On February 13, 2012 2011 Senate Bill 466 (more commonly referred to as the Landlords’ Omnibus Bill) was introduced by Senator Lasee and referred to the Committee on Insurance and Housing. A companion bill was also introduced in the Assembly – 2011 AB 561. A public hearing on the above bills was held on February 15, 2012.
The Landlords’ Omnibus Bill addresses numerous issues affecting landlord-tenant relations in Wisconsin and if passed will greatly assist landlords.
The bill proposes the following:
1. Eliminates the ability of a municipality from enacting or enforcing any ordinance that imposes a moratorium on a landlord from evicting a residential or commercial tenant.
Such moratoriums have occurred in the past effectively preventing landlords from evicting tenants during the holiday season for instance.
2. Allows for the severability of all rental agreement provisions and prevents an entire rental agreement from being declared unenforceable against a tenant — or void — because it contains an unenforceable or void provision.
If passed this will effectively render the Wisconsin Supreme Court’s decision in Bairl v. McTaggart moot.
3. Allows a landlord to immediately dispose of any property abandoned by a departed tenant.
Currently according to Wis. Stats. sec. 704.05(5) a landlord can choose one of three options with regard to a tenant’s abandoned property, but all three involve a landlord jumping through hoops and/or holding the abandoned property for a period of time.
4. Requires a landlord to disclose to prospective tenants if there are any uncorrected building code violations in the rental unit.
5. Requires that a landlord provide a residential tenant with a standardized check-in sheet describing the condition of the property at the time of the tenant’s check-in.
6. Requires that a landlord shall (i.e. MUST) recover damages for a tenant’s failure to vacate after his tenancy has been terminated. The amount of damages shall be, at a minimum, double the rental value of the unit for the time that the tenant held over, but can be more.
Currently Wis. Stats. sec. 704.27 only says that a landlord “may” recover “holdover” damages.
7. Creates a new statutory section that allows a landlord to withhold the following from a tenant’s security deposit: (a) tenant damage, waste or neglect, (b) unpaid rent, (c) utilities, (d) any other items listed in a Nonstandard Rental Provision document.
Currently the above is only contained in the Wisconsin Administrative Code ATCP 134.06(3) — which is a regulation and not law.
8. Provides that if a tenant vacates before the end of his lease that a landlord will not have to return the tenant’s security deposit or send the teanant a security deposit itemization letter until 21 days after the lease ends or 21 days after the unit is re-rented.
Currently per ATCP 134.06(2) the landlord must return the security deposit or security deposit itemization letter within 21 days of the tenant “surrendering” the rental unit. As this regulation is currently written there are some instances where a security deposit must be returned to a tenant that has broken a lease even though the tenant will be legally responsible for future rent but is not responsible for any rent within the 21 days after the tenant surrenders.
9. Requires a tenant to notify the landlord in writing of any repair or maintenance problem before reporting the problem to a building inspector, elected public official or code enforcement agency.
Currently some tenants are calling DNS or other building code enforcement agencies alleging that they told their landlord of a maintenance or health and safety emergency in their rental unit and that the landlord is not making the necessary repairs – when this is not the case . Tenants may do this in order to “get a landlord in trouble” with an enforcement agency or to avoid paying rent. As a result, some landlords are hearing about the maintenance issue for the first time when contacted by the building code agency. This provision will hopefully eliminate such “he said – she said.”
10. If a landlord has filed an eviction action against a tenant for non payment of rent and the landlord accepts past due rent from the tenant after the eviction lawsuit was filed, the eviction may not be dismissed by the court solely because of the acceptance of rent.
Currently a landlord is in a catch-22 position. If a landlord accepts payment of late rent (either partial past due rent or the full amount after the “cure” period has ended) the landlord risks the court deciding that the landlord “waived” his right to proceed with the eviction. But if the landlord turns away past due rent offerred by the tenant after the “cure” period has passed, the landlord is essentially losing out on money owed to him that he will never see again.
Please be sure and call your state senator and state assembly person and urge them to vote in favor of the Landlord’s Omnibus Bill.
#1 by Mike Lawrynk on March 1st, 2012
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Wouldn’t #8 above effectively eliminate double damages and attorneys fees from all 21-day violations? Since that rule would now be statutory and not an ATCP violation I dont think those damage enhancers would apply.
#2 by John H. "Dr Rent" Fischer on March 7th, 2012
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Although I feel this bill is pretty much dead on arrival, and I am not a fan of any legislation that appears to be fast-tracked (in other words, hearing should be given more than ample notice, etc)… I thought I would share my comments.
For those who were debating taking away my landlord card… I am sure I will lose it after this comment.
1. Not allowing restrictions on when evictions can take place. I am 100% in support of this and actually pride myself in not 1, not 2 but three Christmas Eve Day eviction writ executions.
2. Allowing for severability and not voiding entire lease. Actually, for some issues I would agree, but for others I would disagree. I have actually read the logic behind the attorney fees provision voiding the entire lease. And that logic is sound. By having that provision in the lease, even though that provision is unenforcable, a tenant who does not know that it is unenforcable may not pursue a legal recourse they may have had. There has to be a down side risk to landlords who use illegal provisions that just the presence of the provisions could limit a tenant from taking certain actions they can legally take. I am fine with the way the law works now, it separates the good landlords from the ignorant.
3. Stuff left behind can go directly to the dumpster, do not pass go, do not collect $200. I love it… I absolutely love it. If this was a stand alone provision, I am sure it would pass quickly.
4. Require disclosure of uncorrecting housing violations. I am fine with this, as a matter of fact, this is current law (except I assume what would change is when you have to disclose, now you have to disclose before accepting money or entering into a lease).
5. Provide a standardized check in sheet that already lists items we know about. Although I already do this, this could be a lot more work that most landlords already do. I don’t understand why landlords in general would support something that creates more work for them.
6. Double damages for holdover. This already is law and I don’t understand the implications of changing the word may to must. Personally, I like it when I have options. Now, if some wording could be done to help you Milwaukee folks so that the courts there better understand that double rent allowed under 704.27 would be IN ADDITION TO other physical damages, that would be a good idea.
7. Adding the ATCP security deposit provisions to 704. I am strongly opposed to this. I do land leases, farm leases, office/retail leases, and warehousing/industrial leases as well as residential. I like the fact that we can address the deposit concerns differently in commercial properties, especially industrial. Leave deposits in the ATCP rules, they have worked there just fine for many years. If it is not broke, don’t fix it.
8. Surrender is lease end or re-rent date. Yes, you have my support on that one. Right now, although the surrender laws are clear to me, they are not to many. It is lease end date, unless notice in writing that the tenant has vacated if before the lease end date, or when landlord learned of it after tenance ended. So, if a tenant turns in the keys on 3/15 with a 4/30 lease end date, 4/30 is the surrender date unless the tenant gave written notice with the keys. However, if you gave that tenant a 5-Day notice with a 3/12 pay or quit date, now getting the keys on 3/15 even without the letter triggers a 3/15 surrender date. I have a 45 minute class that I teach that JUST covers the surrender date. And of course, the court doesn’t care about the current law. A much clearer law would be easier to convince a judge to follow.
9. Tell the landlord before telling the city about a problem. On the surface this seams like a good idea. But I have actually got to learn a great deal about some really bad landlords while serving of the City of Wausau’s Housing Blight Task Force. And, there are times when it is in the tenant’s best interest when dealing with a slumlord to go straight to the authorities, and that right should not be taken away from them.
10. I actually have a provision in my lease indicating that accepting delinquent payment is not waiver of default. Technically, nothing in the law says accepting rent after terminting a tenancy ends that termination. However, many courts will side with the tenant. So I support something that clarfies what existing law already says.
So… there are my thoughts on this bill, but it is in my opinion dead on arrival anyway.
Feel free to revoke my landlord card because of my opposition to many facets of it… I was looking for a new job anyway.
Dr Rent
#3 by Tristan R. Pettit, Esq. on March 7th, 2012
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It wouldnt be removed from ATCP just added to WIs. Stats. So a tenant could still bring the lawsuit based on ATCP violation and seek double damages and atty. fees. So no, I dont think it eliminates the double damages and atty. fees.
#4 by Tristan R. Pettit, Esq. on March 7th, 2012
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I don’t think any of your comments are anti-landlord. Well -reasoned and thought out replies. Landlords can still disagree — you can still keep your landlording card in my opinion John : )
#5 by Brian K on March 16th, 2012
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Requiring a check in sheet is an EXTREMELY bad idea. Why? Have you ever seen the standard forms? I used them maybe once or twice, then abandoned them because they are extremely vague. In my view, they only protect the tenant. They now have the right to ask for it.
What exactly will be required in this check in sheet?
I take pictures with digital camera before they move in to prove condition.
I haven’t seen the language of the proposed law, but I am also wary of the requirement to disclose building code violations to prospective tenants. Will this mean building code violations that haven’t been cited by a legal authority? I could walk into the best landlord’s property any day of the week and find a few code violations. I could walk into any owner-occupant’s property and find 2 dozen.
I have always wondered about the personal property law in 704.05. Tristan points out that another statute says “may” collect rent for illegal holdover, but does not point out that 704.05 says what a landlord “may” do with regard to personal property left behind. Is there some unrwritten common law here that I don’t know about? Anyways, I long ago solved this problem by putting specific language in my non-standard provisions addendum saying whatever they leave is mine.
Well, some of this may be moot by the time anyone reads this, but I am going to personally ask Walker to veto the check in sheet clause and the code violation disclosure clause if this law passes.
#6 by Brian K on March 19th, 2012
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The version of this bill that hs now passed and awaits the governor’s signature contains the following:
provision allowing landlords to evict if a crime has neen committed in or on the rental property.
Provision requiring written notice along with the original agreement if the landlord does not intend to store personal property
Provision removing original language stating that landlord must notify of cited code violations with provision stating landlord must notify in writing of any code violations know to the landlord.
In my view the version of this bill that has passed both houses places far more new burden on landlords in exchange for relatively little, namely the adoption of admin. code as statute with regard to security deposit charges.The provision allowing eviction for crime commission will likely eventually be used in civil court against landlords who do NOT exercise this option
#7 by Brian K on March 20th, 2012
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Allow me to correct myself:
The version as passed by both houses does not allow eviction if a crime has been committed in or on the premises. I misread this amendment. The current version restores unseverability for all of the former illegal rental agreement provisions and adds to this list of illegal provisions any provision allowing eviction if a crime has been committed in or on the premises.
The original bill would have simply voided any currently deemed unacceptable provisions under 704.44, which currently make the entire agreement null and void. In other words, these provisions, although still illegal would have become severable, and would not make the entire agreement null and void. The current version maintains unseverability of these illegal provisions and adds one to it, the one allowing eviction for a crime. So, if the agreement has any of these illegal provisions, it will be entirely null and void.
#8 by Brian K on March 20th, 2012
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I am just going to reproduce this portion of the actual text as it now stands in the version that has passed both houses:
“Section 17. 704.07 (2) (bm) of the statutes is created to read:
(2) (bm) A landlord shall disclose to a prospective tenant, before entering into a rental agreement with or accepting any earnest money or security deposit from the prospective tenant, any building code or housing code violation to
which all of the following apply:
1. The landlord has actual knowledge of the violation
2. The violation affects the dwelling unit that is the subject of the prospective rental agreement or a common area of the premises.
3. The violation presents a significant threat to the prospective tenant’s health or safety.
4. The violation has not been corrected. ”
Item 1 seems to be a violation of 5th amendment rights agains self incrimination, since disclosing a violation to a spy working for the govt could eventually lead to a citation which could eventually lead to a fine which could eventually lead to jail for failure to correct or pay.
Note also that the language does not specify that the disclosure must be in writing. Also, there seems to be no penalty for failure to make this “required” disclosure. Seems to me this will lead to a bunch more “he said, she said” in court, followed by a whole lot of legislating from the bench. Yet another purported Republican attempt to “clarify” and “simplify” the law has failed miserably. For this, one can blame a certain law firm in Milwaukee, which in recent years has reaped untold sums writing horrible legislation. Then you can connect the dots.
#9 by Brian K on March 20th, 2012
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My letter to the Governor, asking for veto of certain sections of this bill. Feel free to plagiarize for the cause.
Governor Walker:
Among other things, I am a landlord with 16 rental units in the City of Milwaukee and one in Glendale. In Glendale, my wife and I occupy one unit of a 2 family dwelling. We are not getting rich by owning rental property, but live a modest life. We are in the 15% federal tax bracket, so we are not even middle class, by popular definition. We strive to maintain our properties in good condition and be fair in all of our dealings with our tenants. I am extremely disappointed in the version of the Landlord/Tenant Omnibus bill that has now passed both Houses and now awaits your signature.
I am writing to request that you utilize your veto power to completely veto the following portions of Senate Substitute Amendment 1 to 2011 Senate Bill 466 as amended by Senate Amendments 1 and 2 to said Senate Substitute Amendment as passed by both Houses of the legislature as of March 17, 2012:
704.07 (2) (bm) A landlord shall disclose to a prospective tenant, before
entering into a rental agreement with or accepting any earnest money or security
deposit from the prospective tenant, any building code or housing code violation to
which all of the following apply:
1. The landlord has actual knowledge of the violation
2. The violation affects the dwelling unit that is the subject of the prospective
rental agreement or a common area of the premises.
3. The violation presents a significant threat to the prospective tenant’s health
or safety.
4. The violation has not been corrected.
Section 18. 704.08 of the statutes is created to read:
704.08 Information check-in sheet. A landlord shall provide to a new
residential tenant when the tenant commences his or her occupancy of the premises
a standardized information check-in sheet that contains an itemized description of
the condition of the premises at the time of check-in. The tenant shall be given 7 days
from the date the tenant commences his or her occupancy to complete the check-in
sheet and return it to the landlord. The landlord is not required to provide the
information check-in sheet to a tenant upon renewal of a rental agreement. This
section does not apply to the rental of a plot of ground on which a manufactured
home, as defined in s. 704.05 (5) (b) 1. a., or a mobile home, as defined in s. 704.05
(5) (b) 1. b., may be located.
Section 12f. 704.05 (5) (bf) of the statutes is created to read:
704.05 (5) (bf) Notice that landlord will not store property. If the landlord does
not intend to store personal property left behind by a tenant, except as provided in
par. (am), the landlord shall provide written notice to a tenant when the tenant
enters into, and when the tenant renews, a rental agreement that the landlord will
not store any items of personal property that the tenant leaves behind when the
tenant removes from the premises, except as provided in par. (am). Notwithstanding
1pars. (a), (am), and (b), if the landlord does not provide to a tenant the notice required
under this paragraph, the landlord shall comply with s. 704.05, 2009 stats., with
respect to any personal property left behind by the tenant when the tenant removes
from the premises.
The disclosure burden imposed by the proposed new Section 704.07 (2) (bm) above is extremely vague. What constitutes “actual knowledge” of “any building code or housing code violation”? What is considered a “significant threat”? Exactly what constitutes “correction” of a violation? What constitutes “disclosure”? Must the “disclosure” be in writing? Other than requiring possibly unconstitutional self-incrimination by landlords, what real purpose does this proposed new law serve? Is not the existing Administrative Code contained in ATCP 134.04 (2) sufficient to satisfy whatever the intent of this proposed new legislation is? Will ATCP 134.04 (2) be deemed as exhaustive interpretation of this new law? If so, then again, why the new law on top of law? Will ATCP 134.04 be deemed by some court as not a sufficiently thorough interpretation of this new law, thus opening the door to judicial activism? Furthermore, existing law, at 704.07(2)(5) already requires a landlord to keep his residential property up to code. This new proposed section of law leaves far too many questions unanswered and leaves the door wide open to abuse by attorneys and activist courts.
The new requirement imposed by proposed new Section 704.08 is similarly vague. What exactly is a “standardized information check-in sheet”? What exactly does it mean that the tenant shall be given 7 days to “complete” the check in sheet? Will a tenant be allowed to damage the premises in the first 7 days and then “complete” the sheet with notations of damage that will now be attributed to the landlord? If the tenant damages the premises in the first 7 days to the point of creating code violations, and then attributes these violations to the landlord, will the landlord now be liable for a violation of the new 704.07? Check-in sheets are in practice too vague to be of any real use in settling a dispute, especially the pre-printed check-in sheet that currently exist, which I suppose may be called “standardized”. Most, if not all of the information as to the condition of the premises purportedly documented by a “standardized check-in sheet” is completely subjective and lacking in detail. If it is not to be completely subjective, I suppose landlords will have to provide an extensive written description of the premises. However, it seems to me that such a written description which actually contains some actual detail and fact will not be deemed a “standardized check-in sheet”. Is not existing Administrative Code at ATCP 134.06 (1) sufficient to satisfy whatever the intent of this new law may be? This existing code gives the tenant the right to inspect newly occupied premises for 7 days and notify the landlord of any preexisting damages or defects. Again, will the existing Administrative Code be deemed by the courts to be an exhaustive interpretation of this new proposed law, or will the courts feel they now have the leeway to legislate from the bench? Will ATCP now feel they have leeway to write a bunch of new rules? This proposed new section of law again leaves the door wide open to abuse by attorneys, activist courts, and activist administrative agencies.
The excellent provisions in the proposed new law that would have clarified and simplified the troubling and confusing existing law with regard to disposition of a tenant’s personal property have been rendered almost moot by Senate Amendment 1, which contains the proposed new law at 704.05(bf) as reproduced above. This language will again demand that landlords provide a clause in their Non-Standard Rental Provisions addendum with regard to disposition of personal property. This language also refers to back to a law that will soon no longer exist, thus adding to the confusion. Although I already have clauses in my addendum which address this issue, this issue has always been one causing great fear and trepidation to me, as I imagine it does to many landlords. This new law should have simply and completely wiped out any claim to personal property by a tenant who has moved on, and it did so in its original version. The reality is that any claim brought by tenants for repossession of their personal property is brought only as a means of retaliation. The amendment as adopted in the current version of the bill allows this bone of contention to again rear its ugly head and places undue burden on landlords, whether aware of this issue or not. This proposed amendment is again unjustifiably vague as well. It speaks to the “intent” of the landlord upon entering the rental agreement. Really, how will anyone know or prove what the initial intent of the landlord was some period of time later, when the tenant has moved on and left the premises full of junk? Again, a law ripe for abuse and judicial activism is about to be created.
Therefore, because the proposed new law as reproduced above at proposed 704.07 (2) (bm) and 704.08, WI Stats., which is to be created by Senate Substitute Amendment 1 to 2011 Senate Bill 466, as amended, at its best may be construed as a duplication of existing Administrative Code and serves no real purpose other than to open the door for more and more litigation and judicial activism, these proposed new sections of law should be vetoed in their entirety. Furthermore, the proposed new law at proposed 704.05(bf) should also be vetoed in its entirety because it fails to simplify and improve existing law and effectively renders substantially moot the other excellent proposed changes to 704.05.
Respectfully Yours,
Brian
#10 by Brian K on March 21st, 2012
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See below, in which the WI Legislative Council draws the conclusion that the damning rental agreement provisions listed in 704.44 are also considered to be retaliatory actions as defined in 704.45. Actually, this is absolutely NOT the case, but as I predicted, the two separate ideas/issues are already being interpreted as the same idea/issue. The memo quoted below goes so far in reference to the damning provisions as to say the new bill “ states that these are also considered retaliatory practices.”
This statement is absolutely and unequivocally false, yet a lawyer in our government has stated it to be true.
What does this mean?
Since a rental agreement provision allowing the landlord to terminate the tenancy for crime will now be considered a damning provision, if a landlord were to terminate a tenancy for crime, even absent such a damning lease provision, such termination will now be considered retaliatory and will be thrown out of court.
So, when you get the drug nuisance notice from the cops telling you to get rid of so and so or they are going to take your property and you promptly issue the 5 day drug nuisance notice to the tenant and they show up in court arguing that it is a retaliatory termination because you are terminating because they committed a crime they will be absolutely right according to the Wisconsin Legislative Council Amendment Memo, which any competent attorney will use as evidence of the intent of the legislature in making all the changes of SB 466. The truly scary part is that the lawyer won’t even have to invoke this memo because the judge will already believe that prohibited lease clauses and retaliatory terminations are one and the same.
From: https://docs.legis.wisconsin.gov/2011/related/lcamendmemo/sb466.pdf :
WISCONSIN LEGISLATIVE COUNCIL AMENDMENT MEMO
Severability and Provisions Making a Rental Agreement Void
The Bill
The bill specifies that certain so-called retaliatory provisions of a rental agreement are void and unenforceable, but such provisions do not render the entire rental agreement void and unenforceable. The bill also provides that if any provision of a rental agreement is found to be void or unenforceable by a court, or is rendered void or unenforceable by reason of a statute or administrative regulation, the provision is severable from other provisions of the rental agreement that are not affected and that remain valid and enforceable.
Senate Substitute Amendment 1
The substitute amendment maintains the specification that a void provision is severable from other unaffected provisions of a rental agreement, but specifies that the so-called retaliatory provisions do render the entire rental agreement void and unenforceable. In doing so, the bill also codifies all – 4 –
prohibited rental agreement provisions listed in s. ATCP 134.08, Wis. Adm. Code, and states that these are also considered retaliatory practices.
Senate Amendment 1 to the Substitute Amendment
Senate Amendment 1 to the substitute amendment specifies that a provision in a rental agreement that allows a landlord to terminate the tenancy if a crime is committed in or on the rental property, even if the tenant could not reasonably have prevented the crime, is a prohibited provision, and therefore, renders the entire rental agreement void and unenforceable.
#11 by bob andersen on March 21st, 2012
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The bill has to be signed as a whole or vetoed as a whole, because it does not nmake appropriations. Only bills that make appropriations can be partially vetoed.
The bill mistakenly makes the following provisions apply to commercial leases:
1. withholding and return of security deposits
2. lanldords ability to dispose of or sell personal property of tenant immediately after tenant leaves the premises
3. exposes commerial leases to new cause of action for unfair trade practice for any violation of Chapter 704. The substitute amendment says that any violation of Chapter 704 (landlord tenant code in the statutes) may be an unfair trade practice.
This bill was only supposed to apply to residential tenancies. The bil was hastily and poorly rushed through the legislature.
As for residential tenants, under current law a refusal to return security deposits is an unfair trade practice and double damages plus costs and reasonable attorney fees have to be paid to enable the tenant to have access to court. This was designed as an alternative when the landlord tenant code was created to the idea of a vast expansion of the administrative agency to regulate landlord tenant affairs. The award of attorney fees allows for people to be their own enforcers. It is the same concept as exists in the Wisconsin Consumer Act.
The substitute amendment says this only may be an unfair trade practice — thereby eliminating the assurance that a tenant will have access to court to get a security deposit back that was wrongfully withheld.
2. The same is true for a lanldord who fails to notify the tenant of existing building code violations. It only may be an unfair trade practice –whereas it is an unfair trade practice under current law.
3. landlords may dispose of or sell the personal property of a tenant immediately after the tenant leaves the premises. An amendment was offered in the Senate and Assembly that would give the tenant two days notice for furniture and appliances and 7 days notice for smaller personal effects. It was rejected.
4. The ability of the administrative agency to establish rules is compromised
This is a bad bill that has a bad effect on commercial leases that the bill was not supposed to even cover. And it eliminates the automatic right that a tenant has to the return of a security deposit that was wrongfully withheld. The failure of lanldords to return security deposits was largely the reason for the creation of the landlord tenant code in the first place. It was the number one consumer complaint, not just landlord tenant complaint. It still ranks as one of the top complaints for the department.
The governor should be requested to veto this and start over.
#12 by John H. "Dr Rent" Fischer on March 21st, 2012
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here… I was worried about loosing my landlord card because I was not happy go lucky about draft one of this bill.
Now that the brain surgeons in madison have had the chance to make it even worse…. I no longer feel bad about not liking this thing from the start