Archive for September, 2009

Why Milwaukee’s Mandatory Rental Inspection Program (a.k.a. “Landlord Licensing”) Is Not Needed and Is A Bad Idea.

Sep 14

Posted by Tristan R. Pettit, Esq. in City of Milwaukee, DNS, Residential Rental Inspection (RRI) Program / Mandatory Rental Inspections / Landlord Licensing | 4 Comments

Here are a few of the reasons why the City of Milwaukee’s soon-to-be proposed ordinance requiring mandatory rental inspections  (a.k.a. “Landlord Licensing”) should not be passed.

For more background information on this proposed new ordinance please read my earlier post entitled ” Milwaukee To Propose Landlord Licensing and Mandatory Interior Inspections of Rental Property.”  

There Are Better Ways To Spend Milwaukee’s Limited Money – The city of Milwaukee has no money and as such the city is threatening to close libraries, not hire additional police officers, not pay overtime to police officers, cut back on the number of firemen assigned to each ladder company.  Under this new ordinance the city will spend money which would be better spent on more police officers and other safety issues rather than hiring more building inspectors. Read the rest of this entry »

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Milwaukee to Propose Landlord Licensing and Mandatory Interior Inspections of Rental Property

Sep 10

Posted by Tristan R. Pettit, Esq. in AASEW, DNS, Residential Rental Inspection (RRI) Program / Mandatory Rental Inspections / Landlord Licensing | 20 Comments

The city of Milwaukee is planning on introducing a new ordinance that will require rental property owners in certain parts of the city to license their rental properties and submit to mandatory interior inspections by the Department of Neighborhood Services (DNS).

Many of the AASEW board members have been having regular monthly meetings with the new DNS Commissioner Art Dahlberg.  During a recent meeting Mr. Dahlberg informed us that in the near future he will be pushing for some form of residential rental inspection program (a.k.a “Landlord Licensing”) for portions of the city.  During a meeting with Alderman Bob Donovan it was confirmed that this program was in the works and that the city’s forthcoming budget already has money earmarked for the program.

Under this program DNS would target certain areas of the city which they consider to be “blighted” or which will soon become “blighted” if something is not done.  Other factors that would be considered in determining what areas to target would be the age of the housing stock, the percentage of rental units to owner occupied properties, and the history of complaints in the neighborhood.  Mr. Dahlberg indicated that the area of the city that would most likely be addressed first would be the east side near UWM due to the large number of illegally converted dwelling units and poorly maintained properties.

The goal of the program would allegedly be for the owners and the city building inspectors to work together to better the rental housing stock with the building inspectors becoming a resource for rental property owners.

While the specific details were not provided to me, any proposed program will most certainly contain provisions such as the following:

-  A requirement that all rental property owners in the targeted area pay a fee to the city for each unit that they own. 

-  A requirement that rental property owners allow the city building inspectors to conduct mandatory inspections of the interiors of each of their rental properties that are located within the targeted area.

-  If no code violations are found then the rental property would receive a certificate of code compliance which would allow the owner to rent out the unit for a period of time until the next mandatory interior inspection would be required.

-  If code violations were to be found in the rental property then the owner would be denied a certificate of code compliance (thus preventing the unit from being rented) until the violations were corrected.  Depending on the the number and severity of the violations, the rental property owner would be required to submit to an increased number of interior inspections during the ensuing months until the city would determine that the rental property was safe.

While this new program would only focus on the UWM area initially, other areas of town were also mentioned (the north side of Milwaukee for instance) as being targeted eventually.  It is fairly obvious that the end goal would be to have all rental properties within the city under this program.

I personally am not in favor of this program and I can’t imagine that many landlords would be.  If passed this new ordinance will be yet another regulation on rental property owners - a group that is already overly regulated.  I can’t imagine that tenants are going to enjoy this invasion of their privacy either.  Not to mention that the additional costs to landlords will most likely be passed on to the tenant by increased rents.  I also personally have difficulty with the fact that the city regularly threatens to cut the number of police, refuse overtime for police, eliminate the number of firemen at ladder companies, and close libraries, but yet they are willing to provide additional money for the hiring of more building inspectors.

While the alleged goal of this residential rental recording program is to improve the quality of the housing stock in the city I can’t help but think that it will also be a source of revenue for a city that allegedly is broke.

This proposed ordinance will be addressed in more detail in my future posts.

To read why this program is not a good idea click here.

To read the text of a study conducted by the LaFollette Institute in 2002 on whether or not Landlord Licensing should be implemented in Milwaukee click here.  To read a summary of the the study concluding that Landlord Licensing would casue more harm then good if implemented in Milwaukee click here.

For more information go to www.rentalinspectionprogram.com

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MILWAUKEE CO. SMALL CLAIMS COURT’S NEW POLICY REGARDING WHO MAY APPEAR IN COURT ON BEHALF OF A LLC WENT INTO EFFECT SEPTEMBER 1st.

Sep 2

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

I was attending the regular monthly meeting of Milwauke RING (Real Estate Investors Networking Group) last night and during the “open mic” portion of the meeting I reminded everyone that Milwaukee County Small Claims Court’s new policy regarding who may appear in court (i.e. sign court documents and appear in court) went into effect yesterday, September 1, 2009.  As I was walking back to my seat two people asked me what that would mean.  After the meeting several landlords that own a large number of rental properties also approached me and said they had never heard of this new policy.

Because of this major change and the fact that many people either are not aware of it or do not understand the change I thought it would be prudent to explain what this new policy is before some unsuspecting landlord or management company ends up having their eviction lawsuit dismissed.

For the last month or so the Court Commisioners in Milwaukee County Small Claims Court have been talking to court regulars about the change as well as handing out flyers and posting those flyers on the tables in the courtroom and in the Clerk of Courts Office.  Essentially the flyers say:

PLEASE NOTE

In small claims eviction cases, you may only sign complaints (and summons) and appear in court on behalf of a property owner if you are one of the following:

1.     The property owner (if the property is not owned by a corporation/limited liability corporation).

2.     A full-time employee of the property owner.

3.     An attorney.

Employess of management companies or other outside service providers many not sign complaints (or summons)or appear on behalf of property owners.

The biggest group that this new policy will effect is those that own their rental properties in a LLC.  For personal liability protection it is encouraged that owners of rental properties transfer ownership to a LLC.  However, under this new policy LLC’s will only be able to appear in court by either (1) an attorney or a (2) full-time employee of the LLC (this must be supported with evidence such as W2′s).  Even if you are the sole member of the LLC you will not be able to appear in court on it’s behalf unless that LLC pays you a full-time salary.  Since most landlords are not a full time employee of their LLC, this means that they will be forced to hire an attorney to handle their evictions in Milwaukee County.

I am not sure exactly what has brought about this change.  And no, awyers did not lobby the court for this change (at least this one didn’t).  There is a Wisconsin Court of Appeals case that says that corporations (becasue they are a separate legal entity distinct from an individual person) may only appear in large claims cases by an attorney in Wisconsin.  LLC’s are also separate business entities distinct from the individual (and that is why placing your rental properties in a LLC is a great way to protect your personal assets).  So it is my guess that Milwaukee County has decided to extend this same reasoning to LLC’s.  What precipitated that, I do not know.

Whether you agree with it or not is really not important any longer.  The court commissioners are behind this policy and it has the support of the current small claims judge as well.  If you do not want your eviction tossed out of court you must decide how you are going to comply with this new policy.

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