ATTENTION LANDLORDS: Wisconsin Court of Appeals case of Koble v. Marquardt Is Now Law

This is a long blog post, and I apologize in advance, but I sincerely hope that you take the time to read it all the way until the end as it is very important that Wisconsin landlords know what they will be facing. This may be one of the biggest, if not the biggest, issues facing landlords in the last 30 years that I have been a practicing attorney, representing many of you.

Koble Investments v. Marquardt (“Koble”) is a District III Wisconsin Court of Appeals case from Marathon County which has now been published and therefore is now the law in the State of Wisconsin. When a Court of Appeals case is published it becomes precedent for all courts that are lower than the Court of Appeals, which means all the state circuit courts in every county in Wisconsin.

The holding in Koble is that if a landlord has a void rental agreement (i.e., the rental agreement contains one of the “10 Deadly Sins” as set forth in Wis. Stat. § 704.44  the remedy for the rental agreement being void and unenforceable is the complete disgorgement of all rent previously paid by the tenant to the landlord. Stated another way, if a landlord has a provision in its rental agreement, which includes any rental documents as they are incorporated into the rental agreement, that violate any of the “10 Deadly Sins,” the landlord must return all rent that it received from the tenant during the tenant’s entire tenancy. Essentially, because of something that may not even have been intentional by the landlord, the tenant will get to live in the landlord’s rental property for free for the tenant’s entire tenancy, even if the tenant was not damaged because of the prohibited language in the rental agreement.

While the landlord in the Koble has petitioned the Supreme Court of Wisconsin to accept and hear this case, the Wisconsin Supreme Court only accepts a limited number of cases each year and is not obligated to take the Koble case.

Additionally, the landlord in Koble failed to raise the argument that under Wisconsin law if a landlord’s lease is determined to be void, it automatically defaults to a month-to-month tenancy per Wis. Stat. § 704.01(2), and thus still requires the tenant to pay rent. How did the landlord fail to raise such an obvious argument? I do not know the answer for certain, but my assumption is that the attorney that represented the landlord was unfortunately not familiar with Wisconsin Landlord-Tenant law.

In May of 2023, in an unpublished District III Wisconsin Court of Appeals case also out of Marathon County entitled Henchey and Blakely v. Wausau Landmark Corp. (“Henchey”) the landlord also failed to raise the argument that a void lease defaults to a month-to-month tenancy and that rent still must be paid. In Henchey, the Wisconsin Court of Appeals from District III also said the sole remedy for having an illegal provision in a lease was the return all rent paid by the tenant during the entire tenancy, thus allowing the tenant to live for free. In Henchey, the tenant was not even a current tenant of the landlord at the time of the lawsuit. The tenant had moved out of the rental property two (2) years earlier before choosing to sue the landlord for the return of its rent. Again, just like in Koble, the tenant was not damaged because of the prohibited provision included in the lease. In Henchey, the Court of Appeals analogized the inclusion of prohibited language in the lease to an auto repair shop failing to obtain prior authority from the customer to make the repair and failing to provide an estimate of the cost of the repair to the customer prior to commencing work on the customer’s car.

Additionally, the landlord in Koble also allegedly failed to sufficiently develop its argument against the remedy of returning all rent received during the entire tenancy back to the tenant. The landlord also failed to advise the court that such a holding would decimate a large part of the residential rental industry in Wisconsin.

Since the above arguments were either not raised or allegedly not sufficiently developed by the landlord in Koble, those arguments are essentially waived and cannot be raised by the landlord before the Wisconsin Supreme Court.

Thus, the burden falls on the various landlord groups throughout the state, such as the Rental Property Association of Wisconsin, Inc. (“RPA”) to take action and make these arguments to the Wisconsin Supreme Court by filing an amicus (“friends of the court”) brief requesting that the Wisconsin Supreme Court accept the Koble case. This is necessary so that the Supreme Court of Wisconsin can prevent an unjust outcome because the applicable law in Wisconsin was ignored.

The publication of Koble is detrimental to all Wisconsin landlords because tenants now have an even greater reason to argue that all rental leases that they have ever entered into with a landlord or property management company are void and contrary to Wis. Stat. § 704.44. Tenants have nothing to lose in making such an argument. If they prevail, they receive a windfall and have been able to live for free. And if they lose, their case is just dismissed and there is no penalty to the tenant.

In the Koble case, the landlord failed to include the required domestic violence notice provisions as required per Wis. Stat. § 704.14. Further, the lease also contained language that allowed the landlord to terminate the tenancy of a tenant for a crime committed in relation to the rental property. The inclusion of such language coupled with the failure to include the domestic violence language is a clear violation of the 10th Deadly Sin (Wis. Stat. § 704.44(10)).

But the arguments that tenants have been making since Henchey in May of 2023, have not been as clear. In fact, some of the arguments being made stretch both the imagination and common sense. Arguments are being made that if a landlord’s lease states that a “tenant can be evicted if they engage in criminal activity on the premises” that it violates the 9th Deadly Sin (Wis. Stat. § 704.44(9)).

Wis. Stat. § 704.44(9) says that a lease will be void if it “Allows the landlord to terminate the tenancy of a tenant based solely on the commission of a crime in or on the rental property if the tenant, or someone who lawfully resides with the tenant, is a victim, as defined in 950.02(4), of that crime.”

Where in the following language -- “tenant can be evicted if they engage in criminal activity on the premises” -- does is say that the landlord can evict a tenant if they are a victim of a crime? Nowhere. It does not state that anywhere and thus it is not a violation of the 9th Deadly Sin. But it is being argued that the above language violates the 9th Deadly Sin unless you also include the following phrase: “unless the tenant, or someone who lawfully resides with the tenant, is a victim, as defined in Wis. Stat. § 950.02(4), of that crime.”

So, with the publication of Koble, I anticipate that landlords will see even more tenants trying to attack their leases arguing that they are void. Wisconsin landlords must ensure they are using rental documents that do not violate any of the 10 Deadly Sins. If you are using the rental documents that I draft that are sold at Wisconsin Legal Blank (“WLB”), you must use the most current version of both the Residential Rental Agreement, Rules and Regulations, Nonstandard Rental Provisions, and the other rental forms that I draft. WLB provides you with a list of the most current rental documents. This is necessary to protect yourself. It doesn’t mean that tenants won’t still try to attack them. They will. They most definitely will. They will continue to attack them as long as there is the possibility for them to obtain that windfall and live for free.

The Koble case could completely wipe out small to mid-size landlords in Wisconsin. If many tenants living in a large rental complex come together to sue a larger landlord seeking reimbursement of all rent paid or if all tenants renting from a large landlord with multiple rental properties in the state, join in a class action lawsuit against that larger landlord seeking the return of all their rent, that landlord could go out of business as well.

If landlords are forced to file bankruptcy and/or give up their rentals, who is prepared to take over their roles? Is the government ready to step in and be a landlord? We need only look so far as the Housing Authority of the City of Milwaukee (“HACM”) to see that the government is not the answer. Who then?

A final note, if you happen to be on the wrong end of one of these lawsuits and the tenant is arguing that your rental documents are void and unenforceable and that you must return all of their rent payments and let them live for free, make sure that you contact the Rental Property Association of Wisconsin, Inc. (RPA) or your local landlord association. Let them know of your situation so they can help.

Additionally, if you have been sued, make sure that you retain an attorney that understands and is knowledgeable about Wisconsin landlord-tenant law as there are legitimate and valid arguments and defenses that can and should be raised in your defense. Don’t’ end up like the landlords in Henchey and Koble.

Thanks for reading until the end.

T

It Is Very Important That Landlords Ensure That They Are Using the Most Current Version of WLB's Landlord Tenant Rental Forms.

It is very important that landlords that are using the landlord-tenant law rental documents/forms that I draft, and which are sold through Wisconsin Legal Blank (WLB), ensure that they are using the most current forms.  To aid you in determining if you are using the most current version, WLB just published the document below on their website, so that you know have one place to go to determine if your rental documents are up to date. 

Please be assured that I don't revise any of the WLB landlord-tenant forms just for the hell of it.  If I revise a rental form, it is for an important reason.  In some situations the law has changed and that necessitates the revision. Other times, a Court may make an adverse ruling against a landlord based on some language in the form, and if that landlord brings this to my attention and I can confirm the ruling, that may be the reason for a revision. Sometimes, I simply have come up with a better way to explain something in the rental document or realized that I should address a new issue or topic that will make the rental document better.  But there is always an important reason that causes me to revise any of the WLB rental documents. So, if you notice that you are not using the most current version of a rental document, take the time to purchase the updated version and begin using it as soon as possible as allowed under Wisconsin Law, so that you are protected as well as possible.

Thanks

T

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Updated Nonstandard Rental Provisions form Now Available at Wisconsin Legal Blank

Hi Everyone - I hope that you are all well on this rainy Friday afternoon.  I just wanted to alert those of you that use the Landlord-Tenant forms that I draft for Wisconsin Legal Blank, that I recently re-wrote the Nonstandard Rental Provisions (NSRP) form for clarity and legal conformity.  I recommend that you update your NSRP form accordingly to better protect yourself and your rental property.

Thanks

T

Beware of Clauses Requiring More than 28-Days’ Notice to Terminate Month-to-Month Tenancies

By Atty. Gary D. Koch

Clauses requiring tenants to provide 60-Day Notice to terminate a month-to-month tenancy are popular – we see them a lot in rental agreements. Recently, though, we have seen the Wisconsin Department of Agriculture, Trade and Consumer Protection take issue with such clauses in rental agreements in month-to-month tenancies that require the tenant to give anything more than a 28-Day Notice to terminate the tenancy.

These DATCP challenges can end one of two ways: the landlord can fight the Department, or, more likely, the landlord concedes and removes the clause from its rental agreements, potentially paying a fine for the pleasure of doing so.

We have not yet had a client want to fight DATCP on this issue, but we believe that there may be statutory grounds to do so.

The DATCP’s argument is found in Wisconsin Administrative Code § 134.06(3)(a)(2), prohibiting withholding from the security deposit for any charges other than for “Unpaid rent for which the tenant is legallyresponsible, subject to s. 704.29, Stats.” (Emphasis added). The Department believes that any notice period more than 28 days is illegal.

Wisconsin Statute § 704.19 discusses what notices are necessary to terminate periodic tenancies, such as month-to-month tenancies. Pursuant to Wis. Stat. § 704.19(3), “At least 28 days’ notice must be given” to terminate a month-to-month tenancy (emphasis added). It seems pretty straightforward that “at least” does not mean “exactly”.

Elsewhere in the same statute, we find that a month-to-month tenancy can be terminated “only by giving to the other party written notice complying with this section, unless any of the following conditions is met: (1) [t]he parties have agreed expressly upon anther method of termination and the parties’ agreement is established by clear and convincing proof.” (Emphasis added). Again, it seems pretty straightforward that a clause in the lease calling for a 60-Day Notice to terminate the month-to-month tenancy would be clear and convincing proof that the parties have expressly agreed upon another method of termination.

Nevertheless, the Department takes the position that landlords can ONLY require a 28-Day Notice to terminate the tenant’s month-to-month tenancy.

Do these arguments win? That remains to be seen. It might be a serious undertaking to find out the answer, but Petrie + Pettit is certainly ready to take on that challenge with you!

Updated Nonstandard Rental Provision Form Available Now at Wisconsin Legal Blank

A new and updated version of the Nonstandard Rental Provisions (NSRP) form that I draft is available for purchase at Wisconsin Legal Blank.  The need for the revisions were due to conversations that I had with the State (namely the Attorney General's Office) while defending a client of mine during a Civil Investigative Demand (CID).  During our conversations, the AG's office informed me that it was their opinion that a NSRP cannot state that a landlord can deduct from a tenant's security deposit both a fee (set by the landlord) and the actual costs incurred by the landlord.  

It is the AG's opinion that a landlord can only deduct from a tenant's security deposit for the actual costs incurred by the landlord.  I am not aware of any law, rule, or caselaw that sets forth the AG's view regarding this, however I certainly do not want any of you that purchased a form that I drafted, to be investigated by the State.  So I have errored on the side of caution.  As such, the revised NSRP form (dated 4/11/23) excludes any reference to a fee (except for a late fee) and instead states that the landlord can deduct its actual costs incurred as a result of the tenant's failure to properly perform the listed requirements. 

I hope that you are well

T

How Long Should A Landlord Save A Tenant's Lease and Other Rental Documents?

A while ago I wrote a post in which I recommended that landlords retain a denied rental applicant's application and related paperwork for at least 2 years from the date of denial.  This post will focus on the situation where the landlord has accepted the applicant, the applicant was your tenant, and now their tenancy has ended for whatever reason.  Under this scenario, how long should a landlord hold on to a past-tenant's rental documents (which would include the lease or month to month rental agreement, nonstandard rental provisions document, pet addendum etc. etc.)?

The answer to this question again, just like in my prior post, depends on something called the "statute of limitation."  A statute of limitation is a law which sets the maximum period in which a person can wait before filing a complaint or lawsuit against another person.

By entering into a lease or a month to month rental agreement (or any other rental document for that matter) with a tenant, you have entered into a contract.  So, if a tenant refuses to take occupancy because the tenant feels that the apartment was not in a habitable condition as promised, the tenant could sue the landlord for a breach of contract.  If a landlord forgot to return a tenant's security deposit within the applicable time frame, the tenant could also sue a landlord for a breach of contract.  Most violations of a lease or other rental document would be considered a breach of contract.

The statute of limitations for filing a lawsuit based upon a breach of contract in Wisconsin is 6 years from the date of the breach.  So, the safest thing for a landlord to do is to keep a past-tenant's rental file, and specifically all the contracts, for at least 6 years from the date that the contract ended. 

When it comes to the return of a security deposit, a landlord has 21 days after a lease has ended (or any other action set forth in Wis. Stat. § 704.28(4)) to return the security deposit or send the letter itemizing how the security deposit was applied.  As such a landlord would be smart to retain the tenant's file and all contracts for at least 6 years after the deadline for the return of the tenant’s security deposit (i.e. 6 years + 21 days from any event sent forth is Wis. Stat. § 704.28(4)).

If you forget to keep your past-tenant's rental documents for at least 6 years, you could end up in the unenviable position of trying to defend yourself against a lawsuit filed by a past-tenant whose tenancy you have no memory of.  As such, you would have no documents to refer to, to refresh your memory nor would you have any documents that you could use as an exhibit in court.  Keep in mind that a tenant typically only has one landlord at a time, whereas you may have tens or hundreds of tenants simultaneously.  It is probably safe to say that the tenant will have a better memory of you and his or her tenancy than you will have of them.  Therefore, keeping all tenant-related documentation for as long as the past tenant can sue you, is very important.  With computers and the ability to save things digitally these days, a landlord has no excuse for not holding on to a tenant’s rental file for at least the length of the statute of limitations.

What Is The Difference Between a Rental Agreement, a Lease, and a Month to Month Tenancy

A question that I am often asked is what is the difference between a rental agreement, a lease, and a month to month tenancy.

I will do my best to explain.

The "Real World" Answer

A "Rental Agreement" is the general term that is used to cover all types of rental tenancies. A rental agreement includes a lease and a periodic tenancy (such as a month to month tenancy).

A "Lease" is a specific type of rental agreement. A lease is a tenancy for a definite period of time with a specific beginning date and a specific end date. A lease can be for any duration of time that you can think of . . . 10 years, 5 years, 1 year, 6 months, 3 months, 1 month, or even for 1 week. They key component of a lease is that it is for a specific duration of time. I often refer to a lease as a "lease for term" to remind people that we are dealing with a tenancy for a specific period of time (i.e. term). A Lease can be in writing or oral, however a lease for more than one year must be in writing in order to be enforceable. It is my recommendation that all leases be in writing.

A "Periodic Tenancy" is another type of rental agreement. A periodic tenancy is a tenancy that has a beginning date but no end date and continues indefinitely until terminated by either the landlord or tenant. The most common type of periodic tenancy is a month to month. A periodic tenancy can be in writing or oral. It is my recommendation that all periodic tenancies be in writing.

While the definitions are fairly straightforward, things become muddled because many people use the terms improperly and/or interchangeably. For example, I often hear people say that they have a "month to month lease." There is no such thing as a month to month lease. You either have a month to month tenancy or you have a lease. They are not the same thing as the month to month tenancy continues indefinitely until terminated whereas the lease has a specific end date.

The "Law School" Answer

A rental agreement is defined as an oral or written agreement between a landlord and tenant, for the rental or lease of a specific dwelling unit or premises, in which the landlord and tenant agree on the essential terms of the tenancy, such as rent. Wis. Stat. § 704.01(3m) (2015-16).

A lease is defined as an agreement, whether oral or written, for the transfer or possession of real property or both real and personal property, for a definite period of time. Wis. Stat. § 704.01(1) (2015-16).

A periodic tenancy, while having a specific start date does not have a specific end date and continues indefinitely until either the landlord or the tenant terminates the tenancy. A periodic tenant holds possession of a rental property without a lease and pays rent on a periodic basis. Wis. Stat. § 704.01(2) (2015-16).

Thanks

T

More New and Revised Landlord Forms Available at Wisconsin Legal Blank

I have recently completed drafting some new landlord forms which are now available at Wisconsin Legal Blank, including:

1. Smoking Policy Addendum (Form 982) - This form may be used when a landlord wants to prohibit smoking on the rental premises or only allow smoking in specific location/s of the rental premises. This form also sets forth the terms, conditions and rules related to any smoking prohibition or restriction on smoking.

2. Co-Signer Agreement (Form 20) - I wanted to "beef up" the co-signer agreement section that previously was located in the lower left-hand corner of the Rental Agreement (Forms 19 and 19L). This new form will allow a landlord to obtain more information about the co-signer similar to the information requested of a potential tenant on a rental application lie address, DOB, SS#, place of employment etc. This information will aid a landlord in evaluating the collectability of a co-signer and provide necessary information should the co-signer need to sued or turned over to a collection agency. This form also explains in greater detail the obligations of a co-signer if the tenant fails to pay rent or violates other portions of the rental agreement.

I have also revised several of Wisconsin Legal Blank's current forms to make them better, including:

3. Applicant Screening Criteria (Form 990A) - This form needed to be modified in light of HUD's April 4, 2016 directive regarding the use of applicants' criminal history during the screening process. I also took this opportunity to make this form easier to use by combining all requirements into separate numbered paragraphs.

4. Nonstandard Rental Provisions (Form 984) - If you will recall, the main purpose of a NSRP is to list things that a landlord can deduct from a tenant's security deposit. Toward that end, I added a new provision that will allow a landlord to deduct any rental promotion or concession (i.e. first month free rent upon the signing of a 12 month lease) from a tenant's security deposit should the tenant skip out prior to the end of the lease or be evicted. Another provision that was added includes any costs incurred by a landlord associated with the removal of tenants' abandoned property. Finally, I also clarified that a landlord may deduct for "damage, waste or neglect" to the rental unit and not just "damage."

5. Landlord Reference Questionnaire (Form 12) - This form provides suggested questions that a landlord can ask a rental applicant's current or prior landlord during the screening process. Revisions were made to bring the form into compliance with HUD's directive (see reference above and prior blog post). I also made some grammatical changes to the questions.

6. 12 Hour Notice To Enter (Form 331) - I made some changes to this form so that it better explains the situations in which a landlord may enter a tenant's rental unit. I also clarified the portion of the form dealing with who the tenant may contact if s/he has any questions/concerns.

Happy Landlording!

New & Revised Landlord-Tenant Forms Available at Wisconsin Legal Blank

As a result of 2015 Act 176 becoming law earlier this month it became necessary to draft and/or revise some of the landlord-tenant forms sold at Wisconsin Legal Blank Co., Inc.

As of March 24th the following revised or new forms will be available at WLB:

• 5 Day Notice To Vacate for Criminal Activity or Drug-Related Criminal Activity

This new notice may be served on a tenant, under any tenancy, if the tenant, a member of the tenant's household, or a guest or other invitee of the tenant or of a member of the tenant's household, has engaged in criminal activity or drug-related criminal activity. The notice cannot and should not be served on a Tenant who is a victim, as defined in Wis. Stat. § 950.02(4), of the criminal activity. It is not necessary that the tenant have been arrested for or convicted of the criminal activity or drug-related criminal activity in order to serve this notice.

For more information on the new law regarding criminal activity in rental housing refer to my blog post summarizing Act 176.

• 5 Day Notice To Vacate for Imminent Threat of Serious Physical Harm

This notice has nothing to do with Act 176. I had never drafted this form in the past because as there did not seem to be a demand. In the last few months I have had many clients encounter domestic violence issues amongst their tenants such that the victim of the domestic abuse has requested that the landlord remove the abuser, and therefore I thought I better create the form.

• Residential Rental Agreement

The biggest change to this form is the inclusion of language regarding criminal activity and drug-related criminal activity on the rental premises as set forth in Wis. Stat. 704.17(3m) as created by Act 176.

I also added a new clause which addresses the non-liability of the landlord in certain circumstances and another clause prohibiting modifications to the premises by the tenant without prior written approval by the landlord.

I also made some smaller changes as a result of the passage of Act 176 which most likely will not even be noticed but are important. Finally, I removed the language that said rent is "due" by a specific date and replaced it with rent "must be received by" a certain date. modified that rent must be "received by" a certain date.

In order to fit the above changes into the form it became necessary to remove the "Co-Signer/Guarantor" section of the Rental Agreement. I am in the process of creating a separate Personal Guaranty Addendum with beefed up language.

I am currently working on the following forms which are not yet available. When they become available I will let you know via this blog.

• A table that summarizes all of the various notices in Wisconsin and when to use each one
• A revised Nonstandard Rental Provisions form
• A Smoking Policy Addendum
• A Personal Guaranty Addendum
• A Bed Bug Addendum
• A basic Commercial Lease

If You Allow Your Tenant To Keep A Pet Then You Should Be Using a Written Pet Agreement

In talking with my clients and potential clients over the past year, I have also noticed that more and more landlords are allowing tenants to keep pets. I am not sure if this is because of the many pet owners that were also homeowners that have since lost their homes to foreclosure and have been forced to become renters or if it is because landlords are trying to be more accomodating to their tenants' wishes in order to keep their rental units occupied during a difficult recesssion -- or a combination of both.

Whatever the reason for this trend, if you are allowing your tenants to have pets then you must make sure that you are using a strong written Pet Agreement. Unfortunatly too many landlords do not use such a document - and it typically is to their detriment. Let's face it, "man's best friend" (if never trained or poorly trained) can cause A LOT OF DAMAGE to a rental unit. Don't even get me started about cats. While I personally have a cat that I am very fond of my experience with cats in rental units has not been good. Can you say "personal litter box?" Here is a Wisconsin Court of Appeals case about the damage that pets can cause to a rental unit.

Whether or not you choose to allow pets in your rentals is a business decision that all landlords must grapple with at one point or another. All animals, even rabbits, birds, reptiles, and fish can end up causing damage to a rental unit. If you have made the decision to allow pets then you need a good Pet Agreement.

Pet Agreements are considered to be part of the Nonstandard Rental Provisions document. Despite this your Pet Agreement should be a separate written document and not just a numbered provision within your NSRP.

A good Pet Agreement should have 4 key componants. First, it should specifically identify the pet that is being allowed to reside in the apartment. Second, it should set forth all charges/deposits for the pet. Third, a Pet Agreement must include the terms and conditions relating the keeping of a pet - the rules. Finally, the agreement should clearly explain what the consequences will be if any of the pet rules are violated.

1. Specifically Identify the Pet:

A client of mine had allowed his tenant to keep a dog as a pet - it was a fairly small dog - small enough to fit on a person's lap or a woman's purse (OK someone will need to explain to me the purpose of keeping a dog in your purse - I just don't get it). Anyways, that small dog eventually died and the tenant decided to buy another dog. Problem was the replacement dog could not fit in a purse as it was the size of a small car. It was too big for the rental property and it scared the neighbors and other tenants because of its gigantic size. While my client was using a written Pet Agreement, the agreement did not specifically identify the pet that was allowed to reside in the property - it merely said that the tenant could keep 1 dog. While the original (little) dog had passed away and was replaced with a much larger canine, the tenant still only had one dog -- problem was it was not the dog that the landlord wanted in his property and there was nothing he could do about it as the tenant had not violated the Pet Agreement.

A good Pet Agreement should clearly identify the animal/s that are being allowed to reside in the unit In order to do this the Agreement must identify the following:

- The type of animal (dog, cat, iguana etc.),

- The breed of animal (beagle, labrador, border collie),

- The name of the animal (you know . . . . Fido, Scrappy, Puss 'N Boots),

- The color of the animal,

- The age of the animal, and

- The weight of the animal.

If there are any other distinguishing characteristics of the pet then you should list them as well.

The Pet Agreement should clearly restrict the tenant to keeping the identified animal only. Should the "allowed pet" pass away during the tenancy then the tenant will not be allowed to replace that pet unless the landlord consents to the replacement pet by entering into a revised Pet Agreement.

2. List All Charges For Keeping A Pet

A second componant of a good Pet Agreement is that it should clearly state what charges will be required in exchange for keeping the pet. You can charge the tenant an increased monthly rent and/or a pet deposit. The Department of Agriculture, Trade and Protection is of the strong opinion that you cannot charge a non-refundable pet deposit or fee. If you review the definition of a "security deposit" set forth in ATCP 134.02(11) that they are most likely correct. So while in the past I used to believe that you could charge a non-refundable pet fee, over the years I have changed my mind. If a landlord continues to charge a non-refundable fee they run the risk of being sued for an improper security deposit deduction which opens them up to paying double damages and attorney's fees to a tenant.

I have allowed past tenants to keep pets in my rental property. I required my tenants to post a refundable pet deposit to cover the cost to repair any damages that their pet may cause to my property. If there are no damages then the tenant gets this money back.

I have never charged an increased rent for the keeping of a pet, but I do know of landlords that do. Nothing is wrong with charging additional rent for the pet - the reasoning for using this option is that there will be increased "wear and tear" to the unit as a result of the pet and even if that wear and tear is not "damage," the landlord should be compensated for that additonal use.

Pet Agreements should also clearly state that the tenant's financial obligations for the pet are NOT limited to the non-refundable pet fee, the refundable pet deposit, or the increase monthly rent. If Sparky uses the baseboards in the unit as his personal rawhide bone and/or the Kitty unrinates and defecates all over the carpet and hardwood floors, you should be able to recoup all of the damages from the tenant and not be limited to only the amount of any fee or deposit.

3. List All Rules For The Pet

The third componant to a Pet Agreement is to list all of the rules that pertain to the keeping of the pet. Possible rules could include:

- The dog must be keep on a leash at all times when outside of the unit

- The cat's litter box must be changed twice per week and the contents of the litter box must be disposed of in a sealed bag and placed in the dumpster located outside of the rental unit

- The iguana must remain properly caged at all times and any waste must be cleaned or removed on a frequent basis so as to prevent odors

- All waste must be removed from the yard immediately.

4. Explain What The Consequences Are If The Agreement Is Breached

Finally, your Pet Agreement needs to include what I call "The Hammer" -- essentially you need to explain what will happen if the tenant and his/her pet are in violation of any of the rules. Will they be fined? If so, how much? Will a violation of the rulesbe considered a material breach of the agreement such as to give rise to the termination of the tenancy and an eviction lawsuit? Could a violation result in the removal of the animal? Obviously the consequence will depend on the nature of the violation and its severity. A tenant needs to clearly understand that they do not have a right to keep a pet in your rental unit - the keeping of a pet is a privilege - and there are consequences if the animal or the owner violates the rules.

I would be remiss if I didn't mention that a service animal or an animal that is needed to "reasonably accomodate" a disabled tenant is NOT a pet. If a person meets the definition of "disabled," under federal, state or municipal law, and otherwise meets any other requirements for the use of an assistance animal or a companion animal, then they are legally entitled to keep that animal in their rental unit. Think of such an animal as a device that assists a disabled person live their life rather then a pet. An assistance animal is similar to a wheelchair, hearing aid, crutches, or medication. The difference between a pet and an assistance or companion animal will need to be covered in a future post (or many posts as it is a somewhat complicated topic).

If you would like to see an example of a good Pet Agreement visit Wisconsin Legal Blank Co. which sells a Pet Agreement that I have authored.

The 10 Deadly Sins: 10 Provisions That Landlords Cannot Include in Their Wisconsin Residential Rental Agreements

With the passage of Act 143 (2012) and Act 76 (2014) the legislature has created several new provisions that a Residential Landlord cannot include in his Rental Agreement. There are currently 10 items, which I affectionately refer to as the "10 Deadly Sins" that if they are included in your Wisconsin residential rental agreement will render the agreement void and unenforceable.

In my representation of landlords over the past 20 years, the two most frequent situations in which I have found an illegal provision in a rental agreement were because: (1) the landlord decided to draft his/her own rental agreement and didn't know that Wisconsin law prohibited him/her from including certain language, and (2) the landlord used a rental agreement that s/he found on the internet that was not drafted by a person knowledgeable about Wisconsin landlord-tenant law.

Section 704.44 of the Wisconsin Statutes sets forth the prohibited provisions.

You cannot include a provision in your Wisconsin residential rental agreement that:

1. Allows a landlord to do any of the following because the tenant has contacted an entity for law enforcement services, health services, or safety services:

a. Increase rent

b. Decrease services

c. Bring an action for possession of the premises (i.e. eviction lawsuit)

d. Refuse to renew a rental agreement

e. Threaten to take any action in (a) - (d)

This prohibition is pretty self-explanatory. You cannot have a rental agreement provision that allows a landlord to retaliate against a tenant in any way just because the tenant has called the police, the municipal building inspection department, or other agency to complain about something that the landlord did (when they shouldn't have) or something the landlord didn't do (when they should have).

2. Authorizes the eviction of a tenant from the property other than by the judicial eviction process set forth in the Wisconsin Statutes.

Essentially this means that you cannot put any language in your rental agreement that states that if the tenant refuses to vacate at the end of a lease or after committing a breach, that the landlord is able to engage in self-help eviction. Your rental agreement cannot state that the landlord can change the locks so that the tenant is locked out. Your rental agreement cannot state that the landlord can remove the door to the apartment. The rental agreement cannot state that the landlord can turn off the heat or electricity to the unit. Nor can your rental agreement state that the landlord can remove the tenant's belongings and put them on the curb or in a storage facility.

If a tenant refuses to leave your property, the only legal way to have them removed is to file an eviction action against them, obtain a judgment of eviction, and if necessary involve the Sheriff's Department to physically remove the tenant. Because this is the only legal way to remove a tenant, it is illegal to include some other procedure to remove a tenant in your Wisconsin residential rental agreement.

3. Provides for the acceleration of rent payments if the tenant defaults or breaches the rental agreement or otherwise waives the landlord's obligation to mitigate damages as required in section 704.29, Wis. Stats.

Some commercial leases include an "acceleration of rents" clause but such clauses are prohibited in Wisconsin residential leases. So if a tenant breaches their rental agreement the landlord cannot require that the tenant immediately pay all future rent through the end of the term. According to sec. 704.29 of the Wisconsin Statutes, the landlord must attempt to mitigate the tenant's damages by trying to re-rent the unit. If the landlord is able to re-rent the unit then the breaching tenant will no longer be responsible for the rent once the new tenant moves in and begins paying rent. If the landlord is unable to re-rent the unit then the breaching tenant will be responsible for all of the rent through the end of the term, however since the landlord is unable to determine if that will be the case at the time of the breach, the landlord cannot include language in the rental agreement that the tenant must pay all future rent immediately upon a breach. It is illegal for a landlord to avoid his duty to mitigate the breaching tenant's damages (i.e. make effort to re-rent the unit) by putting such language in the rental agreement.

4. Requires the tenant to pay the landlord's attorney's fees or costs that are incurred in any legal action or dispute arising under the rental agreement.

This is the illegal provision that I see the most often when reviewing rental agreements. The lease agreements that are sold at OfficeMax and Office Depot contain this prohibited language. This is also the illegal language that was included in the rental agreement at issue in the seminal prohibited rental provision case of Baierl v. McTaggart.

In a commercial lease it is acceptable to include language that requires a tenant to pay for the landlord's attorney's fees and costs however it is not allowed in the residential context. A landlord who prevails in court and has a tenant properly evicted will still be responsible for paying his/her own attorney's fees. If you are interested in learning more about the Wisconsin Supreme Court's reasoning you should read the Baierlcase.

5. Authorizes the landlord or an agent of the landlord to confess judgment against the tenant in any action arising under the rental agreement.

A Wisconsin residential rental agreement is prohibited from including a clause that says that the tenant authorizes the landlord to automatically take a judgment against the tenant and that the tenant has no right to defend against it.

6. Relieves the landlord from liability for property damage or personal injuries caused by the landlord's negligent acts or omissions.

To put it simply, if the landlord causes damage or injury to a tenant then the landlord will be responsible for it. A landlord cannot remove his/her liability by having a tenant sign a rental agreement waiving that responsibility. For example, if a landlord is aware that the railing on his rental property's second floor porch is loose and the landlord has not gotten around to repairing it for several weeks, the landlord could be responsible for the tenant's injuries should he fall off the porch, regardless of what the rental agreement says.

7. Imposes liability on a tenant for any of the following:

(a) Personal injury arising from causes clearly beyond the tenant's control.

(b) Property damage caused by natural disasters or by persons other than the tenant's the tenant's guests or invitees.

This Deadly Sin is even broader in scope than the 6th Deadly Sin. Essentially, the rental agreement cannot state that a landlord can hold a tenant responsible for personal injuries that were caused by something beyond a tenant's control. So if a massive snowstorm injures someone or if an electrician hired by the landlord improperly wires the rental unit and their negligence causes injury to someone, a landlord cannot state that the tenant is liable for those injuries as they were out of the tenant's control.

Similarly, if that massive snowstorm or the faulty wiring by the electrician hired by the landlord results in property damage, a rental agreement cannot state that the tenant in liable for that damage as the damage was caused by a natural disaster and/or a person other than the tenant or the tenant's guests or invitees.

However, it is legal and enforceable for a rental agreement to state that a tenant will be responsible for personal injuries and/or property damage if the injuries or damage were caused by the tenant, the tenant's guests, or the tenant's invitees.

8. Waives any other statutory or legal obligation of the landlord to deliver the unit in a fit or habitable condition or maintain the unit during the tenancy.

A landlord has a responsibility to provide the tenant with an rental unit that is liveable and safe. A landlord also has the responsibility to repair and maintain the property to insure that it remains safe and livable. A landlord cannot avoid this responsibility even if the tenant agrees to allow him/her to do so in the rental agreement.

9. Allows the landlord to terminate the tenancy of a tenant based solely on the commission of a crime in or on the rental property if the tenant, or someone who lawfully resides with the tenant, is a victim of that crime.

Simply stated, your rental agreement cannot state that the tenant or a legal occupant is the victim of a crime.

10. Allows the landlord to terminate a tenant's tenancy for a crime committed in relation to the rental property and the rental agreement does not include the notice of domestic violence protections required under sec. 704.14, Wis. Stats.

Most good rental agreements contain some language along the lines of "Tenant shall not engage in or allow others to engage in any criminal activity on the property." You definitely want to have such language in your rental agreement. Sec. 704.14 requires that all residential rental agreements in Wisconsin must contain the language set forth in the statute verbatim (i.e. word for word - no summaries allowed). If you have failed to include the domestic abuse protections language then your rental agreement will be void if the agreement also includes language allowing you to terminate a tenant's tenancy if the tenant or their guest have engaged in criminal activity. So the key here is to make sure that your rental agreement contains the mandatory notice of domestic abuse protections set forth in sec. 704.14.

Wisconsin residential landlords need to make sure that their rental agreements do not contain any of the aforementioned "10 Deadly Sins." Failure to remove such illegal provisions will result in your rental agreement being declared void and unenforceable and may even expose you to a lawsuit for double damages and attorney's fees by the tenant.

Revised Wisconsin Legal Blank Forms Will Be Available on Monday, February 17th

As I hope most of you are aware, Wisconsin passed a new law that will great affect landlord-tenant law - Act 76. Whenever the law is changed, there is usually a need to revise and/or update your rental documents to comply with the law. That is definitely the case with the changes from Act 76.

As such, I have had to update many of the rental documents that are sold at Wisconsin Legal Blank.

The new law becomes effective March 1, 2014. So for those of you that use the WLB forms you will want to use these revised forms for any new tenancies that commence on or after March 1, 2014.

The following Wisconsin Legal Blank forms have been revised:

1. Residential Rental Agreement (#19)

The changes made to this form are very important. As of March 1, 2014, it will be required that all residential rental agreements include certain language that provides notice of domestic abuse protections. Act 76 states that a rental agreement will be void and unenforceable if it allows a landlord to terminate a tenancy for a crime and the rental agreement fails to include the domestic violence notice language. As a result of having to add this additional language verbatim the Residential Rental Agreement form will be much longer.

Several other changes and modifications were made to this form as well including:

a. Revision of the "Extermination Costs" section

b. Addition of a "Non-Waiver" section

c. Addition of a "Criminal Activity Prohibited" section

d. The "Notice to Vacate" section was modified to clarify the law better regarding terminating a lease for term. The 30 day notice required to terminate a month to month tenancy was changed to 28 days to coincide with Wisconsin statutes.

e. The "Abandoned Property" section was modified to comply with the law changes in Act 76

f. Additional language was added to clarify that operating a business or providing child care services are not allowed in the rental unit.

g. Additional language was added in the section entitled "Security Deposit" to state that if the repair costs for tenant damages are not known in time for the sending of the security deposit transmittal letter that a "good faith" estimate may be used.

f. Clarifying language was added to the "Breach and Termination" section.

2. Residential Lease Renewal or Notice To Vacate (#970) -- Was updated to comply with Act 76's changes regarding abandoned property.

3. Notice of Rent Increase (for Month to Month Tenant) (#332) - Was updated to comply with Act 76's changes regarding abandoned property.

4. Check-In / Check-Out Sheet (#997 and #993) -- Was updated to to comply with Act 76 with regards to the title and the "When To Use" explanation as well as some stylistic changes.

5. Rental Application (#996) - Eliminated some sections that were not needed and could possibly cause problems for landlords, added some additional instructions for applicant, restructured the layout of the form, and reworded much of the language at the bottom of the signature page.

6. Nonstandard Rental Provisions (#984) -- Rewrote the "When To Use" section to better explain the purpose of a NSRP document, removed the "Miscellaneous Matters" section of the form, revised the statutory references, and fixed some grammatical issue.

I can't stress enough how important it is to use updated/revised forms when they become available. I still see landlords using the Residential Rental Agreement that was drafted over 10 years ago. There are important reasons that rental documents are updated: (1) To comply with law changes, (2) To eliminate problem language that has caused landlords problems. Each new version of these forms are supposed to make your life easier. Using old forms is just an invitation for problems. Effective, March 1, 2014, failing to use the revised Residential Rental Agreement may result in your Agreement being declared void and unenforceable.

T

New & Improved Nonstandard Rental Provisions Form Available at Wisconsin Legal Blank

As many of you know, I draft the various landlord-tenant law forms that are sold at Wisconsin Legal Blank Co., Inc. In light of the recent court of appeals decision (Keyes & Gruner v. Waldbillig et. al) that I referenced in an earlier blog post, I have made some additions and revisions to WLB's Nonstandard Rental Provisions Form. As such, a new and improved Nonstandard Rental Provisions form is now being sold at Wisconsin Legal Blank.

The date of the new form is May 29, 2013.

I would strongly encourage landlords and management companies to start to using the new form as soon as is legally possible.

The new form includes an added provision that allows alandlord to deduct re-rental costs as allowed under Wis. Stats. sec. 704.29 from a tenant's security deposit -- this was the specific deduction that was at issue in the Keys & Gruner v. Waldbillig et. al. Court of Appeals case referenced in my earlier post.

The new Nonstandard Rental Provision form also includes a provision addressing the withholding of "holdover" damages as set forth in Wis. Stats. sec. 704.27, from a tenant's security deposit.

Finally, I made some grammatical changes and reworded a few provisions in the old Nonstandard Rental Provisions form to make them more straightforward and clear.

So to best protect yourself, I would encourage you to pick up the new Nonstandard Rental Provision form dated May 29, 2013 from Wisconsin Legal Blank.

DISCLAIMER: For those of you who may think that I am "pushing" the new Nonstandard Rental Provisions form because I receive a portion of the sale proceeds, that unfortunately is not the case : ). I am paid up front by WLB for my time to draft the forms and revise them as needed based on changes in the law. So I have no vested interest in you purchasing the new form other than I don't want you to be caught in the same situation as the landlord was in the Keyes & Gruner v. Waldbillig et. al court of appeals case. : )

Court of Appeals Decision Reminds Landlords To Review Their Nonstandard Rental Provisions Before Making Deductions from A Tenant's Security Deposit

The Wisconsin Court of Appeals, in an unpublished decision dated May 9, 2013, held that a landlord wrongfully withheld a portion of his tenants' security deposit for costs incurred when attempting to re-rent the rental unit.

As I have mentioned in a prior post, Wisconsin law essentially allows a landlord to deduct only three things from a tenant's security deposit: (1) damage, waste, or neglect, (2) rent, (3) utilities. Any other items that a landlord would like to deduct from a tenant's security deposit must be included in a separate written document entitled "Nonstandard Rental Provisions" (NSRP), in order to be legally deducted. So if what you want to deduct something from your tenant's security deposit and it is not one of the 3 items listed above and not set forth in your NSRP, it will most likley be considered an illegal deduction.

In Keyes and Gruner v. Waldbillig et. al (2012AP1180), two tenants broke their lease with their landlord by moving out prior to the last day of the lease term. The landlord wrote the tenants a letter explaining to them that there would be charges against the their security deposit to cover the cost of advertising and marketing the apartment and that his property management company charged him $100 per showing to show the unit to potential new tenants.

The landlord's managment company showed the tenants' vacated unit 6 times for a total of $600 in costs to the landlord prior to finding a new tenant for the unit. The landlord sent the tenants their security deposit itemization letter explaining that he witheld $600 of their security deposit to cover the costs to re-rent the unit.

Under Wisconsin law, specifically Wis. Stats. 704.29, if a tenant breaks their lease or is evicted, a landlord is required to make reasonable efforts to mitigate the tenant's damages by trying to re-rent the unit. The same statute also says that a tenant who has broken his/her lease or is evicted can be held responsible for all lost rent and all reasonable expenses of listing and advertising the vacant unit which were incurred by the landlord while trying to re-rent the unit.

But this landlord failed to have a NSRP that allowed him to deduct for the re-rental costs. As an aside, if the landlord had just opted to withhold the lost rent incurred while trying to re-rent the unit from the tenants' security deposit instead of the re-rental costs, he also most likley would have prevailed even without having the NSRP regarding re-rental costs since rent owed is an allowable security deposit deduction. Instead, the landlord deducted $600 in showing fees from the tenants' security deposit even though he did not have a NSRP in place that allowed him to do so.

Had the landlord had such a NSRP in place, it is my opinion that his deductions from the tenants' security deposit would have been proper (assuming that the court would agree that $100 per showing is reasonable) and he would not have lost the case and been required to pay double damages and the tenants' attorney's fees.

The moral of the case is that just because the law allows a landlord to hold tenants responsible for the costs to re-rent if they break their lease, does not mean that the landlord can legally withhold those costs from the tenants' security deposit. In order to be able to legally do that, the landlord must have a NSRP in place which allows for the deduction of re-rental costs allowed under Wis. Stats. 704.29.

Does your NSRP contain such a clause? Do you even have a NSRP docuement? If not you may want to contact Wisconsin Legal Blank, which sells a very good Nonstandard Rental Provisions document which I have drafted, that will protect you.

Top 10 Pitfalls That Landlords Should Avoid

Those of you that missed the last AASEW membership meeting on Monday, April 15, 2013, missed a great meeting and a great presentation. The featured presenter was John "Dr. Rent" Fischer, a Wausau-area landlord and rental property manager, who spoke to a packed house that Monday. John's presentation was dynamic, educational and at times pretty darn funny.

With John's permission, I am providing you with a link to John's handout from the meeting which was entitled "Top Ten Pitfalls That Landlords Should Avoid."

Like any good Top 10 list (a la David Letterman), John presented these pitfalls in reverse oreder based on importance. The pitfalls to avoid included:

10. Mailing the 5 Day Notice

9. Digging The Hole Too Deep

8. Incomplete Applications

7. Not Asking The Right People (about your rental applicant)

6. Auto-Renewing A Lease

5. 14 Day Notice (or NOT)

4. "Do-It-Yourself" Leases or Rental Forms

3. Misuse of CCAP

2. Carpet Cleaning

1. That Lease is HOW LONG?

As John stated during his presentation, there are a lot of things that are beyond our control that make life as a landlord very difficult at times. As such, we certainly do not want to make life more difficult for ourselves based on a lack of knowledge of landlord-tenant laws . . . unless we are masochists, that is.

The AASEW has another great meeting scheduled for May 20, 2013 at 7 pm at the Best Western Midway in Brookfield about "How To Finance Real Estate Transactions In The Current Economy."

So Are Illegal Provisions In Wisconsin Residential Rental Agreements Severable Or Not?

SHORT ANSWER: Yes . . . and No.

LONG ANSWER: The newly passed law referred to as the Landlord's Omnibus Law (Act 143) adresses this issue but provides contradictory answers.

In newly created sec. 704.02 of the Wisconsin Statutes, the law states quite clearly that the provisions of a rental agreement or lease are severable. Specifically, it states that if any provision of a rental agreement is rendered void or unenforceable by reason of any statute, rule, regulation or judicial order, the invalidity or unenforceability of that provision does not affect the other provisions of the rental agreement that can be given effect without the legal provision.

So according to sec. 704.02, the answer to question posed in the title of this blog post would be a resounding "Yes."

BUT . .

In the very same law, the legislature also decided to create a new section 704.44 that copies a regulation from ATCP 134 entitled (Residential Rental Provisions), specifically ATCP 134.08 entitled "Prohibited Rental Agreement Provisions," which sets forth 7 things that cannot be included in a Wisconsin residential rental agreement - which I affectionately refer to as the 7 Deadly Sins.

The legislature also decided to add an 8th and 9th provision that cannot be included in residential rental agreements in Wisconsin. So now I have to refer to the outlawed provisions as "The 9 Deadly Sins" which just doesn't have the same ring to it. : (

The 9 provisions that if included in a residential rental agreement will render the agreement void are:

1. Any provision that allows a landlord to do any of the following because a tenant has contacted an entity for law enforcement services, health services, or safety services: (a) increase rent, (b) decrease services, (c) Bring an action for possession of the premises, (d) refuse to renew a rental agreement, (e) threaten to take any action under pars. (a) to (d). This is one of the new clauses added by the legislature is Act 143.

2. A provision that authorizes the eviction or exclusion of a tenant from the premises, other than by judicial procedures as provided under ch. 799.

3. A provision that provides for an acceleration of rent payments in the event of tenant default or breach of obligations under the rental agreement, or otherwise waives the landlord's obligation to mitigate damages as provided in s. 704.29.

4. A provision that requires payment by the tenant of attorney fees or costs incurred by the landlord in any legal action or dispute arising under the rental agreement. This subsection does not prevent a landlord or tenant from recovering costs or attorney's fees under a court order under ch. 799 or 814.

5. A provision that authorizes the landlord or an agent of the landlord to confess judgment against the tenant in any action arising under the rental agreement.

6. A provision that states that the landlord is not liable for property damage or personal injury caused by negligent acts or omissions of the landlord. This subsection does not affect ordinary maintenance obligations of a tenant under s. 704.07 or assumed by a tenant under a rental agreement or other written agreement between the landlord and the tenant.

7. A provision that imposes liability on a tenant for any of the following: (a) personal injury arising from causes clearly beyond the tenant's control, (b) property damage caused by natural disasters or by persons other than the tenant or the tenant's guests or invitees. This paragraph does not affect ordinary maintenance obligations of a tenant under s. 704.07 or assumed by a tenant under a rental agreement or other written agreement between the landlord and the tenant.

8. A provision that waives any statutory or other legal obligation on the part of the landlord to deliver the premises in a fit or habitable condition or to maintain the premises during the tenant's tenancy.

9. A provision that allows the landlord to terminate the tenancy of a tenant if a crime is committed in or on the rental property, even if the tenant could not reasonably have prevented the crime. This is the other new clause added by the legislature in Act 143.

So according to sec. 704.44, the answer to question posed in the title of this blog post would be "yes . . . unless it is one of the 9 deadly sins which if included in a Wisconsin residential rental agreement or lease would not be severable and in fact would render the entire agreement void."

Why can't the law be more simple and clear?

Newly revised Landlord-Tenant Law Forms Available at Wisconsin Legal Blank on April 2 and April 3, 2012.

Wisconsin's Landlord Omnibus Law (Act 143) went into effect today - April 1, 2012. As a result of the new law it was necessary for me to update many of the landlord-tenant law forms that are sold at Wisconisn Legal Blank.

As of Monday, April 2, 2012, the following revised forms will be available:

1. Residential Rental Agreement (Form #19)

- Added language required in order for landlord to be able to dispose of tenant's abandoned property immediately after they vacate.

- Added language about any illegal clause in the rental agreement being severable from the n9on-illegal clauses.

- Correction of some grammar and punctuation mistakes.

2. Nonstandard Rental Provisions (Form #984)

- Added langauge required in order for landlord to be able to dispose of tenant's abandoned property immediately after they vacate.

- Revised language as to when landlord must return security deposit or supply security deposit itemization letter when tenant vacates prior to end of lease term.

- General revisions to the language of each nonstandard rental provision to comply better with the holding in the Tschantz case.

3. Notice of Rent Increase in Month to Month Tenancies (Form #332)

- Added langauge required in order for landlord to be able to dispose of tenant's abandoned property immediately after they vacate.

4. Residential Lease Renewal or Notice To Vacate (Form #970)

- Added langauge required in order for landlord to be able to dispose of tenant's abandoned property immediately after they vacate.

5. Tenant Inspection Sheet (Check-In - Check-Out Form)

- Revised the title of this form to comply with the title used in the new law.

NOTE: It is now required that a landlord give this document to tenant's upon occupancy. So if you have not previously used this document you need to start doing so now.

As of Tuesday, April 3, 2012 the following revised forms will be available for purchase at Wisconsin Legal Blank

6. 5 Day Notice To Pay Rent or Vacate (Form #328)

- Changed the word "may" to "shall" when advising the tenant that landlord is entitled to holdover damages of, at a minimum, double the daily rent for the holdover period.

- Added a line for "Total Amount Due"

7. 5 Day Notice To Correct Breach or Vacate (Form #330)

- Changed the word "may" to "shall" when advising the tenant that landlord is entitled toholdover damages of, at a minimum, double the daily rent for the holdover period.

8. 5 Day Notice To Vacate - Nuisance (Form #329)

- Changed the word "may" to "shall" when advising the tenant that landlord is entitled toholdover damages of, at a minimum, double the daily rent for the holdover period.

9. 14 Day Notice To Vacate for Failure To Pay Rent (Form #768)

- Changed the word "may" to "shall" when advising the tenant that landlord is entitled toholdover damages of, at a minimum, double the daily rent for the holdover period.

- Added a line for "Total Amount Due"

10. 14 Day Notice To Vacate For Breach of Rental Agreement (Form #767)

- Changed the word "may" to "shall" when advising the tenant that landlord is entitled toholdover damages of, at a minimum, double the daily rent for the holdover period.

11. 28 Day Notice Terminating Tenancy (Form #327)

- Changed the word "may" to "shall" when advising the tenant that landlord is entitled toholdover damages of, at a minimum, double the daily rent for the holdover period.

12. 30 Day Notice To Correct Breach or Vacate (Form #325)

- Changed the word "may" to "shall" when advising the tenant that landlord is entitled toholdover damages of, at a minimum, double the daily rent for the holdover period.

Sometime in the near future the following revised form will be available at Wisconsin Legal Blank:

13. Rules & Regulations (Form #994)

- Will inlcude major revisions including language, organization and format.

- Will include revised language regarding a tenant's responsibility for the actions of their guests, invitees and family members that will comply with the law and not run afoul of "Deadly Sin #8" created by the new law.

2011 Wisconsin Act 143 (Landlord Omnibus Law) Also Applies To Commercial Landlord-Tenant Law

While this blog primarily focuses on residential landlord-tenant law, on occasion I also touch on issues applicable to commercial landlord-tenant law. This is one such instance.

Commercial landlord-tenant is more straightforward than residential in my opinion because commercial tenancies are less regulated than residential. Typically what a commercial landlord and tenant agreed to and placed into their lease agreement is what governs. The Wisconsin Administrative Code's ATCP 134 does not apply to commercial leases and most of Chapter 704 of the Wisconsin Statutes does not apply to commercial leases unless (1) the parties had no written lease, or (2) the lease was silent as to certain issues (see sec. 704.03 and 704.05 respectively).

Well, that has all changed now with the passage of 2011 Wisconsin Act 143 which was signed into law last week and will take effect on March 31, 2012.

While almost all of the attention paid to the new law surrounded its effects on residential landlord-tenant law, the law also impacts the commercial arena as well. I too was caught up in the effect Act 143 would have on residential landlords and missed the applicability of this new law to commercial landlords initially --- thanks to Bob Anderson of Legal Aid of Wisconsin for redirecting me : )

As I have mentioned in prior posts, this legislation was fast-tracked for some reason and rushing new laws through the legislative process is never a good thing. In fact it is a recipe for disaster.

It appears that the legislators did not realize that Senate Bill 466 -- the precursor to Act 143 -- was written in such a way as to encompass commercial landlord-tenant law. When it was brought to their attention, a quick amendment was made to exclude one portion of the new law (the section that makes a rental agreement void if it contains certain prohibited language) from the commercial arena, but apparently there was not enough time to deal with the other sections of the new law, which now will apply to both commercial and residential tenancies.

So what do we have?

The following provisions of Act 143 apply to both commercial landlord-tenant law as well as residential:

1. Moratorium on evictions

2. Severability of rental agreement provisions

3. Disposition of abandoned property

4. Requirement that landlords receive an award of holdover damages when appropriate

5. Acceptance of past due rents

6. Withholding from and return of security deposits

7. Making any violation of chapter 704 a possible unfair trade practice

If you are unfamiliar with the above sections of the new law you should read my prior post summarizing the new law.

Number 1-5 above actually benefit commercial landlords. However numbers 6 and 7 are problematic

By adding ATCP 134.06, which focuses on the withholding from and the return of security deposits, to chapter 704, the new law has now made these requirements applicable to commercial landlords as well. Prior to Act 143 being passed, there was no law addressing what a commercial landlord could withhold from a commercial tenant's security deposit, nor was there any law regarding when that security deposit (or an itemization as to how the security deposit was applied) had to be returned to the commercial tenant. Well thanks to Act 143, now there is.

Act 143 allows a commercial landlord to only make deductions for the following items from a commercial tenant's security deposit:

704.28 Withholding from and return of security deposits. (1) Standard withholding provisions. When a landlord returns a security deposit to a tenant after the tenant vacates the premises, the landlord may withhold from the full amount of the security deposit only amounts reasonably necessary to pay for any of the following:

(a) Except as provided in sub. (3), tenant damage, waste, or neglect of the premises.

(b) Unpaid rent for which the tenant is legally responsible, subject to s. 704.29.

(c) Payment that the tenant owes under the rental agreement for utility service provided by the landlord but not included in the rent.

(d) Payment that the tenant owes for direct utility service provided by a government-owned utility, to the extent that the landlord becomes liable for the tenant's nonpayment.

(e) Unpaid monthly municipal permit fees assessed against the tenant by a local unit of government under s. 66.0435 (3), to the extent that the landlord becomes liable for the tenant's nonpayment.

(f) Any other payment for a reason provided in a nonstandard rental provision document described in sub. (2).

So if a commercial landlord would now like to deduct anything other then the items listed in (a) - (e) above, then that landlord needs to start using a separate written document entitled "Nonstandard Rental Provisions" which must list the additional fees/costs that can be deducted from a commercial tenant's security deposit.

Additionally, Act 143 now requires a commercial landlord to either (1) return the tenant's security deposit to them, or (2) send them an itemization explaining how that security deposit was applied, within 21 days of the following:

(4) Timing for return. A landlord shall deliver or mail to a tenant the full amount of any security deposit paid by the tenant, less any amounts that may be withheld under subs. (1) and (2), within 21 days after any of the following:

(a) If the tenant vacates the premises on the termination date of the rental agreement, the date on which the rental agreement terminates.

(b) If the tenant vacates the premises before the termination date of the rental agreement, the date on which the tenant's rental agreement terminates or, if the landlord rerents the premises before the tenant's rental agreement terminates, the date on which the new tenant's tenancy begins.

(c) If the tenant vacates the premises after the termination date of the rental agreement, the date on which the landlord learns that the tenant has vacated the premises.

(d) If the tenant is evicted, the date on which a writ of restitution is executed or the date on which the landlord learns that the tenant has vacated the premises, whichever occurs first.

Commercial landlords never had to worry about that 21 day time frame before -- now they do. Needless to say it is much more difficult and time consuming to do a walkthrough of a giant commercial space and itemize any damages or cleaning charges than it is for a 500 square foot residential rental unit. I'm not exactly sure how commercial landlords will be able to comply with this time frame, but they will need to find a way, or else they may have to to their tenant double damages and attorney's fees. Which leads me to the next concern . . .

Act 143 now makes any violation of chapter 704 a possible violation of unfair trade practices, which pursuant to sec. 100.20, Wis. Stats. allows a tenant to sue a landlord for double damages and attorney's fees. Prior to Act 143 a commercial landlord was not in this predicament because unfair trade practices were set forth in ATCP 134 which only applied to residential tenancies. But now that Act 143 incorporates some provisions of ATCP 134 into chapter 704 -- and chapter 704 applies to commercial landlord-tenant relations -- things are different.

Here is the language of the new law:

704.95 Practices regulated by the department of agriculture, trade and consumer protection. Practices in violation of this chapter may also constitute unfair methods of competition or unfair trade practices under s. 100.20. However, the department of agriculture, trade and consumer protection may not issue an order or promulgate a rule under s. 100.20 that changes any right or duty under this chapter.

I guess the only positive is that the new law says "may constitute" instead of "shall constitute" however to a commercial landlord that never had to worry about anything they did constituting an unfair trade practice and subjecting themselves to being sued for double damages and attorney's fees, I'm sure this will be of little consolation.

So not only will Act 143 require commercial landlords to make some modifications to the language in their leases, but it will require them to completely change how they run their commercial proeprty management businesses starting March 31, 2012 ---- 2 DAYS FROM NOW!!!!!

Landlord's Omnibus Bill Signed Into Law - Read It Now

Governor Walker did sign the Landlord's Omnibus Bill into law.

I appreciate the effort of everyone that called the Governor's office asking him to veto the bill due to its deficiencies.

Here is a link to the new law. Much easier to read than having to go back and forth between the orginal bill, the Substitute bill and the two amendments.

The two main concerns that I have with the law and which caused me to ask that the bill be vetoed. They are section 35M and section 36.

The AASEW has already spoken with Sen. Lassee's office regarding these two major problems and I will keep you informed if and when anything is done about them.

And yes, I will be reviewing all of Wisconsin Legal Blank's forms in the near future and making the necessary revisions - if needed - and will let you know when they will be available : )

Upon Further Reflection, I Think The Governor Should Veto The Landlord's Omnibus Bill

I spent several hours yesterday reviewing and thinking about the new Landlord's Omnibus Bill that is to be signed into law today by Governor Walker at 4 pm.

I then spent hours of time trying to summarize the new law in yesterday's blog post in an easy to read and understand format.

Since publishing the blog post yesterday I have a few more thoughts and concerns:

1. AASEW Board member and friend Tim Ballering pointed out to me that he believes that the new law as written will allow for any violation of Chapter 704 to be considered an unfair trade practice, thus allowing a tenant to sue his/her landlord for double damages and attorney's fees.

Here is the language at issue:

704.95 Practices regulated by the department of agriculture, trade and consumer protection.

Practices in violation of this chapter may also constitute unfair methods of competition or unfair trade practices under s. 100.20. However, the department of agriculture, trade and consumer protection may not issue an order or promulgate a rule under s. 100.20 that changes any right or duty arising under this chapter.

In my prior post I did anticipate that this would allow for tenant's and attorney's to make arguments that any violation of Chapter 704 was an unfair trade practice and that concerned me. But after speaking with Tim and thinking about this in more deeply, and re-reading the new law - I think this is a major concern. So is this law saying that if a landlord improperly drafts or serves a 5 day notice that s/he can be sued by the tenant for double damages and attorney's fees? YES.

I believe that this is such a major problem that I will be contacting Governor Walker's office today before 4 pm and asking him to veto the bill.

2. The addition of the 8th Deadly Sin really concerns me. My friend and past Wisconsin Apartment Association President John Fischer succinctly addresses the problem with in an email that he sent to many in the industry which is reproduced below:

When the Housing Task force was looking at blight, blight went beyond just condition of the property, but it also went to criminal activity.

There has been a proposal that various apartment associations have been working on that would make it easier to evict a tenant for criminal activity. There is a “Crime Free Lease” program that started out west that is very popular with landlords and law enforcement. A few communities have started working on this program here in Wisconsin, but the biggest hurdle is that the key tool of this program is a “Crime Free Lease Addendum”. The problem is that this addendum is unenforceable under Wisconsin’s current laws.

The new law that is being signed by Governor Walker at 4 PM this afternoon (I have been invited to this private signing, but I want nothing to do with this) makes a large number of massive changes to Wisconsin landlord-tenant law. One of the most significant appears to be an answer to our attempts to allow for eviction for criminal activity. The new law would basically render a lease void if the lease contained language that criminal activity on a property would be a breach of the lease.

So there you have it. My take on this new law -- as well as many others in the industry -- is this new law will cause more harm then good. This is what happens when you try to rush legislation -- people do not have time to consider all of the different angles -- so I am planning on contacting Governor Walker and ask him to veto SB 446. I would ask that you consider doing the same.

Thank you to tim Ballering and John Fischer for their thoughts, opinions, and guidance.