Archive for June, 2010

Compiling a List of “Bad” Tenants – a/k/a “Blacklisting” – Can Cause A Landlord A World of Hurt

Jun 29

Posted by Tristan R. Pettit, Esq. in Blacklisting, Fair Debt Collection Practices Act | 17 Comments

Every so often it is suggested that landlords begin compiling a list of bad tenants to share with one another.  This topic often arises after a landlord has been “burned” by a bad tenant that skipped out on a lease owing rent, caused severe damage to the landlord’s rental property, or any number of other breaches of their rental agreement.  It is argued that such a list could prevent other landlords from renting to the same “bad” tenant and hopefully avoid being burned as well.  While this seems like a great idea on its face, blacklising tenants is full of legal ramifications.

This issue came up last week on the “AASEW Listserv”  (a Yahoo groups community that includes 800+ landlords and property managers primarily located in the SE Wisconsin area that discuss all things rental).  The list serv is expertly moderated by Tim Ballering.  If you are not a member of this list serv (and you are invovled in the rental property industry) then you should definitely join by sending an email to ApartmentAssoc-subscribe@yahoogroups.com

Below is the question posed by a landlord and the moderator’s response.

QUESTION: 

Does our group have a policy about sharing names of problem tenants?  I am sure some landlords would love to know who is a problem and others may feel differently about that.

ANSWER: 

Short Version:   We do not permit it.

Long Version (why we do not permit something that would be a great tool for all of us):

Posting deadbeats names to a list violates the Federal Fair Debt Collection Practices Act (FDCPA).

“Blacklists” are quite illegal and potentially costly to those involved with maintaining the list or those sharing the names that end up on the list.  If you keep a list of who has been naughtly or nice, that list must contain both good and bad information about the tenant.  Additionally, those named tenants must have the ability to review and challenge the validity of their inclusion.  Finally, all provisions of the Fair Credit Reporting Act must be complied with that any other credit bureau must adhere to. 

Fines can be as large as $50,000 per offense plus the poosibility of being sued civilly.

The pertinent rules under the FDCPA are:

§ 805. Communication in connection with debt collection 
 
. . .
 
(b) COMMUNICATION WITH THIRD PARTIES. Except as provided in section 804, without the prior consent of the consumer given directly to the debt collector, or the express permission of a court of competent jurisdiction, or as reasonably necessary to effectuate a postjudgment judicial remedy, a debt collector may not communicate, in connection with the collection of any debt, with any person other than a consumer, his attorney, a consumer reporting agency if otherwise permitted by law, the creditor, the attorney of the creditor, or the attorney of the debt collector.
 
§ 806. Harassment or abuse 
 
 A debt collector may not engage in any conduct the natural consequence of which is to harass, oppress, or abuse any person in connection with the collection of a debt. Without limiting the general application of the foregoing, the following conduct is a violation of this section:
 
. . .
 
(3) The publication of a list of consumers who allegedly refuse to pay debts, except to a consumer reporting agency or to persons meeting the requirements of section 603(f) or 604(3)
 
  
__________________________
 
So as helpful as a listing of bad tenants might appear on its face, it is illegal.  The best way to avoid renting to problem tenants legally is to properly screen all rental applicants – to read more about this please see my April 17th post and refer to these helpful internet sites.
 
 

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New Law Limits Landlords From Pursuing A Deceased Tenant’s Estate

Jun 25

Posted by Tristan R. Pettit, Esq. in Collections, Legislation | 1 Comment

Governor Doyle recently signed into law 2009 WI Act 323 which creates a new section to Chapter 704 of the Wisconsin Statutes regarding Landlord-Tenant Law.

The new section 704.165, Wis. Stats., is entitled “Termination of Tenancy at Death of Tenant”

Below is a summary of the new law:

1.     If a residential tenant dies and had a term lease, his/her tenancy will be terminated  60 days after the landlord learns of the death or the expiration of the rental term, whichever occurs first.

2.     If a residential tenant dies and was under a periodic tenancy (i.e. month to month) then the tenancy will terminate 60 days after the landlord  becomes aware of the death.  If the deceased tenant’s estate provides proper notice to terminate the tenancy under sec. 704.19, Wis. Stats. then the tenancy may be terminated even earlier as outlined in 704.19, Wis. Stats.

3.     Neither the deceased residential tenant nor his/her estate will be liable for any rent after the tenancy is terminated.

4.     The landlord must still attempt to mitigate the deceased tenant’s damages by making attempts to re-rent the unit before the tenancy terminates.

5.     Nothing in this new section relieves another adult tenant who resides at the rental property (and who did not die) from their obligations under the rental agreement or otherwise.

6.     A landlord may not contact or otherwise communicate with a member of the deceased tenant’s family in an attempt to obtain rent for which the family member has no liability.

7.     This new law first applies to tenancies and rental agreements that are entered into on or after May 12, 2010.

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Latest EPA Proposed Changes to “Renovate Right” Rules — Deadline to Provide Feedback July 6th

Jun 22

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

ALERT! The latest EPA proposal will require dust sampling and lab testing clearance on many small jobs.  The EPA estimates $160 per room in testing cost.  In WI testing can only be done by state certified risk assessors and the cost is about $240 per room.  So a  repair to a damaged door jamb could cost ten times as much as it does today, and many times more than that if you were a do it yourselfer.

From the Federal Register (Link Below) #2 and #4 are the “gotchas.”

Dust wipe testing must be performed after all renovations involving:

     -  Use of a heat gun at temperatures below 1,100 degrees Fahrenheit

     -  Removal or replacement of window or door frames

     -  Scraping 60 ft [2] or more of painted surfaces

     -  Removing more than 40 ft [2] of trim, molding, cabinets, or other fixtures.

Link to the proposed rule in the Federal Register

The 60 day comment period ends July 6th, 2010

Read the comments submitted by the Apartment Association of Southeastern WI and links to the EPA comment page at:

http://www.renovatorrules.com/

Make sure you post some feedback.  This is one of the biggest changes to affect our industry and these changes are huge and will put many contractors (and landlords) out of business.  Fines for violating these new laws can be as much as $32,500 per each violation.

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AASEW’s New “Mentor’s Corner” to Debut on June 21st

Jun 15

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

At the next membership meeting of the Apartment Association of Southeastern Wisconsin (AASEW), to be held on June 21, 2010, the AASEW will be debuting its new “Mentor’s Corner” for all AASEW members.

The “Mentor’s Corner” will be held at 6:30 pm prior to the general meeting.  The “Corner” will be staffed by one or more “seasoned” landlords who will be ready to answer your non-legal questions about any aspect of landlording.  This is the place to be to get “street-smart” answers from landlords that have already “been there and done that.” 

Come and ask all those nagging questions that you have been afraid to ask such as how to deal with such as the tenant that pays rent lat every month, how to deal with parking problems, intra-tenant disputes, what to do when tenants fail to mow the lawn, chronic complainers  . . . .

The “Mentor’s Corner” will be held at 6:30 pm before every AASEW membership meeting (which are always held on the 3rd Monday of each month) at the Best Western Hotel located at 1005 S. Moorland Road in Brookfield.

Hope to see you there.

UPCOMING SEMINAR – How Evictions Work: Rules for Landlords and Property Managers

Jun 10

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

I will be presenting a seminar for the Institute of Real Estate Management (IREM Milwaukee Chapter #13) on several landlord – tenant law related topics in the near future

Topics to be covered:

1.   Causes for Eviction

2.   Notices To Terminate Tenancy

3.   The Judicial Eviction Process

This seminar will be held on Thursday, June 17, 2010 from 9am – 10:30 am.  Registration will start at 8:30 am.

The seminar will be held at The Wisconsin Club which is located at 900 W. Wisconsin Avenue in Milwaukee (right across from the Milwaukee County Courthouse – how appropriate : )

There will be handouts including a comprehensive outline on the topics covered and forms.

The cost will be $10 for ARM members, $25 for other IREM members and $45 for non-IREM members.  If you are interested in attending please contact Jennie Macaluso-Ruditys at (414) 476-4736.  Call Jennie ASAP as she will need to get a head count to the Wisconsin Club.

Hope to see you there.

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Must A Landlord Provide A Census Taker with Information About His Tenants?

Jun 7

Posted by Tristan R. Pettit, Esq. in Census | 4 Comments

I have recently recieved several calls from my landlord and property manager clients asking me whether or not they have to provide census workers (called “census enumerators” or “census takers” ) with information about their tenants.  Census employees started knocking on the doors of those who failed to return their census questionnaire on May 1st and will continue to do so until July 10th.

The short answer to the question is ”yes.”   If a census taker has attempted to contact and obtain answers to the census questions from your tenant, and been unable unable to do so, the census taker is allowed to — and in fact, is required to – contact the landlord or manager of the rental property to obtain the requested information about your tenant.

Typically, providing personal information about your tenant to a third party is not something that you want to do unless you enjoy being sued.  But providing a census enumerator with the answers to the questions from the census questionnaire regarding your tenants is one of the few exceptions to this rule.   The Department of Commerce has clearly stated that landlords and property managers of rental property will not be in violation of any privacy laws if they provides the requested information about their tenants to the census taker.  In fact, if a landlord refuses to provide the census enumerator with the requested information about his/her tenants, s/he may be fined up to $500.

The applicable law is found at Title 13 of the Code of Federal Regulations (CFR), Chapter 7, Subchapter II, Sections 221 and 223.

If you just clicked on the above links and attempted to read the two code sections, I commend you – they are difficult to read (and understand) and are filled with all kind of archaic language that is referred to as “legalese.”  Since I actually want this post to educate you —  and not piss you off – allow me to paraphrase the law for you:

1.   If a census enumerator is unable to contact the tenant and obtain the census info from the tenant, then the landlord or manager must assist the census employee in answering the census questions regarding their tenants.

2.   The landlord or manager may ask to see the census workers identification before divulging any information.

3.   The first question that the enumerator will ask is whether or not the apartment unit was occupied on April 1, 2010.

4.   If the unit was not occupied by anyone on April 1, 2010, then the census employee questions for you regarding that rental unit should be done.

5.   Assuming that the unit was occupied by a tenant on April 1, 2010, then you should provide the census enumerator with answers to as many of the census questions as possible.  The census questionnaires questions can be found here.  Two of the questions on the census questionnaire ask about an individual’s race, the census enumerators are aware that you may not know this information about your tenants.

6.   You are not breaking any privacy laws by  answering these questions about your tenants for the census taker.

7.   You may be fined up to $500 for failing to provide the census taker with this information about your tenants.

In summary, if the census taker is unable to reach your tenant  and obtain answers to the census questionnaire from them,  then you as the landlord or manager, are required to assist the census employee by providing the census employee with that information.  Failure to do so may result in a $500 fine.

After you are done talking to the census worker, you may want to talk to your tenant about how important it is to complete their census questionnaire next time — in part so that their landlord doesn’t have to spend all of his/her limited time, doing the tenant’s work for them.  Good luck with that :  )

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CITY’S MOTION TO DISMISS LANDLORDS’ LAWSUIT DENIED BY THE COURT – LAWSUIT CONTINUES

Jun 4

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

On May 21, 2010, Judge Timothy Wotkowiak, denied the City of Milwaukee’s motion to dismiss the lawsuit filed by three Milwaukee landlords who sued the city as a result of its newly enacted ordinance requiring mandatory rental inspections of rental housing in two areas of the city.

For background information on the ordinance that went into effect on January 1, 2010, please read my November 24, 2009 post.  For background information on the lawsuit that was filed against the city you can refer to my December 31, 2009 post.  And for information about the city’s motion to dismiss and arguments both for and against the motion I would direct you to my May 4, 2010 post.

As stated in my earlier post, the plaintiff landlords made three key arguments as to why it was not necessary for them to serve the city with a formal Notice of Claim prior to initiating the lawsuit.  Judge Witkowiak agreed with the arguments offerred by the landlords on all three issues.

Issue #1: 

The court indicated that it was not practical to require the landlords to serve the city with a formal Notice of Claim — which would have allowed the city 120 to respond — in part because of the basis of the lawsuit.  The landlords’ lawsuit included the filing of a temporary restraining order to stop an immediate harm (the carrying out of the ordinance) and to make the plaintiffs wait for 120 days before they could even file suit would not be practical or just as the city would have been able to implement what is argued to be an unconstitutional program for at least 120 days before a court could review the issues and concerns with the ordinance.

Issue #2:

The court found that the city did have actual notice of the claim even though a formal notice was not served upon it.  Judge Witkowiak spent considerable time pointing out all of various contacts made by landlords, the Apartment Association of SE Wisconsin (AASEW) , and others which provided the city with actual notice of the concerns with the ordinance.  The court made reference to the letter that the AASEW’s lawyers (who also happen to represent the three plaintiff landlords)sent to City Attorney Grant Langley outlining the many problems with the proposed ordinance.  The court also referred to the letter that I wrote as President of the AASEW to Common Council President Willie Hines and the city’s other alderman, expressing the association’s many concerns with the ordinance.  The aformentioned letters, along with a DVD of the public hearing held before the ZND committee of the Commom Council, were all attached to the plaintiff landlords’ brief in opposition to the city’s motion to dismiss, and appeared to carry great weight with the Court.

Issue #3:

Judge Witkowiak also stated that the city sufferred no prejudice by not having been served with a formal Notice of Claim by the plaintiffs.  The city appeared to argue that it was prejudiced because it had to prepare its legal defense to the lawsuit and that somehow that was to be considered sufficient prejudice to grant the city’s motion.  I have heard a lot of “out there” arguments during my 15 years of law practice, but that was a new one, for me.  The court properly determined that that was not the type of “prejudice” that the city needed to demonstrate in order to prevail on its motion.

As such a result of this decision, the plaintiff landlords’ lawsuit will now move forward and address the actual problems with the ordinance.

A Scheduling Conference has been set for June 15, 2010.  On this date, the court will provide deadlines for the parties to complete various matters that will assist in moving the case forward, such as deadlines to complete discovery (the fact gathering process), deadlines to file dispositive motions (motions that could end the case without the need for a fact-finding trial), and other matters.

Based on the comments of the attorney’s for both the city and the plaintiff landlords it appears that both sides may very well be contemplating the filing of a dispositive motion — such as a summary judgment motion — which would allow the court to decide the lawsuit as a matter of law, without the need for a fact finding trial, because there are no material facts that are in dispute.

I will keep you up to date on the status of the lawsuit as I learn more.

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