Business Journal Article Addresses Fallout of the City's RRI Ordinance To Date

I was recently interviewed by Business Journal reporter Sean Ryan regarding the fallout of the dismissal of three landlords' lawsuit against the City of Milwaukee regarding the unconstitutionality of its Residential Rental Inspection (RRI) program. My most recent post on the subject can be read here.

On October 1, 2010, The Business Journal published its article entitled "Judge Upholds Milwaukee Home Inspection Program. Reporter Sean Ryan spoke with the primary plaintiff, Joseph Peters, Alderman Nik Kovac (sponsor of the ordinance), Todd Weiler (of the Department of Neighborhood Services) and myself for the article.

I found Mr. Weiler's comments to be very noteworthy. He was quoted as saying that to date DNS has inspected over 800 properties in the two target areas (Lindsey Heights on the north side and the UWM-area on the east) and that during those inspections 8,550 violations were found. Apparently 1/2 of the the properties inspected -- or 400 -- had no violations at all.

I wonder if all 8,550 of the violations that were found -- and which the landlords were cited for -- pertained to life-safety issues? If you will recall, life safety issues were the "alleged" original impetus behind the ordinance being introduced.

In speaking with several landlords that I know who own proeprties in the target areas, I was informed that the violations that they were cited for involved very minor issues -- such as peeling paint on the outside of a building, torn screens, and failure to paint some wood that had been properly sealed but not painted. The lead plaintiff, Jospeh Peters, was quoted in the article as saying that the Orders To Correct that he received on his 10 buildings also involved very minor repairs - such as torn screens.

Just how many of the 8,550 violations dealt with life safety issues? How many illegal attic bedrooms were found? How many poorly maintained second story porches that could collapse at any minute were identified? Don't forget the overloading of circuits by the improper use of extension cords - how many of those were found?

If you will recall the testimony that was offerred by both Alderman Nik Kovac, who sponsored the ordinance, and Art Dahlberg, Commissioner of the Department of Neighborhood Services, at the public hearing before the ZND Committee way back when, the focus of this program was to make these affected properties safe and prevent unnecessary deaths.

I'm not sure how many lives have been saved as a result of the RRI ordinance to date, but at least we wont have to worry about any of those deadly torn screens, inherently dangerous unpainted wood, and the lethal peeling paint on the outside of a duplex.

Not sure about you but I feel a lot safer already.

This ordinance is now being shown for what it really is -- not an attempt to save lives and improve properties -- but rather an way for the city to get inside one's private property without the need to obtain a warrant or even receive a tenant complaint, a way to make additional money (through the required filing fees and reinspection fees), and a way to further harass landlords that are having a difficult enough time making ends meet.

Sometimes I just wish that all of the landlords in the city of Milwaukee had the ability to just walk away from their rental properties. I wonder if the city would then realize, once all the landlords are gone and there is no one to own or operate rental housing, that we provide a much needed service and that most of us do a good job of providing that service. Would they try to work with us then . . . . ?

Imagine If Every Tenant Received A Free Lawyer In Eviction Actions . . . It Could Become A Reality

If Legal Action of Wisconsin, Inc, 274 lawyers, 7 judges and 2 court commissioners,have it their way, all indigent persons that are involved in civil lawsuits involving issues of "basic human needs" will be given a free lawyer.

According to a recent Milwaukee Journal Sentinel article and ABA Journal article the Wisconsin Supreme Court has been petitioned and asked to require that all indigent persons involved in civil lawsuits that involve issues impacting an individual's basic human needs, such as sustenance, shelter, clothing, heat, medical care, safety, and child custody and placement, be provided a free lawyer to represent them in th elegal proceedings.

The proposed cost on taxpayers would be anywhere from $50 million to $80 million per year.

If this "civil Gideon rule" is passed you can expect that almost every tenant that wants one will be given a free lawyer to defend them in an eviction action. This will greatly affect landlords on many fronts. First, it will result in a delay in the overall process of removing a tenant from a rental unit thus allowing the tenant to remain in the rental unit longer and result in the landlord losing more rent. Second, it will increase a landlord's costs by (most likely) increasing the cost to file an eviction action, and then result in higher attorney's fees should the landlord opt to retain a lawyer; if the landlord handles the eviction himself/herself then s/he will lose more time and money by having to take off work. Third, assuming that the $50 million - $80 million estimated costs to pay for the "free lawyers" are not entirely covered by an increase in civil filing fees, landlords will most likely see an increase in taxes in some way, shape, or form.

Since the majority of the eviction cases that I encounter involve the tenant not paying rent and has no legal defense, I see this proposed rule as only causing additional court congestion and delay.

In a state such as Wisconsin, which already has very tenant-friendly laws and regulations to begin with, and has courts that often go out of their way to give tenant's additional time to vacate (in violation of state statutes), and even goes so far as to provide legal advice to tenants (which they should not be doing), this civil Gideon rule, if passed, will make it even more difficult for landlords to continue to survive in the rental industry.

Added October 19, 2010 --- Here is a recent blog post by David Ziemer of the Wisconsin Law Journal about the Civil Gideon rule.

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

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

The new forms are:

1. Carbon Monoxide Detector Notice:

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

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

2. Miscellaneous Complaint Form:

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

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

3. Rent Promotion/Concession Agreement:

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

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

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

Bedbugs, Bedbugs and More Bedbugs!

Since my earlier post on the topic of bedbugs, I have been innodated with more and more information on bed bugs. It seems that every blog or newspaper article you read, every radio station that you listen to, and/or television station that you watch has recently addressed this lovely topic. As a result I thought I would devote another blog post to this topic replete with multiple links to the recent information that I have been reading, listening to, and watching.

The New York Times, in a September 5th, 2010 article, states that "according to Google, general searches for "bedbugs" have increased 83% in the last year and 182% for bedbug-related searches in the last four weeks compared with the same period one year earlier."

Milwaukee Magazine's Milwaukee News Buzz recently published an article explaining that in 2009 the incidence of bedbugs was highest in the Northeast regions of the U.S. but that these pests have expanded significantly thoughout the Midwest --- they have arrived in Milwaukee with a vengeance.

In a different article, the New York Times states that "despite what is often referred to as the "ick factor," bedbugs are relatively clean." Studies have been conducted trying to determine whether or not bed bugs can carry disease. To date, not one study has proven that bed bugs carry diseases. In South Africa researchers have fed bedbugs blood that contains the AIDS virus only to find that the virus dies while in the bed bug. While bedbugs can contain the hepatitus B virus for bugs, studies have show that when the bugs bite chimpanzees, the infection is not passed on to the chimp.

While not necessarily recent -- although I did recently discover it -- Phil Pellitteri of the U.W. Insect Diagnostic Lab wrote a Lab Note entitled Bed Bugs In Wisconsin, which is chock full of information that many of the news articles leave out. According to the Note, bed bugs feed for 3-10 minutes at a time and they will try to feed again 5-10 days later. In Wisconsin there are four different kinds of bedbugs: the human bed bug, the eastern bed bug and two kinds of bird feeding bedbugs. No suprise that the human bedbug (which prefers to feed on humans) is the hardest type to eradicate. Mr. Pellitteri also has some amazing (ly disgusting) close-up photos of these critters.

Time magazine, has a beautiful photo essay on the "pest of the year" -- these photos were taken under a microscope and provide so much detail that you may want to avert your eyes at times.

New York has been so hard hit by bedbug infestations that state housing officials have created a new law that requires all New York landlords to provide rental applicants and tenants with a document that discloses any prior bed bug infestation history. Here is a copy of the disclosure form. Here is a copy of the complaint form for tenant's to use if their New York landlord does not provide them with the bedbug infestation disclosure form.

Bedbug outbreaks have caused so much disruption in Ohio and Kentucky that some pest controllers in those two states are asking the EPA to allow them to use a highly toxic chemical -- propoxur -- which has been shown to cause nervous-system damage in children, in order to attack these bugs in limited situations.

In Cincinnati, one of the cities that has been the hardest hit by bedbugs, a commission has been created to address and attack the bedbug problems facing the city.

Bedbugs are not just infiltrating beds and bedrooms anymore. USA Today published an article about the proliferation of bedbug infestations in offices. According to the article, publishing giant Time magazine recently brought in bedbug sniffing dogs to check for infestations. The IRS had bedbugs in its Philadelphia and Covington, Kentucky offices. Ad agency Saatchi & Saatchi had a minor bedbug issue in its New York office. Reports of bedbugs in AMC movie theater chains and the Empire State Building in New York are also well recognized. According to a survey mentioned in the USA Today article, four out of every 10 bedbug treatments performed by pest management firms were in commercial buildings.

Additional reports of bedbugs have been noted in movie theaters, clothing stores, food plants, factories, and airplanes. The popular-with-the hip-kids clothing store, Ambercrombie and Fitch, had to close two of its stores in NYC in July to deal with bedbug infestations. Bedbugs have also taken over college dormitories at Catawba College, Wake Forest, NYU, Penn State and Missouri State.

While a general pain in the the backside for most of us, the bedbug explosion is creating a new niche for several pest eradication businesses, says the New York Times in a September 8, 2010, article. Costs of eradication can run from hundreds of dollars to spray a small apartment for bedbugs to over $1,000 for heat treatment. Bedbug sniffing dogs -- which are said to "alert" to live bedbugs. One lady, recently laid off from work, bought a specially trained bedbug sniffing beagle for $9,700 and recouped all of her costs in just 3 months doing just 1-3 inspections per week.

Web sites have been created which encourage people to report hotels, apartment complexes, and other locations were bedbugs have been seen -- bedbugregistry.com and bedbugreports.com are two such sites.

National Public Radio's Terri Gross recently aired a 30 minute piece on on bedbugs during her Fresh Air program on September 8, 2010, cutely titled "Good Night, Sleep Tight, Don't Let The Bedbugs . . . ."

I located one website based out of New York, entitled Bedbugger.com, which serves as a clearinghouse of all things bedbug related.

Problems recently arose in Boston with the transition of students prior to the new school year, per a recent NY Times article. One of the key problems is that students are discarding used furniture (that may contain bedbugs) and other students are picking up that same furniture to use in their new apartments. The Mayor of Boston has been discouraging the use of secondhand furniture in the city. Boston's Inspectional Services Department have even gone so far as to create bright orange stickers that they stick on discarded furniture that read "Caution this may contain bedbugs, do not remove." Despite such warning, many students will still take the discarded furniture.

If you had told me early this spring that tenants would ignore telltale signs of bedbug infestation in used furniture and still use the furniture in their apartment I would not have believed you. But this past summer while visiting a client's apartment complex, I watched a manager inspect a used couch that a tenant wanted moving into their apartment. The manager found clear indications of bedbugs on the couch -- which he showed to the tenant -- and forbade the tenant from moving the couch into the apartment building. Just a few minutes later, after the manager and I returned from taking care of another issues, I witnessed that same tenant returning to his truck with an empty dolly ---- he had disregarded the manager's warning and moved the bedbug-infested couch into the apartment building anyhow. I was blown away by this.

As can be expected, there as also been a sharp increase in litigation involving bedbugs. A couple that stayed in a Catskills resort has sued the hotel they stayed in for $20 million after the wife sufferred over 500 bedbug bites and had a severe allergic reaction that resulted in a hospital stay. A Fox News Channel employee sued the building owner, and management comany claiming she got bedbugs from working at the city newsoom in New York, and that the defendants were negligent in rectifying the situation. While there are reports of many lawsuits being filed as a result of bedbugs, most appear to have been settled out of court prior to trial, to avoid negative publicity.

I performed a Westlaw search on bedbug-related lawsuits in Wisconsin a few days ago and only found one case that has any precedential value in this state. The case is from 2003 and is entitled Mathias v. Accor Economy Lodging, Inc., 347 F.3d 672, and involves a guest of a Motel 6 hotel chain that sued the hotel for damages caused by the hotel ignoring the many bedbug infestations in many of the hotel rooms. The evidence that was presented demonstrated that the hotel was aware of the bedbug problems. Nonetheless the hotel refused to perform suggested eradication measures and continued to rent out hotel rooms, to unsuspecting guests, that they knew were infested with bedbugs based on prior guests' reports. One guest complained of bedbugs in his hotel room and was moved to another room, where he then located more bedbugs, and had to be moved again. A jury awarded the plaintiff/guest $5,000 in compensatory damages and $186,000 in punitive damages. The Seventh Circuit Court of Appeals upheld the jury award (which had been appealed by the hotel chain) and went so far as to state that the hotel's "failure to warn guests or to take effective measures to eliminate bedbugs amounted to fraud and probably to battery as well."

Lawsuits are even being filed by companies that produce products to assist in the eradication of bedbugs. Bloomburg Businessweek reported on September 17, 2010 that JAB Distributors, Inc., which produces a pateneted bed bug proof mattress cover called "Protect-A-Bed" sued Martha Stewart Living for infringing on JAB's patent when it sold a competing mattress cover that was impervious to bedbugs.

On September 21, 2010, I was listening to the radio (Bob and Brian in the morning, specifically) and learned that Rosemount, Illinois was hosting the North American Bedbug Summit that day and there were over 400 attendees signed up to attend. The Summit was covered by the Today Show.

Bedbugs are amazing critters that can live up to a year without feeding ( I find that hard to believe but that is what I read) and they reproduce like guppies. A universal theme in all the articles that I read, videos that I watched, and broadcasts that I listened to, was that prevention is the best way to defeat the bedbug. Clearly education is needed on this topic for both landlords and tenants. As long as we have landlords that believe they can kill infestations with moth balls and tenants that continue to move bedbug-infested furniture into their apartments, this problem will continue and grow larger. The costs to eradicate these varmits can put many a landlord "into the red" and out of business.

I suggest that we as landlords learn all we can about preventing bedbugs form infesting our rental properties. We should then take things a step further and pass that education that we learned to our tenants. I am even considering adding to my rental agreement that my tenants cannot move any used or secondhand furniture into my rental units. I have clients that have spent close to $100,000 to date on bedbug eradication measures. I don't know about you but I do not make enough money as a landlord to be able to afford paying hundreds or even thousands of dollars to eradicate a bedbug infestation.

Landlords Lose Lawsuit

On Wednesday, September 22, 2010, Judge Timothy Witkowiak denied three landlords' motion for summary judgment against the City of Milwaukee and granted the City's cross motion for summary judgment against the landlords, with regard to constitutionality of the city's new RRI ordinance. This ruling effectively ended the lawsuit.

The lawsuit dealt with the City's new Residential Rental Inspection (RRI) program/ordinance that went into effect on January 1, 2010. The RRI ordinance requires all landlords in two areas of Milwaukee (the UWM-area on the east side and Lindsay Heights on the north side) to register any and all rental units, pay a fee to the city, allow for the Department of Neighborhood Services to conduct an interior inspection of the rental units, pass the inspection and obtain a rental certificate, in order to continue to be able to rent the rental unit to a tenant. Any rental unit that does not pass the inspection would be denied a rental certificate and as such the lanldord would no longer be allowed to rent out the unit until such time as a rental certificate could be obtained.

If you are unfamiliar with the RRI program and/or the lawsuit you should review my past blog posts on the subject to get up to speed.

The plaintiff landlords had four main arguments. I will summarize the arguments and then summarize the court's ruling on each.

1. The Ordinance Is Too Vague

Landlords' Argument:

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

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

Court's Ruling:

The court ruled that the plaintiff landlords did not meet the burden that was required of them in order to prove that the ordinance was so vague that it was unconstitutional. The burden that the plaintiffs were required to meet was quite high.

Under Wisconsin law, a ordinance is presumed to be constituional. In order to prove an ordinance unconstitutional the attacker must establish its invalidity beyond a reasonable doubt. Specifically, the plaintiffs had to prove beyond a reasonable doubt that the ordianance posessed no rational basis to any legitimate objective. In other words, the landlords had to show that the ordinance was unconstitutionally vague in all aspects and incapable of any valid application.

The typical burden of proof in a civil lawsuit is "a reasonable certainty by the greater weight of the credible evidence" which essentially means that if you tip the scale (of justice) slightly in your favor then you have met your burden. The burden of proof in criminal matters is "beyond a reasonable doubt" which is a much higher and more difficult burden to meet. In order to meet this higher standard you essentially have to tilt the scale (of justice) all of the way in your favor.

In order to show that an ordinance is unconstitutional on its face the plaintiffs had to meet the higher (criminal-type) burden. The court ruled that the ordinance as written was not unconstitutionally vague because the plaintiffs failed to demonstrate that the ordinance was impermissibly vague in all situations. The court added further that just because certain words and phrases in the ordinance were never defined that that alone does not make them vague because if a word or phrse is not defined then one should resort to the common meaning of the word.

The court held that some valid application of the ordinance can be found so as a result there can be no finding that the ordinance was unconstitutionally vague.

The court added that the burden of proof is lower in an "as applied" challenge, or post-enforcement attack, on the validity of the constitutionality of an ordinance and that the court's ruling under such circumstances could be different. Essentially, this means that if a landlord was injured (i.e. denied a rental certificate and was forced to evict his/her tenant and lose rental income) by the application of the RRI ordinance, that landord would have a lower burden of proof, in that context, in proving that the ordinance was unconstitutional.

2. The ordinance contains fatal defects

Plaintiffs' Argument:

This argument was that the ordinance as written contained terms which were unclear, had no definitions, and failed to set forth clear standards for when a rental certificate would be granted. As a result the application of the ordinance by the city would be fatally flawed. Additionally it was argued that the ordinance gives the DNS Commissioner and his inspectors the arbitrary power to grant, deny, or revoke a rental certificate without providing specific standards as to how that discretion should be used.

The plaintiffs provided nine examples within the ordinance where significant terms were not defined or were unclear. It was argued that the standard as to what will cause the issuance of a rental certificate is a subjective standard contained only in the minds of the Commissioner and his inspectors and such standard will most likely vary from one inspector to the next.

This argument also focused on the fact that the ordinance allows for the DNS Commissioner to draft rules or regulations which have not been made a part of the ordinance. This means that the Commissioner could change the rules at any time and without providing owners prior notice of the changes. The rules and regulations are not required to be made publicly available since they are not contained in the ordinance itself.

Court's Ruling:

Disclaimer: I was unable to attend the entire ruling of the court on this issue as I needed to get across town to give a seminar at the AASEW Tradeshow. However, I was present for the first part of the court's ruling on this issue and I spoke with people in attendence at the hearing later in the day with regard to the remainder of the court's ruling.

The court felt that the plaintiffs' 1st argument (vagueness) and its 2nd argument (fatal flaws) were very similar and contained much overlap. As such, the court applied the same analysis as it did on the vagueness claim and ruled that the plaintiffs did not meet their burden of proof.

The court also addressed the plaintiffs' argument that the ordinance does not provide landlords with sufficient notice becasue it refers to standards that are not incorporated into the ordinance itself, which allows DNS to add these standards at a later date and/or change them over time etc. The court ruled that regulations can legally be added to an ordinance at a later date and are not required to be included in the wording of the ordinance itself. The court pointed out that it is often the case that administrative rules are created to interpret statutes and ordinances at the federal, state and local levels, and therefore this subset of the plaintiffs' argument is moot.

3. Failure to provide impartial review

Plaintiffs' Argument:

Under the ordinance as written if a landlord does not agree with the decision rendered by the city inspector, the landlord can appeal that decision to the Commissioner of DNS -- the employer of the inspector that made the initial decision. The plaintiffs argued that any ordinance that allows a boss to review the decision of his employee (to deny a landlord a rental certificate) cannot be impartial. The plaintiffs argued that Wisconsin Statutes Sec. 68.11(2) requires that all municipalities provide an "impartial decision-maker . . . who did not participate in making or reviewing the initial determination" to preside over any review. While the RRI ordinance does eventaully allow an impartial review by the Standards and Appeals Board at a later point in the procees, the plaintiffs argued that the requirement that the initial decision first be reviewed by the commissioner, will delay a review by an impartial body by almost a month at a minimum.

Court's Ruling:

The court stated that the ordinance did provide for an impartial review of the building inspector's decision by the Standards and Appeals Board and that the requirement that the Commissioner be allowed to review the initial decision, before it could be appealed to Standards and Appeal Board, added no appreciable delay.

4. Interference with a landlord's constitutional right to contract with a tenant

Plaintiffs' Argument:

The plaintiffs argued the denial of a rental certificate would interfere with the landlords rental agreement with his/her tenant. According to the ordinance, if a landlord does not obtain a rental certificate then s/he cannot continue to rent out the unit -- thus implying that the tenant must vacate or if the tenant refuses to do so, be evicted. First, the plaintiffs argued that the city does not have the authority to remove a tenant from a rental unit which is denied a rental certificate. The city does not own the property and therefore is not legally allowed to bring an eviction action against the tenant. Second, the plaintiffs argued that while a landlord has the right to bring an eviction action against his/her tenant generally, said eviction must be predicated upon a breach of the rental agreement by the tenant (unless it is a month to month tenancy). It was argued that, under a scenario where a rental unit that is inhabited by a tenant is denied a rental certificate, and the tenant has done nothing wrong, a landlord has no legal basis to evict the tenant, and to require a landlord to evict his tenant under such circumstances is an interference with the landlord and tenant's contractual agreement.

Court's Ruling:

The city argued, and the court seemed to tacitly agree, that if a rental certificate is not issued for a specific unit, that the landlord has in effect breached the rental agreement because the landlord is in violation of a city ordinance. Such a violation of a city ordinance, and brach of the lease, renders the rental agreement void and could thus be the basis for an eviction.

NOTE: I will have to devote another post to my analysis of this aspect of the ruling because I promise you this will be a huge problem in eviction court should this ever get pushed that far.

Hearing on Landlords Lawsuit vs. City To Be Held This Wednesday, September 22nd

The hearing on both the Landlords' and the City's cross motions for Summary Judgment will be held this Wednesday, September 22nd, at 10 am. The hearing will take place before Judge Timothy Witkowiak at the Milwaukee County Courthouse.

This hearing could be the final hearing on this lawsuit (barring any appeals) which involves three Landlords suing the City and asking the Court to declare the Residential Rental Inspection (RRI) program unconstitutional as currently written.

Both parties have completed their briefing on the issues. I have reviewed all of the briefs (hundreds of pages, trust me : ) and am looking forward to attending the hearing at which the judge could issue an oral decision.

If you are interested in attending and want to get up to speed here is a link to all of the posts that I have written on this subject.

AASEW Landlord Tradeshow - This Wednesday - Sept. 22nd

Annual Landlord Tradeshow!

Bring 2 non perishable food items that we will donate to the Hunger Task Force for free admission, free seminars, free entrance to the exhibit hall, a chance to win some great raffle prizes and free appetizers

September 22nd, 2010

Serb Hall, 5101 W. Oklahoma Avenue, Milwaukee

Seminars 12:00 p.m.-6:00 p.m. (doors will open at 11:40 p.m. for first seminar)

Exhibit hall open from 12:00 p.m. until 5:00 p.m.

Be sure to visit our exhibit hall to talk with vendors that offer products and services for the rental property industry and graciously support our tradeshow!

Click here for a listing of the seminars that will be presented

The Topic of CCAP Restriction Is Back!

As the followers of my blog well know, many of my posts have centered on State. Rep. Marlin Schneider's attempts to restrict CCAP access to the public. Restriction of CCAP will greatly affect landlords as CCAP is one of the best avenues to conduct background checks on prospective tenants. Here is a link to my prior posts on this topic.

Well, Rep. Schneider and his Special Commottee On Review of Records Access of Circuit Court Documents, have resurfaced. On September 8, 2010 a notice of this special committee's upcoming meeting was circulated. The meeting will be held on September 15th and will address several topics, including Proposals Limiting Access to Consolidated Court Automation Programs Information Considered During 2009 Legislative Session, and several other topics intimately related to CCAP.

Here is a copy of the Notice that was circulated.

If you would like to read the actual reports and memos referenced in the above Notice click here and you will be directed to a page with all the necessary links.

Looks like we will have to prepare for another year of battling for our continued access to CCAP and the Open Records law in general.

What Is The Effect On The Eviction Process If A Tenant Files Bankruptcy?

I have had a number of people ask me over the last several months to address what effect a tenant filing bankruptcy has on the eviction of that tenant. I have been delaying writing that blog post and I apologize for that. Bankruptcy is a tricky area of the law, and I am by no means an expert in bankruptcy law, but I will attempt to provide you with a general summary of how a tenant filing bankruptcy effects a landlord's attempt to evict that tenant.

Once an individual files bankruptcy (which I will refer to as "BK" for short to prevent having to type the word "bankruptcy" 25,000 more times during this post) all creditors of the debtor (person filing BK) are "stayed" from pursuing the debtor for repayment of any monies owed. This is referred to as the "automatic stay" and is specifically addressed in Title 11 of the United States Code (U.S.C.) at section 362. The automatic stay applies whether the individual files for BK under Chapter 7 (liquidation) or under Chapter 13 (reorganization).

There are some exceptions, but for the most part, the "automatic stay" prevents any creditor from attempting to collect a debt from the debtor. Before a creditor can pursue the debtor for money owed the automatic stay must be "lifted" by the BK court. So, essentially, you must get permission from the BK court before you can attempt to collect.

The need to seek permission from the BK court applies to a landlord that has not been paid rent by his/her tenant, if the tenant has filed for BK, as well. Practically speaking, this means that a landlord cannot telephone a tenant to ask when they are going to pay rent that is owed, a landlord cannot draft and serve a 5 Day Notice (or a 14 Day notice) on a tenant, a landlord cannot file an eviction action against a tenant, if the tenant has filed for BK.

As many of you who have already gone through the eviction process well know, the entire process can take anywhere from several weeks to months to complete. All the while you have no rent coming in. If your tenant has filed BK, the process will take even longer.

In order to "lift" the automatic stay, a landlord must file a Notice of Motion and Motion To Lift The Automatic Stay with the BK court. There is a filing fee that must be paid. The tenant/debtor then has a period of time in which to reply to the motion. Next, a hearing will be scheduled on the motion. This hearing is typically not even scheduled until after the time has passed for the tenant/debtor to reply to the motion, then due to the BK court's heaving calandar, the hearing will often be scheduled out several weeks into the future.

In the motion, and at the hearing, the landlord will need to set forth the pertinent facts and law and ask the BK court to lift the stay in order to allow the landlord to serve the tenant with a notice to pay or vacate, and if needed, follow that up with the filing of an eviction. There are various scenarios that can play out at the hearing -- too many to address in this post. Oftentimes, if the BK court determines it is feasible, the BK court will attempt to broker a deal if the tenant/debtor wants to continue to reside in the unit -- this often entails the landlord being strongly persuaded to allow the tenant/debtor to continue residing in the rental unit in exchange for the tenant/debtor agreeing to reimburse the landlord for past due rent via a payment plan.

One exception to the automatic stay that can greatly help landlords, is if the landlord has already obtained a judgment of eviction against a tenant, prior to the tenant filing BK, then the automatic stay does not apply and the landlord is allowed to execute the writ with the Sheriff and have the tenant removed from the rental unit (11 U.S.C. Section 362(b)(22)). In order for this exception to apply, the judgment of eviction must already have been granted prior to the tenant filing BK. If no judgment of eviction has been entered, then it is irrelevant whether or not the landlord has already served the 5 Day Notice, filed the eviction lawsuit, had the eviction lawsuit served on the tenant, or already appeared in court ---- the automatic stay will still apply.

It should also be noted that if a landlord has obtained a judgment of eviction prior to the tenant filing BK, this only allows the landlord to proceed with the execution of the writ. It does not allow the landlord to pursue the tenant for money owed (what is often referred to in Milwaukee County as the 2nd and 3rd casues of action). If a landlord wishes to obtain a money judgment against the tenant/debtor, s/he would still need to seek relief from the automatic stay from the BK court.

As you can see, a tenant's BK filing can have a HUGE impact on a landlord's ability to evict a tenant and recover possession of the rental unit. Once a tenant has filed for BK, a landlord must stop all attempts at collecting past due rent from the tenant or evicting them. Failure to abide by the automatic stay can result in a landlord being sanctioned by the BK court and if a landlord "willfully" violates the automatic stay, the injured party (the tenant/debtor) can recover actual damages from the landlord, including court costs and attorney's fees, as well as punitive damages.

Do Not Miss the 11th Annual AASEW Tradeshow on Sept. 22, 2010

Do you know what you can legally deduct from a tenant's security deposit? Looking for ways to improve your cash flow? Need a few sales tips to fill your vacancies? Are you in Compliance with State and Federal Fair Housing Laws? You will get the answers and more at the Apartment Association of Southeastern Wisconsin (AASEW) Annual Landlord Tradeshow!

Free seminars.

Free entrance to exhibit hall.

Free appetizers.

Network with hundreds of rental property owners and real estate professionals!

Need a product or service for your rental business? Visit our exhibit hall and talk with vendors that service our industry!

Plus, find our Traders' Corner in the exhibit hall and bring your property listings if you are in the market to buy or sell!

Admission is FREE with 2 non-perishable food items that we will donate to the Hunger Task Force

September 22nd, 2010

Serb Hall, 5101 W. Oklahoma Avenue, Milwaukee, 53219

Seminars 12:00 p.m. -6:00 p.m.

Exhibit Hall open from 12:00 p.m.-5:00 p.m.

The seminars that will be offered include:

- Security Deposits: What A Landlord Can Legally Deduct From A Tenant’s Security Deposit (Attorney Tristan R. Pettit of Petrie & Stocking S.C.)

- Improving Your Cash Flow: Tips for Rental Property Owners (Don Hill of Heartland Information Research)

- Rental Business Ownership: Pros and Cons of Using An LLC (Attorney Heiner Giese of Giese & Weden S.C.)

- Are You In Compliance With State and Federal Fair Housing Laws? (Margaret Bowitz of the Milwaukee Fair Housing Council)

- Sales Tips To Fill Your Vacancies (Andi Simmons of Start Renting)

- Saving Energy and Dollars In Your Rental Business (Jeffrey Mackey of WE Energies)

- Reduce Interior and Exterior Paint Problems: Save Time and Money (Gary Paul and Steve VanGorp of Diamond Vogel Paints)

- Is Your Prospective Tenant a Good Credit Risk? (Kathy Haines of Landlord Services LLC)

- Financing Programs For The Investor (Dan Kleinke of Merit Financial)

Fair Housing Update: Review of 2010 Fair Housing Trends Report

A large segment of my work involves advising landlords and property managers about fair housing laws and counseling them what they can and cannot do in the rental industry with regard to the federal and state fair housing laws and discrimination in general. As such, I recently took the time to read the National Fair Housing Alliance's (NFHA) 2010 Fair Housing Trends Report which was published May 26, 2010.

To provide you with some background on the protected classes and fair housing law in general you may wish to review my July 10th post which discusses the various protected classes or visit Atty. Ron Leshnower's Fair Housing Blog.

Some of the relevant highlights of the report are below.

- In 2009 there were a total of 30,213 fair housing complaints filed. This is a significantly higher number of complaint than in past years. It should be noted that all of these complaints do not arise in the context of rental housing -- many involve mortgage lending, hosing construction etc.

- NFHA conservatively estimates that there are over 4 million fair housing violations each year although most of them are never reported.

- In 2009 H.U.D. (U.S. Dep't of Housing and Urban Development) and D.O.J. (Department of Justice) charged more fair housing cases than in past years.

- Private fair housing groups continue to process the highest number of complaints -- 19,924 (or 66%) of the total complaint load even though there are fewer private fair housing groups than in prior years.

- Since 1999, private non-profit fair housing organizations have processed 186,308 (66%) of the complaints. By comparison, Fair Housing Assistance Program (FHAP) agencies processed 69,358 complaints (25%), and HUD processed 25,881 (9%) of the cases.

- People with disabilities continued to be the protected class that is most discriminated against (or at least the most reported) in 2009. This was also true in 2008. The report explains that disability complaints remain high for several reasons: (1) HUD has an office devoted solely to disability issues, (2) many apartment owners make direct comments refusing to make reasonable accomodations or modifications for people with disabilities so the discrimination is easier to detect, (3) builders, developers, and architects still continue to design and construct apartment complexes that violate the Accesibility Guidelines, (4) every state has a Protection and Advocacy System and every city has one or more non-profit agencies dedicated to assisting people with cognitive, mental, sensory, and physical disabilities.

ASIDE: In a recent article from Milwaukee Magazine's newsbuzz, disability related discrimination leads the way in Milwaukee also.

- In 2009, private fair housing groups reported 15, 624 complaints of housing discrimination in the rental market. FHAP agencies reported 6,464 and HUD reported 1,656. The report goes on to explain that one reason for the increase in the number of rental market complaints from prior years may be the foreclosure crises -- i.e. many tenants were evicted when the owner defaulted on his/her mortgage and many others lost their homes and needed to enter the rental market where they faced discrimination.

- In 2009, several representatives in Washington introduced bills to extend the protection of the Fair Housing Act to create 2 additional federally protected classes: (1) gender identity, and (2) sexual orientation.

Obviously, more work needs to be done to ensure that landlords are aware of the protected classes and do not engage in discrimination, but as the title of the report says - 2009 was a "step in the right direction."

ASIDE: There is a portion of the report that addresses fair housing implications of the foreclosure crisis that is very interesting and worth a read.

Audits In Milwaukee by HUD Regarding Compliance with Lead-Based Paint Disclosure Laws

A fellow board member on the Apartment Association of SE Wisconsin forwarded the email below to me and other landlord-tenant attorneys and others in the industry. It concerns the recent audits of landlords and management companies in the city of Miwlaukee with regard to complying with the federal lead-based paint disclosure laws. I spoke with a potential client yesterday who was also being audited and had failed to give out the required disclosure forms and pamphlet. The feds seem to have turned up the heat on this issue. Please read the email below and also view my blog post on this topic at http://petriepettit.com/blog/landlord-tenant/lead-based-paint-disclosure-form-you-must-use-this-document Subject: Lead based paint warnings Ladies and gents Our benevolent government is comprised of multitudes of faceless bureaucrats with nothing to do so they dredge up projects to justify their cushy jobs, benefits and pensions. The latest of these to affect our real estate residential industry is that the Dept of Housing and Urban Development (HUD) is auditing landlords to be SURE that they give the required Lead warnings to each incoming tenant. Thie would include the pamphlets and forms you received from us and are instructed to use. As our buildings were constructed before 1978 (when lead paint was officially banned - even tho nobody used it for years previous), ALL tenants MUST sign the form and get the pamphlet. For EACH failure to provide the form and pamphlet, the fine can reach $11,000. You can see this could add up to real money real fast. I urge you to check your files and be SURE the lead form is there for each tenant. Those of you who send your leases to the office usually do not send the Lead form which is usually not necessary for tenant management, but it is vital that the forms are available for one of these audits. Today the audits are in the City of Milwaukee. A friend of mine was just audited and the HUD guy was there 3 hours and made many copies of stuff. My friend has about 300 units in Milwaukee. They could audit anywhere next. We will be checking with each of you in the near future to check on this. This is serious. Do not fail. Please take heed of this and make sure you are in compliance -- the penalties are huge and can easily put a landlord out of business.

EXECUTION OF WRIT: Part 2 - The Details

Last week I provided some basic information about what is involved in the execution of a writ of restitution (eviction) and how the process works. With this week's post I wanted to provide everyone with some additional -- more detailed -- information about the execution process. I attempted to group these tidbits of info by category. Much of the information below is specific to Milwaukee County and the Milwaukee County eviction squad.

General

- The applicable Wisconsin Statute regarding executing a writ is 799.45, Wis. Stats.

- Milwaukee County Eviction Squad's phone number is (414) 278-5030.

- A typical eviction move-out takes 1 hour.

- Approximately 15-20 evictions are performed per day.

- There is both a 1st and a 2nd shift that performs evictions. The 1st shift arrives at the office around 7 am. The 2nd shift works until 8 pm.

- The landlord should alert the Sheriff if any of the following apply: (1) the tenant has mental health issues, (2) there are dangerous dogs residing in the unit, (3) the tenants are believed to be involved with drug dealing, (4) there are guns on the property, (5) the tenant is elderly and/or disabled and has no place to move to or family to assist him/her.

The reason that the Sheriff wants to be notified of (1) - (4) is for the Sheriff's own safety. If there is a mentally unstable tenant, dogs, drugs, guns, or some other factor that might result in the increased risk of injury, the Sheriff wants to be notified of this in advance so that they can have back-up near by. The execution of a writ can be very dangerous. Tenants who are being displaced from their homes are often emotional (understandably so). I have heard of Sheriff's deputies being injured and even killed while performing an eviction. If a landlord has any inkling that there could be issues during the eviction this should be communicated to the Sheriff's Department.

The reason that the Sheriff wants to be notified of (5) (if the tenant is elderly and/or disabled and has no family to assist or place to move to) is because the Sheriff will then contact the Department of Aging or a social service agency prior to the eviction so that someone can be on hand to assist the elderly and/or disabled person in locating a safe place.

The best way to notify the Sheriff of any of the above conditions is to attach a note to the paperwork that you are filing with the Sheriff. This way the clerk can pass that note along to the eviction squad along with the Writ.

- After the tenant's property has been removed, the tenant and any other individuals living in the unit will be escorted out of the unit. The Sheriff will put a placard on the door. If the tenant returns and enters the unit after the eviction has occurred the police should be called. The Sheriff cannot make a tenant leave the apartment complex or neighborhood as the Sheriff only has the authority to remove the tenant from the unit.

Eviction Route

- The eviction squad performs all evictions on the south side of Milwaukee first and then they move to the north side.

Notification To Landlord

- The Sheriff will do its best to notify the landlord of the date and time for the eviction on three different occassions: (1) the night before the eviction is scheduled, (2) at 7:30 a.m. the morning of the scheduled eviction, and (3) as they are driving to the property to perform the eviction.

Moving Companies

- Certain moving companies are used only on certain days of the week in Milwaukee County. So a landlord does have some control over what day of the week his/her eviction will occur by choosing who to hire as the moving company. If Eagle Movers has been retained then the Sheriff will schedule the eviction for Monday, Wednesday, or Friday. If Aetna Movers are hired then the eviction will occur on a Tuesday. If Dweyer Movers (owned by Eagle Movers) are used then the eviction will be on a Thursday. Wednesdays are reserved for JC Triplett.

Appliances

- If the landlord provides appliances with his/her rental unit then the landlord should notify the Sheriff of this. The landlord should also provide the Sheriff with information about the type of appliances, manufacturer, color etc. If the Sheriff is not advised of this information and the tenant tells the moving company that the appliances are his/hers, there is little the Sheriff can do to prevent this type of theft.

Storage Lockers

- If the tenant has property stored in a storage locker which needs to be removed, the Sheriff needs to be told of this. If the landlord does not know which storage locker is the tenant's, the Sheriff will not remove any items from any of the lockers as they could be held responsible if they remove items from the wrong storage locker.

Tenant's Personal Property

- The Sheriff has the authority to decide what of the tenant's belongings are of no value (junk) and what is valuable and should be packed and moved to storage.

- Neither the Sheriff nor the moving company will remove a tenant's clothing. This rule is in place for safety reasons because in the past the Sheriff/movers were stuck by needles that were left in clothing.

- Only large items will be removed. Smaller items will be left in the unit for the landlord to remove.

- If the tenant's property is infested with roaches, bed bugs, or some other critter, the items will NOT be moved. Moldy items will also not be placed into the moving truck. The moving companies do not want to help spread these infestations throughout the city so the removal of such property will be left to the landlord.

- Once the Sheriff determines what is junk/garbage, the landlord then has a choice to either leave the junk in the property (which the landlord can then remove later) or have the moving company haul everything to the curve (which the moving company will charge the landlord for doing).

- If a tenant is present, and his/her property is determiend to be of value, the tenant is given a choice as to what should be done with his/her belongings. The property can be moved and placed into storage (which the tenant will then be required to pay for if s/he wants the possessions back) or the tenant can opt to have his/her property placed at the curb (for the tenant to remove).

- If a tenant's personal property is going to be placed into storage, the moving company must put the property into boxes, which the landlord will pay for. While it is frustrating for the landlord to have to pay for boxes to house the tenant's property, the moving company cannot just throw the tenant's belongings haphazardly into the back of the truck for many reasons (safety and liability are two that come to mind). The property will also be inventoried.

Liability for Execution of Void Writ

- The Sheriff will be liable to the tenant for any damages resulting from the execution of a writ that was given to the Sheriff beyond the 30 day period. The Sheriff will also be liable for any resulting damages if the Sheriff executes a writ beyond the 10 day period. Wolfe-Lille v. Kenosha County Sheriff, 699 F. 2d 864 (7th Cir. 1983).

Cancellation of Writ

- Landlord must have the docket number that was giving at the time that the paperwork was filed with the Sheriff, in order to cancel an eviction. Only the Sheriff and the landlord are given the docket number. The tenant should NEVER be given the docket number or else s/he could cancel their own eviction.

- If a landlord cancels an eviction, the Sheriff discards the paperwork. As a result, a landlord cannot "un-cancel" an execution of the writ. A landlord should never cancel the eviction with the Sheriff unless they are certain that the tenant has vacated.

Costs of Execution

- The Sheriff charges $112.50 per hour for their time in executing a writ.

- The total cost to execute the writ will be based on the actual hours expended by the Sheriff. The costs will be taken out of the $130 deposit that was previously posted. Any remaining monies will be returned to the landlord within 4-8 weeks. If the total cost exceeds the $130 deposit, the Sheriff will send a bill for the overage.

- The cost of the Sheriff and the moving company are all chargeable to the landlord. However these costs will be taxed and added to any money judgment that the landlord pursues against the tenant -- whether or not the judgment is collectible, is a whole different issue.

- The only costs that are the truly the responsibility of the tenant (aside from if the landlord obtains a judgment against the tenant and actually collects on it) are the costs incurred for the storage of the tenant's belongings after the delivery of the property to the storage facility.

EXECUTION OF WRIT: Part 1 - The Basics

I have noticed a trend in the last several months of more and more tenants refusing to leave a landlord's rental property even after the landlord has obtained a judgment of eviction against the tenant and been issued a Writ of Restitution ("writ"). As a result of this trend more and more landlords are being forced to go through the process of having the writ executed. The execution of the writ is the process whereby the Sheriff actually removes the non-vacating tenant and returns possession of the property to the landlord.

Background Information:

Most eviction lawsuits have 3 causes of action or claims. The first cause of action is for return of the rental property. This is often referred to as the "eviction" portion and in Milwaukee County it is called the "1st cause of action." The 2nd and 3rd causes of action have to do with the money that the tenant might owe the landlord. The 2nd cause refers to the past due rent that may be owed and the 3rd cause refers to any claims for physical damages to the unit and/or holdover damages. Together the 2nd and 3rd causes of action are often referred to as the "money claims."

This post will focus on the 1st cause of action generally, and specifically, on what a landlord must do s/he has been granted a judgment of eviction and received a writ of restitution but the tenant continues to reside in the unit.

A landlord typically obtains a judgment of eviction (and the ensuing writ) in one of three ways. First, the tenant fails to show for court and the landlord is granted a default judgment. Second, the tenant appears in court and contests the eviction thus necessitating an eviction trial before a judge. Assuming the landlord proves his/her case, the landlord obtains a judgment of eviction and is issued a writ. Third, the tenant appears in court and admits that they are in breach of the lease and the court commissioner or judge grants a judgment of eviction against the tenant based on his/her admission and issues a writ.

Many landlords mistakenly believe that after they obtain a judgment of eviction and a writ that they can then change the locks and toss out the tenants personal property if the tenant fails to leave. DO NOT DO THIS. If the tenant fails to vacate the unit, even after there has been a judgment and a writ issued, the only legal way to remove the tenant is to hire the Sheriff and to have the writ executed (sec. 799.45, Wis. Stats.) If a landlord attempts to illegally evict a tenant (also referred to as a "self-help" eviction) th elandlord is openeing himself/herself up to either civil or criminal liability, or both. The tenant can sue the landlord that engaged in a self-help eviction for double damages and attorney fees. While it may seem "unfair" to require the landlord to expend more time and money after s/he has already obtained a judgment of eviction against a non paying tenant, that is what the law requires.

The Writ of Restitution:

Along with obtaining a judgement of eviction comes the issuance of a Writ of Restitution (writ). A writ is a document that orders the Sheriff to evict the tenant and anyone else that has occupancy of the rental unit. The writ also contains additional information that will assist the Sheriff in executing the writ, such as the name and address and phone number of the landlord, the landlord's attorney, and the defendant/tenant.

In Milwaukee County the court does not give you a writ. Instead the court gives you an Authorization for Writ. The landlord must then take that Authorization to the Clerk of Courts and pay $5 in order to obtain the actual writ. The landlord must then complete the writ and tender it to the Sheriff.

Each county handles the distribution of the writ differently. In Waukesha County (at least last time I was there) a landlord is required to return to court the following day to obtain the writ and pay the fee. The Clerk completes the writ for you in Waukesha. In Racine County, a landlord should pick up a blank writ from the Clerk of Courts before court, complete all the requested information on the writ, and then present it to the judge when the case is called and the judge will sign the writ. No fee is required in Racine County. In Kenosha County, a landlord must go to the Clerk of Courts after court and pay $5 and the Clerk will then complete the writ for you and hand it to you. It is advisable to talk to the Clerk of Courts in whatever county you own rental property about the process of obtaining the writ before you appear in court.

A writ is only valid for 30 days. If a landlord does not tender the writ to the Sheriff within the 30 day period the writ will expire and the landlord will need to start the entire eviction process over again in order to remove a tenant that is still residing in the property. Yep, you heard me correctly. If the landlord lets the writ expire, the landlord will need to serve the tenant with a new notice, purchase a new summons and have it filed and served on the tenant, appear in court again etc. etc. Do not let the writ expire! New landlords (or landlords with no previous eviction experience) should not let a tenant dupe them into not filing the writ with the Sheriff within the 30 day period. Tenants may tell you that they just need 10 more days, and then another 5 days, and then 3 more days and they will be out, etc. etc. If all those extra days add up to 30 - the landlord has only himself/herself to blame.

Executing The Writ:

In Milwaukee County, only the Sheriff can legally execute the writ. Before the Sheriff will do this however the landlord must hire a moving company. The landlord must obtain a Letter of Authority from a licensed and bonded moving company and in return the landlord will have to shell out a refundable deposit of approximately $350 to the movers.

Once the landlord has engaged the services of a moving company the landlord should go to the Sheriff's Department for Milwaukee County and bring along the following items:

1. The Authorization for Writ

2. The fully completed Writ of Restitution

3. $130 deposit to give to the Sheriff

4. A set of keys to the unit to give to the Sheriff.

By law, once the writ has been delivered to the Sheriff, the Sheriff must execute the writ within the next 10 days (sec. 799.45(5), Wis. Stats.) Due to the large amount of evictions in Milwaukee, it typically takes the Sheriff the full 10 days. Oftentimes the Milwaukee County Sheriff will mail the tenant a 24 hour notice the day before the planned eviction to give them one last chance to leave on his/her own. This notice is not legally required and so it is irrelevant if the Sheriff does not do it for every eviction. Think of it as a courtesy.

If the tenant still has personal property in the rental unit when the Sheriff arrives to execute the writ ,the Sheriff will then determine what of the tenant's personal property should be stored by the moving company and what property is considered to have no value and can be disposed of. After the tenant's personal property has been dealt with, and if the tenant is still residing in the property, the Sheriff will direct the tenant -- and any others residing in the unit -- out of the unit and insure that the unit is secure. If the tenant refuses to leave the unit, s/he will be arrested for Disorderly Conduct. It should be noted that the Sheriff can make the tenant leave the specific rental unit but cannot make the tenant leave the apartment building or complex. If the tenant refuses to leave the building then the landlord must call the police.

It is helpful if the landlord or his agent can be present during the eviction to answer any questions that the Sheriff or moving company may have. I have heard of one instance where a tenant told the Sheriff that the refirgerator and stove in the unit were purchased by the tenant and were his. This was not the truth. The landlord was not present during the eviction however to refute the tenant (or to produce the rental agreement to the Sheriff which would have shown that the landord supplied a refrigerator and stove along with the rental) and the appliances were taken off to storage. The landlord had a difficult time retrieving his property and had to pay a storage fee to get the appliances back.

In smaller counties -- those with a population of less than 500,000 -- a landlord is allowed to remove, store, and dispose of a tenant's property himself/herself and the only role that the Sheriff performs is to supervise the landlord. I have not had any experience with this type of eviction, so I can not provide yu with any more information other than this option is legally available to landlords who own rental property outside of Milwaukee County.

Next week I will blog on some of the smaller details involved with executing a writ that will assist you in the process.

FREE Seminar on Evictions - Saturday, August 14th

I will be presenting a free seminar on the topic of evictions for the City of Milwaukee's Landlord Training Program on Saturday, August 14th. I am presenting this seminar on behalf of the Apartment Association of Southeastern Wisconsin (AASEW).

The Seminar will run from 9 am - 12 noon and will be held at Alverno College's Wehr Theater which is located at 3441 S. 39th Street. I was informed that there is a parking lot located at 40th & Morgan for attendees to use.

I will cover three topics:

1. Causes for Evictions - I will explain the different types of notices that can be served on a tenant and explain under what circumstances you should use the different notices)

2. Notices Terminating Tenancy - I will explain what must be included in a proper notice and how to properly serve a notice), and

3. The Judicial Eviction Process - I will cover the "nuts and bolts" of what you must do to file an eviction lawsuit and what to expect once you arrive in court).

The attendees will receive copies of my detailed outlines on the above topics plus examples of various forms.

If you are interested in attending the seminar you must register in advance by calling (414) 286-2954 or email jhagne@milwaukee.gov.

Hope to see you there!

With All of This Flood Damage Lately . . . Let's Talk About Untenantability

With all of the flood damage from the July 22, 2010 storms throughout SE Wisconsin, I have been receiving lots of questions asking what will cause a rental unit to become "untenantable" and if that happens what are a landlord's duties and a tenant's rights.

"Untenantable" basically means that a property is not fit for an occupant, is not in proper repair, and/or is not liveable. A rental property can become untenantable as a result of many things. A property could become untenantable as a result of a tenant's negligence, failure by the landlord to keep up the property, or an act of God.

A tenant could be negligent and leave a candle burning which causes a fire and results in substantial smoke and fire damage leaving the property untenantable. A landlord could fail to perform the necessary upkeep to his/her rental property and over time this could result in plumbing or electrical problems thus rendering a unit untenantable. Through neither the fault of the landlord nor the tenant, a major storm could pass through causing the basement to be flooded by a combination of storm and sewer water --- sound familiar??? --- and this could result in a rental become untenantable in certain sitautions, if neglected.

Sec. 704.07, Wis. Stats., addresses the topic of untenantability. The statute states that it is a landlord's duty to:

1. Keep in a reasonable state of repair portions of the premises over which the landlord maintains control, and

2. Keep in a reasonable state of repair all equipment under the landlord's control necessary to supply services that the landlord has expressly or impliedly agreed to furnish to the tenant, such as heat, water, elevator or air conditioning, and

3. Make all necessary structural repairs, and

4. Repair or replace any plumbing, electrical wiring, machinery, or equipment furnished with the premises and which is no longer in reasonable working condition, and

5. Comply with any applicable local housing codes.

The same statute also sets forth the duties of a tenant:

1. If the premises are damaged by the negligence or improper use of the premises by the tenant, the tenant must repair the damage and restore the appearance of the premises, or a landlord may elect to undertake the repair themself and in such cases the tenant must reimburse the landlord for the reasonable cost of the repairs

A QUICK ASIDE: My personal view is that even if the tenant causes the damage, it is the landlord that should make the repairs. It is the landlord's property and I would not be comfortable allowing a tenant to make repairs to my property. I want to be the person to choose the contractor, ensure that the contractor is insured and bonded and is complying with the new EPA lead renovation rules, and decide what materials the contractor uses. If a landlord passes that responsibility onto a tenant, there are a million things that could go wrong. The tenant could elect to perform the repairs himself/herself and not have a clue what they are doing which could result in more damage, additional costs, and possible injury. The tenant could opt to hiring the contractor who quotes the cheapest price and who uses inferior products that won't last. The tenant could hire a contractor that is not bonded and insured who could then injur himself/herself and then attempt to sue me, the landlord. I could go on and on with the potential pitfalls in allowing a tenant to make repairs to your rental property, but I won't. Suffice it to say that it is your rental property, and it is your investment and as such you should be in control of it and make the key decisions.

As you can see, both the landlord and the tenant may have duties when it comes to making sure that a rental property remains tenantable. But if you follow my advice, and do not allow your tenant to make any repairs (even if s/he caused the damage), then the onus to keep a unit tenantable primarily falls on the landlord.

Sec. 704.07 also addresses the sitaution where a landlord fails to make the necessary repairs and return the unit to a liveable condition. Sec. 704.07(4), states that if the premises become untenantable because of damage by fire, water, or other casualty or because of any condition hazardous to health, or if there is substantial violation that affects the health or safety of the tenant, then:

1. The tenant has the right to vacate the premises, unless the landlord proceeds to promptly repair or rebuild or eliminate the health hazard,

or

2. The tenant may vacate the premises if the nature and time of the repair, rebuilding, or elimination of the hazard, would impose an undue hardship on the tenant, if s/he stayed in the unit.

If the tenant justifiably moves out of the unit for one of the above reasons then the tenant will not be held responsible for rent after the point when the premises become untenatable. Additionally if a unit becomes untenatable, and the landlord does not make the needed repairs, the landlord must return any prepaid rent for the period of time after which the unit is untenantable.

It is very important to note however that the tenant's ability to vacate the unit and be absolved of paying rent DOES NOT APPLY if the tenant's negligence or improper use of the property caused the damage or unsafe condition.

If the unit is damaged, but it is not untenantable such that a tenant can remain in the unit, sec. 704,07 allows a tenant to abate the rent (i.e withhold a portion of the rent) to the extent that the tenant is deprived of the full normal use of the premises. A tenant cannot abate rent 100% and remain living in the unit. If the unit is in such bad shape that a tenant feels no rent is owed then the unit is untenantable and the tenant should vacate. A tenant should be very careful before choosing to abate rent. If proper abatement procedures are not followed a tenant can find themselves on the wrong end of an eviction.

Whether or not a unit is untenantable is very fact-intensive. Different facts will give rise to different outcomes. Different judges and different court commissioners can come to different conclusions based on the very same facts.

Let me give you some real life examples to demonstrate just how subjective a determination of untenantability can be.

What if, as a result of the recent storms, the basement of your rental property is flooded by storm/sewer water (as occurred with my rental property this past week), does this make the unit untenantable? I don't think it does because we are only talking about the basement and not the living quarters. But if, I failed to remove the standing water, clean, and dry the basement -- thus preventing my tenant from using the washer and dryer for a length of time -- an argument could be made that my tenant should be able to abate rent to some extent. But if the same flood caused storm/sewer water to crest the first floor where my tenant lives and resulted in water damage to the hardwoord floors, my tenant's personal property, etc etc., then I believe a better argument could be made that the unit is untenantable.

What if the tenant has no hot water becasue the pilot light on the hot water heater was snuffed out during the flooding (which once again happened to my tenants this past week), does this make the unit untenantable? Probably not. But if I ignore my tenants' calls and fail to relight the pilot light on the water heater for the tenant, the tenant is being deprived of something that I was to provide under the rental agreement -- the hot water, and an argument for abatement of rent could be made.

What if a a tree that was struck by lighting crashed through the living room of my rental property and there was a gaping hole in the roof and little birds were nesting in my tenant's couch (thank God this has never happened to me) untenantable now? Yes, a reasonable argument could be made that the premises are uninhabitable now. Same goes for when there is a substantial fire resulting in smoke damage and structural concerns. What about an infestation of bed bugs?

There are no clear answers. Certain facts may tilt the scale in one direction or the other. There is no black line rule as to when a unit is tenantable and when a unit is untentable. Using some common sense and the guidance of Sec. 704.07, Wis. Stats. hopefully you will be able to evaluate any future situations that come your way. And if you haven't cleaned up the damage to your rental properties from last week's floods . . . what are you waiting for, DNS to show up?

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.