I Think I Discovered a Fraudulent Tenant, What Can I do?

Drafted by Attorney Jennifer Hayden of Petrie + Pettit S.C. 

Identity theft or fraud for the purposes of renting an apartment is growing issue. We have heard there are social media pages dedicated to selling fraudulent identities to individuals specifically to rent apartments as well as sites that will produce fake paystubs, bank account information, credit reports and checks or money orders, along with the more traditional methods such as friends and family members posing as a current employer or former landlord to give a good reference.

With all of the available options, it is likely that at some point you may believe you have a tenant who used one or several of these methods to pass your screening criteria, enter into a written rental agreement and take possession of an apartment.

Frequently, the potential for fraud comes to light because of other issues with the tenancy. In most cases, there will be a corresponding failure to pay rent, bounced payments or non-rent breaches occurring some amount of time after the tenant has been residing in the apartment. Unfortunately, once the tenant has been residing in the apartment, it is likely that you will need to issue notice and proceed with filing an eviction action as it is unlikely the police will take any action to remove the tenant, though you can certainly file a police report if you have a sufficient basis to do so. In certain circumstances, the police may be able to provide the actual identity of the person residing in the apartment, which can be helpful in proceeding.

If your rental agreement contains a provision regarding providing accurate and complete information in the application and rental documents as the basis for an eviction action, you could issue notice and, if necessary, file an eviction action based on that provision. You will have to be prepared to prove what information was provided by the tenant and what was fraudulent or inaccurate. We do not believe that this is the type of criminal activity which threatens the health, safety or peaceful enjoyment of other tenants or immediate neighbors such that a Non-Curable Notice for Criminal Activity could be used but, particularly if there is a police report, you may be able to allege that criminal activity provisions of your lease have been breached by the fraud.

Alternatively, if you do not have sufficient evidence of the fraud or rental agreement provisions to proceed on that basis, you can wait until the tenant fails to pay rent or “bounces” a rent payment and serve notice and file an eviction action based on the non-payment. You will want to do so promptly, as collecting charges for any unpaid rent or physical damage to the apartment in these cases is obviously next to impossible.

If the tenant happens to be paying rent, you can wait until there are non-rent breaches such as noise complaints, fights with other tenants, or other activities for which you would normally issue a Notice to Quit or Vacate. You would issue the notice and then file an eviction action on that basis, if the tenant fails to cure or vacate after the notice period.

It is relatively common in these instances that tenants tend to stay in the apartment as long as possible, fail to appear in court but frequently seem to have largely vacated by the time the Sheriff executes the writ. We cannot, of course, guarantee what any particular tenant will do, so, as in all instances, you must proceed as though the matter will be contested in court and it will be necessary to proceed through the eviction case and having the sheriff execute the writ of restitution.

Drafted by Attorney Jennifer Hayden of Petrie + Pettit S.C. 

GUEST POST: Wisconsin Rental Income Standards and Section 8 Rent Vouchers

Guest post from Tim Ballering  - justalandlord.com
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

From a Fair Housing perspective, you probably must account in some manner for the value of the Section 8 payment when calculating an income multiplier guideline.

I’ve read of the argument made in other jurisdictions that if an owner is using a rent multiplier, that it should be on net rent to the tenant. This is probably not a workable answer for either tenant nor the owner. If the net payment by the tenant is $20 with a three times multiplier, a $60 per month income is not going to cover living expenses like heat and lights. A good discussion of this issue from a while ago is at: Bigger Pockets

In WI you must include the value of child support, food stamps and perhaps* Rent Assistance Vouchers in income calculations. So if the gross rent is $800 and the tenant receives $700 RA, $500 in food stamps, they would need to earn $1200 additional to meet the three times multiplier.

*Wisconsin Lawful Source of Income definition:

Wis Admin Code DWD 220.02(8)  “Lawful source of income” includes, but is not limited to, lawful compensation or lawful remuneration in exchange for goods or services provided; profit from financial investments; any negotiable draft, coupon or voucher representing monetary value such as food stamps; social security; public assistance; unemployment compensation or worker’s compensation payments.

There is a 1995 federal case, Knapp v. Eagle Property Management Corp, that found the value of Section 8 vouchers are not required to be included as income.

But that was nearly 25 years ago. Sentiments have changed over that time. I believe that if Knapp was tried today the court would find against the owner on this question as concepts like disparate impact were not widely argued then. Today we are restricted by HUD in using criminal records in screening because of the disparate impact on members of protected classes.

The plain language reading of the WI code makes not including the voucher value in the rent multiplier calculation open to expensive litigation, which the Knapp court determined that their insurer had no duty to defend.

To form your own opinion on this and other WI fair housing standards, a good starting point is:

“STATE OF WISCONSIN Fair Housing Plan Analysis of Impediments to Fair Housing and Actions to Overcome Them Update to the 2015-2019 Consolidated Plan”

~~~~~~~~~~

Thanks Tim

HUD Issues New Guidelines On The Use of Criminal Records In The Rental Screening Process

On April 4, 2016 the U.S. Department of Housing and Urban Development (HUD) dropped a bombshell on owners and managers of residential rental properties in the U.S.

HUD's Office of General Counsel published a 10 page guide entitled "Guidance on Application of Fair Housing Act Standards to the Use of Criminal Records by Providers of Housing and Real-Estate Related Transactions."

This guide essentially changes the rules as we currently know them with regard to rejecting a rental applicant based on their prior criminal history. I highly recommend that all of you read the document itself -- many times in fact -- as this is a very important change and this issue is not going to go away.

This Policy Is Applicable To All Landlords

HUD's guide applies to ALL HOUSING PROVIDERS. I repeat, this new policy applies to all of you. Some landlords assume that when the see "HUD" that it only applies to federally subsidized housing and public housing. Sometimes that is true, but not in this case. HUD is the federal agency that investigates allegations of fair housing (discrimination) violations. HUD investigates discrimination allegations against all landlords not just landlords of section 8 properties. So this guide published by HUD applies to all of you market rate/conventional housing landlords as well.

Disparate Impact

In order to understand HUD's view on the use of a person's criminal history in the screening process you have to understand something referred to as "disparate impact". In essence, "disparate impact" means that a landlord can have a facially neutral screening policy that is applied equally to everyone but it can still be discriminatory if its use results in a disproportionate impact on a member of a protected class.

HUD's guide includes lots of statistics that show that across the U.S. African-Americans and Hispanics are arrested, convicted, and incarcerated at rates disproportionate to their share in the general population.

As a result of these statistics, if a landlord considers and applicant's criminal history (arrest and/or conviction) as part of the screening process, that landlord may be discriminating against African- Americans or Hispanics based on their race and/or national origin (both of which are protected classes under Fair Housing laws).

So even if your screening policy on its face is not discriminatory and even if you are applying it evenly you may still be discriminating based on race and/or national origin, because your policy affects African-Americans and Hispanics more than others.

Substantial, Legitimate, Nondiscriminatory Interest

So does this mean that a landlord cannot take into consideration a rental applicant's criminal background at all? The answer is both "yes" and "no." HUD states that a landlord may not be discriminating based on race or national origin if his/her screening criteria with regard to the criminal history of an applicant can be proven to be "necessary to achieve a substantial, legitimate, nondiscriminatory interest of the [housing] provider."

What the heck does that mean?

There is no easy definition or explanation of this phrase. Whether a landlord's screening policy with regard to an applicant's criminal history is "substantial, legitimate, and nondiscriminatory" will depend on many specifics. It could depend on the facts of the crime or how old the conviction is or the exact wording of the criteria or how the criteria is applied etc. etc. And it is helpful to keep in mind that one Fair Housing investigator's interpretation of the phrase may be different than another's. And one judge's view may be different than another's.

HUD has tried to further clarify this phrase by boiling it all down to the following statements:

• A landlord must be able to prove through reliable evidence that his/her policy or practice of screening based on criminal history actually assists in protecting resident safety and/or property.

• Merely relying on generalizations or stereotypes that anyone with a criminal history poses a greater risk than a person without such a background is not sufficient.

Prior Arrests

HUD states that if a landlord rejects a rental applicant because of one or more prior arrests -- that have not resulted in a conviction -- that the landlord's policy cannot meet the burden of having a "substantial, legitimate, nondiscriminatory interest." Translation: if you are doing this, you are discriminating.

HUD states that "the fact of an arrest is not a reliable basis upon which to assess the potential risk to resident safety or property posed by a particular individual. For that reason, a housing provider who denies housing to persons on the basis of arrests not resulting in convictions cannot prove that the exclusion actually assists in protecting resident safety and/or property."

So landlords may no longer consider whether a rental applicant has been arrested unless that arrest resulted in a conviction.

HUD does not come out and say this but it would seem to me that by logical extension a landlord also can not deny an applicant who has a criminal case that it still pending (since there has not yet been a conviction).

So the applicant that has a pending "first-degree homicide" charge or a "sexual assault of a child" case that is still winding its way through the criminal justice system or is on appeal - cannot be rejected based on that fact alone.

I understand the whole "innocent until proven guilty" viewpoint, but do you think this will comfort your longstanding tenant that has minor children living with her when a middle-aged white guy charged with "sexual assault of a child" is allowed to move in next door to her because his case has not yet gone to trial and therefore he has not yet been convicted?

Oh just wait, it gets even better.

Criminal Convictions

HUD also states that a landlord that imposes a "blanket prohibition" on any rental applicant with a "conviction record -- no matter when the conviction occurred, what the underlying conduct entailed, or what the convicted person has done since then -- will be unable to meet this burden."

Translation: If you deny any and all applicants because they have a criminal conviction you are violating Fair Housing laws and therefore discriminating based on race and national origin, even if you apply that criteria evenly against everyone.

HUD goes on to say that even if you have a more tailored policy or practice that excludes individuals with only certain types of conviction you still must prove that your screening policy is necessary to serve a "substantial, legitimate, nondiscriminatory interest." There that pesky phrase again.

HUD recommends that any landlord that wants to consider an applicant's past criminal convictions as part of the screening process must at a minimum consider the following:

• The nature and severity of the crime, and
• The amount of time that has passed since the criminal conduct occurred.

That is the only guidance that HUD has given us. The rest is for you to figure out. And if you don't handle things properly you may get investigated or sued for discrimination.

Exception: Illegal Manufacture or Distribution of a Controlled Substance

There is one point of clarity. The federal Fair Housing Act does contain a section that states that the taking of an adverse action against a person who has been convicted for illegally manufacturing or distributing a controlled substance as defined in section 102 of the Controlled Substances Act (21 U.S.C. 802) will not be discriminatory. So a landlord is still free to deny a rental applicant if they have ever been convicted of manufacturing or distributing a controlled substance.

Conclusion

What really frustrates me about this whole thing is that landlords are now being told that they must consider a applicant's criminal convictions on a case by case basis. For years we have been told by HUD that the best way to avoid discriminating against someone is to treat everyone the same; your screening criteria must be "objective" and not "subjective. But now HUD seems to be saying that is no longer appropriate.

Now HUD is telling landlords that they will need to become social workers and therapists and try to determine if an applicant who was convicted of a crime in the past has been rehabilitated or not.

Think of the time and effort that will be required for a landlord to travel to the courthouse to review the criminal case file to determine all of the facts surrounding the crime, all of the events that led up to the person engaging in the criminal conduct, the individual's past, to review any pre-sentencing report to see what the evaluator thinks about the defendant etc. None of this information is available on CCAP. You will only get this information from the actual file. Or are you just supposed to listen to the applicant's version of the facts of the conviction and believe them?

It appears to me that HUD might actually be hoping that landlords decide their is too much risk involved in denying any applicant based on their past criminal convictions (except for the conviction for manufacturing or distributing controlled substances - see above) and therefore they should all be accepted.

Landlords will now need to try and determine what convictions might be considered "directly related to the safety of your residents and your property" and hope their interpretation is correct or else risk being investigated and/or sued.

GUEST POST: The Benefits of Tenant Screening

This is a blog post drafted by the American Apartment Owners Association

Although taking time to screen rental applicants thoroughly may not seem necessary, failing to do so may cost you considerable time and money later. If you just accept money from an applicant ready to put down the deposit today, it could backfire on you. If you simply approve a tenant after verifying his or her employment because you are eager to rent the property, it could prove a serious mistake. Just because your applicant has a job says nothing about that person's background or rental history. Just because a person has the deposit today gives no indication that the applicant has a good rental history and clear criminal record.

The benefits of conducting a thorough tenant screening check on every applicant far outweighs the cost associated with it. In fact, the cost of tenant screening is often passed on to rental applicants.

How to avoid costly mistakes during the tenant screening process

One common mistake occurs when the landlord presents an applicant with their own homemade rental application. Landlords often fail to ask crucial questions that typically eliminates a rental applicant. There is more to screening applicants than asking the applicant's name, employer and current address. The American Apartment Owners Association knows the importance of thorough tenant screening and provides comprehensive forms, including a free rental application form that asks the right questions.

Another mistake made by landlords is failing to get thorough information on every adult wanting to reside in the rental. Some landlords still only ask the head of household for their personal information. If other adults plan to live in the household you must also conduct comprehensive tenant screening on them as well. Prospective tenants often know that if you find negative rental history or a criminal record of other adults in the household, you will no longer consider them.

A common mistake made by landlords is to just check local criminal records to see if a rental applicant has committed any crimes. That information often includes only misdemeanor and local information and may not even be up-to-date. Criminal offenders often move frequently to avoid authorities or because they've committed crimes at a rental property. To thoroughly screen for an applicant's criminal history you need to search state and federal records. Sex offenders also move around to abscond from authorities or to avoid detection. Including a sex offender check in your comprehensive tenant screening package protects other tenants, nearby children, and provides an additional level of safety at your property.

Get more than just a tenant credit check

Landlords often mistakenly believe that a tenant credit check provides all necessary tenant screening information. A credit check for landlords only provides credit information, not criminal history or eviction history.

Proper tenant screening reports will benefit landlords in a multitude of ways. The fact that you can charge each adult, not just the primary applicant, for tenant screening services means you can recover part or all of your tenant background check fees. Conducting thorough tenant screening means the difference between renting to a qualified applicant and an unqualified applicant. It also means you can feel confident you made the right choice when you rented your property instead of worrying about whether the tenant will pay the rent. Reap the benefits of proper tenant screening and save expensive legal fees, time, and money associated with failing to screen every adult applicant properly.

Check out other things to look for during the tenant screening process by reading AAOA's article "Top 5 Reasons to Reject an Applicant."

Screening Prospective Tenants Is a Must --- That Includes Commercial Tenants

Those of you that have attended my seminars or read prior blog posts of mine are well aware that in my opinion screening prospective tenants is the single most important part of landlording.

These sentiments apply to commercial tenants as well as residential tenants. Just because your tenant is a corporation, LLC or some other business entity does not make make them legitimate.

A corporate tenant can also fail to pay rent, damage your property, and otherwise be a nightmare. In fact some tenants can hide behind an empty shell of a corporation (or partnership or LLC) and actually turn out to be a commercial tenant from hell.

I was recently interviewed by Colleen Henry of Ch. 12 News about one such "professional" tenant from hell. This tenant moved her business into her landlord's rental unit and refused to move out even though she had not paid rent for months. She bounced her check for the security deposit. She bounced her check for the 1st month's rent. She refused to make any other rental payments. She ignored her landlord's pleas to pay rent or move. Once her landlord began the process to evict her, she filed bankruptcy. By doing so all creditors, including her landlord, were precluded from attempting to collect from her (including the filing of an eviction action against her) until they received permission from the bankruptcy court. And this wasn't the first landlord that this tenant did this to. She had done this to landlords before.

Tenants such as this one make good landlords want to get out of the business.

My recommendation to landlords who are or have been in this difficult situation is not to give up and get out of the business but rather take the time to educate yourself about landlord tenant law so that you are better equipped to handle such a situation in the future. Chances are the better educated you are the better chance that you will not rent to the tenant from hell because you will have learned enough to know that you ALWAYS, ALWAYS must screen your tenants before signing a lease and/or handing them the keys to your property.

New CCAP Bill Introduced

A new CCAP bill (Senate Bill 526) was introduced on January 30, 2014 by Senators Grothman, Taylor, Schultz, Harris, and Risser. A public hearing has already been held.

Current law allows for any criminal charge to remain on CCAP even if the charge was dismissed.

This new bill, if passed, would require the Director of CCAP to remove a case involving a misdemeanor or felony from CCAP within 120 days after being notified that the case or charge has been dismissed (and not read into the record for the purposes of sentencing the defendant), the defendant was found not guilty, or the case was overturned on appeal and dismissed.

I am a fan of open records and not removing information about open records that are on CCAP. While I personally do not have a problem with a criminal charge being removed if the defendant was found not guilty or the case was overturned on appeal and dismissed, I still believe that doing so still interferes with open records, but I can bite my tongue nonethless.

On the other hand, I have a huge problem (and concern) with a criminal case being removed from CCAP solely because it was dismissed.

Many people unfamiliar with the criminal justice system assume that if a case was dismissed that that means that it was filed in error. While that certainly does occur, that is not the typical situation in which a case is dismissed. The majority of criminal cases are dismissed, not becasue they were impropely filed, but rather because the victim witness did not appear at trial to testify against the defendant and therefore the State could not prove their case. This happens quite often especially in crimes involving domestic violence.

When I was younger (and stupider) I used to do some criminal defense work. I finally quit being a criminal defense attorney after I represented a young man that was charged for the 8th time with Domestic Violence - Battery. It was alleged that he beat up his girlfriend. All 8 times it was alleged that he beat up his girlfriend. I attempted to meet with my client to prepare for trial. He refused, just smiled, and told me that it was not necessary. I told him that I could not represent him properly if we didnt prepare. He told me again not to worry and that there would not be a trial. I reminded him that there was a "no contact" order in place and that he was not allowed to contact the alleged victim so how would he know if she was or was not going to appear in court to testify against him. He smiled and said he would never do anything against the law.

The trial date came and the victim did not show. As a result the District Attorney was forced to dismiss the charge against my client as without the victim the DA could not meet their burden. My client smiled at me and said "See, I told you you didnt need to worry - no trial." He then walked out of the court room.

Even though I was young and stupid, I was not naive. I knew very well that this individual most likley had talked to the victim and either threatened to harm her if she came to court to testify against him or he actually did harm her to make sure she understood. The same thing probably happened the prior 7 occassions as well.

I would not want to rent to this person.

Under this new CCAP bill, those 8 criminal charges for DV-Battery against my client would be removed from CCAP and a future landlord would not even know they had been filed or that s/he would be renting to a person that felt it was acceptable to beat up his girlfriend whenever he couldn't control his anger management issues.

If you have similar examples from propspective rental applicants that you have screened recently, please forward the details to me directly at tpettit@petriepettit.com. Let's make sure the politicians are aware that this type of behavior does actually occur and how it may hurt our industry, if such a law is passed.

Thanks

T

CCAP Is Under Attack Again

When Senator Marlin Schneider lost re-election a few years ago, I thought that the attacks against Wisconsin's Consolidated Court Automation Programs (CCAP) would disappear. Well they did -- for a while. But Senator Lena Taylor along with Representatives Goyke, Sargent, Kessler, Hebl and Pope haven taken up the torch and are trying to prevent the public from accessing CCAP once again via Senate Bill 234/Assembly Bill 253.

These two bills were introduced on July 31, 2013, and if passed will negatively affect access to "open records" in the following ways:

1. Two separate CCAP databases would be created. One for a privileged few and another with less information for the general public. The current CCAP database would only be available for judges, court commissioners, other court, state, local, agency employees, law enforcement and law enforcement employees, lawyers, journalists, licensed debt collectors, employees for financial institutions, and realtors --- and landlords (see below correction note). A second more restrictive database would be available for everyone else.

2. The more restrictive database accessible by the general public would only provide case information after a court has done one of the following: (1) made a finding that a person is guilty of a criminal charge, (2) made a finding that a person is liable in a civil matter, (3) ordered a judgement of eviction, or (4) issued a restraining order or injunction. If one of those 4 things did not yet happen --- the general public will not even be able to access that information.

3. All information related to a criminal or civil case in which a finding or order related to the case or charge is reopened, vacated, set aside, or overturned on appeal, would be removed from the more restrictive CCAP database.

4. If a user searches for a person's name on CCAP and then denies that person employment, housing, or another public accommodation, the user must inform the person that a CCAP search was performed on them. Failure to tell the person could result in a $1,000 fine.

5. Upon receipt of a written request, the Director of State Courts must remove from the general public database, any information relating to a case if there was no finding of criminal guilt or civil liability, order of eviction, or issuance of a restraining order, or if the finding or order was subsequently reopened, vacated, set aside, or overturned.

What does this mean to landlords and property managers? --------------- See correction note at end of post.

Short Answer: You will have a much more difficult time screening any prospective tenants. And as a result of being able to review only select information you may end up renting to someone that you otherwise would not have, resulting in increased costs to you such as eviction costs, damage to your property, lost rent.

Long Answer:

You will be unable to learn about any pending criminal cases, eviction cases, money judgment cases, restraining orders, that an applicant might have pending until the case is concluded and has resulted in a judgment or conviction.

So if the person that has applied to live in your rental property is currently charged with a drug crime, you will have no way of knowing that -- lucky you. Nor would you be aware that the reason an applicant is applying to rent your unit is because their current landlord is currently evicting them. You would also be unable to learn that an applicant is currently being sued by their landlord for damaging the rental property they just left. You also would be unable to learn that the applicant is being sued for not paying other bills. Essentially, you would lose access to information that would be very helpful in determining if this applicant would be a successful tenant with you.

If the applicant that wants to rent your property has been evicted in the past and a motion to reopen the judgment of eviction has been filed when you are evaluating the applicant's application --- that information would be off limits to you. If the applicant ever had an eviction judgment or money judgment case reopened and vacated -- regardless of the reason -- you also would not be able to learn that information. Believe it or not, some courts have been known to grant a motion to reopen/reconsider and vacate a judgment of eviction, solely because the tenant already vacated the unit at the time they filed to motion to reopen/reconsider. If this bill were to be signed into law, and that was to occur, you the landlord, would never even have the chance to learn that there was an eviction judgment against the applicant you are screening.

If you use CCAP as part of your screening process (is there any landlord in Wisconsin who doesn't?) you must advise the tenant (in writing to CYA) that you performed a CCAP search on them if you end up not renting to them. Failing to so so could end up costing you $1,000.

A person could write the Director of State Courts and ask them to remove any information on CCAP regarding any criminal case ever filed against them if it did not result in a conviction. So the individual that I represented 17 years ago when I was a young lawyer trying to decide is I wanted to be a criminal defense lawyer, who had been charged with 8 domestic violence -battery misdemeanor counts over the course of 3 years for beating his girlfriend --- never to be convicted of any of them because the victim was too scared to appear in court to testify --- would be able to remove any mention of being charged with those crimes. Do you think he would be a good tenant?

In the case of a civil matter -- such as an eviction or money judgment -- if there was no finding of liability or an eviction judgment entered than any reference to that case would be removed from CCAP, upon receipt of a request to do so by the person. So if the person applying to rent your unit has had prior evictions filed against them in which the landlord decided to not proceed because the tenant moved out before the court date, that information could be removed. Remember all those stipulated dismissals that you entered into with a tenant to vacate, so that you could avoid a trial? If this bill passes, none of those would show up in the general population CCAP database because they were dismissals.

I guess "public records" are really not so "public" after all. Hopefully this bill will not see the light of day and will die a quick death.

CORRECTION 08/05/13 ---- I received a t/c from Rep. Evan Goyke, one of the authors of the bill, and he pointed out that under his bill "landlords" would be able to access the full version of CCAP as they would be included in the group of "chosen few" who would still be able to access CCAP as we currently know it. See proposed sec. 758.20(3)(a)(8). I appreciate him calling me to point that out and I apologize for inadvertantly posting incorrect information about the bill

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."

East Side Landlord "Think Small" Seminar Event on March 13th

Make plans to attend the fourth East Side Landlord Think Small event hosted by UWM!

This event is free and open to all interested landlords, with a special focus on Milwaukee's East Side.

This spring's event promises to be very engaging with featured presenter Attorney Tristan Pettit, who focuses his practice on representing landlords and management companies in landlord-tenant law matters.

Topics will include screening potential tenants and recent updates to landlord-tenant laws in Wisconsin.

As always, there will be networking time to share ideas with fellow attendees, Q&A time with the presenter, and light refreshments will be served.

Event Details

Date: Wednesday, March 13, 2013

Location: Chapman Hall on the UWM Campus, 2310 E Hartford Ave, Regents Room (2nd Floor)

Time: 4:30pm-6:00pm

Please RSVP to Heather Harbach at harbach@uwm.edu. Your registration helps us in our planning for this event. Please feel free to share this with other landlords that might find this session interesting! If you have further questions, please contact Heather Harbach, UWM Neighborhood Relations Liaison by e-mail at harbach@uwm.edu or by calling 414-229-4451.

Hope To See You There!

HUD Issues New Rule On "Discriminatory Effect" a.k.a Disparate Impact

HUD has issued a new Fair Housing “disparate impact” rule that may cause problems for landlords during the screening process. The new rule creates a new provision entitled “Prohibiting Discriminatory Effects” which defines “discriminatory effect” as situations in which a facially neutral (i.e. not discriminatory) housing practice can become discriminatory if it actually or predictably has an effect on a group of persons that are members of a protected class.

The concern is whether or not this new rule will restrict landlord’s use of criminal background checks on prospective tenants. Recently Pepsi Co. agreed to pay $3.13 Million to resolve allegations of hiring discrimination against African-Americans based on Pepsi’s use of the African-American’s arrest records.

This recent settlement when read in conjunction with HUD’s new rule causes concern regarding whether it will be considered discriminatory to use a person’s criminal arrest or conviction as a basis for rejecting a rental applicant when such use would result in members of a protected class being rejected as tenants. For more on this issue and

please read Tim Ballering’s blog post entitled ‘Will Criminal Background Checks For Screening Be Restricted By Proposed Federal Rule?”

In light of this concern, the AASEW’s Executive Committee submitted the following comments to HUD:

The Apartment Association of Southeastern WI, Inc. is a trade association representing approximately 575 owners and managers of rental housing in the Metro Milwaukee area.

Our organization supports Fair Housing as well as community efforts to reduce the effects of crime within the neighborhoods that our members own and manage rental housing.

We are concerned that this proposed rule will restrict the legitimate and necessary use of criminal arrest and conviction records in screening tenants to exclude those who will cause disruption and harm to other occupants, the neighborhoods those properties are located in, and to our properties.

Many communities in southeastern Wisconsin have "Nuisance Property Ordinances" that hold owners accountable for the misdeeds of their tenants. For example Milwaukee's Nuisance Ordinance does not require the conviction, nor the arrest of the tenant or their invitees, rather simply repeat law enforcement activity will trigger the enforcement provisions of that ordinance.

As part of your proposed rule property owners need "bright line" guidance, establishing what background screening criteria and methods will remain acceptable under this proposed rule as well as protections from potentially conflicting local requirements.

It would be inequitable, causing unnecessary costs and harm to property owners if such guidance is not provided in advance of the implementation and enforcement of this proposed rule.

Hopefully additional guidance will be provided. If and when it is I will be sure to provide everyone an update.

CCAP Committee's Recommendation To Change Wisconsin's Expungment Laws Shot Down

Last year Wisconsin's Joint Legislative Council created a Special Committee On The Review of Records Access of Circuit Court Documents – what I affectionately referred

to as the CCAP Committee. Landlords were very fortunate that in the end the committee made no recommendations to change or alter information on CCAP or limit its access by landlords or any other group. The committee's sole recommendation was to call for the liberalization of Wisconsin's criminal expungement statute.

The proposed bill, if passed would have done the following:

1. Defined what is meant for a court to expunge a court record (and yes, this did include removing any reference to the conviction from CCAP)

2. Clarified that an expunged record may not be considered for employment or housing matters.

3. Stated that a person may petition the circuit court at any time to expunge the following:

- any court record of a person who was under the age of 25 at the time the crime was committed and who was found guilty of a forfeiture, misdemeanor, and certain (lessor) felonies, that are punishable by up to 6 years in prison.

- any court record of a person charged with an offense punishable by a forfeiture, misdemeanor, or felony in which all charges were dismissed or for which the defendant was acquitted AND the court determines that the person will benefit by the expungement and that society will not be harmed by the expungement.

So as you can see, the proposed bill would have negatively affected landlords in the screening process and if passed would mean that a landlord would find no record of the applicant having ever been charged and convicted of crime x, y or z (or charged and acquitted or charged and the later dismissal of the case), if the applicant had applied for and received an expungement.

It also would have meant that even if the landlord somehow learned of the conviction (or acquittal or dismissal) and the later expungement, that the landlord could not use that information when making a decision on whether or not to rent to that individual.

Furthermore, it would have meant that a landlord would be precluded from inquiring as to the existence of any expunged record from a rental applicant whether that question

be on the rental application itself or verbally when talking to the applicant.

Thankfully we do not have to worry about this proposed bill being passed as it never even got introduced. In a notice dated January 20, 2012, the Director of the committee wrote to the members of the committee to inform them that their recommended bill was not approved for introduction by the Joint Legislative Council by a vote of 13 to 6. While a petition can be circulated to have the matter reconsidered, I have not heard of that happening.

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!

Update on Landlord Pre-Emption Bill

It has been awhile since I updated everyone on the pro-landlord legislation that is being addressed in Madison. Senate Bill 107 (SB 107) -- referred to as the Landlord Pre-Emption Bill -- has been passed by the Wisconsin Senate and is currently being reviewed by the House this term (AB 155).

You may recall that SB 107 prohibits any municipality from enacting any ordinance that limits a landlord from obtaining or using various types of information about a tenant or prospective tenant, such as household income, occupation, court records, rental history, and credit information, or limits how far back in time a prospective tenant's

credit information, conviction record, or previous housing may be considered.

The bill has received much opposition from local municipalities and their lobbyists, not for the substance of the bill, but rather for the fact that if passed, the law will

restrict a municipality’s ability to draft certain ordinances. Essentially the municipalities feel this to be a breach of their own sovereignty and an example of the state overstepping its bounds. Many feel that this is really just a Madison problem -- since it is the City of Madison that has enacted many of these restrictions on what information a landlord can consider when making a rental decision – and therefore should be dealt with at the city level.

Another group of critics believe that the bill discriminates against African-Americans. Four Dane County Board Supervisors, two Madison City Council members and one Madison School Board member, sent a letter to Governor Walker and legislators on September 7, 2011, asking that the provision of the bill that will allow landlords to deny housing to tenants with criminal histories be removed because is discriminates against African Americans.

They argue that allowing a landlord to deny a rental applicant housing based on his/her criminal convictions will unfairly affect African-Americans because while they

only comprise 6% of the state’s population they account for almost 50% of those with arrest and conviction records. Thus the critics of the bill argue that to allow a landlord to deny a rental applicant based on his/her criminal record is to allow landlords to deny housing based on race.

The critics are relying on the doctrine of "disparate impact." The disparate impact doctrine holds that certain laws may be discriminatory and illegal – even if the law is neutral on its face -- if they have a disproportionate "adverse impact" on members of a minority group.

This disparate impact argument is ignoring a key ingredient – one’s choice to engage in criminal activity. One’s race is not something that a person has control over – we are born into a certain race. On the other hand, individuals do have control over whether or not they engage in criminal activity. Committing a crime is a volitional act. Being born African-American is not. We are dealing with apples and oranges here.

Disparate impact arguments are often raised when a law unintentionally affects a minority group through no fault of their own. This small group of critics, are trying to apply the disparate impact doctrine to individuals that made a voluntary decision to engage in criminal activity.

UPDATE - 10-28-11 -- On Wed. Octo 26, 2011, By a vote of 59-34 the Assembly voted to suspend a rulling on AB155. An amendment was made by Rep Chris Taylor (D-Madison) that would protect some local control within the bill - the amendment was tabled by a vote of 60-33.

Free Landlord-Tenant Law Seminar In West Allis on March 31, 2011

I will be presenting a seminar for the West Allis Landlord Training Program on Thursday, March 31, 2011 from 6:30 pm - 8:30 pm. This seminar is sponsored by the West Allis Police Department and is open to the public at no cost.

I will be speaking on two specific areas:

1. Rental Documents -- specifically what rental documents you should be using with your tenants to protect yourself such as: Rental Agreement, Nonstandard Rental Provisions, Rules and Regulations, Rental Application, Pet Agreement, Lead-Based Paint Disclosure Forms, Carbon Monoxide Detector Forms, Check-In & Check-Out forms and more.

2. Screening Prospective Tenants -- this topic will include discussion of the federal and state Fair Housing laws, written screening criteria, credit checks, CCAP, and how to reject an applicant.

The Seminar will be held in the West Allis Municipal court room which is located at 11301 W. Lincoln Avenue in West Allis. Seating is limited so I would encourage anyone that is interested in attending to arrive early to insure a seat.

A detailed outline on the above topics will be given to each attendee and Wisconsin Legal Blank Co. will be on hand with their landlord tenant law forms available for purchase.

Hope to see everyone there.

Rejecting A Rental Applicant: The Do's and Dont's

UPDATE - APRIL 15, 2016 ---- Please review my April 15, 2016 blog post on HUD's new guidance regarding the consideration of a rental applicant's criminal history in the screening process as it may impact or alter the information in this blog post.

Let's face it, most landlords would prefer to never have to reject a rental applicant. It would be great if every application that we received from a potential tenant passed muster -- great credit, no prior evictions, awesome job history etc. etc. Unfortunately, most of the time that is not the case. Depending on how tough your screening criteria is, some of you may be rejecting a lot of applicants. It is not fun rejecting a rental applicant, but it goes with the job of being a landlord -- it needs to be done.

I would strongly suggest that if you have not read my prior post on written rental screening criteria that you do so before reading the rest of this post. Understanding what written screening criteria is and how to use it properly, will be very helpful in getting the most out of this post.

So how does a landlord go about giving an applicant the ol' rejection? In most areas of Wisconsin, a landlord is not required to provide a reason for denying a rental applicant. While this may not seem "fair" - it is legal -- in most areas of Wisconsin.

CAVEAT: Those of you that have read my prior posts know of my fondness for the city of Madison and Dane County -- sarcasm intended. Well you guessed it, Dane County and "Mad-Town" are a little different in that they require landlords to provide a rejected applicant with an explanation for denying them rental -- and the explanation must be in writing. So if you own or manage rental property in either of these liberal bastions, I would suggest that you spend some time reviewing the Dane County ordinances and the city of Madison ordinances . .. . then reconsider owning rental property in these areas : )

All kidding aside, there is not one correct way to deny a rental applicant. All landlords handle this situation differently depending on the specific facts of the situation. Each of my landlord clients handles the rejection of a rental applicant differently. For instance, some landlords choose to tell the applicant why they were denied while others refuse to do so. Both ways are legally acceptable (except in Dane County and City of Madison)

I would encourage any landlord that does want to provide a reason for the denial to the applicant, to insure that the reason they are denying the applicant complies with the landlord's written screening criteria, that the screening criteria used does not run afoul of any fair housing laws, and that the reason for the denial is not discriminatory. If you are not sure that your screening criteria is legally valid -- or you have never heard of the term screening criteria before now -- than you should probably avoid giving a reason for the denial.

I know of several landlords who require the applicant to put their request in writing in order to receive a reason for their denial. If they receive the written request, then the landlord will provide a written explanation. Oftentimes the applicant will not take the time to make the written request and the landlord has avoided the need to provide the explanation.

There is one specific context in which all landlords MUST provide an applicant with a written document -- not a written explanation for why they were denied -- but a written document referred to as an "adverse action letter."

If a landlord rejects a rental applicant because of something obtained from the applicant's credit report, the federal Fair Credit Reporting Act requires that the landlord send the applicant an "adverse action notice" advising them that they have been denied rental in part due to information obtained from their credit report.

An adverse action notice must include the following information:

1. The name, address, and telephone number of the credit reporting agency that supplied the credit report.

2. A statement that the credit reporting agency that supplied the report did not influence the landlord's decision to reject the application.

3. Advise the rejected applicant of his/her right to dispute the correctness or completeness of the information from the credit reporting agency and the applicant's right to obtain a free copy of their credit report from the agency within 60 days, if requested.

So, actually an adverse action notice does not require a landlord to state the reason that a rental applicant was denied, but it does tell the rejected applicant that the decision to deny their application was, at least in part, based upon something learned from the applicant's credit report.

Personally, I provide any applicant that I reject with an explanation. My reasons for doing so are threefold:

1. If I was being rejected for housing I would like to know why so I could see if the reason is something that could be corrected in the future. This is NOT a legal reason for providing the applicant with an explanation but rather a personal one -- a variation on the concept of treating others as you would like to be treated.

2. I believe that if I provide a rental applicant with the truthful (and legally valid) explanation as to why I will not be renting to them, they will be less inclined to incorrectly assume that I denied them based on discriminatory factors.

3. I'm well-versed in fair housing law and am confident that the basis for my decision to deny a rental applicant is not in violation of federal or state fair housing laws and that my decision can be legally supported.

As mentioned previously, if you do not know if your reason for denial is legally justifiable, then you need to be cautious in what you tell an applicant. You certainly don't want to end up providing the applicant with the only evidence that they need to file -- and win -- a fair housing claim. If you find yourself in such a situation, I would recommend that you seek legal advice before you make the decision to deny the rental applicant.

Whether you have decided to provide an applicant with an explanation as to why they were denied rental or not, all landlords and property managers should memorialize the reason that they rejected the applicant in writing for their own records. If you are utilizing written screening criteria -- which I hope everyone is -- then a copy of the criteria is the perfect place to record the reason for denial. Simply circle the specific criteria that the applicant failed to meet. You should also attach any supporting documentation -- such as a copy of the applicant's credit report, CCAP printout showing a prior eviction, or notes from your conversation with the applicant's current or past landlord where s/he told you the applicant was always late with paying the rent etc. etc. Finally, be sure and notate when you made the decision to deny the applicant and when that was communicated to the applicant. You should retain this paperwork for at least three years as this is the statute of limitations for the majority of most fair housing claims.

Rejecting a rental applicant can be an uncomfortable situation and even an anxious one if you are not educated about written screening criteria and when you can legally reject an applicant. If you would like to learn more about these topics you should consider attending the AASEW's Landlord Boot Camp which will focus on these topics more in depth.

UPDATE - APRIL 15, 2016 ---- Please review my April 15, 2016 blog post on HUD's new guidance regarding the consideration of a rental applicant's criminal history in the screening process as it may impact or alter the information in this blog post.

The Topic of CCAP Restriction Is Back!

As the followers of my blog well know, many of my posts have centered on State. Rep. Marlin Schneider's attempts to restrict CCAP access to the public. Restriction of CCAP will greatly affect landlords as CCAP is one of the best avenues to conduct background checks on prospective tenants. Here is a link to my prior posts on this topic.

Well, Rep. Schneider and his Special Commottee On Review of Records Access of Circuit Court Documents, have resurfaced. On September 8, 2010 a notice of this special committee's upcoming meeting was circulated. The meeting will be held on September 15th and will address several topics, including Proposals Limiting Access to Consolidated Court Automation Programs Information Considered During 2009 Legislative Session, and several other topics intimately related to CCAP.

Here is a copy of the Notice that was circulated.

If you would like to read the actual reports and memos referenced in the above Notice click here and you will be directed to a page with all the necessary links.

Looks like we will have to prepare for another year of battling for our continued access to CCAP and the Open Records law in general.

State Supreme Court To Jump Into The Debate Over Restricting Information on CCAP

The Journal Sentinel published an article on Saturday, March 13, 2010 entitled "Supreme Court Considers Limits To Online Court Records." It appears that while landlords have pretty much quashed Rep. Schneiders attempts to pass legislation on the restriction of infromation posted on CCAP, that the State Supreme Court will be reviewing the issue in the near future.

Patrick Marley's article states that Rep. Schneider did not believe his CCAP bill would come up for a vote this spring. However, Marley states that in an administrative meeting last month, the Wisconsin Supreme Court agreed that they should study limiting what is posted on CCAP. Justice Prosser was quoted as saying that "whatever problems we have has been incredibly exacerbated by CCAP and the Internet. The case for redress is much too compelling to just let it die."

The State Bar of Wisconsin has also asked the Supreme Court to make it easier to remove CCAP records and filed a request with the Supreme Court to make it easier to expunge records, both online and at the courthouse.

So while the legislative attempt to restrict CCAP may be over the overall fight appears to be continuing. Be sure and read the comments to Marley's article for a lively discussion for and against restrictions on CCAP.

Rep. Marlin Schneider Amends AB-340 (CCAP Bill)

On December 2, 2009, Rep. Marlin Schneider (D-Wisconsin Rapids) made an amendment to AB-340. Referred to as Assembly Substitute Amendment 1 to 2009 AB 340, this revised bill essentially would create two versions of the CCAP database. Schneider's amendment appears to be -- based on its timing at least -- a partial response to the Apartment Association of SE Wisconsin's critical response to a memo that Schneider sent to other members of the Wisconsin legislature and staff on November 20, 2009. The problem with Rep. Schneider's amendment, if it is indeed a response to the AASEW's criticisms, is that it ignores everything that the AASEW attempted to explain to him.

The original AB 340 can be read in its entirety at www.DefeatAB340.org. This site also contains background information on the sponsors of AB 340, responses from across Wisconsin to Schneider's bill, and Schneider's earlier attempts to restrict CCAP and prevent landlords from legally screening rental applicants.

Version #1

Under the amended AB 340, the first version of CCAP would remain exactly as we now know it. It would continue to provide data on pending cases and completed cases that were resolved by stipulated dismissal, acquittal, or motion. It would also continue to provide information as to all original criminal charges filed even if those charges were later reduced or dismissed.

However, this fully transparent version of CCAP would be restricted to only a "chosen few," namely:

1. Justices, judges, magistrates, court commissioners, and other employees of state, federal, or municipal courts and agencies who require access to court documents and records during the course of their employement.

2. Law enforcement officers.

3. Attorneys and their employees.

4. Members of the Wisconsin Newspaper Assoc., the Wisconsin Broadcaster's Assoc., and any other Wisconsin media organization designated by the director of state courts.

5. A debt collector licensed under Sec. 218.04, Wis. Stats.

Version #2

The second version of CCAP would be a redacted version (just as was set forth in the original AB 340) and would exclude any and all information about any civil or criminal case that had not yet been resolved by: (1) a finding of guilt, (2) a finding of liability, (3) an order of eviction, or (4) the issuance of a restraining order or injunction.

Under the revised AB 340, a person would still be able to request that the director of state courts remove all CCAP information relating to that individual's case if it did not result in a finding of guilt, liability, eviction judgment, or TRO/Injunction, or if it was reopened, vacated, set aside or overturned on appeal. Thus, even the "chosen few" detailed above would still not have access to this information if an affected individual made a request to remove it from CCAP.

The revised AB 340 appears to have eliminated the requirement that all users must register with the Director of State Courts and pay a $10 fee. However, still intact in the amended bill is the requirement that a person who has been denied employment, housing, or a public accomodation, be informed that said decision was made after reviewing information contained on CCAP. The intentional failure to comply with this section could result in a $1,000 fine.

The revised AB 340 is not an improvement over its predecessor. Yes, I guess it does allow a select few to access most of the information currently contained on CCAP but what about those individuals who are not included? Landlords, employers, moms and dads, and everyone else excluded from accessing the info on the "real CCAP" are still being prevented from using CCAP to obtain information that falls under Wisconsn's open records law.

I wonder just how much time Rep. Schneider and his staff spent drafting the revised AB 340? Since the revised version still ignores Wisconsin's open records law and still hinders a landlord's ability to properly - and legally - screen a prospective renter, I hope that they didn't spend too much time on it because I still don't think it will pass.

What are your thoughts about this revised version of AB 340? Let me know your thoughts by sending a "comment."

What Questions Should You Ask An Applicant's Current and/or Prior Landlord During The Screening Process

Screening applicants/potential tenants is the single most important element of landlording in my opinion. As I have mentioned in prior posts, if you properly screen your applicants you will have a better chance of finding a good tenant that pays rent on time and does not abuse your investment property.

Landlords should require each adult person to completely fill out a written rental application. After you have all this good information about your applicant you now need to confirm that info. You have not conducted a thorough screening until you have confirmed all of the information that was provided to you in the application.

Some of that info is more important than others. In my experience the most important information that you need to confirm about a potential tenant is: (1) the applicant's current and prior rental history, (2) the applicant's employment information, and (3) whether or not the applicant has been evicted, had a money judgment taken against them, or been charged/convicted with a crime -- this information, at least for now, can be obtained through CCAP.

This post will focus on item #1 - the applicant's current and past rental history. The way to confirm this information is to communicate with both the applicant's current landlord AND their prior landlord. You are probably asking yourself, "why is it necessary for me to talk to more than just the applicant's current landlord?" The answer is simple -- if the applicant is a bad tenant then the current landlord may tell you anything (even a bunch of lies) in order to get rid of their problem tenant. A less than honest landlord who is trying to unload a bad tenant may neglect to tell you that the tenant has loud parties every weekend, pays rent late every single month, enjoys hoarding pit bulls, and thinks its funny to rev the engine on his crotch rocket when he comes home after bar time. While it would be nice if all landlords realized that we are all in this together and were truthful to one another, that is not always the case. If you think that a fellow landlord would not lie to you in order to pass on a nightmare tenant then I want to let you know that I have a new ebook for sale which I just completed writing - and which I am selling for the unreasonable low price of $79.95 -- that I guarantee you will teach you how to make a million dollars in 30 days through investing in real estate, even during this recession : )

A prior landlord - one tht is at least one landlord removed from the applicant's current landlord - has no reason to lie to you. They no longer have any connection to their old tenant and therefore have no personal interest in whether you accept him or her as your new tenant. So it is always reccomended that you talk to both the applicant's current landlord AND their prior landlord. Now that you know who you should be talking to and why, the next hurdle is determining what questions you should be asking.

Oftentimes, the current/prior landlord is going to want to confirm that the applicant has authorized you to talk to them about the applicant and his/her information. This may involve having the applicant call the landlord and verbally telling them that they can talk to you, but more often than not it involves providing the landlord with a written authorization signed by the applicant. If you are using a good Rental Application then you may already have the authorization language in that document.

When providing the authorization to the current/prior landlord be careful to only provide the landlord with the authorization language, the applicant's signature, and the date that it was signed. While the current or prior landlord most likely already has all of the applicant's personal information - you do not want to take the chance and divulge personal info that you shouldn't have.

Prior to calling a landlord you should be aware that sometimes an applicant will list a friend or a family member as their current or prior landlord. They may do this for any number of reasons such as: (1) they have no prior rental history, (2) they have been evicted by their prior landlord, (3) or they know that they are a less then stellar tenant and that their landlord will not have positive things to say about them. As I'm sure you can guess, a family member or friend that is standing in for the applicant's real landlord is going to have nothing but glowing things to say about the applicant.

In order to avoid having this ruse played on you, you should attempt to confirm that the person you are speaking to is the actual current or prior landlord. There are several ways you can do this but none of them are foolproof. One trick is to call the alleged landlord and act as if you are a tenant inquiring about a vacancy. If the listed "landlord" is a friend or family member they will probably not respond appropriatley to your inquiry. I have caught one person applying to rent from me by this method. The person I called responded along the lines of "what are you talking about -- you must have the wrong number - I ain't renting out sh*t."

Another option is to check online property data records for the munucipality in which the current/prior landlord's property is located to see if the name on the property records matches the name of the alleged landlord. This method does not always work. If the property is being managed by a management company then the name that the applicant gave you is most likely that of the manager and not the owner. Additionally, if the property is legally owned by a business entity then there will be no individual person's name listed on the property data. Most municipalities have their property data infromation available on the web. I just googled "property data" and the name of various municipalities in Milwaukee County and came up with 4 sites in just a few seconds -- Milwaukee, West Allis, Greenfield, Wauwatosa. Short of the above methods you will just need to remain attentive during your conversation with the person and see if they "slip up" while talking with you.

Some landlords will be happy to answer your questions orally over the phone while others -- especially the larger landlords and management companies -- will only respond to your questions in writing. This means that you will need to send them written questions. This is normal and should not be a cause for concern. These companies are merely trying to protect themselves as they will now have proof of the answers they provided you should the tenant accuse them of false statements or sue them for slander.

Whether you are asking your questions verbally or in writing you should insure that you use the same questions for every applicant when talking to their current/prior landlord. If you fail to do this you may end up inadvertantly violating Fair Housing (discrimination) laws. To make this simple you should prepare a script of questions that you will use. I would suggest that you have an experienced landlord, property manager, or landlord-tenant law attorney review your questions prior to using them.

There are no hard and fast rules as to what questions you should ask but any questions posed should include the following:

1. Confirm that the applicant is/was a current/prior tenant.

2. Confirm the address of the current/prior rental unit.

3. Confirm the dates that the applicant resided at the current/prior landlord's property.

4. Confirm the rent amount that the applicant is currently paying or paid in the past.

5. Ask if the applicant has ever been late in paying their monthly rent. If the answer to this question is "yes" then you should follow up with a few additional questions such as: how late was the rent paid; was the rent paid late more than one; and how many times was the rent paid late?

6. Ask if the applicant has ever violated any other terms of the rental agreement (i.e. damage to property, loud parties, unauthorized guests, illegal activity etc).

7. Ask if the landlord ever had to serve the applicant a 5-Day or 14-Day notice. If the answer is "yes" then you should attempt to learn additional info about the breach.

8. Finally, you should ask the landlord if s/he would ever rent to the applicant again.

Remember that your goal in talking to the current/prior landlord and asking them these questions is to try and obtain as much pertinent information as you can about the applicant so that you will be better able to determine whether or not the applicant will be a good tenant for you.

It is important to realize that some landlords may not be comfortable answering these questions - especially the more detailed questions - as they may be fearful of retaliation by the tenant or being sued by them. This fear is the primary reason why some landlords will only reply to written questions with written answers. I have personally experienced landlords who would only give me "yes" or "no" answers to my questions and refused to provide any detail. On the other hand I have talked to more than one landlord that told me way more about an applicant then I would ever want to know (and way more than a landlord should ever knowabout his/her tenant). You take what you can get!

Remember that if a landlord is unwilling to verify the applicant's information then you have a valid and legal reason to deny housing to that applicant, assuming that verification of information contained in the application is part of your written screening criteria.

I hope that it goes without saying -- although I will say it anyway -- that during this "vetting" process you should only ask relevant and non-discriminatory questions. If you stick to asking questions about the topics listed above you should be OK.

How To Really "Read" A Person's Drivers License

I always enjoy learning information that will assist my clients and myself when screening potential new tenants. Based on my review of the Analytics for my blog, readers also appreciate this info because my post on the Social Security Number Validator consistently ranks as one of the most viewed posts each month.

While co-presenting at the City of Milwaukee and UWM's Landlord Training Program this past October I learned that a person's drivers license has all kinds of hidden elements that allow you to verify that the person handing you the DL is the actual person who was issued the DL.

Here's what I learned:

Assume that you are looking at a DL of a person named Jane No who has a DOB of 1937 and a DL # of N242-5323-7833-04.

1. The first letter of the individual's last name will be the first letter of the DL #. In this case it is the letter "N."

2. The last number of the second grouping of numbers in the DL# and the first number of the 3rd grouping of numbers in the DL will be the individual's birth year. In this example it is "37"

3. If the last three numbers in the third grouping of numbers in the DL # is greater than 500 then the individual that you are looking at should be a female. In the example provided the number is "833" which means that Jane No is a female. Similarly if the last three numbers in the third grouping of numbers in the DL # are below 500 then the person who handed you the DL should be a male.

4. To determine the the individual's DOB you can do the following:

For Females: Take the last three numbers in the third grouping of numbers and subtract 500.

For Males: Take the last three numbers in the third grouping of numbers but DO NOT subtract 500.

Applying this to our example, we note that the last three numbers of the third grouping of numbers of Jane's DL # are "833." So we should do the following calculation: 833 - 500 = 333.

Next we take 333 and divide it by 40. The first number of the answer is an "8." You should take that number and add "1" to it to get the month of the individual's birthday. So in this example 333/40 = 8.325 We take the first number of the answer which is "8" and +1 to get "9" which corresponds with the month of September. So Jane was born in the month of September in 1937.

Obviously this information is most beneficial if the applicant whose ID you are looking at (and whose application you are reviewing) is using someone else's DL or has "doctored" the DOB on the DL for some reason. I'm certainly glad that the bouncers at the bars at UW-Madison did not know this information back when I was in college or I might have had to spend more time at the movies or the library : )