New Landlord-Tenant Law - Act 317 - Is Effective on April 18, 2018.

On April 16, 2018 Governor Walker signed into law 2017 Wisconsin Act 317 which is Wisconsin's newest Landlord-Tenant law. The law was published yesterday, April 17th, which means that it will become effective tomorrow, April 18, 2018.

It is a very large law -- 8 1/2 pages long -- too much for me to cover in this post. I have chosen to focus on the portions of the law that affect Landlord-Tenant law specifically. There are other portions of the law that will affect Landlording in general, however, so I recommend that you review the entire law.

ASSISTANCE ANIMALS

• Repeals Wis. Stat. § 106.50(2r)(bm) entitled “Animals Assisting Persons with Disabilities" which was a very confusing provision and only focused on animals that assisted people with visual, hearing, or mobility impairments and only applied to animals that were specially trained.
• Replaces the above statutory section with two separate provisions, one addressing Animals That Do Work or Perform Tasks for Persons with Disabilities, and one for Emotional Support Animals. Both sections provide guidance on the law regarding assistance animals.

Animals That Do Work or Perform Tasks for Individuals with Disabilities (“Animal")

• If a rental applicant/tenant (“Tenant") has a disability and a disability-related need for an Animal, it is discrimination for a Landlord to do any of the following because the Tenant keeps such an Animal:

1. Refuse to rent;
2. Cause the eviction of;
3. Require extra compensation from the Tenant as a condition of continued residence; or
4. Engage in the harassment of the Tenant.

• If a Tenant wants to keep an Animal, the Landlord may request -- unless the disability and the disability-related need is apparent or known -- that the Tenant provide:

1. Reliable documentation that the Tenant has a disability; and
2. Reliable documentation of the disability-related need for the Animal.

• A Tenant who keeps an Animal shall accept liability for damage to the premises caused by the Animal.
• A Landlord can deny a Tenant the ability to keep an Animal if:

1. The Tenant is not disabled, does not have a disability-related need for the Animal, or fails to provide the necessary documentation;
2. Allowing the Animal would impose an undue financial and administrative burden or would fundamentally alter the nature of services provided by the Landlord;
3. The specific Animal poses a direct threat to a person's health or safety that cannot be reduced or eliminated by another reasonable accommodation;
4. The specific Animal would cause substantial physical damage to a person's property that cannot be reduced or eliminated by another reasonable accommodation.

Emotional Support Animals (“ESA")

• An ESA is defined as an animal that provides emotional support, well-being, comfort, or companionship to an individual but is not trained to perform tasks for the benefit of a disabled person.
• If a rental applicant/tenant (“Tenant") has a disability and a disability-related need for an ESA, it is discrimination for a Landlord to do any of the following because the Tenant keeps an ESA:

1. Refuse to rent;
2. Cause the eviction of;
3. Require extra compensation from the Tenant as a condition of continued residence; or
4. Engage in the harassment of the Tenant.

• If a Tenant wants to keep an ESA, the Landlord may request -- unless the disability and the disability-related need is apparent or known -- that the Tenant provide:

1. Reliable documentation that the Tenant has a disability; and
2. Reliable documentation of the disability-related need for the ESA from a licensed health care professional.

NOTE: A “licensed health care professional" is defined as a physician, psychologist, social worker, or other health care professional who satisfies all of the following:

1. Licensed or certified in the state of Wisconsin; and
2. Acting within the scope of his or her license or certification.

• A Tenant who keeps an ESA shall accept liability for damage to the premises caused by the ESA.
• A Landlord can deny a Tenant the ability to keep an ESA if:

1. The Tenant is not disabled, does not have a disability-related need for the ESA, or fails to provide the necessary documentation;
2. Allowing the ESA would impose an undue financial and administrative burden or would fundamentally alter the nature of services provided by the Landlord;
3. The specific ESA poses a direct threat to a person's health or safety that cannot be reduced or eliminated by another reasonable accommodation;
4. The specific ESA would cause substantial physical damage to a person's property that cannot be reduced or eliminated by another reasonable accommodation.

• If a Tenant, for the purpose of obtaining housing, intentionally misrepresents that s/he has a disability or misrepresents the need for an ESA to assist with the disability, the Tenant shall pay a fine of not less than $500.
• If a licensed health care professional, for the purpose of allowing a patient to obtain housing, misrepresents that the patient has a disability or a disability-related need for an ESA, the health care provider shall pay a fine of not less than $500.

CHARGING FOR LANDLORD'S TIME AND MATERIALS

• Current law states that if Landlord elects to repair the damage caused by the Tenant then the Tenant must reimburse the Landlord for the reasonable cost.
• The new law defines what “Reasonable Costs" include the following:

1. Materials or labor provided by Landlord;
2. At a reasonable hourly rate, the time a Landlord spends doing the following: (a) purchasing or providing materials, (b) supervising an agent of the Landlord, and/or (c) hiring a third-party contractor.

ABATEMENT

• Current law states that if the rental property in untentable and the Tenant remains in the property that rent can be abated.
• New law adds that the Tenant can only abate rent if s/he remains in the property and “the condition materially affects the health or safety of the tenant or substantially affects the use and occupancy of the premises.

CREDIT AND BACKGROUND CHECKS

• Essentially incorporates Wis. Admin, Code § ATCP 134.05(4) regarding credit checks and increases the amount that can be charged by $5 and adds a new provision regarding charging out of state applicants for background checks.
• A Landlord may require a rental applicant to pay the Landlord's actual cost, up to $25, to obtain a consumer credit report on the applicant from a consumer credit reporting agency that compiles and maintains files on a nationwide basis.
• A Landlord must notify the applicant of the charge prior to ordering the report and must provide a copy of the report to the applicant if applicant paid for the report.
• A Landlord cannot require an applicant to pay for the report is the applicant provides a copy of his/her credit report that is less than 30 days old, to the Landlord prior to the Landlord ordering the report.
• A Landlord may require an applicant who is not a resident of Wisconsin to pay the Landlord's actual costs, up to $25, to obtain a background check.
• A Landlord must notify the applicant of the charge prior to ordering the report and must provide a copy to the applicant.
• NOTE: This portion of Act 317 first applies to rental agreements entered into or renewed as of the effective date of the new law which is April 18, 2018.

ELECTRONIC DELIVERY OF CERTAIN DOCUMENTS/INFORMATION

• A rental agreement may include provisions that allow a Landlord to provide and indicate agreement to send the following via electronic means:

1. A copy of the rental agreement and any document related to the rental agreement;
2. A security deposit and any documents related to the accounting and disposition of the security deposit and security deposit refund;
3. Any promise made by the Landlord, prior to entering into the rental agreement to clean, repair, or otherwise improve any portion of the rental unit;
4. A notice for Landlord to enter the rental unit.
• NOTE: This portion of Act 317 first applies to rental agreements entered into or renewed as of the effective date of the new law which is April 18, 2018.

RENT INCLUDES LATE FEES

• In the section regarding Notices Terminating Tenancy (Wis. Stat. § 704.17) the term “rent" is defined to include any rent that is past due as well as any late fees owed for rent that is past due.
• NOTE: This portion of Act 317 first applies to rental agreements entered into or renewed as of the effective date of the new law which is April 18, 2018.

INCORRECT AMOUNT IN NOTICE

• A notice for failure to pay rent or any other amount due under the rental agreement that includes an incorrect statement of the amount due is still valid unless any of the following apply:

1. The Landlord's statement of the amount due is intentionally incorrect; or
2. The Tenant paid or tendered payment of the amount that the Tenant believes to be due.
• NOTE: This portion of Act 317 first applies to rental agreements entered into or renewed as of the effective date of the new law which is April 18, 2018.

CONSOLIDATED COURT AUTOMATION PROGRAMS (CCAP)

• The Director of State Courts may not remove case management information from CCAP for any civil case that is not closed, confidential, or sealed for the following periods:

1. If a writ of restitution has been granted in an eviction action - 10 years;
2. If an eviction action has been dismissed and no money judgment has been docketed – 2 years.

NOTARIZATION

• A Court may not require that a person filing a summons or complaint under ch. 799 to have the summons and complaint notarized.

CONTESTED EVICTION

• Prior law stated that in an eviction, garnishment, or replevin action if any party claims that a contest exists, the matter shall be scheduled for a hearing before the judge.
• New law states that in an eviction, garnishment, or replevin action, if any party raises valid legal grounds for a contest, the matter shall be scheduled for a hearing before the judge.

SERVICE OF NOTICES

• If a Landlord gives a notice terminating tenancy via certified mail, proof of certified mailing from the U.S. Post Office is sufficient to establish that proper service has been provided. An affidavit of Service may not be requested to establish proper service has been provided.

WAIVER

• It shall not be a defense to an eviction action or a claim for damages that the Landlord or Tenant has previously waived any violation or breach of any terms of the rental agreement, including, but not limited to, the acceptance of rent or that a custom or practice occurred or developed between the parties in connection with the rental agreement so as to waive or lesson the right of the Landlord or Tenant to insist upon strict performance of the terms of the rental agreement.

EMERGENCY ASSISTANCE (“EA")

• Prior law said that the Court shall stay an eviction if the Tenant applies for EA.
• In McQuestion v. Crawford, 2009 WI App. 35, 316 Wis.2d. 494, 765 N.W.2d 822, the Wisconsin Court of Appeals held that any EA stay may be in effect for only a “reasonable period of time."
• New law requires that:

1. No EA stay may be granted after a writ of restitution has already been issued; and
2. If a stay is granted the stay may not be for more than 10 working days.

REPRESENTATIONS TO COURT AS TO PREPARATION OF PLEADINGS OR OTHER DOCUMENTS

• If an attorney drafts or assists in drafting a pleading, motion, or other document for a self-represented person. Any such document must contain a statement immediately adjacent to the person's signature that “This document was prepared with the assistance of a lawyer, followed by the name of the attorney and the attorney's state bar number."

GUEST POST: A Brief Overview of Wisconsin Options To Purchase

By Attorney David J. Espin of Petrie + Pettit S.C.

Many landlords in Wisconsin are looking for ways to persuade their tenants to put some “skin in the game," and eventually to purchase the property they are renting. Tenants with a financial stake in the property will often take better care of the premises, and are less likely to walk away from their lease obligations. In order to accomplish this, landlords often turn to land contracts so that tenants will build equity in the property, or rent credit programs structured to incentive tenants to save towards a down payment.

Unfortunately, these alternatives come with formidable downsides. In the event of a breach of the land contract, the property owner must go through a costly and time-consuming foreclosure process before it can proceed with an eviction. Rent credit programs risk garnering the attention of regulators who may interpret them as mortgage financing instruments in disguise, which, without the proper licenses, could result in significant fines and penalties. However, there is another alternative: the Option to Purchase.

Landlords can structure an Option to Purchase as part of the lease, or as a separate stand-alone agreement. Although there are many variations, an ordinary Option to Purchase usually contains the following key provisions:

• Tenant agrees to pay an upfront fee, usually called an “option fee," for the exclusive right to purchase the property pursuant to the terms of the agreement.
• Landlord and tenant agree upon the purchase price for the property. This can either be a fixed dollar amount, or some other methodology, such as an appraisal, used to determine the property's value if and when the option is exercised.
• For some finite period of time, the tenant has the exclusive right to purchase the property at the agreed upon purchase price.
• If the tenant lease breaches the lease, the Option to Purchase is voided.
• Regardless of whether the tenant exercises the Option to Purchase, the landlord retains the option fee. The consideration for the option fee is the tenant's exclusive right to purchase the property, and the landlord's agreement to keep the property off the market for the duration of the option.

If drafted and structured properly, the Option to Purchase can be a great way for landlords to take in some extra cash at the front end of the lease, give their tenants an incentive to maintain the property and abide by the terms of the lease, and potentially sell the property once the lease expires

Milwaukee County Proposes A New Protected Class in Housing - "Receipt of Rental or Housing Assistance"

Milwaukee County Supervisor Maria Dimitrijevec is sponsoring a resolution to amend the Milwaukee County Code of General Ordinances related to Fair Housing to include a new protected class - the "receipt of rental or housing assistance." The resolution has been referred to the Economic Development Committee and may be scheduled to be discussed at the committee's meeting on March 12, 2018 at 9 AM.

If passed, this resolution would have a significant impact on landlords and property managers. Currently a landlord may legally refuse to accept any applicant if they receive rental or housing assistance. If this resolution passes, landlords in Milwaukee County would no longer be able to do so without risking a discrimination claim.

Under the proposed resolution, "receipt of rental or housing assistance" is defined as including the receipt of any form of financial contribution from a third party for the purposes of creating or keeping affordable housing for tenants, purchasers, or other potential housing recipients, including but not limited to, assistance provided pursuant to Title 42, United States Code, section 1437f (commonly known as the "Section 8" housing program), the HOME Partnership Program, the Community Development Block Grant program, or any other public or private rental assistance vouchers or programs.

Rental or housing assistance in SE Wisconsin is often referred to as "Section 8" or "Rent Assistance" or "RA." The most common form of rental assistance is run through the Section 8 program. Section 8 tenant-based housing assistance is available to low-income families and the subsidy moves with the tenant and can be used to pay toward rent at any conventional market-rate rental units. Essentially the tenant chooses the rental unit where they want to live and if the tenant meets the landlord's screening criteria, the landlord accepts the RA (which will be required in Milwaukee County if this resolution passes), and the rental unit passes an inspection, then the Section 8 program will pay the RA directly to the landlord. The RA typically does not cover the entire monthly rent amount and therefore the tenant will be required to pay the difference to the landlord.

In order for a tenant to receive RA they need to find a landlord that will accept it. In order for a landlord to receive RA on behalf of a tenant the landlord must enter into a contract with the government or its agent. Here is an example of such a contract.

Some things to be aware of when entering into a contract to receive RA include:

1. The government or its agent determines what the maximum amount of rent that can be charged by the landlord for the rental property based on a number of factors. Once that maximum amount is determined, a landlord is prohibited from charging the tenant a higher amount.

2. The government or its agent will inspect the rental unit and it must pass certain housing quality standards and be maintained up to those standards throughout the lease term. If repairs are required to pass the inspection the landlord must pay for them and the landlord may also be cited for building code violations. At a minimum there will be annual inspections. If the standards are not met the government may withhold paying the RA to the landlord.

3. A landlord would not be able to use a month-to-month rental agreement with the tenant as all of the agencies that administer RA require the landlord to enter into an initial 12 month lease.

4. The government does not "screen" the tenant for the landlord - screening remains the landlord's responsibility.

5. The tenant cannot be evicted if the government fails to pay its portion of the monthly rent.

6. The landlord must serve the government with copies of any notice for failure to pay rent or other breach that the landlord serves on the tenant. If this is not done, it can serve as a basis for any ensuing eviction to be dismissed.

7. The government has no liability or responsibility to the landlord for the tenant's behavior (again, the government is not screening the tenant for you).

8. A landlord's lease must be approved by the government. A landlord's lease will be required to include the government's tenancy addendum and ideally the lease term (between the landlord's lease and the government's addendum) will be identical (but if it is not, the government's lease addendum controls).

Accepting RA is not for every landlord. For every landlord that loves the program I have heard just as many landlords that dislike it. Regardless of your view, you must be prepared to give up some control to the government in exchange for receiving the guaranteed RA from the government. There has been a trend around the country of municipalities adding "rental assistance" to the list of protected classes, so I am not surprised to see Milwaukee County joining in.

Don't Miss The Next Landlord Boot Camp on February 24th

Don't hand your keys over to just anyone . . . Join Attorney Tristan Pettit as he presents the AASEW's Landlord Boot Camp on February 24, 2018. Tristan will provide you with the information that you need to succeed as a landlord and/or property manager in the rental business. You will learn invaluable information to run your business more efficiently, avoid pitfalls that can crush your profit, and navigate the ever-changing landlord-tenant laws. The price of admission includes a 100+ page manual and lunch. For more information or to register click here. Tristan is a shareholder with the firm of Petrie + Pettit S.C. in Milwaukee, Wisconsin. He concentrates his practice in the area of landlord-tenant law, representing landlords and property management companies throughout the state. Tristan drafts many of the landlord-tenant law forms sold at Wisconsin Legal Blank and is the past president, and currently on the board of directors, of the Apartment Association of Southeastern Wisconsin.

New Landlord-Tenant Law Legislation - Wisconsin's Affordable Rental Housing Act of 2017

There are currently two bills in Madison that will significantly impact Landlord-Tenant Law in Wisconsin. 2017 Senate Bill 639 (SB 639) and 2017 Assembly Bill 771 (AB 771) ("bill") are referred to as the Wisconsin's Affordable Rental Housing Act of 2017 and are sponsored by Senator Frank Lasee and Representative Robert Brooks.

The 20-page bill address many issues including historic preservation, rental inspections, rental inspection fees, notice of eviction requirements, background and credit checks, emotional support animals, landlord's charging for personal time when making repairs, rent abatement, local fees, dwelling inspections, public utility service, levy limits, court records, municipal administrative review and the rental weatherization program.

It is important to understand that a bill is a work in progress. I attended a public hearing in Madison on SB 639 back on December 13th and based on the testimony presented at that hearing it is clear that there will be some modifications to the bill. Additionally the public hearing on the Assembly companion bill, AB 771, was only held earlier today. Additionally, in the past few days I have read several proposed changes to the bill, so there will definitely be some changes to the bill.

This blog post will only focus on the sections of the bill related to landlord-tenant law.

Emotional Support Animals

The bill will separate assistance animals animals into 2 separate categories. The first category will be "animals that do work or perform tasks for individuals with disabilities" and second category will be "emotional support animals." An emotional support animal ("ESA") is defined in the bill as an animal that provides emotional support, well-being, comfort, or companionship for an individual but that is not trained to perform tasks for the benefit of the person with a disability.

Under the bill a landlord is able to request that the individual who wants to keep an ESA submit reliable documentation from a licensed health professional verifying that the individual requesting the reasonable accommodation has both a disability and a disability-related need for the ESA. A "licensed health professional" is defined as a physician, psychologist, social worker, or other health professional who is licensed or certified in the state of Wisconsin and is acting within the scope of his or her license or certification.

A person that keeps an ESA shall accept liability for sanitation and damage to the premises caused by the ESA. Further the person requesting an ESA shall forfeit not less than $500 if he or she, for the purpose of obtaining housing or living in housing, misrepresents a disability or misrepresents the need for an ESA to assist with the disability. The bill also states that a licensed health professional that misrepresents the above for a person requesting an ESA will also be subject to the same forfeitures.

Landlords Are Able To Charge For Their Time

The bill clarifies that if a tenant causes damage to the rental property, a landlord is able to charge the tenant his/her "reasonable costs," at a reasonable hourly rate, which may include (a) the cost of materials and (b) the landlord's time spent purchasing materials, providing labor, supervising, or hiring a third-party contractor to make the repairs.

Abatement

A tenant can abate rent only if the tenant remains in possession of the rental property and the condition of the property materially affects the health or safety of the tenant or substantially affects the use and occupancy of the rental property. Further, any municipal ordinance that is currently in effect or is created in the future, may only allow abatement for conditions that materially affect the health or safety of a tenant or substantially affect the use and occupancy of the rental property.

Consumer Credit Reports and Background Checks

The bill allows a landlord to charge a rental applicant for the cost, up to $25, to purchase a consumer credit report or the actual cost to the landlord, whichever is less. This is a $5 increase from the current amount that can be charged. The bill also allows a landlord to charge a rental applicant that is not a resident of Wisconsin up to $25 to obtain a background check.

E-Delivery

A landlord will be allowed to provide the following information and/or documentation to a tenant by electric means: (1) rental documents, (2) security deposit documents related to the accounting and disposition of the security deposit or refund, (3) any promises made before the rental agreement was entered into relating to cleaning, repairing, or otherwise improving the rental property.

Rent Includes Late Fees

The bill would define rent to include any past due rent and accompanying late fees.

Incorrect Amount Listed In Notice

If a Notice for failure to pay rent or for failure to pay any other amount due under the rental agreement contains an incorrect dollar amount, the notice will still be valid unless the tenant has paid or tendered payment of money that the tenant admits is actually due. I expect to see some changes to this section as the purpose of this section of the bill was to prevent courts from dismissing evictions based on notices with mathematical errors but as written this section could be abused by some.

CCAP

The Director or State Courts may not remove any case management information from CCAP related to a civil case, which includes evictions, for a period of at least 10 years after the date that a final judgment was entered. I suspect this section will be modified before it becomes law.

Notarization

Eviction Summons will no longer need to be notarized.

Tenant Must Present Valid Legal Grounds To Contest An Eviciton

Currently in order to have an eviction action scheduled for a contested hearing a tenant merely has to "claim that a contest exists." Under the bill a tenant would be required to provide valid legal grounds to contest the eviction before he or she would be entitled to an eviction hearing.

Notices Terminating Tenancy

If a landlord serves a Notice via certified or registered mail and provides the court with a certified or registered mail receipt a court may not require the landlord to also complete and Affidavit of Service.

No Waiver

It shall not be a defense to an eviction lawsuit or a claim for damages that the landlord has previously waived any violation or breach of any of the terms of the rental agreement so as to waive or lesson the landlord's right to insist upon strict performance under the rental agreement in the future.

Emergency Assistance Stays

An Emergency Assistance stay cannot be ordered after the landlord has been granted a writ of restitution. If a writ has not yet been granted, the Court may only stay the eviction for no more than 5 working days. The time period of the stay in this section will most likely be enlarged due to testimony from the public hearing.

There are many other provisions in bill that I have not touched but which will affect landlords and property managers even though the sections are not lanldord-tenant related. f you are interested in reading the other provisions provisions which while they are not landlord-tenant related, will affect property owners and manager you should do so at SB 639 or AB 771.

T

Wondering What To Get That Special Landlord In Your Life For The Holidays?

Are you wondering what to get that special landlord in your life for the holidays? Look no further. How about giving him or her some peace of mind and lots of education? Send the landlord in your life to the AASEW's next Landlord Boot Camp on February 24, 2018.

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 “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 $400-$500.
This is your opportunity to learn all of the same information at a huge discount through the Apartment Association .

When: February 24th, 2018 Registration opens at 7:10 AM. The seminar is 8:30 to 5 with a half hour lunch break. There will be a one hour question and answer session afterwards, ending promptly at 6 PM. Many will find the Q&A invaluable, therefore you may wish to make arrangements to stay until 6 PM.

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

Specials: Not a member? Pay just $1 more than the non member price and receive both the Boot Camp and a 12 month AASEW General Membership including member discounts at Home Depot, Sherwin Williams and more.($298).

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.

What you will learn at the Apartment Association's Spring 2018 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 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 The Wisconsin Eviction Notices have changed and improved under Act 176, enacted in March 2016
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.

You get all this for less than you would pay for an hour of an attorney's time.

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

Call the Association at (414) 276-7378 or email us at membership@AASEW.org 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!

Good News For Rental Property Investors - Rental Weatherization Program Is Eliminated

I apologize for the delay in getting this post published but there is good news for rental property investors -- the much maligned rental weatherization program was eliminated as part of the passing of the state budget (2017 Wisconsin Act 59) which was signed into law on September 21, 2017 and the program will sunset as of January 1, 2018.

Back in 1979 the legislature passed a law requiring that all rental properties be weatherized prior to the property being sold. The Department of Safety and Professional Services developed minimum energy efficiency standards which focused on windows, patio doors, inward-swinging exterior doors, weatherstripping, caulking, moisture control and insulation. The program went into effect in 1985 with the goal that all rental properties being transferred would meet a minimum of energy conservation standards. So prior to a rental property being sold, the seller had to have an inspection, make any necessary repairs as advised by the inspector, and obtain a certificate of compliance with the program.

To avoid this obstacle, in practice, the buyer of the property typically entered into a stipulation agreeing to meet the requirements within 1 year of purchase. The new owner frequently did not have an inspection or make any improvements within the one year period. However, there was very little enforcement of the program and as a result an open stipulation for compliance would remain open indefinitely or until there was another sale of the rental property.

Under the latter scenario, the program requirements became an impediment when the initial purchaser wanted to sell the rental property to another because the open stipulation would be discovered at the last minute and real estate agents, attorneys, title companies etc. ended up running around to figure out what needed to be done to satisfy the stipulation so as not to impede the sale.

So while the program had high hopes and goals, it was not implemented very well and caused delay and confusion. The program will now end as of the first of the year.

Wisconsin's Land Contract Default Remedies

This is a guest post by Atty. David Espin of Petrie + Pettit

As bank's lending standards have tightened in recent years, financing for real estate sales has become more difficult to obtain. More buyers and sellers are considering alternative financing options, such as land contracts. If the buyer, otherwise known as the vendee, makes all payments on time and pays off the land contract when due, then all parties seemingly walk away from the transaction happy.

However, in the event the buyer defaults on the land contract, Wisconsin has a limited number of remedies that the seller, otherwise known as the vendor, may choose to employ.

Strict Foreclosure. Vendors most frequently elect to use this option. Like in a traditional foreclosure, the vendor starts by filing a strict foreclosure lawsuit against the vendee. Unless the vendee files an answer and disputes the assertions in the complaint, the court typically will grant a default judgment and give the vendee a period of time to pay off the remaining amount due under the land contract, called the “redemption period." In Wisconsin, the redemption period must be at least seven business days. If the vendee pays off the balance due during the redemption period, it obtains legal title to the property. If it fails to pay, title reverts back to the vendor. If the vendor chooses this option, it cannot also pursue the vendee for a money judgment for any additional amounts owed.

Specific Performance. This option typically is used if the property is significantly underwater, and the vendee has assets available to satisfy a money judgment. It is most akin to a traditional bank foreclosure; a lawsuit is filed for the balance due, a redemption period is set, and a sheriff's sale is scheduled. The vendor can “credit bid" at the sheriff's sale up to the full amount of the debt it is owed and pursue the vendee for any remaining balance, which is called a “deficiency judgment."

Lawsuit for Breach of Contract. The vendor can also simply sue the vendee for the unpaid balance due under the land contract. In this scenario, the vendee retains title to the property, and the vendor obtains a judgment against the vendee for the full balance due. The vendor would then have to satisfy the money judgment from the vendee's assets.

Quiet Title Action. If the vendee's interest in the property is “insignificant," the vendor can declare the land contract to be at an end and bring an action to quiet title, thus restoring full title to the vendor. While no hard and fast rule delineates when the vendee's interest is “insignificant," this remedy likely only could be utilized if the vendee has made a small number of payments prior to the default.

Ejectment. Similar to having a tenant evicted, the vendor can sue to have the vendee “ejected" from possession of the property. The vendor can then manage the property on its own, or request that a court appoint a third-party like a receiver to manage the property on its behalf.

While selling a property through a land contract may seem like a viable solution when a buyer is not able to obtain a traditional bank loan, sellers should carefully consider the additional time, expense, and hassle involved with Wisconsin's default remedies before deciding whether or not it is their best option.

Attorney David Espin

What Is The Difference Between A Service Animal, An Emotional Support Animal, A Comfort Animal, A Companion Animal, and a Therapy Animal?

There is much confusion regarding the difference between the various terms used for assistance animals. Landlords, tenants, tenant's health care providers, lawyers and even the courts are often confused when it comes to this issue. Hopefully this blog post will help.

I often use the generic term "assistance animal" to refer to any animal that is prescribed for a tenant to assist him or her in some way. The general term "assistance animal" includes all of the terms mentioned below.

Service Animals

The American's with Disabilities Act (ADA) defines a service animal as an dog that is individually trained to do work or perform tasks for the benefit of a person with a disability, including a physical, sensory, psychiatric, intellectual or other mental disability.

• A service animal can only be a dog or a miniature horse (if certain conditions are met).

• The task performed by the animal must be directly related to the person's disability.

• Tasks performed by a service animal may include pulling a wheelchair, guiding a person who is blind, alerting a person to an oncoming seizure, pressing an elevator button, or reminding a person to take his or her medicine.

• Because a service animal is trained, it typically will not cause any problems in rental housing. Service dogs are better behaved than most human beings that I have met. A Landlord rarely needs to be concerned about a service animal causing problems.

• A service animal is allowed to accompany its handler everywhere including public places, private property, rental housing, an airplanes, with a few very limited exceptions.

• There is no government entity that certifies or registers service animals. Those service animal cards, badges, and vests that you have seen can be purchased by anyone and used for animals that are not service dogs.

• Service animals are not pets. They are an assistive device.

Emotional Support Animals, Comfort Animals, and Companion Animals

The terms emotional support animal (ESA), companion animal and comfort animal are interchangeable and refer to an animal that assists a person with a mental or emotional health issue.

• An ESA provides companionship, relieves loneliness, and mitigates the emotions or psychological symptoms associated with the handler's mental health issue.

• An ESA is not specifically trained to work or perform a task.

• Because an ESA is not specially trained like a service animal, an ESA may be poorly behaved and may cause problems in rental housing including, but not limited to, excessive barking, damaging property, running away, and attacking other animals, residents, vendors or management staff.

• An ESA is not restricted by type of animal or breed of animal and may include any and all animals.

• An ESA is not allowed in public places like stores or restaurants as it is not a service animal. An ESA is allowed in rental housing as a reasonable accommodation under the Fair Housing Act. An ESA is also allowed on airplanes.

• An ESA is not a pet.

Therapy Animals

A therapy animal is a pet that is trained to interact with people other than its handler in order to make those people feel better. Therapy animals are typically found in a group setting like a hospital, retirement home, nursing homes, etc.

• A therapy animal can be any type of animal.

• A therapy animal is not specifically trained but typically is well-mannered and will behave safely around all types of people.

• To become a therapy animal, the animal typically must pass a test and may be certified

• A therapy animal does not have any special access rights to public places, private property, rental housing or airplanes, unlike service animals and ESA's
• A therapy animal is a pet.

So in the majority of situations where a landlord is asked by a tenant to keep an animal to assist him or her, the tenant is referring to an ESA/comfort animal/companion animal, even though the tenant may improperly refer to the animal as a service animal. Also remember that the only type of animal that can be a service animal is a dog or a miniature horse (if certain conditions are met).

They key for landlords is to focus on what they animal does for the tenant rather than what the animal is called. Does the animal assist a tenant with a disability? Is the animal prescribed for the tenant as a result of their disability?

It really does not matter to a landlord whether the animal is a service animal or an ESA since both are allowed in rental housing.

Since so many people use the various terms incorrectly, a landlord does not want to put himself is a difficult (and possibly expensive) situation by responding improperly to a tenant's request to keep an animal just because the tenant used the incorrect term. Focus on what the animal does for the tenant and not what the animal is called.

Less Than 1 Month Left Until Landlord Boot Camp on October 7, 2017

Hello Everyone –

There is less than 1 month left until the next Landlord Boot Camp which is scheduled for October 7, 2017. I hope to see many of you there.

One new topic that we will be addressing is e-filing your evictions and collection lawsuits. E-filing has been required for most Wisconsin counties for several months now and it is now required in Milwaukee County as well as of September 1st.

If you have never had to e-file your eviction or collection lawsuit – do not worry, by the end of Boot Camp you will be a pro.

To sign up now you can call or email Kathy at (414) 276-7378 or membership@AASEW.org or sign up online at www.LandlordBootCamp2017.com

Below are more details about the event.

Thanks

T

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

WHO: Taught by Attorney Tristan R. Pettit of Petrie + Pettit S.C.

Attorney Tristan Pettit has given similar landlord-tenant law seminars to fellow attorneys, landlords, and property management organizations that charge their members $400-$500. This is your opportunity to learn all of the same information at a huge discount through the Apartment Association.

WHEN: October 7, 2017 from 8:30 am - 5 pm. Q+A from 5 pm - 6 pm

Registration opens at 7:10 AM. The seminar will run from 8:30 am to 5 pm with a half hour lunch break. There will be a one hour question and answer session afterwards, ending promptly at 6 pm. Many will find the Q&A invaluable, therefore you may wish to make arrangements to stay until 6 pm.

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

INCLUDED:

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

• LUNCH

PRICE:

• AASEW Members $179

• Non-Members $297

SPECIALS: Not an AASEW member? Pay just $1 more than the non-member price ($298) and receive both attendance at Boot Camp and a 12 month general membership at the AASEW, which includes 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 receive a $40 discount.

What you will learn at the Apartment Association's Fall 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 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 The Wisconsin Eviction Notices have changed and improved under Act 176, enacted in March 2016

7. Everything you wanted to know (and probably even more than you wanted to know) about the Residential Rental Practices (ATCP 134)

AND MUCH MORE -

Landlords Should Create and Implement A Reasonable Accommodation Request Process

With more and more tenants making reasonable accommodation requests to keep assistance animals in their apartments, it is important for landlords to create a policy and process to handle such requests when they arise.

As background, a reasonable accommodation request is a request from a person with a disability to a landlord asking that the landlord modify his/her policies, practices or procedures to accommodate the disabled person so that s/he can enjoy their housing to the same extent as a non-disabled person.

To learn the basics of reasonable accommodation requests, please refer to my prior blog post entitled “A Landlord's Primer on Reasonable Accommodations."

To learn more about reasonable accommodation requests involving assistance animals, please refer to my prior blog post entitled “So Let's Talk About . . . Companion/Comfort Animals."

The most common reasonable accommodation request these days is to be able to keep an assistance animal. The term assistance animal is a general term and includes, but is not limited to, service animals, emotional support animals, companion animals, comfort animals, and therapy animals. Regardless of what the tenant calls the animal, if it is prescribed by a health care provider it may be the basis for a reasonable accommodation request.

Oftentimes a tenant will show up at the rental office with a letter from their health care provider that says that they need an animal to assist with their disability. While the letter may be sufficient to verify the reasonable accommodation request, it is recommended that landlords create and implement a process to deal with reasonable accommodation requests to ensure that the landlord is treating everyone the same.

At a minimum, a landlord's Reasonable Accommodation Request process should include the use of the following documents:

1. Reasonable Accommodation Request form

2. Reasonable Accommodation Verification form

3. Assistance Animal Agreement

Please remember that if the tenant's disability is open and obvious and the need for the accommodation is also apparent, then a landlord does not need to follow the reasonable accommodation process, nor should they.

Reasonable Accomodation Request form

When a tenant makes a reasonable accommodation request, the landlord should provide the tenant with a Reasonable Accommodation Request form to complete. Essentially this form asks the tenant to confirm the following: (1) that they are disabled, (2) that the accommodation being requested is necessary for the tenant to enjoy their housing, and (3) that there is an identifiable relationship, or nexus, between their disability and their accommodation request. The form should allow space for the tenant to specify their accommodation request.

Once the request form is returned to the landlord, the landlord should review it to confirm that it is accurate and complete.

If the tenant does not answer “yes" to all three questions mentioned above, then the landlord may not have to grant the reasonable accommodation request. If this occurs, further investigation and guidance will be necessary.

Please be aware that a reasonable accommodation request can be made orally or in writing and a landlord must still consider, evaluate and respond to the request even if the tenant does not use the landlord's Reasonable Accommodation Request form.

Reasonable Accommodation Verification form

Next, the landlord should meet with the tenant and explain that the next step is to verify their request with their health care provider. The landlord should ask the tenant for the contact information for his or her health care provider and the landlord should then mail, fax or email a Reasonable Accommodation Verification form to the health care provider.

A Reasonable Accommodation Verification form should allow space for the landlord to both identify the tenant by name and for the landlord to specify the tenant's requested reasonable accommodation. A verification form should also ask the health care provider if the above-mentioned three questions are applicable to their patient.

It is necessary for a landlord to obtain the applicant or tenant's permission to contact and verify the information with their health care provider,therefore, the verification form should also include language giving the landlord permission to do so.

The form should also provide space for the health care provider to provide his or her contact information, signature, and the date.

Once the health care provider returns the verification form, the landlord should review it for completeness. The health care provider should have answered the above-mentioned three questions with a “yes." If not, the landlord may not have to grant the reasonable accommodation request and further clarification and guidance will be necessary.

It is important to remember that the verification of a disability and the need for a reasonable accommodation may come from a doctor, but it does not have to come from a doctor. Verification can also be made by other medical professionals such as a therapist, physician's assistant, or nurse. Verification may also come from a counselor, social worker, peer support group, a non-medical service agency or a reliable third-party who is in a position to know about the tenant's disability.

Confirm That The Specific Assistance Animal Does Not Pose A Danger

Prior to granting the tenant's reasonable accommodation request, a landlord should ask the tenant if the assistance animal has ever: (1) bitten or injured another person, (2) damaged the property or possessions of another, and/or (3) has a propensity or predisposition to bite or injure.

If the tenant answers “yes" to any of these questions, the landlord should inquire further. If the tenant's assistance animal has caused harm or damage in the past, a landlord may be entitled to reject the reasonable accommodation request for that specific animal, unless the danger can be eliminated by another reasonable accommodation. Further clarification and guidance may be necessary.

It is important to remember that a landlord may not reject a tenant's reasonable accommodation request for an assistance animal because the landlord believes that the breed of the assistance animal is dangerous. The danger has to be specific to the animal.

Assistance Animal Agreement

Assuming the Reasonable Accommodation Request and Verification forms have been returned and adequately meet and verify the need for the accommodation, the next step is to meet with the tenant and have them complete an Assistance Animal Agreement.

A landlord should not use a Pet Agreement for an assistance animal. An assistance animal is not a pet; rather it is an “assistive device" similar to a wheelchair or prescription medicine. Additionally, unlike with a pet, a landlord cannot charge a fee or deposit for an assistance animal.

Nonetheless, a landlord may still require the owner of an assistance animal to follow certain rules with regard to their assistance animal. The purpose of the Assistance Animal Agreement is to set forth those rules. Examples of acceptable rules include, but are not limited to: (1) the tenant will clean up after the animal, (2) the tenant will comply with all municipal and county ordinances and state laws regarding the animal, (3) the animal will not be allowed to cause undue noise and/or disrupt the quiet use and enjoyment of the premises, (4) the tenant will be responsible for the animal's behavior at all times, (5) the tenant agrees not to leave the animal unattended in common areas or on the grounds at any time.

An Assistance Animal Agreement should also require that the tenant provide the name and contact information of a person who will be responsible for the assistance animal should the tenant become sick, incapacitated, or die. As always, the tenant should sign and date the Agreement.

While the issue of reasonable accommodation requests and assistance animals may seem overwhelming to landlords, I do not foresee this issue going away. If anything, I believe that landlords will be receiving more requests for assistance animals and the requests will be for more exotic assistance animals (can you say ferret, sugar glider, guinea pigs, iguana, tarantula, pot-bellied pig etc.) and for multiple assistance animals (yes it is true, I have already had client's that have received requests from tenants for 3 and 4 assistance animals). I have even had a client receive a reasonable accommodation request for an assistance "person." To help streamline the process, reduce stress, and most importantly to make sure all tenants are being treated the same, landlords should create and implement a Reasonable Accommodation Request process.

For those of you that do not want to reinvent the wheel, I have drafted Reasonable Accommodation Request forms, Verification forms, and Assistance Animal Agreements which are available at Wisconsin Legal Blank Company, Inc.

Milwaukee County Board Considering Ordinance on Rent Abatment

An important message for the Apartment Association of Southeastern Wisconsin: The Milwaukee County Board is considering a proposal that would permit your tenants to abate rent for maintenance issues not addressed within 24 hours. For example, your tenant calls on Friday morning to say the bathroom faucet is not working correctly. You go out and fix it on Sunday, 50 hours after the call came in. This proposal would allow that tenant to deduct $200 from the rent - Yes! Under this proposal, the tenant can deduct TWO HUNDRED dollars even though you made a timely repair of a minor item that does not affect health or safety. You can read the whole proposal and list of proposed deductions here. There will be a hearing on this proposal at 9:00 AM Monday, July 17th, 2017 at the County Board Committee Hearing Room at the Milwaukee County Courthouse, 901 North 9th Street, RM 201B, Milwaukee, WI 53233 Phone: 414-278-4222. Ironically this is two floors below the eviction courtroom where the legitimacy of each deduction will be decided. I encourage you to attend. If you cannot attend you can still make an impact by reaching out to your County Supervisor and/or County Executive Chris Abele to let them know the potential negative impact of this proposal on both you as the property owner and on your tenants. If you live in one of their districts please make an extra effort to contact your supervisor and attend. Constituents of the supervisors make a bigger impact when in attendance. Who represents me? Here is the link to look up your County Supervisor: Here is the link for County Executive Chris Abele: Here are some talking points to help you get started when making your call. How is maintenance even directly related to evictions? Who will be responsible for verifying maintenance issues? At what cost? In what time frame? What is the plan if the issues are deemed inaccurate? Cost of these abatements and the court costs to fight them will be passed on to good tenants There is a risk of tenants seeing these types of abatements as a means to avoid paying legitimate rent. This proposed system is just another layer of cost to the city There are already programs in place to protect tenants through the Department of Neighborhood Services (DNS). Why add this? If the current system is not working, why not improve what we have rather than create a new layer of bureaucracy and cost. Evictions are not a result of non-repair, but a result of non-payment This proposal will increase evictions, not decrease them. Many of the tenants featured in the news surrounding the Eviction Defense Project (Milwaukee) are serial evictees. This type of evictee increases the rents of good tenants; repeated court costs, employee time, and loss of rent cause rents to rise. There are bigger issues to be addressed regarding evictions in Milwaukee. We need to be looking at ways for landlords to be better landlords and tenants to be better tenants. Many want to blame housing for all the problems in our communities. A better approach for both housing and for the tenants that find themselves in eviction would be to look at the underlying cause of the tenant's failure to pay rent and have both financial assistance and social intervention to make their future tenancies successful. Housing isn't the problem, it's part of the solution. Money would be better spent on education, neighborhood programs and increased police protection. The AASEW applauds efforts to reduce evictions as they are time consuming and costly for the owners as well as negatively impacting the housing stock and the tenants. Take action today; contact your supervisor or attend the meeting on Monday (7/17/17). Ron Hegwood President AASEW

Fall Landlord Boot Camp Announced - October 7, 2017

Hello Everyone

We have recently selected Saturday, October 7, 2017 for the next Landlord Boot Camp.

As you are well aware, 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 Landlord Boot Camp can help you navigate these treacherous waters and learn how to run your properties with less hassles.

WHO: Taught by Attorney Tristan Pettit of Petrie + Pettit S.C.

Attorney Tristan Pettit has given similar landlord-tenant law seminars to fellow attorneys, landlords, and property management companies that charge their members $400-$500.
This is your opportunity to learn all of the same information at a huge discount through the Apartment Association .

WHEN: October 7th, 2017

Registration opens at 7:10 am. The seminar is 8:30 am to 5 pm with a half hour lunch break. There will be a one hour question and answer session afterwards, ending promptly at 6 pm. Many will find the Q&A invaluable, therefore you may wish to make arrangements to stay until 6 pm.

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

IINCLUDED:

• 100 plus page manual to help you put what you learn into practice.
• LUNCH

Price:

• AASEW Members - $179

• Non-Members - $297

Specials: Not an AASEW member? Pay just $1 more than the non member price and receive both the Boot Camp and a 12 month AASEW General Membership including member discounts at Home Depot, Sherwin Williams and more ($298).

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.

What you will learn at the Apartment Association's Fall 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 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 The Wisconsin Eviction Notices have changed and improved under Act 176, enacted in March 2016.
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.

You get all this for less than you would pay for an hour of an attorney's time.

This past Spring's Landlord Boot Camp was sold out and we had to turn people away. So call early to reserve your spot.

Call the Association at (414) 276-7378 or email us at membership@AASEW.org 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!

I hope to see many of you there.

T

CCAP Is Under Attack Once Again

A panel tasked with providing guidance to the Director of State Courts has recommended that certain information on Wisconsin's Circuit Court Access site (often referred to as CCAP) should be removed in certain situations. The recommendations made include:

• Any felony charges brought against a person which were later dismissed or where the defendant was acquitted of the charges would be removed from CCAP after 1-2 years.
• Any misdemeanor charges brought against a person which were later dismissed or where the defendant was acquitted of the charges would be removed from CCAP after half of the time prescribed for felonies.
• Any record of a dismissed or denied domestic abuse, child abuse, individual at risk, or harassment injunctions would be removed after 2-4 years.

BUT most importantly for landlords is the following proposal:

• Any stipulated dismissal of a small claims lawsuit, including evictions, would be removed after 2 years.

Interestingly, these changes would only affect the posting of the information on CCAP, not the actual physical file. The actual physical records would still be available for viewing and photocopying in the courthouse. As one commentator stated, "So the real effect of this proposal is to make it more difficult to access these records."

Of particular concern to landlords would be the proposal that any stipulated dismissal in an eviction action would be removed after 2 years.

If an eviction is dismissed outright, that is one thing, as the landlord either failed to appear in court, failed to meet his or her burden of proof, or made a technical or procedural mistake resulting in the eviction being dismissed. However, stipulated dismissals are much different. A landlord may choose to enter into a stipulated dismissal of his or her eviction action for many reasons, but the fact of the matter is that the tenant still breached his or her lease and then refused to vacate which necessitated the filing of the eviction.

The removal of stipulated dismissals from CCAP will affect a landlord vetting a potential tenant during the screening process. Specifically, if the proposed recommendations are followed, a landlord will not be able to find any CCAP record of any eviction action being filed against a rental applicant that the landlord is screening even if that person did have an eviction or evictions filed against them, as long as the eviction/s were resolved via a stipulated dismissal and two years have passed.

If you are not in favor of these proposed changes to CCAP you should contact your elected officials. To find state legislators only you can go to Find Your Legislator This site allows you to simply click a button to use your current location to find those reps.

If you want local officials as well as available social media contacts for all your elected officials, then I recommend Who Are My Representatives. This site does not list Milwaukee Aldermen, however.

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