge Witkowiak agreed with the arguments offerred by the landlords on all three issues.

Issue #1:

The court indicated that it was not practical to require the landlords to serve the city with a formal Notice of Claim -- which would have allowed the city 120 to respond -- in part because of the basis of the lawsuit. The landlords' lawsuit included the filing of a temporary restraining order to stop an immediate harm (the carrying out of the ordinance) and to make the plaintiffs wait for 120 days before they could even file suit would not be practical or just as the city would have been able to implement what is argued to be an unconstitutional program for at least 120 days before a court could review the issues and concerns with the ordinance.

Issue #2:

The court found that the city did have actual notice of the claim even though a formal notice was not served upon it. Judge Witkowiak spent considerable time pointing out all of various contacts made by landlords, the Apartment Association of SE Wisconsin (AASEW) , and others which provided the city with actual notice of the concerns with the ordinance. The court made reference to the letter that the AASEW's lawyers (who also happen to represent the three plaintiff landlords)sent to City Attorney Grant Langley outlining the many problems with the proposed ordinance. The court also referred to the letter that I wrote as President of the AASEW to Common Council President Willie Hines and the city's other alderman, expressing the association's many concerns with the ordinance. The aformentioned letters, along with a DVD of the public hearing held before the ZND committee of the Commom Council, were all attached to the plaintiff landlords' brief in opposition to the city's motion to dismiss, and appeared to carry great weight with the Court.

Issue #3:

Judge Witkowiak also stated that the city sufferred no prejudice by not having been served with a formal Notice of Claim by the plaintiffs. The city appeared to argue that it was prejudiced because it had to prepare its legal defense to the lawsuit and that somehow that was to be considered sufficient prejudice to grant the city's motion. I have heard a lot of "out there" arguments during my 15 years of law practice, but that was a new one, for me. The court properly determined that that was not the type of "prejudice" that the city needed to demonstrate in order to prevail on its motion.

As such a result of this decision, the plaintiff landlords' lawsuit will now move forward and address the actual problems with the ordinance.

A Scheduling Conference has been set for June 15, 2010. On this date, the court will provide deadlines for the parties to complete various matters that will assist in moving the case forward, such as deadlines to complete discovery (the fact gathering process), deadlines to file dispositive motions (motions that could end the case without the need for a fact-finding trial), and other matters.

Based on the comments of the attorney's for both the city and the plaintiff landlords it appears that both sides may very well be contemplating the filing of a dispositive motion -- such as a summary judgment motion -- which would allow the court to decide the lawsuit as a matter of law, without the need for a fact finding trial, because there are no material facts that are in dispute.

I will keep you up to date on the status of the lawsuit as I learn more.

Update On Landlords' Lawsuit Against City of Milwaukee and Its Rental Inspection Ordinance

There has not been a lot of media reporting on the lawsuit brought by three landlords against the City of Milwaukee and its rental inspection ordinance so I thought I would take the time to update you on its status.

If you are unfamiliar with the basics of the lawsuit you should refer to my earlier post on the topic.

The City of Milwaukee has filed a Motion To Dismiss the Landlords' lawsuit. Essentially the City is arguing that the lawsuit against it should be dimissed because the City was not provided the proper notice of the landlords' claims prior to the lawsuit being filed. In Wisconsin, if a person wants to sue a government entity - which would include the City of Milwaukee -- the law states that prior to the lawsuit, the government entity must be served with a Notice of Claim. The City then has 120 days to review that Notice and either attempt to settle the claim or deny the claim. If the City does not deny the claim within the 120 days it will be deemed denied anyway. After the 120 days have passed, a person then has 6 months in which to file the lawsuit. If more than 6 months passes then the person would be precluded from filing the lawsuit.

The reasoning behind what is called the "Notice of Claim" statute (Sec. 893.80, Wis. Stats.) is allegedly to allow the government an opportunity to settle a claim in order to avoid expensive litigation. A secondary reason for the requirement is to provide the government with enough information so that it can budget accordingly for settlement or litigation.

As a quick aside: I have sued a government entity on behalf of a client in the past so I am familiar with the Notice of Cliam statute. In my opinion the government does very little during the 120 days after it is served notice. The typical reaction is to ignore the claim and not even take the time to deny it but rather to allow the 120 days to pass after which the claim will be automatically denied. In fact, I would even go so far as to say that based on my experience that the government typically ignores the Notice of Claim that is served upon it just to see if the aggrieved person will actually file a lawsuit. It costs very little to file a Notice of Claim (which often is done without the assistance of an attorney) but it is expensive to file a lawsuit. The government has little to no interest to pay money to someone unless it knows the individual who filed the claim is serious. Essentially the Notice of Claim statute is a "legal hoop" that the government makes you jump through to see how high you will jump. There may little to no reason for you to jump, but nontheless, jump you must.

So the City of Milwaukee is arguing that the plaintiff landlords' didn't file the Notice prior to filing the lawsuit and therefore their lawsuit should be dismissed.

In its response brief, the plaintiffs argue that a formal notice of claim need not always be served as there are exceptions to this requirement. The plaintiff landlords rely on a recent Court of Appeals decision, Kuehne v. Burdette, which held that the Notice of Claim statute does not always require a formal notice of claim to be served nor is it always required for a plaintiff to wait 120 days before filing a lawsuit against the government.

The plaintiff landlords make three key arguements in their brief in opposition to the City's motion to dismiss:

1. Because the City's Rental Inspection Ordinance became law on January 1, 2010 -- just 22 days after it was passed by the Common Council -- and because the nature of the lawsuit is to determine whether or not the ordinance is constitutional, the plaintiffs were unable to comply with the notice of claim statute.

2. The City had actual notice of the claim even if a formal notice of claim was not served on it.

3. The City sufferred no prejudice as a result of the plaintiffs filing the lawsuit without first filing a formal notice of claim.

The plaintiffs' first argument is very similar to the one made in the Kuehne case. In Kuehne, five residents of a town filed an injunction against the Town of Ledgeview in order to prevent it from holding a referendum on whether or not the town should incorporate. The court in Kuehne stated that the notice of claim statute probably did not apply in the context of the lawsuit because it is illogical that a town can use lack of notice as a defense when the Town by its own actions made compliance with the notice of claim statute impossible.

The plaintiff landlords argue that the exact same situation in Kuehne is at play in the lawsuit against the City of Milwaukee. The City adopted the new ordinance and Mayor Barrett signed it into law 22 days later. If the plaintiffs had been required to file a notice of claim the City would have been under no legal obligation to respond to the notice until approximately May 1, 2010. By that time the rental inspection ordinance would have been in effect for a minimum of 4 months without a court being allowed to examine the constitutionality of the ordinance. The City can't use the notice of claim defense in order to allow it to move forward with its unconstitutional ordinance.

The plaintiffs' second argument is that they City had actual notice of the claim because the plaintiffs, through the actions of the AASEW, advised the City of its concerns and objections to the proposed ordinance as eary as October 29, 2009. On October 29th yours truly sent a letter to the Common Council pointing out the various constitutional problems with the ordinance. Additionally, the AASEW's attorney (who is also the attorneyfor the plaintiff landlords) also sent a letter to the City Attorney on the same date setting forth the myriad of problems with the proposed ordinance. Additionally there were numerous communications between the AASEW, its attorneys, and the alderman that sponsored the ordinance (Nic Kovac) and the DNS Commisioner. So the City had actual notice of the plaintiffs' claims approximately two months prior to the filing of the lawsuit. By contrast, in the Kuehne case the plaintiff gave notice to the Town on the same day as the lawsuit was filed and the Court of Appeals found that notice to have been sufficient.

Finally, the plaintiffs argue that the City was not prejudiced by the lack of a formal notice of claim. If the purpose of the notice requirement is to allow a government entity time to potentially resolve a claim, the fact that the AASEW 9of which the plaintiffs are members) notified the City of the problems with the ordinance and even met to discuss the potential problems, demonstrates that the City had the opportunity to resolve the issue if it wanted to. In essence the City is arguing that the plaintiff should be required to jump through the legal hoop for the sake of jumping rather than because the jumping serves an actual purpose.

The City was allowed the opportunity to have the last word so it did file a reply brief to the plaintiffs' brief in oppostion to the motion to dismiss.

I would point out that even if the City should prevail on its motion to dismiss, all that this will do is cause delay. A notice of claim has already been filed and served on the City (just in case) and another lawsuit will be filed if needed. So essentially the City's motion, if successful, will just delay things rather then address the underlying issue -- whether or not the rental inspection ordinance is constitutional as written.

A hearing on the City's motion to dismiss is scheduled to be heard before Judge Timothy Witkowiak on May 21, 2010 at 9:30 am in room 412 of the Milwaukee County Courthouse. The hearing, as most legal proceedings are, is open to the public. For those of you unable to attend, I will provide you with an update hopefully during the week of June 1st after I have returned from my upcoming wedding and honeymoon.

Milwaukee's New Vacant Building Registration Ordinance Is Here

I need to apologize. I have spent much of my time these last several months following and providing information about the city of Milwaukee's new Residential Rental Inspection ordinance and as such I have inadvertantly failed to let everyone know about another of Milwaukee's new ordinances that will affect rental property owners.

I was talking with a client of mine last week prior to the 1:30 pm eviction return calandar in small claims court and he mentioned that the city recently served him with notice that he is in violation of the city's new Vacant Building Registration ordinance. He was told that his rental property was vacant and that he didn't register the property with the city as required and that he must now open his property up for an interior inspection by the Department of Neighborhood Services (DNS). Interesting twist is that my client's rental property is not vacant nor has it ever been vacant. The unit is occupied by a tenant under a valid written rental agreement.

On January 1, 2010, Milwaukee's new Vacant Building Registration ordinance went into effect. Essentially the ordinance states that the owner of any building that is vacant for more than 30 days must register the property with DNS and submit to a mandatory - warrantless - interior inspection of the rental property. The ordinance also requires the owner to secure the building, maintanin the lot, exterior of the property, and interior of the property during the time that it is vacant.

Upon first glance this seems like a reasonable ordinance. A valiant attempt by the city to insure that vacant buildings do not become dilapidated and attract criminal activity, injure individuals, or further depress Milwaukee's neighborhoods. I have no problem with that. Upon closer review of the ordinance however you will note the many requirements -- similar to the city's Residential Rental Certificate ordinance -- that are open to multiple interpretations and therfore open to abuse, which in the end, can and most likely will, be used to the detriment of rental property owners.

I will not attempt to explain or detail the entire Vacant Building Registration ordinance as it is over 6 pages long. I would like to touch on some key parts of the ordinance and note some concerns.

This new ordinance applies to all residential and commercial properties that have been vacant for more than 30 days. There are some exceptions. It does not apply to single family homes or owner-occupied duplexes (as long as the owner has resided in the duplex at least 3 of the last 9 months and the owner intends to continue living in the duplex). Also excluded from the ordinance are condominiums and rental units as long as their vacancy rate does not exceed 95%. Also excluded is property that is currently in the foreclosure process and property that is actively being renovated.

This ordinance will apply to your rental whether or not you are actively showing the property to prospective renters and regardless of the condition of the property. So within 30 days of the property becoming vacant you must fill out a city application and file it with DNS. Additionally you must allow DNS to conduct an interior inspection. If the city finds any violations you will be cited.

Your intial application will be good for a period of 6 months and will cost you nothing (assuming the city does not cite you for any violations). If your property remains vacant for more than 6 months then you must reapply and pay a $250 fee. If DNS determines, at the time of renewal, that your property is not compliant then the fee will increase to $500. If your property continues to be in violation at the time of any subsequent renewals then you may be charged a fee (in increasing increments of $250) up to a maximum of $1,000. If you don't pay the fees they will be assessed against the real estate as a "special charge."

During the inspection, DNS will see if your property meets their minimum requirements. You can read a summary of those requirements at DNS' webpage dedicated to this new program.

Just as with the Residential Rental Certificate ordianance, DNS has the unfettered ability to draft and apply rules and regulations which are not required to be incorporated into the ordinance. These rules and regulations can change at any time and do not have to be published.

Let me just provide you with two situations that clearly fall under the purview of this new ordinance but which I feel should not require any city involvement whatsoever. By no means are these the only two problematice examples that I foresee -- there are many.

First, assume that you own a duplex and you currently have a tenant in the lower unit but because the upper tenant just broke the lease you upper unit is empty. The upper unit is in pretty good shape but requires repainting and some minor repairs to get the unit into move-in condition for the next tenant. Also assume that you were just assigned a new project at work that is taking up most of your time - you are working late and on weekends. While you would like to repaint the unit, make the minor repairs, start advertising the vacancy, and showing it to prospective renters, you just do not have the time. You remain very busy at work for more than 30 days. Under the new ordinance you now have a "vacant building" and you must register the property and allow it to be inspected.

My second example has actually happened to me on several occassions. I was in the process of trying to locate a new tenant for the lower portion of my duplex. Just as the city suggests, I have written screening criteria which any applicant must meet in order to become my tenant. My screening criteria is quite stringent. I follow the adage that it is better to have a vacant unit then to accept any "warm body" as a tenant. Because I also work a full-time job, I am not free to show the property to interested renters every day. As a result of both my stringent criteria and my schedule, my lower duplex remains vacant for over 30 days. Under Milwaukee's new ordinance I would need to register my duplex with the city and take time out of my day to allow an inspector to inspect my property.

NOTE: I have spoken with DNS Commissioner Art Dahlberg and confirmed that my above examples (which I have crossed out) are inaccurate. If you have a duplex and only 1 unit is vacant then you do not fall under the purview of the new ordinance. You would only fall under the purview of the new ordinance if both units of the duplex were vacant for 30 days -- as you would now have more than a 95% vacant property. So I have had to revise my examples.

First, assume that you own a single family home that you operate as a rental property and your tenant just broke his/her lease and as such the property is now vacant. The property will need a little bit of work (minor repairs and some painting) before you can turn it over. Also assume that you were just assigned a new project at work that is taking up most of your time - you are working late and on weekends. While you would like to repaint the unit, make the minor repairs, start advertising the vacancy, and showing it to prospective renters, you just do not have the time. You remain very busy at work for more than 30 days. Under the new ordinance you now have a "vacant building" and you must register the property and allow it to be inspected.

My second example happens to many of my clients that have stringent screening criteria that applicants must meet before they can become tenants. They are in the process of renting out a single family rental unit or both units of a duplex. Just as the city reccomends they use a written screening criteria which any applicant must meet in order to become a tenant. Following the adage that I often teach at my seminars, that it is better to have a vacant unit then to accept any "warm body" as a tenant, my clients often have periods in which their rental units are vacant. Sometimes becasue my clients work a full-time job outside of being a landlord, they not free to show the property to interested renters every day. As a result of both their stringent screening criteria and their busy schedules, their single famuly rental or both units of their duplex remain vacant for over 30 days. Under Milwaukee's new ordinance they would need to register their rentals with the city and take time out of my day to allow an inspector to inspect their property.

I suppose things could be worse. You could be standing in my client's shoes - the guy I mentioned earlier -- and have just been served with a notice from the city that you are in violation of its Vacant Building Recording ordinance. My client is now placed in the difficult position of having to decide whether to ignore the city's notice and risk the possibility of a fine and the future wrath of DNS or capitulating to the city and allowing it to inspect his unit despite the fact that it is occupied by a tenant and the city has no legal right to set foot in his rental property. What would you do?

City of Milwaukee's Rental Rehab Program Offers Investors Funds to Rehabilitate Foreclosed Properties

In an effort to rid itself of the many abandoned and foreclosed properties throughout the city, Milwaukee's Neighborhood Stabilization Program (NSP) Rental Rehab Program will provide investors and landlords with financial assistance to rehabilitate foreclosed homes.

According to the flyer that I was given, responsible investor owners and landlords who purchase foreclosed homes in the city of Milwaukee may be eligible for forgivable loans of up to $17,500 per unit (or $35,00 for a duplex) to assist them with repairs to the property. The funds are made available on a matching funds basis.

The city will be holding an informational seminar on Wednesday, January 27, 2010 from 3:30 - 4:30 pm at the Department of City Development located at 809 N. Broadway in the 1st floor boardroom.

The seminar will provide attendees with additional details as to the program requirements and rehabilitation specifications.

It is requested that all attendees pre-register by sending an email to NSPinfo@Milwaukee.gov.

Additional information on the program can be found at the www.MilwaukeeHousingHelp.org

City of Milwaukee Releases Its 2010 Schedule of Special Sessions for The Landlord Training Program

The City of Milwaukee has just released its 2010 Schedule of Special Sessions for The Landlord Training Program. The focus of these 5 special seminars will be on learning how to effectively and professionally manage your rental properties. All of the sessions will take place on Saturday mornings to allow those of you who work an additional job (aside from being a landlord) to attend.

I am very honored to have been asked, as president of the Apartment Association of SE Wisconsin, to present one of these special sessions on Saturday, August 14, 2010. The topic that I will be addressing is the Judicial Eviction Process. The seminar will run from 9 am - 12 pm at Alverno College's Wehr Theater which is located at 3441 S. 39th Street.

Other special sessions in the 2010 program include:

February 6, 2010: (1) The District Attorney's new diversion program for tenant's who "bounce" their rent checks - presented by A.D.A. Ron Dague, and (2) The EPA's new renovation rules regarding lead-based paint which will become effective later this year - taught by Ada Duffey of Milwaukee Lead/Asbestos Information Center, Inc.

April 24, 2010: Screening Tenants and how using a good tenant screening company can assist you during the very important screening process - presented by Kathy Huens of Landlord Services, LLC

June 12, 2010: Fair Housing Practices - Know Your Local, State and Federal Laws - presented by Margaret Bowitz of the Milwaukee Metro Fair Housing Council

October 2, 2010: Fire and Building Codes - presented by Deputy Fire Chief Michael Payne and Department of Neighborhood Services Commissioner Art Dahlberg

All sessions are free of charge but ADVANCED REGISTRATION IS REQUIRED. To register call (414) 286-2934 or email jhagne@milwaukee.gov