Archive for May, 2009

5 DAY NOTICES AND LATE FEES IN MILWAUKEE COUNTY

May 8

Posted by Tristan R. Pettit, Esq. in Late Fees, Notices | 6 Comments

Around March 1, 2009 or so, Milwaukee County court commissioners began dismissing eviction lawsuits that were based on 5 day notices that included any amounts other than “rent.”

The statute regarding 5 day notices, §704.17, Wis. Stats., states that if a tenant “fails to pay any installment of rent when due” the landlord may issue them a 5 day notice to pay rent or vacate the unit.

In the past landlords often listed other amounts that the tenant owed in their 5 day notices such as: late fees, remaining portions of security deposits, unpaid utility fees, or amounts owed for damage to the unit. Those days appear to be gone.

Milwaukee County is now taking a very narrow view of the definition of “rent.” As such, if a landlord includes any amounts other than pure rent in his/her 5 day notice they risk having their eviction lawsuit dismissed.

As such, landlords will need to pursue these other amounts that the tenant owes during the 2nd and 3rd causes of action for money damages. If the tenant should cure the 5 day notice by paying the rent amounts within the 5 day notice then the landlord will need to keep track of these other amounts owed and deduct them from the tenant’s security deposit at the end of the tenancy or rental term (assuming that those amounts are included in the Nonstandard Rental Provisions and thus can properly be deducted from the tenant’s security deposit).

To date I am not aware of any landlord appealing a court commissioner’s decision to the small claims judge on this issue. While there is a chance that the judge could rule differently I believe that the safest thing to do is for the landlord to eliminate the inclusion of any amounts owed by the tenant other than straight rent from his/her 5 day notice.

It does not appear that Milwaukee County is applying the same reasoning to 14 day notices at this time. That most likely is because the statute pertaining to 14 day notices does not limit itself to just “rent.”

This is just another example of the many technical pitfalls that can cause a landlord’s eviction action to fail. The need to stay on top of the various L-T laws and the many permutations of that law as determined in Milwaukee County is obvious.

WHO MAY BRING AN EVICTION LAWSUIT

May 8

Posted by Tristan R. Pettit, Esq. in Evictions | 2 Comments

§799.40 of the Wisconsin Statutes states that an eviction action may be commenced by a “person entitled to possession of the property.” This law has often been ignored and many eviction lawsuits have been brought in the name of someone other than the owner of the property. Oftentimes a management company is named as the plaintiff rather than the actual owner of the property.

Milwaukee County is paying close attention to this issue lately. At one of my pre-trials with the court commissioner on an eviction action this week I was specifically asked by the commissioner if the plaintiff whom I was representing was the owner of the real estate. The court commissioner then proceeded to go to his computer and search the internet to confirm that my client was indeed the person who’s name was on the deed to the property.

I have heard of several eviction actions being dismissed lately because the name of the plaintiff did not match the name of the person on the deed.

While many management companies have written agreements with the owners who’s property they manage that allows the management company to bring an eviction lawsuit on behalf of the owner, I am not aware as to whether or not that argument will prevail. It might or it might not but why take the chance.

Be safe and make sure that the named plaintiff in the eviction action is the person or entity that owns the property at issue – it is the law.

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PASSING OF WORTHLESS CHECKS WILL NOT BE PROSECTED IN CITY OF MILWAUKEE

May 1

Posted by Tristan R. Pettit, Esq. in Bad/Bounced Checks, City of Milwaukee | 2 Comments

Issuing a worthless check is a crime in Wisconsin.  Accordingly, when a tenant pays his/her rent or security deposit with a worthless check I typically advise my landlord clients to do two things: (1) serve the tenant with the proper notice terminating tenancy for failure to pay rent so that an eviction action can be commenced against the tenant, and (2) report the crime to the local police so that a potential criminal action could be initiated against the tenant.  Unfortunately, this second piece of advice is no longer valid — at least for clients who own or manage rental property in the City of Milwaukee. 

The Milwaukee Police Department have in place a written policy statement containing 20 exceptions to its normal prosecution of “worthless check” complaints, and one of those policy exceptions directly affects landlords and/or their agents:   Policy Exception 17 states that “checks issued pursuant to any contractual agreement, including the payment of rent or security deposits for rental property,” will not be pursued.  The Milwaukee Police Department does not provide an explanation or rationale for this policy exception.  And upon reading the entire list of policy exceptions, I am hard pressed to come up with any situation involving the issuance of a worthless check which wouldn’t fall under one of the twenty exceptions.  Apparently, the Milwaukee Police Department is not interested in pursuing individuals who pass worthless checks in general and, specifically, the MPD will not pursue tenants who pass them to their landlords.

This means that it is more important than ever that City of Milwaukee landlords and/or property managers do thorough and legal background checks on all prospective tenants in order to increase their odds of obtaining trustworthy and responsible tenants.  Secondly, landlords may want to consider adding language to their standard rental agreements stating that any and all rental payments and security deposit payments must be made via certified funds (i.e., certified check/cashier’s check or money order).  Third, City of Milwaukee landlords now have another reason not to allow tenants who have fallen behind with their rent payments to continue to reside in the their properties.

In order to protect yourself and your properties, landlords or their managers should consider commencing an eviction against a tenant as soon as the tenant is late in paying even one month’s rent.  If landlords continue to allow tenants to get further behind in rent payments and continue to accept promises of future payments from such tenants, landlords will increase the chances that the promised past due rent payments will be made via worthless checks — and now landlords will receive absolutely no assistance from the Milwaukee Police Department when trying to recover these funds from their tenants.

TENANT PROTECTION ACT PASSED

May 1

Posted by Tristan R. Pettit, Esq. in Evictions, Foreclosures, Legislation | 2 Comments

A new law has recently been passed that will affect rental property owners that may be in the unfortunate position of having their properties foreclosed upon as well as those individuals that may be purchasing a property that has been foreclosed.  Sen. Lena Taylor’s bill referred to as the “Tenant Protection Act” (SB 78) was incorporated into the budget repair bill that was recently passed. 

The new law requires that the property owner notify any prospective tenant in writing that (a) a foreclosure action has been commenced, and (b) if a judgment for foreclosure has already been entered, the date when the redemption period expires.  Further any rental agreement that is entered into while a foreclosure action is pending must include a separate written statement, signed by the tenant, stating that the owner has provided the above notice to the new tenant.  The rental agreement will be voidable at the option of the tenant if it does not include the written statement.

With regard to current tenants, the new law requires that the plaintiff in the foreclosure action (typically a financial institution) give the tenants several notices advising them as to the status of the foreclosure action.  Failure to provide the notices will allow the tenant to be awarded $250 in damages plus reasonable attorney’s fees.

Also under the new law, if a tenancy is terminated as a result of a foreclosure judgment the tenant may retain possession of the unit for up to 2 months after the end of the month in which the sale of the property is confirmed (but the tenant must pay rent during this period at the same rate that was applicable prior to the confirmation).  Also the tenant may withhold rent in an amount equal to the security deposit during the last month of possession.  Furthermore, no eviction judgment for the removal of the tenant whose tenancy was terminated as a result of a foreclosure judgment, may be executed before the end of the second month after the foreclosure sale was confirmed.

Finally, if an eviction action was commenced against a tenant and their removal from the rental property was due to a mortgage foreclosure then no information regarding that eviction can be included on CCAP.

The newly enacted law can be viewed here (it starts on page 108)

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NEW PUBLISHED CASE ON EMERGENCY ASSISTANCE STAYS

May 1

Posted by Tristan R. Pettit, Esq. in Caselaw, Emergency Assistance | 4 Comments

We will soon have a published Wisconsin Court of Appeals decision on the issue of emergency assistance stays in eviction actions that will assist us as landlords in removing the non-paying tenant.

Sec. 799.40(4) of the Wisconsin Statutes states that a court must stay an eviction action brought against a tenant that has applied for emergency assistance.  The stay remains in effect until it is determined if the tenant is eligible for the assistance, and if they are, until that assistance is received.  For any of you that have been in this situation you are well aware that this stay can work a substantial hardship on the landlord who is now required to allow a tenant to remain in his/her property for free.  Even if the tenant is eventually awarded the emergency assistance it typically does not cover the full amount of the past due rent owed and as such the landlord declines the money and asks for his/her writ.  The tenant then uses the assistance money for the security deposit on their next apartment.

This stay can delay an eviction for months.  Such a situation is frustrating at best and an improper “taking” of a landlord’s property at worse.  In the case of McQuestion v. Crawford (Appeal No. 2008AP1096) from District I (Milwaukee) of the Wisconsin Court of Appeals, it was held that “implicit in the statute’s mandate that a stay is required until the tenant receives the emergency assistance is a requirement that the tenant seek and find suitable permanent housing within a reasonable period of time.”

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

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A NEW COLLECTIONS TOOL FOR LANDLORDS IS AVAILABLE

May 1

Posted by Tristan R. Pettit, Esq. in Collections | 3 Comments

The Apartment Association of Southeastern Wisconsin has recently entered into a contract with Rent Recovery Service so that AASEW members can receive a discount on this new collection tool for landlords.

You can access Rent Recovery Services from the AASEW website.  After providing Rent Recovery Service with the necessary information about your ex-tenant, RRS will send a letter to the debtor advising them of the debt.  If the ex-tenant has not made payment arrangements to pay you back you will be allowed to report the money that the tenant owes you to the 3 credit bureaus.

This is definitely worth looking into — contact Bill Gray at 212-561-5492 or bill@rentrecoveryservice.com for more information and to sign up.

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