Archive for February, 2010

Landlords Will Be Required To Install Carbon Monoxide Detectors In Single Family and Duplex Rentals

Feb 23

Posted by Tristan R. Pettit, Esq. in Carbon Monoxide Detectors, Legislation | 5 Comments

A new bill was recently passed by the Wisconsin Senate that will require landlords that rent out single-family homes and duplexes to install carbon monoxide detectors on all floors of these dwellings by Febraury 1, 2011.

Senate Bill 415 was passed 69-27 via voice vote after the Assembly previously passed the bill by a 2/3′s margin.  You can read the entire history of the bill here.  It is anticipated that the Governor will sign the bill.

SB 415 requires the owner of most buildings that contain one or two dwelling units to install a carbon monoxide detector in the basement and on each floor of the dwelling unit except for the attic.

Additionally, the bill requires that if the tenant notifies the owner in writing that a detector is not working properly, that the owner must perform the necessary maintenance to repair the detector or replace it within 5 days after receipt of the notice by the tenant.

The bill also exempts an owner for any liability for any false alarms or from the failure of the detector to work properly if its failure was due to tampering, as long as the owner reasonably maintained the detector.

Existing 1 and 2 unit dwellings will be allowed to use battery operated carbon monoxide detectors.

A carbon monoxide detector is not required to be installed if the unit does not have an attached garage, has no fireplace, and has no fuel-burning appliances.

Finally, the bill authorizes a building inspector to inspect new dwellings, and if requested to do so by the owner or tenant, to inspect the interior of an existing rental unit to ensure that the owner has complied with the requirements set forth in this bill.

This new law will become effective as of February 1, 2011 and will be contained in Section 101.647 of the Wisconsin Statutes.

Please remember that the carbon monoxide law that affects rentals that include 3 units or greater goes into effect April 1, 2010.  This law can be found in Sec. 101.149, of the Wisconsin Statutes.  ADDED 3/1/10:  These regulations were issued as emergency rules by the Department of Commerce, Safety and Building Division, as required 2007 Wisconsin Act 205 (in April 2008).  The Wisconsin Department of Commerce’s brochure on this law is very informative.

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Thanks to Atty. Heiner Giese for forwarding this information to me.

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Is This The End of Seller Financing For Rental Properties?

Feb 16

Posted by Tristan R. Pettit, Esq. in Investing In Rental Property | 1 Comment

I have received this same information from my contacts at the Apartment Association of Southeastern Wisconsin, Inc. (AASEW) and Milwaukee Real Estate Investors Networking Group (RING).  If you would ever like to be able to obtain seller financing for your next rental property or if you would like to be the seller that finances the sale of your rental property to some young landlord in the future then you must act now.

TODAY – Feb. 16th – IS THE LAST DAY TO SEND COMMENTS! 

DEADLINE FOR COMMENTS HAS BEEN EXTENDED TO MARCH 5th

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I received this Info from 4 different REIA’s – Deadline 2/16 to respond  DEADLINE FOR COMMENTS HAS BEEN EXTENDED TO MARCH 5th

HUD Issues Problematic Rules Interpreting SAFE Mortgage Licensing ACT

HUD has proposed to eliminate ALL seller financing unless the seller lives in the home or becomes a licensed mortgage originator. 

The proposed HUD Rules interpreting the federal SAFE mortgage act can be viewed at www.regulations.gov. 

Use the search parameter “HUD” and the keyword “safe”. 

Please review and comment regarding the impact of this broad interpretation of the law.   “In addition to establishing HUD’s responsibilities under the SAFE Act, through this rule, HUD proposes to clarify or interpret certain statutory provisions that pertain to the scope of the SAFE Act licensing requirements, and other requirements that pertain to the implementation, oversight, and enforcement responsibilities of the States. HUD solicits comment on the proposed clarifications and on the regulations proposed to be codified.”
History: 
As you may recall, we lobbied hard last year to maintain the right for individuals to make up to five seller financed transactions per year before being subject to mortgage originator licensing, etc… However, that law was passed subject to the Department of Housing and Urban Development’s (HUD) approval of the law as “compliant” with the intention of the federal law.  If any state does not have a compliant law, the SAFE act allows HUD to implement licensing for the state.  HUD has since issued proposed rules. 

In a nutshell, seller financing would no longer be allowed for non-owner occupied homes.

How YOU can help: 
We learned about the publishing of the rules very late in the process… and the deadline for comment is upon us on February 16.  However, we desperately need for thousands of REIA members across the country to go on record with HUD on this issue.  We will be working to try to affect this law in other legislative ways, but cannot hope to gain traction unless our members have clearly communicated that they are opposed to this portion of the rules.  This is your chance to be counted on this issue. 

PLEASE SUBMIT YOUR COMMENTS TO HUD!  We have less than one week to flood this system with comments. 

Follow these simple steps:
1.  Logon to www.regulations.gov. You will see two white boxes for searching 
2.  On the left box labeled “Document Type”, pull the menu down and select “proposed rules” 
3.  On the right box labeled “Enter keyword or ID”, enter “safe mortgage”. Then, press search 
4.  Locate the blue search result “FR-5271-P-01 Safe Mortgage Licensing Act: HUD Responsibilities Under ….” To read the rules, click on this title. You will be taken to another page. You will see “views”. You can click on PDF file or another symbol which will show you the rule document online. 
5.  On the right of the screen, click on “submit comment” 
6.  Complete the form providing required information and your comments and then submit

What do you say? 
Say what you feel, but say it politely! The message should include that you would like the definitions in the proposed rules to be changed so that private individuals can originate and service loans on properties they personally own.

Some ideas from others:
• Bank loans are not available on some types of properties 
• The tight lending climate has made bank financing “out of reach” for many 
• Seller financing is an “age old” tradition based on private property rights 
• These rules would prohibit even partial seller financing – i.e. a “seller second” 
• According to HUD’s “Residential Finance Survey” in 2001, roughly 40% of all non-farm residential properties in the US are owned free and clear 
• An estimated 6 million Americans own a property other than their own primary residence 
• An estimated 4.5% of Americans own three or more properties, many purchased solely as investment properties 
• 40% of non-owner occupied residences are mobile homes which are more difficult to sell with bank financing 
• Approximately 5% of homes in US are for sale or for lease… seller financing may be key to liquidating this inventory 

Post comments to: http://bit.ly/b0NyKx

DEADLINE FOR COMMENTS HAS BEEN EXTENDED TO MARCH 5th

Compliments of BILL Kiefer 
ACT TODAY !!!!!!!!!!!!!!!!!

LANDLORD BOOT CAMP: Only 4 Open Seats Remain

Feb 16

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

UPDATE 2/17/10 – WE ARE AT FULL CAPACITY FOR LANDLORD BOOT CAMP ON 2/27/10.  If you are interested in attending please contact Paulette at (414) 276-7378 or paulette@apartmentassoc.org and she will put your name on a “waiting list” and contact you should a seat become available.
 
Thank You
 
T
 
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We had a great AASEW monthly membership meeting last night — close to 90 people.  That was the largest crowd that I have seen at a meeting in my many years as a member.  Many of the attendees at the meeting also signed up for the AASEW’s Landlord Bootcamp that I will be teaching in about 10 days.  If you are interested in attending I would encourage you to do so immediately as I am told that there are only 4 seats left.  Looks like we will have a full house!
 
Below is my earlier blog post about the Boot Camp and the topics that I will address on Feb. 27th:
 
 
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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Landlords Should Attend EPA Lead Renovation Meeting On Feb. 15th

Feb 14

Posted by Tristan R. Pettit, Esq. in AASEW, Lead-Based Paint, Legislation | No Comments

The Bad News:   Those of you who have been following along on this list have heard about the new EPA Law, beginning April 22, 2010, that regulates any renovation work that disturbs 6 sq. ft. or more of paint per room, 20 sq. ft. or more of exterior paint, or involves windows. This law specifically includes rental property owners, management companies and their employees.  Your workers and company will need certification as well as changing your work practices. 

This law will increase the cost of doing work as well as subject violators to fines of up to $32,500 per day/violation..  You really don’t want to make a mistake here.

The Good News: Steve Antholt of the Wisconsin Department of Health (The people who will enforce this law in WI) has agreed to be at the AASEW’s Monday general meeting to  talk about the new EPA Law and the state companion rule Wisconsin Lead-Safe Renovation Rule, DHS 163.  He will explain why it is important, and what steps Rental Property Owners and Managers need to take to comply.
The Better News:  Steve has agreed to answer any and all questions that we may have on how to comply and keep our butts out of trouble. 
 
The Alternative: If all this makes you want to be rid of your properties… this Monday’s meeting will be the first to feature the new  Traders’ Corner!  Beginning February every month prior to our General Membership meetings our Traders’ Corner will meet to give members the opportunity to talk about their real estate needs. 
Join us Monday, February 15th 6:30 p.m if you wish to participate in the Trader’s Corner and 7:00 p.m. for the general meeting featuring Steve Anholt of DHFS 
Where:  Best Western, 1005 South Moorland Road, Brookfield, WI 53005.
HT to Tim Ballering

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AASEW’s Traders’ Corner To Be Introduced on Feb. 15th, Prior to Monthly Membership Meeting.

Feb 9

Posted by Tristan R. Pettit, Esq. in AASEW, Investing In Rental Property | No Comments

The AASEW is constantly striving to make our monthly membership meetings more interactive, informative, and fun for our members.  Toward that end, we have formed a committee comprised of 3 board members (Alan Rusk, Kim Queen & John Coons) to explore and suggest ideas to improve the AASEW’s monthly meetings.  Our attendence has been up over the past year and we want to maintain (and even increase) this trend.

The first of the ideas to be implemented will be the Traders’ Corner.   The Traders’ Corner will meet from 6:30 pm – 7 pm on Monday, February 15, 2010 (and will continue to meet 1/2 hour before the start of the AASEW’s regular monthly meetings) at the Best Wester Hotel located at 1005 S. Moorland Road in Brookfield.

The goal of the Corner is to allow for members to meet and discuss their real estate ”deals.”  If you have a rental property that you are looking to sell or if you would like to purchase additional rental properties – the Traders’ Corner is where you want to be.  Come and tell us about how you found your most recent “deal” and how you analyzed it and determined that it was something that you should go forward with. 

The meeting will be very informal and we will let those in attendence dictate what we talk about.  Ideally we hope this new event will allow members to meet and interact with one another more and allow for all of us to learn from one another.  Our members possess a wealth of real estate knowledge and experience and that is something that the AASEW is hoping will be shared.

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

Feb 7

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

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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