Article on Landlord-Tenant Law Topped the List of WisBar InsideTrack's Most Read Articles of 2012

Milwaukee lawyer Tristan Pettit's article on landlord-tenant law topped the list of most-read articles from WisBar InsideTrack in 2012.

In the past year, WisBar InsideTrack received a number of timely and relevant article submissions from lawyers discussing legislative actions and judicial decisions, substantive legal issues, practice management, ethics, human interest and other developments.

On April 4, 2012, Attorney Tristan Pettit of Petrie & Stocking S.C. wrote an article entitled "Landlord-Tenant Law: Rights, Remedies, and Changes Under New Act 143" which discussed many of the changes in the new landlord-tenant law that took effect on March 31, 2012, including the disposal of abandoned property, severability of rental agreement provisions, acceptance of past due rent and much more.

Here is a link to the Dec. 19th issue of WisBar InsideTrack announcing its top 10 articles.

Here is a link to Tristan's article.

Don't Miss the AASEW's Holiday Party on Monday December 10th.

It’s that time of year again, Ring in the Holidays with the Apartment Association of Southeastern Wisconsin's Annual Holiday Party!!!!

Monday, December 10th. Doors open at 5:30 p.m. Dinner at 6:30 p.m.

The Clarion Hotel 5311 S. Howell Avenue, Milwaukee

$30.00 per person, includes appetizers, dinner, coffee and dessert and door prizes prizes! Cash bar.

To register, mail your check prior to December 6th to AASEW, PO BOX 4125, Milwaukee, WI 53204. If you prefer, you may pay by credit card by calling us at 414-276-7378.

Happy Holidays!

The Staff & Board of the Apartment Association.

Hope to see you there

T

Milwaukee's Amended Smoke Alarm Ordinance To Take Effect June 1, 2013.

On November 8, 2012, Milwaukee's Common Council passed a revised smoke alarm ordinance by a vote of 13 to 2.

Effective June 1, 2013, all battery-operated smoke alarm must be powered by 10-year or more non-removable (sealed) batteries. Compliance with this requirement must be met when replacing any current battery operated smoke alarm after June 1st next year or by October 1, 2017 -- whichever is sooner. The AASEW was successful in getting the effective date of the revised ordinance delayed so as to allow landlords some additional time to use up their current supply of non-sealed smoke alarms.

The remainder of the ordinance which requires a "hush button" be present on the smoke alarm if it is located within 20 feet of the kitchen and the requirement of annual testing and recording of when the testing occurred and by whom, remained unchanged.

Milwaukee Co. Eviction Court Closure Dates Through End of Year

Milwaukee County just advised many of us that Eviction Court (room 400 only) will be closed the following days:

- Friday, November 2, 2012

- Friday, November 23, 2012

- Friday, December 14, 2012

- Monday, December 24, 2012

- Monday, December 31, 2012

Note: These closures do NOT apply to Judge Kuhnmuench's courtroom in room 409.

The Effects of "Obamacare" On The Small Landlord

There are so many questions regarding how the Patient Protection and Affordable Care Act, more commonly referred to as "Obamacare," will effect small businesses such as us in the rental housing industry. What is the truth?

AASEW Attorney Heiner Giese, a fellow landlord, has researched the law in depth and will be one of the speakers at the AASEW's upcoming monthly membership meeting on Monday, October 15th, where this issue will be discussed. To present an opposing view, former Democratic legislator and current lobbyist, Gary Goyke, will also be on hand.

This is a huge piece of legislation with equally large potential impact on all of us.

Attendance is free to current members of the AASEW and $25 per person for non-members. Your AASEW General Membership includes admission for all members of a single household. An AASEW Business Membership includes admission for all owners and employees of a single business.

Please join us this Monday.

WHEN: Monday, October 15, 2012 at 7 PM

WHERE: Best Western Midway, 1005 S. Moorland Road, Brookfield (just south of I-94)

COST: Free to AASEW members. $25 per person for non-members.

New Milwaukee Smoke Alarm Ordinance To Require Sealed Lithium Battery Units In Residential Rental Housing

The City of Milwaukee has introduced a change to the residential smoke alarm ordinance. If passed, the revised ordinance will require the use of sealed smoke alarm units with 10 year lithium batteries in all city residential rental housing. The proposed ordinance would require landlords to install the sealed unit when replacing a current removable-battery unit or by October 1, 2022, whichever occurs sooner.

In is unknown what the impetus behind the revised ordinance was but most likely it was the fact that tenants still continue to remove the battery from their smoke detectors to use for other things . . . like their kids toys. While the “hush button” requirement a few years ago partially alleviated tenants removing the battery when cooking, it still did not prevent tenants from removing the battery to power little Junior’s Talking Elmo.

The cost of the sealed unit will run approximately $13 more per unit than current smoke alarms. Those landlords in an effort to reduce costs who decided to buy smoke alarms in bulk now find themselves facing a huge loss as they will have difficulty using up their stockpile before the new ordinance requires replacement with the new sealed units.

The current ordinance states:

214-23. Battery-Operated Smoke Alarms.

Every battery-operated smoke alarm shall be

tested by the owner not less than once every

calendar year. The owner shall provide a copy of

test results to the commissioner or the

commissioner=s designee upon request. Test

results shall include the date on which testing was

performed and the name, telephone number and

property relationship of the person who performed

the test. Testing shall be performed in accordance

with the manufacturer=s specifications for testing.

By September 21, 2005, every owner shall take

the actions necessary to ensure that any smoke

alarm located within 20 feet of the primary cooking

appliance within the unit has a silencing switch

(hush button).

The proposed revised ordinance is below:

Part 1. Section 214-23 of the code is repealed and recreated to read:

214-23. Battery-Operated Smoke Alarms. 1. TYPE. Every battery-operated smoke alarm shall be powered by 10-year or more non-removable batteries. Compliance with this requirement shall be met when replacing an existing battery-operated unit according to the manufacturer's recommended replacement date or by October 1, 2022, whichever is sooner.

2. SILENCING SWITCH. Any smoke alarm located within 20 feet of the primary cooking appliance within the unit shall have a silencing switch.

3. TESTING. Every battery-operated smoke alarm shall be tested by the owner not less than once every calendar year. The owner shall provide a copy of test results to the commissioner or the commissioner's designee upon request. Test results shall include the date on which testing was performed and the name, telephone number and property relationship of the person who performed the test. Testing shall be performed in accordance with the manufacturer's specifications for testing.

Part 2. Section 214-27-3 of the code is amended to read:

214-27. Smoke Detectors and Smoke Alarms for Residential Dwellings Built Prior to January 1, 1983. 3. TYPE. Smoke detectors and alarms required under this section shall be single station devices, either battery operated >>as provided in s. 214-23<<, plug-in or directed wired A/C units unless otherwise required by the code.

____________________________________________________________________________________________________________________

UPDATE 10/9/12 --- The hearing was held earlier today and it was referred to ZND committee for a hearing in November sometime. The ordinance was amended to require that the sealed lithium battery units go into effect in 2017 (5 years) rather than 2022 (10 years). A request was made by AASEW counsel Heiner Giese to delay the effective date of the ordinance to June 1, 2013 so that landlords could use up their current supply of non-sealed battery units - one alderman supported this request. Several alderman expressed concern that this proposed modification to the current ordinance would be expensive for homeowners who do not have to deal with tenants that remove the batteries from smoke alarm units

- Thank you to Heiner for the updated information.

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.