MILWAUKEE CO. TO REQUIRE LLCs TO BE REPRESENTED BY AN ATTORNEY
It has recently come to my attention that Milwaukee County small claims court will soon prohibit anyone other than a lawyer from representing an LLC. This would mean a landlord who owns his rental property in an LLC could no longer appear in court to pursue an eviction case against a tenant. In my opinion, this is a change from how things have operated in the past and also different from what the law says.
For those crafty landlords reading this who think that they will be able to circumvent this roadblock by merely filing the lawsuit in their individual names rather than in the name of the LLC that actually owns the property, you may want to read my earlier post entitled WHO MAY BRING AN EVICTION LAWSUIT.
For background, Wisconsin corporations have been required to appear in large claims court through an attorney since 1997 (Jadair Inc. v. U.S. Fire Insurance Co., 209 Wis.2d 187, 562 N.W.2d 401 (1997)). To date, no case or statute specifically requires an LLC to be represented by an attorney in large claims court, although the reasoning for why only an attorney can appear on behalf of a corporation can easily apply to an LLC as well.
Small claims court has been much different than large claims court, however. In small claims court, landlords can appear on behalf of their LLC because of §799.06(2), Wis. Stats. In essence, the law says that as long as you are a full-time employee of the LLC, or a member of the LLC yourself, you can represent the LLC in small claims court. While the statute prohibited most management companies from appearing in court for an LLC (since most management company employees are not full-time members of the LLC that owns the property but rather full-time employees of the management company that has been hired to manage many properties owned by various LLCs), at least the smaller landlord who owned and operated his/her own rental property could appear in court.
Apparently, this will no longer be allowed, as a friend of mine told me that, just this week, a Milwaukee County court commissioner warned him that Milwaukee is preparing to require LLCs to appear in small claims court only through attorneys. Obviously, this will put a financial strain on many smaller landlords who don't have the resources to retain a lawyer to represent their LLC every time they need to evict a tenant.
03/23/15 - UPDATE -- As a result of Act 76 (effective 3-1-14), LLCs no longer need to be represented by Attorneys.
