A De Novo Hearing Is A "Second Kick at the Cat"

Under Wisconsin law, a Court Commissioner cannot decide a contested eviction action -- that must be decided by a judge. However a court commissioner can preside over and decide a hearing on a landlord's 2nd and 3rd causes for action for money damages. Typically this includes claims for past due rent, physical damages to the rental property or holdover damages.

In Milwaukee County, due to the large number of cases, if a tenant diputes the landlord's claims for damages, the matter must first be heard by a Court Commissioner. The Court Commissioner will issue a determination based on the evidence presented. If either the landlord or the tenant does not agree with the decision of the Court Commissioner, either party has the aoutomatic right to request a de novo hearing before the circuit court judge.

De novo literally translates to "anew;" "afresh;" or "a second time."

A de novo hearing is essentially a "do over" -- the parties have the opportunity to present their evidence over again to the judge. They are not restricted to the evidence that they presented in the prior hearing before the court commissioner. New evidence can be presented or old evidence can be removed.

De novo hearings are often referred to incorrectly as "appeals." A de novo hearing is an opportunity to redo your case. An appeal is a review of a lower court's decision for error.

A de novo hearing is a "second kick at the cat," if you will.

NOTE: I currently own a cat. I have had cats as pets in the past. I love cats. By using the above phrase "a second kick at the cat" I am not suggesting or condoning the hurting of a cat. No cat's were harmed in the writing of this blog post.

Above is a video clip from a seminar that I presented last year about de novo hearings.

AASEW Cancels "Meet Your Legislators" Day Due To Protests In Madison

The Apartment Association of Southeastern Wisconsin (AASEW) Board of Directors decided today to cancel its very popular "Meet Your Legislators" Day in Madison which was planned for Wednesday, March 16, 2011.

The goal of "Meet Your Legislators" Day was to meet with several state politicians to voice the concerns of rental property owners with regard to our industry. Many of the politicians that we have spoken with recently indicated that they would not have time to meet with us due to the constant meetings and the protests at the State Capitol.

The AASEW was also concerned that even if meetings could be scheduled, it would be difficult to have the politicians full attention. Obviously those legislators that are actually appearing for work have their hands full with other important matters.

As such, the AASEW has regretfully, canceled the trip to Madison. It is our hope that we can reschedule the trip in the future once things settle down in Mad-Town.

Check back here or at www.apartmentassoc.org for any updates.

I apologize for the inconvenience that this may have caused those members that had already registered for the event.

New Rule In Milwaukee County Eviction Court Will Limit The Number of New Evictions to 80 Per Day

In an effort to eliminate the congestion in eviction court, Milwaukee County has imposed a limit of 80 new eviction cases per day. In the past there have been days in which over 300 new eviction cases were scheduled to be heard in the same afternoon, which often became unmanageble.

This new limit only applies to new case filings for eviction cases (the 1st cause of action) for return of the property. This new limit does not include evidentiary hearings, adjourned matters, or return dates for 2nd and 3rd causes of actions (for money damages).

I was informed that the Clerk of Courts will be keeping a running tally of eviction cases scheduled for each return date/initial appearance. Once that tally reaches 80, no more cases will be allowed to be filed for that same return date.

While I understand the reasoning for this new policy, I do have some concerns. I agree that eviction court can become unmanageable due to the high volume of cases. Us "regulars" to eviction court have had to spend much of our lives sitting and waiting in good ol' room 400 of the Milwaukee County Courthouse due to the high volume. Despite that I have always had my cases completed before 5 pm.

I work for several clients that have a high volume of evictions each month. One client in particular easily has 40 evictions per month and has topped out at 66 evictions on more than one occassion. In order to keep costs down for such clients I schedule all of that client's evictions to be heard on the same day. This limits the amount of fees that they client has to pay me and allows them to only spend one day per month in court.

This new policy may prevent that client, and other landlords similarily situated, from having all of their cases heard on the same day --- thus increasing their costs and encroaching on their valuable time. Let's face it evicting a tenant is a a money-loser to a landlord. It is a necessary evil that they would like to keep to a minimum if at all possible.

Another foreseeable issue would be the landlord that has a smaller number of evictions each month -- say 10 -- who wants to have them all heard on one day in eviction court. What will happen when s/he goes to file the evictions and is told that there are only 3 spots left for evictions on the day s/he wanted to appear in court? That landlord weill either have to scheduled his/her 7 remaining evictions on a different day or choose to postpone all 10 evictions to another day in order to have them all heard at once. The former option wil require the landlord to spend 2 days in eviction court. the latter option will result in a non-paying tenant having additional time to live rent free. Either option causes the landlord money.

So while I understand the motivation for this new rule I am not sure that it will benefit Milwaukee County landlords. We will have to wait and see.

5 Day Notice Terminating Tenancy for Drug or Gang Nuisance In Wisconsin

I thought I would try something new with this blog post. I've embedded a video clip from a seminar that I have given in the past. Let me know what you think.

This clip focuses on a very specific -- and often misunderstood -- type of 5 day notice in Wisconsin called a 5 Day Notice for gang and/or drug nuisance.

There are only very specific instances in which a landlord is legally allowed to serve a tenant with a 5 Day Notice for Drug/Gang Nuisance --- the video clip above explains when this special type of notice can be used.

A 5 Day Notices for Drug /Gang nuisance does not allow the tenant the ability to cure the breach. Gang/Drug nuisance notices are the only 5 day notice in Wisconsin that does not allow the tenant the opportunity to cure the breach.

Click here for a printable table that summarizes the various types of notices that a residential landlord in Wisconsin can serve on his tenant.

If you need more information on how to serve a notice on your tenant, including the 5 Day Notice for Drug/Gang Nuisance, you should refer to my earlier post on that topic.

If you would like to learn more about landlord-tenant law please consider attending Landlord Boot Camp which is sponsored by the Apartment Association of Southeastern Wisconsin, Inc. I will presenting this all-day seminar on Saturday, February 26, 2011 from 8:30 am - 5:30 pm. Contact Paulette at 414-276-7378 or paulette@apartmentassoc.org to register.

U.S. Senate Repeals A Second New 1099 Reporting Law That Would Have Greatly Affected Landlords

About a week ago I blogged about a new federal law that will require landlords to issue 1099's to any individual or business that provides the landlord with more than $600 in services in any 12 month period. While this new law isn't going away anytime soon, another new federal 1099 reporting law has fortunately been repealed.

Included in the new health care reform law known as the Patient Protection and Affordable Care Act (more commonly referred to as "Obamacare"), was a provision that would have required landlords (and other small businesses) to report to the IRS any purchases of goods over $600 per year from any other business or individual.

Under this law, which would have commenced in 2012, a landlord would have been required to issue 1099's to Home Depot and Menard's if the landlord purchased more than $600 in goods from either of these stores. A landlord would have also been required to issue 1099's to the municipal water department and WE Energies --- since water and electricity are considered to be "goods." The additional paperwork required of landlords under this new law would have cleared several rain forests.

Fortunately, the U.S. Senate -- with broad bipartisan support -- approved an amendment on February 2nd, 2011 to repeal the expanded 1099 information reporting requirements contained in the health care reform law.

So while a landlord will still be required to 1099 business and individuals that supply more than $600 in services within a 12 month period, landlords will no longer be required to 1099 a business or individual that supplied more than $600 in goods in that same 12 month period.

New 1099 Law Will Greatly Affect Landlords In 2011

A new federal will greatly affect how landlords do business in 2011.

In September 2010, a small provision affecting landlord was tucked into the Small Business Jobs Act of 2010, which has now become a subject of concern to many of us. Not only will this new law create a lot of additional paperwork for landlords, but it may open up Pandora’s Box should you be audited.

The new law requires all people who own rental property to issue a form 1099 to any service provider that is paid more than $600 per year starting as of January 1, 2011. The 1099 would have to be issued to the service provider and to the IRS.

Prior to this new law being passed, only landlords whose real estate activities were considered to be a "trade or business" had to issue 1099's to service providers. Now, even if you own only one duplex or a single-family rental property, and continue to maintain a full-time job doing something other than landlording, you will need to comply with this new law.

Landlords will now be required to obtain certain information from their vendors/contractor, such as their name, address, and social security number or tax identification number. You will also need to keep track of the amount of money that you pay the vendor/contractor over the course of the year. If you pay them more than $600 within the tax year then you must reflect that income on a 1099.

Under this law, landlords will need to issue a 1099 to most all contractors/vendors regardless of whether they are a corporate entity or an individual. This will include handymen, plumbers, carpet cleaners, electricians, painters, gardeners, landscapers, accountants, lawyers etc. etc.

If you give one of your current tenants a discount on rent for looking after your rental property, shoveling snow in the winter, and mowing the lawn in the summer, and that discount adds up to $600 or more over the course of the year, you will need to 1099 them as well. Basically you will need to issue a 1099 to all service providers who you pay $600 or more within a year and who are not employed by you and already receiving a W2.

The proposed penalty will be $100 per instance and possibly higher if the Feds believe that you intentionally failed to comply with the law. You could also lose the ability to deduct the payments to the service provider from your taxes, if you do not have a matching 1099.

As my friend and fellow AASEW board member Tim Ballering, so accurately pointed out, this new law has much deeper consequences than a $100 fine for failing to issue a 1099 to your handyman.

If you submit a deduction on your taxes without a matching 1099 you have just tipped off the IRS or your state taxing authority, and increased the possibility of being audited. Additionally, once you file a 1099 for each service provider that did work on your rental properties — just think how many 1099 this could potentially be — the Feds may very well look at all of that new paperwork and wonder if some of those so called independent contractors shouldn’t more properly be classified as a statutory employees instead.

Essentially, all of the 1099's that you will be required to file may now alert the IRS and the Wisconsin Department of Revenue to investigate whether or not these contractors should be reclassified as "employees." If such a reclassification would happen, a landlord could be placed in a very painful and expensive predicament. Fines can be as large as $5,000 per employee. You would also be required to pay both the employer and employee’s taxes (that should have been withheld had the contractor been properly classified as an employee), penalties, and interest. The IRS has indicated that they expect to collect an additional $7 billion per year as a result of this provision.

Not only can improperly classifying an employee as a contractor involve the IRS or Wisconsin Department of Revenue, but it could also provoke other government entities to investigate the independent contractor vs. employee issue – think unemployment compensation and worker’s compensation insurance.

While the tests for whether or not someone is an employee for purposes of UC, WC and tax purposes are slightly different, there are commonalities. If you are paying the service provider by the hour, if you provide them with supplies, if you provide them with tools, if you control how and when they do the work – there is a strong likelihood that they are statutory employees and you should have been doing withholding, and paying both unemployment insurance and workers compensation insurance.

So not only will this new law result in a lot of additional paperwork for landlords, it could put many of you in a position to lose everything that you have worked so hard to build. I would strongly recommend that all landlords take the time and effort to determine if they are improperly classifying an employee as an independent contractor. Any money that you think you are saving up front by avoiding the proper withholdings will be greatly overshadowed by the back taxes, fines, interest, and potential loss of your business, if the government later determines that your classification was wrong.

2/22/11 - UPDATE: On February 17, 2011, the House Ways and Means Committee, by a vote of 21-15, approved H.R. 705, the Comprehensive 1099 Taxpayer Protection and Repayment of Exchange Subsidy Overpayment Act of 2011. Among other things, H.R.705 seeks to repeal IRS Code section 6041(h), which was added by the Small Business Jobs Act of 2010, and which treats recipients of rental income from real estate (i.e. landlords) as engaged in the trade or business of renting property for information reporting purposes starting in 2011.

So this new 1099 law may still be repealed. Stay tuned . . .

3/8/11 -- UPDATE

On March 3, 2011, the House approved a repeal of the expanded 1099 information reporting requirements by a vote of 314-112. The bill, called the Small Business Paperwork Mandate Elimination Acot of 2011 (H.R. 4) would repeal the 1099 provisions of both the Affordable Care Act ("Obamacare") and the Small Business Job Act which required business -- including rental property owners -- to file a 1099 with the IRS reporting any purchases of services or goods over $600 per year.

The rub is that the new bill attempts to pay for the alleged costs of the repeal by requiring people who had received tax credits to pay for health insurance under the health care reform bill to repay the subsidies if they end up earning too much during the year to qualify. Seventy-six Democrats in the House opposed H.R. 4 because of this offset provision.

Apparently everyone -- Republicans and Democrats alike -- favor the repeal of the new 1099 laws, now it is just a matter of finding a way to pay for the repeal that everyone can live with.

4/7/11 -- UPDATE

The U.S. Senate has passed H.R. 4 which repeals the new 1099 reporting laws for businesses and rental property owners. The vote was 87-12. Since the House had already passed this bill -- and no modifications were made by the Senate -- the bill will now go to the President for his signature. While the President has indicated that he did not care for the "pay for" (offset) provisions that were included in H.R. 4, he has supported the repeal of the 1099 reporting requirements, so it is believed that he will sign the bill into law.

4/18/11 - UPDATE

President Obama signed H.R. 4 into law today. So all new 1099 reporting requirements for landlords are gone. The law now goes back to what it was prior to the 2010 legislation (Small Business Jobs Act and Obamacare). For more detail refer to my 4/18 post on the topic.

Don't Miss Landlord Boot Camp on February 26th!

The Apartment Association of Southeastern Wisconsin's (AASEW) will be offering its third annual Landlord Boot Camp on Saturday, February 26, 2011 from 8:30 am - 5:30 pm. Learn everything that you need to know about Landlord-Tenant law in Wisconsin at this all-day seminar.

Yours truly will be the presenter and I will be addressing the following topics:

- Screening Rental Applicants

- Written Screening Criteria

- Fair Housing (Discrimination) law

- Rental Documents (Rental Agreements, Nonstandard Rental Provisions, Rules & Regulations, Pet Agreements . . .)

- Notices Terminating Tenancy

- Causes for Eviction

- ATCP 134

- Security deposit transmittal letters ("21 day letters")

- The judicial eviction process

- Abandoned tenant property

- Collections . .. . and much much more.

You can view a detailed outline of the course here.

Cost to attend the seminar will be $159 for AASEW members and $249 for non-members. All attendees will receive a manual that includes over 100 pages of outlines, case law, relevant statutes and regulations, and templates to assist you with managing your rental properties.

The seminar will be held at the Clarion Hotel located at 5311 S. Howell Avenue, Milwaukee, WI 53207.

Last year's AASEW Landlord Boot Camp was filled to capacity and we even had to turn a few people away. So call early to reserve your spot.

Here are two comments from attendees at last year's Boot Camp:

"I really enjoyed the class. The course materials were very helpful. The location was very convenient. I learned a lot about screening and evictions. I would highly recommend the course. It should be taught to all landlords. Thanks" - Lisa Wolff

"We have owned our rental properties for over ten years and in January of 2009 we decided to join the AASEW. We jumped right in by signing up for the Landlord Boot Camp. We both learned so much and have had the opportunity to utilize so much of what we learned already. Tristan is an excellent teacher and the included manual is a wonderful resource." - Steve and Kathy Kinnamon, Woodcreek Apartments, LLC.

Remember that "landlording" is a business --- so take the time to educate yourself on how to better manage your business.

Contact Paulette Vildberg, Executive Director of AASEW, at (414) 276-7378 or paulette@apartmentassoc.org today to reserve your spot.

New Carbon Monoxide Detector Notice Forms Available at Wisconsin Legal Blank

As I mentioned in my previous post, as of February 1, 2011 a new Wisconsin law requiring owners of single family and two-family properties throughout Wisconsin (including owner-occupied properties) went into effect.

In light of this new law, I have drafted a new Carbon Monoxide Detector Notice form that landlords can give to their tenant's that explains the new law and provides both the tenant and the landlord with notice as to what their respective responsibilities are under the new law. This new form is now available for purchase at Wisconsin Legal Blank Company, Inc.

I have also renamed prior carbon monoxide detector notice form for multi-unit properties which has been available since April of 2010,and is also sold at Wisconsin Legal Blank.

The new form addressing the new law is entitled "Carbon Monoxide Detector Notice: Single and Two-Family Dwellings." The older form for multi-unit buildings has been renamed "Carbon Monoxide Detector Notice: Multi-Unit Properties."

Notices Available To Landlords In Residential Tenancies

There are several types of notices that a landlord can serve on a tenant when a landlord wishes to terminate the tenancy or when a tenant commits a breach of their residential rental agreement. Most of these notices can be used in both periodic tenancies -- like a month to month -- and a lease for term -- like a 12 month lease -- but under different situations. But there are some notices that can only be used in a periodic tenancy and others that can only be used in term leases.

In an effort to clarify under what circumstances you can use each notice I have put together this table for your reference.

	LEASE FOR TERM (i.e. 1 year lease or less)	PERIODIC TENANCY (i.e. month to month)
5 Day Notice To Pay Rent or Vacate	Yes (Sec. 704.17(2)(a), Wis. Stats.	Yes (Sec. 704.17(1)(a), Wis. Stats.)
14 Day Notice Terminating Tenancy For Failure To Pay Rent	Yes but only if tenant served with 5 Day Notice To Pay Rent in previous 12 months (Sec. 704.17(2)(a), Wis. Stats.)	Yes (Sec. 704.17(1)(a), Wis. Stats.)
5 Day Notice To Correct Breach (other than non-payment of rent)or Vacate	Yes (Sec. 704.17(2)(b), Wis. Stats.)	No
14 Day Notice Terminating Tenancy for Breach (other than non-payment of rent)	Yes but only if tenant served with 5 Day Notice To Correct Breach in previous 12 months (Sec. 704.17(2)(b), Wis. Stats.)	Yes (Sec. 704.17(1)(b), Wis. Stats.)
5 Day Notice Terminating Tenancy for Drug or Gang Nuisance	Yes (Sec. 704.17(2)(c), Wis. Stats.)	Yes (Sec. 704.17(1)(c), Wis. Stats.)
28 Day Notice	No	Yes (Sec. 704.19, Wis. Stats.)

NOTE: I have chosen not to include a 30 day notice which must be used in leases for more than 1 year in most situations as residential leases greater than 1 year are infrenquently used.

IF YOU WOULD LIKE TO PRINT OUT A COPY OF THIS SUMMARY JUST CLICK HERE.

To "Walkthrough" or Not To "Walkthrough" That Is The Question

At the end of a tenancy a tenant or a landlord often requests a walkthrough of the rental unit prior to turning in the keys and delivering possession of the unit back to the landlord. A walkthrough is just that --- the tenant and the landlord walk through the rental unit and make observations of the condition of the unit. It is at this time that a landlord may point out damage to the rental that occurred during the tenancy and which the tenant will be held responsible for. A landlord might also note if the tenant did not adequately clean the unit or some of the appliances (typically this is the stove and/or refrigerator) and indicate that the tenant's security deposit will be deducted accordingly.

When I first began working with landlords over fifteen years ago, I often encouraged them to conduct walkthroughs with their tenants. I would recommend that they conduct the walkthrough a few hours before the lease termination date or the end of the tenancy. That way, if damages were identified, or areas were not cleaned properly, the tenant would have time to go back and make the repairs or better clean the area. My reasoning was that this was a win-win situation for both the landlord and the tenant. The tenant could go back and fix things thus insuring that they received their security deposit back and the landlord would not have to spend time or money repairing damage or cleaning the unit and could thus turn the unit over more quickly.

Over the years, I have made a complete 180 degree turn on the issue of walkthroughs. I no longer recommend that my landlord clients do walkthroughs with their tenants -- or at a minimum I point out some of the drawbacks of the walkthrough.

It is important to note that conducting a walkthrough with a tenant prior to their vacating is not required. I am not aware of any federal, state or municipal law that requires a landlord to conduct a walkthrough with his/her tenant. I am aware that many a tenant will demand a walkthrough with their landlord. Just because one is asked for - or even demanded - does not mean that the landlord must agree to it. Nothing is wrong with telling a tenant to drop off their keys at the office and then after are long gone checking out the condition of the apartment. In fact this is what I often reccomend that landlords do these days.

My primary reason for no longer recommending that landlords conduct walkthroughs with their departing tenants has to do with the pressure of the moment. I guess a secondary factor is that more and more tenants are unpredictable these days. Let me explain . . .

The main motivation for a tenant during a walkthrough is to determine what amount of their security deposit they will be getting back from their landlord. The tenant has already removed their belongings (at least hopefully), done any repairs that they are willing to do, and done any cleaning that they think is necessary. The tenant's mindset is that they are basically "outta here" and at least mentally, they have moved onto bigger and better pastures -- whether that be a new home or a different apartment. The tenant has no interest in getting sweaty by engaging in additional cleaning or having to go purchase some more screws or nails or putty to make a repair.

Because of this mindset, a tenant is not interested in being told by their soon to be ex-landlord that they didn't clean well enough or that they will have to pay for damaging the rental unit. Instead, the tenant is ready to argue, scratch, and claw, to protect what they feel is theirs -- the security deposit. Any attempt by the landlord to hinder the return of "their" money is typically not well-taken.

So what ends up happening during many of these walkthroughs is the landlord and tenant have an argument. I recall one client that informed me she was physically attacked by a tenant during a walkthrough. Another landlord that I know was verbally threatened when the tenant was told at the conclusion of a walkthrough that x, y and z would be deducted from their security deposit.

No landlord is interested in a confrontation with their tenant -- especially not a soon to be ex-tenant. We are not paid enough to put ourselves in situations. Even more common than physical attacks and verbal threats, is the scenario in which the landlord just wants to get the walkthrough over with. All of you know what I am talking about -- you quickly peruse the unit, with the tenant looking over your back, and just to avoid confrontation, or because you feel intimidated by the moment (or the tenant in some cases), or because it is human nature (for most of us) to shun an uncomfortable situation, you tell the tenant that everything looks good and sign off on the check-in/check-out sheet. Only later, after the pressure of the moment has subsided and the tenant is no longer breathing down your neck, you realize that you really should have charged the tenant for damage to this or failure to clean that.

At that point, it is a little too late to change your mind however, at least from a legal standpoint. You have already told the tenant that everything looks good and you have already signed off on the check-out form. Now, you decide that you want to withhold some money from the tenant's security deposit to repair this or clean that. The tenant receives his security deposit itemization letter from you (within 21 days after vacating) and is surprised and upset to see that a portion of his/her deposit has been withheld.

I have seen this scenario play out time and time again. The tenant, who is now upset as they feel they were lied to, decides to sue the landlord for improper deductions from their security deposit and seeks double damages pursuant to ATCP 134 and sec. 100.20(2) , Wis. Stats. and their actual attorney's fees to be paid by the landlord. The landlord is now stuck taking time out of their day to appear in court to defend against this lawsuit or to pay a lawyer to defend them in court.

I recall a past client who ended up in exactly this situation. A walkthrough was conducted with the tenants. I asked my client to look at the check-out form that she used. I saw that the form said that everything was in "good" condition and was signed by my client and both tenants. I also noted that scribbled across the top of the check-out form were the words "under protest." I asked my client who wrote those words. She replied, that she did. I asked her when she wrote them. She said that she wrote them about 1 week after the walkthrough had taken place -- so obviously the check-out form that the tenants were given did not contain these words. I then asked my client what the heck she meant by "under protest." I was told that my client felt intimidated and threatened by the tenants during the walkthrough and therefore she didn't really mean that the unit was returned in "good" condition.

I'm sure you can imagine all of the legal challenges that this would create had this actually gone to trial. Earlier in my representation of the client and prior to the tenants vacating, I had told her that she was not required to do a walkthrough with her tenants. After I finished looking at the check-out form, asking my questions, and listening to my client's answers, I asked her why she had put herself in such a precarious situation -- one in which she felt scared and intimidated -- especially when she was not legally required to do so? My client didn't provide me with an answer.

FYI, I totally believed that my client felt threatened during the walkthrough --- she was a much older lady, both tenants had criminal records including battery of one another, one of the tenants had issues with alcohol and the other with drugs, and one of the tenants had physically attacked another individual in front of my client earlier in the tenancy. I had also observed the tenants "act up" in court during an earlier court hearing. These tenants were not the type of people that understood the word "reasonable" or had even heard the word "rational" for that matter.

But I digress. The point of the story is that my client never should have put herself in that situation in the first place. She could have waited until the tenants had vacated and conducted a thorough examination of the unit at her leisure and with no one breathing down her back.

Situations like the above, have caused me to re-think my advice to my landlord clients about doing walkthroughs with their tenants. There really is no reason to put yourself in that type of pressure situation if you do not want to.

I'm interested in learning what your thoughts are regarding walkthroughs? Do you conduct them? If so, why? If not, why? What are some interesting (funny, scary, disgusting) experiences that you have encountered during a walkthrough?

Rejecting A Rental Applicant: The Do's and Dont's

UPDATE - APRIL 15, 2016 ---- Please review my April 15, 2016 blog post on HUD's new guidance regarding the consideration of a rental applicant's criminal history in the screening process as it may impact or alter the information in this blog post.

Let's face it, most landlords would prefer to never have to reject a rental applicant. It would be great if every application that we received from a potential tenant passed muster -- great credit, no prior evictions, awesome job history etc. etc. Unfortunately, most of the time that is not the case. Depending on how tough your screening criteria is, some of you may be rejecting a lot of applicants. It is not fun rejecting a rental applicant, but it goes with the job of being a landlord -- it needs to be done.

I would strongly suggest that if you have not read my prior post on written rental screening criteria that you do so before reading the rest of this post. Understanding what written screening criteria is and how to use it properly, will be very helpful in getting the most out of this post.

So how does a landlord go about giving an applicant the ol' rejection? In most areas of Wisconsin, a landlord is not required to provide a reason for denying a rental applicant. While this may not seem "fair" - it is legal -- in most areas of Wisconsin.

CAVEAT: Those of you that have read my prior posts know of my fondness for the city of Madison and Dane County -- sarcasm intended. Well you guessed it, Dane County and "Mad-Town" are a little different in that they require landlords to provide a rejected applicant with an explanation for denying them rental -- and the explanation must be in writing. So if you own or manage rental property in either of these liberal bastions, I would suggest that you spend some time reviewing the Dane County ordinances and the city of Madison ordinances . .. . then reconsider owning rental property in these areas : )

All kidding aside, there is not one correct way to deny a rental applicant. All landlords handle this situation differently depending on the specific facts of the situation. Each of my landlord clients handles the rejection of a rental applicant differently. For instance, some landlords choose to tell the applicant why they were denied while others refuse to do so. Both ways are legally acceptable (except in Dane County and City of Madison)

I would encourage any landlord that does want to provide a reason for the denial to the applicant, to insure that the reason they are denying the applicant complies with the landlord's written screening criteria, that the screening criteria used does not run afoul of any fair housing laws, and that the reason for the denial is not discriminatory. If you are not sure that your screening criteria is legally valid -- or you have never heard of the term screening criteria before now -- than you should probably avoid giving a reason for the denial.

I know of several landlords who require the applicant to put their request in writing in order to receive a reason for their denial. If they receive the written request, then the landlord will provide a written explanation. Oftentimes the applicant will not take the time to make the written request and the landlord has avoided the need to provide the explanation.

There is one specific context in which all landlords MUST provide an applicant with a written document -- not a written explanation for why they were denied -- but a written document referred to as an "adverse action letter."

If a landlord rejects a rental applicant because of something obtained from the applicant's credit report, the federal Fair Credit Reporting Act requires that the landlord send the applicant an "adverse action notice" advising them that they have been denied rental in part due to information obtained from their credit report.

An adverse action notice must include the following information:

1. The name, address, and telephone number of the credit reporting agency that supplied the credit report.

2. A statement that the credit reporting agency that supplied the report did not influence the landlord's decision to reject the application.

3. Advise the rejected applicant of his/her right to dispute the correctness or completeness of the information from the credit reporting agency and the applicant's right to obtain a free copy of their credit report from the agency within 60 days, if requested.

So, actually an adverse action notice does not require a landlord to state the reason that a rental applicant was denied, but it does tell the rejected applicant that the decision to deny their application was, at least in part, based upon something learned from the applicant's credit report.

Personally, I provide any applicant that I reject with an explanation. My reasons for doing so are threefold:

1. If I was being rejected for housing I would like to know why so I could see if the reason is something that could be corrected in the future. This is NOT a legal reason for providing the applicant with an explanation but rather a personal one -- a variation on the concept of treating others as you would like to be treated.

2. I believe that if I provide a rental applicant with the truthful (and legally valid) explanation as to why I will not be renting to them, they will be less inclined to incorrectly assume that I denied them based on discriminatory factors.

3. I'm well-versed in fair housing law and am confident that the basis for my decision to deny a rental applicant is not in violation of federal or state fair housing laws and that my decision can be legally supported.

As mentioned previously, if you do not know if your reason for denial is legally justifiable, then you need to be cautious in what you tell an applicant. You certainly don't want to end up providing the applicant with the only evidence that they need to file -- and win -- a fair housing claim. If you find yourself in such a situation, I would recommend that you seek legal advice before you make the decision to deny the rental applicant.

Whether you have decided to provide an applicant with an explanation as to why they were denied rental or not, all landlords and property managers should memorialize the reason that they rejected the applicant in writing for their own records. If you are utilizing written screening criteria -- which I hope everyone is -- then a copy of the criteria is the perfect place to record the reason for denial. Simply circle the specific criteria that the applicant failed to meet. You should also attach any supporting documentation -- such as a copy of the applicant's credit report, CCAP printout showing a prior eviction, or notes from your conversation with the applicant's current or past landlord where s/he told you the applicant was always late with paying the rent etc. etc. Finally, be sure and notate when you made the decision to deny the applicant and when that was communicated to the applicant. You should retain this paperwork for at least three years as this is the statute of limitations for the majority of most fair housing claims.

Rejecting a rental applicant can be an uncomfortable situation and even an anxious one if you are not educated about written screening criteria and when you can legally reject an applicant. If you would like to learn more about these topics you should consider attending the AASEW's Landlord Boot Camp which will focus on these topics more in depth.

UPDATE - APRIL 15, 2016 ---- Please review my April 15, 2016 blog post on HUD's new guidance regarding the consideration of a rental applicant's criminal history in the screening process as it may impact or alter the information in this blog post.

Don't Miss DR. RENT at AASEW's Next Meeting on Monday, January 17th!!

On Monday, January 17, 2011 at 7 p.m., John "Dr. Rent" Fischer will be the featured speaker at the AASEW's February membership meeting. John will be presenting his most requested seminar entitled "Top Ten Mistakes That Landlords Make." The meeting will be held at the Best Western Midway Hotel which is located at 1005 S. Moorland Road in Brookfield.

Besides, being a blogging buddy of mine --- John's blog is entitled the Dr. Rent Chronicles --- John is a Wausau area landlord and landlord-tenant law guru, and Past-President og the Wisconsin Apartment Association. John is a very dynamic speaker - you will not want to miss his presentation. His most recent post is a great overview of Rent Certificates.

Here is some more info about John:

John H. Fischer is a Wausau area landlord. He started working part-time with Emmerich & Associates, Inc. in 1993 and since then has worked in nearly every aspect of the real investment field. Although he still works with Emmerich & Associates, managing their non-residential portfolio, in 2006 he purchased the bulk of their residential inventory and founded HelpRent, Co.

Observing a number of old and new landlords going to court and having a hard time because of their lack of understanding of Wisconsin's complicated landlord-tenant laws and procedures, John has been making an effort to educate landlords on the proper way to do things for over a decade. He has taught classes on everything from accounting, to proper management procedures, to landlord-tenant law. He has provided training sessions to a number of local apartment associations as well as the Wisconsin Apartment Association. He offers a series of courses in real estate through the University of Wisconsin Continuing Education program.

John is the past president of the Wausau Area Apartment Association and was the 2010 president of the Wisconsin Apartment Associations. He has degrees in International Business Management as well as Human Resources Management from the UW-Madison School of Business. He is also a graduate of Bryce Harlow Institute for Business and Government Affairs at Georgetown University.

Also known as Dr. Rent, John answers landlord and tenant questions on his weekly radio talk show which can be heard on Thursdays from 5 p.m. to 6 p.m. on WNRB-LP 93.3 FM, a local Wausau readio station. He also participates in a number of online forums. He is a feature contributor to WausauBlog and is a featured writed at Citizen Wausau.

I hope to see everyone at the meeting!

A Landlord's Primer on "Reasonable Accommodations"

I am seeing an increase in tenants making "reasonable accommodations" requests during their tenancy. While similar to "reasonable modifications," which I blogged about a few weeks ago, reasonable accommodations are different.

A reasonable accommodation request is one in which a tenant who has a disability asks his/her landlord to make an accomodation to the landlord's rules, policies, practices or services as a result of that disability. Wisconsin's Open Housing law, states that a landlord may be found to have discriminated against a tenant if the landlord refuses to make reasonable accommodations in rules, practices, policies or services that are associated with housing when such accommodations may be necessary to afford the person equal opportunity to use and enjoy housing, unless the accommodations would impose an undue hardship on the owner of the housing. Sec. 106.50(2r)(4), Wis Stats.

NOTE: For the most part, Wisconsin's Open Housing Law has adopted the language of the federal Fair Housing Act, so when when I mentione one or the other in this blog post, essentially I am referring to both.

So whereas reasonable modifications involve changes to the physical structure of a rental unit, building or grounds, reasonable accommodations would be a change to the landlord's rules, policies, procedures, and/or services. A request to install a wheelchair ramp would be a request for a reasonable modification whereas a request to allow a comfort/companion animal to reside with a tenant in a "no pets" building would be a request for a reasonable accommodation.

If requested (and all other requirements are met) a landlord must make reasonable accommodations at any stage of the rental process, including the application process, screening process, during tenancy, post tenancy. Therefore a reasonable accommodations request can be made by an applicant, not just a tenant.

Similar to the law regarding reasonable modifications, an applicant or tenant is not entitled to reasonable accommodations unless the accomodation has been requested. That request can be in writing or oral and can be made by the applicant or tenant or by someone on their behalf.

A person is considered to have a disability if the individual (1) has a physical or mental impairment that substantially limits one or more major life activities, (b) is regarded as having such an impairment, or (c) has a record of such impairment.

A "physical or mental impairment" includes, but is not limited to, such diseases and conditions as orthopedic, visual, speech and hearing impairments, cerebral palsy, autism, epilepsy, muscular dystrophy, multiple sclerosis, cancer, heart disease, diabetes, HIV, mental retardation, emotional illness, drug addiction (other than addiction caused by current, illegal use of controlled substances) and alcoholism.

A "major life activity" can include, but is not limited to, any activity that is of central importance to daily life, such as seeing, hearing, walking, breathing, performing manual tasks, caring for one's self, learning and speaking.

Just like with a reasonable modifications request, there must be an identifiable "nexus" or relationship between the disability and the accommodation request. If there is no "nexus" then a landlord can legally decline to make the accommodation.

If the applicant or tenant's disability is not outwardly obvious, a landlord is allowed to request reasonable disability-related information that will:

a. Verify that the applicant or tenant meets the federal Fair Housing Act or Wisconsin's Open Housing law's definition of a person with a "disability."

b. Describes the requested accommodation.

c. Shows the relationship between the disability and the accommodation request.

I hope that it goes without saying that any information obtained during this procees must be kept confidential by the landlord. If a person's disability is obvious or otherwise known and the need for the requested accommodation is also readily apparent or known, then the landlord may not request any additional information.

A landlord can legally deny a request for reasonable accommodations in certain circumstances. I have already mentioned a few situations that would allow a denial, such as a person who does not have a disability, or a circumstance where there is no "nexus" between the disability and the request. Additionally, a request could be denied if there is no disability-related need for the accomodation or if providing the accommodation is not "reasonable."

What is "reasonable" or not will be determined on a case by case basis, however the Department of Justice and H.U.D. have indicated that a request may be unreasonable if it would impose an undue financial and/or administrative burden on the landlord or of it would fundamentally alter the nature of the landlord's operations.

An example of an unreasonable accommodation request would be a tenant that has mobility limitations who requests that his landlord take him to the grocery store once a week.

Here are a few more examples of situations where the courts have upheld a tenant's request for reasonable accommodations.

- Accepting late rent and postponing the filing of an eviction against a tenant that is late with his/her rent because they have been hospitalized.

- Allowing a tenant with a vision disability to have a guide dog reside with her even though the landlord has a "no pets policy."

- Allowing a mobility impaired person to be assigned a parking spot closest to the apartment complex even though the landlord's has a "first come, first served" policy and does not allow assigned parking spaces.

- Allowing a tenant with severe arthritis to move from her 3rd floor unit to a vacant 1st floor unit so she can avoid having to climb stairs.

- Allowing a "companion/comfort animal" to reside with a tenant that has an anxiety disorder even though the landlord has a "no pets" policy.

NOTE: Requests for companion/comfort animals are so frequent these days -- and so abused -- that I will devote an entire blog post to this topic in the near future.

The Department of Justice and the U.S. Department of Housing and Urban Development have published a Joint Statement on Reasonable Accommodations Under The Fair Housing Act, that is a great resource for those landlords that have additional questions on this topic.

Carbon Monoxide Detector Law for Single Family Homes and Duplexes To Take Effect Feb. 1st

The new state law requiring that carbon monoxide detectors be installed in all single family homes and duplexes takes effect on February 1, 2011.

The law requires that a functional CO2 detector be installed in the basement and on each floor (except the attic, garage or storage area) of each property. This law can be found at sec. 101.647 of the Wisconsin Statutes. The only exception to this would be if the building has all-electric heat and electric appliances and no attached garage. Here is my prior post on this new law.

Here is a link to a recent Journal Sentinel article on the topic.

If you will recall, carbon monoxide detectors were required to be installed in multi-family buildings back in April of 2010. The law reagarding CO2 detectors in multi-family units is codified in sec. 101.149, Wis. Stats.

If you are looking for a carbon monoxide detector form to distribute to your tenants, Wisconsin Legal Blank Co. is currently selling the form that sets forth the law regarding multi-family buildings. A form detailing the carbon monoxide detector law for single-family homes and duplexes will be available in the near future for those landlords renting out singles and deuces.

Top 10 New Year's Resolutions for Wisconsin Landlords

About 75% of my law practice involves representing landlords and management companies on issues that they confront on a daily basis (the other 25% involves business and general civil litigation). Devoting such a large segment of my law practice to representing landlords, I have had the opportunity to spend a lot of time with many of you, talk to you, learn from you, and sometimes even notice a few things that if they had been done differently, could've saved you some money and headaches.

Knowledge is power and I firmly believe that with more knowledge, landlords can make changes that will make their landlording or property management business prosper. I thought that some of my observations this past year would make for a pretty decent New Year's resolution list for Wisconsin landlords.

ASIDE: When applicable, I have linked each specific resolution to one of my blog posts that addresses that specific subject or provided a link to the law on that topic. It should be noted that sometimes the link is to a longer post that addresses more than one issue, so the direct reference may be a bit farther down in the post -- i.e. Resolution #3's link - the reference is way at the bottom of the post).

Tristan’s Top Ten New Year’s Resolutions for Wisconsin Landlords

1. I will review my current rental agreement and other rental documents to make sure that they do not include any of the seven prohibited provisions as set forth in ATCP 134.08. If you are using a rental agreement from ezLandlordForms.com, Office Depot, or OfficeMax – get rid of them, before a court throws them out for you.

2. If my rental property is owned by an LLC (even if I am the sole member of the LLC) and I need to file an eviction action (in Milwaukee County), I will ensure that I bring proof that I am a full-time employee of the LLC or I will hire an attorney to represent the LLC in court.

3. If my tenant and I make any modifications to the rental agreement, or if my tenant and I decide to modify an agreement that we signed in eviction court, I will make sure that those modifications are in writing and signed.

4. If I have an automatic renewal provision in my rental agreement, I will not attempt to enforce it unless I have sent my tenant a separate written reminder, at least 15 days but no more than 30 days -- in addition to any other notice period required -- prior to the beginning of the renewal period as required in ATCP 134. 09(3) and sec. 704.15, Wis. Stats. For example, if my tenant signed a lease for a specific term (as opposed to a month to month or some other periodic tenancy) I will remind myself over and over and over, that I cannot hold a tenant responsible for the next month's rent after the lease term ended, just becasue the tenant failed to give me written notice that they would be vacting at the end of the lease term. To do so would be a violation of the automatic renewal law.

5. If I am a relatively new landlord– or if I haven’t attended any landlord-tenant law refresher courses recently -- I will sign up and attend the AASEW’s Landlord Boot Camp, so that I will be better able to avoid costly mistakes while managing my rental properties.

6. If I do not already have a set of written screening criteria, which sets forth the minimum requirements that a rental applicant must meet in order to rent one of my rental units, I will spend the time and energy to draft such criteria and begin using it.

7. I will always remember to either: (a) return a tenant’s security deposit to them within 21 days of the date that they vacated, or (b) send a clear and understandable accounting of how the tenant’s security deposit was applied within 21 days of the tenant vacating. I will not attempt to make deductions from my tenant's security deposit for things that I am not legally entitled to deduct from it. Simply put, I will NOT play games with my tenant's security deposit.

8. I promise that despite whatever sad story a prospective renter provides me, I will still take the time to conduct a thorough background check, including running the applicant’s name on CCAP, vetting their current landlord, prior landlord and employer, obtaining a credit report, and require that the applicant supply me with the necessary documentation to substantiate that they can afford to consistently pay rent.

9. If I learn of any legislation that negatively affects me as a landlord, I promise to write and/or call my congressman, senator etc. etc., and clearly explain why I think they should vote against the proposed legislation. Landlords are one of the most regulated preofessions out there - I need to make my voice heard to try and mitigate this.

10. I will treat the management of my rental properties as a business. The government and court system treat the management of rental property as a business, so you need to do the same!

If you have any resolutions that you would like to add to this list please be sure to post a comment and include your resolution -- I'm sure there are more that I forgot to mention.

Here’s to a healthy and prosperous 2011.

"Reasonable Modifications:" What A Landlord Needs To Know About This Important Topic

The term "reasonable modifications" is used throughout the federal Fair Housing Act as well as Wisconsin's Open Housing law (which for the most part adopts federal law). Requests for reasonable modifications by tenant are on the rise.

The Basics:

Wisconsin's Open Housing law, which can be found at sec. 106.50, Wis. Stats., states that a landlord cannot refuse to permit, at the expense of a person with a disability, reasonable modifications to the housing by a tenant, if the modifications are necessary to afford the disabled tenant the full enjoyment of the housing. Sec. 106.50(2r)(3), Wis. Stats.

Reasonable modifications can include structural changes to the interior of the property or the exterior of the property. Reasonable modifications can be made to common areas and public use areas of the property as well.

The tenant is responsible for paying for the reasonable modifications to the property. It is also the responsibility of the tenant to maintain the modification if it is used exclusively by the tenant. If the modification is in a common area and other tenants also use the modification, the upkeep would be the responsibility of the landlord

Requesting A Reasonable Modification

A tenant is not entitled to a reasonable modification unless the modification is requested. The request can be verbal or written.

A tenant must obtain the landlord's approval before the tenant can move forward with the modification.

A landlord cannot condition the approval of the modification on the tenant obtaining special liability insurance.

There Must Be A Nexus Between the Disability and the Reasonable Modification

There must be an identifiable relationship or "nexus" between the requested modification and the tenant's disability. For instance an identifiable nexus would exist if a tenant using a wheelchair requests that a ramp be installed leading up to the apartment's front door. There would not be an identifiable relationship if a tenant that is mobility impaired requests that the landlord permit him to change the roofing from shaker shingles to clay tiles and fiberglass shingles becasue he believes the original shingles are less fireproof.

Examples of Reasonable Modifications:

- Installation of a ramp for a person using a wheelchair.

- Widening of the doorways in an apartment so that a tenant's wheelchair can pass through.

- Installing grab bars in a shower for a person with with mobility/balance issues.

- Allowing a tenant with a hearing disability to install a peephole and an extra loud doorbell.

- Replacing doorknobs with levers for a tenant with severe arthritis who has difficulty turning a doorknob.

What Is Reasonable?

There is not a clear "black and white" definition of what is reasonable in terms of a tenant's request for a reasonable modification. What is "reasonable" is a very fact intensive question and depends on the specific situation. Asking a landlord to tear down a wall dividing the two lower rental units in a 4-family so that the tenant using a wheelchair would have additional space, would most likely not be found to be reasonable as such a modification would greatly affect the landlord's rental property by changing it from a 4 family to a 3 family. But asking a landlord to lower the light switches throughout a unit as well as the counter tops in the kitchen, to allow a person using a wheelchair to enjoy full enjoyment of their apartment, would more than likely be found to be reasonable.

In the end, what is "reasonable" will be determined on a case by case basis by a Circuit Court Judge or an Administrative Law Judge, should a tenant file a discrimination complaint against a landlord for denying a request for reasonable modifications.

What Information May A Landlord Request From A Tenant To Support A Request For Reasonable Modifications?

A landlord can request that a tenant provide him/her with reliable disability-related information that: (a) is necessary to verify that the person meets the Act's definition of a "disability," (b) describes the needed modification; and (c) shows the relationship between the person's disability and the need for the requested modification.

I hope it goes without saying -- but I will say it anyway -- that a landlord must keep any requested information confidential.

Additionally, if a person's disability is open and obvious or otherwise known, and the need for the requested modification is also readily apparent or known, the landlord may not request any information from the tenant. An example of such a situation would be a tenant that has cerebral palsy who uses braces to walk, makes a request that the landlord replace the doorknobs with levers to assist the tenant with opening the doors.

The Tenant Must Pay For The Reasonable Modifications

In case you missed this very important point in the definition above, I wanted to reiterate it. The number one comment/question I receive from landlord's on the topic of reasonable modifications is "This is not fair. I can't afford to pay for these modifications. Why do I need to pay for this?" You don't have to pay for it. The law clearly states that it is the tenant's responsibility to pay for any reasonable modification that is requested.

Restoration Agreements

A landlord may condition permission for a reasonable modification -- to the inside of the property -- on the tenant entering into an agreement to restore the interior back to the condition that it was in before the modifications were made. Sec. 106.50(2r)(3), Wis. Stats.

Restoration Agreements cannot apply to the outside of the property. So a landlord cannot require a tenant to pay to uninstall a wheelchair ramp that leads to the front door, for instance.

It is improper for a landlord to require a larger security deposit from a person with a disability to cover the cost to return a unit to its original condition, but it is perfectly legal to require a tenant to place the monies to return a unit to its original condition under a restoration agreement.

A Practical Matter

I would strongly reccomend that a landlord be involved in the process of determining who is hored to make the reasonable modifications. It is the landlord's property after all and s/he needs to protect it from damage and protect the tenant from shoddy workmanship.

While it is probably not reasonable for a landlord to require a tenant to use a specified contractor to make the modifications, I would argue that it is also not reasonable for a tenant to require a landlord to allow the tenant's little brother's best friend, who is not insured or bonded, and has failed to pull the required permits, to do the work. The landlord and tenant should work together to find a contractor that is qualified and reliable and meets both the tenant's and the landlord's needs.

A Great Resource:

The U.S. Department of Justice and the U.S. Department of Housing and Urban Development have issued a Joint Statement on Reasonable Mondifications Under The Fair Housing Act. This March 2008 publication is a great resource to turn to on the topic of reasonable modifications.

Bed Bug Liability Poses Legal Quandary

I was recently interviewed by the Wisconsin Law Journal about the issue of bed bug liability in rental housing. You can read the article by Jack Zemlicka here.

If you are interested in additional information on bed bugs you should review my earlier posts on this pesky subject.

SMALL CLAIMS BENCH/BAR MEETING: Milwaukee County Gives Clarification Regarding Including Late Fees In 5 Day Notices and Other Issues

The Milwaukee County Small Claims court has reinstituted its monthly Bench/Bar meetings. These meetings allow the Milwaukee County Small Claims Court, including Judge Jane Carroll (presiding small claims judge) and the court commissioners, to come together with attorneys that appear regularly in small claims court, to discuss issues and concerns.

The most recent small claims bench/bar meeting was held on Monday, December 6, 2010. I was able to attend the meeting and found it to be very insightful. The meeting was attended by attorneys for tenants (Legal Action of Wisconsin, Inc.), attorneys for landlords (myself and a few others), the attorney for the AASEW, court commissioners, small claims judge, and other court staff. The overall response to the meeting was very good and Judge Carroll indicated that another meeting would be scheduled in January.

It was very enlightening -- and helpful -- to hear everyone discuss issues of concern and to learn the thought process behind certain rules and procedures in small claims court.

For those of you that could not attend the meeting, I have attempted to provide a summary of the discussion, below:

- Judge Carroll explained that she felt that nothing was wrong with a landlord including a late fee in a 5 day notice as long as the tenant was under a lease for a term as opposed to a month to month or other periodic tenancy.

Back in March of 2009 or so, when Judge Siefert was still the small claims judge, evictions were being dismissed if the landlord included late fees in the 5 day notice which was served on the tenant. Here is a post on that topic that I previously wrote.

It was origianlly explained to me several months ago, that the reason for this new policy was that the court was now reading the statute very strictly, and sec. 704.17(1), Wis. Stats. (regarding notices in month to month situations and other periodic tenancies) and sec. 704.17(2), Wis. Stats. (regarding notices in leases for a specific term) said that a 5 day notice could be given to a tenant for failure to pay "rent." "Rent" was strictly interpreted to include rent -- not late fees, security deposit amounts not paid, damages owed etc.

The discussion on this issue at the bench/bar meeting clarified that the court considered a tenant's failure to pay a late fee to be a "breach of a covenant or condition of the tenant's agreement" rather than a failure to pay rent and therefore a landlord would need to use a different 5 day notice -- one for breach other than failure to pay rent -- as opposed to a 5 day notice for failure to pay rent, in that particular cotext.

Judge Carroll said that she saw no problem with a landlord combining the two notices, as long as the tenant was under a lease for term, thus allowing a landlord to include a late fee in a 5 day notice for failure to pay rent.

The combining of notices (to include a late fee and the past due rent amount) would NOT be allowed (and could result in the dismissal of an eviction) if the tenant was under a periodic tenancy, such as a month to month tenancy. The reason for this distinction is that the Wisconsin Statutes do not allow a landlord to serve a tenant with a 5 day notice for the breach of lease for other than non-payment of rent. If there is a breach of the lease for anything other than the non-payment of rent, in a month to month or other periodic tenancy, the Wisconsin Statutes require that a 14 day notice be used.

The court further explained that if a tenant was under a month to month or other periodic tenancy, that a landlord could combine the notices (failure to pay rent and breach of agreement other than failure to pay rent) into a 14 day notice if the landlord wanted to include a late fee along with the rent owed. It should be noted however that 14 day notices do not allow a tenant the opportunity to cure the breach.

If this sounds confusing to you, you are not alone -- IT IS CONFUSING!! This is an example of the minutia of the law.

A quick summary:

1. It is OK to include a late fee in a 5 day notice for failure to pay rent as long as the tenant is under a lease for term (as opposed to a periodic tenancy like a month to month).

2. It is NOT OK to include a late fee in a 5 day notice for failure to pay rent if the tenant is a month to month tenant. In that case the 5 day can only list rent owed OR the landlord should use a 14 day notice if the landlord wants to include a late fee.

Truthfully, I think the above will cause more confusion for landlords that are representing themselves (pro se) and for attorneys who do not specialize in landlord-tenant law. To keep things simple I am still going to reccomend that my Milwaukee County landlord clients not include late fees in their 5 day notices.

- Small claims court will NOT be splitting up the 2 pm (initial appearance on evictions) court calandar as it did last year.

Many of you may recall the attempt by the courts to reduce the amount of people sitting in room 400 during the flu season last year. The goal was to prevent people from spreading the flu and so the court split the eviction calandar in half and made some landlords appear at 2 pm and others appear at 3 pm.

If you were a landord or attorney with multiple properties having multiple owners (some with names in the beginning of the alphabet and some toward the end of the alphabet), this often met you were stuck in small claims court even longer than usual. Even with the splitting of the court's calandar there were still a lot of people sitting in room 400 at one time - so I'm not sure that the transmission of the flu was really reduced. I was happy to learn that the court would be forgoing this splitting of the calandar this season.

- The court asked for everyone's thoughts regarding requiring a landlord to provide written notice to a tenant that defaults on a stipulated dismissal, in all circumstances.

Currently, if a tenant enters into a stipulated dismissal of an eviction action and agrees to either vacate by a date certain or remain in the unit and pay past due rent under a payment plan, and the tenant defaults on the stipulation, a landlord may come to court and file an Affidavit of Default and obtain a judgment of eviction and a writ of restitution WITHOUT having to provide the tenant with any notice.

Under a slightly different scenario, it is the policy of small claims court currently, that if the tenant enters into such a stipulated dismissal outside of court (i.e. signs the stipulation at the office of the landlord) and therefore neither the court nor the landlord's attorney explains the stipulation to the tenant, and should the tenant default, the landlord MUST provide written notice to the tenant of the default and provide the tenant with the date and time that the landlord will be coming to court to request the judgment of eviction and writ.

Judge Carroll expressed concern that some of these stipulations, notably those that involve payments that will occur several months into the future, should possibly require written notice to the tenant. Judge Carroll indicated that in some of the stipulated dismissals that she approves in her court (as opposed to those approved by the court commissioners in room 400) she requires the landlord to provide written notice to the tenant of the default, if the default occurs 5 months or more after the stipulation was entered into. Judge Carroll's concern was that some tenants would default on the stipulation and think they were working things out with the landlord to remedy the default, only to be surprised when the Sheriff was at the door ready to evict the tenant, thus leaving the tenant little time to move.

Many suggestions and opinions were offerred during the discussion. I indicated that requiring another level of notice to the tenant would just cause further delay to the landlord in getting possession of his/her rental property and would allow the tenant another opportunity to argue that they didnt receive the "notice" and therefore should have additional time to vacate. One suggestion was to require landlords to send a letter via regular U.S. mail to the tenant within 48 hours after going into court to file the Affidavit of Default and obtaining the eviction judgment and the writ. Another suggestion was to require such notice only in situations in which the landlord and tenant modified (orally or in writing) the terms of the stipulated dismissal. Yet another suggestion was to require such a notice only when the default occurred X number of months after the stipulation was entered into.

No decision was made to modfify the notice requirements in defaults of stipulated dismissals but the court appreciated everyone's thoughts and input and indicated that the topic may be addressed again in the future.

- Judge Carroll expressed concern with "proving up" modifications to stipulated dismissals or other agreements.

Judge Carroll indicated that she has witnessed many instances in which a landlord, who has already received a judgment of eviction and a writ, would then attempt to work with a tenant so that they could remain in the unit, rather than executing that writ with the Sheriff. Nothing is wrong with attempting to work to keep the tenant in the unit in, Judge Carroll explained,but what is a problemis that these agreements are not being put in writing. To avoid confusion, and possibly additional litigation, she emphasized that any agreement resulting from such negotiations should ber put in writing. Modifications to previosuly enetered into agreements are not being put in writing and this is resulting in the Court seeing a lot of "he said, she said" sitautions.

The practical effect of failing to memorialize such agreements or modifications often results in the scenario below:

At some point in time the landlord decides to stop working with the tenant to keep them in the rental unit, and tenders the writ to the Sheriff. The Sheriff gives the tenant a 24 hour notice before executing the writ which causes the tenant to run into court and file a motion to reopen the judgment of eviction. The tenant argues that while a writ was granted to the landlord, since that time the landlord began to work with the tenant to allow them to remain in the unit. The landlord told the tenant that they could stay if they did X and Y (or at least that is what the tenant "heard") and the tenant has done X and Y, so the landlord should not be allowed to have the writ executed becasue of the new agreement. The court then schedules a hearing on the tenant's motion to reopen the eviction judgment -- which results in a stay of the execution of the writ. The landlord now has to appear in court again and both the tenant and the landlord have differernt versions of their discussions and the court has to sort through all of this -- with nothing in writing to support either side's argument.

The court understands that landlords would often like keep a tenant if possible, and that is the reason for a landlord attempting to "work with" a tenant even after a writ has been obtained. But as Judge Carroll pointed out, because these modification are not put in writing there is often disagreements as to what was agreed to between the parties.

My thoughts on this issue are simple: (1) If you have a writ, execute it and remove the tenant from your rental property -- the time for trying to work with the tenant so that they can remain in the unit is long past if you have filed an eviction action against them, in my opinion, or (2) if you still want to work with the tenant so that they can remain in the unit at this late date ----- put the agreement in writing, using clear and simple terms tht the tenant, the landlord, and the court, can understand and interpret.

Milwaukee County Eviction Court Schedule For The Holidays

For those of you scheduling evictions in Milwaukee County, eviction court will be closed on the following days:

- Thursday, December 23, 2010

- Friday, December 24, 2010

- Thursday, December 30, 2010

- Friday, December 31, 2010

City of West Allis Passes Landlord Licensing Ordinance

The City of West Allis recently passed a new ordinance that requires all property owners to register their rental properties with the City.

The new law is contained in 3 separate ordinances. The first ordinances was passed back in August 6, 2010, followed by a repeal and revision to the original ordinance on September 24, 2010, followed by an ordinance creating a sub-section of the ordinance on October 7, 2010.

You can read all 3 ordinances here.

According to the new law, West Allis feels that landlord registration is necessary in order to properly enforce the city's building, zoning, fire, and health codes and to safeguard persons (read "tenants"), property, and the general welfare. The city says that only by having a list of current rental property owners and their contact information can the city expeditiously process building code enforcement issues (read: "issue fines and forfeitures").

A summary of the provisions of this new "Landlord Licensing" ordinance includes the following:

- This new ordinance applies to all residential or commercial property owners (except owners of owner-occupied one and two family properties where ownership is recorded with the Milwaukee County Register of Deeds), condominium owners (except owners of owner-occupied condos where ownership is recorded with the Register of Deeds of Milwaukee County and a Condo Declaration is established and there is an appointed agent for the association). Government-owned properties are also excluded from the ordinance's requirements. So essentially this ordinance applies only to rental property owners.

- The owner must live within the 7 county area ( Milwaukee, Ozaukee, Kenosha, Racine, Walworth Washington and Waukesha counties) or else the owner must appoint a "local operator" who lives in the 7 County area and has the authority to accept notice of violations for enforcement of city codes.

NOTE: The 1st version of the ordinance required the owner to live in the City of West Allis or that the "local operator" live in the "near area" of West Allis -- whatever that means. A bit restrictive don't you think -- obviously the city agreed hence the amendment.

- A separate registration form (and fee) must be filed for each separate tax-key numbered parcel.

- The registration form must include the owner's names, address of residence, and phone number if the owner is a person or persons. A post office box is not allowed. If a "local operator" is appointed by the owner then the registration must include the same information for the operator. The tax-key number and address of the property must also be provided on the registration form.

- The intial registration fee for the 1st year is $30 per property and $10 per property for each year thereafter. If you file online the fee is only $20 for the first year. A reduced registration fee may be offerred to those owners that attend a city-sponsored landlord training program or equivalent.

- The form and fee must be filed by November 15th each year. If filed later than Nov. 15th the fee will be increased to $100.

- Failure to file the registration form, fee, or change of information form is a violation and will result in a Notice being sent by the City. If the owner fails to comply with the Notice then the city may file a court action against the owner.

- If the West Allis Municipal Court believes that the city has proven its case against the owner with regard to failing to comply with this new ordinance, the city may impose a forfeiture of not less than $100 nor more than $500, plus the costs of the prosecution.

Unfortunately, West Allis has opted to follow in the footsteps of Milwaukee -- something many of us were afraid would happen -- with regard to the landlord registration/licensing. Let's see what community is next to follow.