Archive for category Landlord Liability

2011 Wisconsin Act 143 (Landlord Omnibus Law) Also Applies To Commercial Landlord-Tenant Law

While this blog primarily focuses on residential landlord-tenant law, on occasion I also touch on issues applicable to commercial landlord-tenant law.  This is one such instance.

Commercial landlord-tenant is more straightforward than residential in my opinion because commercial tenancies are less regulated than residential.  Typically what a commercial landlord and tenant agreed to and placed into their lease agreement is what governs.  The Wisconsin Administrative Code’s ATCP 134 does not apply to commercial leases and most of Chapter 704 of the Wisconsin Statutes does not apply to commercial leases unless (1) the parties had no written lease, or (2) the lease was silent as to certain issues (see sec. 704.03 and 704.05 respectively).

Well, that has all changed now with the passage of 2011 Wisconsin Act 143 which was signed into law last week and will take effect on March 31, 2012.

While almost all of the attention paid to the new law surrounded its effects on residential landlord-tenant law, the law also impacts the commercial arena as well.  I too was caught up in the effect Act 143 would have on residential landlords and missed the applicability of this new law to commercial landlords initially  — thanks to Bob Anderson of Legal Aid of Wisconsin for redirecting me : )

As I have mentioned in prior posts, this legislation was fast-tracked for some reason and rushing new laws through the legislative process is never a good thing.  In fact it is a recipe for disaster.

It appears that the legislators did not realize that Senate Bill 466 — the precursor to Act 143 — was written in such a way as to encompass commercial landlord-tenant law.  When it was brought to their attention, a quick amendment was made to exclude one portion of the new law (the section that makes a rental agreement void if it contains certain prohibited language) from the commercial arena, but apparently there was not enough time to deal with the other sections of the new law, which now will apply to both commercial and residential tenancies.

So what do we have?

The following provisions of Act 143 apply to both commercial landlord-tenant law as well as residential:

1.  Moratorium on evictions

2.  Severability of rental agreement provisions

3.  Disposition of abandoned property

4.  Requirement that landlords receive an award of holdover damages when appropriate

5.  Acceptance of past due rents

6.  Withholding from and return of security deposits

7.  Making any violation of chapter 704 a possible unfair trade practice

If you are unfamiliar with the above sections of the new law you should read my prior post summarizing the new law.

Number 1-5 above actually benefit commercial landlords.  However numbers 6 and 7 are problematic

By adding ATCP 134.06, which focuses on the withholding from and the return of security deposits, to chapter 704, the new law has now made these requirements applicable to commercial landlords as well.  Prior to Act 143 being passed, there was no law addressing what a commercial landlord could withhold from a commercial tenant’s security deposit, nor was there any law regarding when that security deposit (or an itemization as to how the security deposit was applied) had to be returned to the commercial tenant.  Well thanks to Act 143, now there is.

Act 143 allows a commercial landlord to only make deductions for the following items from a commercial tenant’s security deposit:

704.28 Withholding from and return of security deposits.  (1) Standard withholding provisions.  When a landlord returns a security deposit to a tenant after the tenant vacates the premises, the landlord may withhold from the full amount of the security deposit only amounts reasonably necessary to pay for any of the following:

(a)  Except as provided in sub. (3), tenant damage, waste, or neglect of the premises.

(b)  Unpaid rent for which the tenant is legally responsible, subject to s. 704.29.

(c)  Payment that the tenant owes under the rental agreement for utility service provided by the landlord but not included in the rent.

(d)  Payment that the tenant owes for direct utility service provided by a government-owned utility, to the extent that the landlord becomes liable for the tenant’s nonpayment.

(e)  Unpaid monthly municipal permit fees assessed against the tenant by a local unit of government under s. 66.0435 (3), to the extent that the landlord becomes liable for the tenant’s nonpayment.

(f)  Any other payment for a reason provided in a nonstandard rental provision document described in sub. (2).

So if a commercial landlord would now like to deduct anything other then the items listed in (a) – (e) above, then that landlord needs to start using a separate written document entitled “Nonstandard Rental Provisions” which must list the additional fees/costs that can be deducted from a commercial tenant’s security deposit.

Additionally, Act 143 now requires a commercial landlord to either (1) return the tenant’s security deposit to them, or (2) send them an itemization explaining how that security deposit was applied, within 21 days of the following:

(4) Timing for return.  A landlord shall deliver or mail to a tenant the full amount of any security deposit paid by the tenant, less any amounts that may be withheld under subs. (1) and (2), within 21 days after any of the following:

(a)  If the tenant vacates the premises on the termination date of the rental agreement, the date on which the rental agreement terminates.

(b)  If the tenant vacates the premises before the termination date of the rental agreement, the date on which the tenant’s rental agreement terminates or, if the landlord rerents the premises before the tenant’s rental agreement terminates, the date on which the new tenant’s tenancy begins.

(c)  If the tenant vacates the premises after the termination date of the rental agreement, the date on which the landlord learns that the tenant has vacated the premises.

(d)  If the tenant is evicted, the date on which a writ of restitution is executed or the date on which the landlord learns that the tenant has vacated the premises, whichever occurs first.

Commercial landlords never had to worry about that 21 day time frame before — now they do.  Needless to say it is much more difficult and time consuming to do a walkthrough of a giant commercial space and itemize any damages or cleaning charges than it is for a 500 square foot residential rental unit.  I’m not exactly sure how commercial landlords will be able to comply with this time frame, but they will need to find a way, or else they may have to to their tenant double damages and attorney’s fees.  Which leads me to the next concern . . .

Act 143 now makes any violation of chapter 704 a possible violation of unfair trade practices, which pursuant to sec. 100.20, Wis. Stats. allows a tenant to sue a landlord for double damages and attorney’s fees.  Prior to Act 143 a commercial landlord was not in this predicament because unfair trade practices were set forth in ATCP 134 which only applied to residential tenancies.  But now that Act 143 incorporates some provisions of ATCP 134 into chapter 704 — and chapter 704 applies to commercial landlord-tenant relations — things are different.

Here is the language of the new law:

704.95  Practices regulated by the department of agriculture, trade and consumer protection.  Practices in violation of this chapter may also constitute unfair methods of competition or unfair trade practices under s. 100.20.  However, the department of agriculture, trade and consumer protection may not issue an order or promulgate a rule under s. 100.20 that changes any right or duty under this chapter.

I guess the only positive is that the new law says “may constitute” instead of “shall constitute” however to a commercial landlord that never had to worry about anything they did constituting an unfair trade practice and subjecting themselves to being sued for double damages and attorney’s fees, I’m sure this will be of little consolation.

So not only will Act 143 require commercial landlords to make some modifications to the language in their leases, but it will require them to completely change how they run their commercial proeprty management businesses starting March 31, 2012 —- 2 DAYS FROM NOW!!!!!

 

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Landlords & Wisconsin’s New CCW Law

As I’m sure many of you are aware, Wisconsin has a new Carrying Concealed Weapon (CCW) law.  Wisconsin Act 35 was signed into law on July 8, 2011 and took effect on November 1, 2011.

Since the new law was published, I have received several calls from landlords and property management companies asking me how this new law will affect them.  Since the question has come up repeatedly I thought I would do a post on it.

If you have any questions about the CCW law generally the best resource I can direct you is a document that was published by the Wisconsin Department of Justice in August 1, 2011 entitled “Wisconsin’s New Carrying Concealed Weapon Law: Questions and Answers“   If you are interested in learning how the new law applies to employers generally (not just landlords) you should read Petrie & Stocking’s Talking Workplace Law Blog posts on the subject here and here.

The Basics:

1.   The law allows individuals to carry a concealed weapon upon their person in most locations as long as they have applied for and received a permit to do so.

2.  The types of weapon that can be carried include: handguns, an electric weapon as defined in Wis. Stat. § 941.295(1c)(a), a billy club, and a knife other than a switchblade.  See Wis. Stats. § 175.60(1)(j). A handgun does NOT include a machine gun, short barreled rifle or short barreled shotgun.  See Wis. Stat. § 175.60(1)(bm)

2.   The law provides immunity to owners of property who do not prohibit the carrying of concealed weapons on their property.  So if you allow concealed carry on your property by others you will not be held liable for any consequences arising from that decision.  Wis. Stat. § 175.60(21)(b).

3.   The law also permits owners to prohibit persons from carrying concealed weapons on their property.

4.   Prohibiting concealed carry on your property strips you of the immunity mentioned above.

5.   If you wish to prohibit concealed carry on your property you must post signs that are (a) at least 5 inches by 7 inches, (b) state that concealed weapons are not allowed in the building or on the premises, (c) specify the area where the prohibition applies if the prohibition only applies to a portion of the property, (d) place the signs on or near all entrances to the building.

So How Does The New Law Affect Landlords?:

An owner of rental property must decide whether or not they wish to prohibit the carrying of concealed weapons in their rental property and on the property grounds.  Second, if they do wish to prohibit concealed carry they must determine if the prohibition will apply to the entire building or just certain portions of the building.  Third, they must post the required signage.

If you prohibit concealed carry in your rental property, and proper notice has been posted, then it is against the law for anyone to enter, or remain in the common areas of the building or on the grounds of the building after being asked to leave, while carrying a concealed weapon.

IT IS IMPORTANT TO NOTE that Wisconsin’s new CCW law does not address a tenant’s right to keep a weapon in his/her rental unit.  The CCW law only deals with carrying a concealed weapon in public places such as the common areas of the apartment building.  So even if the landlord posts signs preventing concealed carry in the apartment building, that does not prevent a tenant from keeping a weapon in his/her unit.  A tenant has the right to keep a weapon in his/her rental unit just the same as a homeowner has the right to keep a weapon in his/her single family home.  So if a landlord does not want a tenant to be able to keep a weapon in their rental unit than such language must be included in the tenant’s rental agreement.

Also, even if a landlord prohibits concealed carry in the rental property, that prohibition does not apply to the apartment’s parking lots.  A tenant is  allowed to keep a weapon in his/her vehicle if parked in the apartment complex’s parking lot.

Many Unanswered Questions:

Wisconsin’s new CCW law leaves many questions unanswered.

One question that immediately came to my mind is what will happen in those situations in which a landlord prohibits concealed carry in the apartment complex but has failed to include a lease provision prohibiting a tenant from keeping a weapon in the tenant’s rental unit?  The tenant has a right to keep a gun in his rental unit but how can he get the gun to and from his unit without violating the CCW prohibition since, depending on the layout of the apartment complex, the tenant will have to walk through a common area such as a hallway or lobby?  Which “right” trumps in this situation?

Taking a more broad perspective of the law, there are even more important questions that remain unanswered, such as:

-   How broad will the immunity provided under the new law extend?

-  If a landlord decides to prohibit concealed carry in his rental property is he opening himself up to increased liability exposure?

-  If a landlord prohibits concealed carry in his rental properties, does s/he now have a broader duty to protect his tenants or their visitors from someone that may enter the rental property with a weapon and ignores the CCW prohibitied posting?  Does the landlord have an obligation to actively attempt to enforce his no CCW policy?  If so, how should he enforce it?  Does he have to post an employee at every entrance to ask people who enter if they are “packing heat”?  Does he have to frisk people upon entering the apartment building?  If a tenant is injured by another person who ignores the CCW prohibited sign will the landlord be liable to the tenant?

We will not learn the answers to these questions until the DOJ provides additional guidance or until lawsuits are filed, trial court and juries make decisions, and appellate courts either affirm the trial court’s decision or not.

For additional factual scenarios and unanswered questions raised by Wisconsin’s new CCW law I reccomend a magazine article entitled “Concealed Weapons Questions and Answers” written by Attorney Josh Johanningmeier published in the Wisconsin Independant Agent magazine.

 

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You Will Not Want To Miss AASEW’s Fourth Annual Landlord Boot Camp on Saturday Feb. 25th

Landlording can be pretty complex, with a seemingly never ending myriad of paperwork, rules, landlord-tenant laws and simple mistakes that can cost you thousands of dollars.

The Apartment Association of Southeastern Wisconsin’s Fourth Annual Landlord Boot Camp can help you navigate these treacherous waters and teach you how to run your properties with greater profit and less hassles.

I have given similar landlord-tenant law seminars to fellow attorneys, landlords, and property manager organizations throughout the state for other state-wide semianr companies that charge attendees $300-$400.  This is your opportunity to learn all of the same information at a huge discount through the Apartment Association.

 

Who:   Taught by Attorney Tristan R. Pettit (who drafts the landlord tenant forms for Wisconsin Legal Blank)

When:    Saturday, February 25th, 2012. 8:30 am – 5 pm

Where:   Clarion Hotel 5311 S. Howell Avenue, Milwaukee [Map]

Included:  100 plus page manual/outline to help you put what you learn into practice plus helpful forms.

Cost:  $159 for AASEW members and $249 for non-members.  If you are not a member of AASEW but are a member of another landlord/apartment association the cost to attend will be $199.

Specials: Not a member?  Pay just a dollar more and enjoy a 2012 AASEW membership.

Wisconsin landlord-tenant laws are constantly changing.  To help keep you up to date we offer prior attendees a $50 discount.

Sign up by going to the AASEW’s Landlord Boot Camp landing page where you can sign up online and pay via PayPal.

 

What you will learn at the Apartment Association’s 2012 Landlord Boot Camp

Landlord Boot Camp covers 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 and protect you from discrimination complaints.
  3. How to comply with both federal and state Fair Housing laws including how to handle with “reasonable modifications”  and “reasonable accommodations” 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.  There will also be time for questions and answers.

You get all this for less than you would pay for an hour of an attorney’s time.

Last year’s AASEW Landlord Boot Camp was filled to capacity and we even had to turn a few people away.  So call early to reserve your spot.

Call the Association at (414) 276-7378, email membership@apartmentassoc.org or go to our Landlord Boot Camp landing page to sign up online and reserve your spot.

Remember that “landlording” is a business — so take the time to educate yourself on how to better manage your business and avoid costly errors!

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New Case Further Solidifies That A Landlord Is Not Liable For Injuries Caused By A Tenant’s Dog

A recent Wisconsin Court of Appeals decision has been recommended for publication that will assist landlords in defending against any claims filed by a third party that was bitten by a tenant’s dog.

The case of Ladewig v. Tremmel, (2010AP1925) involved a claim for negligence against two landlords by a neighborhood boy that was bitten by the landlords’ tenant’s pit bull.

The Court of Appeals was reviewing the trial court decision to dismiss the plaintiffs’ claims against the landlords on a motion for summary judgment.  A motion for summary judgment is filed when a party believes that the court is able to make a decision as a matter of law (without the need for a trial) because no material facts are in dispute by the parties, so the court must merely apply the law to the undisputed facts.

The general liability rule in Wisconsin, is based on public policy grounds, and states that a landlord is not liable for injuries caused by a tenant’s dog, unless the landlord is an owner or a keeper of that dog.  This general rule was established in the seminal case of Smaxwell v. Bayard, 2004 WI 101, 274 Wis.2d 278, 682 N.W.2d 923.

The plaintiff in this case argued that the general liability rule should not apply to these landlords because these landlords voluntarily assumed a duty to his client, because their lease included a provision which prohibited a tenant from keeping “vicious” dogs on the leased property.

Plaintiffs argued that the landlords in this case assumed a duty which they otherwise did not have, by including a lease provision prohibiting a tenant from keeping any vicious dogs on the premises, and as such they were negligent when they did not enforce this provision against the tenants, thus resulting in the plaintiff’s injuries.

It should be noted that in the case of Malone v. Fons, 217 Wis. 2d 746, 580 N.W.2d 697 (Ct. App. 1998) the Wisconsin Court of Appeals had previously held that a landlord’s alleged knowledge that a tenant was keeping a dog with a history of bad behavior was not sufficient to create liability on the landlord even though the landlord had a “no pets” provision In his lease.

Essentially, the plaintiffs were arguing that this case was an exception to the general rule of non-liability by a landlord set forth in Smaxwell, and since Smaxwell does not apply, the landlords should be found liable for the plaintiff’s injuries.

The Wisconsin Court of Appeals disagreed with the plaintiffs’ argument and said that there was no need to even determine whether or not the landlords assumed a duty of care to the plaintiff which they otherwise did not have, because such a determination was irrelevant under Smaxwell.

It was determined that the holding in Smaxwell applied to the facts in this case as well, and since there was no evidence that the landlords were owners or keepers of the dog that injured the visiting child, that the landlords were not liable, regardless.

The Court explained that the Smaxwell case “explicitly forecloses landlord liability on a broad basis, regardless of a plaintiff’s theory of a landlord’s duty of care, unless the landlord has a role, separate from that of a landlord, which involves exercising control or custody over the dog so as to qualify as an owner or keeper of the dog.”

Here, the Court of Appeals held that there was nothing about the landlords’ alleged non-enforcement of the “no vicious dogs” lease provision that “logically transformed the landlords into ‘owners and keepers’ of the dog.

This is a sound decision and in keeping with prior Wisconsin law.  A landlord will not be held liable for the injuries of a tenant’s dog to a third party, unless the injured party can demonstrate that the landlord “acted in the additional role of owner or keeper of the dog and exercised dominion and control over the dog.”

The Court of Appeals also echoed the Smaxwell decision by adding that recovery against a landlord would not place liability where it belongs, because it is the tenant, not the landlord, who has direct control over the dog and that it is sound policy to ensure that liability is placed upon the person with whom it belongs – the owner of the dog – rather than promoting the practice of seeking out the defendant with the most affluence – which often happens to be the landlord.

 

 

 

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