Archive for category Legislation

Joint Legislative Council Gives Clarification To Wisconsin’s New Landlord’s Omnibus Law

Apr 27

Posted by Tristan R. Pettit, Esq. in AASEW, ATCP 134, Legislation | 4 Comments

You will recall from my earlier post that I had some concerns about the new Landlord’s Omnibus Law (Act 134).  One of my main concerns was that it was unclear from the wording of Act 143 whether or not a violation of chapter 704 would give rise to a claim by a tenant that would entitle the tenant to double damages and attorney’s fees if successful.

The portion of Act 143 that concerned me was Section 36, which creates Wis. Stats. sec 704.95, and reads as follows:

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 arising under this chatper.

My concern was that tenants might start filing suits against landlords alleging that they were entitled to double damages and attorny’s fees if a landlord violated any portion of chapter 704.  Could a landlord be on the hook for double damages and attorney’s fees if he drafted a 5 day notice improperly or served the notice incorrectly?

Because of this concern, the Apartment Association of Southeastern Wisconsin (AASEW) attorney wrote to the State of Wisconsin’s Joint Legislative Council which authored the earlier memo summarizing the new Act 143.  Specifically the AASEW asked staff attorney Margit Kelley to clarify section 36 of her Act Memo dated March 26, 2012.

I have good news to report.  Attorney Kelly in her letter to the AASEW’s attorney, indicated that any violation of Chapter 704 does not automatically lead to a cause of action for double damages and attorney’s fees.

Her verbatim response — referring to section 36 (now Wis. Stats. section 704.95) – was as follows:

This means that DATCP may promulgate and enforce any administrative rules that are in line with ch. 704, Stats., including the provisions of the Act that affect that chapter, under DATCP’s authority to regulate unfair methods of competition or unfair trade practices in s. 1002.0, Stats.  Section 100.20(5), Stats., then, in turn allows an individual right of action for a violation of any rules promulgated under s. 100.20, Stats., and allows for recovery of costs, reasonable attorney’s fees, and twice the amount of any pecuniary loss.

Translation:  DATCP can create rules to add to ATCP 134 that are line with chapter 704, but a violation of ch. 704 alone does not give rise to a cause of action that entitles a tenant to double damages and attorney’s fees, unless that section of the statute is also contained in ATCP 134.

So for instance, if a landlord was found to have violated Wis. Stats. section 704.28, entitled withholding from and return of security deposits, a tenant would be entitled to receive an award of double damages and attorney’s fees because the language of sec. 704.28 is ALSO contained in ATCP 134 – specifically ATCP 134.06(2).

Along those same lines, if a landlord was found to have violated Wis. Stats., sec. 704.44, entitled residential rental agreement that contains certain provisions is void, a tenant would als be able to recover double damages and attorney’s fees as the language of sec. 704.44 is ALSO contained in ATCP 134  – specifically ATCP 134.08.

As long as the courts are made aware of this, it now appears that landlords can breathe a sigh of relief as they will no longer have to worry about being ordered to pay double damages and attorney’s fees to a tenant for  improperly drafting or serving a 5 day notice, or any other portion of ch. 704 that is not also included in ATCP 134.

Now we just have to worry — as we have always had to – about having the court dismiss our evictions because of an improperly drafted or served 5 day notice : )

 

 

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New Landlord Omnibus Law: Odds and Ends

Apr 11

Posted by Tristan R. Pettit, Esq. in Commercial L-T Law, Legislation, State of Wisconsin | 1 Comment

There has been a lot of discussion about the new Landlord Tenant law in Wisconisn (2011 Wisconsin Act 143) since it became law on March 31, 2012.  Some people’s views seem similar to mine while others have interpreted the law completely differently than I do.  Here is a link to one law firm’s summary that in my opinion is completely off base, but then again they are Minnesota lawyers so we may have to give them a pass : ).  But really guys, the new law did not create a new right for landlord’s do deduct from a tenant’s security deposit — have you ever heard of ATCP 134.

I guess only time will tell how the law in interpreted by the courts in Wisconsin.  One thing that I know for sure is that the politicians in Madison will be unable to correct any errors, or clarify and vagueness, in the new law until 2013 when they are back in session.  So we are stuck with this for awhile and must make do.

The AASEW will be devoting it’s June membership meeting (June 18, 2012 at 7 pm) to the new law and we hope to invite both landlord advocates and tenant advocates alike to present so that all sides can be presented.  You will not want to miss this meeting.  Come learn what the new law is and what you need to do in order to be in compliance.  There will be no charge to AASEW members but we will be charging $25 for non-members to attend.

While I personally do not have anything new to add on the new law that I haven’t said already in prior posts, I thought I would provide links to several items relevant to the new law that people might find interesting and useful.

Here is a copy of the newly enacted law – Act 143

Here is an overview of the new law by the Wisconsin Legislative Council

Here is a copy of the newly revised Chapter 704 (Landlord and Tenant) of the Wisconsin Stattutes which includes all of the changes/additions — so I no longer have to carry around Act 143 : )

Here is an article that I recently wrote on the new law for the Wisconsin State Bar’s Inside Track blog which includes several interesting comments on the new law by local lawyers.

Here’s a blog article by my friend Tim Ballering about how the new law affects those landlords who are currently using a crime free lease addendum or something similar.

Thanks for reading

T

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

Mar 29

Posted by Tristan R. Pettit, Esq. in ATCP 134, Attorney's Fees, Commercial L-T Law, Holdover Damages, Landlord Liability, Legislation, Property Management, Rental Agreements, Rental Documents, Security Deposit, State of Wisconsin | No Comments

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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Landlord’s Omnibus Bill Signed Into Law – Read It Now

Mar 23

Posted by Tristan R. Pettit, Esq. in AASEW, ATCP 134, Legislation, Rental Agreements, Rental Documents, State of Wisconsin | 3 Comments

Governor Walker did sign the Landlord’s Omnibus Bill into law.

I appreciate the effort of everyone that called the Governor’s office asking him to veto the bill due to its deficiencies.

Here is a link to the new law.  Much easier to read than having to go back and forth between the orginal bill, the Substitute bill and the two amendments.

The two main concerns that I have with the law and which caused me to ask that the bill be vetoed. They are section 35M and section 36.

The AASEW has already spoken with Sen. Lassee’s office regarding these two major problems and I will keep you informed if and when anything is done about them.

And yes, I will be reviewing all of Wisconsin Legal Blank’s forms in the near future and making the necessary revisions – if needed – and will let you know when they will be available : )

Upon Further Reflection, I Think The Governor Should Veto The Landlord’s Omnibus Bill

Mar 21

Posted by Tristan R. Pettit, Esq. in Legislation, Notices, Rental Agreements, Rental Documents | 3 Comments

I spent several hours yesterday reviewing and thinking about the new Landlord’s Omnibus Bill that is to be signed into law today by Governor Walker at 4 pm.

I then spent hours of time trying to summarize the new law in yesterday’s blog post in an easy to read and understand format.

Since publishing the blog post yesterday I have a few more thoughts and concerns:

1.  AASEW Board member and friend Tim Ballering pointed out to me that he believes that the new law as written will allow for any violation of Chapter 704 to be considered an unfair trade practice, thus allowing a tenant to sue his/her landlord for double damages and attorney’s fees.

Here is the language at issue:

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 arising under this chapter.

In my prior post I did anticipate that this would allow for tenant’s and attorney’s to make arguments that any violation of Chapter 704 was an unfair trade practice and that concerned me.  But after speaking with Tim and thinking about this in more deeply, and re-reading the new law – I think this is a major concern.  So is this law saying that if a landlord improperly drafts or serves a 5 day notice that s/he can be sued by the tenant for double damages and attorney’s fees?  YES.

I believe that this is such a major problem that I will be contacting Governor Walker’s office today before 4 pm and asking him to veto the bill.

2.  The addition of the 8th Deadly Sin really concerns me.  My friend and past Wisconsin Apartment Association President John Fischer succinctly addresses the problem with in an email that he sent to many in the industry which is reproduced below:

When the Housing Task force was looking at blight, blight went beyond just condition of the property, but it also went to criminal activity.

There has been a proposal that various apartment associations have been working on that would make it easier to evict a tenant for criminal activity.  There is a “Crime Free Lease” program that started out west that is very popular with landlords and law enforcement.  A few communities have started working on this program here in Wisconsin, but the biggest hurdle is that the key tool of this program is a “Crime Free Lease Addendum”.  The problem is that this addendum is unenforceable under Wisconsin’s current laws.

The new law that is being signed by Governor Walker at 4 PM this afternoon (I have been invited to this private signing, but I want nothing to do with this) makes a large number of massive changes to Wisconsin landlord-tenant law.  One of the most significant appears to be an answer to our attempts to allow for eviction for criminal activity.  The new law would basically render a lease void if the lease contained language that criminal activity on a property would be a breach of the lease.

So there you have it.  My take on this new law — as well as many others in the industry — is this new law will cause more harm then good.  This is what happens when you try to rush legislation — people do not have time to consider all of the different angles — so I am planning on contacting Governor Walker and ask him to veto SB 446.  I would ask that you consider doing the same.

Thank you to tim Ballering and John Fischer for their thoughts, opinions, and guidance.

 

Landlord’s Omnibus Bill — with Amendments — To Be Signed Into Law Today

Mar 20

Posted by Tristan R. Pettit, Esq. in ATCP 134, Legislation, Rental Agreements, Rental Documents, State of Wisconsin | 7 Comments

One of the biggest pieces of pro-Landlord legislation in quite some time was passed by the Wisconsin Senate and adopted by the Assembly recently and will be signed into law by Governor Walker today.  Unfortunately some of the pro-Landlord provisions were amended, diluted, or removed.

I am certainly not denouncing this new law.  Many aspects of it will be very helpful to landlords.  I just wish that more time had been allowed — the bill was fast-tracked — to allow for more discussion, thought and input and allowing for more notice.  For instance, many of us in the rental industry were given one day advance notice before the public hearing on the bill which prevented many of us from attending.

I will attempt to summarize the new law in this post.  As this new law plays out in the “real world” I am sure that I will be devoting additional blog posts to each provision in more detail.

The proposed effective date of this new law is March 31, 2012.  So many of us will need to make some additions and/or modifications to our rental documents prior to that date.

 

Bankground of Legislation

The Landlord’s mnibus bill (Senate Bill 466) was put on the “fast track” for reasons unknown to me.  It was introduced on February 13, 2012 by Senator Lassee.  A Substitute Amendement 1 was offered by Senator Lassee on February 29, 2012.  Senator Waangard then offered the first amendment to the Substitute Amendment on March 6th which was passed March 13th.  Senator Lassee then offered a second amendment to the Substitute Amendment on March 12th which was passed on March 13th.  The bill will be signed into law by Governor Walker today – March 21st.  Approximately one month from introduction to passage into law is very fast for the legislative process.

The key provisions of the new law are:

 

1.   Moratorium on Evictions

This provision of the original bill remained untouched by the Substitute Amendment and the two amendments to the Substitute Amendment.  The new law prohibits any municipality from imposing a moratorium on eviction actions.   If a municipality has a current ordinance that contradicts this new law it cannnot be enforced.

We now must hope that individual counties, courts, and commissioners adhere to this law.  While I don’t anticipate courts ignoring this new law, I do anticipate court’s continuing to use the “stay” provisions of sec. 799.44(3) to give tenants additional time to vacate during the holidays.  So while municipalities will no longer be allowed to impose moratoriums, courts can still prevent evictions during holidays, creating the same result.

 

2.   Severability of Rental Agreement Provisions

The original bill stated that any provision could be severed from the agreement.  So if a landlord inadvertantly included a provision that was found to be improper or retaliatory in nature it could be removed and the remainder of the agreement could be enforced.

The Substitute Amendment diluted the above considerably by adding that if a rental agreement contains one of the “7 Deadly Sins” set forth in ATCP 134.08, the inclusion of any of those provisions cannot be removed and will render the entire rental agreement void and therefore unenforceable.

Amendment 1 to the Substitute Amendment went a step further and added an 8th illegal provision that if included in a rental agreement will cause the rental agreement to be void.  The new illegal provision would include any language that allows a landlord to terminate a tenant’s tenancy if a crime is committed in or on the rental property, even if the tenant couldn’t reasonably have prevented the crime.

So in the end, the new law only allows the severability of certain rental provisions.  If your rental agreement contains one of the 7 prohibited provisions set forth in ATCP 134.08 or the new prohibited provision created by this new law, your rental agreement will still be be void and unenforceable.  Essentially, the new law takes the regulation ATCP 134.08 and codifies it into law.

More tragic is what the “8th Deady Sin” has most likely done to some other pro-Landlord legislation that I had hoped would become law — the “Crime-Free Lease Addendum” bill.  If you read my prior post on the Crime-Free Lease Addendum bill you will see that this 8th Deadly Sin language effectively decapitates this proposed bill.  This is a major disappointment as I believe that had the Crime-Free Lease Addendum bill been passed it would have been the most significant piece of pro-Landlord legislation in years.  Instead the “odds and ends” Landlord Omnibus bill seems to have killed it.  Hopefully, I am wrong and it can be resurrected.

 

3.   Dispostion of Tenant’s Abandoned Property

Once again, the original version of this bill was awesome.  It stated that any personal property left behind by a tenant could be considered abandoned and disposed of immediately in the landlord’s discretion.

The Substitute Amendment modified the original bill by adding that any medical prescriptions and/or medical equipment left behind by the tenant must be held by the Landlord for 7 days.  The Substitute Amendment also added that written notice must be sent to the tenant (and any secured party) prior to disposing of any titled vehicles or mobile homes deemed abandoned.  I could live with both of those modifications.

However, the amendments to the Substitute Amendment added language that will require landlords to jump through a few hoops.  The new law requires that a landlord provide written notice to the tenant at the time of entering into the rental agreement, and at each renewal of the rental agreement, informing the tenant that the landlord will not hold any property left by the tenant and that such property will be deemed abandoned and will be disposed of.  Failure to provide this written notice to the tenant requires a landlord hold the abandoned property fpr a period of time as set forth in sec. 704.05 (5), Wis. Stats.

Essentially landlords will now be required to add a new language to their rental agreements – and any renewal agreements – advising tenants that any property left behind will be considered abandoned and can be disposed of.  Looks like there will be a revised Rental Agreement being sold at Wisconsin Legal Blank Co., in the near future : )

 

4.   Information Check-In Form

This is one of the provisions of the original bill that I didn’t care for.  A landlord will now be required to provide a standardized information check in sheet to each tenant that contains an itemized description of the premises.  The Substitute Amendment merely added that this form must be given to the tenant at the time of occupancy rather than at the time of signing of the rental agreement.

As I understand this law, this does not just mean that the landlord can give his new tenant a blank Information Check-In form to fill in — which many landlords are already doing.  Rather it means that the landlord must completely and thoroughly fill out the Information Check-In form to adequately describe the condition of the rental unit and give it to the tenant.  So if you are not thorough in your description of the renal unit this document could be used against you by the tenant, after the tenancy has ended.  This new provision of the law will clearly cause additional work for landlords and I fear could harm the less detail-oriented landlords out there when pursuing a tenant for damages to the unit or withholding portions of the tenant’s security deposit for damages.

 

5.   Holdover Damages Are Mandated

The new law requires that landlords be awarded holdover damages.  If a tenant stays in the rental unit beyond his tenancy, the landlord is now legally entitled to – at a minimum – double the daily rent for the time period after the tenancy ended (i.e. the notice expired) until the tenant actually vacates the unit.

This is a positive change because current law (sec. 704.27) only states that a landlord “may” be awarded holdover damages — and some courts would not award landlords these damages.  The new law says that a court “shall” award a landlord holdover damages, at a minimum.

 

6.   Withholding From A Tenant’s Security Deposit

The new law has merely codified the provision of ATCP 134.06(3), which states that a landlord is allowed to withhold the following from a tenant’s security deposit: (a) Tenant damage, waste or neglect of the premises, (b) Unpaid rent for which the tenant is legally responsible, (c) Payment which the tenant owes under the rental agreement for utility service provided by the landlord but not included in the rent, (d) Payment which 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 mobile home parking fees which a local unit of government has assessed against the tenant to the extent that the landlord becomes liable for the tenant’s nonpayment, (f) Other reasons authorized in the Nonstandard Rental Provisions.

The new law also adopts the portions of ATCP 134.06 which state that a landlord cannot withhold from a tenant’s security deposit for normal “wear and tear” or other losses which the tenant cannot reasonably be held responsible.

 

7.   Timing For Return of Security Deposit

The original bill indicated that in situations where the tenant broke the lease prior to the end of the term that the landlord need not return the security deposit or provide an accounting of how the security deposit was applied until 21 days after the lease term ended or within 21 days of a new tenant taking occupancy.  This langauge is a substantial improvement over current law as it allows a landlord to hold the security deposit until he is able to determine if any future rent will owed by the breaching tenant if the landlord cannot locate a new tenant to re-rent the property to.  I explain this issue in more detail in my earlier post on the Landlord’s Omnibus Bill.

The Substitute Amendment waters this down a bit.  The new law will now codifies ATCP 134.06(2)(a) and states that a landlord shall deliver or mail to a tenant the security deposit or itemization of how the security deposit was applied within 21 days after any of the following: (a) if the tenant vacates on the last day of the rental agreement, the date on which the rental agreement terminates, (b) if the tenant vacates before the end of the rental agreement, then the date on which the rental agreement terminates or, if the unit is re-rented before the end of the rental agreement, then the date on which the new tenancy begins, (c) if the tenant vacates after the last day of the rental agreement, the date on which the landlord learns that the tenant vacated, (d) if the tenant was evicted, the date on which the writ was executed or the date that the landlord learns that the tenant vacated.

So the new law kept the good part of the original bill but by codifying ATCP 134.06(2)(a) the landlord must return a tenant’s security deposit or send out the itemization of how the security deposit was applied earlier than when the original bill stated in situations where the tenant was evicted.

 

8.   Disclosure of Code Violations

The original bill required that a landlord disclose to any prospective tenant any uncorrected building code or housing code violations prior to the signing of a rental agreement, accepting of a security deposit or accepting of earnest money.

The second Amendment to the Substitute Amendment modified the original bill and as a result the new law requires a landlord to disclose to a new tenant any uncorrected building code or housing code violations if the landlord has actual knowledge of the violation (rather than if the landlord had received notice of the violation from a housing code enforcement agency as under the original bill).

Specifically the new law requires the disclosure to the new tenant if the following four conditions are met: (a) landlord has actual knowledge of the violation, (b) the violation affects the rental unit or a common area, (c) the violation presents a significant threat to the tenant’s health or safety, (d) the violation has not been corrected.

 

9.   Request for Repairs

The orginal bill required that a tenant first notify a landlord in writing of any repair or maintenance issue, and then allow adequate time for the landlord to address the issue, before reporting the problem to the building inspector, elected official, or housing code enforement agency.  The Substitute Amendment removed this provision in its entirety so the law has not changed — tenants are allowed to call whomever they want to complain about maintenance issues without any requirement that they first notify the landlord of the problem.

 

10.   Acceptance of Past Due Rent

The new law states that if a landlord has filed an eviction against a tenant and the landlord accepts past due rent from the tenant during the course of the eviction, that the court cannot dismiss the eviction solely based on the landlord’s acceptance of past due rent from the tenant.

I really like this provision of the new law becasue currently, many tenants and their attorneys argue that if an eviction is pending and a landlord accepts past due rent from a tenant, that the landlord’s acceptance of that rent has effectively “waived” the landlord’s right to proceed with the eviction.

 

11.   Tenant Remedies

The Substitute Amendment added that any violation of chapter 704, including the provisions of the new bill, may constitute an unfair trade practice which may allow the tenant to sue a landlord for double damages and attorney’s fees.

I don’t like this new provision of the law for one simple reason.  I believe it will be used by tenants and tenant’s attorneys to seek double damages and attorney’s fees whenever a landlord allegedly violates any provision of chapter 704, whether the violation is a true unfair trade practice violation or not.  Only the provisions of ATCP 134, which will be codified in ch. 704 under this new law, deal with unfair trade practices.  Nonetheless, I anticipate that we will see some very creative arguments by tenant’s and their attorneys as to why a tenant should be awarded double damages and attorney’s fees for violations of chapter 704 that are not unfair trade practice violations.

 

Now we will have to wait and see how this new law “plays out” in the real world of landlording.  Some of the key things everyone will need to address before March 31, 2012, when the law takes effect are:

1.  Make sure any rental agreement you enter into with a tenant after March 31, 2012, does not contain any language that would be in violation of the “8th Deadly Sin” which essentially means eliminating or modifying any language similar to that found in the Crime-Free Lease Addendum.

2.   Make sure to add language in your rental agreement, and any renewal documents, stating that any property left behind by the tenant will be considered to be abandoned and will be disposed of by the landlord without any further notice to tenant (except for medical prescriptions and medical devices, mobile homes and titled vehicles).

3.   Rename your Check-In / Check Out Sheet as “Information Check-In Sheet” and insure that you provide any new tenants with a completed copy of the form thoroughly documenting the condition of the rental unit.

4.   Disclose any code violations that you have actual knowledge of that may present a significant threat to the tenant’s health or safety before entering into a rental agreement or accepting a security deposit or earnest money.

Good Luck Everyone

ADDITION:  3/21/12 – Make sure you read my 3/21/12 post about why I now think this new law will actually hurt landlords more than help them

 

ADDED 4/11/12 — Here is the link to the new law.

 

ADDED 4/11/12 – Here is a link to an article I recently authored on the new law.

ADDED 4/11/12 – Here is a link to the newly revised Wisconsin Statutes Chapter 704 re: Landlord and Tenant

 

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New Landlords’ Omnibus Bill Being Debated In Madison

Feb 29

Posted by Tristan R. Pettit, Esq. in Legislation | 12 Comments

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.