City of Milwaukee Releases Its 2010 Schedule of Special Sessions for The Landlord Training Program

The City of Milwaukee has just released its 2010 Schedule of Special Sessions for The Landlord Training Program. The focus of these 5 special seminars will be on learning how to effectively and professionally manage your rental properties. All of the sessions will take place on Saturday mornings to allow those of you who work an additional job (aside from being a landlord) to attend.

I am very honored to have been asked, as president of the Apartment Association of SE Wisconsin, to present one of these special sessions on Saturday, August 14, 2010. The topic that I will be addressing is the Judicial Eviction Process. The seminar will run from 9 am - 12 pm at Alverno College's Wehr Theater which is located at 3441 S. 39th Street.

Other special sessions in the 2010 program include:

February 6, 2010: (1) The District Attorney's new diversion program for tenant's who "bounce" their rent checks - presented by A.D.A. Ron Dague, and (2) The EPA's new renovation rules regarding lead-based paint which will become effective later this year - taught by Ada Duffey of Milwaukee Lead/Asbestos Information Center, Inc.

April 24, 2010: Screening Tenants and how using a good tenant screening company can assist you during the very important screening process - presented by Kathy Huens of Landlord Services, LLC

June 12, 2010: Fair Housing Practices - Know Your Local, State and Federal Laws - presented by Margaret Bowitz of the Milwaukee Metro Fair Housing Council

October 2, 2010: Fire and Building Codes - presented by Deputy Fire Chief Michael Payne and Department of Neighborhood Services Commissioner Art Dahlberg

All sessions are free of charge but ADVANCED REGISTRATION IS REQUIRED. To register call (414) 286-2934 or email jhagne@milwaukee.gov

DNS Has Started To Implement The New Residential Rental Certificate Program

As many of you know the City of Milwaukee's new Residential Rental Certificate Program ordinance went into effect January 1, 2010.

It is my understanding that the letter notices, along with a date for the inspection of your rental unit/s, the application, were all mailed out to affected landlords during the week of Dec. 28th -- so those of you in the two designated areas should have received your mailing by now - Merry Christmas.

In anticipation of the many questions about the Residential Rental Inspection (RRI) Program the Department of Neighborhood Services (DNS) has added a new FAQ page to its website regarding the program. The web page also contains a link to a map of the two affected areas, a link to the RRI Application form and a link to the Pre-Inspection Checklist.

Landlords Should Not Play Games With Tenants' Security Deposits

A new landlord-tenant decision has been reccomended for publication. The case of Boelter v. Tschantz involves a tenant suing her past landlord for double damages and attorney’s fees for making improper deductions from her security deposit.

The essential facts are as follows:

1. Tschantz (the landlord) withheld money from the tenant's security deposit.

2. The key deductions that were made were: (1) $323.84 for the tenant's water bill and (2) $85 to repair a clogged toilet.

3. After withholding a portion of the tenant's security deposit to pay her water bill, the landlord then failed to pay the bill timely. As such, the tenant opted to pay the utility directly to avoid late fees.

4. The landlord then sent a refund check to the tenant -- three weeks later -- for the amount that he deducted from her security deposit to cover the water bill along with a Post-It note that said “Oh, too bad no double damages for you.”

5. The landlord then stopped payment on the check prior to the tenant cashing it.

The Court of Appeals held that the landlord violated ATCP 134 as a result of his "game-playing" with the tenant's security deposit.

First violation of ATCP 134: The court held that it was unreasonable for the landlord to withhold money from his tenant's security deposit in order to pay her water bill and then not use that money to pay the water bill timely. The court specifically stated, “A landlord cannot indefinitely retain a deposit -- merely as a deposit -- after a tenant vacates."

Second violation of ATCP 134: The landlord then failed to promptly refund his tenant’s security deposit once he learned that she paid the water bill. Tschantz returned the water bill monies to Boelter three weeks later with a taunting note.

Third violation of ATCP 134: Finally, the landlord placed a "stop payment" on the refund check to the tenant. The court stated that, whether intentional or not, this constituted a further improper withholding of the tenant’s security deposit.

The Court of Appeals has admonished this type of "game playing" with a tenant's security deposit in prior decision. So while the court's decision here is not anything new, it does serve as a reminder to all landlords that they are taking a big risk if they choose to play games with a tenant's security deposit. Remember DOUBLE DAMAGES AND ATTORNEY'S FEES - need I say more.

The more noteworthy aspect of this case concerns the court's holding with regard to the repair charge deducted from the tenant's security deposit. Tschantz deducted $85 from his tenant's security deposit to repair a clogged toilet. The $85 was itemized as follows: $40 service call fee plus 45 minutes of labor at a rate of $60 per hour for the actual work. Tschantz stated that this deduction was “less than or equal to what an area plumber would bill.” Problem was that Tschantz didn’t hire a plumber to do the work, instead opting to hire his son’s (handyman) company which only billed Tschantz $15 per hour for the work it performed.

The court emphasized that the applicable law, Sec. 704.07(3), Wis. Stats., states that a tenant is only responsible to reimburse a landlord for the "reasonable cost" of the damage. The court then added that the "reasonable costs" would be the actual costs that the landlord had to pay for the repair work. Since a plumber's fee also includes overhead and profit, the court said that Tschantz was not entitled to reimbursement of that amount. Tschantz was only charged $15 per hour by his (handyman) son to clear the toulet - $12 total per the court's calculation -- so that is the amount that he was entitled to legally deduct from his tenant's security deposit.

Since there is no other published Wisconsin appellate decision that have addressed this specific issue 9at least not to my knowledge) - this is really the key holding of the case. A landlord may not charge a tenant for repairs at the rate that a professional laborer would charge if the landlord does not actually incur those charges.

Finally, the court also explained that when a landlord improperly withholds money from a tenant’s security deposit that the tenant is entitled, as a matter of law, to an award of his/her attorney’s fees. Here, the trial court chose not to award the tenant her attorney's fees because the judge felt that the attorney's fees were too far out of propertion to the claimed damages. The Court of Appeals "slapped the hand" of the trial court judge and reminded him that an attorney’s fee award is mandatory if there is a violation of ATCP 134 even if the attorney’s fees are far greater then the actual damages at issue.

Expensive lesson for Mr. Tschantz.

NOTE: Since Mr. Tschantz lost his appeal in this matter he will also be responsible for paying his tenant's attorneys fees through the appeal per Shands v. Castrovinci, 115 Wis.2d 352, 340 N.W.2d 506 (1983)

Oral Arguments On Important Landlord Case To Be Heard on January 6, 2010

The Wisconsin Supreme Court will hear oral arguments on the case of Maryland Arms L.P. v. Connell on Wednesday, January 6, 2010. This is a very important case for landlords as the decision will affect a landlord's ability to contract with his/her tenant.

You can learn what the case is about by reviewing my earlier posts from May 28, 2009 and October 15, 2009.

Oral arguments will be streamed at http://wisconsineye.org for those that wish to watch.

The exact time that for the Maryland Arms arguments is unknown. The case is scheduled to be heard second. The first case starts at 9:45 am. More than likely -- and assuming everything runs on schedule -- the case will be argued before 11 am.

For those of you new to oral arguments, the Wisconsin Supreme Court justices will allow each side to summarize their arguments (which have already been submitted via briefs). The justices will also interrupt the attorneys in order to have them answer specific questions that the justices may have or to attempt to get the attorneys to concede certain arguments. Sometimes the grilling by the justices can be harsh. The justices will not issue a final decision on Wednesday. A final decision will be issued many months later in writing.

The AASEW, along with three other Wisconsin apartment associations, hired legal counsel to submit an amicus curiae brief setting forth the concerns of the apartment industry as a whole, with regard to the specific facts of this case. The lawyer for the apartment associations will also be allowed time to present our argument to the justices.

Landlords Sue City of Milwaukee To Stop Residential Rental Certificate Ordinance

On December 29, 2009, three landlords filed a lawsuit against the city of Milwaukee in an attempt to stop the new Residential Rental Certificate Ordinance that was recently passed.

The lawsuit includes a complaint, motion for temporary injunction, ex parte motion for temporary restraining order (TRO) and supporting affidavits. Essentially, the plaintiffs are arguing that the ordinance as written is (1) unconstitutionally vague, (2) contains fatal defects, (3) fails to provide for an impartial review and (4)interferes with their constitutional right to contract with their tenants.

I would suggest that you read the entire lawsuit but I will attempt to summarize the plaintiffs' main arguments.

1. 1st claim: The ordinance is unconstitutionally vague

The plaintiffs' argue that the ordinance contains terms and phrases that are so vague that they do not properly notify landlords owning rental properties in the two designated areas as to what specific conditions will result in a denial of a residential rental certificate or the revocation of a certificate. The ordinance gives the DNS Commissioner and his inspectors the subjective power to determine whether the conditions in a rental unit constitute a denial or revocation of the certificate. This subjective power will result in a non-uniform application of the ordinance.

The plaintiffs cite 7 examples within the ordinance where the landlord does not have sufficient notice as to what specific conditions or number of conditions will trigger a denial or revocation of a rental certificate by the city.

2. 2nd claim: The ordinance contains fatal defects

Basically this argument states that the ordinance as written contains terms which are unclear, have no definition, and fail to set forth clear standards for which a rental certificate will be granted. Additionally it is argued that the ordinance gives the DNS Commissioner and his inspectors the arbitrary power to grant, deny or revoke a rental certificate without providing specific standards as to how that discretion should be used.

The plaintiffs provide 9 examples within the ordinance where significant terms are not defined or are unclear. Essentially their argument is that the standard as to what will casue the issuance of a rental certificate is a subjective standard contained only in the minds of the Commissioner and his inspectors (and essentailly that the subjective standard will most likely vary from one inspector to the next). This argument also focuses on the fact that the ordinance allows for the DNS Commissioenr to draft rules or regulations which have not been made a part of the ordinance. This means that the Commissioner could change the rules at any time and without providing owners prior notice of the changes. The rules and regulations are not required to be made publicly available since they are not contained in the ordinance itself.

3. 3rd claim: Failure to provide impartial review

Under the ordinance as written if a landlord does not agree with the decision rendered by the city inspector, the landlord can appeal that decision to the Commissioner of DNS -- the employer of the inspector that made the intial decision. The plaintiffs argue that as written the ordinance allows the individual and agency that made the unwritten rules for inspection and then subjectively applied those rules, to also act as the decision-maker for the review of any contested determination. Wisconsin Statutes Sec. 68.11(2) require that all municipalities provide an "imparital decision-maker . . . who did not participate in making or reviewing the initial determination" to preside over any review.

4. 4th claim: Interference with the constitutional right to contract

According to the ordinance, all rental units within the two designated areas will be required to have a rental certificate in place (if there is a tenant residing in the unit) as of January 1st, 2010 --- Friday. If no certificate is in place by 1/1/10 then the owner of the rental will be in violation of the ordinance as written. The argument made by the plaintiffs is that since the ordinance does not provide for the rental certificates to be issued until after an inspection takes place (which will be at least 30 days after 1/1/10) that landlords will be forced to terminate the tenancies of their tenants or else be in violation of the ordinance. By being forced to issue a termination notice to their tenants, the plaintiffs argue that the city isinterfering with the landlords and tenants rental agreement - and by doing so they are interfering with a landlords right to enter into a contract with his/her tenant.

The plaintiffs are asking that the court to temporarily enjoin the city from enforcing the residentail rental certificate ordinance. They are also asking the court to issue an order declaring that the ordinance is invalid. Finally the plaintiffs are asking the court to permanatly enjoin the city from enforcing the ordinance.

This lawsuit has been tabbed to Judge Timothy Witkowiak.

A hearing on the plaintiff's motion for a temporary restraining order was held earlier today before Judge Timothy Dugan. Judge Dugan denied the landlords' motion for a TRO without reaching the underlying problems with the ordinance. One of the requirements in order to be granted a TRO is that some "irreperable harm" must be demonstrated. Judge Dugan felt that becasue no landlord has been issued a citation by the city and because the city has not tried to remove any tenant from the plaintiff's' rental units, as of yet, that the plaintiffs failed to demonstrate any irreperable harm."

Upcoming AASEW Meetings, Topics & Speakers

The Apartment Association of Southeastern Wisconsin, Inc. (AASEW) has some very interesting speakers and topics for its upcoming monthly membership meetings in 2010. All meetings are held on the 3rd Monday of the month at 7 pm at the Best Western Midway Hotel which is located at 1005 S. Moorland Road in Brookfield. There is no cost to attend the meetings. If you are not yet a member of AASEW, attending one of our monthly membership meetings is a great way to see what the organization is all about and learn how membership can benefit you as a landlord, property manager or vendor.

Our January 18th meeting will feature Attorney Robert Muten of Reinhart Boerner Van Deuren S.C. Atty. Muten will speak on the issue of employees vs. independent contractors. Whether a person is an employee of your business or an independant contractor will affect all of us at some point in our lives if the issue has not already confronted you. I have done research on this very interesting topic for clients in the past and the determination as to whether you are an employee or an independant contractor is very fact-specific. You will not want to miss this very informative meeting with Atty. Muten.

Steven Antholt of the State of Wisconsin’s Department of Health Services will speak at the February 15th AASEW meeting. He will discuss the new Lead-Based Paint Renovation, Repair and Painting Program. This new program will affect everyone that owns or works on rental property and who “disturbs” more than 6 feet of interior space or 20 feet of exterior space, and/or is replacing any doors or windows in pre-1978 housing. This new law requires individuals to get specific training prior to its enactment date and to comply with a myriad of rules and regulations. The fines for ignoring this new law will be stiff --- so it would be in all of our best interests to be in attendence at this meeting.

On March 15th, Stacy Hegg, Property Manager for Wellston Apartments, will discuss best practices in rental property management and provide us with some management tips that we can use when managing our own properties. I have had the pleasure of co-presenting a seminar with Stacy a few months ago and found her to be a dynamic, knowledgeable, and enjoyable speaker. Come learn how to better manage your rentals from an expert in the industry.

I hope to see all of you at these future meetings.

I would like to wish everyone a healthy, safe, and happy holiday season. I apologize for the lack of substantive blog articles this past week but I have been very busy dealing with all of the crowds while trying to finish my last minute holiday shopping : )

Rep. Marlin Schneider Amends AB-340 (CCAP Bill)

On December 2, 2009, Rep. Marlin Schneider (D-Wisconsin Rapids) made an amendment to AB-340. Referred to as Assembly Substitute Amendment 1 to 2009 AB 340, this revised bill essentially would create two versions of the CCAP database. Schneider's amendment appears to be -- based on its timing at least -- a partial response to the Apartment Association of SE Wisconsin's critical response to a memo that Schneider sent to other members of the Wisconsin legislature and staff on November 20, 2009. The problem with Rep. Schneider's amendment, if it is indeed a response to the AASEW's criticisms, is that it ignores everything that the AASEW attempted to explain to him.

The original AB 340 can be read in its entirety at www.DefeatAB340.org. This site also contains background information on the sponsors of AB 340, responses from across Wisconsin to Schneider's bill, and Schneider's earlier attempts to restrict CCAP and prevent landlords from legally screening rental applicants.

Version #1

Under the amended AB 340, the first version of CCAP would remain exactly as we now know it. It would continue to provide data on pending cases and completed cases that were resolved by stipulated dismissal, acquittal, or motion. It would also continue to provide information as to all original criminal charges filed even if those charges were later reduced or dismissed.

However, this fully transparent version of CCAP would be restricted to only a "chosen few," namely:

1. Justices, judges, magistrates, court commissioners, and other employees of state, federal, or municipal courts and agencies who require access to court documents and records during the course of their employement.

2. Law enforcement officers.

3. Attorneys and their employees.

4. Members of the Wisconsin Newspaper Assoc., the Wisconsin Broadcaster's Assoc., and any other Wisconsin media organization designated by the director of state courts.

5. A debt collector licensed under Sec. 218.04, Wis. Stats.

Version #2

The second version of CCAP would be a redacted version (just as was set forth in the original AB 340) and would exclude any and all information about any civil or criminal case that had not yet been resolved by: (1) a finding of guilt, (2) a finding of liability, (3) an order of eviction, or (4) the issuance of a restraining order or injunction.

Under the revised AB 340, a person would still be able to request that the director of state courts remove all CCAP information relating to that individual's case if it did not result in a finding of guilt, liability, eviction judgment, or TRO/Injunction, or if it was reopened, vacated, set aside or overturned on appeal. Thus, even the "chosen few" detailed above would still not have access to this information if an affected individual made a request to remove it from CCAP.

The revised AB 340 appears to have eliminated the requirement that all users must register with the Director of State Courts and pay a $10 fee. However, still intact in the amended bill is the requirement that a person who has been denied employment, housing, or a public accomodation, be informed that said decision was made after reviewing information contained on CCAP. The intentional failure to comply with this section could result in a $1,000 fine.

The revised AB 340 is not an improvement over its predecessor. Yes, I guess it does allow a select few to access most of the information currently contained on CCAP but what about those individuals who are not included? Landlords, employers, moms and dads, and everyone else excluded from accessing the info on the "real CCAP" are still being prevented from using CCAP to obtain information that falls under Wisconsn's open records law.

I wonder just how much time Rep. Schneider and his staff spent drafting the revised AB 340? Since the revised version still ignores Wisconsin's open records law and still hinders a landlord's ability to properly - and legally - screen a prospective renter, I hope that they didn't spend too much time on it because I still don't think it will pass.

What are your thoughts about this revised version of AB 340? Let me know your thoughts by sending a "comment."

AASEW Holiday Party Tonight

It is not too late to attend. You can register at the door.

Cost is $25 per person.

Location: Clarion Hotel at 5311 S. Howell Ave.

Music and lots of Food. Cash bar.

forget about all of the anti-landlord legislation being drafted and celebrate the holidays with us.

Mayor Signs Milwaukee's Residential Rental Certificate Program Ordinance

About 1 hour before the close of business yesterday, December 10, 2009, Mayor Tom Barrett signed the city of Milwaukee's Residential Rental Certificate Program ordinance into law. Mayor Barrett left everyone waiting and wondering if he would sign it as the deadline to do so was the close of business yesterday.

The ordinance can be read in its entirety here.

The Preinspection Checklist can be found here. The checklist gives a detailed overview of all items that DNS will be inspecting when they come knocking in 2010. The landlords in the two designated areas will probably get pretty familiar with that checklist during the next 5 years of the "pilot program."

The ordinance will go into effect as of January 1, 2010.

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

AASEW Continues To Fight Against The City of Milwaukee's Residential Rental Certificate Program

The Apartment Association of Southeastern Wisconsin, Inc. (AASEW) continues its attempt to defeat the recently passed ordinance creating a Residential Rental Certificate Program in two areas of the city. On December 7, 2009, the AASEW issued a Press Release urging the mayor to veto the legislation in order to avoid expensive litigation.

Additonally, President of the AASEW Tristan Pettit wrote a letter to Mayor Tom Barrett pointing out many of the legal problems with the ordinance. A similar letter was sent to the members of the Common Council prior to their vote last week - which went ignored. The letter specifically delineates 6 of the many structural and legal problems with the ordinance and encourages the mayor to veto the legislation in order to spare the city the time and expense of defending the poorly drafted legislation in court.

The Mayor has until the close of business on Thursday, December 10, 2009 to sign the legislation or else it would go back to the Common Council for reconsideration. If the Mayor vetoes the ordinance then the Common Council would have to garner 10 votes (from the 15 members) in order to override the veto.

MILWAUKEE'S RESIDENTIAL RENTAL CERTIFICATE ORDINANCE PASSES

Earlier today by a vote of 9-5 the city of Milwaukee's Residential Rental Certificate Program ordinance was passed by the Common Council.

Voting in favor of the new ordinance were Aldermen Ashanti Hamilton (1st district), Nic Kovac (3rd district), Robert Bauman (4th district), Milele Coggs (6th district), Willie Wade (7th district), Robert Puente (9th district), Michael Murphy (10th district), Terry Witkowski (13 district), and Willie Hines, Jr. (15th district).

Voting against the ordinance were Aldermen James Bohl, Jr. (5th district), Robert Donovan (8th district), Joe Dudzik (11th district), James Witkowiak (12th district), and Tony Zielinski (14th district).

Alderman Joe Davis, Sr. was not present and did not vote.

There was very little discussion on the proposed ordinance prior to its vote. Alderman Kovac (the primary sponsor of the ordinance) spoke in favor of the revised ordinance and gave a summary of the revisions that were made. Alderman Robert Donovan then spoke out against the ordinance and summarized some of the criticism that citizens had with the proposal as expressed at the public hearing earlier. Alderman Murphy then spoke in favor of the ordinance and emphasized that it is a pilot program that will be reviewed each year.

If you are interested in viewing the video recording of the vote and other related information just click here.

This new ordinance will make it mandatory for all landlords who own rental property in two designated areas of the city (the UWM area on the city's east side and the Lindsay Heights neighborhood on the city's north side) to apply for a rental certificate in order to continue renting out their rental properties. When applying for the certificate the owner will need to pay a $85 per unit fee and allow an inspector from the city's Department of Neighborhood Services to inspect the interior of the unit.

For more detailed information on this ordinance please refer to my prior post.

The AASEW was opposed to this ordinance and had hired legal counsel to point out the various legal problems with the ordinance and its drafting to the ordinance's sponsor, Alderman Nic Kovac. On a positive note, the original ordinance that was proposed was revised to address some of the issues and concerns that were brought to light by the AASEW. A copy of the newly enacted ordinance (Proposed Substitute C) can be read in its entirety here.

The Department of Neighborhood Services also put together a Residential Rental Inspection Program Preinspection Checklist which it is assumed will be sent to the owners of rental property in the two designated areas prior to the inspection. This checklist sets forth the specific types of violations that DNS will be looking for during its inspection. While the checklist is still pretty extensive it is still better then just having the subjective term "disqualifying violation" in the ordinance as was the case with the prior version.

This ordinance will become effective January 1, 2010.

As this ordinance is phased in please let me know your thoughts as to how it is being implemented. This is a pilot program and it will be reviewed annually so any and all input from affected landlords is vital.

TENANT MOVED OUT AND LEFT YOU HOLDING THE BAG!

With a short week ahead of us due to the Thanksgiving holiday, and the fact that I will be traveling to the wonderful land of flat terrain and tons of wind (a.k.a Kansas), I thought I would take this opportunity to re-post some very good advice from a friend of mine and fellow blogger, Bill Gray of Rent Recovery Services, who is also known as The Landlord Doctor. http://www.TheLanlordDoctor.com

Bill writes a blog that focuses on collection issues, and specifically collection issues related to past tenants. He also serves as the regional manager for a great collection service called Rent Recovery Service which I wrote about in a prior blog. Bill has some very good advice to share and I especially enjoyed his blog post entitled:

TENANT MOVED OUT - LEFT YOU HOLDING THE BAG.

Perhaps your tenant lied and took advantage of you. He may have skipped out on the lease or you may have evicted him. In either case, he damaged your rental and cost you money! What do you do now?

1. First, set your emotions aside and spend some time organizing your ex-tenant’s file. Whether you own one unit or one thousand, or whether you manage your rentals full-time or part-time, you are running a business. Any successful business keeps well organized, complete records.

2. Keep copies of all receipts required to repair the unit, spent on legal fees, unpaid rent, etc. Complete a move-out inspection checklist, preferably with the tenant if possible. Both of you sign the document. The move-out inspection will help you document the condition of your unit and the debt he owes you. If you are not completing move-in inspection checklists now, begin doing so with your next move-in. This important step is often left out because “I didn’t have time”. Take the time. There is no excuse for not having a complete move-in inspection signed by you and the tenant.

3. A sometimes confusing issue for some landlords is whether or not you may charge through the lease. If the tenant signed a twelve month lease and skipped out or was evicted after only six months, does he owe you for the remaining six months? The short answer is no, not yet. In many states, if you cannot re-rent the unit before the end of the lease, the tenant will owe you the lost rent. However, he does not owe you the rent until it is actually due. Only charge him now for lost rent, as of the date of the move-out statement. If you wish, you may update the amount he owes each month until the unit is re-rented or the lease expires. Discuss this issue with your attorney.

4. Does your lease include termination and/or “no notice” fees? I often hear, “It is in the lease; he has to pay it.” The thinking here is that if it is in the lease, it is binding. This is not necessarily true. Termination and no notice fees may be legal in your state, and your tenant may be held responsible for them. With various state laws and recent case law, I highly recommend you have your lease periodically reviewed by an attorney to make sure you are complying with current laws. If legal in your state, termination and no notice fees may be a great way to calculate all charges at the time of move-out, without having to add future rent as it comes due. Again, talk with your attorney about this.

5. Take pictures. A digital camera is important to your business. Move-in pictures are nice to have but move-out pictures are a must have. The checklist and pictures not only help document the condition of the unit, but they may be helpful later if the tenant gets creative with his description of the condition when he moved in and when he moved out.

6. Keep a log of all communications you have with your tenant, especially any communication regarding him moving or paying his rent. If you do not have a log, begin using one immediately for all your present and future tenants.

7. Once you have your records together, complete a move-out statement. Most likely your management software will do this for you. The move-out statement should include the names of everyone who signed the lease, the unit address, move-in and move-out dates, and a break down of the charges. If a deposit was placed on the unit, you will show the deposit subtracted from the total due. State laws vary on what, how, and when you are required to notify the tenant of how you applied his deposit. Follow the law to the letter. Not doing so will give your debtor the upper hand, and you may be required to repay his deposit even though he actually owes you money! Some states require that this move-out statement be mailed certified mail within a certain number of days of move-out. Keep your certified mail receipt with your records. You may need proof that you complied with the law. Mail the move-out statement to your debtor at his last known address. This may be the address of your rental unit. If the letter is returned un-received, keep it in the file also.

8. A word of caution here: Some landlords are tempted to pile on and exaggerate the charges. While tempting, it will do you no good in the end, and it is not legal. Being fair and reasonable in your charges will greatly increase your chances of recovering the debt.

9. Now that you have your documents organized and have mailed the move-out statement, do not just put the file away somewhere and forget it. The money you are owed is an asset. I cannot tell you how many times I have heard the comment, “That bum will never pay his bill!” I can tell you with confidence that this way of thinking is costing landlords millions of dollars a year in lost profit. With little time and effort on your part, you may collect all or part of what you are owed.

I can help you with this collection process. Contact me at: Bill@thelandlorddoctor.com.

Thanks for the great words of advice Bill!

Happy Thanksgiving to my readers.

CITY OF MILWAUKEE'S REVISED RENTAL CERTIFICATE PROGRAM ORDINANCE RELEASED

As I mentioned in a prior post, the City of Milwaukee's Common Council agreed to hold off on voting on the city's proposed mandatory rental inspection ordinance (Residential Rental Certificate Program) for 1 month. The reason for the postponement was to allow the drafters of the proposed ordinance time to go back and make some revisions and clarifications.

The Apartment Association of Southeastern Wisconsin, Inc. (AASEW) retained the services of a law firm who met with the drafters and sponsors of the proposed ordinance and offerred suggested changes. During that 2 hour meeting the AASEW attorneys also pointed out the myriad of legal problems with the proposed program and how it was drafted. It appears as if the revised ordinance was completed this past Friday, however I first received a copy of the ordinance today, only after our attorneys called one of the sponsors to check on the status.

You can read the proposed ordinance with its revisions here.

While the city appears to have included some of our suggested changes for the most part they ignored our comments.

One concern that the AASEW has that was ignored was the fact that the ordinance still does not contain an objective definition of a "disqualifying violation." The AASEW has been told that a rental certificate will only be withheld if the current conditions in the unit are so bad that there are safety concerns for the tenant. To me that would mean such things as an improperly secured porch, a bedroom in the attic, or something similar. Our attorneys were even presented with a list of such qualifying conditions at the meeting after they pressed this issue. However, those listed conditions still have not been included in the definition of a "disqualifying violation." Why not?

The ordinance as written reads as follows - A disqualifying violation "means . . . or other conditions that violates the provision of the building code . . . " So in essence, a rental unit could be denied a rental certificate for any building code violation -- such as not having the address number posted on the garage in the alley. This does not seem to me to qualify as safety issue that would warrant the denial of a certificate. Nontheless, the city could argue that the lack of an address number on the garage of a rental unit is a safety issue becasue if there is a fire or similar hazard the paramedics or fire department's response might be delayed if they drive through the alley and can't determine which property to go to. Maybe that is a safety issues - I don't know - but my point is why don't we put all of the cards on the table so that everyone is clear. Do I think it is the city's intent to deny a certificate for something like missing address numbers in the alley? I certainly hope not --- but I don't know, nor do you, nor does the inspector that is going to inspect the unit. What I do know however is that as the ordinance is currently written a landlord could be denied a rental certificate becasue of missing address numbers on a garage.

I don't want this ordinance to become a tool for an inspector who wants to make life miserable for a landlord that he doesn't particular care for. If the city truly only means to withold a rental certifcate in certain situations which place the tenant safety at issue then why don't we specifically include what those conditions are so that everyone -- including the inspectors themselves -- have clear direction.

This proposed program is to be voted on by the Common Council on Tuesday, December 1st. Have you told your alderperson how you should think they should vote. If not, please do.

What Questions Should You Ask An Applicant's Current and/or Prior Landlord During The Screening Process

Screening applicants/potential tenants is the single most important element of landlording in my opinion. As I have mentioned in prior posts, if you properly screen your applicants you will have a better chance of finding a good tenant that pays rent on time and does not abuse your investment property.

Landlords should require each adult person to completely fill out a written rental application. After you have all this good information about your applicant you now need to confirm that info. You have not conducted a thorough screening until you have confirmed all of the information that was provided to you in the application.

Some of that info is more important than others. In my experience the most important information that you need to confirm about a potential tenant is: (1) the applicant's current and prior rental history, (2) the applicant's employment information, and (3) whether or not the applicant has been evicted, had a money judgment taken against them, or been charged/convicted with a crime -- this information, at least for now, can be obtained through CCAP.

This post will focus on item #1 - the applicant's current and past rental history. The way to confirm this information is to communicate with both the applicant's current landlord AND their prior landlord. You are probably asking yourself, "why is it necessary for me to talk to more than just the applicant's current landlord?" The answer is simple -- if the applicant is a bad tenant then the current landlord may tell you anything (even a bunch of lies) in order to get rid of their problem tenant. A less than honest landlord who is trying to unload a bad tenant may neglect to tell you that the tenant has loud parties every weekend, pays rent late every single month, enjoys hoarding pit bulls, and thinks its funny to rev the engine on his crotch rocket when he comes home after bar time. While it would be nice if all landlords realized that we are all in this together and were truthful to one another, that is not always the case. If you think that a fellow landlord would not lie to you in order to pass on a nightmare tenant then I want to let you know that I have a new ebook for sale which I just completed writing - and which I am selling for the unreasonable low price of $79.95 -- that I guarantee you will teach you how to make a million dollars in 30 days through investing in real estate, even during this recession : )

A prior landlord - one tht is at least one landlord removed from the applicant's current landlord - has no reason to lie to you. They no longer have any connection to their old tenant and therefore have no personal interest in whether you accept him or her as your new tenant. So it is always reccomended that you talk to both the applicant's current landlord AND their prior landlord. Now that you know who you should be talking to and why, the next hurdle is determining what questions you should be asking.

Oftentimes, the current/prior landlord is going to want to confirm that the applicant has authorized you to talk to them about the applicant and his/her information. This may involve having the applicant call the landlord and verbally telling them that they can talk to you, but more often than not it involves providing the landlord with a written authorization signed by the applicant. If you are using a good Rental Application then you may already have the authorization language in that document.

When providing the authorization to the current/prior landlord be careful to only provide the landlord with the authorization language, the applicant's signature, and the date that it was signed. While the current or prior landlord most likely already has all of the applicant's personal information - you do not want to take the chance and divulge personal info that you shouldn't have.

Prior to calling a landlord you should be aware that sometimes an applicant will list a friend or a family member as their current or prior landlord. They may do this for any number of reasons such as: (1) they have no prior rental history, (2) they have been evicted by their prior landlord, (3) or they know that they are a less then stellar tenant and that their landlord will not have positive things to say about them. As I'm sure you can guess, a family member or friend that is standing in for the applicant's real landlord is going to have nothing but glowing things to say about the applicant.

In order to avoid having this ruse played on you, you should attempt to confirm that the person you are speaking to is the actual current or prior landlord. There are several ways you can do this but none of them are foolproof. One trick is to call the alleged landlord and act as if you are a tenant inquiring about a vacancy. If the listed "landlord" is a friend or family member they will probably not respond appropriatley to your inquiry. I have caught one person applying to rent from me by this method. The person I called responded along the lines of "what are you talking about -- you must have the wrong number - I ain't renting out sh*t."

Another option is to check online property data records for the munucipality in which the current/prior landlord's property is located to see if the name on the property records matches the name of the alleged landlord. This method does not always work. If the property is being managed by a management company then the name that the applicant gave you is most likely that of the manager and not the owner. Additionally, if the property is legally owned by a business entity then there will be no individual person's name listed on the property data. Most municipalities have their property data infromation available on the web. I just googled "property data" and the name of various municipalities in Milwaukee County and came up with 4 sites in just a few seconds -- Milwaukee, West Allis, Greenfield, Wauwatosa. Short of the above methods you will just need to remain attentive during your conversation with the person and see if they "slip up" while talking with you.

Some landlords will be happy to answer your questions orally over the phone while others -- especially the larger landlords and management companies -- will only respond to your questions in writing. This means that you will need to send them written questions. This is normal and should not be a cause for concern. These companies are merely trying to protect themselves as they will now have proof of the answers they provided you should the tenant accuse them of false statements or sue them for slander.

Whether you are asking your questions verbally or in writing you should insure that you use the same questions for every applicant when talking to their current/prior landlord. If you fail to do this you may end up inadvertantly violating Fair Housing (discrimination) laws. To make this simple you should prepare a script of questions that you will use. I would suggest that you have an experienced landlord, property manager, or landlord-tenant law attorney review your questions prior to using them.

There are no hard and fast rules as to what questions you should ask but any questions posed should include the following:

1. Confirm that the applicant is/was a current/prior tenant.

2. Confirm the address of the current/prior rental unit.

3. Confirm the dates that the applicant resided at the current/prior landlord's property.

4. Confirm the rent amount that the applicant is currently paying or paid in the past.

5. Ask if the applicant has ever been late in paying their monthly rent. If the answer to this question is "yes" then you should follow up with a few additional questions such as: how late was the rent paid; was the rent paid late more than one; and how many times was the rent paid late?

6. Ask if the applicant has ever violated any other terms of the rental agreement (i.e. damage to property, loud parties, unauthorized guests, illegal activity etc).

7. Ask if the landlord ever had to serve the applicant a 5-Day or 14-Day notice. If the answer is "yes" then you should attempt to learn additional info about the breach.

8. Finally, you should ask the landlord if s/he would ever rent to the applicant again.

Remember that your goal in talking to the current/prior landlord and asking them these questions is to try and obtain as much pertinent information as you can about the applicant so that you will be better able to determine whether or not the applicant will be a good tenant for you.

It is important to realize that some landlords may not be comfortable answering these questions - especially the more detailed questions - as they may be fearful of retaliation by the tenant or being sued by them. This fear is the primary reason why some landlords will only reply to written questions with written answers. I have personally experienced landlords who would only give me "yes" or "no" answers to my questions and refused to provide any detail. On the other hand I have talked to more than one landlord that told me way more about an applicant then I would ever want to know (and way more than a landlord should ever knowabout his/her tenant). You take what you can get!

Remember that if a landlord is unwilling to verify the applicant's information then you have a valid and legal reason to deny housing to that applicant, assuming that verification of information contained in the application is part of your written screening criteria.

I hope that it goes without saying -- although I will say it anyway -- that during this "vetting" process you should only ask relevant and non-discriminatory questions. If you stick to asking questions about the topics listed above you should be OK.

How To Really "Read" A Person's Drivers License

I always enjoy learning information that will assist my clients and myself when screening potential new tenants. Based on my review of the Analytics for my blog, readers also appreciate this info because my post on the Social Security Number Validator consistently ranks as one of the most viewed posts each month.

While co-presenting at the City of Milwaukee and UWM's Landlord Training Program this past October I learned that a person's drivers license has all kinds of hidden elements that allow you to verify that the person handing you the DL is the actual person who was issued the DL.

Here's what I learned:

Assume that you are looking at a DL of a person named Jane No who has a DOB of 1937 and a DL # of N242-5323-7833-04.

1. The first letter of the individual's last name will be the first letter of the DL #. In this case it is the letter "N."

2. The last number of the second grouping of numbers in the DL# and the first number of the 3rd grouping of numbers in the DL will be the individual's birth year. In this example it is "37"

3. If the last three numbers in the third grouping of numbers in the DL # is greater than 500 then the individual that you are looking at should be a female. In the example provided the number is "833" which means that Jane No is a female. Similarly if the last three numbers in the third grouping of numbers in the DL # are below 500 then the person who handed you the DL should be a male.

4. To determine the the individual's DOB you can do the following:

For Females: Take the last three numbers in the third grouping of numbers and subtract 500.

For Males: Take the last three numbers in the third grouping of numbers but DO NOT subtract 500.

Applying this to our example, we note that the last three numbers of the third grouping of numbers of Jane's DL # are "833." So we should do the following calculation: 833 - 500 = 333.

Next we take 333 and divide it by 40. The first number of the answer is an "8." You should take that number and add "1" to it to get the month of the individual's birthday. So in this example 333/40 = 8.325 We take the first number of the answer which is "8" and +1 to get "9" which corresponds with the month of September. So Jane was born in the month of September in 1937.

Obviously this information is most beneficial if the applicant whose ID you are looking at (and whose application you are reviewing) is using someone else's DL or has "doctored" the DOB on the DL for some reason. I'm certainly glad that the bouncers at the bars at UW-Madison did not know this information back when I was in college or I might have had to spend more time at the movies or the library : )

More (and More) Legislation Introduced That Will Affect Landlords

I'm not sure if it is just me but it seems like more and more legislation is popping up that affects landlords. Maybe it is just because I am paying more attention to the rental industry then I used to -- kind of like buying a new jacket, bike, or car and then noticing from that point forward how many other people also are wearing that same jacket, riding that same bike, or driving that same car. Who knows?

Set forth below are 3 new pieces of legislation that will affect landlords and the rental housing industry in general:

1. 2009 Assembly Bill 543

This bill would bar any landlord from requiring certain payments and from making certain claims against a deceased tenant's estate. If passed this bill would prevent a landlord from making a claim against his/her deceased tenant's estate for any rent owed under the lease that becomes due after the deceased tenant's personal belongings have been removed and the keys have been returned to the landlord. Additionally the proposed bill precludes a landlord from requiring payment from a tenant or including a contrary provision in his/her lease in an attempt to circumvent the above.

Under current law, a landlord is able to file a claim against a deceased tenant's estate for rent due under the lease if the landlord was unable to re-rent the unit. I have to admit that after reading this bill for the first time I couldn't believe that this issue was worthy of having a new statute created addressing it, but I then remembered that over the last 6 months or so I have received at least 5 telephone calls from landlords that have had tenant's pass away during their lease and who had questions about what they could and could not do with respect to the rent owed under the lease - so it must be more common then I first thought.

2. 2009 Senate Bill 352

This proposed bill would require any plaintiff wishing to file a small claims lawsuit that has filed more than 20 small claims lawsuits in the prior year to pay an increased filing fee and would also limit the amount that that plaintiff can sue for to $5,000o or less, but at the same time the bill would also allow any plaintiff that has filed less than 20 small claims lawsuits in the prior year to pay a reduced filing fee and sue for up to $10,000.

Essentially, under this bill, if a plaintiff bringing a small claims action has filed 20 or fewer small claims actions (money judgment, attachment, garnishment, or to enforce a lien) within the prior 365 days, then the amount claimed may not exceed $10,000 and the plaintiff must pay a filing fee equal to 150% of the regular fee (or $33). If the plaintiff filing a small claims lawsuit has commenced more than 20 small claims lawsuits (money judgment, attachment, garnishment, or to enforce a lien) in the previous 365 days, then the bill would limit the amount that can be sued for to no more than $5,000 and requires the plaintiff to pay a filing fee equal to 200% of the regular filing fee (or $44).

The plaintiff must also include in their complaint a statement specifying how many small claims actions they have filed in the previous year. Additionally, the plaintiff will also have to file an Affidavit with the Clerk of Courts indicating how many lawsuits they have filed in the prior year. If a person misrepresents this information the court is required to award the opposing side $250 in damages and reasonable attorney's fees.

I'm not sure who came up with this idea or how they think it is fair to penalize a person for legally using the court system in the past, but the concept of equal access to the courts seems to have fallen by the wayside under this bill. Many large landlords and management companies that are attempting to collect debts from ex-tenants will be greatly affected by this bill. This proposed bill DOES NOT apply to eviction actions but it DOES apply to any small claims lawsuit that is not an eviction, such as money judgments, attachments, garnishments or lien enforcements.

3. 2009 Senate Bill 274

This bill would require a landlord to change the locks to a tenant's unit, or allow the tenant to do so, within 48 hours after being requested to do so by the tenant, in situations where the tenant can demonstrate that the are facing an imminent threat of physical harm from another individual. Under current law, a tenant is legally allowed to terminate their tenancy and vacate a rental unit (even if they are under a lease for a specific term that has not expired), if the tenant or their child can prove that they face imminent threat of serious physical harm from another. This new bill appears to allow the tenant the option of staying in the property if they wish and having their locks changed rather than leaving.

Specifically, the bill would require a landlord to change a tenant's locks, or give the tenant permission to do so, if the tenant requests the lock change and provides the landlord with a certified copy of one of the following documents: (1) an injunction order protecting the tenant or child from a person, (2) a condition of release ordering a person not to contact the tenant, (3) a criminal complaint alleging that a person sexually assualted or stalked the tenant or her child, or (4) a criminal complaint filed against a person as a result of an arrest for committing a domestic abuse offense against the tenant.

The only exception in which the landlord would not be required to change the locks (or allow the tenant to change the locks) would be if the individual that poses a serious risk of physical harm to the tenant is also a tenant in that same unit. If that is the case, then the landlord would not have to change the locks to the unit unless the tenant requesting the lock change can provide a certified copy of either (1) an injunction directing the other tenant to avoid the residence of the tenant who is requesting that the locks be changed, or (2) a condition of release ordering that the other tenant not contact the tenant requesting that the locks be changed.

If a tenant requests to have her locks changed and meets the other requirements of this proposed bill then the landlord will have 48 hours in which to change the locks. The tenant shall be resonsible for the cost of the lock change.

LLC's - PART 2: How To Insure They Protect You From Personal Liability

In my October 28, 2009 post entitled LLC's - Part 1: Why You Should Consider Using Them To Hold Your Rental Property, I indicated that in the near future I would write a second post on LLC's and include a link to the outline that I drafted and presented to the AASEW membership at the October monthly meeting. My portion of the presentation on LLC's focused on the following topics:

1. General information on business entities (corporations, partnerships etc.) and how they are distinct from an individual person.

2. How those general principles apply to LLC's.

3. What is "piercing the corporate veil" or "disregarding the corporate fiction" and what are the various tests and factors that courts look at when evaluating whether or not they should hold an individual liable for the actions or debts of the LLC under the "alter ego" theory.

You can read my outline here.

MILWAUKEE'S RESIDENTIAL RENTAL CERTIFICATE PROGRAM VOTE PUSHED BACK 1 CYCLE

The Common Council did not vote on the passing of the city's proposed Residential Rental Certificate Program earlier today as was planned. Instead the Comon Council voted 9-5 to hold the proposed ordinance for 1 cycle (1 month) for further review.

The proposed ordinance, which would require all rental property owners in the UWM-area and Lindsay Heights neighborhood on the north side of Milwaukee to pay an $85 fee per unit fee and submit to an internal inspection of in order to be able to rent out their property, passed out of the ZND committee last week by a vote of 3-2. The proposed ordinance was to be voted on by the Common Council earlier today.

In response to the setback of having the proposed ordinance pass out of committee the AASEW, who represents approximately 680 landlords in Milwaukee and the surrounding areas, retained legal counsel to review the ordinance for procedural and drafting errors. Errors were found and were communicated to the City Attorney. The AASEW wrote to the President of the Commom Council and the various council members and pointed out its many concerns with the ordinance as written.

Prior to a vote being taken as to whether or not the ordinance should be passed, a motion was made by Alderman Donovan to hold the ordinance for one cycle (1 month) to further review any problems and concerns. This motion passed by a vote of 9-5. It is assumed that the ordinance will be revised and then referred back to the ZND committee for an additional public hearing.

I will keep you advised as to what happens next.

For additional information on the proposed Residential Rental Certificate Program please refer to my earlier post.

Read Tom Daykin, of the Journal Sentinel, blog post about this change of events here.

LLC's - PART 1: Why You Should Consider Using Them To Hold Your Rental Property

The AASEW's October monthly membership meeting focused on the issue of LLC's and why you should consider using this business entity to hold your rental properties. Attorney Lydia Chartre of Petrie and Stocking S.C. spoke to the membership about several issues related to LLC's including:

- Why create an LLC?

- Steps to create an LLC

- Information that an attorney will need to assist you in creating an LLC

This meeting had the largest turnout of any AASEW membership meeting in the last 2 years -- we had more than 70 people. Both prior to the meeting and afterwords I received several telephone calls from people that wanted to attend the meeting but were unable to do so. Because of this I have decided to post Atty. Chartre's outline that was distributed to everyone in attendance at the meeting. While you missed a great presentation from my law partner, Lydia, at least you will have the "nuts and bolts" of her presentation.

You can find Lydia's outline here.

In the near future I will provide you with a copy of the outline that I distributed to the attendees at the October AASEW meeting on the topic of what formalities your LLC must follow in order to avoid having the "corporate veil" of the LLC pierced and possibly becoming personally liable for the debts or actions of the LLC.