SMALL CLAIMS BENCH/BAR MEETING: Milwaukee County Gives Clarification Regarding Including Late Fees In 5 Day Notices and Other Issues
The Milwaukee County Small Claims court has reinstituted its monthly Bench/Bar meetings. These meetings allow the Milwaukee County Small Claims Court, including Judge Jane Carroll (presiding small claims judge) and the court commissioners, to come together with attorneys that appear regularly in small claims court, to discuss issues and concerns.
The most recent small claims bench/bar meeting was held on Monday, December 6, 2010. I was able to attend the meeting and found it to be very insightful. The meeting was attended by attorneys for tenants (Legal Action of Wisconsin, Inc.), attorneys for landlords (myself and a few others), the attorney for the AASEW, court commissioners, small claims judge, and other court staff. The overall response to the meeting was very good and Judge Carroll indicated that another meeting would be scheduled in January.
It was very enlightening -- and helpful -- to hear everyone discuss issues of concern and to learn the thought process behind certain rules and procedures in small claims court.
For those of you that could not attend the meeting, I have attempted to provide a summary of the discussion, below:
- Judge Carroll explained that she felt that nothing was wrong with a landlord including a late fee in a 5 day notice as long as the tenant was under a lease for a term as opposed to a month to month or other periodic tenancy.
Back in March of 2009 or so, when Judge Siefert was still the small claims judge, evictions were being dismissed if the landlord included late fees in the 5 day notice which was served on the tenant. Here is a post on that topic that I previously wrote.
It was origianlly explained to me several months ago, that the reason for this new policy was that the court was now reading the statute very strictly, and sec. 704.17(1), Wis. Stats. (regarding notices in month to month situations and other periodic tenancies) and sec. 704.17(2), Wis. Stats. (regarding notices in leases for a specific term) said that a 5 day notice could be given to a tenant for failure to pay "rent." "Rent" was strictly interpreted to include rent -- not late fees, security deposit amounts not paid, damages owed etc.
The discussion on this issue at the bench/bar meeting clarified that the court considered a tenant's failure to pay a late fee to be a "breach of a covenant or condition of the tenant's agreement" rather than a failure to pay rent and therefore a landlord would need to use a different 5 day notice -- one for breach other than failure to pay rent -- as opposed to a 5 day notice for failure to pay rent, in that particular cotext.
Judge Carroll said that she saw no problem with a landlord combining the two notices, as long as the tenant was under a lease for term, thus allowing a landlord to include a late fee in a 5 day notice for failure to pay rent.
The combining of notices (to include a late fee and the past due rent amount) would NOT be allowed (and could result in the dismissal of an eviction) if the tenant was under a periodic tenancy, such as a month to month tenancy. The reason for this distinction is that the Wisconsin Statutes do not allow a landlord to serve a tenant with a 5 day notice for the breach of lease for other than non-payment of rent. If there is a breach of the lease for anything other than the non-payment of rent, in a month to month or other periodic tenancy, the Wisconsin Statutes require that a 14 day notice be used.
The court further explained that if a tenant was under a month to month or other periodic tenancy, that a landlord could combine the notices (failure to pay rent and breach of agreement other than failure to pay rent) into a 14 day notice if the landlord wanted to include a late fee along with the rent owed. It should be noted however that 14 day notices do not allow a tenant the opportunity to cure the breach.
If this sounds confusing to you, you are not alone -- IT IS CONFUSING!! This is an example of the minutia of the law.
A quick summary:
1. It is OK to include a late fee in a 5 day notice for failure to pay rent as long as the tenant is under a lease for term (as opposed to a periodic tenancy like a month to month).
2. It is NOT OK to include a late fee in a 5 day notice for failure to pay rent if the tenant is a month to month tenant. In that case the 5 day can only list rent owed OR the landlord should use a 14 day notice if the landlord wants to include a late fee.
Truthfully, I think the above will cause more confusion for landlords that are representing themselves (pro se) and for attorneys who do not specialize in landlord-tenant law. To keep things simple I am still going to reccomend that my Milwaukee County landlord clients not include late fees in their 5 day notices.
- Small claims court will NOT be splitting up the 2 pm (initial appearance on evictions) court calandar as it did last year.
Many of you may recall the attempt by the courts to reduce the amount of people sitting in room 400 during the flu season last year. The goal was to prevent people from spreading the flu and so the court split the eviction calandar in half and made some landlords appear at 2 pm and others appear at 3 pm.
If you were a landord or attorney with multiple properties having multiple owners (some with names in the beginning of the alphabet and some toward the end of the alphabet), this often met you were stuck in small claims court even longer than usual. Even with the splitting of the court's calandar there were still a lot of people sitting in room 400 at one time - so I'm not sure that the transmission of the flu was really reduced. I was happy to learn that the court would be forgoing this splitting of the calandar this season.
- The court asked for everyone's thoughts regarding requiring a landlord to provide written notice to a tenant that defaults on a stipulated dismissal, in all circumstances.
Currently, if a tenant enters into a stipulated dismissal of an eviction action and agrees to either vacate by a date certain or remain in the unit and pay past due rent under a payment plan, and the tenant defaults on the stipulation, a landlord may come to court and file an Affidavit of Default and obtain a judgment of eviction and a writ of restitution WITHOUT having to provide the tenant with any notice.
Under a slightly different scenario, it is the policy of small claims court currently, that if the tenant enters into such a stipulated dismissal outside of court (i.e. signs the stipulation at the office of the landlord) and therefore neither the court nor the landlord's attorney explains the stipulation to the tenant, and should the tenant default, the landlord MUST provide written notice to the tenant of the default and provide the tenant with the date and time that the landlord will be coming to court to request the judgment of eviction and writ.
Judge Carroll expressed concern that some of these stipulations, notably those that involve payments that will occur several months into the future, should possibly require written notice to the tenant. Judge Carroll indicated that in some of the stipulated dismissals that she approves in her court (as opposed to those approved by the court commissioners in room 400) she requires the landlord to provide written notice to the tenant of the default, if the default occurs 5 months or more after the stipulation was entered into. Judge Carroll's concern was that some tenants would default on the stipulation and think they were working things out with the landlord to remedy the default, only to be surprised when the Sheriff was at the door ready to evict the tenant, thus leaving the tenant little time to move.
Many suggestions and opinions were offerred during the discussion. I indicated that requiring another level of notice to the tenant would just cause further delay to the landlord in getting possession of his/her rental property and would allow the tenant another opportunity to argue that they didnt receive the "notice" and therefore should have additional time to vacate. One suggestion was to require landlords to send a letter via regular U.S. mail to the tenant within 48 hours after going into court to file the Affidavit of Default and obtaining the eviction judgment and the writ. Another suggestion was to require such notice only in situations in which the landlord and tenant modified (orally or in writing) the terms of the stipulated dismissal. Yet another suggestion was to require such a notice only when the default occurred X number of months after the stipulation was entered into.
No decision was made to modfify the notice requirements in defaults of stipulated dismissals but the court appreciated everyone's thoughts and input and indicated that the topic may be addressed again in the future.
- Judge Carroll expressed concern with "proving up" modifications to stipulated dismissals or other agreements.
Judge Carroll indicated that she has witnessed many instances in which a landlord, who has already received a judgment of eviction and a writ, would then attempt to work with a tenant so that they could remain in the unit, rather than executing that writ with the Sheriff. Nothing is wrong with attempting to work to keep the tenant in the unit in, Judge Carroll explained,but what is a problemis that these agreements are not being put in writing. To avoid confusion, and possibly additional litigation, she emphasized that any agreement resulting from such negotiations should ber put in writing. Modifications to previosuly enetered into agreements are not being put in writing and this is resulting in the Court seeing a lot of "he said, she said" sitautions.
The practical effect of failing to memorialize such agreements or modifications often results in the scenario below:
At some point in time the landlord decides to stop working with the tenant to keep them in the rental unit, and tenders the writ to the Sheriff. The Sheriff gives the tenant a 24 hour notice before executing the writ which causes the tenant to run into court and file a motion to reopen the judgment of eviction. The tenant argues that while a writ was granted to the landlord, since that time the landlord began to work with the tenant to allow them to remain in the unit. The landlord told the tenant that they could stay if they did X and Y (or at least that is what the tenant "heard") and the tenant has done X and Y, so the landlord should not be allowed to have the writ executed becasue of the new agreement. The court then schedules a hearing on the tenant's motion to reopen the eviction judgment -- which results in a stay of the execution of the writ. The landlord now has to appear in court again and both the tenant and the landlord have differernt versions of their discussions and the court has to sort through all of this -- with nothing in writing to support either side's argument.
The court understands that landlords would often like keep a tenant if possible, and that is the reason for a landlord attempting to "work with" a tenant even after a writ has been obtained. But as Judge Carroll pointed out, because these modification are not put in writing there is often disagreements as to what was agreed to between the parties.
My thoughts on this issue are simple: (1) If you have a writ, execute it and remove the tenant from your rental property -- the time for trying to work with the tenant so that they can remain in the unit is long past if you have filed an eviction action against them, in my opinion, or (2) if you still want to work with the tenant so that they can remain in the unit at this late date ----- put the agreement in writing, using clear and simple terms tht the tenant, the landlord, and the court, can understand and interpret.
