Wisc. Legal Blank Co.’s New & Improved Residential Rental Agreement Is Now Available.

Feb 7

Posted by Tristan R. Pettit, Esq. in Landlording, Rental Agreements, Rental Documents | No Comments

I wanted to alert anyone that is currently using the Residential Rental Agreement that is sold at Wisconsin Legal Blank Co, Inc. (and even those of you who don’t : ) that the new and improved version is now available ans is being sold at WLB.

I completed the revisions to the updated Agreement last week.  The new version indicates a revision date of 1/4/10 whereas the prior version had a revision date of 1/31/07.

Some of the changes include:

1.   I retitled the document “Residential Rental Agreement” — believe it or not I have seen this document improperly used for commercial properties (Note: I will be drafting a form Commercial Lease in the ensuing months for WLB).

2.   I attempted (and think that I succeeded) in removing all legalese from the Agreement in order to make it more understandable for everyone.  So you no longer need to read “heretofore” “therein” “hereof” and wonder to yourself “what the heck does that mean?”

3.   I eliminated some of the “fill in the blank” sections that were causing confusion for some landlords and property managers.  The eliminated sections were not really necessary anyways – so they’re outta there.

4.   I retitled the “Guarantee” section to “Co-Signer / Guarantor” is an attempt to make it more clear that landlords/managers do not need to have the resident/tenant sign this section.  This section need only be signed by individuals (other than the tenant) that are guaranteeing that the tenant will meet all of the conditions in  the Agreement.  For example:  a parent would sign as a co-signer/gurantor for a student tenant that is not employed and/or does not have sufficient credit.

5.  I added a sentence that states that if the Landlord provides the Tenant with an Inspection Checklist (a.k.a. “Check-In/Check-Out” form) and the Tenant fails to return it to the Landlord within seven days after the start of the tenancy, that the Tenant will be considered to have accepted the Premises without any exceptions.”

6.   I deleted the fill in the blank lines relating to “Special Provisions” relating to pets.  The purpose for doing this is to alert landlords that there is a separate docuement entitled “Pet Agreement” that they should be using if they are allowing tenants to keep pets  — rather then trying to cram all of that info into 2 lines on the Rental Agreement.”  By being forced — “forced” may be too strong of a word — to use the Pet Agreement a landlord will also notice (on the Pet Agreement form) that s/he may charge the tenant a refundable pet fee and/or a non-refundable pet fee and it will also make the landlord clearly define the specific pet that is being allowed to reside at the Premises.

7.   I clarified the section that dealt with the type of notice that a tenant must provide the Landlord prior to vacting.  The goal was to make this notice process more understandable for the tenant (and therefore less of a headache for landlords).  This revised section will also serve as a default provision should the landlord fail to include another (i.e. longer) notice provision for the tenant.  The section includes both a notice provision for month to month tenants and tenants that are under a lease for term.

8.   I added a section regarding abandoned personal property.  The section states that any personal property that is left at the Premises after the Tenant has vacated will be considered to have no value and to have been abandoned by the Tenant and therefore it may be disposed of by the Landlord, unless the Tenant notifies the Landlord otherwise – in writing – prior to vacating.

9.    I added a new provision regarding a tenant’s responsibility for maintaining and paying for utilities through the end of theiir tenancy or until the last day that the tenant is responsible for paying rent.

10.   I included a new section that defines late fees, security deposits, utility charges and any other penalty or fee set forth in the Agreement as “rent” – much like is done in commercial leases.

11.   I added a provision stating tha the landlord/manager represents that there are no code violations or other conditions affecting the habitability of the Premises unless indicated otherwise in writing.

12.   I added a new section that clarifies who will be responsible for any extermination costs of the Tenant’s unit and under what circumstances.

13.   I included a provision recommending that all Tenants purchase renter’s insurance and explaining why this is reccomended.

14.   I removed the Consent to Assignment or Sub-Lease section.  I removed this section to reinforce the fact that landlords of residential rental properties would be better protected by entering into a new Rental Agreement (and other rental documents) with a new individual that moves into the Premises after a prior tenant was evicted or vacated the unit, rather then to just assigning or sub-leasing the Premises and continuing to use the old tenant’s rental documents.  While this will result in more paperwork for the landlord, the protections that it will provide more than outweigh the additional paper.  A Landlord in this situation should have the new tenant sign all new rental documents especially a new Lead-Based Paint Disclosure statement (and provide the new tenant with a new EPA pamphlet) and have the new tenant sign and/or initial a new Nonstandard Rental Provisions document rather then just relying on the old documents that the prior tenant signed.  Trust me, if you end up in a court battle (i.e. eviction lawsuit or defending a claim that you violated ATCP 134) or facing the wrath of the EPA, you will be thankful that you used the extra paper.

15.   Finally, I cleaned up all of the mispellings, improper grammar, and other typos  — at least I think I did.

I would reccomend that you toss out any old versions of the Rental Agreement that you may have in your possession and the next time that you renew or rent out a rental unit that you use this new and improved Residential Rental Agreement form.

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CCAP Bill Amended to Allow Landlords Full Access; Possibly Going to Assembly for Vote

Feb 5

Posted by Tristan R. Pettit, Esq. in CCAP, Legislation, Rep. Marlin Schneider | 1 Comment

As many of you know who have been following my updates on the ever evolving attempts by Marlin Schneider to restrict access to CCAP – Mr. Schneider has again amended his proposed bill.  The bill is now called Assembly Bill 663 but it is practically the same as the amended AB 340.  Why the change in the bill number I have not a clue.

AB 663 was voted on by the State Affairs and Homeland Security Committee on Wednesday, February 3, 2010.

Prior to voting on the bill, several amendments were made.  The major amendment was to was to include real estate brokers and salespeople, bankers and other financial agents, landlords, and those working in the title industry, to the list of the ”select few” who would be able to access CCAP in its entirety.  Everyone else would still be limited to the restricted version of CCAP which would exclude information on pending cases and cases in which the defendant was acquitted or the lawsuit was dismissed.

Even with this major changes, AB 663 barely made it out of committee.  The committee was deadlocked at 3 to 3.  Voting for the bill was Rep Fred Kessler (D-Milwaukee), Rep. Leon Black (D-Milwaukee) and Rep. Kelda Helen Roys (D-Madison).  Voting against the proposed bill was Rep. Spencer Black (D-Madison), Rep. Joel Kleefisch (R-Oconomnowac) and Rep. Danield Knodl (R-Germantown).  Two members of the committee were on vacation and therefore did not participate in the vote.  The Chairperson of the committe, and bill c0-sponsor, Fred Kessler advanced the bill, without reccomendation, to the Assembly leaders who will now determine whether or not the Assembly as a whole will vote on it.

While it is great that landlords have now been added to the”chosen few” who are deemed worthy to have access to all open records in Wisconsin – this bill should still fail.  Current President of the Wisconsin Apartment Association, John H. Fischer (also known as Dr. Rent, gave his personal opinion on the AASEWAdvisors list serv, earlier.

He stated, in part:

It is nice that the bill on CCAP was amended to include people like landlords and employers… but to be completely honest, now it has just gotten silly.  He [Rep. MArlin Schneider] wanted this bill so landlords and employers didn’t use the CCAP records in a method that was illegal, but then he modifies the bill to include us…. So what exactly will it accomplish now?  It has been watered down so far to have no real impact, so why even have it at all.  In addition, how are they going to determine who is a landlord, who is an employer?  Are we going to have to register?  (Gee a statewide registration system for landlords, won’t that make licensing something easy to do in the future).
 
In my personal opinion, the stance of the WAA should be similar to that of the Newspapers.  Even though they were allowed full access under the original proposal, they still objected to it because there is something inherently wrong with making public records difficult for the public to have access to.
 
. . .
 
I think we still need to be opposed because once limitations are put in place, what is stopping from them from expanding those limitations in a future session.  They can take away all of our rights at one time, or they can chip away piece by piece until they are all gone.  Either way, the end game is the same.
 
My two cents….
 

I agree with John 100%.

This bill is barely holding on.  It is on life support — we need to put it out of its misery.  Patrick Marley of the Journal Sentinel in his recent article on the topic indicates that Kessler himself, one of the bill’s sponsors, said that it has a “slim” chance of passing.  I would like to change that to NO chance of passing.

This is a very critical time.  We must all contact our representatives in the state legislature and let them know that this bill should be defeated.

If you do not know the contact information for your representatives you can find that information here.

Oh yeah, and here is an article stating that Rep. Schneider is lying in an attempt to push his legislation limiting CCAP through the system.  Good thing the AP caught him.

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Did Your Tenant Write You A Worthless Check? Consider New Restitution Program

Feb 4

Posted by Tristan R. Pettit, Esq. in AASEW, Bad/Bounced Checks, Collections | No Comments

One of my earliest blog posts, back when I had just started Tristan’s Landlord-Tenant Law Blog, was about the fact that the City of Milwaukee Police Department had a policy in place where they refused to investigate crimes in which a tenant made their rent payment with a worthless check or stopped payment on the check.  Shortly thereafter I wrote about a new diversion program that was being created to assist landlords in such a situation.

I was attending the February monthly meeting for Milwaukee RING (Real Estate Investors Networking Group) this past Monday and they had a speaker from the company that is now running this new program.  Mr. Rufus McNealy of Financial Crimes Services, LLC (FCS) spoke to us about the diversion/accountability program that is now in full effect. 

Mr. McNealy handed out a very informative guide outlining the program and including the necessary applications to enter into the program.

With the current recession the District Attorney’s Office says that they are receiving more and more complaints of people passing worthless checks.  Due to limited funding, the DA’s office cannot afford to prosecute all of these these crimes.  So the DA’s office and FCS partnered to try to get some of that money back for the victims — and this includes landlords.

The goals of the program are:

1.  Increase the amount of restitution returned to victims of bad checks.

2.   Increase the accountability of all worthless check writers (regardless of the amount of the check).

3.   Educate local merchants about more effective check acceptance procedures.

4.   Reduce the risk of repeat worthless check activity through training.

There is no cost to any landlord that wishes to try this diversion program.  All costs of the program are born by the worthless check writer.

The program will handle the following kinds of checks: NSF, Account Closed, Stop Payment, Refer to Maker, Business to Business, RENT checks, debit card charge backs, ACH (Automatic Clearing House) charge backs, ACH NSF’s and electronic checks received in Milwaukee County that do not exceed $2,500.

The following types of checks will not be handled by the program: second-party checks, payroll checks, checks that are currently in collections with a collection agency or attorney, and promissory notes or any other situation in which there has been agreement to hold the check for deposit or credit extension.

The final two pages of the PDF that I have linked to above are the “Memorandum of Understanding”  which the landlord would review, sign and return to FCS, and a Preliminary Worthless Check Report which the landlord should complete and send to the Milwaukee County DA Program.  Hold on to these two pages . . .  just in case you find yourself in a situation where this program can help you.

Once FCS receives the above info from the landlord the company will attempt to contact the person that passed the bad check.  The criminal will then have the option of (1) entering into the program and paying restitution to the victim or (2) refuse to enter into the program in which case the matter will be sent for potential prosecution.

It is my understanding that FCS is also partnering with Racine County and Kenosha County in addition to Milwaukee County.  FCS is not currently working with Waukesha County.

Those of you that are interested in learning more about this program may contact Mr. McNealy at (414) 393-9385 or visit his company’s website at www.financialcrimes.net

The AASEW has also schedule Mr. McNealy to speak about this program at its May meeting.

LANDLORD BOOT CAMP: Everything You Need To Know About Residential Landlord-Tenant Law in WI

Feb 1

Posted by Tristan R. Pettit, Esq. in AASEW, Landlording, Seminars | No Comments

I will be presenting an all-day seminar on residential landlord tenant law in Wisconsin for the Apartment Association of Southeastern Wisconsin, Inc. (AASEW).  The seminar is entitled “Landlord Boot Camp” and will take place on Saturday, February 27, 2010 from approx. 8:30 am – 5 pm at the Clarion Hotel located at 5311 S. Howell Avenue in Milwaukee.
 
The cost will be $159 for AASEW members and $259 for non-members.  You will receive a 100 page plus manual.  I have given a similar seminar to lawyers, landlords, and property managers over 25 times during the past few years and the organizations that have sponsored these seminars typically charge between $300-$400.  This is your opportunity to learn all of the same information at a much discounted price.
 
I will cover pretty much anything and everything that you need to know about residential Landlord Tenant law in Wisconsin, 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 accomodations” 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)
 
. . .  and much more.
 
Hope to see you there. 
 
Call Paulette at (414) 276-7378 or email her at paulette@apartmentassoc.org to reserve your seat.

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Milwaukee’s New Vacant Building Registration Ordinance Is Here

Jan 28

Posted by Tristan R. Pettit, Esq. in City of Milwaukee, DNS, Legislation | 3 Comments

I need to apologize.  I have spent much of my time these last several months following and providing information about the city of Milwaukee’s new Residential Rental Inspection ordinance and as such I have inadvertantly failed to let everyone know about another of Milwaukee’s new ordinances that will affect rental property owners. 

I was talking with a client of mine last week prior to the 1:30 pm eviction return calandar in small claims court and he mentioned that the city recently served him with notice that he is in violation of the city’s new Vacant Building Registration ordinance.  He was told that his rental property was vacant and that he didn’t register the property with the city as required and that he must now open his property up for an interior inspection by the Department of Neighborhood Services (DNS).  Interesting twist is that my client’s rental property is not vacant nor has it ever been vacant.  The unit is occupied by a tenant under a valid written rental agreement.

On January 1, 2010, Milwaukee’s new Vacant Building Registration ordinance went into effect.  Essentially the ordinance states that the owner of any building that is vacant for more than 30 days must register the property with DNS and submit to a mandatory – warrantless – interior inspection of the rental property.  The ordinance also requires the owner to secure the building, maintanin the lot, exterior of the property, and interior of the property during the time that it is vacant.

Upon first glance this seems like a reasonable ordinance.  A valiant attempt by the city to insure that vacant buildings do not become dilapidated and attract criminal activity, injure individuals, or further depress Milwaukee’s neighborhoods.  I have no problem with that.  Upon closer review of the ordinance however you will note the many requirements – similar to the city’s Residential Rental Certificate ordinance — that are open to multiple interpretations and therfore open to abuse, which in the end, can and most likely will, be used to the detriment of rental property owners.

I will not attempt to explain or detail the entire Vacant Building Registration ordinance as it is over 6 pages long.  I would like to touch on some key parts of the ordinance and note some concerns. 

This new ordinance applies to all residential and commercial properties that have been vacant for more than 30 days.  There are some exceptions.  It does not apply to single family homes or owner-occupied duplexes (as long as the owner has resided in the duplex at least 3 of the last 9 months and the owner intends to continue living in the duplex).  Also excluded from the ordinance are condominiums and  rental units as long as their vacancy rate does not exceed 95%.  Also excluded is property that is currently in the foreclosure process and property that is actively being renovated.

This ordinance will apply to your rental whether or not you are actively showing the property to prospective renters and regardless of the condition of the property.  So within 30 days of the property becoming vacant you must fill out a city application and file it with DNS.  Additionally you must allow DNS to conduct an interior inspection.  If the city finds any violations you will be cited.

Your intial application will be good for a period of 6 months and will cost you nothing (assuming the city does not cite you for any violations).  If your property remains vacant for more than 6 months then you must reapply and pay a $250 fee.  If DNS determines, at the time of renewal, that your property is not compliant then the fee will increase to $500.  If your property continues to be in violation at the time of any subsequent renewals then you may be charged a fee (in increasing increments of $250) up to a maximum of $1,000.  If you don’t pay the fees they will be assessed against the real estate as a “special charge.”

During the inspection, DNS will see if your property meets their minimum requirements.  You can read a summary of those requirements at DNS’ webpage dedicated to this new program.

Just as with the Residential Rental Certificate ordianance, DNS has the unfettered ability to draft and apply rules and regulations which are not required to be incorporated into the ordinance.  These rules and regulations can change at any time and do not have to be published.

Let me just provide you with two situations that clearly fall under the purview of this new ordinance but which I feel should not require any city involvement whatsoever. By no means are these the only two problematice examples that I foresee — there are many.

First, assume that you own a duplex and you currently have a tenant in the lower unit but because the upper tenant just broke the lease you upper unit is empty.  The upper unit is in pretty good shape but requires repainting and some minor repairs to get the unit into move-in condition for the next tenant.  Also assume that you were just assigned a new project at work that is taking up most of your time – you are working late and on weekends.  While you would like to repaint the unit, make the minor repairs, start advertising the vacancy, and showing it to prospective renters, you just do not have the time.  You remain very busy at work for more than 30 days.  Under the new ordinance you now have a “vacant building” and you must register the property and allow it to be inspected.

My second example has actually happened to me on several occassions.  I was in the process of trying to locate a new tenant for the lower portion of my duplex.  Just as the city suggests, I have written screening criteria which any applicant must meet in order to become my tenant.  My screening criteria is quite stringent.  I follow the adage that it is better to have a vacant unit then to accept any “warm body” as a tenant.  Because I also work a full-time job, I am not free to show the property to interested renters every day.  As a result of both my stringent criteria and my schedule, my lower duplex remains vacant for over 30 days.  Under Milwaukee’s new ordinance I would need to register my duplex with the city and take time out of my day to allow an inspector to inspect my property.

NOTE:  I have spoken with DNS Commissioner Art Dahlberg and confirmed that my above examples (which I have crossed out) are inaccurate.  If you have a duplex and only 1 unit is vacant then you do not fall under the purview of the new ordinance.  You would only fall under the purview of the new ordinance if both units of the duplex were vacant for 30 days — as you would now have more than a 95% vacant property.  So I have had to revise my examples.

First, assume that you own a single family home that you operate as a rental property and your tenant just broke his/her lease and as such the property is now vacant.   The property will need a little bit of work (minor repairs and some painting) before you can turn it over.  Also assume that you were just assigned a new project at work that is taking up most of your time – you are working late and on weekends.  While you would like to repaint the unit, make the minor repairs, start advertising the vacancy, and showing it to prospective renters, you just do not have the time.  You remain very busy at work for more than 30 days.  Under the new ordinance you now have a “vacant building” and you must register the property and allow it to be inspected.

My second example happens to many of my clients that have stringent screening criteria that applicants must meet before they can become tenants.  They are in the process of renting out a single family rental unit or both units of a duplex.  Just as the city reccomends they use a written screening criteria which any applicant must meet in order to become a tenant.  Following the adage that I often teach at my seminars, that it is better to have a vacant unit then to accept any “warm body” as a tenant, my clients often have periods in which their rental units are vacant.  Sometimes becasue my clients work a full-time job outside of being a landlord, they not free to show the property to interested renters every day.  As a result of both their stringent screening criteria and their busy schedules, their single famuly rental or both units of their duplex remain vacant for over 30 days.  Under Milwaukee’s new ordinance they would need to register their rentals with the city and take time out of my day to allow an inspector to inspect their property.

I suppose things could be worse.  You could be standing in my client’s shoes – the guy I mentioned earlier — and have just been served with a notice from the city that you are in violation of its Vacant Building Recording ordinance.  My client is now placed in the difficult position of having to decide whether to ignore the city’s notice and risk the possibility of a fine and the future wrath of DNS or capitulating to the city and allowing it to inspect his unit despite the fact that it is occupied by a tenant and the city has no legal right to set foot in his rental property.  What would you do?

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City of Milwaukee’s Rental Rehab Program Offers Investors Funds to Rehabilitate Foreclosed Properties

Jan 20

Posted by Tristan R. Pettit, Esq. in City of Milwaukee, Investing In Rental Property | 5 Comments

In an effort to rid itself of the many abandoned and foreclosed properties throughout the city, Milwaukee’s Neighborhood Stabilization Program (NSP) Rental Rehab Program will provide investors and landlords with financial assistance to rehabilitate foreclosed homes.

According to the flyer that I was given, responsible investor owners and landlords who purchase foreclosed homes in the city of Milwaukee may be eligible for forgivable loans of up to $17,500 per unit (or $35,00 for a duplex) to assist them with repairs to the property.  The funds are made available on a matching funds basis.

The city will be holding an informational seminar on Wednesday, January 27, 2010 from 3:30 – 4:30 pm at the Department of City Development located at 809 N. Broadway in the 1st floor boardroom.

The seminar will provide attendees with additional details as to the program requirements and rehabilitation specifications.

It is requested that all attendees pre-register by sending an email to NSPinfo@Milwaukee.gov. 

Additional information on the program can be found at the www.MilwaukeeHousingHelp.org

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What May A Wisconsin Landlord Legally Deduct From A Tenant’s Security Deposit?

Jan 17

Posted by Tristan R. Pettit, Esq. in ATCP 134, Landlording, Security Deposit | 3 Comments

I have received many calls from both landlords and managers over the years asking me if they are legally allowed to deduct X, Y, or Z from a tenant’s security deposit.  I fielded such a question just last week – sounds like a good topic for a blog post.

Wisconsin Administrative Code, ATCP 134.06(3) states that a landlord may deduct from a tenant’s security deposit for the following:

1.   Damage, waste, or neglect of the unit

2.   Unpaid rent

3.   Unpaid utilities for which the tenant is responsible

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

5.   Unpaid mobile home parking fees which a local unit of government has assessed against the tenant (to the extent that the landlord becomes liable for the tenant’s nonpayment), and

6.   Other reasons as set forth in a document entitled “Nonstandard Rental Provisions.”

For the majority of landlords and managers out there, items #4 and #5 are not often applicable, so I will focus my attention on the remaining items.

Damage, Waste or Neglect:   There is no bright line rule or definition of what constitutes damage, waste, or neglect.  This is determined on a case-by-case basis and each court commissioner or judge may have a different view on the topic.  The best way to prove that a tenant damaged, wasted or neglected your rental property is to (1) use a “Check-In Check-Out” form and (2) take lots of photographs.

If you want to hold a tenant responsible for damage that they caused to your rental unit then you must first demonstrate that the damage was not pre-existing.  To do this you should take photos of the entire rental unit prior to a tenant moving in.  You should also complete a Check-In form yourself prior to the tenant moving in.  Essentially a Check-In form lists the various rooms and areas of the rental unit and provides space for you to note any damage or problems.  Once the tenant has moved in you should then provide the tenant with a blank Check-In form and ask them to complete it fully, date it, and sign it and then return it to you promptly. Read the rest of this entry »

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