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!

Landlords May Want To Pursue Tenants for Holdover Damages As Well As Other Damages

After a landlord has had her rental property returned through an eviction action or the tenant vacating of their own accord, a landlord has the option of pursuing the ex-tenant for money damages. I have explained in previous posts, that a typical eviction lawsuit includes three causes of actions against the tenant. First, return of the rental property ("eviction"). Second, a claim for past due rent and other fees allowed under the rental agreement. Third, physical damages to the rental property and holdover damages.

When it comes to the third claim, I often see landlords pursue physical damages to the unit (and cleaning charges) and fail to even consider pursuing holdover damages. This is often because the landlord is not aware that holdover damages exist and/or she is unfamiliar with them. Hopefully this blog post will rectify that situation.

Holdover damages are allowed per sec. 704.27,Wis. Stats., which states that if a tenant remains in possession of the rental unit without the consent of the landlord after expiration of the lease or termination of the tenancy, the landlord may recover damages from the tenant for the tenant's failure to vacate the unit within the time required.

Sec. 704.27 further states that, in absence of proof of greater damages, the landlord may recover a minimum damages amount for the tenant's holdover of twice the rental value apportioned on a daily basis.

A tenant becomes a "holdover" tenant once their tenancy has been terminated and they remain living in the rental premises without the landlord's consent. A tenancy is terminated under any number of scenarios. For example:

1. A tenancy terminates when when a 5 day notice for failure to pay rent has been properly served on the tenant and 5 days have passed and the tenant has failed to cure the breach or vacate the rental unit.

2. A tenancy also is terminated when a 14 day notice to vacate due to breach has been properly served on the tenant and the tenant fails to vacate at the end of the 14 days.

3. A tenenacy terminates when a tenant is under a month to month tenancy and has been properly served with a 28 day notice and the tenant fails to vacate.

4. A tenency terminates if a lease expires, no renewal has occurred, and the tenant remains living in the rental unit.

Under all of the above situations, the tenant has now become a "holdover tenant" which entitles a landlord to "holdover damages."

Holdover damages are much more easy to prove up in court than physical damages. All a landlord needs to do to prove holdover damages is to establish the date that the tenancy terminated and the date that the tenant actually vacated the rental unit. The rest is just simple math -- calculating the daily rent for the period of the holdover.

When pursuing physical damages to a rental unit, a landlord must prove the following:

1. That the unit was not previously damaged prior to the tenant moving in -- this is often done via photographs, video, testimony, or a check-in check-out sheet, or a combination of any of the above).

2. That the damages were caused by the tenant or the tenant's guests or invitees.

3. That the damages are actually "damages" and not merely normal "wear and tear."

Maybe you have experienced this yourself, but I have noticed that tenants are readily willing to admit that they did not pay rent, but they will fight you tooth and nail if you argue that they damaged your rental property or failed to clean it prior to vacating. Once a tenant learns that you intend to pursue them for damages and cleaning costs, out come the multitude of excuses, such as . . . I didnt' break that door, my brother did that when he was drunk, you should sue him . . . that urine soaked carpeting was like that when I moved in 5 years ago, must've been the prior tenant's cat that used the carpeting as a litter box (even though the carpet is still physically wet 5 years later) . . . etc. etc.

Since tenants often take issue when a landlord pursues them for physical damages, the landlord is often forced to go through with an evidentiary hearing in order to obtain her judgment. Add to that, the fact that a tenant has the right, at no additional cost, to request a de novo review of the hearing if they do not like the result, and a landlord can expend a lot of time and money pursuing her damage judgment.

Since most tenants are often "uncollectible" it often does not make practical sense for a landlord to go forward. She will only lose time and money . . . both of which will never be recovered. Whetehr or not to pursue money damages against a tenant at all is a decision that only the landlord can make based on their specific situation.

When a landlord pursues holdover damages against a tenant there seems to be fewer requests on the tenant's part for a damage hearing. Oftentimes, the court commissioner will explain to the tenant what holdover damages are and that they are "statutory" in nature and thus only require that one factual issue be determined -- when the tenant vacated the rental unit.

This is not to say that a tenant won't still request a hearing if a landlord pursues only holdover damages against them. They still might (although the frequency of the request is much less than when a landlord pursues physical damages, in my opinion). And they certinaly may request a hearing if the landlord pursues both holdover damages and physical damages against them. Nonetheless, even if an ex-tenant does request a hearing, the time spent prepping for the hearing to prove holdover damages, and the exhibits necessary to be introduced at such a hearing, are much less involved than for a damage seeking physical damages

So while tenants may not like holdover damages, the law provides for them and a landlord has every right to avail herself of them.

ADDED 8/2/11 at 5:53 pm --- It should be noted that in Milwaukee County I have been told repeatedly that landlords cannot seek both physical damages to the rental unit and holdover damages against a tenant. In Milwaukee County, the courts have indicated that it is their interpretationof sec. 704.27 that a landlord may only recover holdover damages if the landlord cannot prove greater physical damages to the unit. I believe this interpretation of the statute to be incorrect. I believe -- just as the commentor below has stated -- that a landlord is entitled to holdover damages of twice the rental value apportioned on a daily value as a minimum for the tenatn's holdover unless she can prove greater damages for the holdover. Physical damages should be treated separately. The language "in absence of greater damages" set forth in sec. 704.27 is not referring to physical damages at all. Nonetheless, a landlord should be prepared that they may be told to choose to elect either holdover damages or physical damages in Milwaukee County.

The Vincenti v. Stewart, 107 Wis. 2d 651, 321 N.W. 2d 340 (Ct. App. 1982) further addresses this issue. the Court of Appeals refers to the Committee Comments to sec. 704.27, at pages 654-655 of its decision, and explains that the recovery of twice the rental value only establishes a minimum damages amount for a tenent holding over. The Court explains that in some circumstances greater damages can be proven as a result of the tenant's holdover. It is clear in from the Vincenti opinion that the "greater damages" language refers to greater damages due to the tenant's holdover only and NOT greater damages in general (i.e. physical damages to the unit).

Small Claims Jurisdictional Limit Increased To $10,000

Wisconsin's small claims jurisdictional limit was increased from $5,000 to $10,000 effective July 1, 2011. This increase was included in Governor Walker's 2011-2013 Budget Bill.

The jurisidictional limit for small claims in Wisconsin was set at $5,000 back in 1995 and has remained the same for 16 years.

I see this as a positive change for debt collectors and potentially landlords.

All eviction actions -- regardless of the amount of rent owed -- must be brought in small claims court as small claims has exclusive jurisdiction of all eviction actions. Because of this, a landlord is allowed to receive a judgment for past due rent well beyond $5,000. So this jurisdictional change will not affect the amount of any past due rent judgement. But until now, a landlord was limited to obtaining a judgment for $5,000 or less in small claims for any physical damages to the rental property caused by the tenant. So this increase in small claims jurisdictional limit will be advantageous for landlords in such a situation.

Additionally, this change will also positively affect landlords bringing straight collection actions (which does not include a cause of action for eviction) against ex-tenants that skipped out owing past-due rent and/or damages greater than $5,000.

Since most tenants are not collectible, I am not sure if this change will greatly affect landlords . . . but it certainly won't hurt them.

It should be noted that this increase in the small claims jurisdictional amount does NOT apply to third-party complaints, personal injury lawsuits, or tort claims.

Must A Landlord Actually Repair Tenant-Caused Damage Before The Landlord Can Deduct The Cost From A Tenant's Security Deposit?

This issue keeps raising its head over and over and over . . . so I feel compelled to address it. The question: Must a landlord have completed the repair of tenant-caused damages to a rental unit before being legally able to deduct the repair costs from the tenant's security deposit?

I personally believe the answer to that question is "No" -- the repair work does not need to be completed prior to a landlord being able to deduct the repair cost from the tenant's security deposit.

Wisconsin law does not provide landlords with a direct answer to this question.

The Wisconsin Administrative Code, ATCP 134, does not address this issue. This is what ATCP 134 does say:

ATCP 134.06(2)(a), entitled Returning Security Deposit, states that within 21 days after a tenant surrenders the rental premises, the landlord shall deliver or mail to the tenant the full amount of the security deposit held by the landlord, less any amounts properly withheld by the landlord under sub (3).

ATCP 134.06(3), entitled Security Deposit Withholding; Restrictions, lists what items can be deducted from a tenant’s security deposit. I wrote a blog post on this topic previously.

ATCP 134.06(4), entitled Security Deposit Withholding; Statement of Claims, states that if any portion of a security deposit is withheld by a landlord, the landlord shall, within the time period and manner specified under sub (2) deliver or mail to the tenant a written statement accounting for all amounts withheld. The statement shall describe each item of physical damages or other claim made against the security deposit, and the amount withheld as a reasonable compensation for each item or claim.

Chapter 704 of the Wisconsin Statutes which deals with Landlord Tenant issues does address the issue.

I am also not aware of any Wisconsin case law that answers the question.

Here are my reasons for believing that it is legal for a landlord to deduct the costs to repair tenant-caused damage from the tenant's security deposit prior to the repair work being completed.

1. Nowhere in ATCP 134 does it state that the repair work must be completed prior to the landlord being able to deduct the costs of repair from the tenant's security deposit. If the drafters of ATCP 134 meant for repair work to have been completed prior to any deduction being made from a tenant's security deposit then they had the opportunity to require that in the regulation. For whatever reason, the drafters chose not to write that into the regulation. As such, such a requirement should not be read into the regulation if it is not there.

2. The repair of tenant-caused damage to a rental unit cannot always be completed within 21 days of a tenant surrendering the rental unit. There are a multitude of legitimate reasons why repair work may not be able to be completed within 21 days, such as: contractor time constraints, financial constraints, or the simple fact that the sheer amount of repair work that needs to be completed is too large to allow it to be completed in 21 days. Just because a contractor can't complete the work within the 21 days, or the landlord does not have the money to make the repairs within 21 days, or the work cannot be completed within 21 days -- such as in the case of fire and smoke damage, or water damage -- does not absolve the tenant from responsibility for the cost of repairs.

3. DATCP, in its own analysis of ATCP 134, has stated that the repair work need not be completed prior to the drafting of the security deposit transmittal letter to the tenant. In 1999, after a major overhaul was completed to ATCP 134, DATCP published a document entitled a Summary of ATCP Chapter 134 Revisions. In its summary, DATCP states on page 3:

(Note: if repair costs are not known within 21 days, a written accounting must still be provided. In this case, a "good faith estimate" may be made.

So those are my three reasons for believing that a landlord is legally able to deduct the cost to repair tenant-caused damages from a tenant's security deposit even if the repair work was not completed within 21 days.

What are your thoughts on this question? Do you have any additional reasons why you would answer the question as I did?

-------

I would like to thank Atty. Heiner Giese for providing me with a copy of the Summary of ATCP Chapter 134 Revisions published by the DATCP and for suggesting that I write a blog post on this issue many, many months ago. I would also like to thank Atty. Evan Knupp for being the most recent person to ask me this question -- within the last hour as a matter of fact -- which finally caused me to write the post that you just read.

Pursuing a Money Judgement Against An Ex-Tenant . . . Should You Even Bother?

Once you have evicted a tenant and have your property returned to you, you are confronted with the decision of whether to invest the time and money to pursue the ex-tenant for money damages or not.

Some of my landlord clients always pursue the ex-tenant for money judgments. Of that segment of landlords, some will obtain their judgment, docket the judgment, and then sit on it hoping that the tenant will eventually pay it off (plus 12% interest) when they need to obtain a loan to purchase a home. Other landlords that I work with will not only obtain the judgment against the tenant but they will also proactively attempt to collect on that judgment via garnishment actions.

On the opposite end of the spectrum, are landlords that never seek a money judgment against a tenant as they consider it to be a waste of time and would merely result in "throwing good money after bad" because the tenant is not collectible. Still other landlords opt to try and collect from past tenants via alternative means such as using the service of Rent Recovery Services --- which allows you to report the ex-tenant's debt to the 3 credit bureaus without the need to obtain a judgment.

There are many options for a landlord to choose from when it comes to collecting against an ex-tenant. There is not one correct option for all situations and for all landlords. The correct option depends on many factors. I will sift through all of the information (or the lack thereof) that my client has about the tenant that could assist in the collection process. Sometimes a discussion regarding the client's financial situation is needed. Determining my client's ultimate goal is a must.

It is my personal opinion that time should be taken up front to discuss these matters with a client so that there are no false illusions going forward. Many landlords are astonished to learn that once they obtain a judgment that they must spend more time and money to collect on that judgment. It is important to remember that a judgment is merely a piece of paper saying that your ex-tenant owes you money, it does not mean that you will get paid. Collecting on a judgment is a whole different ballgame . . . . and a different blog post.

A De Novo Hearing Is A "Second Kick at the Cat"

Under Wisconsin law, a Court Commissioner cannot decide a contested eviction action -- that must be decided by a judge. However a court commissioner can preside over and decide a hearing on a landlord's 2nd and 3rd causes for action for money damages. Typically this includes claims for past due rent, physical damages to the rental property or holdover damages.

In Milwaukee County, due to the large number of cases, if a tenant diputes the landlord's claims for damages, the matter must first be heard by a Court Commissioner. The Court Commissioner will issue a determination based on the evidence presented. If either the landlord or the tenant does not agree with the decision of the Court Commissioner, either party has the aoutomatic right to request a de novo hearing before the circuit court judge.

De novo literally translates to "anew;" "afresh;" or "a second time."

A de novo hearing is essentially a "do over" -- the parties have the opportunity to present their evidence over again to the judge. They are not restricted to the evidence that they presented in the prior hearing before the court commissioner. New evidence can be presented or old evidence can be removed.

De novo hearings are often referred to incorrectly as "appeals." A de novo hearing is an opportunity to redo your case. An appeal is a review of a lower court's decision for error.

A de novo hearing is a "second kick at the cat," if you will.

NOTE: I currently own a cat. I have had cats as pets in the past. I love cats. By using the above phrase "a second kick at the cat" I am not suggesting or condoning the hurting of a cat. No cat's were harmed in the writing of this blog post.

Above is a video clip from a seminar that I presented last year about de novo hearings.

To "Walkthrough" or Not To "Walkthrough" That Is The Question

At the end of a tenancy a tenant or a landlord often requests a walkthrough of the rental unit prior to turning in the keys and delivering possession of the unit back to the landlord. A walkthrough is just that --- the tenant and the landlord walk through the rental unit and make observations of the condition of the unit. It is at this time that a landlord may point out damage to the rental that occurred during the tenancy and which the tenant will be held responsible for. A landlord might also note if the tenant did not adequately clean the unit or some of the appliances (typically this is the stove and/or refrigerator) and indicate that the tenant's security deposit will be deducted accordingly.

When I first began working with landlords over fifteen years ago, I often encouraged them to conduct walkthroughs with their tenants. I would recommend that they conduct the walkthrough a few hours before the lease termination date or the end of the tenancy. That way, if damages were identified, or areas were not cleaned properly, the tenant would have time to go back and make the repairs or better clean the area. My reasoning was that this was a win-win situation for both the landlord and the tenant. The tenant could go back and fix things thus insuring that they received their security deposit back and the landlord would not have to spend time or money repairing damage or cleaning the unit and could thus turn the unit over more quickly.

Over the years, I have made a complete 180 degree turn on the issue of walkthroughs. I no longer recommend that my landlord clients do walkthroughs with their tenants -- or at a minimum I point out some of the drawbacks of the walkthrough.

It is important to note that conducting a walkthrough with a tenant prior to their vacating is not required. I am not aware of any federal, state or municipal law that requires a landlord to conduct a walkthrough with his/her tenant. I am aware that many a tenant will demand a walkthrough with their landlord. Just because one is asked for - or even demanded - does not mean that the landlord must agree to it. Nothing is wrong with telling a tenant to drop off their keys at the office and then after are long gone checking out the condition of the apartment. In fact this is what I often reccomend that landlords do these days.

My primary reason for no longer recommending that landlords conduct walkthroughs with their departing tenants has to do with the pressure of the moment. I guess a secondary factor is that more and more tenants are unpredictable these days. Let me explain . . .

The main motivation for a tenant during a walkthrough is to determine what amount of their security deposit they will be getting back from their landlord. The tenant has already removed their belongings (at least hopefully), done any repairs that they are willing to do, and done any cleaning that they think is necessary. The tenant's mindset is that they are basically "outta here" and at least mentally, they have moved onto bigger and better pastures -- whether that be a new home or a different apartment. The tenant has no interest in getting sweaty by engaging in additional cleaning or having to go purchase some more screws or nails or putty to make a repair.

Because of this mindset, a tenant is not interested in being told by their soon to be ex-landlord that they didn't clean well enough or that they will have to pay for damaging the rental unit. Instead, the tenant is ready to argue, scratch, and claw, to protect what they feel is theirs -- the security deposit. Any attempt by the landlord to hinder the return of "their" money is typically not well-taken.

So what ends up happening during many of these walkthroughs is the landlord and tenant have an argument. I recall one client that informed me she was physically attacked by a tenant during a walkthrough. Another landlord that I know was verbally threatened when the tenant was told at the conclusion of a walkthrough that x, y and z would be deducted from their security deposit.

No landlord is interested in a confrontation with their tenant -- especially not a soon to be ex-tenant. We are not paid enough to put ourselves in situations. Even more common than physical attacks and verbal threats, is the scenario in which the landlord just wants to get the walkthrough over with. All of you know what I am talking about -- you quickly peruse the unit, with the tenant looking over your back, and just to avoid confrontation, or because you feel intimidated by the moment (or the tenant in some cases), or because it is human nature (for most of us) to shun an uncomfortable situation, you tell the tenant that everything looks good and sign off on the check-in/check-out sheet. Only later, after the pressure of the moment has subsided and the tenant is no longer breathing down your neck, you realize that you really should have charged the tenant for damage to this or failure to clean that.

At that point, it is a little too late to change your mind however, at least from a legal standpoint. You have already told the tenant that everything looks good and you have already signed off on the check-out form. Now, you decide that you want to withhold some money from the tenant's security deposit to repair this or clean that. The tenant receives his security deposit itemization letter from you (within 21 days after vacating) and is surprised and upset to see that a portion of his/her deposit has been withheld.

I have seen this scenario play out time and time again. The tenant, who is now upset as they feel they were lied to, decides to sue the landlord for improper deductions from their security deposit and seeks double damages pursuant to ATCP 134 and sec. 100.20(2) , Wis. Stats. and their actual attorney's fees to be paid by the landlord. The landlord is now stuck taking time out of their day to appear in court to defend against this lawsuit or to pay a lawyer to defend them in court.

I recall a past client who ended up in exactly this situation. A walkthrough was conducted with the tenants. I asked my client to look at the check-out form that she used. I saw that the form said that everything was in "good" condition and was signed by my client and both tenants. I also noted that scribbled across the top of the check-out form were the words "under protest." I asked my client who wrote those words. She replied, that she did. I asked her when she wrote them. She said that she wrote them about 1 week after the walkthrough had taken place -- so obviously the check-out form that the tenants were given did not contain these words. I then asked my client what the heck she meant by "under protest." I was told that my client felt intimidated and threatened by the tenants during the walkthrough and therefore she didn't really mean that the unit was returned in "good" condition.

I'm sure you can imagine all of the legal challenges that this would create had this actually gone to trial. Earlier in my representation of the client and prior to the tenants vacating, I had told her that she was not required to do a walkthrough with her tenants. After I finished looking at the check-out form, asking my questions, and listening to my client's answers, I asked her why she had put herself in such a precarious situation -- one in which she felt scared and intimidated -- especially when she was not legally required to do so? My client didn't provide me with an answer.

FYI, I totally believed that my client felt threatened during the walkthrough --- she was a much older lady, both tenants had criminal records including battery of one another, one of the tenants had issues with alcohol and the other with drugs, and one of the tenants had physically attacked another individual in front of my client earlier in the tenancy. I had also observed the tenants "act up" in court during an earlier court hearing. These tenants were not the type of people that understood the word "reasonable" or had even heard the word "rational" for that matter.

But I digress. The point of the story is that my client never should have put herself in that situation in the first place. She could have waited until the tenants had vacated and conducted a thorough examination of the unit at her leisure and with no one breathing down her back.

Situations like the above, have caused me to re-think my advice to my landlord clients about doing walkthroughs with their tenants. There really is no reason to put yourself in that type of pressure situation if you do not want to.

I'm interested in learning what your thoughts are regarding walkthroughs? Do you conduct them? If so, why? If not, why? What are some interesting (funny, scary, disgusting) experiences that you have encountered during a walkthrough?

Wisconsin Supreme Court Rules Against Landlord in Maryland Arms Case and Chooses To Avoid Answering The Bigger Question

The Wisconsin Supreme Court filed its opinion in this very important case on July 7, 2010. While the majority opinion ruled against the landlord it did not go so far as to say that a landlord and tenant could not allocate liability for damage (when neither party was negligent in causing the damage) in their rental agreement.

If you would like to review the specific facts of the case and the arguments made by both sides please revisit my posts of May 29, 2009 and October 15, 2009.

The Court was split, so there is a majority opinion, a concurring opinion, and a dissenting opinion. So if you are brave enough you can read all three opinions which encompass 37 pages and can be read here. The Wisconsin Law Journal provides a very good summary of the decision if you are not feeling ambitious enough to read all 37 pages.

As an attorney who primarily represents landlords, I must admit that I had a mix of emotions after I finished reading the opinion. I was upset that the majority opinion held that the landlord should be responsible for damage to his rental property that was caused by the tenant leaving her hair dryer plugged in overnight. I was also frustrated by the fact that the major issue in the case -- whether or not a landlord and tenant can allocate liability through the language of the rental agreement -- was not addressed by the majority opinion, thus providing little guidance to landlords in the future. On the other hand I was also grateful that the majority decided to "pass the buck" and not address this issue becasue, quite frankly, if the majority had addressed that issue, I believe they would have said "no" a landlord cannot allocate liability on a tenant for damage that was not casued by the negligence of the tenant.

The majority opinion held that the landlord should be held responsible for the damage because the rental agreement (which was drafted by the landlord) was ambiguous when it came to who would be held liable for damage in a situation where neither the tenant not the landlord were negligent in causing the damage. The majority rested its decision on a very well established principle of contract law that any ambiguity in a contract should be construed against the drafter of the contract. The majority said that since the contract terms did not unambiguously state that the tenant would be liable for the damage under the specific fact situation in this case, then the landlord should be liable for the damage.

The majority declined to address the very important issue that the AASEW and other landlord associations were concerned about in this case -- whether a landlord can add a lease provision assigning liability to a tenant for damages (when the damages is not caused by the tenant's negligence) or whether doing so would be a violation of Wis. Stat. sec. 704.07. So essentially the "Supremes" chose to dodge the issue, which in effect means that nothing prevetns a landlord from allocating liability to a tenant for such damage in a rental agreement under similar facts. What this also means is that should a landlord make such an allocation and hold a tenant responsible for similar damage, the tenant can argue that such contract language violates sec. 704.07, and the courts will have no guidance as to how to rule.

It was a missed opportunity by the Supremes to add to Wisconsin Landlord-Tenant law. However, based, on the tortured analysis (my view) of the majority opinion, if the court had addressed the allocation of liability issue it would have most likely resulted in a holding that would not allow a landlord and tenant to allocate liability -- which would have been even worse. So in the end maybe it was best that the issue was not addressed.

Justice Ziegler, who agreed with the majority opinion, wrote a concurring opinion to add that her view of Wisconsin law is that a landlord and tenant are not prohibited from allocating liability by contract as long as it is done clearly (i.e. no ambiguity) and is otherwise enforceable by law.

The dissenting opinion, which begins on page 18 and is authored by Justice Prosser, stated that not only are a landlord and tenant allowed to allocate liability in a rental agreement but that that is exactly what the parties to this lawsuit did and that the majority opinion is ignoring the clear meanign of the language in the rental agreement. The dissent did not find the lease to be ambiguous at all. The dissent, quite correctly in my opinion, points out the absurd nature of the majority opinion by saying that "imposing responsibility on the landlord for damage caused by a tenant, when the landlord cannot control risks created by the tenant" (like keeping a hair dryer plugged in overnight) defies economic logic.

The dissent, being very pragmatic, actually takes the time to address what the practical effect the majority decision will have on landlords by stating, "When the landlord is made responsible for abnormal damages that is actually caused by tenants, the landlord must spread the resulting expense among all tenants by charging higher rent. When a tenant is made liable for damage that is caused by that tenant, the landlord is better able to control rent and the tenant has an economic incentive for prudent stewardship of the premises."

Which of the three opinions seem more reasonable and logical to you?

What Is The Life Expectancy of the Carpet (or Refrigerator or Stove or Hardwood Flooring) In My Rental Unit?

Those of you that have appeared in eviction court in an attempt to obtain a money judgment against a tenant that has damaged your rental unit know that oftentimes the court will not allow you to recover the total cost to replace the damaged item. Even when the court agrees that the tenant caused the damage there will be times when a landlord cannot obtain the full replacement value.

Often when this occurs it is due to issues surrounding the life expectancy of the item that was damaged. Whether it is carpet, a stove, mini-blinds, or a hardwood floor, all items have an estimated life expectancy.

If the item is well past it's life expectancy it would not be fair to award the landlord the full replacement cost because to do so would put the landlord in a better position than s/he was in prior to the item being damaged by the tenant. To award the landlord the full replacement cost of a damaged item may result in the landlord obtaining what is often referred to as a "windfall" --- and courts do not like windfalls.

Let me give you an example to better illustrate. Assume the following facts:

1. The carpeting in your rental unit is 5 years old.

2. The life expectancy of carpeting in a rental unit is 10 years.

3. The tenant damaged the carpeting by spilling Kool-Aid and cooking oil throughout and in the spots where there are not stains there are cigarette burns as the tenant used the carpet as an ashtray.

4. The carpeting cannot be repaired and must be replaced.

5. Total cost to replace the carpeting is $1,000 (I am trying to keep things simple so I don't confuse myself with the math : )

Under the example above, a court would most likely only allow the landlord to recover $500 in damages against the tenant for the replacement of the carpet.

The reasoning is that since the tenant moved into a rental unit with 5 year old carpeting, the landlord should only be able to recover for damage to a 5 year old carpet. As such, the court will only allow the landlord to recover a percentage of the actual cost to replace the carpet. In this example that would be $500 - or half of the actual cost -- because the carpet was already 5 years old (out of its expected 10 year life span) when it was damaged. If the courts allowed the landlord damages of $1,000 then the landlord would be gaining a windfall because (in theory) the landlord would be getting the tenant to pay for the entire cost of brand new carpet (rather than 5 year old carpet).

I know that many of you are snickering as you read this and are saying "the tenant is not going to be pay me anything as they are not collectible and I will never see any money." That may be true -- and I empathize with you -- but I am merely trying to explain why courts will not allow a landlord to recover all of his/her replacement costs.

In Milwaukee County there has always been an unwritten rule -- at least as long as I have been practicing law -- that the life expectancy of carpeting in a rental unit is 10 years. I never knew where that number came from - I just knew that it was used. Other counties may have assigned a different number to the life of rental carpeting, I don't know, but in Milwaukee it is 10 years.

I have always wished that there was a resource that I could look to that listed the life expectancies of various items found in a rental unit such as carpeting, mini-blinds, sinks, hardwood floors etc. etc. I have yet to find such a resource, but while reading the blog of another landlord -- John ("Dr. Rent" ) Fischer -- I noted mention of a resource that set forth the life expectancies of various household items. John, who besides being a landlord is also a property manager, blogger, and president of the Wisconsin Apartment Association, was nice enough to provide me with a copy of that resource.

Here is a link to the document that lists the life expectancy of different products or items in the home.

We all know that the life expectancy of items in a rental property are much less than the life expectancy of furnishings in our own homes. Let's face it, rightly or wrongly, people do not treat property owned by a landlord as nicely as they would treat the property if they owned it themselves (and had to pay to repair or replace the item themselves if it were damaged).

Nonetheless, having a document that compiles the life expectancy of items contained in an owner-occupied home is still a good starting point.

This information in this document was taken from various sources such as:

- Magazines: Appliance Magazine (Sept. 2005)

- Specific Manufacturers: Timberlake Cabinet Co., United States Ceramic Tile Co., Delta Faucet Co., Floortec, Georgia Pacific Corp.

- Associations: National Wood Flooring Association, American Concrete Pipe Association.

CAUTION: This information should be used as a general guideline only. As I mentioned previously, the information provided is for the life expectancy of items in an owner-occupied home -- not a rental unit. Additionally, much of this information is provided by specific manufacturers and may not be the same for the item that you are using in your rental property which might have been manufactured by a different company.

MORE CAUTION: None of the information in the attached table should be interpreted as a representation, warranty, or guarantee regarding the life expectancy or performance of any individual product or product line. You should not make a buying decision or product selection based solely on the information contained in this table.

EVEN MORE CAUTION: The table is not a legal document and cannot and should not be cited in court.

I am merely providing this information to assist landlords who are attempting to determine a reasonable percentage of replacement cost to charge a tenant that has damaged your rental unit. This information may also assist a newer landlord who does not have years of experience on which to rely when attempting to estimate the life expectancy for certain item in his/her rental property.

Landlords Should Not Play Games With Tenants' Security Deposits

A new landlord-tenant decision has been reccomended for publication. The case of Boelter v. Tschantz involves a tenant suing her past landlord for double damages and attorney’s fees for making improper deductions from her security deposit.

The essential facts are as follows:

1. Tschantz (the landlord) withheld money from the tenant's security deposit.

2. The key deductions that were made were: (1) $323.84 for the tenant's water bill and (2) $85 to repair a clogged toilet.

3. After withholding a portion of the tenant's security deposit to pay her water bill, the landlord then failed to pay the bill timely. As such, the tenant opted to pay the utility directly to avoid late fees.

4. The landlord then sent a refund check to the tenant -- three weeks later -- for the amount that he deducted from her security deposit to cover the water bill along with a Post-It note that said “Oh, too bad no double damages for you.”

5. The landlord then stopped payment on the check prior to the tenant cashing it.

The Court of Appeals held that the landlord violated ATCP 134 as a result of his "game-playing" with the tenant's security deposit.

First violation of ATCP 134: The court held that it was unreasonable for the landlord to withhold money from his tenant's security deposit in order to pay her water bill and then not use that money to pay the water bill timely. The court specifically stated, “A landlord cannot indefinitely retain a deposit -- merely as a deposit -- after a tenant vacates."

Second violation of ATCP 134: The landlord then failed to promptly refund his tenant’s security deposit once he learned that she paid the water bill. Tschantz returned the water bill monies to Boelter three weeks later with a taunting note.

Third violation of ATCP 134: Finally, the landlord placed a "stop payment" on the refund check to the tenant. The court stated that, whether intentional or not, this constituted a further improper withholding of the tenant’s security deposit.

The Court of Appeals has admonished this type of "game playing" with a tenant's security deposit in prior decision. So while the court's decision here is not anything new, it does serve as a reminder to all landlords that they are taking a big risk if they choose to play games with a tenant's security deposit. Remember DOUBLE DAMAGES AND ATTORNEY'S FEES - need I say more.

The more noteworthy aspect of this case concerns the court's holding with regard to the repair charge deducted from the tenant's security deposit. Tschantz deducted $85 from his tenant's security deposit to repair a clogged toilet. The $85 was itemized as follows: $40 service call fee plus 45 minutes of labor at a rate of $60 per hour for the actual work. Tschantz stated that this deduction was “less than or equal to what an area plumber would bill.” Problem was that Tschantz didn’t hire a plumber to do the work, instead opting to hire his son’s (handyman) company which only billed Tschantz $15 per hour for the work it performed.

The court emphasized that the applicable law, Sec. 704.07(3), Wis. Stats., states that a tenant is only responsible to reimburse a landlord for the "reasonable cost" of the damage. The court then added that the "reasonable costs" would be the actual costs that the landlord had to pay for the repair work. Since a plumber's fee also includes overhead and profit, the court said that Tschantz was not entitled to reimbursement of that amount. Tschantz was only charged $15 per hour by his (handyman) son to clear the toulet - $12 total per the court's calculation -- so that is the amount that he was entitled to legally deduct from his tenant's security deposit.

Since there is no other published Wisconsin appellate decision that have addressed this specific issue 9at least not to my knowledge) - this is really the key holding of the case. A landlord may not charge a tenant for repairs at the rate that a professional laborer would charge if the landlord does not actually incur those charges.

Finally, the court also explained that when a landlord improperly withholds money from a tenant’s security deposit that the tenant is entitled, as a matter of law, to an award of his/her attorney’s fees. Here, the trial court chose not to award the tenant her attorney's fees because the judge felt that the attorney's fees were too far out of propertion to the claimed damages. The Court of Appeals "slapped the hand" of the trial court judge and reminded him that an attorney’s fee award is mandatory if there is a violation of ATCP 134 even if the attorney’s fees are far greater then the actual damages at issue.

Expensive lesson for Mr. Tschantz.

NOTE: Since Mr. Tschantz lost his appeal in this matter he will also be responsible for paying his tenant's attorneys fees through the appeal per Shands v. Castrovinci, 115 Wis.2d 352, 340 N.W.2d 506 (1983)

Oral Arguments On Important Landlord Case To Be Heard on January 6, 2010

The Wisconsin Supreme Court will hear oral arguments on the case of Maryland Arms L.P. v. Connell on Wednesday, January 6, 2010. This is a very important case for landlords as the decision will affect a landlord's ability to contract with his/her tenant.

You can learn what the case is about by reviewing my earlier posts from May 28, 2009 and October 15, 2009.

Oral arguments will be streamed at http://wisconsineye.org for those that wish to watch.

The exact time that for the Maryland Arms arguments is unknown. The case is scheduled to be heard second. The first case starts at 9:45 am. More than likely -- and assuming everything runs on schedule -- the case will be argued before 11 am.

For those of you new to oral arguments, the Wisconsin Supreme Court justices will allow each side to summarize their arguments (which have already been submitted via briefs). The justices will also interrupt the attorneys in order to have them answer specific questions that the justices may have or to attempt to get the attorneys to concede certain arguments. Sometimes the grilling by the justices can be harsh. The justices will not issue a final decision on Wednesday. A final decision will be issued many months later in writing.

The AASEW, along with three other Wisconsin apartment associations, hired legal counsel to submit an amicus curiae brief setting forth the concerns of the apartment industry as a whole, with regard to the specific facts of this case. The lawyer for the apartment associations will also be allowed time to present our argument to the justices.

WHY ARE THE "BAD LANDLORDS" THE ONLY ONES WE EVER HEAR ABOUT?

I was catching up on some long overdue blog reading this weekend and I came across a great blog post that I thought was very timely. I asked the author is I could re-post his thoughts and he agreed. The author of the post is Bill Gray who runs Rent Recovery Service, a company that assists landlords with collecting past due rent and damage charges from ex-tenants. I was fortunate enough to have met Bill this past September at the AASEW's Annual Landlord Tradeshow when Bill was gracious enough to fly to Milwaukee from Florida in order to present a seminar on collection issues to the attendees. Anyone that has met Bill knows that aside from being extremely knowledgable in the area of collections, he is also a great guy. If you are trying to collect past due rent and damage charges from an ex-tenant you should definitely give Bill a call at 212-561-5492 or email him at bill@rentrecoveryservice.com.

With the city of Milwaukee attempting to pass a version of "landlord licensing," with state politicians trying to short-circuit a landlord's ability to properly screen tenants, and with what I find to be a very prevalent negative attitude toward landlords in general - I thought Bill's post was timely.

Posted by Bill Gray on August 10, 2009

I recently read the following article by credit and collections expert and author, Michelle Dunn. Michelle is correct in her assertion that business owners are typically made out to be the bad guy. The same is true for landlords. When was the last time you heard about a landlord who lowered the rent for a good tenant who had hit bad times? Or the landlord who made sure a tenant, who is a single mother, had Christmas gifts for her children? You don’t hear these stories. The image of the evil “slumlord” is much more appealing to the media.

Are all landlords good? No they are not, just as a percentage of tenants are not good tenants. Go to YouTube and search for words such as “tenant, trashed, destroyed, damaged“, etc. and see the horrors some landlords face when a bad tenant destroys their rental unit. As you view these videos, imagine if you had invested thousands of dollars into a rental unit, and this was the result. Make sure you are not eating your dinner when you view these videos.

The 80 – 20 rule is most likely appropriate here. 80% of landlords and tenants are probably responsible people who try hard to do the right thing. Do the math. Assuming that most landlords own or manage many more than one rental unit, how many more “bad” tenants are there, than “bad” landlords. But again, we seldom hear about the bad tenants.

Landlords provide a valuable product and service. They usually borrow money to make an investment, then rent the apartment or home to someone they hope will care for their investment. People love to beat up on landlords. Think for a minute if landlords threw in the towel and got out of the business all together? Where would everyone live?

Here is Michelle’s blog post I referred to:

Why is the business Owner that got Stiffed the “Bad Guy”?

You hear it all the time, bill collectors are harassing customers that don’t pay.

You see it all the time, websites and news programs that help people use the law to “sneak out” of paying a bill they legitimately owe.

What does this say about small and large businesses everywhere?

That they are the bad guy if they try to collect the money that is owed to them for services rendered or products shipped?

Why are they the bad guy?

Isn’t the “bad guy” the guy who is trying to get out of paying?

Michelle Dunn

www.credit-and-collections.com/blog/

Email me your questions concerning tenant debt. I will try to help you.

Bill Gray

SUING AN EX-TENANT FOR PAST DUE RENT: What Factors To Consider

Your tenant has already vacated your rental unit - so there is no need to file an eviction action -- but they left owing you money. Is it worth your time and effort to sue them in order to obtain a money judgment? This is probably the third most frequently asked question that I receive when talking to landlords (the first two most asked questions in case you are curious are (1) which notice do I use when? and (2) how do I evict my tenant?).

There is not a simple answer to this question. It depends . . . on many things. Many variables need to be taken into consideration before deciding to spend the time and effort to sue an ex-tenant. Let's consider what some of those variables are.

1. How much money does the tenant owe you?

Is the amount that is owed to you worth the time, energy, and cost to attempt to collect it? You will need to purchase a small claims summons which will cost you approximately $100. You will need to personally serve the ex-tenant with the assistance of the Sheriff or a private process server -- typical cost between $35-$100. If you are representing yourself you will spend time away from work and therefore lose some wages. If you opt to hire a lawyer to represent you, you need to consider how much you will have to pay the lawyer.

There is no magic dollar amount that makes suing a tenant worth it or not worth it. The "breaking point" as I like to call it, will be different for different people.

2. Do you have the necessary information to sue the ex-tenant?

Do you have a fully completed rental application fro the tenant and have you updated the information contained in the application since the tenant first moved in? To assist with a potentail collections issue in the future, a good application should at least contain the name and address of the applicant's employer, the name and address of the applicant's bank, and emergency contact information for the tenant's relatives or close friends. If your rental application contains the above then you will already have some of the information that may assist you in collecting the debt that is owed you.

Other information that you will need is the current address of the ex-tenant. Did s/he leave you a forwarding address? If not, you will need to find him or her so that they can be served with the lawsuit. Check CCAP and/or the Milwaukee Municipal Court site to see if they have recently been sued or received a traffic ticket which may provide you with a current address. Contact your postman/woman and see if the ex-tenant has forwarded their mail to a new address. If so, see if they will provide that new address to you (typically the answer is "no"). You can also hire a skip-tracer to locate the whereabouts of the tenant, but typically you will need to wait a period of time for the ex-tenant to become established at their new address before tht data will become available. Consider contacting the emergency contact person/s listed on the ex-tenant's rental application to see if they know where you can reach the debtor.

If you do not have a current address for your ex-tenant, you will end up having to serve them at their last-known address (which is your rental unit) and becasue your process server will not be able to personally serve them since they do not live there any longer, you will end up needing to publish notice against them (this is when you pay a local newspapaerr to publish notice of the court date ) - in Milwaukee the cost to do this is $60.

3. Is the ex-tenant collectible?

When you obtain a money judgment against a person, you essentially receive a piece of paper which is called a "judgment." Having a judgment against someone does not mean the same as getting paid on that judgment. I have yet to encounter any ex-tenant that came knocking on my door begging me to take the money that they owe me. Usually they require a little prodding. So, after obtaining a judgment you will often need to spend additional time and money to collect on that judgment. If your ex-tenant is not "collectible" then it may not even be worth it to sue them

There are numerous factors that you should consider when determining if a person is collectible or not. Are they employed? Do they have a bank account? Are they receiving need-based public assistance? Are they self-employed? Does their household income fall below the federal poverty line? Are their wages already being garnished? Have they been employed at the same job for a significant period of time? Do they have good credit? Are they currently paying child support? If so, how many children are they paying child support for and how old are the children? Are they incarcerated? Did they move out of state? These are only a few of the factors that you should consider when deciding how to proceed.

If the person is employed then you might be able to collect the judgment by filing a garnishment of their wages. A garnishment action is a separate lawsuit that requires you to purchase another summons. Even if the person is employed there are several exemptions that may prevent you from garnishing his/her wages. If the ex-tenant's houshold income is below the federal poverty line then they are exempt from garnishment. If the ex-tenant is receiving any state-based aid then their wages are exempt. 80% of a debtor's disposable earnings are exempt from garnishment, leaving only 20% that can be garnished at one time. If your ex-tenant is currently being garnished by another creditor you will have to wait in line until that garnishment is completed -- garnishments last for 13 weeks. If your ex-tenant is self-employed you can bet that they will not voluntarily garnish their own wages - so that option will be closed to you. If the debtor is paying child support for one child (typically 17% of their gross wages) there will not be much money left over for you to garnish. If the ex-tenant is paying child support for 2 children (typically 25% of their gross wages) there will be no money left for you to garnish. You will be forced to wait until these children reach the age of 18 or the child support orders are terminated. Even if you are fortunate enough to be able to garnish your ex-tenant's wages, if that individual should decide to leave their job or get fired, your garnishment will end.

Keep in mind that you are not allowed to intercept an individual's tax refund -- only the government can do that. If your ex-tenant is incarcerated s/he will not have any wages to garnish. If your ex-tenant has horrible credit already they will not care that you took another judgment against them.

You can also garnish a person's bank account. However, there are many exemptions that can apply here as well. For instance, the first $1,000 in the account is exempt from garnishment. Most tenant's that I have rented to do not have more than $1K in the bank. Any money in the account that is derived from government benefits is also exempt. If the garnishment exemptions do not apply, and you are lucky enough to be able to go forward, make sure that you do not make the mistake of serving the debtor before you serve the bank so that the debtor has time to drain his/her account.

If you do not possess the necessary information to evaluate whether or not a person is "collectible," you are able to serve the debtor with what is referred to as a Financial Disclosure Statement. This is a document that is signed by a judge or court commissioner and requires a debtor to divulge any assets, jobs, and bank accounts. The debtor rarely returns this document and therefore the landlord in once again placed in the position of deciding whether or not s/he should spend more time, energy and money to compel the debtor to provide the information.

4. Is there a chance that the ex-tenant may end up purchasing real estate in the future?

If you think there is a possibility that your ex-tenant will purchase a home within the next 10 years then it may be worth it to at least take a judgment against them and then docket the judgment. Docketing a judgment is very simple and only costs $5. By docketing a judgment a lien will be placed on any property owned by the debtor or acquired by the debtor within the next 10 years in the county in which it was docketed. The judgment will also accumulate interest at the rate of 12% per year. Because of this some landlords will choose to sue the tenant, obtain a judgment, docket the judgment, and then just sit and wait.

If you are stuck in a position where it just doesn't make sense to sue your ex-tenant because the amount owed is too little or the tenant is not collectible you should consider a new service offerred by Rent Recovery Service. For a small fee, Rent Recovery Service will report your ex-tenant's debt to the 3 credit bureas even if you do not have a judgment. By using RRS you will at the very least create havoc with the debtor's credit and will also alert any future landlords (that are smart enough to run a credit report) that the tenant owes money to a prior landlord. Who knows, that could be enough of a push to make the tenant pay you what is owed. For more information on Rent Recovery Service please see my prior post.

The decision to sue an ex-tenant for past due rent and damages is not always an easy decision. A lot of information and knowledge needs to be sifted through to determine if it is worth your time, effort, and money to initiate a lawsuit. I would enjoy hearing what other factors you consider when making this important decision -- please let me know by posting a comment.

COURT OF APPEALS SAYS TENANT NOT LIABLE FOR FIRE DAMAGE

The court of appeals recently released its decision in the case of Maryland Arms Limited Partnership v. Connell. This decision has been reccomended for publication. The issue in this lawsuit was whether the landlord or the tenant should be liable for damage to an apartment unit when the damage was not caused by the negligence of either the landlord or tenant. The Court of Appeals held that it is the Landlord that should be held liable in such a situation. As such the case will now stand for the proposition that a tenant cannot be held liable for his/her actions that damage the property unless the damage is caused by the tenant's negligence

The facts were as follows and were not disputed by either the tenant or the landlord:

- A fire occurred in the tenant's apartment and caused $8,000 worth of damages while the tenant was asleep.

- The fire started from a hair dryer owned by the tenant which was plugged into the elctrical outlet.

- The tenant did not know that the hair dryer was deffective when it was left plugged into the electrical outlet.

- The tenant and the landlord both agreed that the tenant was not negligent in causing the fire as she had no indication that anything was wrong with the hair dryer when she left it plugged into the outlet.

The rental agreement that was signed by both the tenant and landlord included the following language:

"Lessee shall be responsible for all intentional and negligent acts or breaches of thie Lease by the Lessee, Lessee's occupants, guests, or invitiees. Lessee shall be liable for all damage to the premises and appliances and equipment belonging thereto, in any way caused by the acts of Lesee, Lessee's occupants, guests and invitiees."

As a result of the above language the trial court (Judge Michael Brennan of Milwaukee County) granted judgment for the landlord and against the tenant.

A majority of the Court of Appeals (the court was divided as one judge dissented) reversed the trial court's ruling and remanded the case back to the trial court directling it to enter judgement against the landlord.

In essence the Court of Appeals voided the lease language that is underlined above becasue it felt that the lease provision was contrary to the Wisconsin Statutes governing Landlord Tenant Law - specifically sec. 704.07, Wis. Stats.

Sec. 704.07 states that a landlord is required to make repairs to the property unless the repairs were made necessary by the negligence of the tenant. Sec. 704.07 also states that a tenant must repair damage if it is the result of the tenant's negligence.

The Court of Appeals did admit that sec. 704.07 does not specifically address the issue of who should be responsible in a situation where the damage was not caused by the negligence of either the landlord or the tenant. The logical outcome should then be to look to the rental agreement and determine what the parties agreed to in such a situation. If that was done then the tenant would be liable for the cost of the fire damage repair.

Instead the Court of Appeals held that the only logical conclusion that one should come to after reading the statute is that it is the landlord's responsibility to pay for the damage because the damage was not caused by the tenant's negligence.

This is just another example of the courts going out of their way to protect the tenant at all expenses. It seems as if the Court decided the outcome that they wanted and then did whatever was possible to piece together an argument to support that outcome rather then following and applying the law as written and then arriving at the outcome. I'm assuming the landlord had insurance and the Court felt that as such the landlord would be better able to handle the repair costs.

Landlords already have statutes and administrative code regulations that tell them what they can and cannot include in their rental agreements. Now we have a case that essentially says that even if a statute or regulation doesn't prevent you from including certain language in your rental agreement, if we (the Court of Appeals) don't like the provision that was included in then we will find a way to make it void and unenforceable.

The only voice of reason appears to be in the dissent which is authored by Judge Ralph Adam Fine -- who by the way was once a member of my law firm Petrie & Stocking S.C. (we only hire the smartest and brightest ; ) -- who concluded that while the landlord would have a duty to repair the fire damage there is nothing in the statute that requires the landlord to be responsible for the cost of the repairs in the end especially when the parties agrees differently in the rental agreement.

It is yet unknown if the landlord will appeal this decision to the Supreme Court of Wisconsin or even if it did whether or not the "supremes" whould agree to hear the case. So it appears as if for now at least we have precedent in this case that is not very favorable to landlords.

What are your thoughts on this decision?