Attend AASEW's Landlord Boot Camp on October 20th and Learn All About Wisconsin Residential Landlord-Tenant Law

Due to popular demand, the Apartment Association of Southeastern Wisconsin will be holding a second Landlord Boot Camp this year on Saturday October 20, 2012. Our last Boot Camp in February had more than 80 attendees and it was necessary to turn a few away. Additionally with the passage of the new Landlord Omnibus Law (Act 143), which took effect on March 31, 2012, we felt it was necessary to offer another Boot Camp this year so everyone can stay up to date.

Landlord Boot Camp is the most comprehensive seminar that I teach on residential landlord tenant law in Wisconsin. If you have not attended a Landlord Boot Camp before I would encourage you to sign up -- I do not think you will be disappointed. If you have previously attended, please be aware that there have been several updates to both my presentation and the outline as a result of the passage of Act 143.

Here are the details for this Fall's Landlord Boot Camp:

WHEN: Saturday, October 20, 2012 from 8:30 am - 5:30 pm (registration will start at 7:30 am)

WHERE: Clarion Hotel, 5311 S. Howell Ave. in Milwaukee

WHO: Taught by yours truly - Attorney Tristan R. Pettit

COST: $159 for current members of the AASEW and $259 for non-AASEW members.

WHAT WILL I LEARN: You will learn everything that you need to know about residential landlord-tenant law in Wisconsin. Here is a detailed outline of the topics that will be covered.

WHAT IS INCLUDED: (1) A detailed manual containing Tristan's outline of all of the topics discussed as well as sample forms, (2) Q & A session, (3) Lunch, (4) Coffee, soda and other light refreshments throughout the day, (5) Certificate of Attendance/Completion, (6) and the opportunity to mix and mingle with other landlords and property managers.

WHAT HAVE OTHER ATTENDEES SAID ABOUT LANDLORD BOOT CAMP: Here are some past attendees' testimonials.

HOW TO REGISTER: The easiest way to register is to go to www.LandlordBootCamp2012.com. You may also call (414) 755-0852 to register.

I hope to see you all there!

Thanks

T

Are Wisconsin Residential Leases Worth The Paper They Are Written On?

In my personal opinion the answer is often "no." The reason being is due to Wisconsin's requirement that a landlord make reasonable efforts to re-rent the unit if a tenant is evicted or decides to vacate early, and if this is not done, the landlord is not entitled to further rent from the breaching tenant.

Now don't get me wrong, I am not saying that leases in Wisconsin are worthless and that you should never use them. What I am saying however is that they are not as wonderful as some people think they are and landlords need to understand there limitations.

Let me digress to provide some additional background.

First, you should always have a written rental agreement in place with your tenant. The days of verbal agreements over a handshake are long gone.

Second, a "rental agreement" is a general term that includes both leases and periodic tenancies (such as a month to month tenancy. A lease is an agreement for a specific term. It has a beginning date and an end date. Periodic tenancies -- like a month to month -- are not leases as there is no end date and they continue until they are terminated by either the landlord or the tenant.

So when I talk about a "lease" in this blog post I am only referring to those rental agreements that are for a specific term. By signing a lease, a tenant is agreeing to reside in a specified rental unit until the end of the lease term and to pay rent during the entire lease term. So what happens when a tenant decides not to fulfill the term of his or her lease?

Well, according to sec. 704.29 of the Wisconsin Statutes, if this happens, a landlord may only purse the breaching tenant for the remainder of the rent owed under the lease if that landlord has made reasonable efforts to reduce the amount of rent that the tenant is responsible for by attempting to re-rent the unit for the tenant. Translation - if a tenant breaks the lease, a landlord is required to spend time and energy to limit the damage to the tenant for his/her own action of breaking the lease, if landlord does not do this, landlord is entitled to nothing. Seems fair . . . . NOT.

Sec. 704.29 (1) specifically states:

"If a tenant unjustifiably removes from the premises prior to the effective date for termination of the tenant's tenancy and defaults in the payment of rent, or if the tenant is removed for failure to pay rent or any other breach of a lease, the landlord can recover rent and damages except amounts which the landlord could mitigate in accordance with this section . . ."

The statute continues as follows:

"In any claim against a tenant for rent and damages, or for either, the amount of recovery is reduced by the the net rent obtainable by reasonable efforts to rerent the premises."

"Reasonable efforts" means those steps that the landlord would have taken to rent the premises if they had been vacated in due course, provided that those steps are in accordance with local rental practice for similar properties."

So even though the tenant is in the predicament s/he is in due to their own actions, a landlord is not legally entitled to collect rent for the remainder of the lease from the tenant unless the landlord tries to re-rent the unit for the tenant.

If the landlord is able to re-rent the unit for the same amount or more, then the breaching tenant is officially "off of the hook" and not responsible for any further rent because the landlord now found a new paying tenant.

Yes, it is true that a landlord is entitled to recoup from a breaching tenant the costs incurred by the landlord to re-rent the unit. So the breaching tenant is responsible for the advertising costs and maybe the costs of a "for rent" sign, or the costs of running a credit report for the new tenant. Not very much of a payback in my opinion.

Additionally, the courts that I encounter will not reimburse a landlord for the lost time and energy spent getting the unit into shape for re-renting (unless it is damaged), showing the unit to prospective tenants, or reviewing new applications. That non-reimbursable work is considered to be the "cost of doing business" for the landlord. OUCH.

So essentially, a landlord is required to do all this work to fix a problem created by a tenant, and if the landlord doesn't do that extra work, the landlord is not even entitled to attempt to recover rent for the remainder of the lease term from the departing tenant. If the landlord does that extra work and re-rents the unit, then the landlord is still not entitled to recovery of rent for the remainder of the lease term from the breaching tenant, because now the landlord is getting rent from someone else. So essentially the breaching tenant, despite being the person that created the problem in the first place, gets off scot-free.

Only when the landlord does the extra work involved in re-renting the unit, and is unable to do so, is the breaching tenant legally responsible for the rent for the remainder of the lease (or until it eventually is re-rented, whichever comes first). From a practical standpoint, that is a hollow victory as by this time the tenant is long gone, the security deposit most likely does not cover more than 1 month of the rent, and even if you can locate the tenant they may not be ""collectible."

I would like to reiterate that the goal of this blog post is not for all landlords to tear up your leases and only enter into month to month tenancies going forward. There are still tenants out there (I think?) that if they sign a lease, will honor it. They will either stay for the entire lease term or if for some reason they must vacate early - they will honor their lease commitment. Although I am sad to say that I am seeing fewer and fewer of these type of tenants these days -- most cannot afford to pay rent for two homes and opt to pay the landlord that is currently keeping a roof over their head rather than the landlord that used to provide them shelter.

My aim is to insure that landlords using leases understand the legal limitations and requirements involved when a tenant breaks that lease. A landlord cannot just sit back and do nothing to re-rent the unit and expect to collect future rent from the exiting tenant. A lease is not some panacea that guarantees you the right to collect future rent when a tenant ditches. You are only entitled to that rent if you make reasonable efforts to re-rent the unit for the breaching tenant and then only if the tenant can be located and is collectible.

So you need to ask yourself, is my lease worth the paper that it is written on? Only you can answer that question.

AASEW Annual Landlord Trade Show - Wednesday September 19, 2012

It is that time of year again . . . time for the leaves to start falling and the Apartment Association of Southeastern Wisconsin to host its Annual Trade Show. The AASEW Trade Show is the place to be on Wednesday, September 19, 2012 from 11 am - 5 pm. The Trade Show will be held at American Serb Hall at 5101 W. Oklahoma Avenue in Milwaukee, WI.

Entrance to the event is free with a donation of 3 non-perishable food items to the Hunger Task Force (or $4). Collection bins will be on-site.

There is no need to pre-register just show up ready to learn and have some fun. Oh, did I mention that there will be free food as well.

Come mix and mingle with landlords, property managers, and vendors that work with those is the rental industry. The Exhibit Hall will have AASEW business members who will be exhibiting their products and services to make your life as a landlord or rental property manager easier.

We will also have educational seminars throughout the day that you will not want to miss.

Some of the speakers will include:

- Margaret Bowitz of the Metropolitan Fair Housing Council will speak on the ever-important topic of fair housing (discrimination) law.

- Wausau-area landlord (and fellow blogger) John "Dr. Rent" Fischer will talk about the To 5 Most Asked Landlord Questions.

- Charles Harris of Credit Matters will provide attendees with Seven Steps To Better Credit.

- Graig Goldman and Mark Kivley of Re/Max Lakeside will teach everyone how to effectively purchase foreclosure properties

- Attorney Tristan Pettit will talk about Act 143: Wisconsin's New Landlord Omnibus Law focusing on the new provisions and their potential pitfalls as well as how the courts have been ruling on the new law these last few month.

I hope that you all can attend this educational and fun event next Wednesday. If you do please be sure and come up and say hello.

T

AASEW's Next Meeting: How To Buy Rental Property In The New Economy Featuring Joe Dahl - Monday, August 20th

I hope that you all can make it to the next AASEW membership meeting on Monday, August 20th, 2012 starting at 7 PM. Joe Dahl, a young and dynamic local landlord and property manager (and the newest member of the AASEW Board of Directors) will discuss how to successfully invest in real estate in this new economy.

Joe has successfully bought rental property using his own money, bank money, and the city's money under the Neighborhood Stabilization Program. Joe will discuss all of these options and explain how he has been able to successfully own and manage rentals in Milwaukee. Many of Joe's rental properties are located in the Lindsey Heights area of Milwaukee. Lindsey Heights is one of two target areas currently required by the City of Milwaukee's Residential Rental Inspection "pilot" Program requiring landlords to voluntarily submit their rental properties to city inspection and requires them to obtain "landlord licences" in order to continue to rent out their properties. I look forward to hearing Joe's experience with this controversial city program.

Joe's story of investing in local real estate while at the same time assisting in the preservation of Milwaukee's neighborhoods has been covered in local media outlets as well as National Public Radio.

Please join us for Joe's presentation, along with free food and my "educational moment" (a teaser for the AASEW's upcoming Landlord Boot Camp) at 7 pm at the Best Western Midway Hotel which is located at 1005 S. Moorland road in Brookfield. Attendance is free to AASEW members and $25 to any non-member who has previously attended a meeting. Come early and enjoy the free food and network with other landlords and vendors that cater to landlords!!

Landlord Sues the Dish Network For The Costs To Remove Satellite Dishes from His Rental Property -- and Wins

Most landlords have at one time been frustrated by a tenant who contacts a satellite television provider to install a satellite dish on the roof of a rental property without first obtaining the landlord's permission. In fact this unfortunately happens quite often.

The tenant ignores the lease provision which states that they can make no modifications to the unit, the building or grounds without the landlord's prior written consent. The satellite television provider doesn't bother to notify the landlord to ask if the landlord is OK with them drilling holes into the roof of the rental unit. If the satellite television provider even bothers to ask the tenant if s/he has obtained permission from their landlord, the tenant responds "yes, of course, go right ahead and install it so I can watch the big game on Sunday." The result, the landlord is stuck with an ugly satellite dish on his/her roof that needs to be removed and the strong possibility of future water intrusion problems after the tenant is long gone.

Most landlords have opted to either swallow hard and absorb the cost to remove the dish and/or fix any leak issues or attempt to hold the tenant responsible for the costs. Even if the landlord succeeds in obtaining a judgment against the tenant - most tenants are not collectible - so it is a Pyrrhic victory.

Well a landlord in a suburb of Los Angeles County decided to pursue a different path. Christopher Spencer opted to pursue the "deep pockets" -- satellite television provider instead. In what Mark Kellum of the Glendale News Press says is a novel and potentially precedent-setting legal case, Spencer successfully sued the Dish Network for the costs to remove three dishes from his rental property.

Spencer obtained a judgment of $850 to cover the costs to remove three satellite dishes from his apartment building and $110 in court costs. Spencer filed the small claims lawsuit after the Dish Network refused to reimburse him after months of informal negotiations back and forth.

It would be interesting to see if a court would also order a satellite television provider to reimburse a landlord for any water intrusion damage that was caused by the installation of the satellite dish.

Remember that federal law allows a tenant to install a satellite dish on a rental property but only in an area that is exclusively under the tenant's control -- like a private porch or patio. A tenant is not allowed to install a satellite dish in or on any common areas or area that is not under the tenant's exclusive control -- such as a roof, side of the building, shared porch etc. -- unless the landlord consents. Here is the FCC's summary of the rule.

While Spencer's win does not mean that a Wisconsin court must arrive at the same decision, it does give this landlord food for thought.

Accepting Past Due Rent After Termination of Tenancy: The New Law and Traps To Avoid

The Landlord's Omnibus Law (Act 143) introduced a new statutory section to Chapter 799 regarding situations when a landlord accepts past due rent from a tenant after the tenant's tenancy has been terminated. Newly created sec. 799.40(1m) states as follows:

If a landlord commences an action under this section against a tenant whose tenancy has been terminated for failure to pay rent, the action under this section may NOT be dismissed solely because the landlord accepts past due rent from the tenant after the termination of the tenant's tenancy.

On its face, this seems like a very helpful statute for landlords.

As a quick refresher, it is important to remember that a tenant's tenancy can be terminated in many ways such as after the "cure" period passes after being properly served with a 5 day notice, 14 days after being properly served with a 14 day notice, or when a lease term ends.

Prior to sec. 799.40(1m) being created, tenant's advocates argued -- and some courts held -- that if a landlord accepted past due rent from a tenant after the expiration of the tenant's tenancy that the landlord entered into a new agreement with the tenant for a month to month tenancy, thus waiving the landlord's right to proceed with an eviction action based on the prior notice.

I personally believe that such arguments are hogwash, but I will not digress, as that is not the purpose of this post.

Nonetheless, because this "waiver" argument was successfully raised in the past, I have always advised my clients to err on the side of caution and not accept past due rent after the tenant's tenancy was terminated. A landlord can refuse past due rent in one of two ways. First, a landlord can simply refuse the tendered past due rent from the tenant or return the rent payment to the tenant. This is always a difficult pill for landlords to swallow as they know that by returning the rent payment to the tenant that they will never see that money again.

Second, a landlord could hold the past due rent payment in escrow (not cashing the check or money order) and immediately write what I refer to as a "no waiver" letter and send to the tenant via certified and regular mail. A "no waiver" letter simply advises the tenant that their past due rent payment is not being accepted as their tenancy has already been terminated. The letter also should advise the tenant that it is the landlord's intent to pursue the eviction of the tenant and that the landlord will hold the past due rent in escrow pending a determination by the eviction court as to who legally has the right to possess the rental property. Finally, a "no waiver" letter should again remind the tenant that the payment they made is not being accepted.

Whenever I have drafted a "no waiver" letter for a client that has accepted past due rent from a tenant post tenancy, I never had a court hold that my landlord client waived his/her right to proceed with the eviction lawsuit. As a result, my clients have become big fans of the "no waiver" letter.

With the creation of sec. 799.40(1m), it would seem that there is no longer a need for a landlord to send a "no waiver" letter or to return a past due rent payment to a tenant . . . or is there. I would caution landlords against thinking that this newly created statute is the panacea that it appears to be.

Let me explain.

First, if you read the new law closely -- which I don't believe the drafters did or they would have remedied this oversight -- it states that an eviction based on a tenant's failure to pay rent, may not be dismissed solely because the landlord accepts past due rent after the termination of the tenant's tenancy.

There are many basis for terminating a tenant's tenancy besides just failure to pay rent. Other reasons may include the expiration of a lease term or a breach of the rental agreement for something other than non-payment of rent (i.e. criminal activity, damage to the property, loud music, illegal guests etc). The new law does not address what happens if a landlord accepts past due rent from a tenant and the tenant's tenancy was terminated for something other than failure to pay rent.

So literally speaking, a court could still dismiss an eviction if a landlord accepts past due rent from a tenant who's tenancy was terminated based on something other than failure to pay rent and not run afoul of the new law. Ouch! What about situations in which the tenant's tenancy was terminated for failure to pay rent AND other reasons? Does the new law apply those situations?

A second concern with the new law arose recently in Milwaukee County. Please note that this information was relayed to me by another person so I cannot 100% vouch that I have all the facts correct since I was not present when this happened. What I was told was that a landlord's eviction lawsuit, based upon a tenant's failure to pay rent, was dismissed because the landlord accepted past due rent from the tenant after the termination of the tenant's tenancy and failed to advise the tenant that it was the landlord's intent to still proceed with the eviction of the tenant. The court held that newly created sec. 799.40(1m) was not applicable in this situation because the landlord failed to advise the tenant of the fact that the landlord still intended to evict them.

Simply put, the new law is not as great as it appears --- so be cautious when relying on it. Know your judge. Know your court commissioner. Regardless of what the law says, if the court believes it says something else or is not applicable to your specific facts, you may not get the result that you were expecting.

So as a result of above, I am still advising my clients (despite sec. 799.40(1m) being the new law in town) that they should consider refusing to accept any past due rent from a tenant after the tenant's tenancy has been terminated. At the very least they should send a "no waiver" letter.

So proceed with caution.

Judge Mary Kuhnmuench Will Be New Small Claims/Eviction Judge in Milwaukee County

In Milwaukee County we get a new small claims/eviction judge each year around August 1st or so. Most judicial rotations are three years long but for some reason --- possibly the high volume, tediousness, pro se litigants, stress level --- the small claims judge rotates every year.

Milwaukee County's new small claims/eviction judge effective July 27, 2012, will be Mary M. Kuhnmuench. Judge Kuhnmuench is currently completing her rotation in criminal misdemeanor court.

Judge Kuenhmuench was elected in 1998, and re-elected in both 2004 and 2010. Prior to being a judge she was an Assistant City Attorney in Milwaukee, an in-house corporate attorney at A.O. Smith and and adjunct professor of business law at Alverno College.

Learn About Wisconsin's New Landlord-Tenant Law At AASEW's Next Meeting on June 18th.

You will not want to miss the Apartment Association of Southeastern Wisconsin's next membership meeting on June 18, 2012. The focus of the meeting will be on Wisconsin's new Landlord Omnibus law (Act 143).

The passage of this new law in late March made a lot of changes to landlord tenant law in Wisconsin - both residential and commercial. Landlords and management companies will need to make modifications to their rental documents and m,anagement procedures and practices in order to be in compliance.

We will have two landlord attorneys (myself and AASEW Attorney Heiner Giese) and a tenant attorney (Bob Andersen of Legal Action of Wisconsin) at the meeting to summarize the changes to you, give you our interpretation of the law and how it will play out in court, and provide you with reccomended best practices. Oh yeah . . . and we will also answer your questions.

This new law was rushed through the legislative process and as such it was poorly written, resulting in much confusion and a difference of opinion as to how it should be interpreted. The panel members will do their best to point out the areas of concern so that you can be better prepared in dealing with them.

Dont forget about the FREE food.

Here are the details:

LOCATION: Best Western Hotel located at 1005 S. Moorland Road in Brookfield WI

DATE: Monday, June 18, 2012

TIME: 7 pm

COST: Free to members of the AASEW; $25 to non-members -- Become a member that night and pay only $59 for the rest of the year (and avoid the $25 fee).

We hope to have a great turnout and a great discussion. I hope to see all of you there.

T

So Are Illegal Provisions In Wisconsin Residential Rental Agreements Severable Or Not?

SHORT ANSWER: Yes . . . and No.

LONG ANSWER: The newly passed law referred to as the Landlord's Omnibus Law (Act 143) adresses this issue but provides contradictory answers.

In newly created sec. 704.02 of the Wisconsin Statutes, the law states quite clearly that the provisions of a rental agreement or lease are severable. Specifically, it states that if any provision of a rental agreement is rendered void or unenforceable by reason of any statute, rule, regulation or judicial order, the invalidity or unenforceability of that provision does not affect the other provisions of the rental agreement that can be given effect without the legal provision.

So according to sec. 704.02, the answer to question posed in the title of this blog post would be a resounding "Yes."

BUT . .

In the very same law, the legislature also decided to create a new section 704.44 that copies a regulation from ATCP 134 entitled (Residential Rental Provisions), specifically ATCP 134.08 entitled "Prohibited Rental Agreement Provisions," which sets forth 7 things that cannot be included in a Wisconsin residential rental agreement - which I affectionately refer to as the 7 Deadly Sins.

The legislature also decided to add an 8th and 9th provision that cannot be included in residential rental agreements in Wisconsin. So now I have to refer to the outlawed provisions as "The 9 Deadly Sins" which just doesn't have the same ring to it. : (

The 9 provisions that if included in a residential rental agreement will render the agreement void are:

1. Any provision that allows a landlord to do any of the following because a tenant has contacted an entity for law enforcement services, health services, or safety services: (a) increase rent, (b) decrease services, (c) Bring an action for possession of the premises, (d) refuse to renew a rental agreement, (e) threaten to take any action under pars. (a) to (d). This is one of the new clauses added by the legislature is Act 143.

2. A provision that authorizes the eviction or exclusion of a tenant from the premises, other than by judicial procedures as provided under ch. 799.

3. A provision that provides for an acceleration of rent payments in the event of tenant default or breach of obligations under the rental agreement, or otherwise waives the landlord's obligation to mitigate damages as provided in s. 704.29.

4. A provision that requires payment by the tenant of attorney fees or costs incurred by the landlord in any legal action or dispute arising under the rental agreement. This subsection does not prevent a landlord or tenant from recovering costs or attorney's fees under a court order under ch. 799 or 814.

5. A provision that authorizes the landlord or an agent of the landlord to confess judgment against the tenant in any action arising under the rental agreement.

6. A provision that states that the landlord is not liable for property damage or personal injury caused by negligent acts or omissions of the landlord. This subsection does not affect ordinary maintenance obligations of a tenant under s. 704.07 or assumed by a tenant under a rental agreement or other written agreement between the landlord and the tenant.

7. A provision that imposes liability on a tenant for any of the following: (a) personal injury arising from causes clearly beyond the tenant's control, (b) property damage caused by natural disasters or by persons other than the tenant or the tenant's guests or invitees. This paragraph does not affect ordinary maintenance obligations of a tenant under s. 704.07 or assumed by a tenant under a rental agreement or other written agreement between the landlord and the tenant.

8. A provision that waives any statutory or other legal obligation on the part of the landlord to deliver the premises in a fit or habitable condition or to maintain the premises during the tenant's tenancy.

9. A provision that allows the landlord to terminate the tenancy of a tenant if a crime is committed in or on the rental property, even if the tenant could not reasonably have prevented the crime. This is the other new clause added by the legislature in Act 143.

So according to sec. 704.44, the answer to question posed in the title of this blog post would be "yes . . . unless it is one of the 9 deadly sins which if included in a Wisconsin residential rental agreement or lease would not be severable and in fact would render the entire agreement void."

Why can't the law be more simple and clear?

Don't Miss AASEW's Next Meeting Featuring Steve Smullin on Real Estate Trading

Come join us at the next AASEW monthly membership meeting next week.

When: Monday May 21st at 7 PM

Where: The Best Western, 1005 S. Moorland Road, in Brookfield

Who: Steven J. Smullin - Real Estate Problem Solving Since 1988.

Topic: Real Estate Trading - It's All About the Benes . . . That's the Benefits, not the Benjamins.

Cost: Free to current AASEW members, $25 to others.

Note: Starting at our May meeting we will be introducing a landlord/tenant law education component to each of our meetings that will last approximately 10-15 minutes. In anticipation of the next Landlord Boot Camp in October, Attorney Tristan Pettit will be taking a single issue from his Landlord Boot Camp materials and teaching it at each meeting. This month Tristan will talk about LATE FEES.

About our Speaker:

Steve is a commercial investment real estate broker, counselor, exchangor, investor, educator, and long time practitioner using creative solutions to real estate related problems. Steve has closed transactions involving the FDIC, RTC, US Marshall, US Bankruptcy Court, Banks and numerous others since the mid 1980's … following hundreds of cases, attending dozens of sheriff and judicial sales and assisting clients in the acquisition and disposition of properties.

Steve is a member of the National, Illinois and Chicago Associations of Realtors and a Charter Member of the Northern Illinois Commercial Association of Realtors where he has served on the Board of Directors. He adheres strictly to the Code of Ethics of these organizations and applies their principles in everyday life. In addition he has served on the Board of Directors of the Chicago Area Real Estate Exchangors in numerous capacities including serving as President.

Steve routinely studies formulas, exchanging, financial analysis, and property management and has studied creative real estate techniques and strategies with

some of the most brilliant minds throughout the country. He is a long time member of the Chicago Creative Investors Association and active participant at the National Council of Exchangors, The Society of Exchange Counselors and numerous other marketing and educational organizations.

Steve has presented programs and workshops for Chicago Creative Investors Association, Lake County Property Investors Association, West Suburban Landlords Association, Milwaukee Real Estate Investors Association, and for the ValueHoundAcademy.

Steve's presentations and workshops have included:

Formulas, Brainstorming & Problem Solving - The days of throwing money at real estate are over. It’s no longer possible to solve today's problems with yesterday's solutions. Identify the real problem, use effective ideation and brainstorming to identify possible solutions and then, take appropriate action.

Assessing the Situation - The facts and information needed for a successful and profitable deal. Income and Expense analysis; The Documents and Information YOU NEED to evaluate the offering; The Documents YOU NEED to Close the Deal; Sources and Resources.

Real Estate, It's About The Benes … That's The Benefits! Not The Benjamins - The Pros and Cons of Cash and Alternative Currencies; How Benefits oriented real estate transactions create a WIN for all involved.

How To Get What You Want … When You Can't Sell What You've Got - Create benefits oriented real estate transactions that provide WINNING solutions for all involved. "Selling the Sizzle" and "Buying the Benefits"; Takers vs. Buyers; The Benefits of Barter; "Packaging" a Property for Disposition.

It should be a great meeting. Hope to see all of you there.

T

What Can A Landlord Do With A Tenant's Abandoned Personal Property Under Wisconsin's New Law?

With the signing into law of 2011 Wisconsin Act 143, a landlord's obligations with regard to a tenant's abandoned property has just gotten much easier.

Prior to Act 143 a landlord had three options with respect to a tenant's abandoned property. The landlord could:

1. Store the tenant's abandoned property on or off the premises and take a lien on the property for the actual and reasonable cost of removal and storage of the property, or

2. Dispose of the property if the tenant didn't reclaim it within 30 days of the landlord sending the tenant written notice of the abandoned property, or

3. Store the abandoned property without a lien and return it to the tenant.

Some landlords got themselves into trouble under the old law. Some would forget to send out the abandoned property notice to the tenant. Some would dispose of the abandoned property prior to 30 days after mailing the notice. Others would refuse to return the tenant's property unless the tenant paid up all past due rent (this is called distrain and was outlawed years ago). If the tenant's abandoned property had value sometimes these landlord would get sued. In an effort to educate landlords about this law I even drafted an Abandoned Property Notice form that was sold at Wisconsin Legal Blank noting the 3 options the landlord had.

Wisconsin's new law regarding tenant's abandoned property is more simple.

As long as a landlord provides written notice to the tenant -- at the time that the tenant enters into the rental agreement or renews the rental agreement -- that the landlord is NOT going to store any of the tenant's abandoned personal property, a landlord is allowed to immediately dispose of the abandoned property in any manner that the landlord, in his sole discretion, feels is appropriate.

There are two exceptions to the new law allowing a landlord to immediately dispose of a tenant's abandoned property.

First, in the case of prescription medication or prescription medical equipment, a landlord must hold such items for 7 days from the date of discovery to allow the tenant time to retrieve those items. If the tenant contacts the landlord within the 7 day period and requests the return of the medical items the landlord shall promptly return them to the tenant. After the 7 days have passed, the landlord is allowed to dispose of the medical items in any way that he determines to be appropriate.

Second, if the tenant has abandoned a titled vehicle or a mobile or manufactured home, the landlord must give the tenant -- and any secured party that the landlord has actual notice of -- written notice of the landlord's intent to dispose of the titled vehicle or mobile/manufactured home, personally or by regular or certified mail addressed to the tenant's last known address.

So for those of you that want to avail yourself of this streamlined process of the key is to provide the required "notice" language to the tenant. It makes the most since to simply include the required language in your rental agreement and any renewal agreement.

Below is the sample notice language that I added to the rental agreement that I draft for Wisconsin Legal Blank.

ABANDONED PROPERTY: Landlord will not store any items of personal property that tenant leaves behind when tenant vacates, except for prescription medication or prescription medical equipment, which will be held for seven (7) days from the date of discovery. If tenant abandons a manufactured or mobile home or a titled vehicle, landlord will give tenant and any other secured party that landlord is aware of, written notice of intent to dispose of the property by personal service, regular mail, or certified mail to tenant's last known address.

Please be aware that if you fail to provide the required notice to your tenant then you will be required to abide by the old law and follow one of the three options explained earlier in this post.

It is important to note however, that this new law does NOT relieve a landlord of his duty to evict a tenant through the judicial eviction process if the tenant has not vacated. A landlord should not just assume that the tenant's property is abandoned and the tenant has vacated the unit. A landlord still must make the very important (and sometimes costly) analysis on a case by case basis as to whether or not the tenant is still living in the unit or whether he has vacated and abandoned his property. This new law does not prevent a tenant from suing a landlord for double damages and attorney's fees for engaging in a self-help eviction. All this law does is make it simpler and easier to dispose of a tenant's abandoned property once the tenant has vacated the rental property.

Joint Legislative Council Gives Clarification To Wisconsin's New Landlord's Omnibus Law

You will recall from my earlier post that I had some concerns about the new Landlord's Omnibus Law (Act 134). One of my main concerns was that it was unclear from the wording of Act 143 whether or not a violation of chapter 704 would give rise to a claim by a tenant that would entitle the tenant to double damages and attorney's fees if successful.

The portion of Act 143 that concerned me was Section 36, which creates Wis. Stats. sec 704.95, and reads as follows:

704.95 Practices regulated by the department of agriculture, trade and consumer protection. Practices in violation of this chapter may also constitute unfair methods of competition or unfair trade practices under s. 100.20. However, the department of agriculture, trade and consumer protection may not issue an order or promulgate a rule under s. 100.20 that changes any right or duty arising under this chatper.

My concern was that tenants might start filing suits against landlords alleging that they were entitled to double damages and attorny's fees if a landlord violated any portion of chapter 704. Could a landlord be on the hook for double damages and attorney's fees if he drafted a 5 day notice improperly or served the notice incorrectly?

Because of this concern, the Apartment Association of Southeastern Wisconsin (AASEW) attorney wrote to the State of Wisconsin's Joint Legislative Council which authored the earlier memo summarizing the new Act 143. Specifically the AASEW asked staff attorney Margit Kelley to clarify section 36 of her Act Memo dated March 26, 2012.

I have good news to report. Attorney Kelly in her letter to the AASEW's attorney, indicated that any violation of Chapter 704 does not automatically lead to a cause of action for double damages and attorney's fees.

Her verbatim response -- referring to section 36 (now Wis. Stats. section 704.95) - was as follows:

This means that DATCP may promulgate and enforce any administrative rules that are in line with ch. 704, Stats., including the provisions of the Act that affect that chapter, under DATCP's authority to regulate unfair methods of competition or unfair trade practices in s. 1002.0, Stats. Section 100.20(5), Stats., then, in turn allows an individual right of action for a violation of any rules promulgated under s. 100.20, Stats., and allows for recovery of costs, reasonable attorney's fees, and twice the amount of any pecuniary loss.

Translation: DATCP can create rules to add to ATCP 134 that are line with chapter 704, but a violation of ch. 704 alone does not give rise to a cause of action that entitles a tenant to double damages and attorney's fees, unless that section of the statute is also contained in ATCP 134.

So for instance, if a landlord was found to have violated Wis. Stats. section 704.28, entitled withholding from and return of security deposits, a tenant would be entitled to receive an award of double damages and attorney's fees because the language of sec. 704.28 is ALSO contained in ATCP 134 - specifically ATCP 134.06(2).

Along those same lines, if a landlord was found to have violated Wis. Stats., sec. 704.44, entitled residential rental agreement that contains certain provisions is void, a tenant would als be able to recover double damages and attorney's fees as the language of sec. 704.44 is ALSO contained in ATCP 134 - specifically ATCP 134.08.

As long as the courts are made aware of this, it now appears that landlords can breathe a sigh of relief as they will no longer have to worry about being ordered to pay double damages and attorney's fees to a tenant for improperly drafting or serving a 5 day notice, or any other portion of ch. 704 that is not also included in ATCP 134.

Now we just have to worry -- as we have always had to -- about having the court dismiss our evictions because of an improperly drafted or served 5 day notice : )

New Landlord Omnibus Law: Odds and Ends

There has been a lot of discussion about the new Landlord Tenant law in Wisconisn (2011 Wisconsin Act 143) since it became law on March 31, 2012. Some people's views seem similar to mine while others have interpreted the law completely differently than I do. Here is a link to one law firm's summary that in my opinion is completely off base, but then again they are Minnesota lawyers so we may have to give them a pass : ). But really guys, the new law did not create a new right for landlord's do deduct from a tenant's security deposit -- have you ever heard of ATCP 134.

I guess only time will tell how the law in interpreted by the courts in Wisconsin. One thing that I know for sure is that the politicians in Madison will be unable to correct any errors, or clarify and vagueness, in the new law until 2013 when they are back in session. So we are stuck with this for awhile and must make do.

The AASEW will be devoting it's June membership meeting (June 18, 2012 at 7 pm) to the new law and we hope to invite both landlord advocates and tenant advocates alike to present so that all sides can be presented. You will not want to miss this meeting. Come learn what the new law is and what you need to do in order to be in compliance. There will be no charge to AASEW members but we will be charging $25 for non-members to attend.

While I personally do not have anything new to add on the new law that I haven't said already in prior posts, I thought I would provide links to several items relevant to the new law that people might find interesting and useful.

Here is a copy of the newly enacted law - Act 143

Here is an overview of the new law by the Wisconsin Legislative Council

Here is a copy of the newly revised Chapter 704 (Landlord and Tenant) of the Wisconsin Stattutes which includes all of the changes/additions -- so I no longer have to carry around Act 143 : )

Here is an article that I recently wrote on the new law for the Wisconsin State Bar's Inside Track blog which includes several interesting comments on the new law by local lawyers.

Here's a blog article by my friend Tim Ballering about how the new law affects those landlords who are currently using a crime free lease addendum or something similar.

Thanks for reading

T

Newly revised Landlord-Tenant Law Forms Available at Wisconsin Legal Blank on April 2 and April 3, 2012.

Wisconsin's Landlord Omnibus Law (Act 143) went into effect today - April 1, 2012. As a result of the new law it was necessary for me to update many of the landlord-tenant law forms that are sold at Wisconisn Legal Blank.

As of Monday, April 2, 2012, the following revised forms will be available:

1. Residential Rental Agreement (Form #19)

- Added language required in order for landlord to be able to dispose of tenant's abandoned property immediately after they vacate.

- Added language about any illegal clause in the rental agreement being severable from the n9on-illegal clauses.

- Correction of some grammar and punctuation mistakes.

2. Nonstandard Rental Provisions (Form #984)

- Added langauge required in order for landlord to be able to dispose of tenant's abandoned property immediately after they vacate.

- Revised language as to when landlord must return security deposit or supply security deposit itemization letter when tenant vacates prior to end of lease term.

- General revisions to the language of each nonstandard rental provision to comply better with the holding in the Tschantz case.

3. Notice of Rent Increase in Month to Month Tenancies (Form #332)

- Added langauge required in order for landlord to be able to dispose of tenant's abandoned property immediately after they vacate.

4. Residential Lease Renewal or Notice To Vacate (Form #970)

- Added langauge required in order for landlord to be able to dispose of tenant's abandoned property immediately after they vacate.

5. Tenant Inspection Sheet (Check-In - Check-Out Form)

- Revised the title of this form to comply with the title used in the new law.

NOTE: It is now required that a landlord give this document to tenant's upon occupancy. So if you have not previously used this document you need to start doing so now.

As of Tuesday, April 3, 2012 the following revised forms will be available for purchase at Wisconsin Legal Blank

6. 5 Day Notice To Pay Rent or Vacate (Form #328)

- Changed the word "may" to "shall" when advising the tenant that landlord is entitled to holdover damages of, at a minimum, double the daily rent for the holdover period.

- Added a line for "Total Amount Due"

7. 5 Day Notice To Correct Breach or Vacate (Form #330)

- Changed the word "may" to "shall" when advising the tenant that landlord is entitled toholdover damages of, at a minimum, double the daily rent for the holdover period.

8. 5 Day Notice To Vacate - Nuisance (Form #329)

- Changed the word "may" to "shall" when advising the tenant that landlord is entitled toholdover damages of, at a minimum, double the daily rent for the holdover period.

9. 14 Day Notice To Vacate for Failure To Pay Rent (Form #768)

- Changed the word "may" to "shall" when advising the tenant that landlord is entitled toholdover damages of, at a minimum, double the daily rent for the holdover period.

- Added a line for "Total Amount Due"

10. 14 Day Notice To Vacate For Breach of Rental Agreement (Form #767)

- Changed the word "may" to "shall" when advising the tenant that landlord is entitled toholdover damages of, at a minimum, double the daily rent for the holdover period.

11. 28 Day Notice Terminating Tenancy (Form #327)

- Changed the word "may" to "shall" when advising the tenant that landlord is entitled toholdover damages of, at a minimum, double the daily rent for the holdover period.

12. 30 Day Notice To Correct Breach or Vacate (Form #325)

- Changed the word "may" to "shall" when advising the tenant that landlord is entitled toholdover damages of, at a minimum, double the daily rent for the holdover period.

Sometime in the near future the following revised form will be available at Wisconsin Legal Blank:

13. Rules & Regulations (Form #994)

- Will inlcude major revisions including language, organization and format.

- Will include revised language regarding a tenant's responsibility for the actions of their guests, invitees and family members that will comply with the law and not run afoul of "Deadly Sin #8" created by the new law.

2011 Wisconsin Act 143 (Landlord Omnibus Law) Also Applies To Commercial Landlord-Tenant Law

While this blog primarily focuses on residential landlord-tenant law, on occasion I also touch on issues applicable to commercial landlord-tenant law. This is one such instance.

Commercial landlord-tenant is more straightforward than residential in my opinion because commercial tenancies are less regulated than residential. Typically what a commercial landlord and tenant agreed to and placed into their lease agreement is what governs. The Wisconsin Administrative Code's ATCP 134 does not apply to commercial leases and most of Chapter 704 of the Wisconsin Statutes does not apply to commercial leases unless (1) the parties had no written lease, or (2) the lease was silent as to certain issues (see sec. 704.03 and 704.05 respectively).

Well, that has all changed now with the passage of 2011 Wisconsin Act 143 which was signed into law last week and will take effect on March 31, 2012.

While almost all of the attention paid to the new law surrounded its effects on residential landlord-tenant law, the law also impacts the commercial arena as well. I too was caught up in the effect Act 143 would have on residential landlords and missed the applicability of this new law to commercial landlords initially --- thanks to Bob Anderson of Legal Aid of Wisconsin for redirecting me : )

As I have mentioned in prior posts, this legislation was fast-tracked for some reason and rushing new laws through the legislative process is never a good thing. In fact it is a recipe for disaster.

It appears that the legislators did not realize that Senate Bill 466 -- the precursor to Act 143 -- was written in such a way as to encompass commercial landlord-tenant law. When it was brought to their attention, a quick amendment was made to exclude one portion of the new law (the section that makes a rental agreement void if it contains certain prohibited language) from the commercial arena, but apparently there was not enough time to deal with the other sections of the new law, which now will apply to both commercial and residential tenancies.

So what do we have?

The following provisions of Act 143 apply to both commercial landlord-tenant law as well as residential:

1. Moratorium on evictions

2. Severability of rental agreement provisions

3. Disposition of abandoned property

4. Requirement that landlords receive an award of holdover damages when appropriate

5. Acceptance of past due rents

6. Withholding from and return of security deposits

7. Making any violation of chapter 704 a possible unfair trade practice

If you are unfamiliar with the above sections of the new law you should read my prior post summarizing the new law.

Number 1-5 above actually benefit commercial landlords. However numbers 6 and 7 are problematic

By adding ATCP 134.06, which focuses on the withholding from and the return of security deposits, to chapter 704, the new law has now made these requirements applicable to commercial landlords as well. Prior to Act 143 being passed, there was no law addressing what a commercial landlord could withhold from a commercial tenant's security deposit, nor was there any law regarding when that security deposit (or an itemization as to how the security deposit was applied) had to be returned to the commercial tenant. Well thanks to Act 143, now there is.

Act 143 allows a commercial landlord to only make deductions for the following items from a commercial tenant's security deposit:

704.28 Withholding from and return of security deposits. (1) Standard withholding provisions. When a landlord returns a security deposit to a tenant after the tenant vacates the premises, the landlord may withhold from the full amount of the security deposit only amounts reasonably necessary to pay for any of the following:

(a) Except as provided in sub. (3), tenant damage, waste, or neglect of the premises.

(b) Unpaid rent for which the tenant is legally responsible, subject to s. 704.29.

(c) Payment that the tenant owes under the rental agreement for utility service provided by the landlord but not included in the rent.

(d) Payment that the tenant owes for direct utility service provided by a government-owned utility, to the extent that the landlord becomes liable for the tenant's nonpayment.

(e) Unpaid monthly municipal permit fees assessed against the tenant by a local unit of government under s. 66.0435 (3), to the extent that the landlord becomes liable for the tenant's nonpayment.

(f) Any other payment for a reason provided in a nonstandard rental provision document described in sub. (2).

So if a commercial landlord would now like to deduct anything other then the items listed in (a) - (e) above, then that landlord needs to start using a separate written document entitled "Nonstandard Rental Provisions" which must list the additional fees/costs that can be deducted from a commercial tenant's security deposit.

Additionally, Act 143 now requires a commercial landlord to either (1) return the tenant's security deposit to them, or (2) send them an itemization explaining how that security deposit was applied, within 21 days of the following:

(4) Timing for return. A landlord shall deliver or mail to a tenant the full amount of any security deposit paid by the tenant, less any amounts that may be withheld under subs. (1) and (2), within 21 days after any of the following:

(a) If the tenant vacates the premises on the termination date of the rental agreement, the date on which the rental agreement terminates.

(b) If the tenant vacates the premises before the termination date of the rental agreement, the date on which the tenant's rental agreement terminates or, if the landlord rerents the premises before the tenant's rental agreement terminates, the date on which the new tenant's tenancy begins.

(c) If the tenant vacates the premises after the termination date of the rental agreement, the date on which the landlord learns that the tenant has vacated the premises.

(d) If the tenant is evicted, the date on which a writ of restitution is executed or the date on which the landlord learns that the tenant has vacated the premises, whichever occurs first.

Commercial landlords never had to worry about that 21 day time frame before -- now they do. Needless to say it is much more difficult and time consuming to do a walkthrough of a giant commercial space and itemize any damages or cleaning charges than it is for a 500 square foot residential rental unit. I'm not exactly sure how commercial landlords will be able to comply with this time frame, but they will need to find a way, or else they may have to to their tenant double damages and attorney's fees. Which leads me to the next concern . . .

Act 143 now makes any violation of chapter 704 a possible violation of unfair trade practices, which pursuant to sec. 100.20, Wis. Stats. allows a tenant to sue a landlord for double damages and attorney's fees. Prior to Act 143 a commercial landlord was not in this predicament because unfair trade practices were set forth in ATCP 134 which only applied to residential tenancies. But now that Act 143 incorporates some provisions of ATCP 134 into chapter 704 -- and chapter 704 applies to commercial landlord-tenant relations -- things are different.

Here is the language of the new law:

704.95 Practices regulated by the department of agriculture, trade and consumer protection. Practices in violation of this chapter may also constitute unfair methods of competition or unfair trade practices under s. 100.20. However, the department of agriculture, trade and consumer protection may not issue an order or promulgate a rule under s. 100.20 that changes any right or duty under this chapter.

I guess the only positive is that the new law says "may constitute" instead of "shall constitute" however to a commercial landlord that never had to worry about anything they did constituting an unfair trade practice and subjecting themselves to being sued for double damages and attorney's fees, I'm sure this will be of little consolation.

So not only will Act 143 require commercial landlords to make some modifications to the language in their leases, but it will require them to completely change how they run their commercial proeprty management businesses starting March 31, 2012 ---- 2 DAYS FROM NOW!!!!!

Landlord's Omnibus Bill Signed Into Law - Read It Now

Governor Walker did sign the Landlord's Omnibus Bill into law.

I appreciate the effort of everyone that called the Governor's office asking him to veto the bill due to its deficiencies.

Here is a link to the new law. Much easier to read than having to go back and forth between the orginal bill, the Substitute bill and the two amendments.

The two main concerns that I have with the law and which caused me to ask that the bill be vetoed. They are section 35M and section 36.

The AASEW has already spoken with Sen. Lassee's office regarding these two major problems and I will keep you informed if and when anything is done about them.

And yes, I will be reviewing all of Wisconsin Legal Blank's forms in the near future and making the necessary revisions - if needed - and will let you know when they will be available : )

Upon Further Reflection, I Think The Governor Should Veto The Landlord's Omnibus Bill

I spent several hours yesterday reviewing and thinking about the new Landlord's Omnibus Bill that is to be signed into law today by Governor Walker at 4 pm.

I then spent hours of time trying to summarize the new law in yesterday's blog post in an easy to read and understand format.

Since publishing the blog post yesterday I have a few more thoughts and concerns:

1. AASEW Board member and friend Tim Ballering pointed out to me that he believes that the new law as written will allow for any violation of Chapter 704 to be considered an unfair trade practice, thus allowing a tenant to sue his/her landlord for double damages and attorney's fees.

Here is the language at issue:

704.95 Practices regulated by the department of agriculture, trade and consumer protection.

Practices in violation of this chapter may also constitute unfair methods of competition or unfair trade practices under s. 100.20. However, the department of agriculture, trade and consumer protection may not issue an order or promulgate a rule under s. 100.20 that changes any right or duty arising under this chapter.

In my prior post I did anticipate that this would allow for tenant's and attorney's to make arguments that any violation of Chapter 704 was an unfair trade practice and that concerned me. But after speaking with Tim and thinking about this in more deeply, and re-reading the new law - I think this is a major concern. So is this law saying that if a landlord improperly drafts or serves a 5 day notice that s/he can be sued by the tenant for double damages and attorney's fees? YES.

I believe that this is such a major problem that I will be contacting Governor Walker's office today before 4 pm and asking him to veto the bill.

2. The addition of the 8th Deadly Sin really concerns me. My friend and past Wisconsin Apartment Association President John Fischer succinctly addresses the problem with in an email that he sent to many in the industry which is reproduced below:

When the Housing Task force was looking at blight, blight went beyond just condition of the property, but it also went to criminal activity.

There has been a proposal that various apartment associations have been working on that would make it easier to evict a tenant for criminal activity. There is a “Crime Free Lease” program that started out west that is very popular with landlords and law enforcement. A few communities have started working on this program here in Wisconsin, but the biggest hurdle is that the key tool of this program is a “Crime Free Lease Addendum”. The problem is that this addendum is unenforceable under Wisconsin’s current laws.

The new law that is being signed by Governor Walker at 4 PM this afternoon (I have been invited to this private signing, but I want nothing to do with this) makes a large number of massive changes to Wisconsin landlord-tenant law. One of the most significant appears to be an answer to our attempts to allow for eviction for criminal activity. The new law would basically render a lease void if the lease contained language that criminal activity on a property would be a breach of the lease.

So there you have it. My take on this new law -- as well as many others in the industry -- is this new law will cause more harm then good. This is what happens when you try to rush legislation -- people do not have time to consider all of the different angles -- so I am planning on contacting Governor Walker and ask him to veto SB 446. I would ask that you consider doing the same.

Thank you to tim Ballering and John Fischer for their thoughts, opinions, and guidance.

Landlord's Omnibus Bill -- with Amendments -- To Be Signed Into Law Today

One of the biggest pieces of pro-Landlord legislation in quite some time was passed by the Wisconsin Senate and adopted by the Assembly recently and will be signed into law by Governor Walker today. Unfortunately some of the pro-Landlord provisions were amended, diluted, or removed.

I am certainly not denouncing this new law. Many aspects of it will be very helpful to landlords. I just wish that more time had been allowed -- the bill was fast-tracked -- to allow for more discussion, thought and input and allowing for more notice. For instance, many of us in the rental industry were given one day advance notice before the public hearing on the bill which prevented many of us from attending.

I will attempt to summarize the new law in this post. As this new law plays out in the "real world" I am sure that I will be devoting additional blog posts to each provision in more detail.

The proposed effective date of this new law is March 31, 2012. So many of us will need to make some additions and/or modifications to our rental documents prior to that date.

Bankground of Legislation

The Landlord's mnibus bill (Senate Bill 466) was put on the "fast track" for reasons unknown to me. It was introduced on February 13, 2012 by Senator Lassee. A Substitute Amendement 1 was offered by Senator Lassee on February 29, 2012. Senator Waangard then offered the first amendment to the Substitute Amendment on March 6th which was passed March 13th. Senator Lassee then offered a second amendment to the Substitute Amendment on March 12th which was passed on March 13th. The bill will be signed into law by Governor Walker today - March 21st. Approximately one month from introduction to passage into law is very fast for the legislative process.

The key provisions of the new law are:

1. Moratorium on Evictions

This provision of the original bill remained untouched by the Substitute Amendment and the two amendments to the Substitute Amendment. The new law prohibits any municipality from imposing a moratorium on eviction actions. If a municipality has a current ordinance that contradicts this new law it cannnot be enforced.

We now must hope that individual counties, courts, and commissioners adhere to this law. While I don't anticipate courts ignoring this new law, I do anticipate court's continuing to use the "stay" provisions of sec. 799.44(3) to give tenants additional time to vacate during the holidays. So while municipalities will no longer be allowed to impose moratoriums, courts can still prevent evictions during holidays, creating the same result.

2. Severability of Rental Agreement Provisions

The original bill stated that any provision could be severed from the agreement. So if a landlord inadvertantly included a provision that was found to be improper or retaliatory in nature it could be removed and the remainder of the agreement could be enforced.

The Substitute Amendment diluted the above considerably by adding that if a rental agreement contains one of the "7 Deadly Sins" set forth in ATCP 134.08, the inclusion of any of those provisions cannot be removed and will render the entire rental agreement void and therefore unenforceable.

Amendment 1 to the Substitute Amendment went a step further and added an 8th illegal provision that if included in a rental agreement will cause the rental agreement to be void. The new illegal provision would include any language that allows a landlord to terminate a tenant's tenancy if a crime is committed in or on the rental property, even if the tenant couldn't reasonably have prevented the crime.

So in the end, the new law only allows the severability of certain rental provisions. If your rental agreement contains one of the 7 prohibited provisions set forth in ATCP 134.08 or the new prohibited provision created by this new law, your rental agreement will still be be void and unenforceable. Essentially, the new law takes the regulation ATCP 134.08 and codifies it into law.

More tragic is what the "8th Deady Sin" has most likely done to some other pro-Landlord legislation that I had hoped would become law -- the "Crime-Free Lease Addendum" bill. If you read my prior post on the Crime-Free Lease Addendum bill you will see that this 8th Deadly Sin language effectively decapitates this proposed bill. This is a major disappointment as I believe that had the Crime-Free Lease Addendum bill been passed it would have been the most significant piece of pro-Landlord legislation in years. Instead the "odds and ends" Landlord Omnibus bill seems to have killed it. Hopefully, I am wrong and it can be resurrected.

3. Dispostion of Tenant's Abandoned Property

Once again, the original version of this bill was awesome. It stated that any personal property left behind by a tenant could be considered abandoned and disposed of immediately in the landlord's discretion.

The Substitute Amendment modified the original bill by adding that any medical prescriptions and/or medical equipment left behind by the tenant must be held by the Landlord for 7 days. The Substitute Amendment also added that written notice must be sent to the tenant (and any secured party) prior to disposing of any titled vehicles or mobile homes deemed abandoned. I could live with both of those modifications.

However, the amendments to the Substitute Amendment added language that will require landlords to jump through a few hoops. The new law requires that a landlord provide written notice to the tenant at the time of entering into the rental agreement, and at each renewal of the rental agreement, informing the tenant that the landlord will not hold any property left by the tenant and that such property will be deemed abandoned and will be disposed of. Failure to provide this written notice to the tenant requires a landlord hold the abandoned property fpr a period of time as set forth in sec. 704.05 (5), Wis. Stats.

Essentially landlords will now be required to add a new language to their rental agreements -- and any renewal agreements -- advising tenants that any property left behind will be considered abandoned and can be disposed of. Looks like there will be a revised Rental Agreement being sold at Wisconsin Legal Blank Co., in the near future : )

4. Information Check-In Form

This is one of the provisions of the original bill that I didn't care for. A landlord will now be required to provide a standardized information check in sheet to each tenant that contains an itemized description of the premises. The Substitute Amendment merely added that this form must be given to the tenant at the time of occupancy rather than at the time of signing of the rental agreement.

As I understand this law, this does not just mean that the landlord can give his new tenant a blank Information Check-In form to fill in -- which many landlords are already doing. Rather it means that the landlord must completely and thoroughly fill out the Information Check-In form to adequately describe the condition of the rental unit and give it to the tenant. So if you are not thorough in your description of the renal unit this document could be used against you by the tenant, after the tenancy has ended. This new provision of the law will clearly cause additional work for landlords and I fear could harm the less detail-oriented landlords out there when pursuing a tenant for damages to the unit or withholding portions of the tenant's security deposit for damages.

5. Holdover Damages Are Mandated

The new law requires that landlords be awarded holdover damages. If a tenant stays in the rental unit beyond his tenancy, the landlord is now legally entitled to -- at a minimum -- double the daily rent for the time period after the tenancy ended (i.e. the notice expired) until the tenant actually vacates the unit.

This is a positive change because current law (sec. 704.27) only states that a landlord "may" be awarded holdover damages -- and some courts would not award landlords these damages. The new law says that a court "shall" award a landlord holdover damages, at a minimum.

6. Withholding From A Tenant's Security Deposit

The new law has merely codified the provision of ATCP 134.06(3), which states that a landlord is allowed to withhold the following from a tenant's security deposit: (a) Tenant damage, waste or neglect of the premises, (b) Unpaid rent for which the tenant is legally responsible, (c) Payment which the tenant owes under the rental agreement for utility service provided by the landlord but not included in the rent, (d) Payment which the tenant owes for direct utility service provided by a government-owned utility, to the extent that the landlord becomes liable for the tenant's nonpayment, (e) Unpaid mobile home parking fees which a local unit of government has assessed against the tenant to the extent that the landlord becomes liable for the tenant's nonpayment, (f) Other reasons authorized in the Nonstandard Rental Provisions.

The new law also adopts the portions of ATCP 134.06 which state that a landlord cannot withhold from a tenant's security deposit for normal "wear and tear" or other losses which the tenant cannot reasonably be held responsible.

7. Timing For Return of Security Deposit

The original bill indicated that in situations where the tenant broke the lease prior to the end of the term that the landlord need not return the security deposit or provide an accounting of how the security deposit was applied until 21 days after the lease term ended or within 21 days of a new tenant taking occupancy. This langauge is a substantial improvement over current law as it allows a landlord to hold the security deposit until he is able to determine if any future rent will owed by the breaching tenant if the landlord cannot locate a new tenant to re-rent the property to. I explain this issue in more detail in my earlier post on the Landlord's Omnibus Bill.

The Substitute Amendment waters this down a bit. The new law will now codifies ATCP 134.06(2)(a) and states that a landlord shall deliver or mail to a tenant the security deposit or itemization of how the security deposit was applied within 21 days after any of the following: (a) if the tenant vacates on the last day of the rental agreement, the date on which the rental agreement terminates, (b) if the tenant vacates before the end of the rental agreement, then the date on which the rental agreement terminates or, if the unit is re-rented before the end of the rental agreement, then the date on which the new tenancy begins, (c) if the tenant vacates after the last day of the rental agreement, the date on which the landlord learns that the tenant vacated, (d) if the tenant was evicted, the date on which the writ was executed or the date that the landlord learns that the tenant vacated.

So the new law kept the good part of the original bill but by codifying ATCP 134.06(2)(a) the landlord must return a tenant's security deposit or send out the itemization of how the security deposit was applied earlier than when the original bill stated in situations where the tenant was evicted.

8. Disclosure of Code Violations

The original bill required that a landlord disclose to any prospective tenant any uncorrected building code or housing code violations prior to the signing of a rental agreement, accepting of a security deposit or accepting of earnest money.

The second Amendment to the Substitute Amendment modified the original bill and as a result the new law requires a landlord to disclose to a new tenant any uncorrected building code or housing code violations if the landlord has actual knowledge of the violation (rather than if the landlord had received notice of the violation from a housing code enforcement agency as under the original bill).

Specifically the new law requires the disclosure to the new tenant if the following four conditions are met: (a) landlord has actual knowledge of the violation, (b) the violation affects the rental unit or a common area, (c) the violation presents a significant threat to the tenant's health or safety, (d) the violation has not been corrected.

9. Request for Repairs

The orginal bill required that a tenant first notify a landlord in writing of any repair or maintenance issue, and then allow adequate time for the landlord to address the issue, before reporting the problem to the building inspector, elected official, or housing code enforement agency. The Substitute Amendment removed this provision in its entirety so the law has not changed -- tenants are allowed to call whomever they want to complain about maintenance issues without any requirement that they first notify the landlord of the problem.

10. Acceptance of Past Due Rent

The new law states that if a landlord has filed an eviction against a tenant and the landlord accepts past due rent from the tenant during the course of the eviction, that the court cannot dismiss the eviction solely based on the landlord's acceptance of past due rent from the tenant.

I really like this provision of the new law becasue currently, many tenants and their attorneys argue that if an eviction is pending and a landlord accepts past due rent from a tenant, that the landlord's acceptance of that rent has effectively "waived" the landlord's right to proceed with the eviction.

11. Tenant Remedies

The Substitute Amendment added that any violation of chapter 704, including the provisions of the new bill, may constitute an unfair trade practice which may allow the tenant to sue a landlord for double damages and attorney's fees.

I don't like this new provision of the law for one simple reason. I believe it will be used by tenants and tenant's attorneys to seek double damages and attorney's fees whenever a landlord allegedly violates any provision of chapter 704, whether the violation is a true unfair trade practice violation or not. Only the provisions of ATCP 134, which will be codified in ch. 704 under this new law, deal with unfair trade practices. Nonetheless, I anticipate that we will see some very creative arguments by tenant's and their attorneys as to why a tenant should be awarded double damages and attorney's fees for violations of chapter 704 that are not unfair trade practice violations.

Now we will have to wait and see how this new law "plays out" in the real world of landlording. Some of the key things everyone will need to address before March 31, 2012, when the law takes effect are:

1. Make sure any rental agreement you enter into with a tenant after March 31, 2012, does not contain any language that would be in violation of the "8th Deadly Sin" which essentially means eliminating or modifying any language similar to that found in the Crime-Free Lease Addendum.

2. Make sure to add language in your rental agreement, and any renewal documents, stating that any property left behind by the tenant will be considered to be abandoned and will be disposed of by the landlord without any further notice to tenant (except for medical prescriptions and medical devices, mobile homes and titled vehicles).

3. Rename your Check-In / Check Out Sheet as "Information Check-In Sheet" and insure that you provide any new tenants with a completed copy of the form thoroughly documenting the condition of the rental unit.

4. Disclose any code violations that you have actual knowledge of that may present a significant threat to the tenant's health or safety before entering into a rental agreement or accepting a security deposit or earnest money.

Good Luck Everyone

ADDITION: 3/21/12 - Make sure you read my 3/21/12 post about why I now think this new law will actually hurt landlords more than help them

ADDED 4/11/12 -- Here is the link to the new law.

ADDED 4/11/12 - Here is a link to an article I recently authored on the new law.

ADDED 4/11/12 - Here is a link to the newly revised Wisconsin Statutes Chapter 704 re: Landlord and Tenant

Milwaukee County Releases Dates That Eviction Court Will Be Closed in 2012

Milwaukee County recently released all dates that Eviction Court will be closed in 2012. Most of them are obvious closings for holidays but there are a few that are not holiday-related.

So make sure you don't schedule a return date in eviction court for any of these days:

May 4, 2012

May 28, 2012

July 4, 2012

September 3, 2012

November 2, 2012

November 23, 2012

December 24, 2012

December 25, 2012

December 31, 2012

New Landlords' Omnibus Bill Being Debated In Madison

On February 13, 2012 2011 Senate Bill 466 (more commonly referred to as the Landlords' Omnibus Bill) was introduced by Senator Lasee and referred to the Committee on Insurance and Housing. A companion bill was also introduced in the Assembly - 2011 AB 561. A public hearing on the above bills was held on February 15, 2012.

The Landlords' Omnibus Bill addresses numerous issues affecting landlord-tenant relations in Wisconsin and if passed will greatly assist landlords.

The bill proposes the following:

1. Eliminates the ability of a municipality from enacting or enforcing any ordinance that imposes a moratorium on a landlord from evicting a residential or commercial tenant.

Such moratoriums have occurred in the past effectively preventing landlords from evicting tenants during the holiday season for instance.

2. Allows for the severability of all rental agreement provisions and prevents an entire rental agreement from being declared unenforceable against a tenant -- or void -- because it contains an unenforceable or void provision.

If passed this will effectively render the Wisconsin Supreme Court's decision in Bairl v. McTaggart moot.

3. Allows a landlord to immediately dispose of any property abandoned by a departed tenant.

Currently according to Wis. Stats. sec. 704.05(5) a landlord can choose one of three options with regard to a tenant's abandoned property, but all three involve a landlord jumping through hoops and/or holding the abandoned property for a period of time.

4. Requires a landlord to disclose to prospective tenants if there are any uncorrected building code violations in the rental unit.

5. Requires that a landlord provide a residential tenant with a standardized check-in sheet describing the condition of the property at the time of the tenant's check-in.

6. Requires that a landlord shall (i.e. MUST) recover damages for a tenant's failure to vacate after his tenancy has been terminated. The amount of damages shall be, at a minimum, double the rental value of the unit for the time that the tenant held over, but can be more.

Currently Wis. Stats. sec. 704.27 only says that a landlord "may" recover "holdover" damages.

7. Creates a new statutory section that allows a landlord to withhold the following from a tenant's security deposit: (a) tenant damage, waste or neglect, (b) unpaid rent, (c) utilities, (d) any other items listed in a Nonstandard Rental Provision document.

Currently the above is only contained in the Wisconsin Administrative Code ATCP 134.06(3) -- which is a regulation and not law.

8. Provides that if a tenant vacates before the end of his lease that a landlord will not have to return the tenant's security deposit or send the teanant a security deposit itemization letter until 21 days after the lease ends or 21 days after the unit is re-rented.

Currently per ATCP 134.06(2) the landlord must return the security deposit or security deposit itemization letter within 21 days of the tenant "surrendering" the rental unit. As this regulation is currently written there are some instances where a security deposit must be returned to a tenant that has broken a lease even though the tenant will be legally responsible for future rent but is not responsible for any rent within the 21 days after the tenant surrenders.

9. Requires a tenant to notify the landlord in writing of any repair or maintenance problem before reporting the problem to a building inspector, elected public official or code enforcement agency.

Currently some tenants are calling DNS or other building code enforcement agencies alleging that they told their landlord of a maintenance or health and safety emergency in their rental unit and that the landlord is not making the necessary repairs - when this is not the case . Tenants may do this in order to "get a landlord in trouble" with an enforcement agency or to avoid paying rent. As a result, some landlords are hearing about the maintenance issue for the first time when contacted by the building code agency. This provision will hopefully eliminate such "he said - she said."

10. If a landlord has filed an eviction action against a tenant for non payment of rent and the landlord accepts past due rent from the tenant after the eviction lawsuit was filed, the eviction may not be dismissed by the court solely because of the acceptance of rent.

Currently a landlord is in a catch-22 position. If a landlord accepts payment of late rent (either partial past due rent or the full amount after the "cure" period has ended) the landlord risks the court deciding that the landlord "waived" his right to proceed with the eviction. But if the landlord turns away past due rent offerred by the tenant after the "cure" period has passed, the landlord is essentially losing out on money owed to him that he will never see again.

Please be sure and call your state senator and state assembly person and urge them to vote in favor of the Landlord's Omnibus Bill.