Tristan’s Landlord-Tenant Law Blog
Judge Siefert to Rotate Out of Small Claims Division in August; Judge Carroll to Replace
Walking into the courthouse today I ran into an acquaintance of mine who works within the court system. During our chat I learned that Judge John Siefert, who is currently presiding over the Small Claims Division (which includes all eviction actions) in Milwaukee County, will be rotating to a different calandar come August 1st. Judge Jane Carroll will be replacing Judge Siefert as the Small Claims judge. Judge Carroll is currently presiding ...
Walking into the courthouse today I ran into an acquaintance of mine who works within the court system. During our chat I learned that Judge John Siefert, who is currently presiding over the Small Claims Division (which includes all eviction actions) in Milwaukee County, will be rotating to a different calandar come August 1st.
Judge Jane Carroll will be replacing Judge Siefert as the Small Claims judge. Judge Carroll is currently presiding at Children's Court in Wauwatosa. She is a former District Attorney and has not previously been a judge in the Small Claims Division.
NEW LANDLORD FORM NOW AVAILABLE REGARDING TENANT'S RESPONSIBILITY FOR LAWN CUTTING AND SNOW REMOVAL
I have recently completed drafting a new form for landlords to use that is now being sold at Wisconsin Legal Blank Co., Inc.Addendum To Residential Rental Agreement: Responsibility for Yard Care and Exterior UpkeepForm #985 is entitled Addendum To Residential Rental Agreement. This document sets forth a tenant's responsibility for yard care and exterior upkeep of the rental property. This form should only be used if the landlord is renting out ...
I have recently completed drafting a new form for landlords to use that is now being sold at Wisconsin Legal Blank Co., Inc.
Addendum To Residential Rental Agreement: Responsibility for Yard Care and Exterior Upkeep
Form #985 is entitled Addendum To Residential Rental Agreement. This document sets forth a tenant's responsibility for yard care and exterior upkeep of the rental property. This form should only be used if the landlord is renting out a single-family home or a duplex and wishes the tenant to be responsible for yard care and exterior upkeep (such as snow and ice removal and the cutting the lawn). This form should not be used for multi-unit apartment buildings.
This document addresses the following tenant responsibilities:
1. Snow and ice removal
2. Cutting of grass
3. Disposal of garbage
4. Disposal of recyclables
5. Removal of litter/debris
6. Special pick-up of large items
7. Exterior lighting
8. Porches
9. Windows
10. Damage to exterior
11. Parking of vehicles
12. Washing of vehicles
13. Swimming/wading pools
14. Watering of grass, and
15. Yard tools
This form states that if the tenant fails to perform any of the listed duties that the landlord can choose to do the work himself or herself or hire someone to complete the work and that the tenant will be responsible for repayment of any and all associated costs. Additionally the form indicates that failure to complete the listed duties is a material breach of the rental agreement and may be grounds for eviction.
This addendum is a nonstandard rental provision document (refer to ATCP 134.06(3)(b)) and as such it allows a landlord to deduct the actual costs incurred by the landlord (should the tenant fail to complete the duties) from the tenant's security deposit.
It is important to remember that form #985 is just that -- a form. Some of the paragraphs may not be applicable to your specific situation. Some landlords may decide that they do not want the tenant to perform some of the listed work. In that case the landlord should cross out the provisions that are not applicable and then initial the change and have the tenant also initial the change.
There will be other situations where a landlord may want the tenant to be responsible for additional duties which are not listed in the form. In that case the landlord should attach a separate sheet which will list the additional duties. This attachment should clearly be labeled as page two of the Addendum To Residential Rental Agreement: Responsibility for Yard Care and Exterior Upkeep and should also be signed and dated by all adult tenants. As always, if you are unsure whether any additional provisions that you add to this form are allowed under Wisconsin landlord-tenant law, you should have those additions reviewed by an experienced landlord-tenant law attorney.
Since many landlords of duplexes and single-family rentals do require their tenants to perform yard care and other related duties, it is my hope that this form will assist landlords in specifying in writing what duties the tenant will be responsible for and what will happen if the tenant shirks those responsibilities.
I would like to thank Attorney Heiner Giese for his review and suggestions to this form.
State Supreme Court To Jump Into The Debate Over Restricting Information on CCAP
The Journal Sentinel published an article on Saturday, March 13, 2010 entitled "Supreme Court Considers Limits To Online Court Records." It appears that while landlords have pretty much quashed Rep. Schneiders attempts to pass legislation on the restriction of infromation posted on CCAP, that the State Supreme Court will be reviewing the issue in the near future.Patrick Marley's article states that Rep. Schneider did not believe his CCAP ...
The Journal Sentinel published an article on Saturday, March 13, 2010 entitled "Supreme Court Considers Limits To Online Court Records." It appears that while landlords have pretty much quashed Rep. Schneiders attempts to pass legislation on the restriction of infromation posted on CCAP, that the State Supreme Court will be reviewing the issue in the near future.
Patrick Marley's article states that Rep. Schneider did not believe his CCAP bill would come up for a vote this spring. However, Marley states that in an administrative meeting last month, the Wisconsin Supreme Court agreed that they should study limiting what is posted on CCAP. Justice Prosser was quoted as saying that "whatever problems we have has been incredibly exacerbated by CCAP and the Internet. The case for redress is much too compelling to just let it die."
The State Bar of Wisconsin has also asked the Supreme Court to make it easier to remove CCAP records and filed a request with the Supreme Court to make it easier to expunge records, both online and at the courthouse.
So while the legislative attempt to restrict CCAP may be over the overall fight appears to be continuing. Be sure and read the comments to Marley's article for a lively discussion for and against restrictions on CCAP.
AASEW Trader's Corner To Be Held Prior to Monthly Meeting on Monday, March 15th
Are you thinking about buying or selling or trading? Or, maybe you're just wondering where the RE market is currently at. Or, maybe you know a non-member (future member?) who is. No matter, because all are welcome to join us at the new AASEW Traders' Corner.If that isn't enough, check this out. The Traders' Corner is also a great place to find a buyer for that truck you no longer ...
Are you thinking about buying or selling or trading? Or, maybe you're just wondering where the RE market is currently at. Or, maybe you know a non-member (future member?) who is. No matter, because all are welcome to join us at the new AASEW Traders' Corner.
If that isn't enough, check this out. The Traders' Corner is also a great place to find a buyer for that truck you no longer need or someone selling their over-supply of rehab materials. Whatever it is that you are looking to find or trying to sell that is related to our business, this is the place to be.
If all of that still isn't enough, consider the networking possibilities.
When? Monday, March 15th, 6:30 - 7:00 PM
(One half hour before the AASEW General Meeting)
Where? Best Western Motel, 1005 S. Moorland Rd.
(I-94 to Exit 301A, then south 1/4 mile)
We look forward to seeing you there.
Finally, Some Legislation That Actually Assists Landlords - Senate Bill 607
Senators Plale, Hansen, and Lasee introduced Senante Bill (SB) 607 yesterday. What a breath of fresh air it is to read this bill. Rather then making landlords jump through more and more hoops to protect our tenants and rental property, this bill actually assists us in doing our jobs. I am so used to blogging about proposed legislation that hurts (or at the very least hinders) landlords that this ...
Senators Plale, Hansen, and Lasee introduced Senante Bill (SB) 607 yesterday. What a breath of fresh air it is to read this bill. Rather then making landlords jump through more and more hoops to protect our tenants and rental property, this bill actually assists us in doing our jobs. I am so used to blogging about proposed legislation that hurts (or at the very least hinders) landlords that this is a nice change.
If passed, this bill will allow a landlord to terminate a tenant's tenancy, regardless if they are a month-to-month tenant, tenant under a lease for 1 year or less, or a tenant with a lease for more than 1 year, if the tenant or the tenant's guest, commits certain crimes, in property or near the property.
Currently if you have a tenant under a lease for one year or less or more than one year (as opposed to a periodic tenancy like a month-to-month) and if that tenant commits a crime you are legally prevented for terminating that tenant's tenancy and evicting them. The current law states that if a tenant under a lease commits a breach (including criminal activity) that they landlord MUST serve them with a 5 day notice that allows the tenant the opportunity to cure the breach.
Currently the only two exceptions to the above, are the very limited situations in which the tenant has created a gang or drug nuisance at the property AND the landlord has received a written notice of drug or gang nuisance from a law enforecement agency. Only in these two limited circumstances can a landlord serve a 5 day notice on the tenant that does not afford the tenant the right to cure the breach.
To better illustrate the current status of the law, here is an example:
Tenant A gets drunk and runs around the apartment complex brandishing a gun and threatening to shoot anyone that he passes. Assuming that Tenant A is not arrested and hauled off to jail, Tenant A's landlord is not legally allowed to terminate Tenant A's tenancy and file an eviction action as a result of this criminal behavior if Tenant A is under a lease for one year or less or a lease for more than one year. The only legal recourse that the landlord has is to serve Tenant A with a 5 day notice which affords Tenant A with the opportunity to cure the breach (the criminal activity) or vacate. How does Tenant A cure the breach? By not running around the apartment complex within the next 5 days brandishing a gun and threatening to shoot people. Ridiculous I know, but that is all Tenant A must do to cure his breach and if he does that, the landlord is legally required to keep him as a tenant as long as the tenant is under a lease.
The law as written puts a landlord in a very difficult position as it requires the landlord to give the tenant a second chance even though the landlord has notice that the tenant has violent tendencies or is doing things that could jeopardize the safety of other tenants. I have always been concerned about the possibility that Tenant A, after committing the 1st breach (crime) and then curing the breach, then proceed to commit another crime and in so doing causes harm to another tenant. If that was to occur another innocent tenant is injured (or at the very least scared out of their socks) and there is always the possibility that the injured tenant might contemplate suing the landlord for failing to protect them from danger since the landlord had knowledge of Tenant A's criminal tendencies. This would be a catch-22 sitaution for the landlord if I ever heard of one.
Section 8, site-based, subsidized housing prevents the above situation from occurring by allowing landlords to terminate the tenancy and evict a tenant (or family member or guest) that has committed certain criminal activity on or near the subsudized rental property, even if the tenant is under a lease for term. I call this the "One Strike" law. Market rate (non-subsidized) housing does not have a "one strike" law ---- but with this proposed legislation, we may have one in the future.
SB 607, if passed, will allow a landlord of market-rate housing to terminate the tenancy of and evict a tenant, even if they are under a lease, if the tenant or the tenant's guest commits certain crimes at the property or near the property, by issuing a 5 day notice with no right to cure.
The crimes that would allow a landlord to terminate a tenant's tenancy include:
1. Battery (or related crimes),
2. Endangering safety by use of a dangerous weapon (or related crimes),
3. Criminal gang activity,
4. Criminal damage to property (or related crimes),
5. Prostitution (or related crimes),
6. Harassment (or related crimes),
7. Any other breach of the rental agreement that jeopardizes the health, safety, or welfare of the owner, his/her agent, or another tenant.
SB 607 also allows a landlord to terminate the tenancy of a tenant under a periodic tenancy (month to month) that has committed one of the aforementioned crimes, by serving them with a 5 day notice with no right to cure. This proposed modification of the law, while helpful, is not as important as the above mentioned changes involving tenants under leases for term, as a landlord with a month-to-month tenant has always had the right to serve the tenant with a 14 day notice to vacate (without a right to cure the breach) or a 28 day notice (for any reason at all). Nonetheless, SB 607 will allow a landlord of a month-to-month tenant to remove a dangerous tenant more quickly then before.
The bill will requires that the landlord give the tenant a written 5 day notice that states the basis of the breach and informs the tenant of his/her right to contest the termination if an eviction action is filed. If the tenant contests the eviction action, the landlord must still prove that the tenant or his/her guest committed the crime.
Please take the time to contact your state representatives and tell them that they should fully support this proposed bill.
Also take the time to thank Brian Fleming - President of Milwaukee RING - for taking the time and effort to bring this major "hole in the law" to Senator Plale's attention. Without Brian's work on this there would be no SB 607.
I Discovered A Really Informative Blog Devoted To Fair Housing Issues
This past weekend I was trying to think of some ways to add some variety and fun to Tristan's Landlord-Tenant Law Blog. While I feel that my blog is informative and helpful I wish that I could make it more fun. Toward that end I decided that I would spend some time trying some new types of blog posts in the future -- a list post (i.e. Top Ten Reasons ...
This past weekend I was trying to think of some ways to add some variety and fun to Tristan's Landlord-Tenant Law Blog. While I feel that my blog is informative and helpful I wish that I could make it more fun. Toward that end I decided that I would spend some time trying some new types of blog posts in the future -- a list post (i.e. Top Ten Reasons To Not Allow Cats in Your Rental Unit, Top Ten Excuses for Paying Rent Late), a video post, a book review post.
Those of you that are regular readers of my blog or those of you that have met me personally may know that I really enjoy learning knew things relating to Landlord-Tenant law. Because of this, I was really excited this past weekend to discover a blog devoted totally to discrimination/Fair Housing issues.
The Fair Housing Blog is published by Attorney Ron Leshnower. He started his blog in 2008 to coincide with the 40th anniversary of the Fair Housing Act. The purpose of his blog, according to his bio, is to explore housing discrimination issues that are important and interesting but do not always get much press.
This blog covers all issues that could possible arise in the Fair Housing context. He talks about all of the protected classes, reasonable modifications and reasonable accomodations for individuals with disabilities, testing, voice profiling, steering, and many more issues. What I like most about this blog is that the author provides links to the actual legal documents that the federal or state government filed against the landlord, property manager, or owner who allegedly violated the law. This allows you to read the actual factual allegations. While many of these lawsuits are resolved without a need for a hearing and therefore there is no written decision necessary, it is still very enlightening to read about what specific situations are egregious enough to cause the government file a lawsuit.
What better way to learn then from other's mistakes. Some of the author's blog posts include links to fair housing studies performed by various municipalities as well as media reports.
If you are interested in Fair Housing issues as I am or just want to learn what type of actions can land you in trouble I would encourage you to spend some time at the Fair Housing Blog.
I have previously posted a three-part series about Fair Housing law that will give you some useful basic information to better understand the Fair Housing Blog. You can read those posts here, here and here.
SECURITY DEPOSIT TRANSMITTAL LETTERS: How To Draft A Legal 21-Day Letter
Security deposit withholding issues are the second most litigated area in landlord tenant law after evictions. If a landlord makes improper deduction from a tenant’s security deposit, pursuant to ATCP 134 and §100.20, Wis. Stats., the tenant may sue the landlord for double damages and attorney’s fees. There are numerous published Court of Appeals decisions in Wisconsin dealing with this exact issue. I would like to offer a ...
Security deposit withholding issues are the second most litigated area in landlord tenant law after evictions. If a landlord makes improper deduction from a tenant’s security deposit, pursuant to ATCP 134 and §100.20, Wis. Stats., the tenant may sue the landlord for double damages and attorney’s fees. There are numerous published Court of Appeals decisions in Wisconsin dealing with this exact issue. I would like to offer a few suggestions to landlords which will hopefully keep you from making any improper security deposit deductions.
First, we need to address some basics . . .
A security deposit is defined as "any payment that is given to a landlord as security for the performance of the tenants obligations under the rental agreement." ATCP 134.01(11).
ATCP 134.06(2), states that "within 21 days after a tenant surrenders the rental property, the landlord shall deliver or mail to the tenant the full amount of any security deposit held by the landlord, less any amounts properly withheld by the landlord."
If you would like to know what a landlord may legally deduct from a tenant’s security deposit you will want to read my Jan. 17th post.
ATCP 134.06(4), states "If any portion of a security deposit is withheld by the landlord, the landlord shall, within the time period and manner prescribed in sub.(2) – 21 days -- deliver or mail to the tenant a written statement accounting for all amounts withheld. The statement shall describe each item of physical damages or other claim made against the security deposit, and the amount withheld as reasonable compensation for each item or claim."
I will refer to this written statement interchangeably as either the "security deposit transmittal letter" or the "21-day letter."
According to ATCP 134 all prepaid rent in excess of one month is legally considered to be a security deposit. So if you require a new tenant to pay first and last month's rent plus a security deposit, legally the security deposit will also include the last month’s rent
Essentially a landlord must either return a tenant’s security deposit or send the tenant an itemization of how the tenant’s security deposit was applied within 21 days after the tenant surrenders the premises. This is mandatory. No matter what the situation – even if you are legally entitled to keep all of the tenant’s security deposit – you must still send the tenant a letter explaining to them why you can legally keep it and how it was applied. There is no situation in which you should not be sending the 21-day letter to a vacating residential tenant in Wisconsin. Even if common sense tells you it is not necessary (i.e. the tenant told me to use his/her security deposit to pay for the last month’s rent) you should still send out the letter. If you are wrong the ramification may be expensive. Be safe - send the letter each and every time.
As I mentioned in a previous post about what a landlord can legally deduct from a tenant’s security deposit, ATCP 134.06(3) states that you can only deduct the following from a tenant’s security deposit: (1) damage, waste, neglect, (2) unpaid rent, (3) utility costs, (4) any other items properly identified in a document called Nonstandard Rental Provisions (NSRP).
Note: There are two additional items listed in ATCP 134.06(3) which may be deducted from a tenant’s security deposit but they are not very common so to keep things simple I have not chosen not to mention them in this post.
So if you are not using a NSRP then legally you may only withhold for rent, utilities, and damage or waste or neglect. That is it. Nothing more. If you would like to be able to legally deduct other things from a tenant’s security deposit such as late fees, insufficient funds fees, actual costs charged by a municipality that the landlord had to pay resulting from the tenant’s failure to cut the grass or properly dispose of recyclables etc. -- then you must have those deduction listed in your NSRP and signed or initialed by the tenant.
Many landlords get into trouble because they wait until the last day to send out the letter. You only have 21 days from the date that they tenant "surrenders" the unit.
ATCP 134.06(2)(b) defines "surrender" as follows:
a. The last day of the tenancy provided under the rental agreement.
b. If tenant vacates before the last day of the tenancy and gives landlord written notice that they have vacated, then surrender occurs when the landlord receives the written notice.
c. If tenant vacates after the last day of the tenancy, then surrender occurs when the landlord learns that the tenant has vacated.
d. If tenant is evicted, surrender occurs when the writ is executed by the Sheriff or when the landlord learns that the tenant has vacated, whichever occurs first.
If that sounds a bit confusing to you that is because it is confusing! So the key is to not wait until the 21st day to send out the letter. Send it out as soon as you can. Don’t wait until the 21st day to mail it to the tenant because there is always a chance that there will be a dispute as to what day the tenant "surrendered the property."
A client of mine was once sued for failing to return a tenant’s security deposit within the required time period. The tenant allegedly dropped off the keys in the rental office drop box on a Sunday before the Memorial Day holiday. The office was closed on Monday because of the holiday so my client didn’t learn that the keys were returned until she came into the office and noticed them on Tuesday following the holiday. My client considered the date of surrender to be on Tuesday. My client mailed the tenant’s entire security deposit to them on the 21st day from that Tuesday.
The tenant sued my client arguing that the 21-day letter and the enclosed return of the security deposit was sent on the 23rd day rather than the 21st day after surrender. The tenant argued that the date of surrender was on the Sunday when the keys were dropped off rather than on the Tuesday when my client discovered them. The court commissioner handling the case agreed with the tenant. My client had returned the tenant’s entire security deposit to him but nonetheless was still ordered to pay double damages and a reasonable attorney fee.
While I disagree with the decision of the court commissioner (based on the definition of "surrender" and for equitable reasons - the tenant got the entire deposit back) that is not the point. The point is that my client should never have waited so long to return the security deposit to the tenant. Since my client was returning the entire security deposit to the tenant there was no need to obtain estimates for damage to the unit or have repair work completed. They could have easily mailed it back 2 days earlier, or 5 days earlier, or 2 weeks earlier for that matter. There is no reason to wait the full 21 days.
Yes, I realize that sometimes you may need additional time in order to properly identify all the tenant damage and obtain estimates for those repairs. Sometimes that will be the case. But oftentimes there will be no reason to use the entire 21 days to return the deposit or send the letter, but yet this is what many landlords do. This leads to my second suggestion.
ATCP 134 only requires that a landlord account for how the security deposit was applied. It does not say that you must provide the tenant with a complete written list of all damages or money owed – just enough to explain how the security deposit was used.
Here is an example:
Tenant, Joe Smith, vacates the property on the last day of the month of January. While the tenant provided proper notice to terminate his tenancy he failed to pay January’s rent. Mr. Smith left the rental unit in a mess. There was damage, beyond normal wear and tear, to the carpeting, walls, and floors. There were window screens missing. Window blinds were trashed. The place was essentially left a mess and the cost to repair the damage will be very expensive.
Question: Under this scenario, when should the landlord send out the 21-day letter?
Answer: The landlord should send out the 21-day letter the day after the tenant vacated - Feb. 1st.
If rent is $500 and the tenant failed to pay the last month’s rent then you have all of the information that you need to notify the tenant why they are not getting their security deposit back. Remember you are only required to explain how the security deposit was applied. You are not required to notify the tenant within 21 days of all the damages that the tenant owes you because he trashed the place.
In the above example, the tenant failed to pay January’s rent in the amount of $500 which just so happens to be the same amount as the tenant’s security deposit. So even if there are lots of damages to the unit you can still send out the 21-day letter the day after the tenant surrenders the unit because you have enough information to account for the application of the security deposit. Your letter should simply state that the tenant failed to pay the last month’s rent for which he was legally responsible and that you will be applying his security deposit of $500 toward the last months’ rent and no portion of his security deposit is being returned. You have now complied with the ATCP 134 regulations.
Now you can take your time, if needed, to obtain estimates for all the tenant-caused damage to the unit and send the tenant a separate letter on a later date notifying him of the additional money he owes you.
By remembering this simple rule it has been my experience that many 21-day letters can be mailed out well before the 21 day period closes.
3. If you are able, make only "slam dunk deductions" from a tenant’s security deposit.
"Slam dunk deductions" are deductions that the tenant would have a difficult time arguing about. If you have enough "slam dunk deductions" to cover the entire security deposit then the tenant is less likely to sue you for allegedly making an improper deduction from his/her security deposit. Examples of "slam dunk deductions" would be items such as rent and/or utilities. As long as you have a written rental agreement with the rent amount listed and it indicates what utilities the tenant is responsible for paying, these two types of deductions tend to be the safest to make. This is not always the case (especially if there are arguments about if proper notice to vacate was given by the tenant) but for the most part rent and utilities are safe items to deduct.
In my 15 years of representing landlords, I have found that most tenants will be truthful and admit if they did not pay rent and if they failed to pay their utilities. However, tenants are rarely willing to concede that they left the place a mess or that they caused damage. I am not sure why this is - someone should conduct a study of this! As such, deductions for repairs or cleaning charges are NOT "slam dunk deductions." Rather they are deductions that often are disputed by tenants - so try to avoid them if possible. Keep things simple and you will lesson you exposure to a lawsuit.
Let’s take the example mentioned above and change the facts. Assume that the tenant, Joe Smith, did pay the last month’s rent and did not owe any utilities, and therefore the only possible legal security deposit deductions that you could make are the non-slam dunk items related to the property damage. Under this scenario, my "slam dunk deductions" theory is not helpful, so you must proceed to my next suggestion.
4. Itemize all deductions separately and clearly, and enclosing all invoices for the cost of repairs (or estimates if the work has not been completed), photographs, copy of the Check-In/Check Out Sheet, and always error on the side of caution.
If the only legal deductions that can be made from a tenant’s security deposit are for damages to the unit then you very well may need most of the 21 days to obtain your estimates and or make the repairs. If you are unable to have the repairs completed or even obtain estimates within 21 days you still are required to send out the 21 day letter. In that situation I caution you to error on the side of under-estimating the cost of the repairs.
You 21 day letter should be clear and detailed. The purpose of the letter is to explain to the tenant what happened to their deposit. If you are clear in your explanations as to how that deposit was applied there is less of a chance that your tenant will sue you. If the tenant cannot understand the deductions that you made because you did not clearly explain them in the letter or your handwriting is illegible then s/he may think that you are treating them unfairly and that will increase the chances that they will sue you.
Take photos of the damage left behind by the tenant. Hopefully you also have photos that were taken prior to the tenant moving in which will show that the damages caused by the tenant were not preexisting. A Check-In/Check-Out form which you and your tenant completed at the outset of the tenancy, noting any pre-existing damages prior to them moving in, will also be helpful.
If you take the above precautions there will be a better chance than not that a tenant will not sue you for making improper security deposit deductions because s/he will be able to understand the deductions that you made and s/he will also know that you have evidence to support your deductions. Even if the tenant does decide to sue you, you will now be better prepared to defend yourself in court if that is where you end up.
Keep in mind, that if you are unsure whether you can adequately prove that your tenant caused the damage then it is safer to not make the deduction from their security deposit. You will need to engage in some cost-benefit analysis as well as analyze your willingness to take risk. Ask yourself if the $100 deduction that you want to make (and which you cannot adequately support) is worth the chance of having to pay the tenant double damages ($200) plus the hundreds or thousands in attorney’s fees if a court commissioner or judge disagrees with you.
ADDED ON APRIL 21, 2010 --- The law does not require that all damages be prepared prior to you making a deduction from a tenant's security deposit. Unfortunately many courts do not realize this. It should be noted that the Department of Agriculture, Trade and Consumer Protection, the governmental entity that drafted ATCP 134 and the encompassing security deposit regulations, stated in its 1999 Summary of ATCP 134 Revisions, that "if repair costs are not known within 21 days, a written accounting must still be provided. In this case, a 'good faith estimate' may be made."
5. Send the 21-day letter via certified mail.
I always recommend to my clients that they send the 21-day letter (whether it includes the return of security deposit money or not) via certified mail. Why? Because the certified mail receipt is proof of the date that you mailed it. You do not want to be stuck in a "he said - she said" argument with your tenant as to the date you mailed the letter when you are before a court commissioner or judge. The certified mail receipt gives you additional evidence besides "your word" as to when you mailed the letter. Yes, it does cost more to mail a letter certified. And yes, if you have to mail out many 21-day letters this cost can add up. Once again, you will need to evaluate whether or not foregoing the certified mail option is worth the possibility of having a court rule that you did not mail the security deposit transmittal letter timely.
6. If no forwarding address is provided then mail the 21-day letter to the tenant’s last known address.
Send the letter to the tenant’s new address if they provided you with one. But if they didn’t, which seems to be the norm, then ATCP 134. 06(5) says that you should mail it to their last known address. Yes, I do realize that the tenant’s last known address is the address of your rental unit which the tenant just vacated - but as silly as that may seem you should still do it.
ATCP 134 says that you must mail or deliver the security deposit transmittal letter to the tenant - it does not say that the tenant needs to receive the letter. Yet another reason why I suggest certified mail. If the letter is returned to you - do not open it. Keep it in your files for a while to see if the tenant contacts you. If the tenant decides to sue you - having the unopened letter with a date from the U.S. Post Office on it showing when you mailed the letter - should be all the evidence you need to prevail in court.
7. If you have multiple tenants then the refund should be made payable to all of the tenants.
If more than one adult is on the rental agreement, assuming that you are returning their security deposit, you should make the refund payable to all of the adult tenants.
Your check could read:
Made Payable To: Tenant A, Tenant B and Tenant C
It is not your role as a landlord to decide who contributed what portion of the security deposit. The tenants entered into one rental agreement with you (not three individual agreements) for the entire rental unit and they paid one security deposit as a group. You should return the security deposit to all of them and let them determine how to split it up. The only exception to this rule is if the tenants provide you with notice, in writing, signed by all of them, advising you who the return of the security deposit should be made payable to.
_______________________
The above suggestions cover the most common mistakes that I have witnessed regarding security deposit deductions over the years. While I cannot promise you that if you follow my suggestions that you will never be sued by a tenant for making an improper security deposit deduction, I can tell you that you will significantly reduce your exposure to such a lawsuit.
Wisconsin's New Lead-Safe Renovation Rule is Upon Us - April 22, 2010 - Get Trained
From a March 1, 2010 post by Tim Ballering on the AASEW Advisors listserv:Beginning April 22nd you will be required to be trained and have WIDHFS or EPA certification even to work on your own pre 1978 rentalhousing.Yes the rule will be very expensive to comply with (See the articlesbelow). Yes it is another -- to put it in terms the government uses --unfunded mandate. But it is now the ...
From a March 1, 2010 post by Tim Ballering on the AASEW Advisors listserv:
Beginning April 22nd you will be required to be trained and have WI
DHFS or EPA certification even to work on your own pre 1978 rental
housing.
Yes the rule will be very expensive to comply with (See the articles
below). Yes it is another -- to put it in terms the government uses --
unfunded mandate. But it is now the law and it will eventually be
painfully expensive not to comply. (Big fines, lawsuits etc.)
The good news, if there is such a thing in this context, is the AASEW has a
tentative agreement with another state certified trainer to provide
this training for less than $200 per person.
We need a head count of how many owners and their crew members would
be interested in taking advantage of this. That number will set the
final pricing. If we hustle the training would be prior to 4/22/10 so
that no one is out of compliance.
This rule will affect you if you replace windows, disturb 6 square feet of paint on the interior or 20 square feet of paint on the exterior of any pre-1978 rental housing. Essentailly this will affect all of us that own rentals.
If you would be interested in attendng -- please post a comment below along with the number of people you would be sending and I will pass the info on to Tim.
Thanks
T
-------------Recent News on EPA Rules -----------------
"The price for homeowners could be hiked by $500 to $1,000 per room,
McComas said."
----------
"It's going to price a lot of these jobs right out of the market," he
said."I think it's going to put me out of business."
-----------
The new federal lead safety rules that take effect this spring are
coming just as work gears up on federal stimulus projects that may be
affected by the new regulations.
-----------
"You're talking about at least a few thousand dollars extra," said
DiBernardo. Gehrig estimated the extra labor might add 25 percent to
a siding job.
-----------
New regulations aimed at protecting homeowners from lead based paint
could make your renovation costs skyrocket.
Landlords Will Be Required To Install Carbon Monoxide Detectors In Single Family and Duplex Rentals
A new bill was recently passed by the Wisconsin Senate that will require landlords that rent out single-family homes and duplexes to install carbon monoxide detectors on all floors of these dwellings by Febraury 1, 2011.Senate Bill 415 was passed 69-27 via voice vote after the Assembly previously passed the bill by a 2/3's margin. You can read the entire history of the bill here. It is anticipated ...
A new bill was recently passed by the Wisconsin Senate that will require landlords that rent out single-family homes and duplexes to install carbon monoxide detectors on all floors of these dwellings by Febraury 1, 2011.
Senate Bill 415 was passed 69-27 via voice vote after the Assembly previously passed the bill by a 2/3's margin. You can read the entire history of the bill here. It is anticipated that the Governor will sign the bill.
SB 415 requires the owner of most buildings that contain one or two dwelling units to install a carbon monoxide detector in the basement and on each floor of the dwelling unit except for the attic.
Additionally, the bill requires that if the tenant notifies the owner in writing that a detector is not working properly, that the owner must perform the necessary maintenance to repair the detector or replace it within 5 days after receipt of the notice by the tenant.
The bill also exempts an owner for any liability for any false alarms or from the failure of the detector to work properly if its failure was due to tampering, as long as the owner reasonably maintained the detector.
Existing 1 and 2 unit dwellings will be allowed to use battery operated carbon monoxide detectors.
A carbon monoxide detector is not required to be installed if the unit does not have an attached garage, has no fireplace, and has no fuel-burning appliances.
Finally, the bill authorizes a building inspector to inspect new dwellings, and if requested to do so by the owner or tenant, to inspect the interior of an existing rental unit to ensure that the owner has complied with the requirements set forth in this bill.
This new law will become effective as of February 1, 2011 and will be contained in Section 101.647 of the Wisconsin Statutes.
Please remember that the carbon monoxide law that affects rentals that include 3 units or greater goes into effect April 1, 2010. This law can be found in Sec. 101.149, of the Wisconsin Statutes. ADDED 3/1/10: These regulations were issued as emergency rules by the Department of Commerce, Safety and Building Division, as required 2007 Wisconsin Act 205 (in April 2008). The Wisconsin Department of Commerce's brochure on this law is very informative.
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Thanks to Atty. Heiner Giese for forwarding this information to me.
Is This The End of Seller Financing For Rental Properties?
I have received this same information from my contacts at the Apartment Association of Southeastern Wisconsin, Inc. (AASEW) and Milwaukee Real Estate Investors Networking Group (RING). If you would ever like to be able to obtain seller financing for your next rental property or if you would like to be the seller that finances the sale of your rental property to some young landlord in the future ...
I have received this same information from my contacts at the Apartment Association of Southeastern Wisconsin, Inc. (AASEW) and Milwaukee Real Estate Investors Networking Group (RING). If you would ever like to be able to obtain seller financing for your next rental property or if you would like to be the seller that finances the sale of your rental property to some young landlord in the future then you must act now.
TODAY - Feb. 16th - IS THE LAST DAY TO SEND COMMENTS!
DEADLINE FOR COMMENTS HAS BEEN EXTENDED TO MARCH 5th
___________________________________________________
I received this Info from 4 different REIA's - Deadline 2/16 to respond DEADLINE FOR COMMENTS HAS BEEN EXTENDED TO MARCH 5th
HUD Issues Problematic Rules Interpreting SAFE Mortgage Licensing ACT
HUD has proposed to eliminate ALL seller financing unless the seller lives in the home or becomes a licensed mortgage originator.
The proposed HUD Rules interpreting the federal SAFE mortgage act can be viewed at www.regulations.gov.
Use the search parameter "HUD" and the keyword "safe".
Please review and comment regarding the impact of this broad interpretation of the law. "In addition to establishing HUD's responsibilities under the SAFE Act, through this rule, HUD proposes to clarify or interpret certain statutory provisions that pertain to the scope of the SAFE Act licensing requirements, and other requirements that pertain to the implementation, oversight, and enforcement responsibilities of the States. HUD solicits comment on the proposed clarifications and on the regulations proposed to be codified."
History:
As you may recall, we lobbied hard last year to maintain the right for individuals to make up to five seller financed transactions per year before being subject to mortgage originator licensing, etc... However, that law was passed subject to the Department of Housing and Urban Development's (HUD) approval of the law as "compliant" with the intention of the federal law. If any state does not have a compliant law, the SAFE act allows HUD to implement licensing for the state. HUD has since issued proposed rules.
In a nutshell, seller financing would no longer be allowed for non-owner occupied homes.
How YOU can help:
We learned about the publishing of the rules very late in the process... and the deadline for comment is upon us on February 16. However, we desperately need for thousands of REIA members across the country to go on record with HUD on this issue. We will be working to try to affect this law in other legislative ways, but cannot hope to gain traction unless our members have clearly communicated that they are opposed to this portion of the rules. This is your chance to be counted on this issue.
PLEASE SUBMIT YOUR COMMENTS TO HUD! We have less than one week to flood this system with comments.
Follow these simple steps:
1. Logon to www.regulations.gov. You will see two white boxes for searching
2. On the left box labeled "Document Type", pull the menu down and select "proposed rules"
3. On the right box labeled "Enter keyword or ID", enter "safe mortgage". Then, press search
4. Locate the blue search result "FR-5271-P-01 Safe Mortgage Licensing Act: HUD Responsibilities Under ...." To read the rules, click on this title. You will be taken to another page. You will see "views". You can click on PDF file or another symbol which will show you the rule document online.
5. On the right of the screen, click on "submit comment"
6. Complete the form providing required information and your comments and then submit
What do you say?
Say what you feel, but say it politely! The message should include that you would like the definitions in the proposed rules to be changed so that private individuals can originate and service loans on properties they personally own.
Some ideas from others:
• Bank loans are not available on some types of properties
• The tight lending climate has made bank financing "out of reach" for many
• Seller financing is an "age old" tradition based on private property rights
• These rules would prohibit even partial seller financing - i.e. a "seller second"
• According to HUD's "Residential Finance Survey" in 2001, roughly 40% of all non-farm residential properties in the US are owned free and clear
• An estimated 6 million Americans own a property other than their own primary residence
• An estimated 4.5% of Americans own three or more properties, many purchased solely as investment properties
• 40% of non-owner occupied residences are mobile homes which are more difficult to sell with bank financing
• Approximately 5% of homes in US are for sale or for lease... seller financing may be key to liquidating this inventory
Post comments to: http://bit.ly/b0NyKx
DEADLINE FOR COMMENTS HAS BEEN EXTENDED TO MARCH 5th
Compliments of BILL Kiefer
ACT TODAY !!!!!!!!!!!!!!!!!
LANDLORD BOOT CAMP: Only 4 Open Seats Remain
UPDATE 2/17/10 - WE ARE AT FULL CAPACITY FOR LANDLORD BOOT CAMP ON 2/27/10. If you are interested in attending please contact Paulette at (414) 276-7378 or paulette@apartmentassoc.org and she will put your name on a "waiting list" and contact you should a seat become available. Thank You T ________________________________________________________ We had a great AASEW ...
Landlords Should Attend EPA Lead Renovation Meeting On Feb. 15th
The Bad News: Those of you who have been following along on this list have heard about the new EPA Law, beginning April 22, 2010, that regulates any renovation work that disturbs 6 sq. ft. or more of paint per room, 20 sq. ft. or more of exterior paint, or involves windows. This law specifically includes rental property owners, management companies and their employees. Your workers and company ...
This law will increase the cost of doing work as well as subject violators to fines of up to $32,500 per day/violation.. You really don't want to make a mistake here.
AASEW's Traders' Corner To Be Introduced on Feb. 15th, Prior to Monthly Membership Meeting.
The AASEW is constantly striving to make our monthly membership meetings more interactive, informative, and fun for our members. Toward that end, we have formed a committee comprised of 3 board members (Alan Rusk, Kim Queen & John Coons) to explore and suggest ideas to improve the AASEW's monthly meetings. Our attendence has been up over the past year and we want to maintain (and even increase) this trend.The first of ...
The AASEW is constantly striving to make our monthly membership meetings more interactive, informative, and fun for our members. Toward that end, we have formed a committee comprised of 3 board members (Alan Rusk, Kim Queen & John Coons) to explore and suggest ideas to improve the AASEW's monthly meetings. Our attendence has been up over the past year and we want to maintain (and even increase) this trend.
The first of the ideas to be implemented will be the Traders' Corner. The Traders' Corner will meet from 6:30 pm - 7 pm on Monday, February 15, 2010 (and will continue to meet 1/2 hour before the start of the AASEW's regular monthly meetings) at the Best Wester Hotel located at 1005 S. Moorland Road in Brookfield.
The goal of the Corner is to allow for members to meet and discuss their real estate "deals." If you have a rental property that you are looking to sell or if you would like to purchase additional rental properties - the Traders' Corner is where you want to be. Come and tell us about how you found your most recent "deal" and how you analyzed it and determined that it was something that you should go forward with.
The meeting will be very informal and we will let those in attendence dictate what we talk about. Ideally we hope this new event will allow members to meet and interact with one another more and allow for all of us to learn from one another. Our members possess a wealth of real estate knowledge and experience and that is something that the AASEW is hoping will be shared.
Wisc. Legal Blank Co.'s New & Improved Residential Rental Agreement Is Now Available.
I wanted to alert anyone that is currently using the Residential Rental Agreement that is sold at Wisconsin Legal Blank Co, Inc. (and even those of you who don't : ) that the new and improved version is now available ans is being sold at WLB.I completed the revisions to the updated Agreement last week. The new version indicates a revision date of 1/4/10 whereas the prior version had a ...
I wanted to alert anyone that is currently using the Residential Rental Agreement that is sold at Wisconsin Legal Blank Co, Inc. (and even those of you who don't : ) that the new and improved version is now available ans is being sold at WLB.
I completed the revisions to the updated Agreement last week. The new version indicates a revision date of 1/4/10 whereas the prior version had a revision date of 1/31/07.
Some of the changes include:
1. I retitled the document "Residential Rental Agreement" -- believe it or not I have seen this document improperly used for commercial properties (Note: I will be drafting a form Commercial Lease in the ensuing months for WLB).
2. I attempted (and think that I succeeded) in removing all legalese from the Agreement in order to make it more understandable for everyone. So you no longer need to read "heretofore" "therein" "hereof" and wonder to yourself "what the heck does that mean?"
3. I eliminated some of the "fill in the blank" sections that were causing confusion for some landlords and property managers. The eliminated sections were not really necessary anyways - so they're outta there.
4. I retitled the "Guarantee" section to "Co-Signer / Guarantor" is an attempt to make it more clear that landlords/managers do not need to have the resident/tenant sign this section. This section need only be signed by individuals (other than the tenant) that are guaranteeing that the tenant will meet all of the conditions in the Agreement. For example: a parent would sign as a co-signer/gurantor for a student tenant that is not employed and/or does not have sufficient credit.
5. I added a sentence that states that if the Landlord provides the Tenant with an Inspection Checklist (a.k.a. "Check-In/Check-Out" form) and the Tenant fails to return it to the Landlord within seven days after the start of the tenancy, that the Tenant will be considered to have accepted the Premises without any exceptions."
6. I deleted the fill in the blank lines relating to "Special Provisions" relating to pets. The purpose for doing this is to alert landlords that there is a separate docuement entitled "Pet Agreement" that they should be using if they are allowing tenants to keep pets -- rather then trying to cram all of that info into 2 lines on the Rental Agreement." By being forced -- "forced" may be too strong of a word -- to use the Pet Agreement a landlord will also notice (on the Pet Agreement form) that s/he may charge the tenant a refundable pet fee and/or a non-refundable pet fee and it will also make the landlord clearly define the specific pet that is being allowed to reside at the Premises.
7. I clarified the section that dealt with the type of notice that a tenant must provide the Landlord prior to vacting. The goal was to make this notice process more understandable for the tenant (and therefore less of a headache for landlords). This revised section will also serve as a default provision should the landlord fail to include another (i.e. longer) notice provision for the tenant. The section includes both a notice provision for month to month tenants and tenants that are under a lease for term.
8. I added a section regarding abandoned personal property. The section states that any personal property that is left at the Premises after the Tenant has vacated will be considered to have no value and to have been abandoned by the Tenant and therefore it may be disposed of by the Landlord, unless the Tenant notifies the Landlord otherwise - in writing - prior to vacating.
9. I added a new provision regarding a tenant's responsibility for maintaining and paying for utilities through the end of theiir tenancy or until the last day that the tenant is responsible for paying rent.
10. I included a new section that defines late fees, security deposits, utility charges and any other penalty or fee set forth in the Agreement as "rent" - much like is done in commercial leases.
11. I added a provision stating tha the landlord/manager represents that there are no code violations or other conditions affecting the habitability of the Premises unless indicated otherwise in writing.
12. I added a new section that clarifies who will be responsible for any extermination costs of the Tenant's unit and under what circumstances.
13. I included a provision recommending that all Tenants purchase renter's insurance and explaining why this is reccomended.
14. I removed the Consent to Assignment or Sub-Lease section. I removed this section to reinforce the fact that landlords of residential rental properties would be better protected by entering into a new Rental Agreement (and other rental documents) with a new individual that moves into the Premises after a prior tenant was evicted or vacated the unit, rather then to just assigning or sub-leasing the Premises and continuing to use the old tenant's rental documents. While this will result in more paperwork for the landlord, the protections that it will provide more than outweigh the additional paper. A Landlord in this situation should have the new tenant sign all new rental documents especially a new Lead-Based Paint Disclosure statement (and provide the new tenant with a new EPA pamphlet) and have the new tenant sign and/or initial a new Nonstandard Rental Provisions document rather then just relying on the old documents that the prior tenant signed. Trust me, if you end up in a court battle (i.e. eviction lawsuit or defending a claim that you violated ATCP 134) or facing the wrath of the EPA, you will be thankful that you used the extra paper.
15. Finally, I cleaned up all of the mispellings, improper grammar, and other typos -- at least I think I did.
I would reccomend that you toss out any old versions of the Rental Agreement that you may have in your possession and the next time that you renew or rent out a rental unit that you use this new and improved Residential Rental Agreement form.
CCAP Bill Amended to Allow Landlords Full Access; Possibly Going to Assembly for Vote
As many of you know who have been following my updates on the ever evolving attempts by Marlin Schneider to restrict access to CCAP - Mr. Schneider has again amended his proposed bill. The bill is now called Assembly Bill 663 but it is practically the same as the amended AB 340. Why the change in the bill number I have not a clue.AB 663 was ...
As many of you know who have been following my updates on the ever evolving attempts by Marlin Schneider to restrict access to CCAP - Mr. Schneider has again amended his proposed bill. The bill is now called Assembly Bill 663 but it is practically the same as the amended AB 340. Why the change in the bill number I have not a clue.
AB 663 was voted on by the State Affairs and Homeland Security Committee on Wednesday, February 3, 2010.
Prior to voting on the bill, several amendments were made. The major amendment was to was to include real estate brokers and salespeople, bankers and other financial agents, landlords, and those working in the title industry, to the list of the "select few" who would be able to access CCAP in its entirety. Everyone else would still be limited to the restricted version of CCAP which would exclude information on pending cases and cases in which the defendant was acquitted or the lawsuit was dismissed.
Even with this major changes, AB 663 barely made it out of committee. The committee was deadlocked at 3 to 3. Voting for the bill was Rep Fred Kessler (D-Milwaukee), Rep. Leon Black (D-Milwaukee) and Rep. Kelda Helen Roys (D-Madison). Voting against the proposed bill was Rep. Spencer Black (D-Madison), Rep. Joel Kleefisch (R-Oconomnowac) and Rep. Danield Knodl (R-Germantown). Two members of the committee were on vacation and therefore did not participate in the vote. The Chairperson of the committe, and bill c0-sponsor, Fred Kessler advanced the bill, without reccomendation, to the Assembly leaders who will now determine whether or not the Assembly as a whole will vote on it.
While it is great that landlords have now been added to the"chosen few" who are deemed worthy to have access to all open records in Wisconsin - this bill should still fail. Current President of the Wisconsin Apartment Association, John H. Fischer (also known as Dr. Rent, gave his personal opinion on the AASEWAdvisors list serv, earlier.
He stated, in part:
I agree with John 100%.
This bill is barely holding on. It is on life support -- we need to put it out of its misery. Patrick Marley of the Journal Sentinel in his recent article on the topic indicates that Kessler himself, one of the bill's sponsors, said that it has a "slim" chance of passing. I would like to change that to NO chance of passing.
This is a very critical time. We must all contact our representatives in the state legislature and let them know that this bill should be defeated.
If you do not know the contact information for your representatives you can find that information here.
Oh yeah, and here is an article stating that Rep. Schneider is lying in an attempt to push his legislation limiting CCAP through the system. Good thing the AP caught him.
Did Your Tenant Write You A Worthless Check? Consider New Restitution Program
One of my earliest blog posts, back when I had just started Tristan's Landlord-Tenant Law Blog, was about the fact that the City of Milwaukee Police Department had a policy in place where they refused to investigate crimes in which a tenant made their rent payment with a worthless check or stopped payment on the check. Shortly thereafter I wrote about a new diversion program that was being ...
One of my earliest blog posts, back when I had just started Tristan's Landlord-Tenant Law Blog, was about the fact that the City of Milwaukee Police Department had a policy in place where they refused to investigate crimes in which a tenant made their rent payment with a worthless check or stopped payment on the check. Shortly thereafter I wrote about a new diversion program that was being created to assist landlords in such a situation.
I was attending the February monthly meeting for Milwaukee RING (Real Estate Investors Networking Group) this past Monday and they had a speaker from the company that is now running this new program. Mr. Rufus McNealy of Financial Crimes Services, LLC (FCS) spoke to us about the diversion/accountability program that is now in full effect.
Mr. McNealy handed out a very informative guide outlining the program and including the necessary applications to enter into the program.
With the current recession the District Attorney's Office says that they are receiving more and more complaints of people passing worthless checks. Due to limited funding, the DA's office cannot afford to prosecute all of these these crimes. So the DA's office and FCS partnered to try to get some of that money back for the victims -- and this includes landlords.
The goals of the program are:
1. Increase the amount of restitution returned to victims of bad checks.
2. Increase the accountability of all worthless check writers (regardless of the amount of the check).
3. Educate local merchants about more effective check acceptance procedures.
4. Reduce the risk of repeat worthless check activity through training.
There is no cost to any landlord that wishes to try this diversion program. All costs of the program are born by the worthless check writer.
The program will handle the following kinds of checks: NSF, Account Closed, Stop Payment, Refer to Maker, Business to Business, RENT checks, debit card charge backs, ACH (Automatic Clearing House) charge backs, ACH NSF's and electronic checks received in Milwaukee County that do not exceed $2,500.
The following types of checks will not be handled by the program: second-party checks, payroll checks, checks that are currently in collections with a collection agency or attorney, and promissory notes or any other situation in which there has been agreement to hold the check for deposit or credit extension.
The final two pages of the PDF that I have linked to above are the "Memorandum of Understanding" which the landlord would review, sign and return to FCS, and a Preliminary Worthless Check Report which the landlord should complete and send to the Milwaukee County DA Program. Hold on to these two pages . . . just in case you find yourself in a situation where this program can help you.
Once FCS receives the above info from the landlord the company will attempt to contact the person that passed the bad check. The criminal will then have the option of (1) entering into the program and paying restitution to the victim or (2) refuse to enter into the program in which case the matter will be sent for potential prosecution.
It is my understanding that FCS is also partnering with Racine County and Kenosha County in addition to Milwaukee County. FCS is not currently working with Waukesha County.
Those of you that are interested in learning more about this program may contact Mr. McNealy at (414) 393-9385 or visit his company's website at www.financialcrimes.net
The AASEW has also schedule Mr. McNealy to speak about this program at its May meeting.
LANDLORD BOOT CAMP: Everything You Need To Know About Residential Landlord-Tenant Law in WI
I will be presenting an all-day seminar on residential landlord tenant law in Wisconsin for the Apartment Association of Southeastern Wisconsin, Inc. (AASEW). The seminar is entitled "Landlord Boot Camp" and will take place on Saturday, February 27, 2010 from approx. 8:30 am - 5 pm at the Clarion Hotel located at 5311 S. Howell Avenue in Milwaukee. The cost will be $159 for AASEW members ...
Milwaukee's New Vacant Building Registration Ordinance Is Here
I need to apologize. I have spent much of my time these last several months following and providing information about the city of Milwaukee's new Residential Rental Inspection ordinance and as such I have inadvertantly failed to let everyone know about another of Milwaukee's new ordinances that will affect rental property owners. I was talking with a client of mine last week prior to the 1:30 pm eviction return calandar in small claims ...
I need to apologize. I have spent much of my time these last several months following and providing information about the city of Milwaukee's new Residential Rental Inspection ordinance and as such I have inadvertantly failed to let everyone know about another of Milwaukee's new ordinances that will affect rental property owners.
I was talking with a client of mine last week prior to the 1:30 pm eviction return calandar in small claims court and he mentioned that the city recently served him with notice that he is in violation of the city's new Vacant Building Registration ordinance. He was told that his rental property was vacant and that he didn't register the property with the city as required and that he must now open his property up for an interior inspection by the Department of Neighborhood Services (DNS). Interesting twist is that my client's rental property is not vacant nor has it ever been vacant. The unit is occupied by a tenant under a valid written rental agreement.
On January 1, 2010, Milwaukee's new Vacant Building Registration ordinance went into effect. Essentially the ordinance states that the owner of any building that is vacant for more than 30 days must register the property with DNS and submit to a mandatory - warrantless - interior inspection of the rental property. The ordinance also requires the owner to secure the building, maintanin the lot, exterior of the property, and interior of the property during the time that it is vacant.
Upon first glance this seems like a reasonable ordinance. A valiant attempt by the city to insure that vacant buildings do not become dilapidated and attract criminal activity, injure individuals, or further depress Milwaukee's neighborhoods. I have no problem with that. Upon closer review of the ordinance however you will note the many requirements -- similar to the city's Residential Rental Certificate ordinance -- that are open to multiple interpretations and therfore open to abuse, which in the end, can and most likely will, be used to the detriment of rental property owners.
I will not attempt to explain or detail the entire Vacant Building Registration ordinance as it is over 6 pages long. I would like to touch on some key parts of the ordinance and note some concerns.
This new ordinance applies to all residential and commercial properties that have been vacant for more than 30 days. There are some exceptions. It does not apply to single family homes or owner-occupied duplexes (as long as the owner has resided in the duplex at least 3 of the last 9 months and the owner intends to continue living in the duplex). Also excluded from the ordinance are condominiums and rental units as long as their vacancy rate does not exceed 95%. Also excluded is property that is currently in the foreclosure process and property that is actively being renovated.
This ordinance will apply to your rental whether or not you are actively showing the property to prospective renters and regardless of the condition of the property. So within 30 days of the property becoming vacant you must fill out a city application and file it with DNS. Additionally you must allow DNS to conduct an interior inspection. If the city finds any violations you will be cited.
Your intial application will be good for a period of 6 months and will cost you nothing (assuming the city does not cite you for any violations). If your property remains vacant for more than 6 months then you must reapply and pay a $250 fee. If DNS determines, at the time of renewal, that your property is not compliant then the fee will increase to $500. If your property continues to be in violation at the time of any subsequent renewals then you may be charged a fee (in increasing increments of $250) up to a maximum of $1,000. If you don't pay the fees they will be assessed against the real estate as a "special charge."
During the inspection, DNS will see if your property meets their minimum requirements. You can read a summary of those requirements at DNS' webpage dedicated to this new program.
Just as with the Residential Rental Certificate ordianance, DNS has the unfettered ability to draft and apply rules and regulations which are not required to be incorporated into the ordinance. These rules and regulations can change at any time and do not have to be published.
Let me just provide you with two situations that clearly fall under the purview of this new ordinance but which I feel should not require any city involvement whatsoever. By no means are these the only two problematice examples that I foresee -- there are many.
First, assume that you own a duplex and you currently have a tenant in the lower unit but because the upper tenant just broke the lease you upper unit is empty. The upper unit is in pretty good shape but requires repainting and some minor repairs to get the unit into move-in condition for the next tenant. Also assume that you were just assigned a new project at work that is taking up most of your time - you are working late and on weekends. While you would like to repaint the unit, make the minor repairs, start advertising the vacancy, and showing it to prospective renters, you just do not have the time. You remain very busy at work for more than 30 days. Under the new ordinance you now have a "vacant building" and you must register the property and allow it to be inspected.
My second example has actually happened to me on several occassions. I was in the process of trying to locate a new tenant for the lower portion of my duplex. Just as the city suggests, I have written screening criteria which any applicant must meet in order to become my tenant. My screening criteria is quite stringent. I follow the adage that it is better to have a vacant unit then to accept any "warm body" as a tenant. Because I also work a full-time job, I am not free to show the property to interested renters every day. As a result of both my stringent criteria and my schedule, my lower duplex remains vacant for over 30 days. Under Milwaukee's new ordinance I would need to register my duplex with the city and take time out of my day to allow an inspector to inspect my property.
NOTE: I have spoken with DNS Commissioner Art Dahlberg and confirmed that my above examples (which I have crossed out) are inaccurate. If you have a duplex and only 1 unit is vacant then you do not fall under the purview of the new ordinance. You would only fall under the purview of the new ordinance if both units of the duplex were vacant for 30 days -- as you would now have more than a 95% vacant property. So I have had to revise my examples.
First, assume that you own a single family home that you operate as a rental property and your tenant just broke his/her lease and as such the property is now vacant. The property will need a little bit of work (minor repairs and some painting) before you can turn it over. Also assume that you were just assigned a new project at work that is taking up most of your time - you are working late and on weekends. While you would like to repaint the unit, make the minor repairs, start advertising the vacancy, and showing it to prospective renters, you just do not have the time. You remain very busy at work for more than 30 days. Under the new ordinance you now have a "vacant building" and you must register the property and allow it to be inspected.
My second example happens to many of my clients that have stringent screening criteria that applicants must meet before they can become tenants. They are in the process of renting out a single family rental unit or both units of a duplex. Just as the city reccomends they use a written screening criteria which any applicant must meet in order to become a tenant. Following the adage that I often teach at my seminars, that it is better to have a vacant unit then to accept any "warm body" as a tenant, my clients often have periods in which their rental units are vacant. Sometimes becasue my clients work a full-time job outside of being a landlord, they not free to show the property to interested renters every day. As a result of both their stringent screening criteria and their busy schedules, their single famuly rental or both units of their duplex remain vacant for over 30 days. Under Milwaukee's new ordinance they would need to register their rentals with the city and take time out of my day to allow an inspector to inspect their property.
I suppose things could be worse. You could be standing in my client's shoes - the guy I mentioned earlier -- and have just been served with a notice from the city that you are in violation of its Vacant Building Recording ordinance. My client is now placed in the difficult position of having to decide whether to ignore the city's notice and risk the possibility of a fine and the future wrath of DNS or capitulating to the city and allowing it to inspect his unit despite the fact that it is occupied by a tenant and the city has no legal right to set foot in his rental property. What would you do?
City of Milwaukee's Rental Rehab Program Offers Investors Funds to Rehabilitate Foreclosed Properties
In an effort to rid itself of the many abandoned and foreclosed properties throughout the city, Milwaukee's Neighborhood Stabilization Program (NSP) Rental Rehab Program will provide investors and landlords with financial assistance to rehabilitate foreclosed homes.According to the flyer that I was given, responsible investor owners and landlords who purchase foreclosed homes in the city of Milwaukee may be eligible for forgivable loans of up to $17,500 per unit (or ...
In an effort to rid itself of the many abandoned and foreclosed properties throughout the city, Milwaukee's Neighborhood Stabilization Program (NSP) Rental Rehab Program will provide investors and landlords with financial assistance to rehabilitate foreclosed homes.
According to the flyer that I was given, responsible investor owners and landlords who purchase foreclosed homes in the city of Milwaukee may be eligible for forgivable loans of up to $17,500 per unit (or $35,00 for a duplex) to assist them with repairs to the property. The funds are made available on a matching funds basis.
The city will be holding an informational seminar on Wednesday, January 27, 2010 from 3:30 - 4:30 pm at the Department of City Development located at 809 N. Broadway in the 1st floor boardroom.
The seminar will provide attendees with additional details as to the program requirements and rehabilitation specifications.
It is requested that all attendees pre-register by sending an email to NSPinfo@Milwaukee.gov.
Additional information on the program can be found at the www.MilwaukeeHousingHelp.org
What May A Wisconsin Landlord Legally Deduct From A Tenant’s Security Deposit?
I have received many calls from both landlords and managers over the years asking me if they are legally allowed to deduct X, Y, or Z from a tenant’s security deposit. I fielded such a question just last week – sounds like a good topic for a blog post.Wisconsin Administrative Code, ATCP 134.06(3) states that a landlord may deduct from a tenant’s security deposit for the following:1. Damage, waste, ...
I have received many calls from both landlords and managers over the years asking me if they are legally allowed to deduct X, Y, or Z from a tenant’s security deposit. I fielded such a question just last week – sounds like a good topic for a blog post.
Wisconsin Administrative Code, ATCP 134.06(3) states that a landlord may deduct from a tenant’s security deposit for the following:
1. Damage, waste, or neglect of the unit
2. Unpaid rent
3. Unpaid utilities for which the tenant is responsible
4. Payment for which the tenant owes for direct utility service provided by a government-owned utility (to the extent that the landlord becomes liable for the tenant’s nonpayment)
5. Unpaid mobile home parking fees which a local unit of government has assessed against the tenant (to the extent that the landlord becomes liable for the tenant’s nonpayment), and
6. Other reasons as set forth in a document entitled "Nonstandard Rental Provisions."
For the majority of landlords and managers out there, items #4 and #5 are not often applicable, so I will focus my attention on the remaining items.
If you want to hold a tenant responsible for damage that they caused to your rental unit then you must first demonstrate that the damage was not pre-existing. To do this you should take photos of the entire rental unit prior to a tenant moving in. You should also complete a Check-In form yourself prior to the tenant moving in. Essentially a Check-In form lists the various rooms and areas of the rental unit and provides space for you to note any damage or problems. Once the tenant has moved in you should then provide the tenant with a blank Check-In form and ask them to complete it fully, date it, and sign it and then return it to you promptly.
Upon receipt of the tenant’s completed Check-In form you should compare it to the one that you completed earlier. If there are major differences between the two you should address this immediately with your tenant. Oftentimes the discrepancy will be due to the tenant causing damages during the move-in process.
If the tenant fails to return the Check-In form then a landlord should document this in the tenant’s file. If there is a dispute at a later date, the landlord will now have proof (a contemporaneous document) demonstrating that s/he did provide the tenant with the form and that the tenant, for whatever reason, chose not to complete it.
After your tenant moves out of the unit you should take the time to fully inspect the unit and take photographs of any and all damage, waste, or neglect that you see. Digital cameras (and some of the better phones which include cameras) are great for this purpose. Be sure and use the time/date stamp function if you have it. For those of you that are partial to using a camcorder to record the condition of the rental unit instead of photographs, I would caution you that most commissioners do not have the time or inclination to view a 20 minute tape of you walking around the apartment. Additionally, landlords that I have represented that have opted to videotape the move-out condition of the unit often make inappropriate statements while they are taping which if heard by the judge or commissioner could hamper your case. Furthermore, most courts do not supply the playback equipment needed to view a recording. So unless you want to haul around a VCR and television ("old school") or a digital camcorder and possibly a computer ("new school") - stick to photos.
After the landlord has inspected the unit and taken photos s/he should also complete the Check-Out portion of the Check-In Check-Out form. By doing so, the landlord will now have a "before and after" view of the rental property in one single document to submit as an exhibit in court should it become necessary.
By having photos taken before the tenant moved in, photos taken after the tenant moved out, a Check-In form completed prior to (or immediately after) the tenant moved in, and a Check-Out form completed after the tenant moved out, a landlord should be in pretty good shape to prove any tenant damage, waste, or neglect, if needed.
Do not forget that a landlord is not allowed to deduct for "normal wear and tear." This phrase has never been defined in any Wisconsin statute, administrative rule, or case. Once again, the determination of what is "normal wear and tear" is left to the discretion of the commissioner or judge and may vary from day to day (or even hour to hour - as I have had the misfortune of experiencing)
Unpaid Rent: Deducting unpaid rent from a security deposit would seem pretty straight forward but that is not always the case. Prior to deducting unpaid rent from a tenant’s security deposit a landlord should be sure that s/he can prove what the monthly rent amount is. If you are using a written rental agreement that should do the trick. If you do not have a written rental agreement – a cardinal sin in the rental industry – then you will most likely need to provide proof of your tenant’s rent payment history to demonstrate what the monthly rental amount is.
The issue regarding deductions for rent payments often centers on the determination of when the tenant is no longer responsible for paying rent. This can arise in many different contexts.
One such context would be whether or not the tenant is still responsible for paying rent after they vacate the unit. Another relevant context would be whether or not the tenant is responsible for paying the full rental amount because of the poor condition of the property. Determining whether or not a tenant is responsible for rent in the above contexts (and the myriad of other situations) often depends on a number of factors such as: (1) was the rental agreement a lease for a specific term, (2) did the tenant leave prior to the ending of the term, (2) did the tenant provide the landlord with proper notice of their intent to vacate, (3) was the rental unit uninhabitable, (4) was there sufficient damage to the rental unit such that a tenant could be entitled to "abate" some of the rent, and (5) did the landlord make reasonable efforts re-rent the unit after the tenant vacated.
Unpaid Utilities: This deduction would seem to be fairly straightforward, either the tenant paid their utility bill or they didn’t. But before you make any deduction for utilities from a tenant’s security deposit you should make sure that you have adequate proof to demonstrate that the tenant was responsible for paying the utility. Once again this is where a written rental agreement is a necessity. If you don’t have a rental agreement that clearly states whether or not the utilities are included or not you will often find yourself in a "he said - she said" situation. The person that usually wins that credibility judgment is the party that is the best at lying. Avoid being stuck in such a situation and always use a written rental agreement (even if your tenant is on a month to month tenancy) and always indicate in that rental agreement who is responsible for the utilities.
Another issue that arises with utility fee deductions is whether or not the utility bill became due prior to the 21 day period in which a landlord must either return a tenant’s security deposit or provide the tenant with a written itemization as to how their security deposit was applied. Landlords need to remember that they cannot just hold onto a tenant’s security deposit indefinitely while waiting for the utility bill to arrive. Once your tenant vacates, you will need to contact the applicable utility service and find out what amounts are owed as of that date. Attempt to obtain a written record of this amount if possible. A landlord is not excused form the 21 day requirement under ATCP 134.06(2) just because he or she didn’t yet receive the utility bill for which the tenant is responsible.
Other Reasons as stated in the Nonstandard Rental Provisions: As was mentioned above, if a landlord wishes to be able to legally withhold from a tenant’s security deposit anything other then items 1-5 above, then the landlord must have those additional items set forth in a written NSRP document. There is no such thing as a verbal NSRP. So those landlords that are handling everything verbally - you have limited yourself as to what you may deduct from your tenant’s deposit.
The items in the NSRP should be specifically identified and discussed with the tenant and you must have the tenant either sign or initial the provisions. Examples of items that are often included in a NSRP include: fees for the late payment of rent, the resulting costs to the landlord if a tenant's check is returned for "insufficient funds," any fees charged to the landlord by the local municipality for the tenant's improperly disposing of recyclables, fees for a tenant's failure to permit access to rental unit, the costs to rekey the locks should the tenant fail to return the keys to the unit after vacating, fees for smoking in a non-smoking unit etc. Some landlords charge a flat fee if the tenant fails to clean the stove or refrigerator but other landlords feel that such "liquidated damages" are illegal and if deducted from a tenant's security deposit might open the landlord up for being sued for double damages and atttorney fees. From recent case law it appears that it would be legal to charge a tenant for the actual costs incurred by the landlord for cleaning - at least if the landlord uses an outside company to do the work. The issue of deducting fees for cleaning from a tenat's security deposit is somewhat of a "grey" area so prior to placing such a provision in your NSRP you should consult with your landlord-tenant law attorney.
For those of you that are thinking creatively, I hate to squash your creativity but "no" a landlord may still not deduct for "normal wear and tear" even if there is a specific NSRP saying that such a deduction can be made and it is signed or initialed by the tent.
So that is it - those are the items that a landlord may legally deduct from a tenant's security deposit in Wisconsin.
Two additional notes of caution. First, if you make an improper deduction from a tenant’s security deposit Wisconsin law allow for your tenant to recover double damages and their attorney's fees if they prevail. attorney’s fees. So be careful. Second, security deposits are just that - security. A security deposit should not be treated as an additional source of income - something that a landlord can keep at the end of every tenancy. If you are withholding the entire amount of your tenant’s security deposit after they leave - every time and with every tenant - then it is just a matter of time until you will be sued and have to defend yourself against "double damages" and "attorney’s fees." You do not make money in this industry by keeping your tenant’s security deposits; nor is that the purpose of a security deposit.
To read about a landlord that got burned by not following the above information please go to my January 7, 2010 post.