Landlord's Omnibus Bill -- with Amendments -- To Be Signed Into Law Today

One of the biggest pieces of pro-Landlord legislation in quite some time was passed by the Wisconsin Senate and adopted by the Assembly recently and will be signed into law by Governor Walker today. Unfortunately some of the pro-Landlord provisions were amended, diluted, or removed.

I am certainly not denouncing this new law. Many aspects of it will be very helpful to landlords. I just wish that more time had been allowed -- the bill was fast-tracked -- to allow for more discussion, thought and input and allowing for more notice. For instance, many of us in the rental industry were given one day advance notice before the public hearing on the bill which prevented many of us from attending.

I will attempt to summarize the new law in this post. As this new law plays out in the "real world" I am sure that I will be devoting additional blog posts to each provision in more detail.

The proposed effective date of this new law is March 31, 2012. So many of us will need to make some additions and/or modifications to our rental documents prior to that date.

Bankground of Legislation

The Landlord's mnibus bill (Senate Bill 466) was put on the "fast track" for reasons unknown to me. It was introduced on February 13, 2012 by Senator Lassee. A Substitute Amendement 1 was offered by Senator Lassee on February 29, 2012. Senator Waangard then offered the first amendment to the Substitute Amendment on March 6th which was passed March 13th. Senator Lassee then offered a second amendment to the Substitute Amendment on March 12th which was passed on March 13th. The bill will be signed into law by Governor Walker today - March 21st. Approximately one month from introduction to passage into law is very fast for the legislative process.

The key provisions of the new law are:

1. Moratorium on Evictions

This provision of the original bill remained untouched by the Substitute Amendment and the two amendments to the Substitute Amendment. The new law prohibits any municipality from imposing a moratorium on eviction actions. If a municipality has a current ordinance that contradicts this new law it cannnot be enforced.

We now must hope that individual counties, courts, and commissioners adhere to this law. While I don't anticipate courts ignoring this new law, I do anticipate court's continuing to use the "stay" provisions of sec. 799.44(3) to give tenants additional time to vacate during the holidays. So while municipalities will no longer be allowed to impose moratoriums, courts can still prevent evictions during holidays, creating the same result.

2. Severability of Rental Agreement Provisions

The original bill stated that any provision could be severed from the agreement. So if a landlord inadvertantly included a provision that was found to be improper or retaliatory in nature it could be removed and the remainder of the agreement could be enforced.

The Substitute Amendment diluted the above considerably by adding that if a rental agreement contains one of the "7 Deadly Sins" set forth in ATCP 134.08, the inclusion of any of those provisions cannot be removed and will render the entire rental agreement void and therefore unenforceable.

Amendment 1 to the Substitute Amendment went a step further and added an 8th illegal provision that if included in a rental agreement will cause the rental agreement to be void. The new illegal provision would include any language that allows a landlord to terminate a tenant's tenancy if a crime is committed in or on the rental property, even if the tenant couldn't reasonably have prevented the crime.

So in the end, the new law only allows the severability of certain rental provisions. If your rental agreement contains one of the 7 prohibited provisions set forth in ATCP 134.08 or the new prohibited provision created by this new law, your rental agreement will still be be void and unenforceable. Essentially, the new law takes the regulation ATCP 134.08 and codifies it into law.

More tragic is what the "8th Deady Sin" has most likely done to some other pro-Landlord legislation that I had hoped would become law -- the "Crime-Free Lease Addendum" bill. If you read my prior post on the Crime-Free Lease Addendum bill you will see that this 8th Deadly Sin language effectively decapitates this proposed bill. This is a major disappointment as I believe that had the Crime-Free Lease Addendum bill been passed it would have been the most significant piece of pro-Landlord legislation in years. Instead the "odds and ends" Landlord Omnibus bill seems to have killed it. Hopefully, I am wrong and it can be resurrected.

3. Dispostion of Tenant's Abandoned Property

Once again, the original version of this bill was awesome. It stated that any personal property left behind by a tenant could be considered abandoned and disposed of immediately in the landlord's discretion.

The Substitute Amendment modified the original bill by adding that any medical prescriptions and/or medical equipment left behind by the tenant must be held by the Landlord for 7 days. The Substitute Amendment also added that written notice must be sent to the tenant (and any secured party) prior to disposing of any titled vehicles or mobile homes deemed abandoned. I could live with both of those modifications.

However, the amendments to the Substitute Amendment added language that will require landlords to jump through a few hoops. The new law requires that a landlord provide written notice to the tenant at the time of entering into the rental agreement, and at each renewal of the rental agreement, informing the tenant that the landlord will not hold any property left by the tenant and that such property will be deemed abandoned and will be disposed of. Failure to provide this written notice to the tenant requires a landlord hold the abandoned property fpr a period of time as set forth in sec. 704.05 (5), Wis. Stats.

Essentially landlords will now be required to add a new language to their rental agreements -- and any renewal agreements -- advising tenants that any property left behind will be considered abandoned and can be disposed of. Looks like there will be a revised Rental Agreement being sold at Wisconsin Legal Blank Co., in the near future : )

4. Information Check-In Form

This is one of the provisions of the original bill that I didn't care for. A landlord will now be required to provide a standardized information check in sheet to each tenant that contains an itemized description of the premises. The Substitute Amendment merely added that this form must be given to the tenant at the time of occupancy rather than at the time of signing of the rental agreement.

As I understand this law, this does not just mean that the landlord can give his new tenant a blank Information Check-In form to fill in -- which many landlords are already doing. Rather it means that the landlord must completely and thoroughly fill out the Information Check-In form to adequately describe the condition of the rental unit and give it to the tenant. So if you are not thorough in your description of the renal unit this document could be used against you by the tenant, after the tenancy has ended. This new provision of the law will clearly cause additional work for landlords and I fear could harm the less detail-oriented landlords out there when pursuing a tenant for damages to the unit or withholding portions of the tenant's security deposit for damages.

5. Holdover Damages Are Mandated

The new law requires that landlords be awarded holdover damages. If a tenant stays in the rental unit beyond his tenancy, the landlord is now legally entitled to -- at a minimum -- double the daily rent for the time period after the tenancy ended (i.e. the notice expired) until the tenant actually vacates the unit.

This is a positive change because current law (sec. 704.27) only states that a landlord "may" be awarded holdover damages -- and some courts would not award landlords these damages. The new law says that a court "shall" award a landlord holdover damages, at a minimum.

6. Withholding From A Tenant's Security Deposit

The new law has merely codified the provision of ATCP 134.06(3), which states that a landlord is allowed to withhold the following from a tenant's security deposit: (a) Tenant damage, waste or neglect of the premises, (b) Unpaid rent for which the tenant is legally responsible, (c) Payment which the tenant owes under the rental agreement for utility service provided by the landlord but not included in the rent, (d) Payment which 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 mobile home parking fees which a local unit of government has assessed against the tenant to the extent that the landlord becomes liable for the tenant's nonpayment, (f) Other reasons authorized in the Nonstandard Rental Provisions.

The new law also adopts the portions of ATCP 134.06 which state that a landlord cannot withhold from a tenant's security deposit for normal "wear and tear" or other losses which the tenant cannot reasonably be held responsible.

7. Timing For Return of Security Deposit

The original bill indicated that in situations where the tenant broke the lease prior to the end of the term that the landlord need not return the security deposit or provide an accounting of how the security deposit was applied until 21 days after the lease term ended or within 21 days of a new tenant taking occupancy. This langauge is a substantial improvement over current law as it allows a landlord to hold the security deposit until he is able to determine if any future rent will owed by the breaching tenant if the landlord cannot locate a new tenant to re-rent the property to. I explain this issue in more detail in my earlier post on the Landlord's Omnibus Bill.

The Substitute Amendment waters this down a bit. The new law will now codifies ATCP 134.06(2)(a) and states that a landlord shall deliver or mail to a tenant the security deposit or itemization of how the security deposit was applied within 21 days after any of the following: (a) if the tenant vacates on the last day of the rental agreement, the date on which the rental agreement terminates, (b) if the tenant vacates before the end of the rental agreement, then the date on which the rental agreement terminates or, if the unit is re-rented before the end of the rental agreement, then the date on which the new tenancy begins, (c) if the tenant vacates after the last day of the rental agreement, the date on which the landlord learns that the tenant vacated, (d) if the tenant was evicted, the date on which the writ was executed or the date that the landlord learns that the tenant vacated.

So the new law kept the good part of the original bill but by codifying ATCP 134.06(2)(a) the landlord must return a tenant's security deposit or send out the itemization of how the security deposit was applied earlier than when the original bill stated in situations where the tenant was evicted.

8. Disclosure of Code Violations

The original bill required that a landlord disclose to any prospective tenant any uncorrected building code or housing code violations prior to the signing of a rental agreement, accepting of a security deposit or accepting of earnest money.

The second Amendment to the Substitute Amendment modified the original bill and as a result the new law requires a landlord to disclose to a new tenant any uncorrected building code or housing code violations if the landlord has actual knowledge of the violation (rather than if the landlord had received notice of the violation from a housing code enforcement agency as under the original bill).

Specifically the new law requires the disclosure to the new tenant if the following four conditions are met: (a) landlord has actual knowledge of the violation, (b) the violation affects the rental unit or a common area, (c) the violation presents a significant threat to the tenant's health or safety, (d) the violation has not been corrected.

9. Request for Repairs

The orginal bill required that a tenant first notify a landlord in writing of any repair or maintenance issue, and then allow adequate time for the landlord to address the issue, before reporting the problem to the building inspector, elected official, or housing code enforement agency. The Substitute Amendment removed this provision in its entirety so the law has not changed -- tenants are allowed to call whomever they want to complain about maintenance issues without any requirement that they first notify the landlord of the problem.

10. Acceptance of Past Due Rent

The new law states that if a landlord has filed an eviction against a tenant and the landlord accepts past due rent from the tenant during the course of the eviction, that the court cannot dismiss the eviction solely based on the landlord's acceptance of past due rent from the tenant.

I really like this provision of the new law becasue currently, many tenants and their attorneys argue that if an eviction is pending and a landlord accepts past due rent from a tenant, that the landlord's acceptance of that rent has effectively "waived" the landlord's right to proceed with the eviction.

11. Tenant Remedies

The Substitute Amendment added that any violation of chapter 704, including the provisions of the new bill, may constitute an unfair trade practice which may allow the tenant to sue a landlord for double damages and attorney's fees.

I don't like this new provision of the law for one simple reason. I believe it will be used by tenants and tenant's attorneys to seek double damages and attorney's fees whenever a landlord allegedly violates any provision of chapter 704, whether the violation is a true unfair trade practice violation or not. Only the provisions of ATCP 134, which will be codified in ch. 704 under this new law, deal with unfair trade practices. Nonetheless, I anticipate that we will see some very creative arguments by tenant's and their attorneys as to why a tenant should be awarded double damages and attorney's fees for violations of chapter 704 that are not unfair trade practice violations.

Now we will have to wait and see how this new law "plays out" in the real world of landlording. Some of the key things everyone will need to address before March 31, 2012, when the law takes effect are:

1. Make sure any rental agreement you enter into with a tenant after March 31, 2012, does not contain any language that would be in violation of the "8th Deadly Sin" which essentially means eliminating or modifying any language similar to that found in the Crime-Free Lease Addendum.

2. Make sure to add language in your rental agreement, and any renewal documents, stating that any property left behind by the tenant will be considered to be abandoned and will be disposed of by the landlord without any further notice to tenant (except for medical prescriptions and medical devices, mobile homes and titled vehicles).

3. Rename your Check-In / Check Out Sheet as "Information Check-In Sheet" and insure that you provide any new tenants with a completed copy of the form thoroughly documenting the condition of the rental unit.

4. Disclose any code violations that you have actual knowledge of that may present a significant threat to the tenant's health or safety before entering into a rental agreement or accepting a security deposit or earnest money.

Good Luck Everyone

ADDITION: 3/21/12 - Make sure you read my 3/21/12 post about why I now think this new law will actually hurt landlords more than help them

ADDED 4/11/12 -- Here is the link to the new law.

ADDED 4/11/12 - Here is a link to an article I recently authored on the new law.

ADDED 4/11/12 - Here is a link to the newly revised Wisconsin Statutes Chapter 704 re: Landlord and Tenant

You Will Not Want To Miss AASEW's Fourth Annual Landlord Boot Camp on Saturday Feb. 25th

Landlording can be pretty complex, with a seemingly never ending myriad of paperwork, rules, landlord-tenant laws and simple mistakes that can cost you thousands of dollars.

The Apartment Association of Southeastern Wisconsin's Fourth Annual “Landlord Boot Camp” can help you navigate these treacherous waters and teach you how to run your properties with greater profit and less hassles.

I have given similar landlord-tenant law seminars to fellow attorneys, landlords, and property manager organizations throughout the state for other state-wide semianr companies that charge attendees $300-$400. This is your opportunity to learn all of the same information at a huge discount through the Apartment Association.

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

When: Saturday, February 25th, 2012. 8:30 am – 5 pm

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

Included: 100 plus page manual/outline to help you put what you learn into practice plus helpful forms.

Cost: $159 for AASEW members and $249 for non-members. If you are not a member of AASEW but are a member of another landlord/apartment association the cost to attend will be $199.

Specials: Not a member? Pay just a dollar more and enjoy a 2012 AASEW membership.

Wisconsin landlord-tenant laws are constantly changing. To help keep you up to date we offer prior attendees a $50 discount.

Sign up by going to the AASEW's Landlord Boot Camp landing page where you can sign up online and pay via PayPal.

What you will learn at the Apartment Association's 2012 Landlord Boot Camp

Landlord Boot Camp covers everything that you need to know about residential Landlord Tenant law in Wisconsin, including:

1. How to properly screen prospective tenants.
2. How to draft written screening criteria to assist you in the selection process and protect you from discrimination complaints.
3. How to comply with both federal and state Fair Housing laws including how to handle with “reasonable modifications” and “reasonable accommodations” requests.
4. How to legally reject an applicant.
5. What rental documents you should be using and why.
6. When you should be using a 5-day notice versus a 14-day notice, 28-day notice, or 30-day notice and how to properly serve the notice on your tenant.
7. Everything you wanted to know (and probably even more than you wanted to know) about the Residential Rental Practices (ATCP 134) and how to avoid having to pay double damages to your tenant for breaching ATCP 134.
8. When you are legally allowed to enter your tenant’s apartment.
9. How to properly draft an eviction summons and complaint.
10. What to do to keep the commissioner from dismissing your eviction suit.
11. What you can legally deduct from a security deposit.
12. How to properly draft a security deposit transmittal / 21 day letter.
13. How to handle pet damage.
14. What to do with a tenant’s abandoned property and how this may affect whether or not you file an eviction suit.
15. How to pursue your ex-tenant for damages to your rental property and past due rent (and whether it is even worth it to do so).

. . . and much more. There will also be time for questions and answers.

You get all this for less than you would pay for an hour of an attorney's time.

Last year’s AASEW Landlord Boot Camp was filled to capacity and we even had to turn a few people away. So call early to reserve your spot.

Call the Association at (414) 276-7378, email membership@apartmentassoc.org or go to our Landlord Boot Camp landing page to sign up online and reserve your spot.

Remember that “landlording” is a business — so take the time to educate yourself on how to better manage your business and avoid costly errors!

New "Residential Lease Renewal or Notice To Vacate" Form Available at Wisconsin Legal Blank

I have recently completed drafting a new landlord-tenant form that is now available at Wisconsin Legal Blank Co., Inc.

The new form is entitled "Residential Lease Renewal or Notice To Vacate" and a sample can be viewed here.

Essentially this is a form that a landlord could use when his tenant's lease is ending (and does not automatically renew or revert to a month to month tenancy) and the landlord wants the tenant to remain as a tenant. The tenant would be allowed to opt for 1 of 3 options on the form.

1. Renew the lease for a specific term, thus creating another lease.

2. Continue under a month to month tenancy

3. Vacate at the end of the rental term.

With this form, the landlord should be filing in all of the blanks before offering to the tenant.. So for instance, if the landlord does not want to give the tenant the option to remain as a month to month tenant, that option could be stricken. The landlord should fill in the dates of any new term and any new monthly rent amount.

Per the language of the form, all terms and conditions of the current (and soon to expire) lease, rules and regulations, nonstandard rental provisions etc. will continue in full force and effect.

The form provides the tenant with a DEADLINE to return the form to the landlord so that the landlord will know what the tenant intends to do.

It also states that if the tenant fails to return the form to the landlord by the deadline, that the landlord will assume that the tenant intends to vacate the rental at the end of the rental term. So if a tenant does not return the form to you by the deadline, you should begin the process of re-renting the unit (or make a follow up call to the tenant to see if his unauthorized pit bull dog accidentally ate it, if you feel like enabling the tenant : )

I hope that the form proves to be helpful.

Avoid Homemade Rental Agreements . . . Regardless of What the Tenant Resource Center Tells You

I received a troubling call from a landlord last week. This landlord had some questions regarding management of her rental properties and told me that she had previosuly called the Landlord-Tenant Resource Center for assistance. I informed the caller that there is no such animal as the Landlord-Tenant Resource Center and that she had actually spoken with the Tenant Resource Center, a very pro-tenant organization.

The landlord continued to tell me that she has been using the Residential Rental Agreement sold at Wisconsin Legal Blank Co. Inc. for the last 10 years and has been very happy with it. She advised me that when she mentioned this fact to the person at the Tenant Resource Center that she was informed that she should stop using the WLB rental agreement immediately as it was vague and indefinite and would not stand up in court. She was then told that she should instead draft her own lease in the future.

As many of you know, I have been the author of Wisconsin Legal Blank’s residential rental agreement for the last 15 or so years, so this criticism was news to me. I explained that I have been representing landlords throughout Southeastern Wisconsin for years and during those hundreds of court appearances, I have never had a tenant or a tenant's attorney raise that argument. More importantly, I had never had a court make a ruling the the WLB rental agreement was vague or lost a case based on the alleged vagueness of the WLB rental agreement. I am also quite sure that if other lawyers or landlords had lost a case as a result of the wording of the WLB rental agreement, that either I or Wisconsin Legal Blank would have received an angry telephone call by now.

I proceeded to tell this landlord about the Apartment Association of Southeastern Wisconsin and that it was an organization comprised of landlords and for landlords and that she should consider calling it in the future should she have any questions about the management of her rental properties, and not the Tenant Resource Center. I also encouraged her to join the AASEW and believe that she is now a member.

What troubled me most about this call was not that someone was critical of the WLB rental agreement, but rather that the Tenant Resource Center advised this landlord that she would be better off drafting her own rental agreement in the future. Those of you that have heard me speak on the topic of rental documents before know that one of my biggest concerns is when a landlord drafts their own rental agreement. I would say that over 80% of the landlord-drafted rental agreements that I have reviewed over the years contain illegal clauses or provisions that would most likely render the rental agreement void in Wisconsin.

Inadvertently, landlords who draft their own rental agreements, often will include a provision that violates one of ATCP 134.08’s seven prohibited rental agreement provisions ("The Seven Deadly Sins"). The result of making such a mistake is that the landlord now has a rental agreement that is unenforceable against the tenant (but yet is still enforceable by the tenant against the landlord). One needs to look no further than the 2001 Wisconsin Supreme Court case of Baierl v. McTaggart, 245 Wis.2d 632, 629 N.W.2d 277, to see the disastrous results of using a poorly drafted lease.

In actuality, a landlord is better served by using a pre-printed rental agreement that has been drafted by a lawyer knowledgeable in Wisconsin residential landlord tenant law -- and is reviewed regularly by that lawyer -- then they are by drafting their own rental agreement or cutting and pasting together a conglomeration of rental agreements found on the internet.

Incidentally, many of the so-called state specific rental agreements that can be purchased on the internet also contain illegal provisions that will render them unenforceable in Wisconsin. One of these online companies actually contacted me to draft a lease for them about 5 years ago, but when they balked at actually paying me for my work, I opted to not assist them. Apparently they found an attorney who was willing to work for free but who -- unfortunately for the unsuspecting landlords that purchase this company's online rental agreements -- did not know Wisconsin residential landlord-tenant law very well and included language that would violate ATCP 134.08. There are similar issues with the rental agreements sold at Office Depot and Office Max.

I have been mulling over the possible intent of the Tenant Resource Center employee that advised this landlord to draft her own rental agreements in the future. All I can come up with is that tenant advocates must be putting out this so-called “advice” hoping that uneducated landlords will follow it, thus increasing a tenant’s chance of prevailing in court due if the landlords' self-drafted rental agreement contains an illegal provisions thus making it unenforceable against the tenant.

Call me jaded, but I can't come up with any other reasonable motivation.

Free Landlord-Tenant Law Seminar In West Allis on March 31, 2011

I will be presenting a seminar for the West Allis Landlord Training Program on Thursday, March 31, 2011 from 6:30 pm - 8:30 pm. This seminar is sponsored by the West Allis Police Department and is open to the public at no cost.

I will be speaking on two specific areas:

1. Rental Documents -- specifically what rental documents you should be using with your tenants to protect yourself such as: Rental Agreement, Nonstandard Rental Provisions, Rules and Regulations, Rental Application, Pet Agreement, Lead-Based Paint Disclosure Forms, Carbon Monoxide Detector Forms, Check-In & Check-Out forms and more.

2. Screening Prospective Tenants -- this topic will include discussion of the federal and state Fair Housing laws, written screening criteria, credit checks, CCAP, and how to reject an applicant.

The Seminar will be held in the West Allis Municipal court room which is located at 11301 W. Lincoln Avenue in West Allis. Seating is limited so I would encourage anyone that is interested in attending to arrive early to insure a seat.

A detailed outline on the above topics will be given to each attendee and Wisconsin Legal Blank Co. will be on hand with their landlord tenant law forms available for purchase.

Hope to see everyone there.

New Rental Agreement for Self-Service Storage Units Now Available at Wisconsin Legal Blank

I have recently drafted a Self-Service Storage Unit Rental Agreement that is now available and being sold at Wisconsin Legal Blank Co., Inc. Additionally I have drafted two seperate default notices that should be sent to the tenant who has breached the rental agreement for the self-service storage unit. The two default notices contain differernt language as required per Wisconsin's new law regarding self-service storage facilities and units.

Self-service storage facilities in Wisconsin are governed by sec. 704.90, Wis. Stats., which is the chapter that deals with landlord tenant relationships. While a self-service storage unit involves a landlord tenant relationship, the laws governing these facilities and units is very different than the laws governing an apartment unit or other rental property.

Sec. 704.90 is specific to self-service storage facilities and units. It does not apply to storage units that are incidental to the rental of a apartment unit. For example, sec. 704.90 (and the new forms that I have drafted) would not be used if a tenant is renting an apartment unit that includes the use of a storage unit in the basement.

The laws regarding self-service storage units were significantly changed by 2009 Wisconsin Act 380 (2009 Assembly Bill 707) which is the reason that I decided to draft the new rental agreement and notice of default forms.

Some of the changes in the new law include the following:

1. The new law makes current statutory provisions governing self-service storage facilities also apply to self-service storage units. A self-service storage units include a box, shipping container, or trailer that is leased by a tenent primarily for use as a storage space whether the unit is located at a facility owned or operated by the owner or at a locations designated by the tenant. This change in the law was made to address the new PODS type units that are being leased to people who store the units off-site from the self-service storage facility.

2. The new law requires that if a self-service storage facility rental agreement includes a provision that limits the value of the property stored, that the clause must be printed in bold or underlined type of the same size as the rest of the agreement. The limit listed in any agreement is presumed to be the maximum value of the property stored in the unit.

3. After the termination of the rental agreement, an owenr may deny the tenant access to the personal property remaining in the leased space until the tenant redeems the property by paying the owner any rent and other charges that are due.

4. The owner may sell the property after providing two notices to the tenant, and if the tenant does not redeem the property within fourteen days after the date of the second notice.

5. The new law provides that the second notice of default may be sent via certified mail or by first class mail with a certificate of mailing.

6. If the tenant does not redeem the property, then an owner who wishes to sell the property, must publish an advertisement of the sale once a week for two consecutive weeks in a newspaper of general circulation where the self-service storage facility is located.

6. The new law eliminates the old requirement that an owner's advertisement of the sale of the abandoned property include the nubler of the space where the property was located.

7. The old law required that any sale of the abandoned property be conducted in a "commercially reasonable manner." The new law states that the sale must meet one of the following requirements: (a) the property is offerred as a single parcel or multiple parcels at a public sale attended by three or more bidders, (b) the property has been offerred to at least three persons who deal with the type of personal property offerred for sale and is sold in a provate transaction, or (c) the property is sold in another manner that is commercially reasonable.

8. The new law allows the owner or operator of the self-service storage facility to do the following with the property if they do not want to sell the property, if the value of the property is less than $100 and proper notice is provided: (a) donate it to a non-profit organization, (b) dispose of it in a solid waste facility, (c) recycle it, (d) remove it in another reasonable manner.

9. The old law allowed "any person" to bring a civil lawsuit for a violation of the self-service storage facility laws -- this resulted in a very well known 2008 lawsuit entitled Cook v. Public Storage Inc., in which the owner/operator was sued by the parents of a tenant, who happened to also store some of their belongings in the tenant's self-service storage units. The new law allows only the "lessee" (tenant) to bring such a lawsuit.

For those of you owning and operating self-service storage facilties and units I hope the new rental agrrement, Notice of Default #1, and Notice of Default #2, prove helpful in assisting that you follow the applicable laws.

New Carbon Monoxide Detector Notice Form (and Others) Available at Wisconsin Legal Blank

I have recently completed drafting 3 new forms that Wisconsin Legal Blank Co., Inc. now has available for purchase that should assist landlords and property managers with their rental units..

The new forms are:

1. Carbon Monoxide Detector Notice:

As of April 1, 2010, state law requires that an owner of a residential property must install a carbon monoxide detector in various locations within the property. This new notice sets forth the state requirements as to where the detectors must be located. The notice also alerts owners that state law requires the owner maintain the detector. The new law, which can be found at Sec. 101.149, Wis. Stats., also requires a tenant to provide an owner with written notice if the carbon monoxide detector is not working. Once the owner receives this notice s/he has 5 days to repair or replace the carbon monoxide detector.

This new form sets forth all of the pertinent requirements under the new law and acknowledges that the the owner has complied with this law. A tenant's signature on the form acknowledges that the detectors in the rental unit are working and that the tenant is aware that they must notify the owner in writing should any detector stop working or not work properly.

2. Miscellaneous Complaint Form:

This document will provide landlords with a standardized form that s/he can use and provide to all tenants so that if a tenant has a complaint it can be documented properly in writing.

As we all know, it is easier for a landlord to monitor and address tenants complaints if they are provided in writing. Additionally, a tenant will often testify in court that they didn't pay rent becasue the landlord failed to remedy some problem in the unit which the landlord was never notified of. If a landlord has a policy and procedure in place to provide all tenants with blank written complaint forms at the outset of the tenancy and require them to document any complaints in writing, the fact that a tenant failed to provide written notice of a problem (when a form was provided) should help to avoid those "he said - she said" situations in court.

3. Rent Promotion/Concession Agreement:

With the recession in full force, I have noticed that many of my clients and other landlords are offerring new tenants some form of concession in order to induce them to move-in. A common problem that I have noticed with the self-drafted promotion/concession agreements that are being used, is that many of them are not clear and do not accurately set forth the agreement. For example, many of the agreements that I have seen do not clearly state that if the tenant does not perform all obligations under the rental agreement for the term of the lease, that the concession will be forfeited. Failure to have this clearly stated in any concession agreement will allow the tenant to receive the benefits of the concession (such as first month's rent free or reduced rent for first month's rent) and still break or breach the lease.

It is my hope that with this form, landlords will at the very least have the necessary language to use -- if they wish to offer a concession or promotion -- so that should the tenant vacate prior to the end of the rental term, or be evicted prior to the rental term, or if the tenant's tenancy is terminated by the landlord for any reason, that the tenant will forfeit ther rent concession.

I have been working on some additional forms for WLB that should be available in the near future -- I will let you know when they are ready.

NEW LANDLORD FORM NOW AVAILABLE REGARDING TENANT'S RESPONSIBILITY FOR LAWN CUTTING AND SNOW REMOVAL

I have recently completed drafting a new form for landlords to use that is now being sold at Wisconsin Legal Blank Co., Inc.

Addendum To Residential Rental Agreement: Responsibility for Yard Care and Exterior Upkeep

Form #985 is entitled Addendum To Residential Rental Agreement. This document sets forth a tenant's responsibility for yard care and exterior upkeep of the rental property. This form should only be used if the landlord is renting out a single-family home or a duplex and wishes the tenant to be responsible for yard care and exterior upkeep (such as snow and ice removal and the cutting the lawn). This form should not be used for multi-unit apartment buildings.

This document addresses the following tenant responsibilities:

1. Snow and ice removal

2. Cutting of grass

3. Disposal of garbage

4. Disposal of recyclables

5. Removal of litter/debris

6. Special pick-up of large items

7. Exterior lighting

8. Porches

9. Windows

10. Damage to exterior

11. Parking of vehicles

12. Washing of vehicles

13. Swimming/wading pools

14. Watering of grass, and

15. Yard tools

This form states that if the tenant fails to perform any of the listed duties that the landlord can choose to do the work himself or herself or hire someone to complete the work and that the tenant will be responsible for repayment of any and all associated costs. Additionally the form indicates that failure to complete the listed duties is a material breach of the rental agreement and may be grounds for eviction.

This addendum is a nonstandard rental provision document (refer to ATCP 134.06(3)(b)) and as such it allows a landlord to deduct the actual costs incurred by the landlord (should the tenant fail to complete the duties) from the tenant's security deposit.

It is important to remember that form #985 is just that -- a form. Some of the paragraphs may not be applicable to your specific situation. Some landlords may decide that they do not want the tenant to perform some of the listed work. In that case the landlord should cross out the provisions that are not applicable and then initial the change and have the tenant also initial the change.

There will be other situations where a landlord may want the tenant to be responsible for additional duties which are not listed in the form. In that case the landlord should attach a separate sheet which will list the additional duties. This attachment should clearly be labeled as page two of the Addendum To Residential Rental Agreement: Responsibility for Yard Care and Exterior Upkeep and should also be signed and dated by all adult tenants. As always, if you are unsure whether any additional provisions that you add to this form are allowed under Wisconsin landlord-tenant law, you should have those additions reviewed by an experienced landlord-tenant law attorney.

Since many landlords of duplexes and single-family rentals do require their tenants to perform yard care and other related duties, it is my hope that this form will assist landlords in specifying in writing what duties the tenant will be responsible for and what will happen if the tenant shirks those responsibilities.

I would like to thank Attorney Heiner Giese for his review and suggestions to this form.

Wisc. Legal Blank Co.'s New & Improved Residential Rental Agreement Is Now Available.

I wanted to alert anyone that is currently using the Residential Rental Agreement that is sold at Wisconsin Legal Blank Co, Inc. (and even those of you who don't : ) that the new and improved version is now available ans is being sold at WLB.

I completed the revisions to the updated Agreement last week. The new version indicates a revision date of 1/4/10 whereas the prior version had a revision date of 1/31/07.

Some of the changes include:

1. I retitled the document "Residential Rental Agreement" -- believe it or not I have seen this document improperly used for commercial properties (Note: I will be drafting a form Commercial Lease in the ensuing months for WLB).

2. I attempted (and think that I succeeded) in removing all legalese from the Agreement in order to make it more understandable for everyone. So you no longer need to read "heretofore" "therein" "hereof" and wonder to yourself "what the heck does that mean?"

3. I eliminated some of the "fill in the blank" sections that were causing confusion for some landlords and property managers. The eliminated sections were not really necessary anyways - so they're outta there.

4. I retitled the "Guarantee" section to "Co-Signer / Guarantor" is an attempt to make it more clear that landlords/managers do not need to have the resident/tenant sign this section. This section need only be signed by individuals (other than the tenant) that are guaranteeing that the tenant will meet all of the conditions in the Agreement. For example: a parent would sign as a co-signer/gurantor for a student tenant that is not employed and/or does not have sufficient credit.

5. I added a sentence that states that if the Landlord provides the Tenant with an Inspection Checklist (a.k.a. "Check-In/Check-Out" form) and the Tenant fails to return it to the Landlord within seven days after the start of the tenancy, that the Tenant will be considered to have accepted the Premises without any exceptions."

6. I deleted the fill in the blank lines relating to "Special Provisions" relating to pets. The purpose for doing this is to alert landlords that there is a separate docuement entitled "Pet Agreement" that they should be using if they are allowing tenants to keep pets -- rather then trying to cram all of that info into 2 lines on the Rental Agreement." By being forced -- "forced" may be too strong of a word -- to use the Pet Agreement a landlord will also notice (on the Pet Agreement form) that s/he may charge the tenant a refundable pet fee and/or a non-refundable pet fee and it will also make the landlord clearly define the specific pet that is being allowed to reside at the Premises.

7. I clarified the section that dealt with the type of notice that a tenant must provide the Landlord prior to vacting. The goal was to make this notice process more understandable for the tenant (and therefore less of a headache for landlords). This revised section will also serve as a default provision should the landlord fail to include another (i.e. longer) notice provision for the tenant. The section includes both a notice provision for month to month tenants and tenants that are under a lease for term.

8. I added a section regarding abandoned personal property. The section states that any personal property that is left at the Premises after the Tenant has vacated will be considered to have no value and to have been abandoned by the Tenant and therefore it may be disposed of by the Landlord, unless the Tenant notifies the Landlord otherwise - in writing - prior to vacating.

9. I added a new provision regarding a tenant's responsibility for maintaining and paying for utilities through the end of theiir tenancy or until the last day that the tenant is responsible for paying rent.

10. I included a new section that defines late fees, security deposits, utility charges and any other penalty or fee set forth in the Agreement as "rent" - much like is done in commercial leases.

11. I added a provision stating tha the landlord/manager represents that there are no code violations or other conditions affecting the habitability of the Premises unless indicated otherwise in writing.

12. I added a new section that clarifies who will be responsible for any extermination costs of the Tenant's unit and under what circumstances.

13. I included a provision recommending that all Tenants purchase renter's insurance and explaining why this is reccomended.

14. I removed the Consent to Assignment or Sub-Lease section. I removed this section to reinforce the fact that landlords of residential rental properties would be better protected by entering into a new Rental Agreement (and other rental documents) with a new individual that moves into the Premises after a prior tenant was evicted or vacated the unit, rather then to just assigning or sub-leasing the Premises and continuing to use the old tenant's rental documents. While this will result in more paperwork for the landlord, the protections that it will provide more than outweigh the additional paper. A Landlord in this situation should have the new tenant sign all new rental documents especially a new Lead-Based Paint Disclosure statement (and provide the new tenant with a new EPA pamphlet) and have the new tenant sign and/or initial a new Nonstandard Rental Provisions document rather then just relying on the old documents that the prior tenant signed. Trust me, if you end up in a court battle (i.e. eviction lawsuit or defending a claim that you violated ATCP 134) or facing the wrath of the EPA, you will be thankful that you used the extra paper.

15. Finally, I cleaned up all of the mispellings, improper grammar, and other typos -- at least I think I did.

I would reccomend that you toss out any old versions of the Rental Agreement that you may have in your possession and the next time that you renew or rent out a rental unit that you use this new and improved Residential Rental Agreement form.

Does Your Tenant Have A Pet? If Yes, Then You Should Be Using A Written Pet Agreement

NOTE: THIS BLOG POST WAS REVISED ON AUGUST 26, 2015

In talking with my clients and potential clients over the past year, I have also noticed that more and more landlords are allowing tenants to keep pets. I am not sure if this is because of the many pet owners that were also homeowners that have since lost their homes to foreclosure and have been forced to become renters or if it is because landlords are trying to be more accomodating to their tenants' wishes in order to keep their rental units occupied during a difficult recesssion -- or a combination of both.

Whatever the reason for this trend, if you are allowing your tenants to have pets then you must make sure that you are using a strong written Pet Agreement. Unfortunatly too many landlords do not use such a document - and it typically is to their detriment. Let's face it, "man's best friend" (if never trained or poorly trained) can cause A LOT OF DAMAGE to a rental unit. Don't even get me started about cats. While I personally have a cat that I am very fond of my experience with cats in rental units has not been good. Can you say "personal litter box?" Here is a Wisconsin Court of Appeals case about the damage that pets can cause to a rental unit.

Whether or not you choose to allow pets in your rentals is a business decision that all landlords must grapple with at one point or another. All animals, even rabbits, birds, reptiles, and fish can end up causing damage to a rental unit. If you have made the decision to allow pets then you need a good Pet Agreement.

Pet Agreements are considered to be part of the Nonstandard Rental Provisions document. Despite this your Pet Agreement should be a separate written document and not just a numbered provision within your NSRP.

A good Pet Agreement should have 4 key componants. First, it should specifically identify the pet that is being allowed to reside in the apartment. Second, it should set forth all charges/deposits for the pet. Third, a Pet Agreement must include the terms and conditions relating the keeping of a pet - the rules. Finally, the agreement should clearly explain what the consequences will be if any of the pet rules are violated.

1. Specifically Identify the Pet:

A client of mine had allowed his tenant to keep a dog as a pet - it was a fairly small dog - small enough to fit on a person's lap or a woman's purse (OK someone will need to explain to me the purpose of keeping a dog in your purse - I just don't get it). Anyways, that small dog eventually died and the tenant decided to buy another dog. Problem was the replacement dog could not fit in a purse as it was the size of a small car. It was too big for the rental property and it scared the neighbors and other tenants because of its gigantic size. While my client was using a written Pet Agreement, the agreement did not specifically identify the pet that was allowed to reside in the property - it merely said that the tenant could keep 1 dog. While the original (little) dog had passed away and was replaced with a much larger canine, the tenant still only had one dog -- problem was it was not the dog that the landlord wanted in his property and there was nothing he could do about it as the tenant had not violated the Pet Agreement.

A good Pet Agreement should clearly identify the animal/s that are being allowed to reside in the unit In order to do this the Agreement must identify the following:

- The type of animal (dog, cat, iguana etc.),

- The breed of animal (beagle, labrador, border collie),

- The name of the animal (you know . . . . Fido, Scrappy, Puss 'N Boots),

- The color of the animal,

- The age of the animal, and

- The weight of the animal.

If there are any other distinguishing characteristics of the pet then you should list them as well.

The Pet Agreement should clearly restrict the tenant to keeping the identified animal only. Should the "allowed pet" pass away during the tenancy then the tenant will not be allowed to replace that pet unless the landlord consents to the replacement pet by entering into a revised Pet Agreement.

2. List All Charges For Keeping A Pet

A second componant of a good Pet Agreement is that it should clearly state what charges will be required in exchange for keeping the pet. You can charge the tenant an increased monthly rent and/or a pet deposit. The Department of Agriculture, Trade and Protection is of the strong opinion that you cannot charge a non-refundable pet deposit or fee. If you review the definition of a "security deposit" set forth in ATCP 134.02(11) that they are most likely correct. So while in the past I used to believe that you could charge a non-refundable pet fee, over the years I have changed my mind. If a landlord continues to charge a non-refundable fee they run the risk of being sued for an improper security deposit deduction which opens them up to paying double damages and attorney's fees to a tenant.

I have allowed past tenants to keep pets in my rental property. I required my tenants to post a refundable pet deposit to cover the cost to repair any damages that their pet may cause to my property. If there are no damages then the tenant gets this money back.

I have never charged an increased rent for the keeping of a pet, but I do know of landlords that do. Nothing is wrong with charging additional rent for the pet - the reasoning for using this option is that there will be increased "wear and tear" to the unit as a result of the pet and even if that wear and tear is not "damage," the landlord should be compensated for that additonal use.

Pet Agreements should also clearly state that the tenant's financial obligations for the pet are NOT limited to the non-refundable pet fee, the refundable pet deposit, or the increase monthly rent. If Sparky uses the baseboards in the unit as his personal rawhide bone and/or the Kitty unrinates and defecates all over the carpet and hardwood floors, you should be able to recoup all of the damages from the tenant and not be limited to only the amount of any fee or deposit.

3. List All Rules For The Pet

The third componant to a Pet Agreement is to list all of the rules that pertain to the keeping of the pet. Possible rules could include:

- The dog must be keep on a leash at all times when outside of the unit

- The cat's litter box must be changed twice per week and the contents of the litter box must be disposed of in a sealed bag and placed in the dumpster located outside of the rental unit

- The iguana must remain properly caged at all times and any waste must be cleaned or removed on a frequent basis so as to prevent odors

- All waste must be removed from the yard immediately.

4. Explain What The Consequences Are If The Agreement Is Breached

Finally, your Pet Agreement needs to include what I call "The Hammer" -- essentially you need to explain what will happen if the tenant and his/her pet are in violation of any of the rules. Will they be fined? If so, how much? Will a violation of the rulesbe considered a material breach of the agreement such as to give rise to the termination of the tenancy and an eviction lawsuit? Could a violation result in the removal of the animal? Obviously the consequence will depend on the nature of the violation and its severity. A tenant needs to clearly understand that they do not have a right to keep a pet in your rental unit - the keeping of a pet is a privilege - and there are consequences if the animal or the owner violates the rules.

I would be remiss if I didn't mention that a service animal or an animal that is needed to "reasonably accomodate" a disabled tenant is NOT a pet. If a person meets the definition of "disabled," under federal, state or municipal law, and otherwise meets any other requirements for the use of an assistance animal or a companion animal, then they are legally entitled to keep that animal in their rental unit. Think of such an animal as a device that assists a disabled person live their life rather then a pet. An assistance animal is similar to a wheelchair, hearing aid, crutches, or medication. The difference between a pet and an assistance or companion animal will need to be covered in a future post (or many posts as it is a somewhat complicated topic).

If you would like to see an example of a good Pet Agreement visit Wisconsin Legal Blank Co. which sells a Pet Agreement that I have authored.

NOTE: THIS BLOG POST WAS REVISED ON AUGUST 26, 2015

MARYLAND ARMS CASE WILL BE REVIEWED BY WISCONSIN SUPREME COURT

In my May 28, 2009 post I wrote about the then recently published Wisconsin Court of Appeals case of Maryland Arms Limited Partnership v. Connell, 2009 WI App 87, __ Wis.2d __, 769 N.W.2d 145.

This was an important case because a divided Court of Appeals held that a tenant could not be held responsible for the damages that resulted after her hair dryer caused a fire which resulted in thousands of dollars of damage to her landlord's rental property.

A key fact in the case was that the landlord agreed that the tenant was not negligent in causing the fire becasue she had no prior knowledge of the hair dryer being faulty. Another key fact in the case was that the tenant's lease contained a provision that stated that the tenant would be responsible for all damages that were in any way caused by the acts of the tenant. The Court of Appeals held that such a lease provision was void.

The landlord in this case has petitioned the Supreme Court of Wisconsin to review the the case and the "Supremes" have agreed to hear the case. Oral arguments are to be held on January 6, 2010 and it is expected that a decision will be issued sometime in 2009-2010 term.

One of the main issues that the Wisconsin Supreme Court will have to decide is whether or not a landlord can contractually make a tenant liable for damage in a situation where the tenant is not negligent in causing the damage.

This will be an interesting case to watch and I will keep you updated as I learn more.

Newly Revised 5-Day Notice To Pay Rent or Vacate Now Available at Wisconsin Legal Blank

As many of you know I am the author of the set of Landlord-Tenant forms that are sold at Wisconsin Legal Blank Co., Inc. I am currently in the process of reviewing and updating all of the L-T forms as well as creating a few new ones. At this time however, I wanted to alert you that the revised 5-Day Notice to Pay Rent or Vacate is now available for sale at WLB.

Essentailly the revisions to the Notice include the following:

- I have added language that states that the tenant will still be in default and subject to eviction if they make only a partial payment and/or make a full payment after the 5 day cure period has elapsed. It is my hope that by adding this language it will better protect a landlord that accepts a partial payment or late payment from having their eviction lawsuit dismissed based on a legal theory called "waiver."

NOTE: The best way to avoid a "waiver" arguement is to not accept any partial payment or any payment that is made after the 5 day period has elapsed. Having said that, I am aware that it is very difficult for a landlord to turn away money that s/he is almost certain to never see again if the landlord is evicting a tenant. So if you decide that you want to keep the partial or late payment then the next best option to avoid the tenant prevailing on a "waiver" argument is to place the payment in escrow -- do not cash the check!! -- and send the tenant a letter --- which I refer to as a "No Waiver" letter --- which essentially says that the landlord has received the partial or late payment and that the money will be held in escrow until after the court has decided whether or not to grant the eviction. The 'No Waiver" letter should also state that the money will be appplied to any past due amounts owed after the eviction has been decided and that by holding the money in escrow the landlord is not waiving his/her right to continue with the eviction against the tenant and that it is the landlord's intent to proceed with the eviction and have the tenant evicted. The new language added that has been added to the revised 5-Day Notice now available at WLB has been added as a "safety net" should the landlord not follow one of the two options set forth above.

- I have referenced the applicable Wisconsin Statutes regarding 5 day notices.

- I have made a few other grammatical changes.

I will be sure and let you know when other updated landlord-tenant forms are available at WLB.

The Importance of Using Written Screening Criteria During The Tenant Selection Process

UPDATE - APRIL 15, 2016 ---- Please review my April 15, 2016 blog post on HUD's new guidance regarding the consideration of a rental applicant's criminal history in the screening process as it may impact or alter the information in this blog post.

Those of you that have attended one of my landlord-tenant law seminars or read my prior posts on screening tenants know that in my opinion the screening process is the single most important aspect of being a landlord. If done properly, the screening process can save a landlord from many headaches such as: having to evict a bad tenant, repairing your damaged rental property, dealing with other tenants complaining about your loud and disruptive tenant, and/or having your rental property declared to be a public nuisance due to the bad behavior of your tenant and his/her guests. By properly screening your tenants you will significantly reduce your exposure to the above situations.

One key aspect of the screening process is having and using written screening criteria. Screening criteria sets forth the minimum requirements that an individual must meet in order to be able to rent from you. Looking at it another way, screening criteria also sets forth what will cause an applicant to be denied rental from you.

Here is an example of written screening criteria. Please be aware that this screening criteria is pretty stringent. I am not saying that you should or should not use this criteria - you must determine what criteria works for you and that is based on many factors which I will not be addressing in this post. I am linking to this sample screening criteria so that you have some examples of permissable (and legal) criteria so that you can better understand this post.

You should think of your screening criteria as a checklist that you go through when reviewing each application. By utilizing screening criteria a landlord is reminded that s/he should be making a decision to rent to an individual based on objective reasons rather then subjective ones.

An objective reason to deny an applicant is something that is quatifiable and verifiable. Examples would include whether or not the applicant has ever been evicted before, whether their prior landlord would rent to them again, whether their gross monthly wages are at least 3 times the amount of your monthly rent. Subjective reasons cannot be verified and as such can lead to allegations of or actual instances of discrimination.

A subjective reasonson the other hand, cannot be quantified or verified. Examples of subjective reason for denying an applicant would be because you got a "bad feeling" when talking to them or you didn't feel like you "connected" with them. You should not be making a decision to rent to someone based on a subjective feeling; by doing so you may inadvertantly and unconsciously be discriminating against them.

You should have your screening criteria in place prior to taking your first application. Screening criteria should not be created as you go. Ideally you should spend some time thinking about what would cause you to deny an applicant and conversely what would cause you to rent to an applicant. Think of objective reasons such as: do they have a prior rental history, have they been employed at their current job for a period of time, do they make enough money that they can afford to pay the rent and still have extra money to live on, have they ever been evicted before, do they have prior money judgements against them, would their prior landlord rent to them again, have they been arrested and/or convicted of a crime. Think about what caused you to accept or reject your current tenants. This information will serve as the initial draft of your screening criteria.

Next, take a seasoned landlord that is familiar with discrimination/fair housing laws to lunch and ask him/her to review your draft criteria or hire an attorney that has experience with the fair housing laws to give you some feedback. You need to insure that your criteria is legal and does not violate any aws before you begin to use it.

Once you have your screening criteria in place, the next step is to insure that you apply it evenly and consistently. You should not make exceptions to your criteria. If your screening criteria says that an applicant will be denied rental if they have ever been evicted in the past -- and your applicant has a prior eviction judgment on their record -- then you should deny them. Once you start making exceptions to your screening criteria you lose the protection of the screening criteria because you are once again resorting to subjective decision making such as "I know that s/he was evicted last year but they seemed like such a nice and honest person that there must have been a misunderstanding." Does this sound familiar? Do not make exceptions.

Screening criteria does not have to be distributed to the applicants. Many larger landlords do give their criteria to potential renters as a form of self-screening with the intent that potential applicants will read the criteria and not submit an application if they do not meet the criteria - thus saving the landlord time and money of reviewing an application that will be denied in the end anyhow. Many other landlords choose not to give out their criteria but rather use it internally to assist in the screening process. Either option is legal and both options have pros and cons.

The most common complaint I receive from clients that have started using screening criteria is that they feel "bound" or "restrained" by the criteria. If that is how you feel when you start using it then you know that it is serving its purpose and you are doing things correctly. Screening criteria is supposed to restrain you -- it is designed to reign you in from making random, spur of the moment, subjective decisions.

You are able to change your screening criteria over time. For instance if one of your criteria requires an applicant to have a FICO score of at least 700 and you find that none of the applicants are meeting this requirement and your unit is vacant as a result, then you may need to lower the FICO score requirement. Nothing is wrong with changing your criteria but you cannot and should not be changing your criteria back and forth day to day, week to week or even month to month.

If you do change your screening criteria you should make a notation as to when you stopped using the old criteria and began using the new criteria. If you look at the sample screening criteria linked above you will see that there is a place on the second page of the document for you to indicate the date that you started using the criteria and the date when you stopped using that criteria. After you have stopped using a certain version of your screening criteria you should retain a copy for a minimum of 3 years but preferably for up to 7 years. The statute of limitations for most federal and state discrimination complaints is 3 years but there are some that are 7 years. So if a past applicant should decide to file a discrimination complaint against you 6 years and 11 months later you still want to have written proof of the criteria that you were using at the time of the alleged discriminatory conduct.

If you review an application and you determine that the applicant does not meet your croteria you should make a notation as to which criteria they did not meet and attach any supporting documentation. Then file it away with your other important records.

Screening criteria is also very helpful if you have more than one person screening potential applicants. For example, if you have multiple employees or have hired a management company to run your rental properties you can provide them with a copy of your screening criteria and tell them that you want them to utilize it. By having them follow your written screening criteria - which can serve as a checklist - you have a better chance that they will follow it.

Being a defendant/respondent in a federal or state discrimination investigation is about as much fun as a root canal. The investigative process is long, tiring, disruptive, and very intrusive. The investigators will interview your current tenants, your past tenants, current employees, past employees and anyone else that may be able to assist them in determining whether or not you engaged in a discriminatory act.

I have represented many landlords that have had both federal and state fair housing complaints lodged against them for discrimination arising out of the screening process. In all of those cases, the first question that the investigator asked me was whether or not my client was using written screening criteria. Unfortunately in every one of those cases I have always had to answer "no" to that question. If my clients had been utilizing written screening criteria I would have been able to forward the screening criteria to the investigator along with the documentation supporting which criteria the applicant did not meet and I would have had verifiable proof that the applicant was denied rental based on a non-discriminatory reason.

Because my past clients were not using written screening criteria it ended up being a case of "he said/she said." What I mean by that is my client is saying that s/he didn't discriminate against the applicant and the applicant is saying that the tenant did discriminate against them. There is no written proof one way or the other. It is a crap shoot. When you are in a "he said/she said" scenario you are in for a long, painful, and often expensive investigation.

Do yourself a favor -- if you are a landlord and are not currently using written screening criteria, use the information in this post to begin the process of putting together some criteria, have it reviewed, and begin using it during your screening process.

UPDATE - APRIL 15, 2016 ---- Please review my April 15, 2016 blog post on HUD's new guidance regarding the consideration of a rental applicant's criminal history in the screening process as it may impact or alter the information in this blog post.

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

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

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

1. How much money does the tenant owe you?

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

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

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

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

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

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

3. Is the ex-tenant collectible?

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

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

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

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

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

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

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

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

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

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

ATCP 134: THE 7 DEADLY SINS - 7 PROHIBITED RENTAL PROVISIONS

04/16/15 - UPDATE - This blog post has been updated by a new blog post dated 04/16/15 and entitled THE 10 DEADLY SINS: 10 PROVISIONS THAT LANDLORDS ANNOT INCLUD IN THEIR WISCONSIN RESIDENTIAL RENTAL AGREEMENT

Did you know that if you have an illegal provision in your rental agreement that the entire agreement may be unenforceable? Unfortunately this is true. In the case of Baierl v. McTaggart the Wisconsin Supreme Court held that because the landlord's lease contained an illegal provision, the entire lease could be thrown out. This result can occur even if you never tried to enforce the "illegal" provision as was the case with the landlord in the Baierl case.

In my representation of landlords over the past 14 years, the two most frequent situations in which I have found an illegal provision in a rental agreement were because: (1) the landlord decided to draft his/her own rental agreement and didn't know that Wisconsin law prohibited him/her from including certain language, and (2) the landlord used a rental agreement that s/he found on the internet that was not drafted by a person knowledgeable about Wisconsin law.

The Wisconsin Administrative Code, Chapter ATCP 134, specifically ATCP 134.08 sets forth the 7 provisions that cannot be included in a Wisconsin residential rental agreement - often referred to as the 7 deadly sins.

You cannot include a provision in your rental agreement that:

1. Authorizes the eviction of a tenant from the property other than by the judicial eviction process set forth in the Wisconsin Statutes.

Essentially this means that if the tenant refuses to vacate at the end of a lease or after committing a breach, the landlord is not able to engage in self-help eviction. You are not allowed to change the locks so that the tenant is locked out. You are not allowed to remove the door to the apartment. You are not allowed to turn off the heat or electricity to the unit. Nor can you remove the tenant's belongings and put them on the curb or in a storage facility.

If a tenant refuses to leave your property, the only legal way to have them removed is to file an eviction action against them, obtain a judgment of eviction, and if necessary involve the Sheriff's Department to physically remove the tenant. Because this is the only legal way to remove a tenant it is illegal to include some other procedure to evict a tenant in your rental agreement.

2. Provides for the acceleration of rent payments if the tenant defaults or breaches the rental agreement.

Some commercial leases include an "acceleration of rents" clause but such clauses are prohibited in Wisconsin residential leases. So if a tenant breaches their rental agreement the landlord cannot require that the tenant immediately pay all future rent through the end of the term. According to sec. 704.29 of the Wisconsin Statutes, the landlord must attempt to mitigate the tenant's damages by trying to re-rent the unit. If the landlord is able to re-rent the unit then the breaching tenant will no longer be responsible for the rent once the new tenant moves in and begins paying rent. If the landlord is unable to re-rent the unit then the breaching tenant may very well be responsible for all of the rent through the end of the term, however since the landlord is unable to determine if that will be the case at the time of the breach, the landlord cannot include language in the agreement that the tenant must pay all future rent immediately upon a breach.

3. Waives the landlord's duty to mitigate damages.

As I mentioned above, landlord's have a duty to mitigate a tenant's damages by trying to re-rent the unit. As such, it is illegal for the landlord to avoid that duty by putting such language in the rental agreement.

4. Requires the tenant to pay the landlord's attorney's fees or costs that are incurred in any legal action or dispute arising under the rental agreement.

This is the illegal provision that I see the most often when reviewing rental agreements. The lease agreements that are sold at OfficeMax and Office Depot contain this prohibited language. This is also the illegal language that was included in the rental agreement at issue in the Baierl case that I reference above.

In a commercial lease it is acceptable to include language that requires a tenant to pay for the landlord's attorney's fees and costs however it is not allowed in the residential context. A landlord who prevails in court and has a tenant properly evicted will still be responsible for paying his/her own attorney's fees. If you are interested in learning more about the Wisconsin Supreme Court's reasoning you should read the Baierl case here.

5. Relieves the landlord from liability for property damage or personal injuries caused by the landlord's negligent acts or omissions.

To put it simply, if the landlord causes damage or injury to a tenant then the landlord will be responsible for it. A landlord cannot remove his/her liability by having a tenant sign a rental agreement waiving that responsibility. For example, if a landlord is aware that the railing on his rental property's second floor porch is loose and the landlord has not gotten around to repairing it for several weeks, the landlord will be responsible for the tenant's injuries should he fall off the porch, regardless of what the rental agreement says.

6. Imposes liability on a tenant for injuries or damages which are clearly beyond the tenant's control or any damage caused by natural disasters or by persons other then the tenant or the tenant's guests.

This is very similar to the 5^th deadly sin mentioned above but is even broader in scope. The landlord can't hold a tenant responsible for someone else's negligence (other than a guest) if the tenant has no control over that person, nor can the landlord hold the tenant responsible for injuries or damage resulting from an act of God. So if the tenant or the tenant's guest was negligent and that negligence caused damage or injury to the tenant or his property then the landlord will not be responsible - the tenant would. But if a massive snowstorm damages the rental property or an electrician hired by the landlord improperly wires the unit causing injuries and damage, the landlord cannot hold the tenant responsible regardless of what the rental agreement says.

7. Waives any other statutory or legal obligation of the landlord to deliver the unit in a fit or habitable condition or maintain the unit during the tenancy.

A landlord has a responsibility to provide the tenant with an apartment that is liveable and safe. A landlord also has the responsibility to repair and maintain the property to insure that it remains safe and liveable. A landlord cannot avoid this responsibility even if the tenant agrees to allow him/her to do so in the rental agreement.

Wisconsin landlords need to make sure their rental agreements do not contain any of these 7 deadly sins. Failure to remove such illegal provisions may result in your rental agreement being declared unenforceable against the tenant and may even expose you to a lawsuit for double damages and attorney's fees by the tenant.

04/16/15 - UPDATE - This blog post has been updated by a new blog post dated 04/16/15 and entitled THE 10 DEADLY SINS: 10 PROVISIONS THAT LANDLORDS CANNOT INCLUDE IN THEIR WISCONSIN RESIDENTIAL RENTAL AGREEMENT

LEAD-BASED PAINT DISCLOSURE FORM: YOU MUST USE THIS DOCUMENT!

Just last week I read yet another article about an owner and its management company in California being threatened with a $330,000 fine for failure to give it's tenants a lead-based paint and lead-based paint hazard disclosure notice as required under federal law. Yes, that number is correct - $330,000 - I did not mistakenly add an extra 0 or two. That is $11,000 per violation for the 30 alleged violations.

Just yesterday I was meeting with a new client to review his rental documents and assist him with a problem tenant issue. This client owns several properties in the city of Milwaukee and has owned one of them for over 10 years. After reviewing the rental documents that he was using and not noticing the lead-based paint disclosure form among them, I asked him if he gave his tenants the federally-mandated lead-based paint disclosure. He did not know what I was talking about - he was not aware of the law or the disclosure form.

It is federal law (24 C.F.R. Part 35, subpart A) that an owner, or its agent, of any property that was built before 1978, must disclose to any prospective tenant whether or not it has any knowledge of lead-based paint or lead-based paint hazards in the property and if so provide any written records of same if available. The owner/agent must also give the prospective tenant a copy of the E.P.A.-approved information pamphlet entitled "Protect Your Family from Lead In Your Home."

You must give these two documents to each and every tenant even if you have no knowledge of any lead-based paint issues in your property. Chances are that most, if not all, older housing stock has some layers of lead-based paint somewhere within it. The fines for failing to provide these documents to tenants are huge - as you can tell from the California article I reference above.

If you are interested in seeing a copy of the manual that the feds follow to determine what amount the fine should be for such violations click here. It is truly scary. You can be fined for failing to provide the above documents to tenants even if no one has been injured by ingesting lead-based paint chips or dust. You can be fined even if there are no children living in the unit. The fine is for failing to provide the disclosure form. If children are living in the unit or god forbid any child is injured as a result of ingesting lead-based paint at your rental property the fines just increase.

It is very easy to comply with this law and protect both yourself and your tenants. You can purchase a copy of the Lead-Based Paint Disclosure form at Wisconsin Legal Blank, Inc. The EPA pamphlet may also be purchased at WLB. The pamphlet is also available for free on the internet here. As long as you include all of the pertinent requirements you can even draft your own disclosure form.

Once you have purchased or drafted the disclosure form fill it out. If you are not aware of any lead-based paint or lead-based paint hazards you simply check the applicable box on the form. If you have no documentation of any lead-based paint or lead-based paint hazards (such as building code orders) you also check the applicable box. If you are aware of your property having lead-based paint or lead-based paint hazards (i.e. you or some agency have conducted tests and/or you have been cited by your municipality) then you must disclose this information and also attach any written documentation that you have in your possession regarding this.

Once you have accurately completed the form you should sign and date it. You should then give a copy of the form and the EPA-approved pamphlet to each adult and have them sign and date it. This disclosure form is the first document you should be having your soon-to-be tenant reviewing and signing when you meet with them to review and sign your rental documents. The law says that you should be providing this disclosure form to prospective tenants - so they should be receiving the disclosure before they sign the rental agreement and actually become tenants.

If you are reading this post and have not provided your current tenants with the disclosure form and the pamphlet I would suggest that you take action immediately and get these two documents to them ASAP. Late disclosure is better then no disclosure.

With such large fines levied by the government for such failure to disclose lead-based paint and lead-based paint hazards I am extremely cautious and often advise my clients to provide new disclosure forms and a new EPA-approved pamphlet to tenants every time they sign a renewal or enter into a new rental agreement. It probably is not necessary but I'd rather be safe then sorry.

TIME TO REVIEW YOUR RENTAL DOCUMENTS

With the new year already upon us, I encourage all property owners and managers to spend some time reviewing their current rental documents so that any needed changes can be made before accepting new applicants. Below are some questions and ideas that may assist you in your review.

Is the rent amount that you are charging your current tenants in line with the what other similar properties are being rented for in the same neighborhood? If your monthly rental price is "under market" then you should consider increasing your rent. Have your costs of doing business increased over the past year? If so, then you have yet another reason to increase your rent amount as long as the rental market in which your rental property is located can accomodate such an increase.

Does your residential lease contain an automatic renewal clause whereby at the end of the lease term it automatically renews for another lease term or even reverts to a month-to-month tenancy? If the answer is yes, then insure that an automatic renewal or reversion is what you actually want. Many landlords are now opting to have their lease agreements cease at the end of the term. By doing so, the owner or manager now has the inclination and reason to review his/her tenant's behavior and payment history over the past year and determine whether or not they want that tenant to remain in their property for the next year. It should also be noted that owners using automatic renewal provisions in their leases must also provide written notice of that renewal to the tenant in order for the provision to be enforceable.

In light of your interactions (both good and bad) with your tenants this past year is there a need to add any additional restrictions to your Rules and Regulations? If you have encountered any problem behaviors from your tenants this past year then consider amending your Rules & Regulations to include a new provision addressing the unwanted behavior.

Has your written screening criteria changed during the preceding year? If so, then you will need to update your screening criteria, specifically noting the changes made, and do this is writing. Be sure and save your old screening criteria and also record the date when you stopped using it. Remember, having written screening criteria and applying it consistently is the #1 best defense to any discrimination/Fair Housing complaints.

Have you incurred any additional costs or fees this past year (other than "normal wear and tear" to your property) that you would like to pass on to your tenants? If so, consider adding these costs to your Nonstandard Rental Provisions. By adding the new charges or fees to your NSRP, reviewing those charge with your tenants, and obtaining your tenantss signatures on the NSRP, you will be able to legally deduct these charges from your tenant's security deposit if needed.

Are you utilizing the Disclosure of Information on Lead-Based Paint and/or Lead-Based Paint Hazards form Did you provide a copy of this important document along with a copy of the E.P.A.'s free pamphlet entitled "Protect Your Family From Lead In Your Home" to all of your new tenants this past year? If you are not providing these two documents to all tenants that reside in any of your pre-1978 properties then you are in violation of federal laws and subject to large fines, regardless of whether anyone incurs lead poisoning or not.