Archive for category Legislation

HUD Issues New Rule On “Discriminatory Effect” a.k.a Disparate Impact

Feb 20

Posted by Tristan R. Pettit, Esq. in AASEW, Fair Housing / Discrimination, Legislation, Protected Classes, Screening Tenants | 3 Comments

HUD has issued a new Fair Housing “disparate impact” rule that may cause problems for landlords during the screening process.  The new rule creates a new provision entitled “Prohibiting Discriminatory Effects” which defines “discriminatory effect” as situations in which a facially neutral (i.e. not discriminatory) housing practice can become discriminatory if it actually or predictably has an effect on a group of persons that are members of a protected class.

The concern is whether or not this new rule will restrict landlord’s use of criminal background checks on prospective tenants.  Recently Pepsi Co. agreed to pay $3.13 Million to resolve allegations of hiring discrimination against African-Americans based on Pepsi’s use of the African-American’s arrest records.

This recent settlement when read in conjunction with HUD’s new rule causes concern regarding whether it will be considered discriminatory to use a person’s criminal arrest or conviction as a basis for rejecting a rental applicant when such use would result in members of a protected class being rejected as tenants.  For more on this issue and
please read Tim Ballering’s blog post entitled ‘Will Criminal Background Checks For Screening Be Restricted By Proposed Federal Rule?”

In light of this concern, the AASEW’s Executive Committee submitted the following comments to HUD:

The Apartment Association of Southeastern WI, Inc. is a trade association representing approximately 575 owners and managers of rental housing in the Metro Milwaukee area.

Our organization supports Fair Housing as well as community efforts to reduce the effects of crime within the neighborhoods that our members own and manage rental housing.

We are concerned that this proposed rule will restrict the  legitimate and necessary use of criminal arrest and conviction records in screening tenants to exclude those who will cause disruption and harm to other occupants, the neighborhoods those properties are located in, and to our properties.

Many communities in southeastern Wisconsin have “Nuisance Property Ordinances” that hold owners accountable for the misdeeds of their tenants.  For example Milwaukee’s Nuisance Ordinance does not require the conviction, nor the arrest of the tenant or their invitees, rather simply repeat law enforcement activity will trigger the enforcement provisions of that ordinance.

As part of your proposed rule property owners need “bright line” guidance, establishing what background screening criteria and methods will remain acceptable under this proposed rule as well as protections from potentially conflicting local requirements.

It would be inequitable, causing unnecessary costs and harm to property owners if such guidance is not provided in advance of the implementation and enforcement of this proposed rule.

Hopefully additional guidance will be provided.  If and when it is I will be sure to provide everyone an update.

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CCAP Committee’s Recomendation To Change Wisconsin’s Expungment Laws Shot Down

Feb 14

Posted by Tristan R. Pettit, Esq. in CCAP, Legislation, Screening Tenants | 2 Comments

Last year Wisconsin’s Joint Legislative Council created a Special Committee On The Review of Records Access of Circuit Court Documents – what I affectionately referred
to as the CCAP Committee.  Landlords were very fortunate that in the end the committee made no recommendations to change or alter information on CCAP or limit its access by landlords or any other group.  The committee’s sole recommendation was to call for the liberalization of Wisconsin’s criminal expungement statute.

The proposed bill, if passed would have done the following:

1.  Defined what is meant for a court to expunge a court record (and yes, this did include removing any reference to the conviction from CCAP)

2.  Clarified that an expunged record may not be considered for employment or housing matters.

3.  Stated that a person may petition the circuit court at any time to expunge the following:

-  any court record of a person who was under the age of 25 at the time the crime was committed and who was found guilty of a forfeiture, misdemeanor, and certain (lessor) felonies, that are punishable by up to 6 years in prison.

- any court record of a person charged with an offense punishable by a forfeiture, misdemeanor, or felony in which all charges were dismissed or for which the defendant was acquitted AND the court determines that the person will benefit by the expungement and that society will not be harmed by the expungement.

So as you can see, the proposed bill would have negatively affected landlords in the screening process and if passed would mean that a landlord would find no record of the applicant having ever been charged and convicted of crime x, y or z (or charged and acquitted or charged and the later dismissal of the case), if the applicant had applied for and received an expungement.

It also would have meant that even if the landlord somehow learned of the conviction (or acquittal or dismissal) and the later expungement, that the landlord could not use that information when making a decision on whether or not to rent to that individual.

Furthermore, it would have meant that a landlord would be precluded from inquiring as to the existence of any expunged record from a rental applicant whether that question
be on the rental application itself or verbally when talking to the applicant.

Thankfully we do not have to worry about this proposed bill being passed as it never even got introduced.  In a notice dated January 20, 2012, the Director of the committee wrote to the members of the committee to inform them that their recommended bill was not approved for introduction by the Joint Legislative Council by a vote of 13 to 6.  While a petition can be circulated to have the matter reconsidered, I have not heard of that happening.

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“Landlord Preemption Bill” Signed Into Law

Dec 28

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

It is nice to finally see some landlord-friendly laws being passed in the state of Wisconsin.

On December 7, 2011, Senate Bill 107 (commonly referred to as the “Landlord Preemption Bill”) was signed into law by Governor Scott Walker as 2011 Wisconsin Act 108.  This new law creates Section 66.0104 of the Wisconsin Statutes and prohibits municipalities from enacting an ordinance that places certain limits or requirements on a landlord.

Specifically, section 66.0104 prohibits any city, village, town or county from enacting an ordinance that prohibits a landlord from obtaining and using any of the following information with respect to a tenant or prospective tenant:

  1. Monthly household income
  2. Occupation
  3. Rental history
  4. Credit information
  5. Court records, including arrest and conviction records, to which there is public access
  6. Social Security number or other proof of identity.

The new law also prevents a municipality from limiting how far back in time a prospective tenant’s credit information, conviction record, or previous housing may be taken
into account by a landlord.  It also prevents a municipality from prohibiting or limiting when a landlord can enter into a rental agreement for a rental unit with a prospective tenant or show a rental unit to a prospective tenant during the tenancy of a current tenant.

Additionally, the new law prohibits a municipality from enacting an ordinance that places requirements on a landlord with respect to security deposits, earnest money or pre or post tenancy inspections that are in addition to the requirements currently set forth in Wisconsin Administrative Code ATCP 134.

If a municipality has an ordinance on its books that conflicts with sec. 66.0104 than that ordinance is no longer applicable and may not be enforced.

This new law will positively affect landlords throughout the state, but most especially in Madison and its environs.  I think as a result of Wisconsin Act 108 the city of Madison’s Code just lost a few pounds.

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Governor Walker Signs 2 Pro-Landlord Bills Into Law

Dec 9

Posted by Tristan R. Pettit, Esq. in Attorney's Fees, Legislation | No Comments

Just wanted to let everone know that in the last few days Governor Walker has signed into law two bills that will positively affect landlords.

-  On December 7th, Governor Walker signed SB 107 (2011 Wisconsin Act 108) which relates to prohibiting municipalities from creating ordinances that put limits on landlords.  If you would like more detail on this law please see my prior blog post on the topic.  Here is a link to the legislative history of the bill.

- On December 7th Governor Walker also signed into law SB 12 (2011 Wisconsin Act 92) which creates a presumption that a tenant’s attorney’s fees should be capped at 3 times the amount of damages at issue when a tenant sues a landlord for an alleged violation of ATCP 134.  If you would like more information on this see my prior blog post.  Here is a link to the legislative history of the bill.

 

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New Federal Bill Would Add Two New Protected Classes To Federal Fair Housing Act

Oct 31

Posted by Tristan R. Pettit, Esq. in Fair Housing / Discrimination, Legislation | 4 Comments

On September 26, 2011 both chambers of the U.S. Congress introduced legislation that would extend housing discrimination laws to include protections based on sexual orientation and gender identity.  The HOME (Housing Opportunities Made Equal) Act was introduced by Sen. John Kerry and others.  The bill would amend the Fair Housing Act to prohibit housing discrimination and intimidation on the basis of sexual orientation and gender identity.

Wisconsin is one of 13 states and the District of Columbia that already outlaws housing discrimination on the basis of sexual orientation. However, currently only 8 states afford fair housing protection based on gender identity and Wisconsin is not one of those states.

 

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New Bills Would Limit Tenant’s Attorney’s Fees When Suing Landlords

Oct 27

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

There are two new proposed laws that if passed would limit the amount of attorney’s fees that could be awarded to a tenant that has sued his/her landlord for violation of ATCP 134 to 3 times the amount of compensatory damages in Wisconsin.  The proposed legislation (Special Session Assembly Bill 12 & Special Session Senate Bill 12) was introduced by the committee on Senate Organization and the Committee on Assembly Organization at the request of Governor Scott Walker, Senator Rich Zipperer (R) and
Representative Robin Voss (R).

Currently if a tenant sues his landlord for a violation of ATCP 134 – which typically is due to  the landlord’s alleged improper withholding of the tenant’s security deposit – and prevails, the court must award the tenant double damages, the costs of the lawsuit, and the tenant’s reasonable attorney’s fees.  In almost every instance, the tenant’s reasonable attorney’s fees are much larger than the compensatory damages awarded.

In the United States we follow what is referred to as the American Rule which states that a person pays for their own attorney’s fees regardless of the outcome of the lawsuit.  This is very different from the English Rule, which is followed in England, which requires the losing party to pay for the prevailing party’s attorney’s fees in addition to their own.

Despite following the American Rule in the United States, there are certain situations in which a state or federal statute will allow for the shifting of one’s attorney’s fees to th other party.  These statutes are referred to as fee shifting statutes.  Sec. 100.20(5) of the Wisconsin Statutes is an example of a specific type of fee shifting statute, called the private Attorney General statute, which requires that a landlord that has been found to have violated ATCP 134, to pay his tenant two times the tenant’s compensatory damages and the tenant’s reasonable attorney’s fees.

It is argued that the private Attorney General statute, which is codified as sec. 100.20 (5), Wis. Stats., has many purposes, such as: (1) it encourages a tenant that is damaged financially by the acts of their landlord to file a lawsuit to enforce their rights even if the alleged damages are small, (2) it allows a tenant to enforce his own rights as well a well as the public’s rights, (3) it deters improper conduct by landlords, (4) it strengthen the bargaining power of a tenant, and (5) it provides a much needed backup for th State as there are too many violations for the Attorney General’s Office to enforce alone.

These new bills would limit a tenant’s attorney’s fees to 3 times the amount of the compensatory damages awarded in all cases in which only compensatory damages are awarded.  If non-monetary relief is awarded in addition to compensatory damages (such as injunctive or declaratory relief, rescission or modification, or specific performance the court must “presume” that reasonable attorney’s fees do not exceed 3 times the amount of the compensatory damages awarded, however that presumption may b overcome after the court analyzes 13 factors which the bills will allow a court to consider when setting the amount of attorney’s fees.

Critics of the two new bills feel that if passed, they will essentially “gut” Wisconsin’s consumer protection laws.  Their argument is that no attorney will be able to afford to tak a tenant’s smaller damage case due to the limitations of their fees.  As a result, it is argued that tenants will no longer be able to challenge the improper behavior of the landlords and therefore” bad” landlords will be able to do whatever they want and get away with it.

 

UPDATE – 10-28-11 — On Thursday, Oct. 27, 2011 the aforementioned bill was passed by the Senate 17-15 (on a party line vote). The bill was softened a bit to allow for atty. fees greater than 3 times damages to be awarded by a judge BUT the presumption would still be that three times damages is sufficient.

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Crime-Free Lease Bill On The Horizon

Oct 17

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

On September 12, 2011, on behalf of the AASEW, I traveled to Madison to meet with the Wisconsin Rental Housing Coalition, several legislators’ aides, and an attorney from the Legislative Reference Bureau to assist in the review of and drafting of a new piece of legislation that will greatly affect residential landlords.

Not yet a bill, this proposed legislation is referred to as LRB-2098/1 or informally as the “Crime-Free Lease bill.”  Initiated by fellow landlord and South Milwaukee Police Officer Brian Fleming, this legislation if passed, will change current Wisconsin law to allow a landlord to terminate the tenancy of any tenant (even those under a lease for term) that engages in criminal activity in their rental unit or on the rental property.  A new type of 5 day notice would be created under this legislation which would not allow the tenant the opportunity to cure the breach and stay.  It would basically be a “1 strike” law similar to what is in place in federal Section 8 site-based housing.

Criminal activity under the proposed legislation would be defined as any act or behavior that is punishable in Wisconsin by a fine or period of imprisonment or that is a violation of a municipal ordinance.

If the tenant fails to vacate the unit after being served with this new 5 day notice, the landlord would still be required to prove the criminal activity in eviction court.

The impetus for this legislation was the National Crime Free Lease Addendum that has been adopted and used in many counties outside of Wisconsin.  Under this initiative, a tenant agrees not to engage in criminal activity on the rental property — or allow any of their guests to do the same — and signs a contract with the landlord to that effect.  If the tenant or the tenant’s guests engage in the prohibited criminal activity, they agree to vacate the property upon notice by the landlord.

Current law in Wisconsin conflicts with the Crime Free Lease Addendum as tenants under a lease for a specific term, must be afforded the opportunity to correct the breach and remain a tenant the first time that they violate their lease — even if that violation is a crime.

Sec 704.17(2)(b) of the Wisconsin Statutes, allows a tenant under a lease who engages in criminal activity, to remain a tenant as long as s/he ceases the criminal activity within 5 days of being served the notice of breach.  Thus, a landlord can be stuck with a tenant that he knows engages in criminal behavior until that tenant commits a second crime and can be served with a 14 day notice (which does not afford the tenant the opportunity to “cure” the breach and remain a tenant).

This puts Wisconsin landlords in a very difficult position and opens them up to liability.  It also prevents a landlord from protecting his/her other tenants from the tenant that is engaging in criminal activity.

Once the bill is officially introduced and has obtained co-sponsors I will let you know so that you can begin calling and writing your state representatives to encourage them to vote in favor of this very important legislation.

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