Landlords Sue City of Milwaukee To Stop Residential Rental Certificate Ordinance

On December 29, 2009, three landlords filed a lawsuit against the city of Milwaukee in an attempt to stop the new Residential Rental Certificate Ordinance that was recently passed.

The lawsuit includes a complaint, motion for temporary injunction, ex parte motion for temporary restraining order (TRO) and supporting affidavits. Essentially, the plaintiffs are arguing that the ordinance as written is (1) unconstitutionally vague, (2) contains fatal defects, (3) fails to provide for an impartial review and (4)interferes with their constitutional right to contract with their tenants.

I would suggest that you read the entire lawsuit but I will attempt to summarize the plaintiffs' main arguments.

1. 1st claim: The ordinance is unconstitutionally vague

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

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

2. 2nd claim: The ordinance contains fatal defects

Basically this argument states that the ordinance as written contains terms which are unclear, have no definition, and fail to set forth clear standards for which a rental certificate will be granted. Additionally it is argued that the ordinance gives the DNS Commissioner and his inspectors the arbitrary power to grant, deny or revoke a rental certificate without providing specific standards as to how that discretion should be used.

The plaintiffs provide 9 examples within the ordinance where significant terms are not defined or are unclear. Essentially their argument is that the standard as to what will casue the issuance of a rental certificate is a subjective standard contained only in the minds of the Commissioner and his inspectors (and essentailly that the subjective standard will most likely vary from one inspector to the next). This argument also focuses on the fact that the ordinance allows for the DNS Commissioenr to draft rules or regulations which have not been made a part of the ordinance. This means that the Commissioner could change the rules at any time and without providing owners prior notice of the changes. The rules and regulations are not required to be made publicly available since they are not contained in the ordinance itself.

3. 3rd claim: Failure to provide impartial review

Under the ordinance as written if a landlord does not agree with the decision rendered by the city inspector, the landlord can appeal that decision to the Commissioner of DNS -- the employer of the inspector that made the intial decision. The plaintiffs argue that as written the ordinance allows the individual and agency that made the unwritten rules for inspection and then subjectively applied those rules, to also act as the decision-maker for the review of any contested determination. Wisconsin Statutes Sec. 68.11(2) require that all municipalities provide an "imparital decision-maker . . . who did not participate in making or reviewing the initial determination" to preside over any review.

4. 4th claim: Interference with the constitutional right to contract

According to the ordinance, all rental units within the two designated areas will be required to have a rental certificate in place (if there is a tenant residing in the unit) as of January 1st, 2010 --- Friday. If no certificate is in place by 1/1/10 then the owner of the rental will be in violation of the ordinance as written. The argument made by the plaintiffs is that since the ordinance does not provide for the rental certificates to be issued until after an inspection takes place (which will be at least 30 days after 1/1/10) that landlords will be forced to terminate the tenancies of their tenants or else be in violation of the ordinance. By being forced to issue a termination notice to their tenants, the plaintiffs argue that the city isinterfering with the landlords and tenants rental agreement - and by doing so they are interfering with a landlords right to enter into a contract with his/her tenant.

The plaintiffs are asking that the court to temporarily enjoin the city from enforcing the residentail rental certificate ordinance. They are also asking the court to issue an order declaring that the ordinance is invalid. Finally the plaintiffs are asking the court to permanatly enjoin the city from enforcing the ordinance.

This lawsuit has been tabbed to Judge Timothy Witkowiak.

A hearing on the plaintiff's motion for a temporary restraining order was held earlier today before Judge Timothy Dugan. Judge Dugan denied the landlords' motion for a TRO without reaching the underlying problems with the ordinance. One of the requirements in order to be granted a TRO is that some "irreperable harm" must be demonstrated. Judge Dugan felt that becasue no landlord has been issued a citation by the city and because the city has not tried to remove any tenant from the plaintiff's' rental units, as of yet, that the plaintiffs failed to demonstrate any irreperable harm."