ACT 76 - Wisconsin's New Landlord-Tenant Law - Part 2: Restrictions on Local Ordinances

As I mentioned in Part 1, the soon to be new law contains new provisions as well as some corrective provisions (which will correct unintended consequences from last year's new law Act 143). In this blog post I will talk about one of the new provisions of the law which will restrict a local municipality from creating and/or enforcing certain local ordinances.

The new law will creates sec. 66.0104(2)(c) and (d), Wis. Stats., which says that a municipality may not enact or enforce an ordinance that:

a. Limits a residential tenant’s responsibility, or a residential landlord’s right to recover for damage, waste or neglect of the premises, or for any other costs, expenses, fees payments or damages for which tenant is responsible under law or under the rental agreement.

b. Requires a landlord to communicate to a tenant any information that is not required to be communicated under federal or state law.

i.e. City of Madison’s ordinance that requires landlords to distribute voter registration information to new tenants will not be enforceable under this new law.

c. That requires a landlord to communicate to a municipality any information regarding the landlord or tenant unless:

(1) Information is required under federal or state law.

(2) Information is required of all residential real estate owners (not just landlords!)

(3) Information will enable a person to contact the owner, or agent of the owner.

Note: This subsection does not apply to an ordinance that has a reasonable and clearly defined objective of regulating the manufacture of illegal narcotics.

So what will the net effect of this new provision of the law curtailing local municipalities from enacting and enforcing certain ordinances? According to one tenant advocate SB 179 will eliminate over 20 Madison ordinances. SB 179 should also eliminate Milwaukee’s Residential Rental Inspection (RRI) pilot project in the UW-M and Lindsay Heights neighborhoods.

It should be noted however that the new law will not eliminate "rental recording" in various municipalities as earlier versions of SB 179 had. Under the final version of the law, landlords will still have to provide their ownership and contact information to the municiaplity since doing so would fall under the above exception since the information will enable a person to contact the owner or agent of the owner.

To learn more on the background and overview of Wisconsin's new Landlord-Tenant Law read my prior post.

Governor Walker To Sign Wisconsin's New Landlord-Tenant Law Next Week

I have recently learned that Governor Scott Walker will be signing Senate Bill 179 into law next week Thursday, December 12, 2013 at 8 AM in the Governor's Conference Room in Madison.

Senate Bill 179 will be signed along with a group of other bills starting at 8 AM that morning.

Those of us involved in the drafting of this bill are happy to see all of the hard work come to a close.

What most people want to know is if the Governor signs the bill into law on December 12th, when will the new law become effective?

All but one section of the new law will become effective as of March 1, 2014 (the 3rd month after enactment). The section dealing with the towing of vehicles (sec. 349. Wis. Stats.) will become effective as of July 1, 2014 (the 7th month after enactiment) as the Department of Transportation will need to draft several regulations to flesh out the new towing laws.

ACT 76 - Wisconsin's New Landlord-Tenant Law - Part 1: Background and Overview

Senate Bill 179, which is commonly referred to as the "Landlord-Tenant Law Bill," is on its way to becoming law in the near future. For many of us it has been a long wait.

After initially being introduced in the Wisconsin Senante on May 8, 2013, the Senante concurred to some changes made to SB 179 by the Assembly on October 16, 2013. It is expected that Governor Walker will sign this bill into law prior to the end of the year.

The new law is 8 pages long and will make sweeping changes to Wisconsin's landlord-tenant laws as we currently know them. This new law will benefit landlords and "good" tenants. "Bad" tenants (i.e. those that don't pay rent on time, cause damage to the rental property, ignore the rights of their neighbors and fellow tenants etc. etc.) will not like this new law.

This new law was initially created to fix many of the unintended consequences from last year's Landlord's Omnibus law -- Act 143. Act 143 was unfortunately rushed through the legislative process in a little over a month. Rushed legislation is never good. As a result of the speed with which Act 143 was created, coupled with the fact that those of us that spend most of our days dealing with landlord-tenant issues were not consulted, there were some serious flaws in Act 143. SB 179 will repair those flaws.

Fortunately, SB 179 was not rushed like its predecessor. Work on SB 179 began even prior to Act 143 becoming law -- once the problems were recognized. Many of us involved in the process worked on SB 179 since April of 2013. SB 179 was officially introduced in the Senate on May 8, 2013, and as mentioned previosly, it was finalized in mid-October. So from start to finish it took approximately 6 months not including the time for the Governor to sign it.

I have been asked by many over the past few weeks, when will this new law become effective. Well, the answer to that depends in part on when the Governor signs it. SB 179 states that most componants of the new law will become effective on the 1st day of the 3rd month following its publication. So it would become effective February 1, 2014 or March 1, 2014 depending on when it is signed into law.

By my count, the new law repaired/corrected 6 sections of Act 143 and introduced or amended an additional 13 other sections that will affectlandlord-tenant law in Wisconsin.

In future blog posts during I will summarize and discuss all 19 componants of the new law.

Why I Am So Excited About This Saturday's AASEW Landlord Boot Camp

I am really excited about this Saturday's AASEW Landlord Boot Camp. Why you ask? Well let me tell you.

Just last week the Senate in Madison passed SB 179 which is a very large and sweeping revision to much of landlord-tenant law in Wisconsin. This bill not only cleans up the unintended consequences of last years Act 143, it also makes some major changes such as:

- Applies the new streamlined abandoned property law to evictions

- Allows the towing of vehicles on private property without the need for a citation to be issued first

- Prevents municipalities from requiring landlords to distribute information or report information to the government that is not required by state or federal law

- Allows non-lawyers to appear in court to represent their LLC's in eviction and other small claims actions

- It speeds up the eviction process - requiring the court to hear and complete an eviction trial within 20 days of the return date

- Allows property management companies or another agent of the owner to file evictions on behalf of their clients/owners

- Clears up the confusion regarding evicting a tenant that was involved in criminal activity

This bill has not yet been signed into law, but barring a veto from Governor Walker -- which is not anticipated -- it will become law very soon. SB 179 will help landlords and good law-abiding tenants alike.

So the reason I am so excited about this Saturday's Boot Camp is because it will be the 1st opportunity I have to teach landlords and property managers about the new changes.

SB 179 is a very comprehensive law. I just completed my outline this past weekend and boy there is a lot of information to cover.

If you are interested in learning about this new bill as well as the 7 other large topics that I will be teaching (including: the judicial eviction process, causes for eviction, security deposit issues, screening applicants, rental documents and much much more) at this Fall's Boot Camp -- please go to www.landlordbootcamp2013.com and sign up as there are still a few spots left!

I hope to see many of you there.

T

SB 179 ("Landlord-Tenant Bill") Is On It's Way To Governor Walker To Be Signed Into Law

At about 6:40 pm on October 16, 2013, SB 179 (commonly referred to as the Landlord-Tenant Bill) was concurred by the state Senate after a minor amendment was made in the state Assembly earlier. The bill passed 18-15 despite attempts to delay the bill via a motion to non-concur. The bill now goes to the Governor who has 30 days to "call" for the bill and sign it.

If you would like to watch the hearing you can do so by clicking here. The portion of the hearing dealing with SB 179 starts at approximately 2:58.

This bill which will hopefully become law -- absent a veto by the Governor -- will makes some major changes to Wisconsin Landlord Tenant law and the small claims eviction procedure. It also cleans up several of the unintended consequences of Act 143, which also dealt with landlord-tenant law, which became law back on March 31, 2012.

I will be devoting a segment of the AASEW's upcoming Landlord Boot Camp on October 26, 2013, to discussing SB 179 and its effect on the landlord-tenant landscape. For more information on the upcoming Boot Camp, including a summary of other topics that will be covered, prior attendees' testimonials, and how to register to attend, please go to www.LandlordBootCamp2013.com.

Assuming the Governor signs SB 179 into law, I will most likley be posting on this topic again in the near future and offerring my own analysis of the law, but for now I have reproduced for the Wisconsin Legislative Council's October 14, 2013 memo which summarizes current law in Wisconsin and then summarizes how SB 179 will affect/change current law.

This memorandum describes Senate Substitute Amendment 1 to 2013 Senate Bill 179, as amended by Senate Amendments 17 and 18, relating to landlord-tenant law, small claims actions, and towing of vehicles. In addition, this Memo describes Assembly Amendment 1 to 2013 Senate Bill 179, as passed by the Senate. The section numbers in brackets refer to the sections of Senate Bill 179 that are described under each heading, below.

RESTRICTIONS ON LOCAL ORDINANCES [Sections 1-4]

Under current law, a city, village, town, or county (municipality) is prohibited from enacting or enforcing certain ordinances relating to landlords and tenants, such as an ordinance imposing a moratorium on eviction actions or an ordinance that places certain limitations on what information a landlord may obtain and use concerning a prospective tenant. [ss. 66.0104 and 66.1010, Stats.]

Senate Bill 179 additionally prohibits a municipality from enacting or enforcing an ordinance that does any of the following:

• Limits a tenant’s responsibility, or a landlord’s right to recover, for any damage or waste to, or neglect of, the premises that occurs during the tenant’s occupancy of the premises.
• Limits a tenant’s responsibility or a landlord’s right to recover for any other costs, expenses, fees, payments, or damages for which the tenant is responsible under the rental agreement or applicable law.
• Requires a landlord to communicate to tenants any information that is not required to be communicated to tenants under federal or state law.
• Requires a landlord to communicate to the municipality any information concerning the landlord unless the information is required under federal or state law or is required of all residential real property owners.

Senate Substitute Amendment 1 authorizes a municipality to enact or enforce an ordinance that requires a landlord to communicate to the municipality any information concerning the landlord ifthe information is solely information that will enable a person to contact the owner or, at the option of the owner, an agent of the owner.

Senate Amendment 17 to Senate Substitute Amendment 1 authorizes a municipality to enact or create an ordinance that requires a landlord to communicate information to tenants that is not required to be communicated to tenants under federal or state law if the ordinance has a reasonable and clearly defined objective of regulating the manufacture of illegal narcotics.

Assembly Amendment 1 to Senate Bill 179, as passed by the Senate (i.e., as amended by Senate Substitute Amendment 1 and Senate Amendments 17 and 18) modifies the provision described above that generally prohibits a municipality from enacting or enforcing an ordinance requiring a landlord to communicate to the municipality any information concerning the landlord, unless an exception applies. Assembly Amendment 1 provides that the general prohibition relates to communication to the municipality of any information concerning the landlord or a tenant, unless an exception applies.

NOTIFICATION TO A PROSPECTIVE TENANT OF BUILDING CODE OR HOUSING CODE VIOLATIONS [Section 11]

Under current law, if a landlord has actual knowledgeof any uncorrected building code or housing code violation in the dwelling unit or a common area that presents a significant threat to the prospective tenant’s health or safety, the landlord must disclose the violation to a prospective tenant before entering into a rental agreement or accepting any earnest money or security deposit. [s. 704.07 (2) (bm), Stats.]

Under Senate Bill 179, the landlord must disclose the types of violations described above only if he or she has received written notice of the violation from a local housing code enforcement agency.

Senate Substitute Amendment 1 deletes this provision from the bill.

COMMISSION OF CRIMES ON RENTAL PROPERTY [Section 18]

Under current law, if a lease contains any of a list of prohibited provisions, the lease is void and unenforceable. Among the prohibited provisions is a provision that allows the landlord to terminate the tenancy of a tenant if a crime is committed in or on the rental property, even if the tenant could not reasonably have prevented the crime. [s. 704.44 (9), Stats.]

Senate Bill 179 repeals the provision of current law describe above.

Senate Substitute Amendment 1 replaces the current law provision described above with a provision that states that the lease is void and unenforceable if it contains a provision that allows the landlord to terminate a tenancy of a tenant based solely on the commission of a crime in or on the rental property, if the tenant, or someone who lawfully resides with the tenant, is the victim of that crime. Victim is defined by reference to s. 950.02 (4), which generally provides that “victim” means a person against whom a crime has been committed, unless he or she is the person charged with or alleged to have committed the crime.

In addition, the substitute amendment requires a lease to include a specified notice, in the lease agreement or an addendum to the lease agreement, of certain domestic abuse protections available under ss. 106.50 (5m) (dm) and 704.16, Stats. The first of these sections prohibits a landlord from evicting a tenant because of the tenant’s status as a victim of domestic abuse, sexual assault, or stalking. The second of these sections provides that a residential tenant may terminate his or her tenancy if the tenant or a child of the tenant faces an imminent threat of serious physical harm from another person if the tenant remains on the premises.

The substitute amendment also provides that a lease is void and unenforceable if it allows the landlord to terminate the tenancy of a tenant for criminal activity in relation to the property and the lease does not include the notice regarding domestic abuse protections described above.

Senate Amendment 18 to Senate Substitute Amendment 1 modifies the language required under the notice of domestic abuse protections. Under Senate Amendment 18, the notice provides that a tenant has a defense to an eviction action under the circumstances provided in s. 106.50 (5m) (dm), Stats., instead of providing that a tenant may be able to stop an eviction action under such circumstances.

TERMINATION OF TENANCY IN MOBILE OR MANUFACTURED HOME COMMUNITIES FOR THREAT OF SERIOUS HARM [No provision in Bill]

Under current law, a landlord may terminate the tenancy of a tenant if the tenant commits one or more acts, including verbal threats, that cause another tenant, or a child of that other tenant, who occupies a dwelling unit in the same single-family rental unit, multi-unit dwelling, or apartment complex as the offending tenant, to face an imminent threat of serious physical harm from the offending tenant if the offending tenant remains on the premises. [s. 704.16 (3), Stats.]

Senate Substitute Amendment 1 authorizes a landlord to terminate the tenancy of the tenant of a mobile or manufactured home community who threatens another tenant, or child of another tenant, of the mobile or manufactured home community under the same circumstances, described above.

TIMING OF RETURN OF SECURITY DEPOSIT [Section 15 and 16]

Under current law, if a tenant is evicted, a landlord must return the security deposit to the tenant, less any amounts that are appropriately withheld, within 21 days after the date on which the writ of restitution is executed or the date on which the landlord learns that the tenant has vacated the premises, whichever occurs first. [s. 704.28 (4) (d), Stats.]

Under Senate Bill 179, if a tenant is evicted, the landlord must return the security deposit to the tenant within 21 days after the date on which the tenant’s rental agreement terminates or, if the landlord rerents the premises before the tenant's rental agreement terminates, the date on which the new tenant’s tenancy begins.

Senate Substitute Amendment 1 provides that the timing of the return of the security deposit depends on whether the tenant is evicted before or after the termination date of the lease. If the tenant is evicted before that date, the landlord must return the security deposit within 21 days after the lease terminates or, if the landlord re-rents the premises before that day, the date on which the new tenant’s tenancy begins. If the tenant is evicted after the termination date, the landlord must return the security deposit within 21 days after the date on which the landlord learns that the tenant has vacated the premises or the date the tenant is removed by eviction.

SERVICE OF SUMMONS IN EVICTION ACTION [Section 22]

Under current law, under most circumstances, the summons in an eviction action must be personally served upon the defendant (the tenant), unless this cannot be achieved with “reasonable diligence.” In this case, the summons may be served by leaving a copy of the summons at the defendant’s usual place of abode in the presence of either: (1) a competent member of the family who is at least 14 years old; or (2) a competent adult who resides in the abode of the defendant. The person serving the summons must inform the family member or other person of the contents of the summons. [s. 801.11 (1) (b), Stats.]

Under Senate Bill 179, a court may, by rule, authorize the summons in an eviction to be served by regular mail.

Senate Substitute Amendment 1 provides that use of certified mail shall be required for all eviction cases for which service by mail is authorized by a court.

TIMING OF APPEARANCE AND TRIAL IN EVICTION ACTIONS [Sections 20, 23 and 24]

Under current law, the summons in an eviction action specifies the date that the defendant must appear in court. That appearance date must be set at not less than five days or more than 30 days after the summons is issued. [s. 799.05 (3) (b), Stats.] Also, the court generally sets the matter for a trial or hearing when the tenant makes the initial appearance. Current law does not specify the required timing of the trial or hearing. [s. 799.20 (4) and 799.206 (3), Stats.]

Senate Bill 179 changes the appearance date to not less than five days or more than 14 days after the summons is issued. The bill also specifies that the trial or hearing must be scheduled within 20 days after the date of appearance.

Senate Substitute Amendment 1 changes the appearance date to not less than five days or more than 25 days after the summons is issued. The substitute amendment also specifies that a trial or hearing on the issue of possession of the premises involved in the action must be held and completed within 30 days after the date of appearance, and provides that this provision applies only to residential tenancies.

WHO MAY APPEAR IN SMALL CLAIMS ACTIONS [Section 21]

Under current law, in any small claims action, a person may commence and prosecute or defend an action or proceeding himself or herself, or by an attorney or a full-time authorized employee of the person. [s. 799.06 (2), Stats.]

Senate Bill 179 eliminates the requirement that the employee be a full-time employee and also allows any small claims action by a member of the person, an agent of the member or an authorized employee of the agent. This provision applies to all small claims actions, not only evictions.

Senate Substitute Amendment 1 clarifies that “member”means a member as defined in s. 183.0102 (15), Stats.:

“Member” means a person who has been admitted to membership in a limited liability company as provided in s. 183.0801 and who has not dissociated from the limited liability company.

DISPOSITION OF PROPERTY LEFT ON RENTAL PREMISES AFTER EVICTION [Sections 9, 10 and 29-46]

Under current law, if a tenant leaves property of value on the rental premises after he or she has been evicted, the property must be removed and stored. The evicted tenant is notified of the location of the property and provided with the receipt needed to obtain possession of the property. The evicted tenant is responsible for the costs of storage. In Milwaukee County, the sheriff must remove and store the property. In all other counties, the landlord may choose to be responsible for the removal and storage of the property. If the landlord does not choose to remove and store the property, the sheriff must do so. [s. 799.45 (3), Stats.]

Under Senate Bill 179, if a tenant is evicted and leaves property on the rental premises, the landlord is not required to store the property unless the landlord and tenant have entered into a written agreement which provides otherwise. If the landlord does not intend to store personal property left behind by a tenant, the landlord must provide written notice either when the tenant enters into or renews the rental agreement, or at any other time before the tenant is evicted from the premises. If this notice is provided, the landlord may dispose of the property, other than prescription medicine or medical equipment, in any manner that the landlord determines is appropriate.

Senate Substitute Amendment 1 deletes the bill provision that authorizes a landlord to provide the notice described “at any time before the tenant is evicted,” and provides that any notice that is provided must be provided either when the tenant enters into or renews the rental agreement.

TOWING OF VEHICLES [Sections 5-8]

Under current law, a vehicle that is parked on a private parking lot or facility without the permission of the property owner may not be removed without the permission of the vehicle owner, unless a traffic or police officer issues a citation for illegal parking, or a repossession judgment is issued. If the vehicle is taken by a towing service to any location other than a public highway within one mile from the location in which the vehicle was improperly parked, the municipality or the traffic or police officer must, within 24 hours, provide the towing service with the name and last-known address of the registered owner and all lienholders of record. [s. 349.19 (3m) and (5) (c), Stats.]

Under Senate Bill 179, a vehicle that is parked without authorization on private property that is properly posted may be towed immediately regardless of whether a parking citation is issued. “Properly posted” means there is clearly visible notice that an area is private property and that vehicles that are not authorized to park in this area may be immediately removed. The vehicle may be removed by a towing service at the request of the property owner or property owner’s agent, a traffic officer, or a parking enforcer. A parking enforcer is a person who enforces nonmoving traffic violations and who is employed by a municipality, a county, or the state. Also, the bill requires the Department of Transportation (DOT) to promulgate rules establishing reasonable charges for removal and storage of vehicles under the provisions described above.

Under Senate Substitute Amendment 1, if a property owner has a vehicle towed under the provisions described above, the towing service must notify a local law enforcement agency of the make, model, and license plate of the vehicle and the location to which the vehicle will be towed. The law enforcement agency is required to maintain a record of the notice as well as the identification of the towing service. Also, the substitute amendment prohibits a towing service from removing a vehicle that has been reported to a law enforcement agency as stolen.

In addition, under the substitute amendment, if requested by the municipality in which the vehicle was illegally parked, the towing service must charge the vehicle owner a service fee not to exceed $35. The towing service must then remit the service fee to the municipality according to procedures specified in the statute.

The substitute amendment provides that the rules promulgated by DOT must establish the form, and manner of display, of the notice necessary to qualify as “properly posted” under the provisions described above, as well as guidelines for towing services to notify law enforcement of the removal of a vehicle.

AASEW's Landlord Boot Camp On October 26th To Address New Landlord Tenant Law Soon To Be Passed

Be the first on your block to learn about the new Landlord-Tenant law which is expected to be passed later this month!

The AASEW's popular Landlord Boot Camp will address the ins and outs of the new law (currently referred to as Senate Bill 179) on Saturday, October 26, 2013 from 8:30 am - 5:30 pm at the Clarion Hotel located near the airport. You will not want to miss this seminar.

Besides teching you about the new law, Attorney Tristan Pettit will also address numerous other of topics that will help you navigate Wisconsin's complex landlord - tenant laws. Learn how to run your properties with greater profit while staying out of trouble. 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.

Some of the other topics that will be covered include:

1) How to properly screen prospective tenants

2) How to draft written screening criteria to assist you in the tenant selection process

3) How to comply with both federal and state Fair Housing laws including how to comply 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 or judge from dismissing your eviction lawsuit

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)

There will also be time for "Q&A" and Lunch is included!

If that is not enough you will also receive a manual that is over 100 pages that includes all of Tristan's outlines on the various topics and various forms.

Who: Taught by Attorney Tristan Pettit, who drafts the landlord tenant forms for Wisconsin Legal Blank.

When: Saturday, October 26, 2013 from 8:30 AM – 5:30 PM ---- Registration opens at 7:00 AM

Where: Clarion Hotel 5311 S. Howell Avenue, Milwaukee [Map]

Price: AASEW Members only $159 . Non AASEW Members - $249 Sorry, no registrations accepted after 5 PM on October 23rd, 2013

Register: Go to www.LandlordBootCamp2013.com and you can register online and read prior attendees testimonials.

I hope to see everyone there.

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

5 Things This Landlords' Attorney Wants For Christmas

With the coming of the holidays, comes list of gifts that people want for Christmas. So I thought I would put together one of my own. So here is a list of the top 5 things that this landlords' lawyer would like for Christmas.

5. That Tenants' Requests For Reasonable Accommodations To Allow for the Keeping of Companion/Comfort Animals Would Actually Be "Reasonable"

The past few years -- and especially this past year -- have seen a large rise in requests by tenants for a reasonable accommodation to landlords' "no pet" or "limited pet" policies specifically to allow for the keeping of a companion/comfort animal. A companion/comfort animal does not need to be specially trained and therefore can be any type of animal including the family dog, cat, gunea pig, or even a miniature horse. A tenant can ask for a reasonable accommodation -- and it should be provided -- as long as the tenant has a disability (i.e. an individual with a physical or mental impairment that substantially limits one or more major life activities) and the accommodation request has a "nexus" to the tenant's disability and will allow them to more fully enjoy a major life activity.

However, somewhere along the line tenants seem to have forgotten about the word "reasonable" in "reasonable accommodations."

It is not reasonable in my opinion to need 5 kittens as companion animals (which were recently born to a landlord-approved pet cat) just because the tenant thinks the kittens are cute and does not want to get rid of the litter.

It is not reasonable in my opinion for a tenant to request a pit bull dog as a reasonable accommodation just because the tenant's relative recently lost their home to foreclosure and can't find a place for their pet "pitty" to live.

It is not reasonable to have to allow a miniature horse as a companion animal because the tenant does not want to have a dog instead because dogs do not live as long as horses do, and if the dog should die it would exacerbate the tenant's mental health issues. Whereas the miniature horse will outlive the tenant so her mental health will be unaffected. Who cares what happens to the miniature horse after the tenant passes.

4. That Tenants Who File Bankruptcy Be Required To Disclose To The Bankruptcy Court That They Are Renters and that the Bankruptcy Court Create A More Efficient Process For The Tenant To "Pay and Stay" or Vacate

If a tenant files for bankruptcy something called the "automatic stay" kicks in that prevents any creditors (yes, that includes landlords) from attempting to collect a debt or in the case of landlords - evict a tenant. Now, tenant/debtors are supposed to disclose in their bankruptcy schedules that they file with the court whether or not they have any "executory contracts or unexpired leases." Without fail, tenants and there bankruptcy attorneys always check the box saying that they have no executory contracts or unexpired leases. I have handled at least 30 of these situations for my landlord clients and not once has the tenant advised the court that they were under an unexpired lease.

A landlord is then required to pay a filing fee, file a motion to lift the automatic stay, wait 14 days for the tenant to object, and if so participate in a hearing before the court, to present evidence that the tenant isn't paying their rent and the landlord should be allowed to proceed to evict the tenant. This process can be expensive and time consuming for a landlord whose hands are legally bound from doing anything until the bankruptcy court says he can.

It would be nice if the court or the bankruptcy trustee would confirm whether or not the debtor is a tenant and whether or not they are up to date with rent and if not, determine if the tenant can get caught up so s/he can stay, or advise the tenant/debtor that they must vacate the landlord's property.

To require a landlord jump through all of these hoops in order to remove a non-paying tenant from his rental property is just another financial drain on landlords. A landlord will spend at least one month (if not more) trying to lift the stay in bankruptcy court. Once that is completed, he then needs to serve the tenant with the appropriate notice, and after that time has elapsed, pay more money to file the eviction, and then wait another 2 weeks or so until the initial appearance in eviction court. As you can see, this process can delay things at least 2 months. So I would like to expedite this somehow. Wishful thinking I know . . . but hey, this is my wish list : )

3. That Tenants Stop Using Jury Trial Demands To "Buy" More Time In Evictions

In my 17+ years of law practice I have probably encountered somewhere between 10-15 requests for a jury trial by a tenant that I am evicting. Not one of those cases have ever resulted in an actual jury being selected. Instead the demand is often made just because it will prolong the case. In Milwaukee County when a jury trial demand is made, the case is tabbed to a large claims judge who often has a very busy caseload and is unable to even get the case into court for a Scheduling Conference for 2 months. Oftentimes, a trial isn't scheduled for months after the Scheduling Conference. On the other hand if a jury trial is not made, the small claims judge in Milwaukee County can hear the eviction within a week in most cases.

I have had jury trial demands filed in failure to pay rent cases where the tenant has no legal defense. Tenant didn't pay rent, notice was properly served, tenant didn't pay past due rent within cure period, and an eviction lawsuit was field. Tenant doesn't deny any of it but wants a jury trial. Now my client gets to sit for months with a non-paying tenant before obtaining a judgement of eviction. And no, landlords rarely ever see those rent amounts from the tenant even if they obtain a money judgment against them later because many tenants are not collectible.

I have had jury trial demands filed in cases where the tenant is being evicted for engaging in criminal activity that is scaring (and at times injuring) fellow tenants and neighbors. Yet, with the jury demand having been made, the landlord, along with the law-abiding tenants and neighbors, have to deal with the scofflaw tenant for months, unless they by chance would get arrested.

The law needs to be changed in this regard. While jury trials are an important part of the judicial system this practice that I am seeing more and more of is clearly an abuse of the system. Perhaps requiring that all jury trials must be held within so many days of the initial appearance or in failure to pay rent cases requiring that all past due rent must be paid up and future rent continue to be paid or the tenant loses his/her right to the jury trial. Something needs to happen to stop this frivolous practice.

2. That All Courts Follow the Law with Regard To Granting "Stays" in Eviction Actions

Sec. 799.44(3), Wis. Stats., is very clear that before a court is allowed to "stay" a writ that the tenant must pay all rent and other charges due as well as any rent that will become due during the period of the "stay." This law is often ignored by the courts to landlords' detriment.

I understand that it is difficult to tell a tenant that you are ordering them to immediately vacate the rental property even when the cause of their non-payment of rent is due to no fault of their own - such as losing a job due to downsizing or health issues -- but that is what the law says. If it is a bad law (and I am not saying that it is) then it can and should be changed through the legislative process.

Let me put this in another context. A tenant that has lost their job or that has encountered a serious medical issue may also not have money to buy food for their family, but that doesn't mean that they are allowed to shoplift food from the grocery store. If they did that they would be arrested.

So why is a landlord required to provide housing for a tenant who's tenancy has been properly terminated and after all proper legal channels have been followed? What makes a landlord so special that s/he gets this special treatment that places them in a different category than any other creditor. Why is a landlord required to house the non-paying tenant to the landlord's financial detriment and risk their ability to continue to provide housing for their paying tenants. Again, for those non-landlords that may be reading this post, most tenants are not collectible, so saying that the landlord will be made whole when they obtain a money judgment against the tenant is not realistic.

1. That All Landlords Join a Landlord Association (such as the Apartment Association of Southeastern Wisconsin - AASEW)

There are more private landlords in Wisconsin than there are teachers but landlords' voices are not anywhere near as powerful as are teachers. The reason for this is that landlords are not organized. Landlords tend to be an independent type that enjoy being their own bosses. That is well and good but landlords need to set that independent spirit aside on occasion for the betterment of themselves and all landlords. Only when landlords unit can positive change occur for them as there is strength in numbers. It is very difficult to survive financially as a landlord these days. But by joining a landlord association, a landlord's life can become a little easier. First, through landlord associations, landlords can create a united voice to challenge bad legislation or champion new legislation. Secondly, landlord associations provide educational opportunities for their members on changes in the law so landlords can stay out of legal trouble. Third, there is camaraderie in joining a landlord association which allows members to rub elbows with other landlords may be facing, or have previously faced, the same struggles that you are having.

If all landlords joined a landlord association and became active in them, we have the money and the numbers to create change that would assist our industry.

____

Oh by the way Santa - if you cant give me any of my wishes on this list, I will settle for a new toy bike with red and white streamers dangling from the handlebars : )

Happy Holidays everyone!

Article on Landlord-Tenant Law Topped the List of WisBar InsideTrack's Most Read Articles of 2012

Milwaukee lawyer Tristan Pettit's article on landlord-tenant law topped the list of most-read articles from WisBar InsideTrack in 2012.

In the past year, WisBar InsideTrack received a number of timely and relevant article submissions from lawyers discussing legislative actions and judicial decisions, substantive legal issues, practice management, ethics, human interest and other developments.

On April 4, 2012, Attorney Tristan Pettit of Petrie & Stocking S.C. wrote an article entitled "Landlord-Tenant Law: Rights, Remedies, and Changes Under New Act 143" which discussed many of the changes in the new landlord-tenant law that took effect on March 31, 2012, including the disposal of abandoned property, severability of rental agreement provisions, acceptance of past due rent and much more.

Here is a link to the Dec. 19th issue of WisBar InsideTrack announcing its top 10 articles.

Here is a link to Tristan's article.

Milwaukee's Amended Smoke Alarm Ordinance To Take Effect June 1, 2013.

On November 8, 2012, Milwaukee's Common Council passed a revised smoke alarm ordinance by a vote of 13 to 2.

Effective June 1, 2013, all battery-operated smoke alarm must be powered by 10-year or more non-removable (sealed) batteries. Compliance with this requirement must be met when replacing any current battery operated smoke alarm after June 1st next year or by October 1, 2017 -- whichever is sooner. The AASEW was successful in getting the effective date of the revised ordinance delayed so as to allow landlords some additional time to use up their current supply of non-sealed smoke alarms.

The remainder of the ordinance which requires a "hush button" be present on the smoke alarm if it is located within 20 feet of the kitchen and the requirement of annual testing and recording of when the testing occurred and by whom, remained unchanged.

The Effects of "Obamacare" On The Small Landlord

There are so many questions regarding how the Patient Protection and Affordable Care Act, more commonly referred to as "Obamacare," will effect small businesses such as us in the rental housing industry. What is the truth?

AASEW Attorney Heiner Giese, a fellow landlord, has researched the law in depth and will be one of the speakers at the AASEW's upcoming monthly membership meeting on Monday, October 15th, where this issue will be discussed. To present an opposing view, former Democratic legislator and current lobbyist, Gary Goyke, will also be on hand.

This is a huge piece of legislation with equally large potential impact on all of us.

Attendance is free to current members of the AASEW and $25 per person for non-members. Your AASEW General Membership includes admission for all members of a single household. An AASEW Business Membership includes admission for all owners and employees of a single business.

Please join us this Monday.

WHEN: Monday, October 15, 2012 at 7 PM

WHERE: Best Western Midway, 1005 S. Moorland Road, Brookfield (just south of I-94)

COST: Free to AASEW members. $25 per person for non-members.

New Milwaukee Smoke Alarm Ordinance To Require Sealed Lithium Battery Units In Residential Rental Housing

The City of Milwaukee has introduced a change to the residential smoke alarm ordinance. If passed, the revised ordinance will require the use of sealed smoke alarm units with 10 year lithium batteries in all city residential rental housing. The proposed ordinance would require landlords to install the sealed unit when replacing a current removable-battery unit or by October 1, 2022, whichever occurs sooner.

In is unknown what the impetus behind the revised ordinance was but most likely it was the fact that tenants still continue to remove the battery from their smoke detectors to use for other things . . . like their kids toys. While the “hush button” requirement a few years ago partially alleviated tenants removing the battery when cooking, it still did not prevent tenants from removing the battery to power little Junior’s Talking Elmo.

The cost of the sealed unit will run approximately $13 more per unit than current smoke alarms. Those landlords in an effort to reduce costs who decided to buy smoke alarms in bulk now find themselves facing a huge loss as they will have difficulty using up their stockpile before the new ordinance requires replacement with the new sealed units.

The current ordinance states:

214-23. Battery-Operated Smoke Alarms.

Every battery-operated smoke alarm shall be

tested by the owner not less than once every

calendar year. The owner shall provide a copy of

test results to the commissioner or the

commissioner=s designee upon request. Test

results shall include the date on which testing was

performed and the name, telephone number and

property relationship of the person who performed

the test. Testing shall be performed in accordance

with the manufacturer=s specifications for testing.

By September 21, 2005, every owner shall take

the actions necessary to ensure that any smoke

alarm located within 20 feet of the primary cooking

appliance within the unit has a silencing switch

(hush button).

The proposed revised ordinance is below:

Part 1. Section 214-23 of the code is repealed and recreated to read:

214-23. Battery-Operated Smoke Alarms. 1. TYPE. Every battery-operated smoke alarm shall be powered by 10-year or more non-removable batteries. Compliance with this requirement shall be met when replacing an existing battery-operated unit according to the manufacturer's recommended replacement date or by October 1, 2022, whichever is sooner.

2. SILENCING SWITCH. Any smoke alarm located within 20 feet of the primary cooking appliance within the unit shall have a silencing switch.

3. TESTING. Every battery-operated smoke alarm shall be tested by the owner not less than once every calendar year. The owner shall provide a copy of test results to the commissioner or the commissioner's designee upon request. Test results shall include the date on which testing was performed and the name, telephone number and property relationship of the person who performed the test. Testing shall be performed in accordance with the manufacturer's specifications for testing.

Part 2. Section 214-27-3 of the code is amended to read:

214-27. Smoke Detectors and Smoke Alarms for Residential Dwellings Built Prior to January 1, 1983. 3. TYPE. Smoke detectors and alarms required under this section shall be single station devices, either battery operated >>as provided in s. 214-23<<, plug-in or directed wired A/C units unless otherwise required by the code.

____________________________________________________________________________________________________________________

UPDATE 10/9/12 --- The hearing was held earlier today and it was referred to ZND committee for a hearing in November sometime. The ordinance was amended to require that the sealed lithium battery units go into effect in 2017 (5 years) rather than 2022 (10 years). A request was made by AASEW counsel Heiner Giese to delay the effective date of the ordinance to June 1, 2013 so that landlords could use up their current supply of non-sealed battery units - one alderman supported this request. Several alderman expressed concern that this proposed modification to the current ordinance would be expensive for homeowners who do not have to deal with tenants that remove the batteries from smoke alarm units

- Thank you to Heiner for the updated information.

AASEW Annual Landlord Trade Show - Wednesday September 19, 2012

It is that time of year again . . . time for the leaves to start falling and the Apartment Association of Southeastern Wisconsin to host its Annual Trade Show. The AASEW Trade Show is the place to be on Wednesday, September 19, 2012 from 11 am - 5 pm. The Trade Show will be held at American Serb Hall at 5101 W. Oklahoma Avenue in Milwaukee, WI.

Entrance to the event is free with a donation of 3 non-perishable food items to the Hunger Task Force (or $4). Collection bins will be on-site.

There is no need to pre-register just show up ready to learn and have some fun. Oh, did I mention that there will be free food as well.

Come mix and mingle with landlords, property managers, and vendors that work with those is the rental industry. The Exhibit Hall will have AASEW business members who will be exhibiting their products and services to make your life as a landlord or rental property manager easier.

We will also have educational seminars throughout the day that you will not want to miss.

Some of the speakers will include:

- Margaret Bowitz of the Metropolitan Fair Housing Council will speak on the ever-important topic of fair housing (discrimination) law.

- Wausau-area landlord (and fellow blogger) John "Dr. Rent" Fischer will talk about the To 5 Most Asked Landlord Questions.

- Charles Harris of Credit Matters will provide attendees with Seven Steps To Better Credit.

- Graig Goldman and Mark Kivley of Re/Max Lakeside will teach everyone how to effectively purchase foreclosure properties

- Attorney Tristan Pettit will talk about Act 143: Wisconsin's New Landlord Omnibus Law focusing on the new provisions and their potential pitfalls as well as how the courts have been ruling on the new law these last few month.

I hope that you all can attend this educational and fun event next Wednesday. If you do please be sure and come up and say hello.

T

Accepting Past Due Rent After Termination of Tenancy: The New Law and Traps To Avoid

The Landlord's Omnibus Law (Act 143) introduced a new statutory section to Chapter 799 regarding situations when a landlord accepts past due rent from a tenant after the tenant's tenancy has been terminated. Newly created sec. 799.40(1m) states as follows:

If a landlord commences an action under this section against a tenant whose tenancy has been terminated for failure to pay rent, the action under this section may NOT be dismissed solely because the landlord accepts past due rent from the tenant after the termination of the tenant's tenancy.

On its face, this seems like a very helpful statute for landlords.

As a quick refresher, it is important to remember that a tenant's tenancy can be terminated in many ways such as after the "cure" period passes after being properly served with a 5 day notice, 14 days after being properly served with a 14 day notice, or when a lease term ends.

Prior to sec. 799.40(1m) being created, tenant's advocates argued -- and some courts held -- that if a landlord accepted past due rent from a tenant after the expiration of the tenant's tenancy that the landlord entered into a new agreement with the tenant for a month to month tenancy, thus waiving the landlord's right to proceed with an eviction action based on the prior notice.

I personally believe that such arguments are hogwash, but I will not digress, as that is not the purpose of this post.

Nonetheless, because this "waiver" argument was successfully raised in the past, I have always advised my clients to err on the side of caution and not accept past due rent after the tenant's tenancy was terminated. A landlord can refuse past due rent in one of two ways. First, a landlord can simply refuse the tendered past due rent from the tenant or return the rent payment to the tenant. This is always a difficult pill for landlords to swallow as they know that by returning the rent payment to the tenant that they will never see that money again.

Second, a landlord could hold the past due rent payment in escrow (not cashing the check or money order) and immediately write what I refer to as a "no waiver" letter and send to the tenant via certified and regular mail. A "no waiver" letter simply advises the tenant that their past due rent payment is not being accepted as their tenancy has already been terminated. The letter also should advise the tenant that it is the landlord's intent to pursue the eviction of the tenant and that the landlord will hold the past due rent in escrow pending a determination by the eviction court as to who legally has the right to possess the rental property. Finally, a "no waiver" letter should again remind the tenant that the payment they made is not being accepted.

Whenever I have drafted a "no waiver" letter for a client that has accepted past due rent from a tenant post tenancy, I never had a court hold that my landlord client waived his/her right to proceed with the eviction lawsuit. As a result, my clients have become big fans of the "no waiver" letter.

With the creation of sec. 799.40(1m), it would seem that there is no longer a need for a landlord to send a "no waiver" letter or to return a past due rent payment to a tenant . . . or is there. I would caution landlords against thinking that this newly created statute is the panacea that it appears to be.

Let me explain.

First, if you read the new law closely -- which I don't believe the drafters did or they would have remedied this oversight -- it states that an eviction based on a tenant's failure to pay rent, may not be dismissed solely because the landlord accepts past due rent after the termination of the tenant's tenancy.

There are many basis for terminating a tenant's tenancy besides just failure to pay rent. Other reasons may include the expiration of a lease term or a breach of the rental agreement for something other than non-payment of rent (i.e. criminal activity, damage to the property, loud music, illegal guests etc). The new law does not address what happens if a landlord accepts past due rent from a tenant and the tenant's tenancy was terminated for something other than failure to pay rent.

So literally speaking, a court could still dismiss an eviction if a landlord accepts past due rent from a tenant who's tenancy was terminated based on something other than failure to pay rent and not run afoul of the new law. Ouch! What about situations in which the tenant's tenancy was terminated for failure to pay rent AND other reasons? Does the new law apply those situations?

A second concern with the new law arose recently in Milwaukee County. Please note that this information was relayed to me by another person so I cannot 100% vouch that I have all the facts correct since I was not present when this happened. What I was told was that a landlord's eviction lawsuit, based upon a tenant's failure to pay rent, was dismissed because the landlord accepted past due rent from the tenant after the termination of the tenant's tenancy and failed to advise the tenant that it was the landlord's intent to still proceed with the eviction of the tenant. The court held that newly created sec. 799.40(1m) was not applicable in this situation because the landlord failed to advise the tenant of the fact that the landlord still intended to evict them.

Simply put, the new law is not as great as it appears --- so be cautious when relying on it. Know your judge. Know your court commissioner. Regardless of what the law says, if the court believes it says something else or is not applicable to your specific facts, you may not get the result that you were expecting.

So as a result of above, I am still advising my clients (despite sec. 799.40(1m) being the new law in town) that they should consider refusing to accept any past due rent from a tenant after the tenant's tenancy has been terminated. At the very least they should send a "no waiver" letter.

So proceed with caution.

Learn About Wisconsin's New Landlord-Tenant Law At AASEW's Next Meeting on June 18th.

You will not want to miss the Apartment Association of Southeastern Wisconsin's next membership meeting on June 18, 2012. The focus of the meeting will be on Wisconsin's new Landlord Omnibus law (Act 143).

The passage of this new law in late March made a lot of changes to landlord tenant law in Wisconsin - both residential and commercial. Landlords and management companies will need to make modifications to their rental documents and m,anagement procedures and practices in order to be in compliance.

We will have two landlord attorneys (myself and AASEW Attorney Heiner Giese) and a tenant attorney (Bob Andersen of Legal Action of Wisconsin) at the meeting to summarize the changes to you, give you our interpretation of the law and how it will play out in court, and provide you with reccomended best practices. Oh yeah . . . and we will also answer your questions.

This new law was rushed through the legislative process and as such it was poorly written, resulting in much confusion and a difference of opinion as to how it should be interpreted. The panel members will do their best to point out the areas of concern so that you can be better prepared in dealing with them.

Dont forget about the FREE food.

Here are the details:

LOCATION: Best Western Hotel located at 1005 S. Moorland Road in Brookfield WI

DATE: Monday, June 18, 2012

TIME: 7 pm

COST: Free to members of the AASEW; $25 to non-members -- Become a member that night and pay only $59 for the rest of the year (and avoid the $25 fee).

We hope to have a great turnout and a great discussion. I hope to see all of you there.

T

So Are Illegal Provisions In Wisconsin Residential Rental Agreements Severable Or Not?

SHORT ANSWER: Yes . . . and No.

LONG ANSWER: The newly passed law referred to as the Landlord's Omnibus Law (Act 143) adresses this issue but provides contradictory answers.

In newly created sec. 704.02 of the Wisconsin Statutes, the law states quite clearly that the provisions of a rental agreement or lease are severable. Specifically, it states that if any provision of a rental agreement is rendered void or unenforceable by reason of any statute, rule, regulation or judicial order, the invalidity or unenforceability of that provision does not affect the other provisions of the rental agreement that can be given effect without the legal provision.

So according to sec. 704.02, the answer to question posed in the title of this blog post would be a resounding "Yes."

BUT . .

In the very same law, the legislature also decided to create a new section 704.44 that copies a regulation from ATCP 134 entitled (Residential Rental Provisions), specifically ATCP 134.08 entitled "Prohibited Rental Agreement Provisions," which sets forth 7 things that cannot be included in a Wisconsin residential rental agreement - which I affectionately refer to as the 7 Deadly Sins.

The legislature also decided to add an 8th and 9th provision that cannot be included in residential rental agreements in Wisconsin. So now I have to refer to the outlawed provisions as "The 9 Deadly Sins" which just doesn't have the same ring to it. : (

The 9 provisions that if included in a residential rental agreement will render the agreement void are:

1. Any provision that allows a landlord to do any of the following because a tenant has contacted an entity for law enforcement services, health services, or safety services: (a) increase rent, (b) decrease services, (c) Bring an action for possession of the premises, (d) refuse to renew a rental agreement, (e) threaten to take any action under pars. (a) to (d). This is one of the new clauses added by the legislature is Act 143.

2. A provision that authorizes the eviction or exclusion of a tenant from the premises, other than by judicial procedures as provided under ch. 799.

3. A provision that provides for an acceleration of rent payments in the event of tenant default or breach of obligations under the rental agreement, or otherwise waives the landlord's obligation to mitigate damages as provided in s. 704.29.

4. A provision that requires payment by the tenant of attorney fees or costs incurred by the landlord in any legal action or dispute arising under the rental agreement. This subsection does not prevent a landlord or tenant from recovering costs or attorney's fees under a court order under ch. 799 or 814.

5. A provision that authorizes the landlord or an agent of the landlord to confess judgment against the tenant in any action arising under the rental agreement.

6. A provision that states that the landlord is not liable for property damage or personal injury caused by negligent acts or omissions of the landlord. This subsection does not affect ordinary maintenance obligations of a tenant under s. 704.07 or assumed by a tenant under a rental agreement or other written agreement between the landlord and the tenant.

7. A provision that imposes liability on a tenant for any of the following: (a) personal injury arising from causes clearly beyond the tenant's control, (b) property damage caused by natural disasters or by persons other than the tenant or the tenant's guests or invitees. This paragraph does not affect ordinary maintenance obligations of a tenant under s. 704.07 or assumed by a tenant under a rental agreement or other written agreement between the landlord and the tenant.

8. A provision that waives any statutory or other legal obligation on the part of the landlord to deliver the premises in a fit or habitable condition or to maintain the premises during the tenant's tenancy.

9. A provision that allows the landlord to terminate the tenancy of a tenant if a crime is committed in or on the rental property, even if the tenant could not reasonably have prevented the crime. This is the other new clause added by the legislature in Act 143.

So according to sec. 704.44, the answer to question posed in the title of this blog post would be "yes . . . unless it is one of the 9 deadly sins which if included in a Wisconsin residential rental agreement or lease would not be severable and in fact would render the entire agreement void."

Why can't the law be more simple and clear?

Joint Legislative Council Gives Clarification To Wisconsin's New Landlord's Omnibus Law

You will recall from my earlier post that I had some concerns about the new Landlord's Omnibus Law (Act 134). One of my main concerns was that it was unclear from the wording of Act 143 whether or not a violation of chapter 704 would give rise to a claim by a tenant that would entitle the tenant to double damages and attorney's fees if successful.

The portion of Act 143 that concerned me was Section 36, which creates Wis. Stats. sec 704.95, and reads as follows:

704.95 Practices regulated by the department of agriculture, trade and consumer protection. Practices in violation of this chapter may also constitute unfair methods of competition or unfair trade practices under s. 100.20. However, the department of agriculture, trade and consumer protection may not issue an order or promulgate a rule under s. 100.20 that changes any right or duty arising under this chatper.

My concern was that tenants might start filing suits against landlords alleging that they were entitled to double damages and attorny's fees if a landlord violated any portion of chapter 704. Could a landlord be on the hook for double damages and attorney's fees if he drafted a 5 day notice improperly or served the notice incorrectly?

Because of this concern, the Apartment Association of Southeastern Wisconsin (AASEW) attorney wrote to the State of Wisconsin's Joint Legislative Council which authored the earlier memo summarizing the new Act 143. Specifically the AASEW asked staff attorney Margit Kelley to clarify section 36 of her Act Memo dated March 26, 2012.

I have good news to report. Attorney Kelly in her letter to the AASEW's attorney, indicated that any violation of Chapter 704 does not automatically lead to a cause of action for double damages and attorney's fees.

Her verbatim response -- referring to section 36 (now Wis. Stats. section 704.95) - was as follows:

This means that DATCP may promulgate and enforce any administrative rules that are in line with ch. 704, Stats., including the provisions of the Act that affect that chapter, under DATCP's authority to regulate unfair methods of competition or unfair trade practices in s. 1002.0, Stats. Section 100.20(5), Stats., then, in turn allows an individual right of action for a violation of any rules promulgated under s. 100.20, Stats., and allows for recovery of costs, reasonable attorney's fees, and twice the amount of any pecuniary loss.

Translation: DATCP can create rules to add to ATCP 134 that are line with chapter 704, but a violation of ch. 704 alone does not give rise to a cause of action that entitles a tenant to double damages and attorney's fees, unless that section of the statute is also contained in ATCP 134.

So for instance, if a landlord was found to have violated Wis. Stats. section 704.28, entitled withholding from and return of security deposits, a tenant would be entitled to receive an award of double damages and attorney's fees because the language of sec. 704.28 is ALSO contained in ATCP 134 - specifically ATCP 134.06(2).

Along those same lines, if a landlord was found to have violated Wis. Stats., sec. 704.44, entitled residential rental agreement that contains certain provisions is void, a tenant would als be able to recover double damages and attorney's fees as the language of sec. 704.44 is ALSO contained in ATCP 134 - specifically ATCP 134.08.

As long as the courts are made aware of this, it now appears that landlords can breathe a sigh of relief as they will no longer have to worry about being ordered to pay double damages and attorney's fees to a tenant for improperly drafting or serving a 5 day notice, or any other portion of ch. 704 that is not also included in ATCP 134.

Now we just have to worry -- as we have always had to -- about having the court dismiss our evictions because of an improperly drafted or served 5 day notice : )

New Landlord Omnibus Law: Odds and Ends

There has been a lot of discussion about the new Landlord Tenant law in Wisconisn (2011 Wisconsin Act 143) since it became law on March 31, 2012. Some people's views seem similar to mine while others have interpreted the law completely differently than I do. Here is a link to one law firm's summary that in my opinion is completely off base, but then again they are Minnesota lawyers so we may have to give them a pass : ). But really guys, the new law did not create a new right for landlord's do deduct from a tenant's security deposit -- have you ever heard of ATCP 134.

I guess only time will tell how the law in interpreted by the courts in Wisconsin. One thing that I know for sure is that the politicians in Madison will be unable to correct any errors, or clarify and vagueness, in the new law until 2013 when they are back in session. So we are stuck with this for awhile and must make do.

The AASEW will be devoting it's June membership meeting (June 18, 2012 at 7 pm) to the new law and we hope to invite both landlord advocates and tenant advocates alike to present so that all sides can be presented. You will not want to miss this meeting. Come learn what the new law is and what you need to do in order to be in compliance. There will be no charge to AASEW members but we will be charging $25 for non-members to attend.

While I personally do not have anything new to add on the new law that I haven't said already in prior posts, I thought I would provide links to several items relevant to the new law that people might find interesting and useful.

Here is a copy of the newly enacted law - Act 143

Here is an overview of the new law by the Wisconsin Legislative Council

Here is a copy of the newly revised Chapter 704 (Landlord and Tenant) of the Wisconsin Stattutes which includes all of the changes/additions -- so I no longer have to carry around Act 143 : )

Here is an article that I recently wrote on the new law for the Wisconsin State Bar's Inside Track blog which includes several interesting comments on the new law by local lawyers.

Here's a blog article by my friend Tim Ballering about how the new law affects those landlords who are currently using a crime free lease addendum or something similar.

Thanks for reading

T

2011 Wisconsin Act 143 (Landlord Omnibus Law) Also Applies To Commercial Landlord-Tenant Law

While this blog primarily focuses on residential landlord-tenant law, on occasion I also touch on issues applicable to commercial landlord-tenant law. This is one such instance.

Commercial landlord-tenant is more straightforward than residential in my opinion because commercial tenancies are less regulated than residential. Typically what a commercial landlord and tenant agreed to and placed into their lease agreement is what governs. The Wisconsin Administrative Code's ATCP 134 does not apply to commercial leases and most of Chapter 704 of the Wisconsin Statutes does not apply to commercial leases unless (1) the parties had no written lease, or (2) the lease was silent as to certain issues (see sec. 704.03 and 704.05 respectively).

Well, that has all changed now with the passage of 2011 Wisconsin Act 143 which was signed into law last week and will take effect on March 31, 2012.

While almost all of the attention paid to the new law surrounded its effects on residential landlord-tenant law, the law also impacts the commercial arena as well. I too was caught up in the effect Act 143 would have on residential landlords and missed the applicability of this new law to commercial landlords initially --- thanks to Bob Anderson of Legal Aid of Wisconsin for redirecting me : )

As I have mentioned in prior posts, this legislation was fast-tracked for some reason and rushing new laws through the legislative process is never a good thing. In fact it is a recipe for disaster.

It appears that the legislators did not realize that Senate Bill 466 -- the precursor to Act 143 -- was written in such a way as to encompass commercial landlord-tenant law. When it was brought to their attention, a quick amendment was made to exclude one portion of the new law (the section that makes a rental agreement void if it contains certain prohibited language) from the commercial arena, but apparently there was not enough time to deal with the other sections of the new law, which now will apply to both commercial and residential tenancies.

So what do we have?

The following provisions of Act 143 apply to both commercial landlord-tenant law as well as residential:

1. Moratorium on evictions

2. Severability of rental agreement provisions

3. Disposition of abandoned property

4. Requirement that landlords receive an award of holdover damages when appropriate

5. Acceptance of past due rents

6. Withholding from and return of security deposits

7. Making any violation of chapter 704 a possible unfair trade practice

If you are unfamiliar with the above sections of the new law you should read my prior post summarizing the new law.

Number 1-5 above actually benefit commercial landlords. However numbers 6 and 7 are problematic

By adding ATCP 134.06, which focuses on the withholding from and the return of security deposits, to chapter 704, the new law has now made these requirements applicable to commercial landlords as well. Prior to Act 143 being passed, there was no law addressing what a commercial landlord could withhold from a commercial tenant's security deposit, nor was there any law regarding when that security deposit (or an itemization as to how the security deposit was applied) had to be returned to the commercial tenant. Well thanks to Act 143, now there is.

Act 143 allows a commercial landlord to only make deductions for the following items from a commercial tenant's security deposit:

704.28 Withholding from and return of security deposits. (1) Standard withholding provisions. When a landlord returns a security deposit to a tenant after the tenant vacates the premises, the landlord may withhold from the full amount of the security deposit only amounts reasonably necessary to pay for any of the following:

(a) Except as provided in sub. (3), tenant damage, waste, or neglect of the premises.

(b) Unpaid rent for which the tenant is legally responsible, subject to s. 704.29.

(c) Payment that the tenant owes under the rental agreement for utility service provided by the landlord but not included in the rent.

(d) Payment that the tenant owes for direct utility service provided by a government-owned utility, to the extent that the landlord becomes liable for the tenant's nonpayment.

(e) Unpaid monthly municipal permit fees assessed against the tenant by a local unit of government under s. 66.0435 (3), to the extent that the landlord becomes liable for the tenant's nonpayment.

(f) Any other payment for a reason provided in a nonstandard rental provision document described in sub. (2).

So if a commercial landlord would now like to deduct anything other then the items listed in (a) - (e) above, then that landlord needs to start using a separate written document entitled "Nonstandard Rental Provisions" which must list the additional fees/costs that can be deducted from a commercial tenant's security deposit.

Additionally, Act 143 now requires a commercial landlord to either (1) return the tenant's security deposit to them, or (2) send them an itemization explaining how that security deposit was applied, within 21 days of the following:

(4) Timing for return. A landlord shall deliver or mail to a tenant the full amount of any security deposit paid by the tenant, less any amounts that may be withheld under subs. (1) and (2), within 21 days after any of the following:

(a) If the tenant vacates the premises on the termination date of the rental agreement, the date on which the rental agreement terminates.

(b) If the tenant vacates the premises before the termination date of the rental agreement, the date on which the tenant's rental agreement terminates or, if the landlord rerents the premises before the tenant's rental agreement terminates, the date on which the new tenant's tenancy begins.

(c) If the tenant vacates the premises after the termination date of the rental agreement, the date on which the landlord learns that the tenant has vacated the premises.

(d) If the tenant is evicted, the date on which a writ of restitution is executed or the date on which the landlord learns that the tenant has vacated the premises, whichever occurs first.

Commercial landlords never had to worry about that 21 day time frame before -- now they do. Needless to say it is much more difficult and time consuming to do a walkthrough of a giant commercial space and itemize any damages or cleaning charges than it is for a 500 square foot residential rental unit. I'm not exactly sure how commercial landlords will be able to comply with this time frame, but they will need to find a way, or else they may have to to their tenant double damages and attorney's fees. Which leads me to the next concern . . .

Act 143 now makes any violation of chapter 704 a possible violation of unfair trade practices, which pursuant to sec. 100.20, Wis. Stats. allows a tenant to sue a landlord for double damages and attorney's fees. Prior to Act 143 a commercial landlord was not in this predicament because unfair trade practices were set forth in ATCP 134 which only applied to residential tenancies. But now that Act 143 incorporates some provisions of ATCP 134 into chapter 704 -- and chapter 704 applies to commercial landlord-tenant relations -- things are different.

Here is the language of the new law:

704.95 Practices regulated by the department of agriculture, trade and consumer protection. Practices in violation of this chapter may also constitute unfair methods of competition or unfair trade practices under s. 100.20. However, the department of agriculture, trade and consumer protection may not issue an order or promulgate a rule under s. 100.20 that changes any right or duty under this chapter.

I guess the only positive is that the new law says "may constitute" instead of "shall constitute" however to a commercial landlord that never had to worry about anything they did constituting an unfair trade practice and subjecting themselves to being sued for double damages and attorney's fees, I'm sure this will be of little consolation.

So not only will Act 143 require commercial landlords to make some modifications to the language in their leases, but it will require them to completely change how they run their commercial proeprty management businesses starting March 31, 2012 ---- 2 DAYS FROM NOW!!!!!

Landlord's Omnibus Bill Signed Into Law - Read It Now

Governor Walker did sign the Landlord's Omnibus Bill into law.

I appreciate the effort of everyone that called the Governor's office asking him to veto the bill due to its deficiencies.

Here is a link to the new law. Much easier to read than having to go back and forth between the orginal bill, the Substitute bill and the two amendments.

The two main concerns that I have with the law and which caused me to ask that the bill be vetoed. They are section 35M and section 36.

The AASEW has already spoken with Sen. Lassee's office regarding these two major problems and I will keep you informed if and when anything is done about them.

And yes, I will be reviewing all of Wisconsin Legal Blank's forms in the near future and making the necessary revisions - if needed - and will let you know when they will be available : )