AASEW'S Annual Landlord Tradeshow To Be Held On September 16th at Serb Hall

The Apartment Association of Southeastern Wisconsin's (AASEW) 10th Annual Landlord Tradeshow and Seminar will be held on Wednesday, September 16, 2009 from 12 noon - 7 pm at American Serb Hall (5101 W. Oklahoma Ave, Milwaukee).

Admission is free for rental property owners and potential owners. Free food and snacks will be offerred. This is a great event for landlords, future landlords, property managers, real estate investors, and anyone else interested in learning how to succeed in today's real estate market.

Attendees will learn how to run their rental properties with more profit and less hassle. They will also have the opportunity to meet the vendors that rental property owners use on a regular basis.

Seminars that will be presented include:

- "How To Collect Tenant Bad Debt" by Bill Gray of Rent Recovery Services

- "Causes for Eviction: Which Notice To Use When" by Tristan Pettit, Esq. of Petrie & Stocking S.C.

- "New Lead Paint Renovation Rules" by Ada Duffy of Milwaukee Lead and Asbestos Center

- "How To Improve the Eviction Process" by the Milwaukee County Sheriff's Department

- "How To Benefit from a 1031 Exchange" by Patrick Harrington, Esq. of M&I 1031 Exchange Service

- Town Hall Meeting - Get Answers to Your Rental Property Questions featuring: Attorney Tristan R. Pettit of Petrie & Stocking S.C. and AASEW President, Attorney Heiner Giese of Giese & Weiden LLC and AASEW's general counsel, and Susan Ipsarides, Portfolio Director for StuartCo.

For more information go to www.LandlordTradeShow.com

You will not want to miss this! Hope to see you there.

Housing Choice Vouchers (Section 8 Rent Assistance) Are Not A "Lawful Source of Income" In Wisconsin

I am often asked whether or not a landlord is able to legally decline to rent to a tenant that is receiving "rent assistance." I believe that the primary reason that landlords are unsure of the answer to this question is because Wisconsin's Open Housing Act (Sec. 106.50, Wis. Stats.) prohibits a landlord from discriminating against a tenant or a prospective tennat based on their "lawful source of income." For more information on Wisconsin's protected classes you should read my prior post entitled "FAIR HOUSING - Part 1: What Are The Protected Classes?"

The Housing Choice Vouchers Program (previously referred to as Section 8 Rent Assistance) is a voluntary federal program that assists very low-income families, the elderly, and the disabled to locate housing in the private market. Housing Choice Vouchers are administered locally by public housing agencies (PHA's). The PHA's receive federal funds from the U.S. Department of Housing and Urban Development (HUD) to administer the voucher program. If a landlord accepts a tenant who is enrolled in the Housing Choice Voucher Program then the local PHA will pay a housing subsidy (to cover a portion of the tenant's rent) directly to the landlord. The tenant then pays the difference between the actual rent charged by the landlord and the amount subsidized by the program. For more information on the program please go to the Housing Choice Vouchers Fact Sheet which is located on HUD's website. The federal regulations that cover this program can be found at 24 CFR Part 982.

An earlier version of the Wisconsin Administrative Code defined "lawful source of income" as including "lawful compensation or lawful remuneration in exchange for goods or services provided, profit from financial investments, any negotiable draft, coupon, or voucher representing monetary value such as food stamps, social security, public assistance or unemployment compensation benefits. Sec. IND 89.01(8), Wisc. Admin. Code. (Please Note that this section of the Code is no longer available). Lawful source of income would also include child support payments, family support payments (i.e. alimony).

Under the above definition it would seem that "rent assistance" would be considered to be a lawful source of income, however the Seventh Circuit Court of Appeals -- which includes Wisconsin -- held otherwise in the 1995 case of Knapp v. Eagle Property Management Corp., 54 F.3d 1272, 63 USLW 2750 (1995).

The court in Knapp specifically held that rent assistance vouchers are NOT considered to be a lawful source of income under Wisconsin's Open Housing Act. The court reasoned that the Section 8 voucher "does not equate" to the other forms of aid mentioned above. The Court explained that of the types of income enumerated in the regulation, that rent assistance vouchers would be the most like food stamps -- but yet they are still very different. Unlike food stamps, rent assistance vouchers do not have a montary value independant of the voucher holder and the apartment sought. Additionally, unlike other forms of support, the local housing authority that administers the federal program makes the rent assistance payments directly to the landlord, rather than to the voucher holder.

The Knapp Court did acknowledge that while rent assistance vouchers could arguably be included within the definition of "lawful source of income" under the Wisconsin Statutes, that they would "decline to ascribe such an intent to the state legislature because of the potential problems in doing so."

The primary problem that the Court was referring to is that if section 8 vouchers were to be considered a "lawful source of income" then Wisconsin would in essence be making the Section 8 program mandatory for all Wisconsin landlords. As mentioned above the federal program is voluntary. The court felt that it would be wrong to allow a state to make a voluntary federal program mandatory without the legislature clearly stating that that was its intent.

Thus, it is because of the Seventh Circuit Court of Appeal's holding in Knapp that landlords in Wisconsin are legally allowed to refuse to rent to a prospective tenant that is on "rent assistance."

ADDED after reviewing comment: PLEASE NOTE THAT SOME MUNICIPALITIES HAVE DECIDED TO MAKE RECIPIENTS OF HOUSING CHOICE VOUCHERS PROTECTED --- So it is always important to check the local ordinances in which you hold property as local municipalities are allowed to create additional protected classes. Dane County and the City of Madison are notable for doing this.

New Bill To Be Introduced Requiring Landlords to Change Locks For Tenants In Cases Of Domestic Violence

A new bill that would require a landlord to change locks for a tenant in cases of domestic violence is being shopped around for additional sponsors. State Rep. Dexter and Senator Holperin have drafted a proposed bill, which has not yet been introduced, which would allegedly protect victims of domestic violence, sexual assault, and stalking by requiring landlords to change the locks of the victim's apartment unit within 48 hours if certain conditions are met.

ADDED 8/31/09 -- The bill has officially been introduced in both the Assembly and the Senate. The proposed text of Senate Bill 274 (AB 400) is now available.

Specifically, the bill requires a landlord to change the locks of a tenant's unit -- or give a tenant permission to do so -- if the tenant requests that the locks be changed and provides the landlord with a certified copy of any of the following: (1) injunction order protecting the tenant or tenant's child from the person, (2) a condition of release [from prison] ordering the person to have no contact with the tenant or the tenant's child, (3) a criminal complaint alleging that the person sexually assualted or stalked the tenant or the tenant's child, or (4) a criminal complaint filed against the person as a result of an arrest for committing a domestic abuse act against the tenant.

If the tenant supplies her landlord with one of the documents mentioned above and requests that her locks be changed then her landlord must change the tenant's locks within 48 hours after receiving the request.

The tenant will be required to pay for the cost of the lock change.

There will be an exception to the above which will come into play if the person who is the subject of the injunction order or criminal complaint is also a tenant living at the same unit for which the lock change is requested. If that happens then the landlord will not be required to change the locks unless there is also an injunction that prohibits the tenant from entering the property of the tenant making the request or there is a condition of release [from prison] ordering the tenant not to contact the tenant that is making the request.

Since this legislation has not yet been officially introduced there is not a link to the actual bill yet available on the Wisconsin Legislature's website. When the bill is officially introduced I will add the link.

Worthless Check Diversion Program: An Opportunity To Collect On "Bad Checks"

The Miwaukee County District Attorneys Office has adopted a new program that will hopefully allow landlords to collect on bad checks that were passed by their tenants. The goal of the program is to get the bad-check writers to pay back the money owed in exchange for not being charged with a crime or referred to collections.

This program, entitled the Worthless Check Diversion Program, is a positive step for landlords because currently the Milwaukee Police Department will not prosecute tenants that write bad rent checks. See my earlier blog post on this topic entitled "Passing of Worthless Checks Will Not Be Prosecuted in City of Milwaukee."

Assistant District Attorney Ron Dague spearheaded this new program for the DA's Office and even spoke at an AASEW membership meeting about the program back in January of this year. The goal was for the program to be up and running by April. According to a recent Journal Sentinel article entitled "Program Allows Writers of Bad Checks To Pay Up, Avoid Charges" written by Tom Kertscher, the program has been operating for the past few months, however the Milwaukee Police Department is not yet participating.

The program will be run by a company called Financial Crime Services. To participate a landlord that has received a bad check from a tenant must contact Financial Crime Services and provide them with the necessary information. The company will then send a letter to the bad-check writer. If the bad-check writer is willing to participate in the program, which they will have to pay for themselves, they must attend an educational based program to teach them about budgeting, finances and bank fees. Upon completion of the program (which includes paying restitution) the bad-check writer will receive a letter advising them that they will not be criminally prosecuted for committing the crime.

There are no fees to the landlord for participating in this program. If and when restitution is collected, 100% of the money is returned to the landlord. Financial Crime Services will not charge a processing fee or take a percentage of the money collected.

If a tenant (who is now hopefully an ex-tenant) wrote you a bad check that you haven't been able to collect on, this program might be something to look into.

Fair Housing - Part 3: Legal Reasons To Deny A Rental Applicant

From reviewing the analytics program that works in conjunction with my blog, I have learned that my two prior posts on fair housing/discrimination issues peaked a lot of interest which resulted in them being two of my most read posts to date. My prior posts can be read here and here. As a result I have decided to add another post related to Fair Housing issues.

When I give seminars on the topic of screening and accepting tenants, especially after I have just discussed the 12 protected classes, the attendees often feel as if they are not allowed to reject any applicant that is a member of a protected class. The important thing to remember is that you are legally allowed to deny rental to a member of a protected class as long as the reason you are denying them rental is not because they are a member of a protected class. This is a subtle distinction but a very important one. If you keep this distinction in mind during your screening process I think you will feel less "hamstrung" in general and hopefully more confident that you are not running afoul of the law.

Here are some examples of acceptable reasons to deny an applicant rental, which do not violate fair housing laws at the federal, state or local level (at least not in the city of Milwaukee):

1. The person smokes.

2. The person wants to keep a pet (not to be confused with a service animal or a comfort animal, both of which are not pets).

3. The applicant has insufficient income (income is defined broadly and includes more than just a salary from a job)

- Note: The City of Madison does have a local ordinance preventing landlords from denying a rental applicant based on minimum income standards.

4. The person's income cannot be verified.

5. The applicant has been arrested and/or charged with a crime.

- Note: Dane County and the City of Madison have made persons with arrest records or criminal convictions protected classes in some instances.

6. The person has been convicted of a crime.

- Note: Dane County and the City of Madison have made persons with arrest records or criminal convictions protected classes in some instances.

7. The individual has been sued for owing someone money.

8. The applicant has a money judgment against them.

9. The person does not have a prior rental history (1st time renters are not protected).

10. The applicant has a poor rental history.

11. They do not provide complete answers on the application.

12. The applicant provided false information on the application.

13. Prior landlords had negative comments about the applicant and would not rent to them again.

14. The person has poor or no credit history.

15. They have only been employed for a short period of time at their current job ( I prefer to see at least 6 months - 1 year of employment at their current job so that I know there is some stability in their source of income).

16. The individual has filed bankruptcy in the past.

17. They have a foreclosure on their record.

These are just 17 of the many legal reasons that a landlord may deny a person's rental application even if the applicant is a member of a protected class. As long as you are rejecting an applicant for a reason other than the person being a member of a protected class -- such as for the reasons set forth above -- you are not violating the fair housing laws.

To protect yourself further, I strongly suggest that rental property owners and management companies utilize written screening criteria which sets forth the minimum standards that must be met for an applicant to be accepted, or to put it another way, what will cause you to deny an applicant.

Update On Who May Represent A LLC in Eviction Court: New Rules To Start September 1st

Those of you that have been following my blog are aware that Milwaukee County Small Claims Court has indicated that it will not allow non-attorneys to represent LLC's in court in the near future.

My earlier posts on this topic can be read here and here.

A fellow board member from the AASEW informed me today that one of the owner's of a property he manages was handed the notice that I reproduced in my earlier post (you can read it here here), as he was leaving small claims court. The notice indicated that he would no longer be allowed to represent his LLC's in small claims court as of September 1, 2009.

He indicated to the commisioner that handed him the notice that he was a full-time employee of the LLC and therefore can appear on behalf of the LLC in small claims court as allowed under Sec. 799.06(2) of the Wisconsin Statutes. The court commissioner's reply was something to the effect that, " I see you down here [small claims court] a lot, and you have many LLC's. There is no way that you can be a full-time employee of all of them or you would have to work hundreds of hours per week."

This issue seems to coming to a head very soon. Unless you are a full-time employee of an LLC, and you have written records to prove this, it looks as if September 1, 2009, will be the deadline by which you will need to have made arrangements to have an attorney represent your LLC's in Milwaukee County Small Claims Court or risk having your case either adjourned or dismissed.

03/23/15 - UPDATE - Act 76 (effective 3-1-14) now allows non-attorneys to represent LLC's

Milwaukee's Chronic Nuisance Ordinance and It's Improper Use Against Landlords

The City of Milwaukee's Chronic Nuisance Ordinance (80-10) is a thorn in the side of many landlords. Essentially the ordinance says that if your property generates more than 3 calls for police service for "nuisance activities" within a 30 day period that the city will charge you for the costs associated with abating the alleged nuisance.

Nuisance activities include the following: harassment, disorderly conduct, battery, indecent exposure, prostitution, littering, theft, possession, manufacture or delivery of drugs, gambling, illegal possession of firearms, keeping a dangerous animal, trespass to land, conspiracy to commit a crime, discharge of a firearm, excessive noise, loitering, public drinking, sale of liquor, possession of counterfeit items, possession or selling of drug paraphenalia, selling or giving tobacco products to children, misuse of emergency telephone numbers, harboring an animal that causes a disturbance, illegal use or sale of fireworks, and truancy. In summary, a nuisance activity is pretty much anything and everything you can think of.

If your rental property is being used as a drug house or is the headquarters for a gang or if you are allowing tenant to run a house of prostitution out of your apartment complex then I agree that your property is more than likely occupying more than its fair share of the police department's time and resources and that the property may be a chronic nuisance. But this is not the only -- nor is it the typical -- situation in which this ordinance is being used against landlords.

Oftentimes landlords are having fines added to their property tax bill or being contacted by the police becasue a tenant called 911 to report a legitimate crime, or because a neighbor (who is mad that they live next to an apartment complex) called the police because s/he doesn't like it when the tenants stand and talk in front of the building, or my all-time favorite, a person (not a tenant or the owner) walked by the rental property and decided to drop their hamburger wrapper on the lawn. All of the above instances qualify as nuisance activities under Milwaukee's ordinance and can result in a property being declared a chronic nuisance.

I have heard from many landlords -- both in my capacity as an attorney representing landlords and as the president of the Apartment Association of Southeastern Wisconsin (AASEW) -- about circumstances in which they have been contacted by the police as a result of examples similar to those mentioned above. I recently received an email from a new AASEW member who was very upset at being in such a situation and contacted the AASEW for assistance and guidance. I have reproduced the member's email, with his permission, ommitting his name and the property address to protect his identity.

I own a 30 unit building at __________________. Last December there were 2 family arguments in which police were called, and a misdialed 911 call. According to the City's Nuisance Ordinance, 3 or more nuisance calls in any 30 day period from a property puts the owner on a list for "supervision" from the district's community liaison officer for a full 12 months. The owner must submit a plan for abatement for acceptance by MPD, fully execute the plan in a timely manner, check for nuisance incidents monthly at MPD Public Records office, and then submit a report and action plan for abatement for each incident.

My plan was approved and executed. I do have continuing nuisance incidents occurring though, but so far only one was a repeat from the same tenant. She had called the police to report that her son was receiving death threats. If my son where receiving death threats, I'd call the police too, but the community liaison officer told me that that was considered a nuisance, and strongly implied that if I didn't deal with it, the property would be designated as a Chronic Nuisance. So, against my better judgment, I filed an eviction. Of course, I was laughed out of court. As any landlord will tell you, a failed eviction action usually means the situation will deteriorate. This is not good business, but the fact is I'm being strong-armed by MPD to act.

I have taken absolutely EVERY action I was directed to take, or suggested I take, by MPD and more. I have responded to nuisance reports in as heavy-handed ways I can muster, with warnings, fines, and 5 Day Notices, to try and satisfy MPD. However, I feel like I'm being railroaded, and no matter what I do MPD will designate it as a Chronic Nuisance.

Please understand that, while my building is by no means the "Ritz", it is also by no means a slum either. Nor am I a slum landlord. This is a nice building in which we have invested heavily, increasing the value, as well as the tax collections for the City of Milwaukee. We turned this building around from a bad property in 2003, with crappy tenants who avoided calling the police like the plague, to a rehabbed property with much better tenants with higher expectations and no qualms about calling the police to demand service (which I pay for).

My understanding is that this ordinance was originally enacted to give the City some ammunition against irresponsible landlords. I fear that MPD is using the ordinance to coerce landlords to enforce the law in their stead. I have asked MPD on several occasions, both verbally and in writing, to provide me with information regarding any citations given to people who are involved in the nuisance activity, and I have gotten none. The ordinance extends to 911 abuse. Why landlords are put in a position where they are required by MPD to enforce 911 abuse is a mystery to me. Why not fine AT&T - it's their line! The whole thing boils down to MPD's inability to enforce the laws, and the abdication of their enforcement responsibilities in favor of coercing landlords to do their job for them, under threat of fines. The whole thing is, in a word, insane. Even if a landlord is successful in eviction someone, the problem just goes somewhere else anyway.

The final insult to me is the fact that MPD's definition of "property" may be a single family home, or a 30 unit building like mine. I get the same 3 call limit per month for 30 families as a single family in a regular house. I pay 30 times more taxes than the single family owner, but I receive 1/30th of the service quota. In my opinion this is an impossible and patently unfair standard.

There are single family homes and condos next to some of my buildings where the tenants are involved in gun play, drugs and prostitution. I have lost tenants due to these neighboring activities. Alas, these are not nuisance properties because there are less than 3 calls per month regarding each property. I have a few family disputes and misdialed 911 calls each month from my 30 family building, and I'm the nuisance.

I thought that this individual's email was extremely well-written and clearly pointed out several of the problems with how the City is applying the Chronic Nuisance property against landlords, such as:

1. Regardless of the size of the property (whether it be a single family home or a 100 unit apartment complex) after 3 "nuisance activities" your property can be declared a chronic nuisance.

2. Many of the so-called nuisance activities are not activities for which a Milwaukee County Court Commissioner or Judge will evict a tenant for participating in. As this person stated, the writer indicaterd, when he tried to evict the tenant he was "laughed out of court." I have been involved in eviction trials where at the close of evidence, rather then evicting the tenant that was selling drugs out of my client's property, the Judger told the tenant that he really didin't need to have 20 people coming and going from his apartment between the hours of 11 pm and 3 am most nights of the week and that he should stop that activity as it wasn't fair to his neighbors. The Judge then denied my clients request for a judgment of eviction but rather scheduled the case for a staus conference in 60 days to see if things improved. If landlords cannot even get obvious drug dealers evicted how are they going to be able to have a tenant that littered, called 911, or made an excessive noise evicted?

3. Some of the 911 calls are legitimate calls for which the police should be called and the owner of that property should not be put in the position of having to choose between receiving a fine and having his/her property declared to be a nuisance or telling his tenants not to call 911 for real emergencies.

4. Oftentimes the property that is attributed with the call is not where the actual "nuisance activity" occurred. I heard of an instance where a woman had gotten into a fight with her boyfriend at her home and then fled, she then stopped at a nearby apartment complex and asked one of the tenant's if she could use her phone to call the police. Seeing that the lady was upset, the tenant allowed her to make the call. The lady called 911. As a result of the tenant being a helpful neighbor to the victim, the tenant's landlord was contacted by the police becasue the telephone call was considered to be an improper use of an emergency number.

I think the police and the Department of Neighborhood Services (which often gets involved in these situations) need to use some "common sense" and distinguish true nuisance activity from other activity rather than classifying everything as a nuisance.

I also think that it would also be helpful for the police and DNS to spend some time in eviction court and observe just how difficult it is to evict a tenant for anything other than failure to pay rent. Maybe after sitting in room 400 of the Milwaukee County Courthouse for an afternoon they will realize that they are living in an alternate universe if they think that a landlord can obtain an eviction judgment against a tenant who litters, improperly calls 911, makes loud noises, or loiters.

I have met with the new Commissioner of DNS, Art Dahlberg, along with other members of the AASEW board, and Mr. Dahlberg was also kind enough to speak at one of the AASEW's membership meetings. In speaking with the Commissioner, he has commented that he agrees that some common sense used when determining if something a a nuisance activity. It is my hope that the addition of some common sense will occur ASAP so that landlords like the one that emailed me above, are not being placed in such an unfair position.

If Milwaukee's Chrnoic Nuisance ordinance has been unfairly applied to you and your rental properties I would appreciate you providing me with the details by adding a comment to this post.

State's Budget Bill Amends Tenant Protection Act

On June 29, 2009 Governor Jim Doyle signed the 2009-11 state biennial budget bill into law. This law in part made modifications to the Tenant Protection Act (starts on page 108) which offers tenants certain protections during the foreclosure process. My earlier post on the Tenant Protection Act can be read here.

Specifically, the state budget bill modified the current law related to tenant protections in foreclosure actions as follows:

1. ADDED - If an eviction action seeks to remove a tenant whose tenancy was terminated as a result of a foreclosure judgment and sale, the complaint must identify that the lawsuit is an eviction that is being brought as a result of a foreclosure action.

2. ADDED - A tenant cannot be named as a party in a foreclosure action unless s/he has a lien or ownership interest in the property. The fact that a tenant lives in the rental property that is being foreclosed upon is not enough to name them as a party in a foreclosure action.

3. ADDED - If a tenant is improperly named as a party in a foreclosure action the court shall award the tenant $250 in damages plus his/hers reasonable attorney's fees.

4. DELETED - The portion of the Tenant Protection Act that required the exclusion of any tenant information related to foreclosure actions from appearing on CCAP. That section was replaced with #2 above.

Milwaukee County to Post Notice on Who Can File and Appear in Court on Eviction Actions

A friend of mine who is an employee at the courthouse and does much work in small claims court, and more specifically eviction court, forwarded to my attention earlier today a copy of a notice that will soon be posted in Room 400 (Eviction Court) and Room 104 (Clerk of Courts) of the Milwaukee County Courthouse.

The notice addresses the issues of who may sign an eviction summons and complaint and who may appear in court on an eviction lawsuit.

The notice that will be posted reads as follows:

_____________________

PLEASE NOTE

In Small Claims Eviction cases, you may only sign complaints and appear in court on behalf of a property owner if you are one of the following:

• The property owner (if the property is not owned by a corporation/limited liability corporation)
• A full time employee of the property owner
• An attorney

Employees of management companies or other outside service providers may not sign complaints or appear on behalf of property owners

__________________

If this notice is going to be posted then it appears as if the clerks, court commissioners and judges will be dismissing eviction lawsuits that violate the above notice.

To read my earlier posts on these topics just click here and here.

AASEW's Response to Rep. Schneider's CCAP Legislation Can Be Found at www.DefeatAB340.org

For those of you that have been following my blog, you are well aware that State Rep. Marlin Schneider (D-Wisconsin Rapids) has introduced yet another bill attempting to restrict the public's access to CCAP. This new bill also will remove certain information from even being included on CCAP. My prior blogs on this topic can be read here, here and here.

The Apartment Association of Southeastern Wisconsin (AASEW), a collection of landlords and rental property managers, are strongly opposed to Schenider's new bill which is entitled AB 340, and have decided to do something about it. The AASEW has created a web page that can be found at www.DefeatAB340.org or by clicking here, which contains links to the actual bill as well as links to your state senators and representative so that you can contact them and convey your displeasure with this bill.

Please visit the AASEW's web page and consider contacting your elected officials to express your views as to AB 340. You should also forward the link to anyone and everyone you know that may be affected by this legislation.

If passed, this bill will affect more than just landlords. Parents, employers, day care providers and more, will be unable to use CCAP without paying an annual fee and having their CCAP searches recorded by the state. Additionally, you will be unable to learn whether a person has been charged with a crime, found liable in a civil lawsuit, or had an eviction action filed against them - until after the case has been resolved, which is often months or years after the action was filed.

The bill will also allow a person who has information contained on CCAP but which did not result in a convictions or judgment (even if this was the result of a stipulated dismissal) to remove all reference to that information from CCAP. The concept of open records will be hurt severly should AB 340 pass.

Please do your part to insure that AB340 fails.

FAIR HOUSING - PART 2: Interesting Statistics from HUD's 2008 Annual Report

I was recently reviewing the U.S. Department of Housing and Urban Development’s (HUD) Fiscal Year 2008 Annual Report on Fair Housing. Not exactly beach reading but then the weather here in Milwaukee isn’t exactly conducive to going to the beach.

HUD and its various Fair Housing Assistance Programs (FHAP) agencies handle all complaints regarding discrimination related to the federal protected classes. To see a list if the 7 federal protected classes please refer to my earlier post here. The report contained some very interesting statistics. You can review the entire Annual Report here. (Be patient as it is a large document and takes awhile to download)

In 2008, HUD and its FHAP agencies received a record-breaking number of housing discrimination complaints – 10,552. That is a huge number when you realize that only a small portion of complaints are ever reported. Added to that is the fact that most states also receive and investigate fair housing complaints with regard to alleged discrimination of the state’s protected classes (which often overlap with the federal classes). And many large cities also have a municipal agency that investigates complaints as well. In Wisconsin, for instance, the State’s Equal Rights Division (ERD) investigates complaints of Wisconsin’s Open Housing law. For a list of Wisconsin’s protected classes see my earlier posts here.

This is the third year in a row in which HUD and its FHAP agencies received more than 10,000 complaints.

The most common basis of housing discrimination complaints was involving a "disability" (4,675 complaints or 44%) with "race" coming in second place (3,669 complaints or 35%). The most common type of complaint was discrimination in the terms, conditions, privileges, services or facilities for the sale or rental of housing (5,862 complaints or 56%) – typically this means treating a person differently such as having different requirements or rules for a person based on their protected class status. In second place was the refusal to rent to members of a protected class (2,697 or 26%).

In 2008 HUD and its FHAP agencies closed 11,189 housing discrimination complaints - an all-time record. 54% of those complaints resulted in a determination on the merits by HUD (they made a determination as to whether or not their was discrimination in the specific case), while 29% of the complaints were resolved in a voluntary resolution by the parties prior to HUD making a decision as to whether or not there was discrimination. The remaining cases were closed for administrative reasons, the report states.

Over the last 4 years, apparently the number and the type of complaints have remained relatively stable. There was a slight increase in the number of complaints of disability-related discrimination and a slight decrease in complaints related to a person’s race over the past 4 years.

Fair Housing claims are not inexpensive. Housing discrimination charges that continue to the point that a hearing is held before an Administrative Law Judge (ALJ) carry a maximum civil penalty of $16,000 for a 1^st offense. That does not include the actual damages that can be awarded to the aggrieved person, nor do they include the attorney’s fees (of the complainant) or the costs that can be awarded. Even if there is a finding of no discrimination, the cost to pay your own attorney is often quite high because of the length of time it takes for HUD to complete its investigation. Once a complaint has been issued HUD has up to 100 days to conduct its investigation. According to the report, over 800 investigations involved investigations lasting beyond the 100 days. In the several fair housing cases that I have been involved with, the investigation process always lasted longer than 100 days and was very intrusive for my clients and their current and past tenants.

2008 was the first year in which HUD issued its first charge of discrimination in a case that alleged same-sex sexual harassment (two male roommates alleged that the property owner and a maintenance worker subjected one of the roommates to verbal and physical advances that were sexual in nature).

Other key cases in which HUD issued discrimination charges in 2008 included a complaint against a retirement community that refused to allow the use of motorized scooters in the units, and a complaint that a property owner refused to allow the keeping of an emotional support animal by a young boy with a form of autism (Asperger’s Syndrome).

If there is one key point to remember after reviewing HUD’s 2008 Annual Report it is that it is better to be very well-versed in the law of Fair Housing issues so that you can operate in a proactive manner by implementing legal screening and management policies, than it is to have to defend against a charge of discrimination after the damage has already occurred.

FAIR HOUSING - PART 1: What Are The Protected Classes?

A large part of my law practice is meeting with and consulting with landlords and management companies with regard to how to avoid trouble. This would include assisting them with the drafting of rental documents and guiding them on the proper notice to use when terminating a tenancy. It also includes consulting with clients with regard to fair housing / discrimination issues.

I enjoy this consulting work as it typically occurs before the landlord is embroiled in a dispute or litigation – thus my client tends to be in a better mood at the consulting stage which puts me in a better mood also.

Recently I have had a lot of calls on topics related to discrimination and fair housing and so I thought that I would devote several posts in the future to topics related to fair housing issues.

The easiest place to start would be to identify the various protected classes under Federal and Wisconsin law.

Federal law (which starts at 42 U.S.C. 3601 et. seq.) has 7 protected classes which are:

1. Race

2. Color

3. National Origin

4. Sex

5. Religion

6. Familial Status

7. Handicap

Wisconsin law (which is found at §106.50(1), Wis. Stats) also includes the above 7 protected classes plus adds an additional 5 more, which include:

1. Marital Status

2. Sexual Orientation

3. Lawful Source of Income

4. Ancestry

5. Age (18 years and older)

It is important for managers and owners to also check their local municipal ordinances as well as because there are some municipalities that have added additional protected classes. The city of Madison for instance also treats convicted criminals, students, and a person’s physical appearance as additional protected classes. You can read more about the City of Madison municipal code - Ch. 32 entitled Landlord and Tenant here.

So if you make a housing decision based on a person’s membership in a protected class you may have discriminated against them. Discrimination in housing covers a wide range of activities such as: refusing to rent to, refusing to discuss rental terms with, refusing to allow the inspection of rental housing, refusing to renew a lease, causing the eviction of, misrepresenting the availability of rental housing, applying different terms or standards, and engaging in harassment, intimidation, or coercion of. There are many more but you get the general idea.

It is important to remember that a landlord does not need to have the intent to discriminate in order to be found to have engaged in discrimination. Also be aware that most insurance policies do not cover an owner’s or manager's discriminatory acts.

Remember that just because someone is a member of a protected class does not mean that you cannot deny them rental or evict them. It only becomes discrimination if you do the above because they are members of a protected class. So if you are denying a person rental or filing an eviction action against an individual for reasons other then their protected class status then you are not discriminating against them. For example, if a person does not meet your screening criteria because they have been evicted in the past, have no prior rental history, or their gross monthly income is not 3 times the monthly rent (or some other legal screening criteria that you have in place) then it is not discrimination to deny that person rental even though they may also be a member of a protected class.

CCAP LEGISLATION INTRODUCED YESTERDAY

State Rep. Marlin Schneider has introduced his newest piece of legislation yesterday - Assembly Bill 340. Schneider's newest bill will once again interfere with a landlord's ability to properly screen his/her applicants through CCAP.

First, AB-340 will require most users of CCAP to register and pay an annual fee. Second, It will also require you to inform an applicant if you denied them rental as a result of information you obtained from CCAP and if you fail to do so you can be fined $1,000. Finally, and what bothers me most, is that no pending cases (criminal or civil) will appear on CCAP until after the case has been concluded. So if the person that just applied to rent from you is doing so becasue their current landlord recently filed an eviction against them --- you will not be able to learn this from CCAP --- until it may be too late. You also may not learn until after you have already accepted them as a tenant, that a recent applicant was just charged with the manufacture and distribution of a controlled substance.

You can read AB-340 in its entirety here.

If you would like to read my earlier blog posts on this topic go here and here.

No matter what you do I hope that you will consider contacting both your state representative and state senator and express your strong opposition to this piece of legislation.

Article and Video Regarding Recent Seminar On Advising and Defending Property Owners in Nuisance Actions

On May 7, 2009 I spoke at the State Bar of Wisconsin Annual Convention. I was asked to speak at the Government Lawyer Division's seminar that focused on the topic of neighborhoods and nuisance properties. Specifically I was asked to speak on advising and defending property owners that have nuisance properties.

The State Bar recently published a nice article summarizing my seminar presentation which was published through its online Inside Track newsletter. A link to the article and a short video of my presentation on the topic of written screening criteria is below.

House rules: Landlords knowledgeable of tenancy laws improves condition of rental properties, neighborhoods (from wisbar.org)

Landlord accountability: Advising and defending the property owner

July 1, 2009 -- In this video clip, Milwaukee attorney Tristan Pettit explains the importance of the property owner's consistent use of written criteria when screening potential tenants. Pettit spoke at the Government Lawyers Division program at the State Bar Annual Convention in May. (from wisbar.org)

CCAP: SCREENING TOOL UNDER ATTACK, AGAIN!

I have had the opportunity to review the newly proposed legislation, authored by State. Representative Marlin Schneider (Wisconsin Rapids), that will affect landlords' use of CCAP when screening rental applicants. This legislation has not yet been officially introduced so there is no link to it available on the web. Currently Rep. Schneider is sending it around attempting to find others who are willing to co-sponsor it with him.

First, the bill would require that no information can be added to CCAP until after there is a finding of guilt in a criminal matter, finding of liability in a civil matter, an order for eviction in an eviction action, or the issuance of a restraining order or injunction.

If this legislation becomes law, landlords will be put at a huge disadvantage during the screening process. If the applicant is currently being evicted by his/her landlord that information would not be displayed on CCAP. I personally feel that th most important piece of information that I want to know about somebody that is applying to rent from me is if they are currently being evicted. The time that it takes to obtain a judgment of eviction often takes up to 1 month or more - as you need to wait for the 5 or 14 day notice to expire, then it takes approximately 2 weeks before you can get into court for the initial appearance, and then if the tenant contests the eviction the trial could be scheduled out as far as 1 week from the date of the initial appearance - and that does not even account for the court time (or backlog) to enter the information into CCAP.

The same would apply to collection lawsuits. If the tenant is currently being sued by his/her landlord for damage to the rental property (not part of an eviction action) or any other person or business that is owed money by the tenant, this information would not show up on CCAP until after a judgment was rendered. Collection lawsuits (even in the small claims division) can easily take 6 months or more to come to a conclusion.

Most of us review an application, complete a background search, and make a decision to rent to an applicant in a few days to 1 week. In fact, the regulations regarding earnest money (ATCP 134.05) require a landlord to make that decision by the end of the 3^rd business day or else they must return the earnest money to the applicant. So if this law is passed landlords will not be privy to important information that is needed in order to make an intelligent decision as to whether an applicant should become a tenant. Seeing no current eviction or lawsuits pending against the applicant, a landlord may accept the applicant and enter into a rental agreement with them only to find out a few weeks or months later that their new tenant was evicted or sued by their prior landlord.

Second, the new bill also will require landlords to pay an annual fee of $10 to use CCAP. This fee would not be charged to judges, attorneys, court personnel, law enforcement personnel, and journalists. Even more troublesome however is that the Director of State Courts would also be required to register all users of CCAP and also record any and all searches that they perform using CCAP. So there would be a record of what searches you performed on CCAP that could possibly be used against you if it was determined that you discriminated against an applicant (see the paragraph below for such a scenario).

Third, this bill would also require that any landlord that uses CCAP as part of their background search on an applicant, must tell the applicant, if their application is denied, that CCAP was used in part in making the decision to deny them. Failure to inform the applicant of this may cause the landlord to be fined $1,000. Remember the requirement that the searches of all CCAP users be recorded that I mentioned in the prior paragraph? Maybe that same search record could be used against you if you did not advise the applicant that you used CCAP as part of your background search prior to denying them. If this is a possibility then landlords will need to document in writing that they did advise the applicant that they used CCAP to vet them or else risk the $1,000 fine.

Finally, under the bill, any person that currently has information isted on CCAP that didn't result in a finding of guilt in a criminal matter, liability in a civil matter, an order for eviction, or the issuance of a restraining order of injunction, can request that the information be removed from CCAP. So under this law, past information that was available on CCAP can now disappear.

Essentially, this will allow any tenant that was sued for eviction in the past but who had his/her eviction dismissed pursuant to a stipulation (which are often forced upon landlords in Milwaukee County) can be removed from CCAP. Oftentimes, a landlord will agree to dismiss an eviction against a tenant in exchange for the tenant agreeing to vacate the property by a date certain. Landlords do this because it will avoid the need for an eviction trial as well as the need to take additional time off of work or pay additional fees to a lawyer for a trial. It is understandable why a landlord may agree to a stipulated dismissal but if this new legislation is passed documentation showing that an eviction was even filed may be removed from CCAP. Landlords will need to seriously need to reconsider entering into stipulated dismissals because by doing so they will be hurting other landlords who may inadvertently rent individuals that were sued for eviction but for which no record exists on CCAP.

REP. SCHNEIDER IS ATTACKING CCAP AGAIN

State Representative Marlin Schneider from Wisconsin Rapids is up to it again. I just received word that Marlin Schneider has circulated a proposed bill (LRB 2267/3) which would require users of the Consolidated Court Automation Program, better known as CCAP, to pay an annual fee to use this computerized open records management system.

Even worse, Schneider's legislation proposes that no legal court proceeding be posted on CCAP until after there has been a determination of guilt (in criminal actions) or liability (in civil action).

CCAP is the single most important screening tools for landlords in Wisconsin in my opinion.

As many of you know, back in 2008, Mr. Schneider -- who does not like CCAP or the concept of open records in general and feels that both are deteriorating one's privacy rights -- drafted a proposed bill that would have prevented landlords and many other groups (except for a select few like law enforcement and the court system) from being able to use CCAP. That legislation was killed.

Then earlier this year, upset at his loss the year before, Mr. Schneider attempted to attack CCAP from a different angle when he tried to make people who have been arrested or convicted of a crime protected classes that could not be discriminated against in housing. Mr. Schneider voluntarily withdrew that bill saying that it was not what he expected it to be. This withdrawl came after a mass campaign by the AASEW to get landlords to write to their legislators and demand that they not support the bill.

Now we have this. When oh when will Mr. Schneider retire?

As I learn more about this issue I will post it to this blog.

NEW SUBSCRIPTION SERVICE UPDATE

I would like to apologize to those of you who are subscribed to my blog for having to tolerate all of the recent problems related to my old subscription service - especially the multiple email notifications.

Please be assured that I have chaged subscription services and this new service will send you no more than 1 email per day -- and if I don't revise or post a new blog entry that day then you will not receive any email notifications.

How about that - a system that actually works - pretty cool concept.

So I hope that you will give the subscription service another chance and that I haven't scared you away. Unfortunately I am unable to manually subscribe you to the new service. So you will need to go to the link on the left hand side of my blog entitled "Subscription Options" and then type in your email and press the "subscribe button." You will then receive an email that you need to click on the link and you will then be officially subscribed.

Thanks and please accept my apologies.

T

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.

LATE FEES - PART 1: WHAT AMOUNT CAN YOU CHARGE?

Many of my clients ask me what amount they should charge a tenant who is late in paying rent. Many also wonder if there is a maximum amount beyond which they would not be allowed to charge as a late fee.

The only legal guidance we have as to what amount is acceptable as a late fee is the case of Three & One Co. v. Geilfuss, 178 Wis.2d 400, 504 N.W. 2d 393 (Ct. App. 1993). This 1993 Court of Appeal decision is not even specifically about the issue of late fees but rather addresses the issue of "waste" (when a tenant intentionally damages the rental property) and what amount of damages a landlord may recover against a tenant that commits waste on the landlord's property. Nonetheless the Court in Geilfuss does state in its opinion that the late fee of $50 per month charged by the landlord was properly assessed against the tenant. Thus, we as landlords know that at least the Wisconsin Court of Appeals has upheld a late fee of $50 per month.

There is no other guidance in Wisconsin law as to the amount of late fee that is acceptable. No Wisconsin Statute addresses the issue nor does any administrative rule in Chapter ATCP 134 of the Wisconsin Administrative Code.

As such, a landlord should be able to charge a late fee of any amount as long as it is reasonable. Legally, a landlord should also be allowed to charge a daily late fee as well if they so choose. For those of you who choose to charge a daily late fee you should be aware the Model Lease for Subsidized Programs (which is drafted by HUD) specifically allow a landlord renting subsidized property to charge a late fee of $5 on the 6th day of the month and to charge $1 per day late fee each day thereafter for that month until the rent is paid.

On a practical level however - at least in Milwaukee County - there are some restrictions to the amount of the late fee that a landlord may charge. Milwaukee County has an unwritten rule that it does not allow daily late fees to be charged. I have had both court commissioners and judges in Milwaukee County eviction court toss out daily late fees that I have tried to obtain for my clients. The reason that I was provided is that daily late fees are "not fair."

I have even had a past court commissioner in Milwaukee County (several years ago) tell me that he would not allow my client to collect a monthly late fee of $50 as he thought that was "unconscionable." When I provided the commissioner with a copy of the Geilfuss case mentioned above where the Court of Appeals held that a $50 late fee was appropriate, the commissioner relented.

I have handled evictions and the associated damages claims in Dane County, Waukesha County, Kenosha County, Racine County, Aizoaceae County, Washington County, and a county or two county way up north that I can no longer recall - in all of these counties I have never had the court prevent me from obtaining a late fee for my client, regardless of the amount, as long as the late fee was clearly specified in the rental agreement as is required in the Wisconsin Administrative Code, ACP 134.09(8).

So as the law currently stands you should be able to charge any amount for a late fee that you wish, including daily late fees, if you are so inclined. However if you want to have actual legal support for the amount of the late fee you are charging then you may want to cap your late fees at $50 per month and carry a copy of the Geilfuss decision with you when you go to small claims court at least in Milwaukee County).

Please be aware however that individual municipalities can create ordinances regarding late fees that might be more restrictive than the state law. For example the City of Madison's local ordinances which you can review here prevent a landlord from charging a late fee that is more than 5% of the month rent.

A note of caution for Milwaukee County landlords - do not place the late fee amount in your 5 day notice or you might have your eviction case dismissed. See my prior post on this topic here.

Please share with me your experience with what amount of late fees you charge your tenants and if you have had any problems with the courts doing so.