What Is This Mitigation of Damages Requirement That I Keep Hearing About?

Whether a tenant breaches his or her lease and is evicted, leaves after receiving the 5 day or 14 day notice, or skips out in the middle of the night with months remaining on the lease, a landlord has the responsibility to make reasonable efforts to mitigate the tenant's damage under Wisconsin law.

Put quite simply - a landlord cannot just sit back and do nothing and expect to collect rent from the departed tenant until the lease term ends. Per Sec. 704.29 of the Wisconsin Statutes, a landlord must make reasonable efforts to attempt to mitigate the tenant's damages by trying to re-rent the unit for the tenant.

"Reasonable efforts" are defined as "those steps that the landlord would have taken to rent the premises if they had been vacated in due course . . ." So if you typically advertise your vacancies in the Journal Sentinel then you should advertise the tenant's vacant unit in the Journal-Sentinel also. If you typically advertise vacancies on Craig's List, then you should do the same for the tenant's vacant's unit. If you always post a "For Rent" sign in the front of the apartment building, then you should do the same here as well.

The tenant is legally responsible for any costs incurred by the landlord to re-rent their now vacant unit. Whether the old tenant is collectible and you will ever be reimbursed for those out of pocket costs is a practical matter that the statutes do not address.

If you have other vacant units at the same property, you do not need to re-rent the tenant's old unit before you rent out the other vacant units. But you should add your ex-tenant's vacant unit into the mix and show it along with your other vacancies to any prospective renters.

The Wisconsin Statutes do not provide us with a definition of "reasonable efforts." What is reasonable is determined on a case by case basis and varies depending on the specific facts and the judge or court commisioner that is hearing the case. A landlord should use common sense. If you follow the same procedures as you always do when you have vacancies, you should be OK.

I hope it goes without saying that the following would NOT be considered to be reasonable efforts to mitigate a tenant's damages:

1. The arbitrary refusal to re-rent the unit to a prospective tenant.

2. An attempt to rent the unit at a higher rental amount then other similar units in an attempt to dissuade a prospective renter from choosing the tenant's vacant unit.

An issue that often arises in these mitigation cases is what if the landlord cannot not begin re-renting the unit because the tenant caused extensive damage and the landlord needs time to return the unit to a rentable condition. In my experience, I have found the courts to be understanding if a landlord is placed into a catch-22 situation like this. I have argued successfully in court on many occasions that if the tenant caused damage to the unit which requires the landlord to need more time to repair the unit -- thus delaying his/her ability to attempt to re-rent the unit -- that this should not be held against the landlord as long as the landlord moves forward with the repairs in a reasonable amount of time.

The argument is a simple one . . . "your Honor, but for the tenant having caused damage to the unit, my client would have been able to begin the re-rental process immediately. It was the fact that the tenant decided to paint the master bedroom a beautiful shade of purple, allowed their cat to use the hallway carpet as a personal litter box, and encouraged their 2 year old child to express her artistic abilities with a permanant marker on the newly refinished hardwood floors, that delayed my client's ability to re-rent the unit the following month."

According to sec. 704.29(3), Wis. Stats., a landlord must allege and prove that s/he made efforts to re-rent the unit for the tenant. The tenant then has the burden of proving that the efforts that the landlord took were not reasonable. The burden then shifts to the tenant to prove that the efforts taken by the landlord were not reasonable. The tenant also has the burden to demonstrate the amount of money that could have been obtained as rent had the landlord made reasonable efforts to mitigate by re-renting.

The issue as to whether or not the landlord used "reasonable efforts" to re-rent the unit is frequently raised by residential tenants that appear in court to fight any money damages claims sought by the landlord. The mitigation issue is ALWAYS raised by commercial tenants because commercial lease terms are typically for many years which could result in the tenant being "on the hook" for tens of thousands of dollars.

So if you are ever in the unfortunate situation where a tenant has vacated your rental unit with months remaining on the lease, you will want to make sure and save any documents that will demonstrate that you made reasonable efforts to re-rent the tenant's unit. This often includes, photos of the "For Rent" sign indicating the date it was put up, copies of advertisements placed on Craig's List or in the Journal Sentinel, invoices for the cost of the ads, a list of the potential renters who called interested in renting the unit, the reasons why any potential tenant was rejected (this is another time when having written screening criteria is a must), and any other evidence that shows that your efforts to mitigate your ex-tenant's damages were reasonable.

Once the unit is re-rented, the tenant's responsibility for rent is over. So typically the tenant will remain responsible for rent until either the end of the lease term or until you are able to re-rent the unit, whichever comes first.

While it may seem unfair that you have to expend extra time and energy to help reduce a tenant's damages when s/he was the one in the worng -- it is the law.

Don't Miss Next AASEW Town Hall Meeting on Monday, July 19th

Have a question about landlord tenant law? Property management? Real estate investing/short sales? Then come to the AASEW General Membership meeting on Monday, July 19th, 7:00 p.m. at the Best Western Hotel, 1005 South Moorland Road in Brookfield.

Attorney and AASEW President, Tristan Pettit, AASEW Director and Portfolio Director at StuartCo, Susan Ipsarides, and owner of Plan B Homebuyers & Tailwind Funding, Brian Meidam, will all be on hand to answer your questions and give you tips to help you manage your rental property business.

Wisconsin Supreme Court Rules Against Landlord in Maryland Arms Case and Chooses To Avoid Answering The Bigger Question

The Wisconsin Supreme Court filed its opinion in this very important case on July 7, 2010. While the majority opinion ruled against the landlord it did not go so far as to say that a landlord and tenant could not allocate liability for damage (when neither party was negligent in causing the damage) in their rental agreement.

If you would like to review the specific facts of the case and the arguments made by both sides please revisit my posts of May 29, 2009 and October 15, 2009.

The Court was split, so there is a majority opinion, a concurring opinion, and a dissenting opinion. So if you are brave enough you can read all three opinions which encompass 37 pages and can be read here. The Wisconsin Law Journal provides a very good summary of the decision if you are not feeling ambitious enough to read all 37 pages.

As an attorney who primarily represents landlords, I must admit that I had a mix of emotions after I finished reading the opinion. I was upset that the majority opinion held that the landlord should be responsible for damage to his rental property that was caused by the tenant leaving her hair dryer plugged in overnight. I was also frustrated by the fact that the major issue in the case -- whether or not a landlord and tenant can allocate liability through the language of the rental agreement -- was not addressed by the majority opinion, thus providing little guidance to landlords in the future. On the other hand I was also grateful that the majority decided to "pass the buck" and not address this issue becasue, quite frankly, if the majority had addressed that issue, I believe they would have said "no" a landlord cannot allocate liability on a tenant for damage that was not casued by the negligence of the tenant.

The majority opinion held that the landlord should be held responsible for the damage because the rental agreement (which was drafted by the landlord) was ambiguous when it came to who would be held liable for damage in a situation where neither the tenant not the landlord were negligent in causing the damage. The majority rested its decision on a very well established principle of contract law that any ambiguity in a contract should be construed against the drafter of the contract. The majority said that since the contract terms did not unambiguously state that the tenant would be liable for the damage under the specific fact situation in this case, then the landlord should be liable for the damage.

The majority declined to address the very important issue that the AASEW and other landlord associations were concerned about in this case -- whether a landlord can add a lease provision assigning liability to a tenant for damages (when the damages is not caused by the tenant's negligence) or whether doing so would be a violation of Wis. Stat. sec. 704.07. So essentially the "Supremes" chose to dodge the issue, which in effect means that nothing prevetns a landlord from allocating liability to a tenant for such damage in a rental agreement under similar facts. What this also means is that should a landlord make such an allocation and hold a tenant responsible for similar damage, the tenant can argue that such contract language violates sec. 704.07, and the courts will have no guidance as to how to rule.

It was a missed opportunity by the Supremes to add to Wisconsin Landlord-Tenant law. However, based, on the tortured analysis (my view) of the majority opinion, if the court had addressed the allocation of liability issue it would have most likely resulted in a holding that would not allow a landlord and tenant to allocate liability -- which would have been even worse. So in the end maybe it was best that the issue was not addressed.

Justice Ziegler, who agreed with the majority opinion, wrote a concurring opinion to add that her view of Wisconsin law is that a landlord and tenant are not prohibited from allocating liability by contract as long as it is done clearly (i.e. no ambiguity) and is otherwise enforceable by law.

The dissenting opinion, which begins on page 18 and is authored by Justice Prosser, stated that not only are a landlord and tenant allowed to allocate liability in a rental agreement but that that is exactly what the parties to this lawsuit did and that the majority opinion is ignoring the clear meanign of the language in the rental agreement. The dissent did not find the lease to be ambiguous at all. The dissent, quite correctly in my opinion, points out the absurd nature of the majority opinion by saying that "imposing responsibility on the landlord for damage caused by a tenant, when the landlord cannot control risks created by the tenant" (like keeping a hair dryer plugged in overnight) defies economic logic.

The dissent, being very pragmatic, actually takes the time to address what the practical effect the majority decision will have on landlords by stating, "When the landlord is made responsible for abnormal damages that is actually caused by tenants, the landlord must spread the resulting expense among all tenants by charging higher rent. When a tenant is made liable for damage that is caused by that tenant, the landlord is better able to control rent and the tenant has an economic incentive for prudent stewardship of the premises."

Which of the three opinions seem more reasonable and logical to you?

BED BUGS: Everything That You Wanted To Know . . . and More

If you have not heard -- bed bugs are making a comeback. Bed bugs are wreaking havoc on hotels, apartment complexes, and anywhere else where people congregate. I have even been told that 75% of all of the hotels in Las Vegas are infested with bed bugs - I don't know if that is true or not - but with the influx of people entering and exiting that city daily, it would not surprise me, since bed bugs are the ultimate hitchhiker. Unlike roaches or other varmits, bed bugs are attracted to people - not dirty living conditions, so you can have a perfectly clean apartment that still may be infested with bed bugs. In the past very strong chemicals (DDT) kept the bed bug population at bay, but with many pesticides now outlawed, bed bugs have made a comeback, much to the dismay of the rental community.

The pesky bed bug has appeared at more than a few of my client's rental complexes and trsut me when I tell you they are expensive and difficult to indicate. The best way to eliminate bed bugs is to prevent them from even showing up in the first place. But prevention is difficult since they hitch rides on furniture, clothing and other personal belongings.

Whereas, bed bugs used to be the specialty of exterminators who would spray chemicals around the infested rooms to kill them and their eggs, there are now other contractors that have entered the field. There are bed bug sniffing dogs that can be rented to sniff around your rental unit and alert you to any possible infestation and other companies that are killing bed bugs by different means then chemicals - such as heat treatment.

Because of the huge increase of bed bugs being found in rental housing lately, the AASEW's June membership meeting included a presentation on this "itchy" subject by AASEW business member, Giertsen Company of Wisconsin. Giertsen Co. is primarily a remediation company (wind, water and fire damage) however they have learned that the heating equipmen that is used to dry out a water damages property also can be used to kill the pesky bed bug.

Below is the PowerPoint presentation that Patrick Meyer of Giertsen Co. shared with the AASEW on June 21, 2010.

The old saying that my parents would tell me prior to going to bed when I was a kid -- "Don't let the bed bugs bite" -- has a whole new context for me after viewing this presentation.

Giertsen Bed Bug Blog

View more presentations from Petrie Stocking.

Compiling a List of "Bad" Tenants - a/k/a "Blacklisting" - Can Cause A Landlord A World of Hurt

Every so often it is suggested that landlords begin compiling a list of bad tenants to share with one another. This topic often arises after a landlord has been "burned" by a bad tenant that skipped out on a lease owing rent, caused severe damage to the landlord's rental property, or any number of other breaches of their rental agreement. It is argued that such a list could prevent other landlords from renting to the same "bad" tenant and hopefully avoid being burned as well. While this seems like a great idea on its face, blacklising tenants is full of legal ramifications.

This issue came up last week on the "AASEW Listserv" (a Yahoo groups community that includes 800+ landlords and property managers primarily located in the SE Wisconsin area that discuss all things rental). The list serv is expertly moderated by Tim Ballering. If you are not a member of this list serv (and you are invovled in the rental property industry) then you should definitely join by sending an email to ApartmentAssoc-subscribe@yahoogroups.com

Below is the question posed by a landlord and the moderator's response.

QUESTION:

Does our group have a policy about sharing names of problem tenants? I am sure some landlords would love to know who is a problem and others may feel differently about that.

ANSWER:

Short Version: We do not permit it.

Long Version (why we do not permit something that would be a great tool for all of us):

Posting deadbeats names to a list violates the Federal Fair Debt Collection Practices Act (FDCPA).

"Blacklists" are quite illegal and potentially costly to those involved with maintaining the list or those sharing the names that end up on the list. If you keep a list of who has been naughtly or nice, that list must contain both good and bad information about the tenant. Additionally, those named tenants must have the ability to review and challenge the validity of their inclusion. Finally, all provisions of the Fair Credit Reporting Act must be complied with that any other credit bureau must adhere to.

Fines can be as large as $50,000 per offense plus the poosibility of being sued civilly.

The pertinent rules under the FDCPA are:

§ 805. Communication in connection with debt collection

. . .

(b) COMMUNICATION WITH THIRD PARTIES. Except as provided in section 804, without the prior consent of the consumer given directly to the debt collector, or the express permission of a court of competent jurisdiction, or as reasonably necessary to effectuate a postjudgment judicial remedy, a debt collector may not communicate, in connection with the collection of any debt, with any person other than a consumer, his attorney, a consumer reporting agency if otherwise permitted by law, the creditor, the attorney of the creditor, or the attorney of the debt collector.

§ 806. Harassment or abuse

A debt collector may not engage in any conduct the natural consequence of which is to harass, oppress, or abuse any person in connection with the collection of a debt. Without limiting the general application of the foregoing, the following conduct is a violation of this section:

. . .

(3) The publication of a list of consumers who allegedly refuse to pay debts, except to a consumer reporting agency or to persons meeting the requirements of section 603(f) or 604(3)

__________________________

So as helpful as a listing of bad tenants might appear on its face, it is illegal. The best way to avoid renting to problem tenants legally is to properly screen all rental applicants - to read more about this please see my April 17th post and refer to these helpful internet sites.

New Law Limits Landlords From Pursuing A Deceased Tenant's Estate

Governor Doyle recently signed into law 2009 WI Act 323 which creates a new section to Chapter 704 of the Wisconsin Statutes regarding Landlord-Tenant Law.

The new section 704.165, Wis. Stats., is entitled "Termination of Tenancy at Death of Tenant"

Below is a summary of the new law:

1. If a residential tenant dies and had a term lease, his/her tenancy will be terminated 60 days after the landlord learns of the death or the expiration of the rental term, whichever occurs first.

2. If a residential tenant dies and was under a periodic tenancy (i.e. month to month) then the tenancy will terminate 60 days after the landlord becomes aware of the death. If the deceased tenant's estate provides proper notice to terminate the tenancy under sec. 704.19, Wis. Stats. then the tenancy may be terminated even earlier as outlined in 704.19, Wis. Stats.

3. Neither the deceased residential tenant nor his/her estate will be liable for any rent after the tenancy is terminated.

4. The landlord must still attempt to mitigate the deceased tenant's damages by making attempts to re-rent the unit before the tenancy terminates.

5. Nothing in this new section relieves another adult tenant who resides at the rental property (and who did not die) from their obligations under the rental agreement or otherwise.

6. A landlord may not contact or otherwise communicate with a member of the deceased tenant's family in an attempt to obtain rent for which the family member has no liability.

7. This new law first applies to tenancies and rental agreements that are entered into on or after May 12, 2010.

Latest EPA Proposed Changes to "Renovate Right" Rules -- Deadline to Provide Feedback July 6th

ALERT! The latest EPA proposal will require dust sampling and lab testing clearance on many small jobs. The EPA estimates $160 per room in testing cost. In WI testing can only be done by state certified risk assessors and the cost is about $240 per room. So a repair to a damaged door jamb could cost ten times as much as it does today, and many times more than that if you were a do it yourselfer.

From the Federal Register (Link Below) #2 and #4 are the "gotchas."

Dust wipe testing must be performed after all renovations involving:

- Use of a heat gun at temperatures below 1,100 degrees Fahrenheit

- Removal or replacement of window or door frames

- Scraping 60 ft [2] or more of painted surfaces

- Removing more than 40 ft [2] of trim, molding, cabinets, or other fixtures.

Link to the proposed rule in the Federal Register

The 60 day comment period ends July 6th, 2010

Read the comments submitted by the Apartment Association of Southeastern WI and links to the EPA comment page at:

http://www.renovatorrules.com/

Make sure you post some feedback. This is one of the biggest changes to affect our industry and these changes are huge and will put many contractors (and landlords) out of business. Fines for violating these new laws can be as much as $32,500 per each violation.

AASEW's New "Mentor's Corner" to Debut on June 21st

At the next membership meeting of the Apartment Association of Southeastern Wisconsin (AASEW), to be held on June 21, 2010, the AASEW will be debuting its new "Mentor's Corner" for all AASEW members.

The "Mentor's Corner" will be held at 6:30 pm prior to the general meeting. The "Corner" will be staffed by one or more "seasoned" landlords who will be ready to answer your non-legal questions about any aspect of landlording. This is the place to be to get "street-smart" answers from landlords that have already "been there and done that."

Come and ask all those nagging questions that you have been afraid to ask such as how to deal with such as the tenant that pays rent lat every month, how to deal with parking problems, intra-tenant disputes, what to do when tenants fail to mow the lawn, chronic complainers . . . .

The "Mentor's Corner" will be held at 6:30 pm before every AASEW membership meeting (which are always held on the 3rd Monday of each month) at the Best Western Hotel located at 1005 S. Moorland Road in Brookfield.

Hope to see you there.

UPCOMING SEMINAR - How Evictions Work: Rules for Landlords and Property Managers

I will be presenting a seminar for the Institute of Real Estate Management (IREM Milwaukee Chapter #13) on several landlord - tenant law related topics in the near future

Topics to be covered:

1. Causes for Eviction

2. Notices To Terminate Tenancy

3. The Judicial Eviction Process

This seminar will be held on Thursday, June 17, 2010 from 9am - 10:30 am. Registration will start at 8:30 am.

The seminar will be held at The Wisconsin Club which is located at 900 W. Wisconsin Avenue in Milwaukee (right across from the Milwaukee County Courthouse - how appropriate : )

There will be handouts including a comprehensive outline on the topics covered and forms.

The cost will be $10 for ARM members, $25 for other IREM members and $45 for non-IREM members. If you are interested in attending please contact Jennie Macaluso-Ruditys at (414) 476-4736. Call Jennie ASAP as she will need to get a head count to the Wisconsin Club.

Hope to see you there.

Must A Landlord Provide A Census Taker with Information About His Tenants?

I have recently recieved several calls from my landlord and property manager clients asking me whether or not they have to provide census workers (called "census enumerators" or "census takers" ) with information about their tenants. Census employees started knocking on the doors of those who failed to return their census questionnaire on May 1st and will continue to do so until July 10th.

The short answer to the question is "yes." If a census taker has attempted to contact and obtain answers to the census questions from your tenant, and been unable unable to do so, the census taker is allowed to -- and in fact, is required to -- contact the landlord or manager of the rental property to obtain the requested information about your tenant.

Typically, providing personal information about your tenant to a third party is not something that you want to do unless you enjoy being sued. But providing a census enumerator with the answers to the questions from the census questionnaire regarding your tenants is one of the few exceptions to this rule. The Department of Commerce has clearly stated that landlords and property managers of rental property will not be in violation of any privacy laws if they provides the requested information about their tenants to the census taker. In fact, if a landlord refuses to provide the census enumerator with the requested information about his/her tenants, s/he may be fined up to $500.

The applicable law is found at Title 13 of the Code of Federal Regulations (CFR), Chapter 7, Subchapter II, Sections 221 and 223.

If you just clicked on the above links and attempted to read the two code sections, I commend you - they are difficult to read (and understand) and are filled with all kind of archaic language that is referred to as "legalese." Since I actually want this post to educate you -- and not piss you off -- allow me to paraphrase the law for you:

1. If a census enumerator is unable to contact the tenant and obtain the census info from the tenant, then the landlord or manager must assist the census employee in answering the census questions regarding their tenants.

2. The landlord or manager may ask to see the census workers identification before divulging any information.

3. The first question that the enumerator will ask is whether or not the apartment unit was occupied on April 1, 2010.

4. If the unit was not occupied by anyone on April 1, 2010, then the census employee questions for you regarding that rental unit should be done.

5. Assuming that the unit was occupied by a tenant on April 1, 2010, then you should provide the census enumerator with answers to as many of the census questions as possible. The census questionnaires questions can be found here. Two of the questions on the census questionnaire ask about an individual's race, the census enumerators are aware that you may not know this information about your tenants.

6. You are not breaking any privacy laws by answering these questions about your tenants for the census taker.

7. You may be fined up to $500 for failing to provide the census taker with this information about your tenants.

In summary, if the census taker is unable to reach your tenant and obtain answers to the census questionnaire from them, then you as the landlord or manager, are required to assist the census employee by providing the census employee with that information. Failure to do so may result in a $500 fine.

After you are done talking to the census worker, you may want to talk to your tenant about how important it is to complete their census questionnaire next time -- in part so that their landlord doesn't have to spend all of his/her limited time, doing the tenant's work for them. Good luck with that : )

CITY'S MOTION TO DISMISS LANDLORDS' LAWSUIT DENIED BY THE COURT - LAWSUIT CONTINUES

On May 21, 2010, Judge Timothy Wotkowiak, denied the City of Milwaukee's motion to dismiss the lawsuit filed by three Milwaukee landlords who sued the city as a result of its newly enacted ordinance requiring mandatory rental inspections of rental housing in two areas of the city.

For background information on the ordinance that went into effect on January 1, 2010, please read my November 24, 2009 post. For background information on the lawsuit that was filed against the city you can refer to my December 31, 2009 post. And for information about the city's motion to dismiss and arguments both for and against the motion I would direct you to my May 4, 2010 post.

As stated in my earlier post, the plaintiff landlords made three key arguments as to why it was not necessary for them to serve the city with a formal Notice of Claim prior to initiating the lawsuit. Judge Witkowiak agreed with the arguments offerred by the landlords on all three issues.

Issue #1:

The court indicated that it was not practical to require the landlords to serve the city with a formal Notice of Claim -- which would have allowed the city 120 to respond -- in part because of the basis of the lawsuit. The landlords' lawsuit included the filing of a temporary restraining order to stop an immediate harm (the carrying out of the ordinance) and to make the plaintiffs wait for 120 days before they could even file suit would not be practical or just as the city would have been able to implement what is argued to be an unconstitutional program for at least 120 days before a court could review the issues and concerns with the ordinance.

Issue #2:

The court found that the city did have actual notice of the claim even though a formal notice was not served upon it. Judge Witkowiak spent considerable time pointing out all of various contacts made by landlords, the Apartment Association of SE Wisconsin (AASEW) , and others which provided the city with actual notice of the concerns with the ordinance. The court made reference to the letter that the AASEW's lawyers (who also happen to represent the three plaintiff landlords)sent to City Attorney Grant Langley outlining the many problems with the proposed ordinance. The court also referred to the letter that I wrote as President of the AASEW to Common Council President Willie Hines and the city's other alderman, expressing the association's many concerns with the ordinance. The aformentioned letters, along with a DVD of the public hearing held before the ZND committee of the Commom Council, were all attached to the plaintiff landlords' brief in opposition to the city's motion to dismiss, and appeared to carry great weight with the Court.

Issue #3:

Judge Witkowiak also stated that the city sufferred no prejudice by not having been served with a formal Notice of Claim by the plaintiffs. The city appeared to argue that it was prejudiced because it had to prepare its legal defense to the lawsuit and that somehow that was to be considered sufficient prejudice to grant the city's motion. I have heard a lot of "out there" arguments during my 15 years of law practice, but that was a new one, for me. The court properly determined that that was not the type of "prejudice" that the city needed to demonstrate in order to prevail on its motion.

As such a result of this decision, the plaintiff landlords' lawsuit will now move forward and address the actual problems with the ordinance.

A Scheduling Conference has been set for June 15, 2010. On this date, the court will provide deadlines for the parties to complete various matters that will assist in moving the case forward, such as deadlines to complete discovery (the fact gathering process), deadlines to file dispositive motions (motions that could end the case without the need for a fact-finding trial), and other matters.

Based on the comments of the attorney's for both the city and the plaintiff landlords it appears that both sides may very well be contemplating the filing of a dispositive motion -- such as a summary judgment motion -- which would allow the court to decide the lawsuit as a matter of law, without the need for a fact finding trial, because there are no material facts that are in dispute.

I will keep you up to date on the status of the lawsuit as I learn more.

A Short Hiatus

As many of you know, I am about to get married at the ripe old age of 40 this Friday. My fiancee, Nancy, and I will be getting married in Maui and then spending some additional time honeymooning on the islands.

While I initially thought about bringing my netbook with me and posting a blog or two while vacationing, upon deeper reflection I have decided against this --- somehow I don't think that would be a good way to start out my marriage.

As such, I will be taking a short hiatus through the Memorial Day holiday.

Assuming I am not buried beneath a desk of work, voicemails, emails and mail upon my return -- I have never been out of the office for more than 5 days, yet alone 2 weeks as will be the case this time -- it is my plan to resume blogging during the first week of June.

I hope that you all will understand and not forget about this blog during my absence and I look forward to resuming my blogging upon my return as a married man.

Happy Blogiversary

May 15, 2010 will be the one year anniversary of Tristan's Landlord-Tenant Law Blog. I thought I would use this occassion to post some interesting data that I have learned about my blog over the past year - thank you Google Analytics.

When I first began this project I did not know what to expect. I have been overwhelmed by the blog's popularity and the support of its readers over the last 12 months. My initial hope was to create a site that landlords and property managers could go to to learn more about landlord-tenant law in Wisconsin. It was also my hope that this blog would allow for those of us who own rental properties to discuss best practices and to learn from each other. I think these two goals have been achieved, and then some.

As I write this post, there are currently 111 posts that viewers can read covering all aspects of landlord tenant law including: new legislation affecting the rental housing industry, new case law that has changed Wisconisn landlord tenant law, discussions about best management practices including how to legally serve a 5 day notice and how to draft a 21 day letter (statement of how security deposit was applied), fair housing/discrimination law, upcoming seminars on topics of interest to landlords and much much more.

There have been over 233 comments posted about the 111 blog posts. With an average of over 2 comments per post it seems as though there has been at least some discussion about the topics that are important to the readers.

Since going live, there have been over 17,000 visits to Tristan's Landlord-Tenant Law Blog. During those 17,000 + visits over 42,375 pages have been viewed. When visiting my blog people spend an average of 2 minutes and 38 seconds on the site and view an average of 2.47 posts.

Of those 17,000 + visits, over 16,400 of them came from visitors within the United States. The site has also received visits from readers in England, Canada, India, Austrailia, the Philippines, Ireland, and Mexico.

Over the past 12 months, the most popular blog posts have been:

1. Late Fees-Part 1: What Amount Can You Legally Charge?

2. Lead-Based Paint Disclosure Form: You Must Use This Document

3. How To Legally Serve A 5-Day Notice To Pay Rent or Vacate

4. Suing An Ex-Tenant For Past Due Rent: What Factors To Consider

5. SSN Validator: Free Website That Allows You To Verify A Social Security Number.

Just this past month I have started to receive several "pingbacks." I had to call my IT guru to efind out what the heck a pingback is, but I learned that they are a good thing. Essentially a pingback is someone linking to your blog - a sign that you have some useful content.

To give you an idea of how the blog has grown since its debut, during its first full month only 28 people visited the site. The next month that number jumped to 731. Last month there were over 2,221 visits to the blog.

I realized the value of this blog one day when I was sitting in Eviction Court in Milwaukee County and overheard one landlord talking to another and telling him about my landlord-tenant law blog that he needed to check out because it contained some helpful information. A few days later, I was approached by a Legal Action attorney said that she appreciated the information on the blog because she felt that it was important to get the correct information out to the public.

One unexpected bonus that has occurred as a result of this blog is that I have been able to use some of my posts to assist my current clients. I have started providing clients with links to certain blog posts to emphasize a point that I made to them during a consultation. Being able to provide a client with the basic law about a particular topic that we just discussed has been much appreciated. They can then print out the post and refer back to it in the future.

Along with the good, there has some bad. After one recent post dealing with the City of Milwaukee's plan to enact a new ordinance requiring mandatory rental inspections, I was flamed by another blogger. My skin is pretty thick so this didn't bother me too much although I still have difficulty comprehending that the same person who will rant and rave to high heaven on the internet and call you every name under the sun and attack you personally, would never have the nerve to say things to your face. Just read some of the comments that people post on the journal Sentinel blogs -- WOW. Hiding under an anonymous screen name seems to give some people carte blanche to act without consideration or foresight.

Even worse than being flamed myself, was the fact that a friend of mine was also flamed because he was attempting to assist me on a technical matter beyond my grasp. My friend uploaded a flyer that had been distributed on the east side of Milwaukee and which contained some very outrageous rhetoric against the proposed ordinance. Because I did not yet know how to upload a document and then link to it on my blog, I needed some assistance. Unfortunately, it was spread across the blogosphere (OK just the Milwaukee blogosphere) that my friend was the author of the flyer - which was not the case - just because he was the person that uploaded the document.

Over the past year however, that was the only sour moment related to my blog that comes to mind. For the most part I have enjoyed publishing this blog and hope to continue doing so as long as it continues to be helpful to others.

I have learned much about myself during this past year as a blogger. First, I have learned that I am not as fast of a writer as I thought I was - my fiancee will testify to this as she has watched me sit in front of my computer for hours only to have a short blog post to show for all of my work. She has often had to encourages me to turn off the #%@* computer and come to bed. Second, I have learned that I actually do procrastinate (at least I do when it comes to writing a blog post). Third, I have also learned that while I type fast for a guy with no training, I do not type accurately. This sad fact dawns on me time and time again each morning as I sit with my bowl of Kashi cereal proofreading the post that I drafted the night before. While I actually do proof read my posts multiple times - I still find many typos and grammatical errors.

While I have been pleasantly surprised with the success of this blog, I by no means plan to sit back on my laurels and stagnate. If you have any suggestions of topics for future posts please let me know. I would like to tell the reader who faxed me months ago and asked me to write a post about how a tenant's bankruptcy filing affects the eviction process, that I have not forgotten about you. While I often cannot post as frequently as I would like -- that darn "work" thing seems to get in the way -- I most certainly am willing to write about topics and issues that are of particular interest to you.

In closing, I would like to thank everyone that has visited my blog this past year, and especially the 80 of you that are currently subscribed to my blog. Without your interest and readership, this blog would just be another lawyer spouting a bunch of legal mumbo jumbo.

Update On Landlords' Lawsuit Against City of Milwaukee and Its Rental Inspection Ordinance

There has not been a lot of media reporting on the lawsuit brought by three landlords against the City of Milwaukee and its rental inspection ordinance so I thought I would take the time to update you on its status.

If you are unfamiliar with the basics of the lawsuit you should refer to my earlier post on the topic.

The City of Milwaukee has filed a Motion To Dismiss the Landlords' lawsuit. Essentially the City is arguing that the lawsuit against it should be dimissed because the City was not provided the proper notice of the landlords' claims prior to the lawsuit being filed. In Wisconsin, if a person wants to sue a government entity - which would include the City of Milwaukee -- the law states that prior to the lawsuit, the government entity must be served with a Notice of Claim. The City then has 120 days to review that Notice and either attempt to settle the claim or deny the claim. If the City does not deny the claim within the 120 days it will be deemed denied anyway. After the 120 days have passed, a person then has 6 months in which to file the lawsuit. If more than 6 months passes then the person would be precluded from filing the lawsuit.

The reasoning behind what is called the "Notice of Claim" statute (Sec. 893.80, Wis. Stats.) is allegedly to allow the government an opportunity to settle a claim in order to avoid expensive litigation. A secondary reason for the requirement is to provide the government with enough information so that it can budget accordingly for settlement or litigation.

As a quick aside: I have sued a government entity on behalf of a client in the past so I am familiar with the Notice of Cliam statute. In my opinion the government does very little during the 120 days after it is served notice. The typical reaction is to ignore the claim and not even take the time to deny it but rather to allow the 120 days to pass after which the claim will be automatically denied. In fact, I would even go so far as to say that based on my experience that the government typically ignores the Notice of Claim that is served upon it just to see if the aggrieved person will actually file a lawsuit. It costs very little to file a Notice of Claim (which often is done without the assistance of an attorney) but it is expensive to file a lawsuit. The government has little to no interest to pay money to someone unless it knows the individual who filed the claim is serious. Essentially the Notice of Claim statute is a "legal hoop" that the government makes you jump through to see how high you will jump. There may little to no reason for you to jump, but nontheless, jump you must.

So the City of Milwaukee is arguing that the plaintiff landlords' didn't file the Notice prior to filing the lawsuit and therefore their lawsuit should be dismissed.

In its response brief, the plaintiffs argue that a formal notice of claim need not always be served as there are exceptions to this requirement. The plaintiff landlords rely on a recent Court of Appeals decision, Kuehne v. Burdette, which held that the Notice of Claim statute does not always require a formal notice of claim to be served nor is it always required for a plaintiff to wait 120 days before filing a lawsuit against the government.

The plaintiff landlords make three key arguements in their brief in opposition to the City's motion to dismiss:

1. Because the City's Rental Inspection Ordinance became law on January 1, 2010 -- just 22 days after it was passed by the Common Council -- and because the nature of the lawsuit is to determine whether or not the ordinance is constitutional, the plaintiffs were unable to comply with the notice of claim statute.

2. The City had actual notice of the claim even if a formal notice of claim was not served on it.

3. The City sufferred no prejudice as a result of the plaintiffs filing the lawsuit without first filing a formal notice of claim.

The plaintiffs' first argument is very similar to the one made in the Kuehne case. In Kuehne, five residents of a town filed an injunction against the Town of Ledgeview in order to prevent it from holding a referendum on whether or not the town should incorporate. The court in Kuehne stated that the notice of claim statute probably did not apply in the context of the lawsuit because it is illogical that a town can use lack of notice as a defense when the Town by its own actions made compliance with the notice of claim statute impossible.

The plaintiff landlords argue that the exact same situation in Kuehne is at play in the lawsuit against the City of Milwaukee. The City adopted the new ordinance and Mayor Barrett signed it into law 22 days later. If the plaintiffs had been required to file a notice of claim the City would have been under no legal obligation to respond to the notice until approximately May 1, 2010. By that time the rental inspection ordinance would have been in effect for a minimum of 4 months without a court being allowed to examine the constitutionality of the ordinance. The City can't use the notice of claim defense in order to allow it to move forward with its unconstitutional ordinance.

The plaintiffs' second argument is that they City had actual notice of the claim because the plaintiffs, through the actions of the AASEW, advised the City of its concerns and objections to the proposed ordinance as eary as October 29, 2009. On October 29th yours truly sent a letter to the Common Council pointing out the various constitutional problems with the ordinance. Additionally, the AASEW's attorney (who is also the attorneyfor the plaintiff landlords) also sent a letter to the City Attorney on the same date setting forth the myriad of problems with the proposed ordinance. Additionally there were numerous communications between the AASEW, its attorneys, and the alderman that sponsored the ordinance (Nic Kovac) and the DNS Commisioner. So the City had actual notice of the plaintiffs' claims approximately two months prior to the filing of the lawsuit. By contrast, in the Kuehne case the plaintiff gave notice to the Town on the same day as the lawsuit was filed and the Court of Appeals found that notice to have been sufficient.

Finally, the plaintiffs argue that the City was not prejudiced by the lack of a formal notice of claim. If the purpose of the notice requirement is to allow a government entity time to potentially resolve a claim, the fact that the AASEW 9of which the plaintiffs are members) notified the City of the problems with the ordinance and even met to discuss the potential problems, demonstrates that the City had the opportunity to resolve the issue if it wanted to. In essence the City is arguing that the plaintiff should be required to jump through the legal hoop for the sake of jumping rather than because the jumping serves an actual purpose.

The City was allowed the opportunity to have the last word so it did file a reply brief to the plaintiffs' brief in oppostion to the motion to dismiss.

I would point out that even if the City should prevail on its motion to dismiss, all that this will do is cause delay. A notice of claim has already been filed and served on the City (just in case) and another lawsuit will be filed if needed. So essentially the City's motion, if successful, will just delay things rather then address the underlying issue -- whether or not the rental inspection ordinance is constitutional as written.

A hearing on the City's motion to dismiss is scheduled to be heard before Judge Timothy Witkowiak on May 21, 2010 at 9:30 am in room 412 of the Milwaukee County Courthouse. The hearing, as most legal proceedings are, is open to the public. For those of you unable to attend, I will provide you with an update hopefully during the week of June 1st after I have returned from my upcoming wedding and honeymoon.

Is It Time To Hire A Property Management Company?

I would like to state at the outset that this particular post is very different from my past posts. In the past I have tried to educate readers about various aspects of landlord-tenant law. I will not be doing that this time. My goal with today's post is to generate a discussion and to have you, the reader, provide me (and the other readers) with your thoughts and concerns regarding the topic of professional management companies and when a landlord should consider hiring one to handle the daily management of rental property.

You may be curious as to why I am writing a different type of post. The reason is quite simple and straightforward -- in the last month or two I have received several phone calls from landlords that are frustrated with dealing with their tenants and the daily management issues. My response to these calls is often along the lines of "welcome to being a landlord," but I have refrained from such comments lately as I have noticed that these are not just the usual rants about irresponsible tenants. Instead I am noting real frustration and a wish to get out of "landlording." Many of the individuals that I have spoken with have been very upfront in telling me that if they could afford to sell their rental properties that they would but since they cannot they have decided that they want to hire someone else to take over the management. They then ask me if I can provide them with the names of some professional property management companies that I would reccomend.

After giving the caller some names of property management companies, I make a point of explaining to the caller that hiring a management company does not make all of their problems disappear. I explain to them that there are a lot of different management companies out there. I point out to them that just like landlords, property management companies have different styles and ways of running their respective businesses.

Giving up the daily management of your rental properties is a big decision. The decision should not be made lightly. A landlord needs to find a company or manager that s/he feels confident in and comfortable with. It is important that you interview any managment company that you are considering hiring. You will be trusting this company with the care of your real estate investment -- take the time to get to know them and learn how they will handle their job. Some management companies are more "hands on" then others. Some are more "service oriented" then others. Some follow applicable landlord-tenant laws more than others.

Most management companies will handle everything that you can possibly think of if you want them to, such as:

- Finding tenants for your vacant units

- Showing the units to prospective tenants

- Screening applicants and vetting their applications

- Fielding complaints and maintenance requests

- Accepting rent

- Hiring contractors to make repairs or making the repairs themselves

and much more.

If you find the right property management company, it can be the best decision that you ever made. The exact opposite can be true if you choose the wrong company.

Even if you hire a company to manage your properties for you, it is important to understand that you -- the owner -- may still be held responsible/accountable if the management company does something wrong. If the management company does not understand fair housing laws and runs a discriminatory advertisement for your vacancy, both the management company and the owner could be sued. If the management company doesn't make adequate and timely repairs and as a result a tenant is injured, there is a strong chance that both the owner and the management company could be on the hook.

Some landlords wish to retain some level of control even after they hire a management company. I know of landlords that still choose to be involved in the tenant selection process but leave everything else to the management company's discretion. I have met other landlords that want to personally approve every repair that is made to their income properties. There are no "typical" situation. It all depends on what the owner wants and what the management company is willing to do.

Some management companies consist of 1 person. Others have hundreds of employees. Some offer their services on an a la carte basis while others offer various packages that the owner can choose from (kind of like a trim package for cars). Some only manage apartment complexes; others may take on the management of duplexes and single families.

I personally do not feel that there is a "right" time for each and every landlord to give up the daily management of their rental properties and turn it over to a professional management company. Its not like there is a certain "cashflow magic number" that dictates the hiring of a property management company. The best time to make that change -- or even if the change should be made in the first place -- depends on the specific landlord and his/her situation.

I believe that there are three issues that often casue the topic of hiring a property manager to the forefront for landlords. First, the landlord no longer has the time to properly manage their rental properties. Second, the landlord realizes that they are not "cut out" to handle daily management of rental properties. Third, a landlord gets "dinged" by a tenant. This could run the gamut from having an eviction action dismissed because of improper service of a 5 Day Notice, or getting sued by a tenant for making an improper deduction from their security deposit, or any other number of situations. These situations often arise becasue the landlord does not know th ebasics of landlord-tenant law for one reason or another. We have all met landlords that don't have a "clue" what they are doing . . . they usually are the ones that are not members of an apartment association, do not attend seminars, and don't read my blog : )

In my years as a landlord-tenant law attorney I have read many good articles that discuss what you should consider when hiring a property management company. One recent article that I came across is entitled What To Consider When Hiring A Property Management Company. Another article adressing the topic is entitled Should I Hire A Property Management Company For My Rental Property? What are the 10 Questions You Should Ask Before Hiring A Property Management Company? There are many more articles on the web that discuss this issue. I would suggest that you take the time to read these articles and others as they are very good at raising issues that you should consider when making this important decision.

If you have just finished reading the above paragraph and have now realized that this is the end of the post and are about to click away . . . DON'T. Please post a comment. If I don't get any comments on this post then I will be forced to just go back to the boring old lecture format. Nobody wants that, do they : )

Proposed Bill To Require Landlords To Disclose If Their Rental Property Was A "Meth Lab"

On March 26, 2010, Senators Lena Taylor and Spencer Coggs along with Senator Lehman sponsored 2009 Senate Bill 650. SB 650 will affect both landlords and sellers of real estate in which the drug methamphetamine has been manufactured.

The bill requires both owners wishing to sell and landlords wishing to rent property that was used as a "meth lab" in the past to disclose in writing this fact to potential renters and purchasors.

If methamphetamine was manufactured on the property the seller of the property must disclose this in the real estate condition report. If a landlord is renting a property that was previously used as a "meth lab" then the landlord must disclose this in writing to any potential renters.

The production of "crystal meth" has become an increasing problem, one that does not just affect city properties. In fact more and more meth labs are being discovered in rural areas where the illegal activity is far less likely to be noticed.

Studies have shown that the hazardous chemicals that are used to make meth and the chemicals which are a produced during the manufacture of the drug can seep into floors, ceilings, walls, duct work etc. and can remain for years. I believe that this discovery is the prime impetus for the creation of this bill.

While I think this is a good bill, it goes without saying that any landlord or seller of real estate in which meth has been manufactured will have a very difficult time renting or selling this property if the bill is passed. As a result it is more important than ever for landlords to visit and inspect their rental properties. To be a good landlord you need to know what is going on in your units. Wisconsin law allows landlords to make periodic inspections of their rental property with at least 12 hours notice (ATCP 134.09 (2). Landlords should take advantage of this opportunity to inspect their rental units ---- especially if they suspect illegal activity.

Do Not Miss Next AASEW Meeting on How To Manage The Financial Side of Your Rental Properties

On Monday April 19, 2010 at 7 pm the AASEW will hold its monthly membership meeting. This meeting will focus on how to manage the financial side of you rental property business. The AASEW is very excited to have Mr. Tim Nolan, CPA of Nolan Accounting Center as the featured speaker.

Mr. Nolan works with smal businesses and property owners and gives special focus to income taxes and business management.

I have known Tim personally and worked with him for the past several years. This should be a very informative meeting and I hope to see everyone there.

The meeting is held at the Best Western Midway Hotel on 1005 S. Moorland Road in Brookfield. Meeting will start promptly at 7 pm.

The AASEW will be holding its Trader's Corner (where you can meet with other members to buy, trade and sell rental properties) at 6:30 prior to the main meeting.

With A Month To Month Rental Agreement A Landlord Has More Options Than Just The 5 Day Notice

One reason many landlords choose to enter into a month to month tenancy (m2m) with a tenant rather than a 1 year lease (or other term lease) is because it is easier to remove a tenant under a m2m tenancy.

In a m2m tenancy a landlord has the choice of serving a tenant with a 5 Day Notice for failure to pay rent, a 14 Day Notice for failure to pay rent or for any other non-rent breach, or a 28 Day Notice. One of the notices -- the 28 Day Notice -- can legally terminate a m2m tenancy without the tenant even having committed a breach.

The 5 Day Notice:

Under a m2m tenancy a landlord has the option to serve the tenant a 5 Day Notice if the tenant fails to pay rent. A 5 Day Notice allows the tenant the right to pay the past due rent within the 5 day cure period and if that is done then the tenancy continues and the tenant can remain. If the tenant fails to pay rent within the 5 days then the tenancy is terminated and the landlord may file an eviction action against the tenant if they have not already vacated.

Please be aware however that the Wisconsin Statutes do not allow a landlord the option of serving a 5 Day Notice on a M2M tenant for a breach other than non-payment of rent. See sec. 704.17(1)(b), Wis. Stats. It is not clear why the law is written this way and it is my opinion that is should be changed because not all landlords wish to terminate a tenant's tenancy with a 14 day notice just because they breached the rental agreement for something other than paying rent. Although as written, Wisconsin law seems to require this.

NOTE: I am not sure why, but many landlords believe that they are required to serve a tenant with a 14 Day Notice after the tenant has been served -- and not cured -- a 5 Day Notice. This is not true and is not required under Wisconsin law. If a tenant is served a 5 Day Notice for committing a breach and does not cure the breach within 5 days the landlord is NOT required to then serve the tenant with a 14 Day Notice. If a 5 Day Notice is not cured (and the tenant has not voluntarily vacated the property) then the landlord should immediately file an eviction action to remove the tenant. This is true whether the tenant is under a m2m tenancy or under a term lease.

The 14 Day Notice:

If a tenant commits a breach under a m2m tenancy the landlord can legally bypass the 5 Day Notice and proceed directly to a 14 Day Notice. Under a 14 Day Notice the tenancy will terminate at the end of the 14 days and the tenant has no right to cure the breach and remain. At the end of the 14 days the landlord is entitled to file an eviction to remove the tenant if they have not vacated. A 14 Day Notice is basically a "1 strike and you are out" notice. Landlords using m2m rental agreements do not have to give a tenant the opportunity to cure the breach.

This is a key difference between a m2m tenancy versus a term lease. If a tenant commits a breach for the first time under a term lease, the tenant must be given the opportunity to cure the breach. A landlord using a term lease can only serve a tenant with a 14 Day Notice if this is the tenant's second time committing breach within a 12 month period and the tenant was previously served a 5 Day Notice for the same or similar breach.

The 28 Day Notice:

The other major distinction between a term lease and a m2m tenancy is that a tenant under a m2m can have their tenancy terminated even if they have not committed a breach with a 28 Day Notice. So a landlord using a m2m rental agreement has the option to issue his/her tenant a 28 Day Notice to vacate for any reason or no reason at all. The only restriction is that the landlord cannot serve a 28 Day Notice to retaliate or discriminate against a tenant.

Summary:

Under a lease for term a landlord may only terminate the lease if the tenant has committed a breach. If it is the first time that the tenant has committed a breach, a landlord must serve the tenant with a 5 Day Notice which allows the tenant the opportunity to cure the breach.

A tenant under a m2m tenancy is not afforded the same protections. A m2m tenant can be removed even if no breach has been committed by simply serving them with a 28 Day Notice. If the tenant has committed a breach, the landlord can choose to serve a 14 Day Notice (which does not allow the tenant the opportunity to cure the breach), a 5 Day Notice if the tenant fails to pay rent (which does allow the tenant the opportunity to cure the breach and remain as a tenant), or a 14 Day Notice if the tenant has committed a breach for something other than non-payment of rent (which does not allow the tenant the opportunity to cure the breach).

The ease in removing a tenant under a m2m tenancy is a significant reason for first time landlords, landlords that have had difficulty with past tenants, or any landlord that wants to have flexibility to consider using a m2m rather than the ol' standby 1 year lease. I personally only offer my new tenants a m2m rental agreement. It is only after a period of time has passed and the tenant has proven to me that they will pay their rent on time and that they will treat my rental property with care --- in other words they have demonstrated responsibility --- that I will offer them the opportunity to enter into a 1 year lease.

BLOG COMMENT: What If Tenant Does Not Give You Proper Notice To Vacate? . . . and Other Questions.

I recently received a very good question through my blog but because it was posted under my "About The Author" section I don't think enough people would see it so I decided to reprint it as a post.

THE QUESTION:

Good Morning,

I will start by saying thank you for this forum, I find it very helpful and one of a kind. I know you must be very busy but I was hoping you could point me in the right direction regarding a question I have. I am a landlord and I had tenants move without giving a 90 day notice which was one of the provisions I set within their lease. I think this is a breach of contract and if so can I to take them to court? Would it still be filed by small claims, and is there a time limit I must file within? Can I even file for this? Thanks for your time.

THE ANSWER:

Thank you for your kind words and I am happy to hear that my blog is helpful to you.

You did not mention if your rental agreement was a periodic tenancy (month to month or something similar) or a lease for term (1 year lease etc.). I will assume that it is the latter.

If a tenant breaks a lease for term and moves out prior to the ending of the term a landlord has a duty to make reasonable efforts to re-rent the unit. The tenant will remain responsible for paying rent if the landlord is unable to find a tenant to re-rent. The tenant will also be responsible for paying the costs incurred by the landlord to re-rent the unit. The applicable statute dealing with this issue is Sec. 704.29, Wis. Stats.

If you have a term lease that states the tenant must give 90 days notice if they plan to move out at the end of the lease term and the tenant completes the lease term and then moves out but fails to give the landlord notice then you have an entirely different situation then when a tenant breaks a lease and moves out early. In this situation the tenant completed the full term and actually did not breach the lease. Because it was a lease for term and the tenant completed the full term of the lease the landlord cannot hold the tenant responsible for an additional 3 month’s of rent (over and above the lease term) just becasue the tenant failed to give the 90 day notice — the reason being that the tenant did complete the term of the lease. Such a notice provision in lease is legal and are included to assist the landlord so that the landlord will be alerted by the tenant if the tenant intend to leave at the end of the term BUT a landlord should not solely rely on the tenant to provide that notice. It is the landlord's job to determine whether or not a tenant intends to enter into a new lease after the full term of the initial lease is completed.

It is good practice for a landlord to send a reminder to the tenant prior to the 90 days notice period (or whatever notice is set forth in the rental agreement) and either (1) advise the tenant that the lease will not be renewed and providing the tenant with move out instructions, or (2) include a new lease and ask the tenant to sign the documents and return them within X days if they intend to stay for another term. If the tenant does not return the newly signed lease to the landlord within the requisite time period then the landlord may choose to follow up with a telephone call to the tenant if s/he wants to but it is not necessary and the landlord may assume that the tenant will not be renewing the lease and the landlord should began to advertise and make efforts to re-rent.

To try and hold the tenant responsible for an additional 90 days rent beyond the completed rental term because the tenant did not provide the landlord with the 90 day notice that they would be vacating at the end of their lease would be in violation of both ATCP 134.09(3) and Sec. 704.15, Wis. Stats., regarding “automatic renewal clauses.”

To address the second issue that you raised in your comment (assuming it is not moot because of the above answer) small claims has jurisdiction over any civil lawsuits that are seeking $5,000 or less in damages. So if you were attempting to collect 3 months of rent from a tenant (and they have already moved out thus negating the need to file an eviction) then as long as the 3 month's of rent is less then $5,000 you would file that collection action in small claims. See sec. 799.01(d), Wis. Stats. If you were seeking damages greater than $5,000 then you would need to file suit in large claims and pay the higher filing fee.

Addressing the next issue raised in your comment, individual persons are allowed to represent themselves in court whether in large claims or small claims (whether or not that is advisable is a separate question that I will not address). Business entitites (corporations, LLC’s etc.) are not allowed to be represented in large claims lawsuits by a non-attorney — you would need to hire a lawyer to represent your business entity in large claims.

In small claims actions, the law carves out a small exception and will allow a business entity to be represented in court by a full-time employee of the business entity. Sec. 799.06(2), Wis. Stats. Milwaukee – more than any other county – is enforcing this strictly and requires a copy of a W2 from the employee issued by the entity to verify this. Managing members or sole members of an LLC are not considered to be a full-time employee of the LLC unless they are paid income by the LLC.

For additional discussion on this topic please refer to my May 15, 2009 post, July 21, 2009 post, July 30, 2009 post, and Sept. 2, 2009 post.

Your final question, asks if there is a time limit in which you must file a lawsuit against your tenants for failure to give the requisite 90 day notice to you prior to vacating. As I mentioned above, depending on your specific fact situation and the type of rental agreement you are using, you may not even have a claim against your tenant for the 3 month's rent. However, assuming you do have a claim it would be a claim for breach of contract and the statute of limitations for breach of contract claim is 6 years from the date of the breach.

I hope that helps

T

What Is The Life Expectancy of the Carpet (or Refrigerator or Stove or Hardwood Flooring) In My Rental Unit?

Those of you that have appeared in eviction court in an attempt to obtain a money judgment against a tenant that has damaged your rental unit know that oftentimes the court will not allow you to recover the total cost to replace the damaged item. Even when the court agrees that the tenant caused the damage there will be times when a landlord cannot obtain the full replacement value.

Often when this occurs it is due to issues surrounding the life expectancy of the item that was damaged. Whether it is carpet, a stove, mini-blinds, or a hardwood floor, all items have an estimated life expectancy.

If the item is well past it's life expectancy it would not be fair to award the landlord the full replacement cost because to do so would put the landlord in a better position than s/he was in prior to the item being damaged by the tenant. To award the landlord the full replacement cost of a damaged item may result in the landlord obtaining what is often referred to as a "windfall" --- and courts do not like windfalls.

Let me give you an example to better illustrate. Assume the following facts:

1. The carpeting in your rental unit is 5 years old.

2. The life expectancy of carpeting in a rental unit is 10 years.

3. The tenant damaged the carpeting by spilling Kool-Aid and cooking oil throughout and in the spots where there are not stains there are cigarette burns as the tenant used the carpet as an ashtray.

4. The carpeting cannot be repaired and must be replaced.

5. Total cost to replace the carpeting is $1,000 (I am trying to keep things simple so I don't confuse myself with the math : )

Under the example above, a court would most likely only allow the landlord to recover $500 in damages against the tenant for the replacement of the carpet.

The reasoning is that since the tenant moved into a rental unit with 5 year old carpeting, the landlord should only be able to recover for damage to a 5 year old carpet. As such, the court will only allow the landlord to recover a percentage of the actual cost to replace the carpet. In this example that would be $500 - or half of the actual cost -- because the carpet was already 5 years old (out of its expected 10 year life span) when it was damaged. If the courts allowed the landlord damages of $1,000 then the landlord would be gaining a windfall because (in theory) the landlord would be getting the tenant to pay for the entire cost of brand new carpet (rather than 5 year old carpet).

I know that many of you are snickering as you read this and are saying "the tenant is not going to be pay me anything as they are not collectible and I will never see any money." That may be true -- and I empathize with you -- but I am merely trying to explain why courts will not allow a landlord to recover all of his/her replacement costs.

In Milwaukee County there has always been an unwritten rule -- at least as long as I have been practicing law -- that the life expectancy of carpeting in a rental unit is 10 years. I never knew where that number came from - I just knew that it was used. Other counties may have assigned a different number to the life of rental carpeting, I don't know, but in Milwaukee it is 10 years.

I have always wished that there was a resource that I could look to that listed the life expectancies of various items found in a rental unit such as carpeting, mini-blinds, sinks, hardwood floors etc. etc. I have yet to find such a resource, but while reading the blog of another landlord -- John ("Dr. Rent" ) Fischer -- I noted mention of a resource that set forth the life expectancies of various household items. John, who besides being a landlord is also a property manager, blogger, and president of the Wisconsin Apartment Association, was nice enough to provide me with a copy of that resource.

Here is a link to the document that lists the life expectancy of different products or items in the home.

We all know that the life expectancy of items in a rental property are much less than the life expectancy of furnishings in our own homes. Let's face it, rightly or wrongly, people do not treat property owned by a landlord as nicely as they would treat the property if they owned it themselves (and had to pay to repair or replace the item themselves if it were damaged).

Nonetheless, having a document that compiles the life expectancy of items contained in an owner-occupied home is still a good starting point.

This information in this document was taken from various sources such as:

- Magazines: Appliance Magazine (Sept. 2005)

- Specific Manufacturers: Timberlake Cabinet Co., United States Ceramic Tile Co., Delta Faucet Co., Floortec, Georgia Pacific Corp.

- Associations: National Wood Flooring Association, American Concrete Pipe Association.

CAUTION: This information should be used as a general guideline only. As I mentioned previously, the information provided is for the life expectancy of items in an owner-occupied home -- not a rental unit. Additionally, much of this information is provided by specific manufacturers and may not be the same for the item that you are using in your rental property which might have been manufactured by a different company.

MORE CAUTION: None of the information in the attached table should be interpreted as a representation, warranty, or guarantee regarding the life expectancy or performance of any individual product or product line. You should not make a buying decision or product selection based solely on the information contained in this table.

EVEN MORE CAUTION: The table is not a legal document and cannot and should not be cited in court.

I am merely providing this information to assist landlords who are attempting to determine a reasonable percentage of replacement cost to charge a tenant that has damaged your rental unit. This information may also assist a newer landlord who does not have years of experience on which to rely when attempting to estimate the life expectancy for certain item in his/her rental property.