What Is The Difference Between a Rental Agreement, a Lease, and a Month to Month Tenancy

A question that I am often asked is what is the difference between a rental agreement, a lease, and a month to month tenancy.

I will do my best to explain.

The "Real World" Answer

A "Rental Agreement" is the general term that is used to cover all types of rental tenancies. A rental agreement includes a lease and a periodic tenancy (such as a month to month tenancy).

A "Lease" is a specific type of rental agreement. A lease is a tenancy for a definite period of time with a specific beginning date and a specific end date. A lease can be for any duration of time that you can think of . . . 10 years, 5 years, 1 year, 6 months, 3 months, 1 month, or even for 1 week. They key component of a lease is that it is for a specific duration of time. I often refer to a lease as a "lease for term" to remind people that we are dealing with a tenancy for a specific period of time (i.e. term). A Lease can be in writing or oral, however a lease for more than one year must be in writing in order to be enforceable. It is my recommendation that all leases be in writing.

A "Periodic Tenancy" is another type of rental agreement. A periodic tenancy is a tenancy that has a beginning date but no end date and continues indefinitely until terminated by either the landlord or tenant. The most common type of periodic tenancy is a month to month. A periodic tenancy can be in writing or oral. It is my recommendation that all periodic tenancies be in writing.

While the definitions are fairly straightforward, things become muddled because many people use the terms improperly and/or interchangeably. For example, I often hear people say that they have a "month to month lease." There is no such thing as a month to month lease. You either have a month to month tenancy or you have a lease. They are not the same thing as the month to month tenancy continues indefinitely until terminated whereas the lease has a specific end date.

The "Law School" Answer

A rental agreement is defined as an oral or written agreement between a landlord and tenant, for the rental or lease of a specific dwelling unit or premises, in which the landlord and tenant agree on the essential terms of the tenancy, such as rent. Wis. Stat. § 704.01(3m) (2015-16).

A lease is defined as an agreement, whether oral or written, for the transfer or possession of real property or both real and personal property, for a definite period of time. Wis. Stat. § 704.01(1) (2015-16).

A periodic tenancy, while having a specific start date does not have a specific end date and continues indefinitely until either the landlord or the tenant terminates the tenancy. A periodic tenant holds possession of a rental property without a lease and pays rent on a periodic basis. Wis. Stat. § 704.01(2) (2015-16).

Thanks

T

GUEST POST: Is Your LLC Protecting Your Personal Assets?

Hello Everyone - Atty. David Espin has recently joined PETRIE + PETTIT. Dave focuses his practice on business law, with an emphasis on business formation, corporate transactions, business bankruptcy, and commercial workouts. Dave advises businesses of all sizes on the legal and practical issues that they face every day.

Below is a guest post that he has written which is applicable to landlords, many of which hold their rental properties in LLC;s, but also to anyone that has an LLC.

Is Your LLC Protecting Your Personal Assets?

So you've decided to start your own business, and being the prudent entrepreneur that you are, you've followed your attorney's advice and formed a limited liability company to run your business and hold its assets. So all of your personal assets are sure to be protected from the company's creditors, right? Well, not in all cases.

The general rule is that a company's shareholders or members are not personally liable for their company's debts. As the theory goes, this incentivizes investment by capping an owner's risk at the amount they have invested. The concept of limited personal liability has been referred to by many legal scholars as the “most important legal development of the nineteenth century."

However, there are exceptions to the general rule of limited personal liability. This is known as “piercing the corporate veil," and most often occurs when a court finds that a company is the owner's “alter ego," and is merely being used as a sham to bypass regulations or defraud third-parties.

The Wisconsin Supreme Court has explained that personal liability may be imposed when a company is a mere “instrumentality" of the owner, and the owner is hiding behind the company to “evade an obligation, to gain an unjust advantage, or to commit an injustice."In order to satisfy the elements of the “alter ego" doctrine, there must be proof of the following elements:

1. The owner must have absolute control of and dominion over the company to the extent it has no separate mind, will or existence of its own;
2. Such control must be used by the owner to commit a fraud or a wrong, to perpetrate the violation of a statutory or other legal duty, or to commit a dishonest and unjust act in contravention of a third-party's legal rights; and
3. The aforementioned control and breach of duty must proximately cause the injury or unjust loss complained of.

In regard to the first element, the court will look at whether or not the company has followed corporate formalities, i.e. whether it has organizational documents like articles or organization, by-laws or an operating agreement, whether it has conducted meetings and maintained records, and whether the owner is using the company as his or her own personal piggy bank.

As to the second element, the court will look at whether the control was used to commit the wrong or the injustice that occurred. Whether or not a company is “adequately capitalized" at formation is often a factor that is analyzed.

For the third element to be proven, it must be shown that there is a link between the control, the injustice, and the harm that occurred. Practically speaking, this means that the third-party alleging the wrongdoing must have relied on the controlling owner's misrepresentations or fraudulent documents.

Finally, the veil piercing doctrine is not just a one way street: the “reverse alter ego doctrine" can also be used by creditors to reach the corporate assets held by a company owned by an individual judgment debtor. This is usually invoked when a shareholder or member uses the company to hide assets or secretly conduct business to avoid some pre-existing liability.

While it is undoubtedly good practice to form a corporate entity like an LLC to run your business, owners must still be diligent in order to maintain corporate formalities, adequately capitalize their companies, and make third-parties aware that they are dealing with a separate corporate entity.

GUEST POST: Views on "Landlords Games" Series and the City of Milwaukee's Task Force on LLC's

This is a Guest Blog Post authored by Tim Ballering

Recently the Milwaukee Journal ran a series “Landlord Games" that inaccurately portrayed LLCs as being used simply to avoiding paying property taxes and fines. The result is the Milwaukee Common Council is creating a committee to study LLCs and rental housing. Text of proposal. The rental industry is again, noticeably absent from those invited to the table.

View as formatted pdf with footnotes

Let's agree that all property owners pay a cost when someone fails to pay their taxes or their property is foreclosed and abandoned.

The Apartment Association of Southeastern Wisconsin (AASEW) does not support bad actors. None of those owners featured in the Journal article are members of the Association.

Rather we see the importance of the city, and private investors working together to make rental housing, and therefore neighborhoods, succeed for the mutual good of both.

Rental housing is an important and integral element of Milwaukee. About 58% of the residents of Milwaukee are tenants. In some neighborhoods, such as 53233 the number of renters exceeds 97%. The success or failure of neighborhoods and rental housing are closely tied.

Rental Housing is the largest small business in Milwaukee with over $7 billion invested in Milwaukee. (MPROP assessor records October 2015) Rental properties account for well over a half billion dollars a year of economic impact, starting with $190 million in property taxes, sewer and water charges, maintenance, insurance and everything else that goes into running rental housing. The Census Bureau found the yearly median operating costs per unit for multifamily rental properties vary between $3,600 per unit for small properties and $5,170 per unit for large properties, adjusted to 2016 dollars. These numbers exclude interest and mortgage servicing.

Providing rental housing in older, poorer neighborhoods is difficult, challenging and unappreciated work. Many have failed, some are opportunists or worse, but the majority were simply overwhelmed financially and mentally by the task at hand.

Owners are impacted by the financial and social problems of their tenants, the high costs of maintenance and lack of capital to address those problems. It is not the owner's lifestyle that contributes to insect infestations or broken windows, yet it is the owner and not the occupant that is accountable both financially and recently in the media.

Not only do private owners suffer these burdens. One only needs to look at the long history of failure among Milwaukee's nonprofit housing providers. (see excerpt below) These groups had every advantage over the small private investor. They had significant financial resources, typically through Block Grant and other government funding and grants; they had well-paid and well-educated staff; they often obtaining properties without costs, and they had access to the best tenants on Rent Assistance. Nearly all of Milwaukee's nonprofit housing providers failed financially.

These groups had every advantage over the small private investor. They had significant financial resources, typically through Block Grant and other government funding and grants; they had well-paid and well-educated staff; they often obtaining properties without costs, and they had access to the best tenants on Rent Assistance. Nearly all of Milwaukee's nonprofit housing providers failed financially.

Or one could look at the Milwaukee's Housing Authority budget to see the costs they incur housing low-income Milwaukeeans. Here too is an organization that gets Rent Assistance tenants, tenants who risk losing their housing subsidy if they fail to comply with the rules or pay their rent. HACM does not rent to the populations with bad histories, leaving the segment most in need of housing to the private sector.

Milwaukee should strive to encourage a successful private rental housing market in this once great city, but since the mid-1980s' the city adopted a culture of hatred towards private rental owners. That has not produced positive results, but instead, discourages the right people from participating.

If Milwaukee rental housing became more sustainable, where people willing to invest their time and money were to make reasonable profits, it would be harder for the few charlatans to exist because of increased competition for available properties. An added benefit is more interest in investing in Milwaukee's rental housing will result in an increase in values and therefore an increase in the tax base.

Alderman Witkowski, who is the co-author of this proposal, created a Local Business Action Team to help small business succeed. Rental housing is the largest segment of small business within the city and one that may have the greatest impact on the well-being of the city. With our half billion dollars a year of economic impact, a similar effort should be undertaken towards making private rental housing more successful.

Let's look at the recent Journal Sentinel series on landlords.

This investigative reporting – using easily available public records – showed that the individual owners behind LLCs could be revealed and that other properties owned by these individuals or different LLCs could also be exposed. Changes in the LLC laws are not necessary, contrary to the assertions of Aldermen Murphy and Witkowski that bad landlords are operating in secret. The City Attorney's office has recently been successful in having a receiver appointed for the various ownership entities used by inner city landlord

Within existing laws, the city could have caused most of the featured landlords to go out of business, through docketing and enforcing code enforcement fines, and foreclosing of tax delinquencies. For whatever reason the city allowed these owners to continue unabated.

Perhaps most troubling is the relentless attack on James H. Herrick, who works for Baird, which went as far as the Mayor calling for the guy to be fired. He is not a member of the Association nor known to us.

The Journal reported that inspectors show up and find basement doors illegally padlocked. In the article, the owner's manager states he did this in an attempt to keep drug dealers from entering the property.

There is no argument that inoperable fire doors are an unreasonable risk to occupants. Clearly, this was a novice mistake made by someone who did not understand fire codes.

The correct response by DNS would be for the inspector to explain the problem and demand the owner's rep immediately remove the padlocks. If the owner did not comply, the Department of Neighborhood Services has an essential services program where the city can order a repair and then bill the owner.

Instead, the inspection supervisor chose to placard the building and force 50 families out onto the street. Closing a 50 unit building would not have been the DNS response had the property been located on the Eastside, Bayview or the Southwest side. In these more affluent neighborhoods DNS would have compelled a solution that kept the tenants safely in their homes.

But this building is in a poor, minority neighborhood. The city's response was harsh as it typically is in these neighborhoods. The DNS employees who acted out of spite towards the owners and a disregard of the tenant population, instead of attempting to protect the homes of 50 low income, primarily minority tenants, should lose their jobs.

The 50 unit building remained closed for a couple of months. It is no surprise that the building ended in foreclosure and sold at a distressed price due to this.

The owner's use of a single property LLCs, in this case, was an advantage to the city. Because the owner had his properties in separate LLCs, this allowed only this one building to be foreclosed upon, instead of all 13.

It is a lending industry practice in larger real estate deals to require single asset entities to separate liability from one project and others with a similar ownership interest.

It would actually be in Milwaukee's best interest if every investment property was in a properly segregated LLC. That way a failure at one property would not have a domino effect and bring down perhaps dozens or more other properties that are under similar ownership.

Then Journal and Mayor call for Herrick, the owner to lose his job. What advantage does the city receive in this? If he loses his job, his remaining properties will likely fall into financial problems as well, resulting in more boarded buildings, displaced tenants, and distressed sales.

Similarly, what did the city gain by the public attack on NBA basketball star Devin Harris? While it may have been expedient in causing the payment of some fines and taxes, overall it sent a clear warning to others with capital “Do not invest in Milwaukee. If you fail, you will be ridiculed and perhaps lose your career." Similar results could have been obtained with a private conversation with Harris, thereby not discouraging outside investment

By Tim Ballering

The Next Landlord Boot Camp Will Be Held on February 18, 2017

Hello Everyone - I have recently announced the next Landlord Boot Camp session. Here are the details. I hope to see many of you there.

WHEN: February 18th, 2017 – Saturday 8:30 AM – 5:30 PM Registration opens at 7:00 AM

WHERE: Clarion Hotel 5311 S. Howell Avenue, Milwaukee

INCLUDED: 100 plus page manual to help you put what you learn into practice.

What you will learn at the Apartment Association's 2017 Landlord Boot Camp

Landlord Boot Camp covers everything that you need to know about residential Landlord Tenant law in Wisconsin, as amended in March 2012 by Act 143, in March 2014 by Act 76 and again in March 2016 with the passage of ACT 176, including:

1. How to properly screen prospective tenants
2. How to draft written screening criteria to assist you in the selection process
3. How to comply with both federal and state Fair Housing laws including how to comply with “reasonable modifications" and “reasonable accommodations" requests
4. How to legally reject an applicant
5. What rental documents you should be using and why
6. When you should be using a 5-day notice versus a 14-day notice, 28-day notice, or 30-day notice and how to properly serve the notice on your tenant.
7. Everything you wanted to know (and probably even more than you wanted to know) about the Residential Rental Practices (ATCP 134) and how to avoid having to pay double damages to your tenant for breaching ATCP 134
8. When you are legally allowed to enter your tenant's apartment
9. How to properly draft an eviction summons and complaint
10. What to do to keep the commissioner from dismissing your eviction suit
11. What you can legally deduct from a security deposit
12. How to properly draft a security deposit transmittal / 21-day letter
13. How to handle pet damage
14. What to do with a tenant's abandoned property and how this may affect whether or not you file an eviction suit
15. How to pursue your ex-tenant for damages to your rental property and past due rent (and whether it is even worth it to do so)
16. An ample question and answer period. This alone is worth the admission.. . . and much more.

NEW PRICES:

• Members $179
• Non-Members $297
• Member refresher $139
• Non-member refresher $257
• Boot Camp w/ AASEW Membership $298
• Member of other Associations $257

Wisconsin landlord-tenant laws are constantly changing. To help keep you up to date those who attended in the past three years receive a $40 discount.

*Note that we can only accommodate a maximum of 120 participants, so register early to reserve your spot as we have had to turn people away the last several sessions!

Portland Landlord Sentenced to Jail For Apartment Fire That Resulted In The Death of Six Tenants

There has been a lot of news reports lately about fires in rental buildings. Recently there was the Oakland, California "Ghost Ship" fire that killed 36 people. Just a few days before that fire, a landlord was sentenced to serve time in jail as a result of one of the deadliest fires in 4 decades in Portland Maine. This was the first jail sentence for a landlord in Maine as a result of a safety code violation.

The landlord of the Portland, Maine residential rental property was charged with manslaughter as a result of the 6 deaths that resulted from the fire that occurred back on November 1, 2014. The landlord was later acquitted of the manslaughter charges but found guilty of a misdemeanor safety code violation.

The prosecutor was asking that the landlord be sentenced to the maximum sentence - 6 months in jail and $1,000 fine - in part to put all landlords in Maine on notice allegedly. While the judge did not impose the maximum jail sentence, he did sentence the landlord to a 90-day jail term and the maximum fine.

The landlord, who was also a real estate agent, was never cited for a code violation prior to the fire but apparently ignored a warning from a building contractor back in 2005 that the third floor windows were not large enough to meet the local building codes.

The judge indicated that the code violation --- the third floor windows were too small to serve as an emergency escape route -- deprived the three individuals on the third floor of an emergency exit thus preventing them from getting out of the house alive. Those three individuals died along with three others who were not on the third floor.

As a result of this fire and the resulting deaths, Portland officials have created a new housing safety office, expanded its safety inspections of rental units, and have started to more aggressively prosecute landlords that ignore code violation notices.

Unless the sentence is appealed, the landlord must report on December 23rd to start serving his 90 day jail sentence.

If you would like to learn more about the case there is a thorough article from Press Herald.

This sad situation is a reminder to all landlords and building managers to inspect their rental properties frequently and insure that your properties meet local codes.

Public Housing Advocates Take Issue with HUD's Memo Regarding the Use of Criminal Backgrounds In The Tenenat Screening Process

The Public Housing Authorities Directors Association (PHADA), a public housing advocacy group comprised of chief executives of public housing authorities, has published a very detailed and well reasoned letter attacking HUD's recent memo regarding landlords use of rental applicants criminal background in the tenant screening process.

If you are would like to learn more about HUD's April 4, 2016 memo drafted by its Office of General Counsel (OGC) you should read my prior blog summarizing the memo.

PHADA takes issue with the HUD memo on a number of grounds:

1. The guidance was issued outside of its normal channels and as such has circumvented the normal extensive internal vetting and review process.

2. New requirements and review standards have been created by HUD without public notice and comment period as required under the Administrative Procedures Act.

3. The guidance is inconsistent with or in some cases contradicts the tone and content of some of HUD's existing regulations.

4. The guidance many not comply with the standards regarding implementation of disparate impact as set forth by the U.S. Supreme Court in Texas Dept. of Housing and Community Development v. Inclusive Communities Project, Inc.

5. HUD's memo appears to contradict guidance issued by HUD's Office of Public and Indian Housing concerning the use of arrest records for screening applicants for public housing and Section 8 programs.

6. The guidance, in conjunction with other regulatory actions and procedures of HUD, could increase the risk of litigation.

7. The guidance fails to offer landlords specific guidance concerning what constitutes acceptable and unacceptable screening practices or to describe any safe harbor for landlords concerning the use of an applicant's criminal history.

While the PHADA's letter is long it is very well written and argued and I encourage everyone affected by HUD's memo (i.e. ALL LANDLORDS) to read it in its entirety.

If anything comes of the letter and its arguments I will keep you apprised in a future blog post.

Thanks

T

More New and Revised Landlord Forms Available at Wisconsin Legal Blank

I have recently completed drafting some new landlord forms which are now available at Wisconsin Legal Blank, including:

1. Smoking Policy Addendum (Form 982) - This form may be used when a landlord wants to prohibit smoking on the rental premises or only allow smoking in specific location/s of the rental premises. This form also sets forth the terms, conditions and rules related to any smoking prohibition or restriction on smoking.

2. Co-Signer Agreement (Form 20) - I wanted to "beef up" the co-signer agreement section that previously was located in the lower left-hand corner of the Rental Agreement (Forms 19 and 19L). This new form will allow a landlord to obtain more information about the co-signer similar to the information requested of a potential tenant on a rental application lie address, DOB, SS#, place of employment etc. This information will aid a landlord in evaluating the collectability of a co-signer and provide necessary information should the co-signer need to sued or turned over to a collection agency. This form also explains in greater detail the obligations of a co-signer if the tenant fails to pay rent or violates other portions of the rental agreement.

I have also revised several of Wisconsin Legal Blank's current forms to make them better, including:

3. Applicant Screening Criteria (Form 990A) - This form needed to be modified in light of HUD's April 4, 2016 directive regarding the use of applicants' criminal history during the screening process. I also took this opportunity to make this form easier to use by combining all requirements into separate numbered paragraphs.

4. Nonstandard Rental Provisions (Form 984) - If you will recall, the main purpose of a NSRP is to list things that a landlord can deduct from a tenant's security deposit. Toward that end, I added a new provision that will allow a landlord to deduct any rental promotion or concession (i.e. first month free rent upon the signing of a 12 month lease) from a tenant's security deposit should the tenant skip out prior to the end of the lease or be evicted. Another provision that was added includes any costs incurred by a landlord associated with the removal of tenants' abandoned property. Finally, I also clarified that a landlord may deduct for "damage, waste or neglect" to the rental unit and not just "damage."

5. Landlord Reference Questionnaire (Form 12) - This form provides suggested questions that a landlord can ask a rental applicant's current or prior landlord during the screening process. Revisions were made to bring the form into compliance with HUD's directive (see reference above and prior blog post). I also made some grammatical changes to the questions.

6. 12 Hour Notice To Enter (Form 331) - I made some changes to this form so that it better explains the situations in which a landlord may enter a tenant's rental unit. I also clarified the portion of the form dealing with who the tenant may contact if s/he has any questions/concerns.

Happy Landlording!

AASEW's Fall Landlord Boot Camp Announced - October 29, 2016

The AASEW's Fall Landlord Boot Camp has recently been announced. This will be the 14th Boot Camp.

This Boot Camp will be a very important one as I will be covering two new topics that are very important.

1. We will discuss the new Landlord Tenant Law (Act 176) and its effects including the "crime-free" provisions, and

2. We will discuss HUD's new directive regarding the use of an applicant's criminal history in the screening process.

Our last Boot Camp sold out several weeks before the event so if you are interested I would encourage you to sign up early.

It is important to remember that landlording can be pretty complex, with a seemingly never ending myriad of paperwork, rules, landlord-tenant laws and simple mistakes that can cost you thousands. In fact as we speak a new landlord-tenant bill is being debated in Madison.

The Apartment Association of Southeastern Wisconsin's 14th “Landlord Boot Camp" can help you navigate these treacherous waters and learn how to run your properties with greater profit and less hassles.

Who: Taught by Attorney Tristan Pettit, who drafts many of the landlord tenant forms for Wisconsin Legal Blank.

Attorney Tristan Pettit has given similar landlord-tenant law seminars to fellow attorneys, landlords, and property manager organizations that charge their members $300-$400. This is your opportunity to learn all of the same information at a huge discount through the Apartment Association

When: Saturday, October 29, 2016 8:30 AM – 5:30 PM Registration opens at 7:00 AM

Where: Clarion Hotel 5311 S. Howell Avenue, Milwaukee [Map]

Included: 100 plus page manual to help you put what you learn into practice.

Price:

• Members $179
• Non-Members $297

What you will learn at the Apartment Association's 2016 Landlord Boot Camp

Landlord Boot Camp covers everything that you need to know about residential Landlord Tenant law in Wisconsin, as amended in April 2012 by Act 143, again in March 2014 by Act 76 and again in March 2016 by Act 176, including:

1. How to properly screen prospective tenants

2. How to draft written screening criteria to assist you in the selection process

3. How to comply with both federal and state Fair Housing laws including how to comply with “reasonable modifications" and “reasonable accommodations" requests

4. How to legally reject an applicant

5. What rental documents you should be using and why

6. When you should be using a 5-day notice versus a 14-day notice, 28-day notice, or 30-day notice and how to properly serve the notice on your tenant

7. Everything you wanted to know (and probably even more than you wanted to know) about the Residential Rental Practices (ATCP 134) and how to avoid having to pay double damages to your tenant for breaching ATCP 134

8. When you are legally allowed to enter your tenant's apartment

9. How to properly draft an eviction summons and complaint

10. What to do to keep the commissioner from dismissing your eviction suit

11. What you can legally deduct from a security deposit

12. How to properly draft a security deposit transmittal / 21 day letter

13. How to handle pet damage

14. What to do with a tenant's abandoned property and how this may affect whether or not you file an eviction suit

15. How to pursue your ex-tenant for damages to your rental property and past due rent (and whether it is even worth it to do so)

There will also be an ample question and answer period. This alone is worth the admission.. . . and much more.

Our Spring session was sold out weeks before the event, so if you are interested in attending please consider signing up early to avoid missing this important seminar.

Call the Association at (414) 276-7378 or email us at membership@AASEW.org or sign up online at www.LandlordBootCamp2016.com today to reserve your spot.

HUD Issues New Guidelines On The Use of Criminal Records In The Rental Screening Process

On April 4, 2016 the U.S. Department of Housing and Urban Development (HUD) dropped a bombshell on owners and managers of residential rental properties in the U.S.

HUD's Office of General Counsel published a 10 page guide entitled "Guidance on Application of Fair Housing Act Standards to the Use of Criminal Records by Providers of Housing and Real-Estate Related Transactions."

This guide essentially changes the rules as we currently know them with regard to rejecting a rental applicant based on their prior criminal history. I highly recommend that all of you read the document itself -- many times in fact -- as this is a very important change and this issue is not going to go away.

This Policy Is Applicable To All Landlords

HUD's guide applies to ALL HOUSING PROVIDERS. I repeat, this new policy applies to all of you. Some landlords assume that when the see "HUD" that it only applies to federally subsidized housing and public housing. Sometimes that is true, but not in this case. HUD is the federal agency that investigates allegations of fair housing (discrimination) violations. HUD investigates discrimination allegations against all landlords not just landlords of section 8 properties. So this guide published by HUD applies to all of you market rate/conventional housing landlords as well.

Disparate Impact

In order to understand HUD's view on the use of a person's criminal history in the screening process you have to understand something referred to as "disparate impact". In essence, "disparate impact" means that a landlord can have a facially neutral screening policy that is applied equally to everyone but it can still be discriminatory if its use results in a disproportionate impact on a member of a protected class.

HUD's guide includes lots of statistics that show that across the U.S. African-Americans and Hispanics are arrested, convicted, and incarcerated at rates disproportionate to their share in the general population.

As a result of these statistics, if a landlord considers and applicant's criminal history (arrest and/or conviction) as part of the screening process, that landlord may be discriminating against African- Americans or Hispanics based on their race and/or national origin (both of which are protected classes under Fair Housing laws).

So even if your screening policy on its face is not discriminatory and even if you are applying it evenly you may still be discriminating based on race and/or national origin, because your policy affects African-Americans and Hispanics more than others.

Substantial, Legitimate, Nondiscriminatory Interest

So does this mean that a landlord cannot take into consideration a rental applicant's criminal background at all? The answer is both "yes" and "no." HUD states that a landlord may not be discriminating based on race or national origin if his/her screening criteria with regard to the criminal history of an applicant can be proven to be "necessary to achieve a substantial, legitimate, nondiscriminatory interest of the [housing] provider."

What the heck does that mean?

There is no easy definition or explanation of this phrase. Whether a landlord's screening policy with regard to an applicant's criminal history is "substantial, legitimate, and nondiscriminatory" will depend on many specifics. It could depend on the facts of the crime or how old the conviction is or the exact wording of the criteria or how the criteria is applied etc. etc. And it is helpful to keep in mind that one Fair Housing investigator's interpretation of the phrase may be different than another's. And one judge's view may be different than another's.

HUD has tried to further clarify this phrase by boiling it all down to the following statements:

• A landlord must be able to prove through reliable evidence that his/her policy or practice of screening based on criminal history actually assists in protecting resident safety and/or property.

• Merely relying on generalizations or stereotypes that anyone with a criminal history poses a greater risk than a person without such a background is not sufficient.

Prior Arrests

HUD states that if a landlord rejects a rental applicant because of one or more prior arrests -- that have not resulted in a conviction -- that the landlord's policy cannot meet the burden of having a "substantial, legitimate, nondiscriminatory interest." Translation: if you are doing this, you are discriminating.

HUD states that "the fact of an arrest is not a reliable basis upon which to assess the potential risk to resident safety or property posed by a particular individual. For that reason, a housing provider who denies housing to persons on the basis of arrests not resulting in convictions cannot prove that the exclusion actually assists in protecting resident safety and/or property."

So landlords may no longer consider whether a rental applicant has been arrested unless that arrest resulted in a conviction.

HUD does not come out and say this but it would seem to me that by logical extension a landlord also can not deny an applicant who has a criminal case that it still pending (since there has not yet been a conviction).

So the applicant that has a pending "first-degree homicide" charge or a "sexual assault of a child" case that is still winding its way through the criminal justice system or is on appeal - cannot be rejected based on that fact alone.

I understand the whole "innocent until proven guilty" viewpoint, but do you think this will comfort your longstanding tenant that has minor children living with her when a middle-aged white guy charged with "sexual assault of a child" is allowed to move in next door to her because his case has not yet gone to trial and therefore he has not yet been convicted?

Oh just wait, it gets even better.

Criminal Convictions

HUD also states that a landlord that imposes a "blanket prohibition" on any rental applicant with a "conviction record -- no matter when the conviction occurred, what the underlying conduct entailed, or what the convicted person has done since then -- will be unable to meet this burden."

Translation: If you deny any and all applicants because they have a criminal conviction you are violating Fair Housing laws and therefore discriminating based on race and national origin, even if you apply that criteria evenly against everyone.

HUD goes on to say that even if you have a more tailored policy or practice that excludes individuals with only certain types of conviction you still must prove that your screening policy is necessary to serve a "substantial, legitimate, nondiscriminatory interest." There that pesky phrase again.

HUD recommends that any landlord that wants to consider an applicant's past criminal convictions as part of the screening process must at a minimum consider the following:

• The nature and severity of the crime, and
• The amount of time that has passed since the criminal conduct occurred.

That is the only guidance that HUD has given us. The rest is for you to figure out. And if you don't handle things properly you may get investigated or sued for discrimination.

Exception: Illegal Manufacture or Distribution of a Controlled Substance

There is one point of clarity. The federal Fair Housing Act does contain a section that states that the taking of an adverse action against a person who has been convicted for illegally manufacturing or distributing a controlled substance as defined in section 102 of the Controlled Substances Act (21 U.S.C. 802) will not be discriminatory. So a landlord is still free to deny a rental applicant if they have ever been convicted of manufacturing or distributing a controlled substance.

Conclusion

What really frustrates me about this whole thing is that landlords are now being told that they must consider a applicant's criminal convictions on a case by case basis. For years we have been told by HUD that the best way to avoid discriminating against someone is to treat everyone the same; your screening criteria must be "objective" and not "subjective. But now HUD seems to be saying that is no longer appropriate.

Now HUD is telling landlords that they will need to become social workers and therapists and try to determine if an applicant who was convicted of a crime in the past has been rehabilitated or not.

Think of the time and effort that will be required for a landlord to travel to the courthouse to review the criminal case file to determine all of the facts surrounding the crime, all of the events that led up to the person engaging in the criminal conduct, the individual's past, to review any pre-sentencing report to see what the evaluator thinks about the defendant etc. None of this information is available on CCAP. You will only get this information from the actual file. Or are you just supposed to listen to the applicant's version of the facts of the conviction and believe them?

It appears to me that HUD might actually be hoping that landlords decide their is too much risk involved in denying any applicant based on their past criminal convictions (except for the conviction for manufacturing or distributing controlled substances - see above) and therefore they should all be accepted.

Landlords will now need to try and determine what convictions might be considered "directly related to the safety of your residents and your property" and hope their interpretation is correct or else risk being investigated and/or sued.

New & Revised Landlord-Tenant Forms Available at Wisconsin Legal Blank

As a result of 2015 Act 176 becoming law earlier this month it became necessary to draft and/or revise some of the landlord-tenant forms sold at Wisconsin Legal Blank Co., Inc.

As of March 24th the following revised or new forms will be available at WLB:

• 5 Day Notice To Vacate for Criminal Activity or Drug-Related Criminal Activity

This new notice may be served on a tenant, under any tenancy, if the tenant, a member of the tenant's household, or a guest or other invitee of the tenant or of a member of the tenant's household, has engaged in criminal activity or drug-related criminal activity. The notice cannot and should not be served on a Tenant who is a victim, as defined in Wis. Stat. § 950.02(4), of the criminal activity. It is not necessary that the tenant have been arrested for or convicted of the criminal activity or drug-related criminal activity in order to serve this notice.

For more information on the new law regarding criminal activity in rental housing refer to my blog post summarizing Act 176.

• 5 Day Notice To Vacate for Imminent Threat of Serious Physical Harm

This notice has nothing to do with Act 176. I had never drafted this form in the past because as there did not seem to be a demand. In the last few months I have had many clients encounter domestic violence issues amongst their tenants such that the victim of the domestic abuse has requested that the landlord remove the abuser, and therefore I thought I better create the form.

• Residential Rental Agreement

The biggest change to this form is the inclusion of language regarding criminal activity and drug-related criminal activity on the rental premises as set forth in Wis. Stat. 704.17(3m) as created by Act 176.

I also added a new clause which addresses the non-liability of the landlord in certain circumstances and another clause prohibiting modifications to the premises by the tenant without prior written approval by the landlord.

I also made some smaller changes as a result of the passage of Act 176 which most likely will not even be noticed but are important. Finally, I removed the language that said rent is "due" by a specific date and replaced it with rent "must be received by" a certain date. modified that rent must be "received by" a certain date.

In order to fit the above changes into the form it became necessary to remove the "Co-Signer/Guarantor" section of the Rental Agreement. I am in the process of creating a separate Personal Guaranty Addendum with beefed up language.

I am currently working on the following forms which are not yet available. When they become available I will let you know via this blog.

• A table that summarizes all of the various notices in Wisconsin and when to use each one
• A revised Nonstandard Rental Provisions form
• A Smoking Policy Addendum
• A Personal Guaranty Addendum
• A Bed Bug Addendum
• A basic Commercial Lease

ACT 176: Governor Signs New Landlord-Tenant Bill Into Law

On Monday, February 29, 2016 Governor Scott Walker signed a new landlord-tenant law bill into law. The new law entitled 2015 Wisconsin Act 176 ("Act 176") was published on March 1, 2016 and went into effect the following day - Mach 2, 2016 - which means I am late in drafting this blog post since the new law is almost 1 week old already.

The passage of Act 176 was a culmination of years of work by many groups, including but not limited to, the Apartment Association of Southeastern Wisconsin, Wisconsin Apartment Association, Apartment Association of South Central Wisconsin, and the Wisconsin REALTORS Association.

So let's explore the new law and the changes to landlord-tenant law in Wisconsin.

Criminal Activity:

With the passage of Act 176 a landlord may now terminate a tenancy for criminal activity and/or drug-related criminal activity by serving the tenant (regardless of whether they are under a lease for a specific term or a month to month tenant) with a non-curable 5 day notice. This is a very important change allows a landlord to remove a tenant who has engaged in criminal activity much sooner than they were able to do under old law.

Under the old law, if a tenant was under a lease for a specific term and engaged in criminal activity, the landlord's only option was to serve the tenant with a 5 day notice giving the tenant the opportunity to cure the breach and continue his/her tenancy. The tenant was deemed to have cured the criminal activity merely by not doing it again during the cure period. Pretty simple to do.

So under the old law, a landlord would have to wait until the tenant committed a second criminal act (within the next 12 months) before they could serve the tenant with a 14 day notice terminating their tenancy. It was kind of difficult to protect your other tenants and your property when your hands are tied like that.

There are certain breaches that are so serious that a tenant should not be afforded the opportunity to cure them and remain a tenant -- such as engaging in certain types of criminal activity. At both public hearings before the Senate and Assembly committees I provided testimony of horrible crimes that were committed at my client's properties by tenants which endangered other tenants' lives and caused damage to property. I explained to the committees how legally all my client could do under those circumstances was serve a 5 day notice and wait for the tenant to commit the next crime (and injure the next tenant and damage more property). It was ridiculous not to mention increasing a landlord's liability exposure.

This new law applies to criminal activity or drug-related criminal activity engaged in by the tenant, a member of the tenant's household, or a guest or other invitee of the tenant or a member of the tenant's household, that occurs after March 2, 2016.

While criminal activity is not defined in Act 176 it includes activity that threatens the health, safety or right to peaceful enjoyment of the premises by other tenants, and/or persons residing in the immediate vicinity. It also includes activity that threatens the health and safety of the landlord or an agent or employee of the landlord.

Act 176 defines drug-related criminal activity as any criminal activity on or near or near the premises that includes the manufacture or distribution of a controlled substance. Unfortunately, we were unable to get "use" or "possession" of drugs included in the definition. As such, a landlord will not be able to serve this new non-curable 5 day notice on a tenant that is smoking marijuana in his apartment or one that has crystal meth sitting on his kitchen table.

It is important to know that it is not necessary that the tenant (or their guest, family member or invitees) be arrested or convicted of the criminal activity or drug-related criminal activity in order to serve this new 5 day notice. Many opponents of Act 176 were up in arms about this fact which I didn't entirely understand as even prior to Act 176 becoming law a landlord could evict a tenant for engaging in criminal activity even if they were not arrested or convicted of a crime. All Act 176 did was speed up the process to remove the tenant --- it didn't remove some prior requirement that there be an arrest or conviction. As I stated at the public hearings, this provision mirrors federal law (in section 8 subsidized housing projects) and properly accounts for the realities of crime in larger cities --- police do not have the time to arrest all people who engage in criminal acts and most of the time it is even difficult to send a squad out to the apartment complex to investigate.

This new non-curable 5 day notice for criminal activity has many requirements in order to be valid. Specifically, the notice must include the following:

1. A description of the criminal activity
2. The date on which the criminal activity took place
3. The identity or description of the individual/s engaged in the criminal activity

The notice must also advise the tenant of the following:

1. That they can may seek the assistance of legal counsel, a volunteer legal clinic, or a tenant resource center
2. That they have the right to contest the allegations in the notice before a court commissioner or judge if an eviction action is filed.

If the notice does not contain the aforementioned disclosures and the required detail of the criminal activity there is a strong likelihood that any eviction based on the notice could end up being dismissed.

5 Day Notices for Non-Rent Breaches in Month to Month Tenancies:

Those of you who have attended my Landlord Boot Camp in the past are aware that Wisconsin law prior to Act 176 did not provide a landlord of a month to month tenant with the ability to serve a 5 day notice with a right to cure if the tenant engaged in a non-rent related breach. Under the old law, a landlords only option in that scenario was to serve a 14 day notice terminating their tenancy or ignore the breach altogether. This was just not practical. Not all landlords want to terminate the tenancy of their month to month tenant that engages in a non-rent breach. If a month to month tenant decided to have a loud party, sometimes a landlord would just want to serve a 5 day notice telling them to not do it again but Wisconsin law prior to Act 176 did not allow for this.

With the passage of Act 176, a landlord of a month to month tenant now has the option of serving the tenant who has engaged in a non-rent breach with a 5 day notice with a right to cure OR a 14 day notice terminating their tenancy. This change should also benefit tenants and prevent them from being evicted for smaller-type non-rent breaches.

Service of a 14 Day Notice:

Act 76 made a small change regarding the service of a 14 day notice for a non-rent breach. Under the old law, a landlord had to serve the 14 day notice prior to the tenant remedying the breach. Technically speaking this meant that if a landlord wanted to serve a 14 day notice on a tenant for having a loud party, that notice had to be served before the party was over. Or if the tenant was smoking in a non-smoking building, the landlord had to serve the 14 day notice prior to the tenant finishing his cigarette.

The italicized language has now been removed so that a landlord may now serve the 14 day notice terminating tenancy after the breach has occurred.

Trespassing:

Act 76 created several laws pertaining to an individual that is trespassing on a rental property. I am not a big fan of this change. I am concerned that this will be a trap for the unwary landlord and will end up causing more problems than good, nonetheless I will attempt to summarize the changes.

A "trespasser" is now defined as a person who is not a tenant and who enters or remains in a residential property without the consent of the landlord or another person lawfully on the property (i.e. a tenant).

The crime of trespassing has been modified such that whoever intentionally enters or remains in the dwelling of another, without the consent of some person lawfully upon the premises, or, if no person is lawfully upon the premises, without the consent of the owner of the property that includes the dwelling, under circumstances tending to create or provoke a breach of peace, is guilty of a class A misdemeanor.

Act 176 also requires that a law enforcement agency shall have a written policy regarding the investigation of complaints of trespassing and that the policy shall require that a law enforcement officer who has probable cause to arrest a person for trespassing, remove the person from the dwelling.

The new law also states that if a trespasser is removed from a residential rental property and leaves personal property behind, that the landlord must hold the trespasser's personal property for 7 days from the date of discovery. After the 7 days have passed, the landlord may presume that the trespasser has abandoned the personal property and dispose of it in any manner that the landlord determines is appropriate. A landlord must promptly return the property to the trespasser if the trespasser requests its return prior to disposal.

I am concerned that this new law will cause problems for landlords as I fear it will be relied upon by landlords to remove people that are residing with a tenant (either known or unknown by the landlord) rather then evicting the tenant and their unauthorized guest. I foresee landlords defending themselves against illegal eviction lawsuits or the disposal of personal property lawsuits as a result.

For example, what if a tenant has allowed her boyfriend to move in with her -- whether known or unknown to the landlord -- and then they have a fight and the tenant calls the landlord and being less than truthful states that the boyfriend does not reside with her but came over Saturday night and now refuses to leave. The landlord decides to call the police and have the boyfriend removed as a trespasser. But then, as so often happens, the tenant decides that she cannot live without the love of her life and is mad at the landlord for calling the police and tossing out the "trespasser's" personal property and a lawsuit is filed against the landlord. Whether or not the landlord is able to get the lawsuit dismissed or not is only part of the issue - it will still cost him time and money defending the case and could potentially result in a judgment against him.

Prohibitions Against Local Government:

Act 176 also attempts to curb local government's intrusion into the life of landlords by:

1. Prohibiting the inspection of a rental property unless there was a complaint made about the property or the inspection is part of a program of regularly scheduled inspections conducted in compliance with state or federal law.
2. Prohibiting rental licensing ordinances (i.e. "Landlord Licensing") unless the ordinance applies to ALL residential rental property owners - including owners of owner-occupied rental property.
3. Prohibits an occupancy of transfer of tenancy fee for rental units.
4. Limits the ability to charge re-inspection fees.

While I believe I have addressed all of the landlord-tenant law changes from Act 176 in this blog post, I have by no means addressed all of non-landlord tenant law changes so I encourage you to read the actual law.

NOTE: The changes created by Act 176 will result in some changes to the rental documents that I draft for Wisconsin Legal Blank and will include the need to create of a new 5 Day Notice for Criminal Activity. When those revisions and new forms are ready and available at Wisconsin Legal Blank, I will let you know on this blog.

Landlord Boot Camp Is Just Around The Corner - February 20, 2016

The AASEW's (Early) Spring Landlord Boot Camp is just around the corner. Can you believe that this will be our 13th Boot Camp seminar?

Landlording can be pretty complex, with a seemingly never ending myriad of paperwork, rules, landlord-tenant laws and simple mistakes that can cost you thousands. In fact as we speak a new landlord-tenant bill is being debated in Madison.

The Apartment Association of Southeastern Wisconsin's 13th “Landlord Boot Camp" can help you navigate these treacherous waters and learn how to run your properties with greater profit and less hassles.

Who: Taught by Attorney Tristan Pettit, who drafts many of the landlord tenant forms for Wisconsin Legal Blank.

Attorney Tristan Pettit has given similar landlord-tenant law seminars to fellow attorneys, landlords, and property manager organizations that charge their members $300-$400. This is your opportunity to learn all of the same information at a huge discount through the Apartment Association

When: February 20, 2016 Saturday 8:30 AM – 5:30 PM Registration opens at 7:00 AM

Where: Clarion Hotel 5311 S. Howell Avenue, Milwaukee [Map]

Included: 100 plus page manual to help you put what you learn into practice.

Price:

• Members $159
• Non-Members $249

Wisconsin landlord-tenant laws are constantly changing. To help keep you up to date those who attended in the past three years a $50 discount.

What you will learn at the Apartment Association's 2016 Landlord Boot Camp

Landlord Boot Camp covers everything that you need to know about residential Landlord Tenant law in Wisconsin, as amended in April 2012 by Act 143 and again in March 2014 by Act 76, including:

1. How to properly screen prospective tenants

2. How to draft written screening criteria to assist you in the selection process

3. How to comply with both federal and state Fair Housing laws including how to comply with “reasonable modifications" and “reasonable accommodations" requests

4. How to legally reject an applicant

5. What rental documents you should be using and why

6. When you should be using a 5-day notice versus a 14-day notice, 28-day notice, or 30-day notice and how to properly serve the notice on your tenant

7. Everything you wanted to know (and probably even more than you wanted to know) about the Residential Rental Practices (ATCP 134) and how to avoid having to pay double damages to your tenant for breaching ATCP 134

8. When you are legally allowed to enter your tenant's apartment

9. How to properly draft an eviction summons and complaint

10. What to do to keep the commissioner from dismissing your eviction suit

11. What you can legally deduct from a security deposit

12. How to properly draft a security deposit transmittal / 21 day letter

13. How to handle pet damage

14. What to do with a tenant's abandoned property and how this may affect whether or not you file an eviction suit

15. How to pursue your ex-tenant for damages to your rental property and past due rent (and whether it is even worth it to do so)

There will also be an ample question and answer period. This alone is worth the admission.. . . and much more.

Both of last year's AASEW Landlord Boot Camp were filled to capacity. So call early to reserve your spot.

Call the Association at (414) 276-7378 or email us at membership@AASEW.org or sign up online at www.LandlordBootCamp2016.com today to reserve your spot.

The Nuts and Bolts of Emergency Assistance Stays

I recently had a client call me and advise that they received an Emergency Assistance letter and other documents from UMOS (one of the agencies that administer E.A. funds) for a client that they were in the process of evicting. Unfortunately, I had to advise the client that merely by the tenant having applied for Emergency Assistance, the eviction action would have to be "stayed" (i.e. delayed) per Wisconsin Law.

Below is the key information that Landlords need to know about E.A. stays:

Sec. 799.40(4) of the Wisconsin Statutes states that a court must stay an eviction action brought against a tenant that has applied for emergency assistance. The stay remains in effect until it is determined if the tenant is eligible for the assistance, and if they are, until that assistance is received. For any landlord that has been in this situation, you are aware that the stay can work a substantial hardship on the landlord who is now required to allow a tenant to remain in his/her property for free.

Even if the tenant is eventually awarded the emergency assistance money it typically does not cover the full amount of the past due rent owed and as such the landlord always has the option to decline the money. The tenant will then uses the assistance money for the security deposit on their next apartment.

However, even if the landlord declines the E.A. money the "stay" still applies while the tenant looks for a new apartment. If on the other hand the landlord elects to accept the E.A. money, the landlord must agree with the issuing agency that they will dismiss the pending eviction.

Here is a copy of a basic Emergency Assistance letter and documentation from UMOS.

Unfortunately an emergency assistance stay can delay an eviction for months. Such a situation is frustrating at best and an improper "taking" of a landlord's property at worse. In the case of McQuestion v. Crawford, 2009 WI App 35, from District I (Milwaukee) of the Wisconsin Court of Appeals, it was held that "implicit in the statute's mandate that a stay is required until the tenant receives the emergency assistance is a requirement that the tenant seek and find suitable permanent housing within a reasonable period of time."

What is a "reasonable" amount of time will still need to be determined on a case by case basis by a judge. Nonetheless, at least there will now be some required inquiry into the efforts made by the tenant to locate new housing and consideration made for the amount of time that this takes. Wisconsin landlords now have case law to support our arguments that the length of the stay is no longer reasonable.

If you would like to learn more about Emergency Assistance in general such as who may apply and other conditions that must be met before you can receive E.A. monies you should refer to Sec. 49.138, Wis. Stats.

Happy Landlording

If You Allow Your Tenant To Keep A Pet Then You Should Be Using a Written Pet Agreement

In talking with my clients and potential clients over the past year, I have also noticed that more and more landlords are allowing tenants to keep pets. I am not sure if this is because of the many pet owners that were also homeowners that have since lost their homes to foreclosure and have been forced to become renters or if it is because landlords are trying to be more accomodating to their tenants' wishes in order to keep their rental units occupied during a difficult recesssion -- or a combination of both.

Whatever the reason for this trend, if you are allowing your tenants to have pets then you must make sure that you are using a strong written Pet Agreement. Unfortunatly too many landlords do not use such a document - and it typically is to their detriment. Let's face it, "man's best friend" (if never trained or poorly trained) can cause A LOT OF DAMAGE to a rental unit. Don't even get me started about cats. While I personally have a cat that I am very fond of my experience with cats in rental units has not been good. Can you say "personal litter box?" Here is a Wisconsin Court of Appeals case about the damage that pets can cause to a rental unit.

Whether or not you choose to allow pets in your rentals is a business decision that all landlords must grapple with at one point or another. All animals, even rabbits, birds, reptiles, and fish can end up causing damage to a rental unit. If you have made the decision to allow pets then you need a good Pet Agreement.

Pet Agreements are considered to be part of the Nonstandard Rental Provisions document. Despite this your Pet Agreement should be a separate written document and not just a numbered provision within your NSRP.

A good Pet Agreement should have 4 key componants. First, it should specifically identify the pet that is being allowed to reside in the apartment. Second, it should set forth all charges/deposits for the pet. Third, a Pet Agreement must include the terms and conditions relating the keeping of a pet - the rules. Finally, the agreement should clearly explain what the consequences will be if any of the pet rules are violated.

1. Specifically Identify the Pet:

A client of mine had allowed his tenant to keep a dog as a pet - it was a fairly small dog - small enough to fit on a person's lap or a woman's purse (OK someone will need to explain to me the purpose of keeping a dog in your purse - I just don't get it). Anyways, that small dog eventually died and the tenant decided to buy another dog. Problem was the replacement dog could not fit in a purse as it was the size of a small car. It was too big for the rental property and it scared the neighbors and other tenants because of its gigantic size. While my client was using a written Pet Agreement, the agreement did not specifically identify the pet that was allowed to reside in the property - it merely said that the tenant could keep 1 dog. While the original (little) dog had passed away and was replaced with a much larger canine, the tenant still only had one dog -- problem was it was not the dog that the landlord wanted in his property and there was nothing he could do about it as the tenant had not violated the Pet Agreement.

A good Pet Agreement should clearly identify the animal/s that are being allowed to reside in the unit In order to do this the Agreement must identify the following:

- The type of animal (dog, cat, iguana etc.),

- The breed of animal (beagle, labrador, border collie),

- The name of the animal (you know . . . . Fido, Scrappy, Puss 'N Boots),

- The color of the animal,

- The age of the animal, and

- The weight of the animal.

If there are any other distinguishing characteristics of the pet then you should list them as well.

The Pet Agreement should clearly restrict the tenant to keeping the identified animal only. Should the "allowed pet" pass away during the tenancy then the tenant will not be allowed to replace that pet unless the landlord consents to the replacement pet by entering into a revised Pet Agreement.

2. List All Charges For Keeping A Pet

A second componant of a good Pet Agreement is that it should clearly state what charges will be required in exchange for keeping the pet. You can charge the tenant an increased monthly rent and/or a pet deposit. The Department of Agriculture, Trade and Protection is of the strong opinion that you cannot charge a non-refundable pet deposit or fee. If you review the definition of a "security deposit" set forth in ATCP 134.02(11) that they are most likely correct. So while in the past I used to believe that you could charge a non-refundable pet fee, over the years I have changed my mind. If a landlord continues to charge a non-refundable fee they run the risk of being sued for an improper security deposit deduction which opens them up to paying double damages and attorney's fees to a tenant.

I have allowed past tenants to keep pets in my rental property. I required my tenants to post a refundable pet deposit to cover the cost to repair any damages that their pet may cause to my property. If there are no damages then the tenant gets this money back.

I have never charged an increased rent for the keeping of a pet, but I do know of landlords that do. Nothing is wrong with charging additional rent for the pet - the reasoning for using this option is that there will be increased "wear and tear" to the unit as a result of the pet and even if that wear and tear is not "damage," the landlord should be compensated for that additonal use.

Pet Agreements should also clearly state that the tenant's financial obligations for the pet are NOT limited to the non-refundable pet fee, the refundable pet deposit, or the increase monthly rent. If Sparky uses the baseboards in the unit as his personal rawhide bone and/or the Kitty unrinates and defecates all over the carpet and hardwood floors, you should be able to recoup all of the damages from the tenant and not be limited to only the amount of any fee or deposit.

3. List All Rules For The Pet

The third componant to a Pet Agreement is to list all of the rules that pertain to the keeping of the pet. Possible rules could include:

- The dog must be keep on a leash at all times when outside of the unit

- The cat's litter box must be changed twice per week and the contents of the litter box must be disposed of in a sealed bag and placed in the dumpster located outside of the rental unit

- The iguana must remain properly caged at all times and any waste must be cleaned or removed on a frequent basis so as to prevent odors

- All waste must be removed from the yard immediately.

4. Explain What The Consequences Are If The Agreement Is Breached

Finally, your Pet Agreement needs to include what I call "The Hammer" -- essentially you need to explain what will happen if the tenant and his/her pet are in violation of any of the rules. Will they be fined? If so, how much? Will a violation of the rulesbe considered a material breach of the agreement such as to give rise to the termination of the tenancy and an eviction lawsuit? Could a violation result in the removal of the animal? Obviously the consequence will depend on the nature of the violation and its severity. A tenant needs to clearly understand that they do not have a right to keep a pet in your rental unit - the keeping of a pet is a privilege - and there are consequences if the animal or the owner violates the rules.

I would be remiss if I didn't mention that a service animal or an animal that is needed to "reasonably accomodate" a disabled tenant is NOT a pet. If a person meets the definition of "disabled," under federal, state or municipal law, and otherwise meets any other requirements for the use of an assistance animal or a companion animal, then they are legally entitled to keep that animal in their rental unit. Think of such an animal as a device that assists a disabled person live their life rather then a pet. An assistance animal is similar to a wheelchair, hearing aid, crutches, or medication. The difference between a pet and an assistance or companion animal will need to be covered in a future post (or many posts as it is a somewhat complicated topic).

If you would like to see an example of a good Pet Agreement visit Wisconsin Legal Blank Co. which sells a Pet Agreement that I have authored.

Don't Miss the Free Annual AASEW Landlord Trade Show and Education Event on October 8th.

Yes, folks it is time once again for the Free Annual AASEW Landlord Trade Show and Education Event. If you own rental housing, or wish to become an investor, this is the event for you.

October 8th 11 AM – 4:30 PM Potawatomi Bingo Casino Expo Center, 1721 W Canal St, Milwaukee, WI 53233

Lots of educational seminars, lots of food, lots of networking, lots of opportunities to find new and better vendors or to reunite with old ones and, for the first time ever, one lucky attendee will go home with an Apple Watch (See contest rules posted at the show)

Free for preregistered attendees, $20 at the door. Register Here!

https://www.eventbrite.com/e/aasew-tradeshow-free-to-apartment-owners-and-managers-tickets-18402319834

Complimentary buffet lunch included with pre-registration by 10/4/15.

Doors open at 11am with an outstanding educational line up:

11:00 Free Buffet lunch and exhibits

11:30 Round Tables and exhibits

12:30 “Personal Safety at Home and Work" and Round Tables

1:30 Break and exhibits

2:00 “Dealing with Difficult People" and Round Tables

3:00 Break and exhibits

3:30 Legal Update with Attorney Tristan Pettit

4:30 Apple Watch Drawing and conclusion

*Exhibits will be open the entire show

Round Table Topics and TImes:

11:30	Emergency Assitance
12:30	Rent Assistance
2:00	Smoke Free
11:30	Marketing and Social Media
12:30	Marketing and Social Media
2:00	Marketing and Social Media
11:30	Pest Control
12:30	Pest Control
2:00	Pest Control
11:30	E-Notify
12:30	Towing and the new laws
2:00	Towing and the new laws
11:30	Collections
12:30	Collections
2:00	Collections
11:30	Sex Offender
12:30	Security & Surveliance
2:00	Security & Surveliance

*Subject to change – final schedule will be available at the week of the show.

Exhibitors:

2nd Wind Exercise

ABC Sewer

Accent Construction and Remodeling, LLC

Always Towing & Recovery Inc

Batzner Pest Control

Brook Furniture Rental

Bruck Law Offices, S.C.

Carpetland USA

CITY OF MILWAUKEE

CJM Lighting & Electrical Inc

Coin Appliances

Dey Distributing

Diamond Vogel Paint

Energy House

Engineered Security Solutions, INC.

Finance System of Green Bay, Inc.

Focus on Energy

For Rent

Forest Green Realty & Management

Giertsen Company

Goldman Group – REMAX Lakeside

Grand Appliance and TV

Great Lakes Commercial Sales

HD Supply

Home Depot

landlord services

Landscape Concepts Management

Lowe's

Midwest Mortgage Credit Services

Milwaukee Cabinetry, Inc.

Milwaukee REIA

Milwaukee Windows

Nonns Flooring

Ogden & Company, Inc.

Orkin

P&C Insurance

PooPrints/Apartment Supply

Quality Floors

Real Property Management Greater Milwaukee Suburbs

Reliable Water Services

Safeway Pest Management

ServiceMaster Recovery Services

Skyline of Milwaukee

Star Bright Carpet and Upholstery

The Equitable Bank

The Realty Company LLC

Tri City Bank

Vesel Services

WASH Multifamily Laundry Systems

Waterstone Bank

We Energies

West Allis Heating & Cooling

Wisconsin Legal Blank Co., Inc.

Wolverine Brass

Wons Background Investigations

GUEST POST: The Benefits of Tenant Screening

This is a blog post drafted by the American Apartment Owners Association

Although taking time to screen rental applicants thoroughly may not seem necessary, failing to do so may cost you considerable time and money later. If you just accept money from an applicant ready to put down the deposit today, it could backfire on you. If you simply approve a tenant after verifying his or her employment because you are eager to rent the property, it could prove a serious mistake. Just because your applicant has a job says nothing about that person's background or rental history. Just because a person has the deposit today gives no indication that the applicant has a good rental history and clear criminal record.

The benefits of conducting a thorough tenant screening check on every applicant far outweighs the cost associated with it. In fact, the cost of tenant screening is often passed on to rental applicants.

How to avoid costly mistakes during the tenant screening process

One common mistake occurs when the landlord presents an applicant with their own homemade rental application. Landlords often fail to ask crucial questions that typically eliminates a rental applicant. There is more to screening applicants than asking the applicant's name, employer and current address. The American Apartment Owners Association knows the importance of thorough tenant screening and provides comprehensive forms, including a free rental application form that asks the right questions.

Another mistake made by landlords is failing to get thorough information on every adult wanting to reside in the rental. Some landlords still only ask the head of household for their personal information. If other adults plan to live in the household you must also conduct comprehensive tenant screening on them as well. Prospective tenants often know that if you find negative rental history or a criminal record of other adults in the household, you will no longer consider them.

A common mistake made by landlords is to just check local criminal records to see if a rental applicant has committed any crimes. That information often includes only misdemeanor and local information and may not even be up-to-date. Criminal offenders often move frequently to avoid authorities or because they've committed crimes at a rental property. To thoroughly screen for an applicant's criminal history you need to search state and federal records. Sex offenders also move around to abscond from authorities or to avoid detection. Including a sex offender check in your comprehensive tenant screening package protects other tenants, nearby children, and provides an additional level of safety at your property.

Get more than just a tenant credit check

Landlords often mistakenly believe that a tenant credit check provides all necessary tenant screening information. A credit check for landlords only provides credit information, not criminal history or eviction history.

Proper tenant screening reports will benefit landlords in a multitude of ways. The fact that you can charge each adult, not just the primary applicant, for tenant screening services means you can recover part or all of your tenant background check fees. Conducting thorough tenant screening means the difference between renting to a qualified applicant and an unqualified applicant. It also means you can feel confident you made the right choice when you rented your property instead of worrying about whether the tenant will pay the rent. Reap the benefits of proper tenant screening and save expensive legal fees, time, and money associated with failing to screen every adult applicant properly.

Check out other things to look for during the tenant screening process by reading AAOA's article "Top 5 Reasons to Reject an Applicant."

SEMINAR: AASEW'S Fall Landlord Boot Camp Will Be Held on October 17th

The AASEW's Fall Landlord Boot Camp is just around the corner. Can you believe that this will be our 12th Boot Camp seminar?

Landlording can be pretty complex, with a seemingly never ending myriad of paperwork, rules, landlord-tenant laws and simple mistakes that can cost you thousands.

The Apartment Association of Southeastern Wisconsin's 12th “Landlord Boot Camp" can help you navigate these treacherous waters and learn how to run your properties with greater profit and less hassles.

Who: Taught by Attorney Tristan Pettit, who drafts many of the landlord tenant forms for Wisconsin Legal Blank.

Attorney Tristan Pettit has given similar landlord-tenant law seminars to fellow attorneys, landlords, and property manager organizations that charge their members $300-$400. This is your opportunity to learn all of the same information at a huge discount through the Apartment Association

When: October 17, 2015 Saturday 8:30 AM – 5:30 PM Registration opens at 7:00 AM

Where: Clarion Hotel 5311 S. Howell Avenue, Milwaukee [Map]

Included: 100 plus page manual to help you put what you learn into practice.

Price:

• Members $159
• Non-Members $249

Specials: Not a member? Pay just $1 more than the non member price and receive both the Boot Camp and an AASEW membership for the remainer of 2015 including member discounts at Home Depot, Sherwin Williams and more.

Wisconsin landlord-tenant laws are constantly changing. To help keep you up to date those who attended in the past three years a $50 discount.

What you will learn at the Apartment Association's 2015 Landlord Boot Camp

Landlord Boot Camp covers everything that you need to know about residential Landlord Tenant law in Wisconsin, as amended in April 2012 by Act 143 and again in March 2014 by Act 76, including:

1. How to properly screen prospective tenants

2. How to draft written screening criteria to assist you in the selection process

3. How to comply with both federal and state Fair Housing laws including how to comply with “reasonable modifications" and “reasonable accommodations" requests

4. How to legally reject an applicant

5. What rental documents you should be using and why

6. When you should be using a 5-day notice versus a 14-day notice, 28-day notice, or 30-day notice and how to properly serve the notice on your tenant

7. Everything you wanted to know (and probably even more than you wanted to know) about the Residential Rental Practices (ATCP 134) and how to avoid having to pay double damages to your tenant for breaching ATCP 134

8. When you are legally allowed to enter your tenant's apartment

9. How to properly draft an eviction summons and complaint

10. What to do to keep the commissioner from dismissing your eviction suit

11. What you can legally deduct from a security deposit

12. How to properly draft a security deposit transmittal / 21 day letter

13. How to handle pet damage

14. What to do with a tenant's abandoned property and how this may affect whether or not you file an eviction suit

15. How to pursue your ex-tenant for damages to your rental property and past due rent (and whether it is even worth it to do so)

There will also be an ample question and answer period. This alone is worth the admission.. . . and much more.

Last year's AASEW Landlord Boot Camp was filled to capacity. So call early to reserve your spot.

Call the Association at (414) 276-7378 or email us at membership@AASEW.org or sign up online at www.LandlordBootCamp2015.com today to reserve your spot.

Remember that “landlording" is a business — so take the time to educate yourself on how to better manage your business and avoid costly errors!

UPCOMING SEMINAR: Legal Issues Pertaining to Bedbugs & How Landlords Can Protect Themselves

Hello Everyone --- I hope that you are all enjoying your summer.

I wanted to let you know about a free seminar that I will be giving on the Legal Issues Pertaining To Bedbugs and What Landlords Can Do To Protect Themselves on Wednesday, July 22, 2015.

I will be presenting this 1-1.5 hour presentation as part of Batzner Pest Control's 5th Annual Bed Bug Seminar.

Here are the details:

- What: Batzner 5th Annual Bed Bug Seminar

- When: Wednesday, July 22, 201. The seminar check-in and complimentary breakfast starts at 8:30am. The seminar program runs from 9:00am-3:30pm. I will be speaking around 2:30 pm.

- Where: Brookfield Suites Hotel

- Cost: Free seminar, with lunch included

- You can register at https://events.r20.constantcontact.com/register/eventReg?llr=ro5uzwcab&oeidk=a07eb31uzf690dbb2d3

Here is a link to Batzner's website where you can view the full brochure.

Hope to see many of you there.

T

Can A Landlord Deny A Reasonable Accommodation Request For A Pit Bull Companion Animal?

As I have mentioned in a prior blog post I have seen a significant increase in tenant requests for a reasonable accommodation to a landlord's "no pet" policy so that the tenant can keep a comfort/companion animal. As a result of this increase, I am also seeing an increase in reasonable accommodation requests to keep what are often referred to as "dangerous breeds" of dogs -- such as Pit Bill Terriers, American Staffordshire Terriers, German Shepherds, Doberman Pinschers, Rottweilers etc. -- as a companion/comfort animals.

If you have not already read my prior post on comfort animals and reasonable accommodation requests generally you should do so now as this post will assume that you already have a basic knowledge of those issues.

Generally speaking it is a violation of federal and state fair housing laws to deny a request for a dangerous breed companion animal unless a landlord can prove that the specific animal will cause a direct threat. Conversely, a landlord cannot deny a reasonable accommodation request for a "dangerous breed" dog just because the landlord believes that all dogs of that breed are inherently dangerous. Fair housing law does not allow a landlord to engage in stereotyping of dog breeds. So just because a landlord may have had a prior bad experience with a Pit Bull or Rottweiler does not mean that the landlord can ban all Pit Bulls or Rottweilers from being used as companion/comfort animals by his/her tenants. I recently read an online article of a landlord that is being sued by the government for Fair Housing violations due to the landlord's stereotyping of all Pit Bulls as dangerous.

However if the landlord can show that the specific Pit Bull poses a direct threat to the safety of others then the tenant's accommodation request may be legally denied. Such a direct threat could be demonstrated if the specific Pit Bull had previously attacked a person or another animal. But it is important to remember that there must be a direct threat not just a speculative risk. So even if the specific Pit Bull at issue was once dangerous, if the tenant takes the animal to obedience training, administers medication, and/or purchases equipment (such as a muzzle) which causes the animal to no longer be a direct threat, then it may no longer be reasonable to exclude the animal and deny the tenant's accommodation request.

Additionally, if the landlord can show that the specific Pit Bull would cause substantial physical damage to the property of others (and that probability cannot be reduced by another accommodation) the tenant's accommodation request may be legally denied. But again, there must be a direct threat of the Pit Bull causing substantial physical damage. A speculative risk or belief that all Pit Bulls cause substantial damage to property is not sufficient.

The long and short of it is the analysis that must be conducted to determine if a disabled individual's Pit Bull poses a direct threat to safety or will cause substantial damage to property of others is very fact intensive and must be done with great care.

There is one more basis for which it is acceptable to deny a tenant's companion Pit Bull. And that is, if a landlord's insurance carrier would cancel the landlord's insurance policy, substantially increase the costs of the insurance policy, or adversely change the policy terms because of the presence of a certain breed of dog or a certain animal, HUD will find that this imposes an undue financial and administrative burden on the landlord. As such, the landlord may deny the tenant's accommodation request as unreasonable. HUD has even issued a memo (back in June of 2006) stating this but also advises their investigators that they must verify such a claim with the insurance carrier directly and also consider whether there is comparable insurance available in the marketplace, without the restriction, for the landlord to purchase.

Milwaukee County Issues New Local Rule Regarding Stipulated Dismissals In Eviction Lawsuits

On May 1, 2015, the Chief Judge of Milwaukee County, Judge Jeffrey Kremers, issued new local rule 3.85 concerning Stipulations to Dismiss the first cause of action (possession of the property) in eviction cases.

Readers should review local rule 3.85 itself but I have summarized the pertinent points below.

1. A landlord and tenant may agree to dismiss the first cause of action (return of premises) in exchange for the tenant's promise to pay certain amounts to the landlord. Local Rule 3.85 governs when such agreements will be accepted and enforced by the Court.

2. All stipulations must be in writing.

3. The stipulation must state a date certain on which the final payment will be due.

4. The payment period should not be any longer than reasonably necessary for the tenant to pay the full amount owed to landlord. Once the final payment is made the landlord no longer has the right to seek an eviction of the tenant without filing a new eviction lawsuit.

5. If the stipulation requires payment from the tenant for any monies other than rent or court costs, the stipulation must specify what those other amounts are for. The court will not approve a stipulation requiring the payment of an obligation that is not enforceable under the lease or law. Translation: you can not include the payment of a landlord's attorney's fees in a stipulated dismissal for a residential eviction action.

6. The stipulation must be signed by all parties in the presence of the court or confirmed in the presence of the court by both parties.

7. If the tenant cannot appear in court to sign the stipulation than the landlord must file an affidavit that states the following:

a. The absent party has reviewed the stipulation and understands what it says.

b. The Landlord or its agent reviewed the stipulation with the absent party prior to signing and the affidavit shall name the person who reviewed the stipulation with the absent party.

c. The absent party agrees that they owe the amount they are agreeing to pay.

d. The absent party is signing the stipulation freely and voluntarily.

e. The absent party must have an "acceptable" reason for why they cannot come to court (such as employment obligations, education, or medical issues) and the court will determine if the reason is acceptable or not.

8. If the stipulation was signed by both parties in court and the tenant defaults by not paying one of the first 3 payments due under the stipulation, the landlord may file an affidavit of default with the court -- without notice to the tenant -- and the court will grant a judgment of eviction and issue a writ of restitution.

9. In all other instances than that stated in #8 above, the landlord will be required to give notice to the tenant stating when the landlord will be coming to court to file the affidavit of default and to obtain the judgment of eviction and the writ.

a. Notice to the tenant is required if the landlord does not come to court to obtain the writ before the 4th or subsequent payment is due under the stipulation.

b. Notice to the tenant is required if the stipulation was not signed by the tenant in court (or affirmed in court) regardless of whether or not the tenant has made any timely payments or not.

c. The notice to the tenant must include a letter identifying the overdue payment (by amount and due date) and explaining in clear and understandable terms that it is the landlord's intention is to ask the court for an eviction judgment and writ of restitution.

d. The notice must be served on the tenant by certified mail and first class mail. The landlord must file proof of mailing by certified mail with the court and an affidavit certifying that the notice was also served by first class mail with the court.

e. The landlord may not come to court to obtain the eviction judgment and writ unless at least seven (7) calendar days have passed after the date of mailing.

The new local rule is very different from how things had been handled with stipulated dismissals in eviction cases in the past. So landlords need to be aware of this new local rule and follow each and every requirement or risk the Court denying you the eviction judgment and writ that you will so desperately want and need at that point and time.