Archive for category Rental Agreements

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

Jan 3

Posted by Tristan R. Pettit, Esq. in AASEW, City of Milwaukee, Collections, Credit Checks, De Novo Hearings, Earnest Money, Emergency Assistance, Evictions, Execution of Writ, Fair Housing / Discrimination, Holdover Damages, Landlord Liability, Late Fees, Lead-Based Paint, Milwaukee County, Mitigation of Damages / Re-Renting, Notices, Pets, Property Management, Protected Classes, Reasonable Accomodations, Reasonable Modifications, Rejecting Rental Applicants, Rental Agreements, Rental Documents, Right of Entry, Roommates, Screening Tenants, Security Deposit, Self-Help Evictions, Seminars, Small Claims Court, Smoke Detectors, State of Wisconsin, Tenant Damage, Untenantability, Walkthroughs | 2 Comments

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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Landlords Should Treat Tenant Roommates As One Person To Better Understand Joint and Several Liability and Resolve Tenant Disputes

Sep 22

Posted by Tristan R. Pettit, Esq. in Collections, Joint & Several Liability, Rental Agreements, Roommates, Security Deposit | 6 Comments

I receive many calls from landlords who have questions and concerns involving issues involving their tenant roommates.  While the problems are often factualy different the proper way to analyze the situation and arrive at a resolution to the problem, often depends on the same thing —  something called “joint and several liability.”

Joint and several liability is a legal concept that, according to Black’s Law Dictionary, is defined as “the liability of copromisors of the same performance when each of them, individually, has the duty of fully performing the obligation.  A liability is said to be joint and several when the creditor may demand payment or sue one or more of the parties to such liability seperately, or all of them together at his option.”

Confused yet? Let me try and explain joint and several liability more clearly than Mr. Black did.

Essentially joint and several liability means that each individual tenant is responsible for the full amount of the rent as well as any and all other obligations under the rental agreement.

I think it would be easier for landlords to comprehend the concept of joint and several liability if they would just think of and treat roommates as one person.

Here is an example:

A Landlord enters into a 12 month lease with Tenant A, Tenant B, and Tenant C.  The monthly rent is $750.  The security deposit is also $750.

The Landlord needs to remember that he has one lease with three tenants NOT three separate leases with one tenant.  As such all three tenants are responsible for the full amount of rent.  All three tenants are responsible for abiding by the rules and regulations.  All three tenants are responsible for paying the security deposit.  All three tenants are responsible for paying the full amount of any damages to the rental unit.

Instead of taking $250 from Tenant A, B, and C for rent (or the security deposit), the landlord should insist that rent be paid via one payment for the full amount.  When landlords accept $250 from each tenant, the landlord is inadvertantly telling the three tenants that each of them is only responsible for 1/3 of the rent — that is wrong.  Remember treat the roommates as one person – one person pays his entire rent not 1/3 of it.

I know many of you that have tenant roommates are thinking that there is nothing wrong with accepting three separate checks for $250 from your three tenants.  You are correct, nothing is wrong, there is nothing wrong with doing that . . .  AS LONG AS ALL OF THE TENANTS PAY RENT ALL OF THE TIME.  But problems arise is when one tenant falls on hard times and doesn’t have the money to pay rent.  It is at this point that the other two tenants start telling the landlord, “well  we paid my portion of the rent so you can’t evict us.”  WRONG.

Once again, think of roommates as one person.  When you have one tenant (no roommates), that tenant is responsible for paying the entire amount of the rent – not just a portion of it.  The same goes with roommates.  One roommate is not just responsible for paying 1/3 of the rent.  Under joint and several liability, that one tenant roommate is responsible for paying all of the rent if the other tenants don’t pay any rent.  If Tenant A and Tenant B have no money to pay rent, then Tenant C better rise to the occasion and pay the full rent amount or else all three roommates can be evicted.

Tenant roommates do not understand the concept of joint and several liability.  I believe it is in the landlord’s best interest to take the time to teach his tenant roommates about joint and several liability and how it specifically applies to them and their roommate situation.  The best way to do demonstrate joint and several liability to your tenant roommates, after you have had the discussion with them, is to make them write one check for rent.  I tell my roomate tenants that they must pay rent with one check.  I don’t care who pays it but I will only accept one check for the full amount of rent.  The tenants can fight amongst themselves as to how they divide up the rent amount or who owes what to whom.  How they do that should not be the landlord’s concern.  The landlord wants to impress upon his tenant roommates that he expects the full amount of rent each month and if they do that then they can remain as tenants.  If not, then they will be evicted.

So while it may seem a bit much to refuse to take more then one rent check from tenant roommates, I believe by making the tenants understand that they are not responsible for just a “portion” of the rent, a landlord can avoid a lot of problems in the future.

Let’s turn our focus to tenant roommates and the security deposit.  If a landlord makes the mistake of accepting $250 from each of his three tenant roommates to apply to the $750 total security deposit, I believe that the landlord is sending his new tenants the wrong message again.  Whether he is aware of it or not, the landlord has unintentionally informed his tenants that each of them are only responsible for 1/3 of the security deposit and therefore only responsible for 1/3 of any damage to the unit.

How many times have you heard one tenant say that the hole in the wall was caused by the other roommate who came home drunk one night and put his fist through the drywall?  And then the next comment out of that tenant’s mouth was, “so you should take the cost to repair that wall out of his portion of the security deposit.”

Each tenant is jointly and severally liable for paying the total amount of the security deposit and for the total amount of any damage caused to a rental property regardless of which tenant caused the damage.  A tenant roommate is not just responsible for “his portion” of any damage.  Under joint and several liability, if the cost to repair the wall is $500 then the landlord can keep $500 of the security deposit and the three roommates can fight over how to split up the remaining $250.

What if your tenant roommates cause major damage to the rental unit that goes well beyond the security deposit on hand.  Let’s say the damages total $5,000.  Under the concept of joint and several liability, a landlord can choose to sue all three of the tenants for the $5,000 or the landlord can choose to sue only two of them for the $5,000 (the two that are gainfully employed, for example) or the landlord could even opt to sue just one of the three roommates for the entire $5,000.

Assuming the landlord could prove his damages and meet his burden of proof, the court could rightfully enter a judgment of $5,000 against only Tenant A, if that is the only tenant that the landlord sued.  This is true even if it was Tenant C that caused the actual damage.  The landlord could then pursue and collect the entire $5,000 from Tenant A.  It would then be up to Tenant A to sue either Tenant B or Tenant C, or both, if he so chooses.

Please note that joint and several liability does not allow a landlord to obtain a double or triple “windfall.”  A landlord can’t sue each tenant individually for the full $5,000 and end up with three judgments totaling $15,000.  This is why the most practical course of action is typically for the landlord to sue all three tenants for the entire $5,000 and then decide which tenant is more “collectible” (and often more responsible) and pursue the collection of the judgment against only that one tenant.

Now, let’s assume there is no damage to the rental unit after the three tenants move out and therefore the entire security deposit will end up being returned.  How is the landlord to return the security deposit?  Under Wisconsin law, specifically Wisconsin Administrative Code, ATCP 134.06(2)(d), a landlord is required to refund the entire security deposit in one “check, draft or money order made payable to all tenants who are parties to the rental agreement unless the tenants designate a payee in writing.”  So under ATCP 134.06(2)(d), a landlord is required to treat the tenant roommates as one person – by sending them one check made payable to all three of them.  If a landlord ended up writing three separate checks to each of the tenants for 1/3 of the security deposit each, that landlord would be violating Wisconsin law.

So, if a landlord treats his tenant roommate as one person, he will not only be adhering to the concept of joint and several liability, he will make his life as a landlord more simple.  Landlords should not have to get involved in trying to determine which roommate did or didn’t pay “his portion of the rent” nor should a landlord be concerned with which roommate punched a hole in the drywall during a drunken rampage.  It is not our job as landlords to be social workers and resolve disputes amongst roommates.  Nor is it our job to be the judge or jury and determine which roommate was at fault.  Fortunately, the concept of joint and several liability allows a landlord the ability to avoid all of that unnecessary drama.

 

NOTE: If the rental agreement you are currently using does not indicate that all tenants are  ”jointly and severally liability” for all obligations under the rental agreement, then it is not a well-written rental agreement and is not worth the paper that it is written on.  If that is the case, you should tear it up at the first possible legal opportunity — i.e. once the term ends if it is a lease or with 28 day’s notice if it is a month to month tenancy.  You should then purchase and start using a rental agreement that states that all tenants are jointly and severally liable.  I hear that the Rental Agreement sold at Wisconsin Legal Blank Company, Inc. is a very good one — someone told me that the author of it is pretty knowledgable about Landlord-Tenant Law.

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Avoid Homemade Rental Agreements . . . Regardless of What the Tenant Resource Center Tells You

Jun 2

Posted by Tristan R. Pettit, Esq. in Rental Agreements, Rental Documents | 13 Comments

I received a troubling call from a landlord last week.  This landlord had some questions regarding management of her rental properties and told me that she had previosuly called the Landlord-Tenant Resource Center for assistance.  I informed the caller that there is no such animal as the Landlord-Tenant Resource Center and that she had actually spoken with the Tenant Resource Center, a very pro-tenant organization.

The landlord continued to tell me that she has been using the Residential Rental Agreement sold at Wisconsin Legal Blank Co. Inc. for the last 10 years and has been very happy with it.  She advised me that when she mentioned this fact to the  person at the Tenant Resource Center that she was informed that she should stop using the WLB rental agreement immediately as it was vague and indefinite and would not stand up in court.  She was then told that she should  instead draft her own lease in the future.

As many of you know, I have been the author of Wisconsin Legal Blank’s residential rental agreement for the last 15 or so years, so this criticism was news to me.  I explained that I have been representing landlords throughout Southeastern Wisconsin for years and during those hundreds of court appearances, I have never had a tenant or a tenant’s attorney raise that argument.  More importantly, I had never had a court make a ruling the the WLB rental agreement was vague or lost a case based on the alleged vagueness of the WLB rental agreement.  I am also quite sure that if other lawyers or landlords had lost a case as a result of the wording of the WLB rental agreement, that either I or Wisconsin Legal Blank would have received an angry telephone call by now. 

I proceeded to tell this landlord about the Apartment Association of Southeastern Wisconsin and that it was an organization comprised of landlords and for landlords and that she should consider calling it in the future should she have any questions about the management of her rental properties, and not the Tenant Resource Center.  I also encouraged her to join the AASEW and believe that she is now a member.

What troubled me most about this call was not that someone was critical of the WLB rental agreement, but rather that the Tenant Resource Center advised this landlord that she would be better off drafting her own rental agreement in the future.  Those of you that have heard me speak on the topic of rental documents before know that one of my biggest concerns is when a landlord drafts their own rental agreement.  I would say that over 80% of the landlord-drafted rental agreements that I have reviewed over the years contain illegal clauses or provisions that would most likely render the rental agreement void in Wisconsin.

Inadvertently, landlords who draft their own rental agreements, often will include a provision that violates one of ATCP 134.08’s seven prohibited rental agreement provisions (“The Seven Deadly Sins”).  The result of making such a mistake is that  the landlord now has a rental agreement that is unenforceable against the tenant (but yet is still enforceable by the tenant against the landlord).  One needs to look no further than the 2001 Wisconsin Supreme Court case of Baierl v. McTaggart, 245 Wis.2d 632, 629 N.W.2d 277, to see the disastrous results of using a poorly drafted lease.

In actuality, a landlord is better served by using a pre-printed rental agreement that has been drafted by a lawyer knowledgeable in Wisconsin residential landlord tenant law — and is reviewed regularly by that lawyer – then they are by drafting their own rental agreement or cutting and pasting together a conglomeration of  rental agreements  found on the internet.

Incidentally, many of the so-called state specific rental agreements that can be purchased on the internet also contain illegal provisions that will render them unenforceable in Wisconsin.  One of these online companies actually contacted me to draft a lease for them about 5 years ago, but when they balked at actually paying me for my work, I opted to not assist them.  Apparently they found an attorney who was willing to work for free but who — unfortunately for the unsuspecting landlords that purchase this company’s online rental agreements — did not know Wisconsin residential landlord-tenant law very well and included language that would violate ATCP 134.08.  There are similar issues with the rental agreements sold at Office Depot and Office Max.

I have been mulling over the possible intent of the Tenant Resource Center employee that advised this landlord to draft her own rental agreements in the future.  All I can come up with is that tenant advocates must be putting out this so-called “advice” hoping that uneducated landlords will follow it, thus increasing a tenant’s chance of prevailing in court due if the landlords’ self-drafted rental agreement contains an illegal provisions thus making it unenforceable against the tenant.

Call me jaded, but I can’t come up with any other reasonable motivation.

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Free Landlord-Tenant Law Seminar In West Allis on March 31, 2011

Mar 25

Posted by Tristan R. Pettit, Esq. in Rental Agreements, Rental Documents, Screening Tenants, Seminars | No Comments

I will be presenting a seminar for the West Allis Landlord Training Program on Thursday, March 31, 2011 from 6:30 pm – 8:30 pm.  This seminar is sponsored by the West Allis Police Department and is open to the public at no cost.

I will be speaking on two specific areas:

1.  Rental Documents – specifically what rental documents you should be using with your tenants to protect yourself such as: Rental Agreement, Nonstandard Rental Provisions, Rules and Regulations, Rental Application, Pet Agreement, Lead-Based Paint Disclosure Forms, Carbon Monoxide Detector Forms, Check-In & Check-Out forms and more.

2.  Screening Prospective Tenants – this topic will include discussion of the federal and state Fair Housing laws, written screening criteria, credit checks, CCAP, and how to reject an applicant.

The Seminar will be held in the West Allis Municipal court room which is located at 11301 W. Lincoln Avenue in West Allis.  Seating is limited so I would encourage anyone that is interested in attending to arrive early to insure a seat.

A detailed outline on the above topics will be given to each attendee and Wisconsin Legal Blank Co. will be on hand  with their landlord tenant law forms available for purchase.

Hope to see everyone there.

New Rental Agreement for Self-Service Storage Units Now Available at Wisconsin Legal Blank

Oct 11

Posted by Tristan R. Pettit, Esq. in Rental Agreements, Rental Documents, Self-Service Storage Units | No Comments

I have recently drafted a Self-Service Storage Unit Rental Agreement that is now available and being sold at Wisconsin Legal Blank Co., Inc.  Additionally I have drafted two seperate default notices that should be sent to the tenant who has breached the rental agreement for the self-service storage unit.  The two default notices contain differernt language as required per Wisconsin’s new law regarding self-service storage facilities and units.

Self-service storage facilities in Wisconsin are governed by sec. 704.90, Wis. Stats., which is the chapter that deals with landlord tenant relationships.  While a self-service storage unit involves a landlord tenant relationship, the laws governing these facilities and units is very different than the laws governing an apartment unit or other rental property.

Sec. 704.90 is specific to self-service storage facilities and units.  It does not apply to storage units that are incidental to the rental of a apartment unit.  For example, sec. 704.90 (and the new forms that I have drafted) would not be used if a tenant is renting an apartment unit that includes the use of a storage unit in the basement.

The laws regarding self-service storage units were significantly changed by 2009 Wisconsin Act 380 (2009 Assembly Bill 707) which is the reason that I decided to draft the new rental agreement and notice of default forms.

Some of the changes in the new law include the following:

1.     The new law makes current statutory provisions governing self-service storage facilities also apply to self-service storage units.  A self-service storage units include a box, shipping container, or trailer that is leased by a tenent primarily for use as a storage space whether the unit is located at a facility owned or operated by the owner or at a locations designated by the tenant.  This change in the law was made to address the new PODS type units that are being leased to people who store the units off-site from the self-service storage facility.

2.   The new law requires that if a self-service storage facility rental agreement includes a provision that limits the value of the property stored, that the clause must be printed in bold or underlined type of the same size as the rest of the agreement.  The limit listed in any agreement is presumed to be the maximum value of the property stored in the unit.

3.     After the termination of the rental agreement, an owenr may deny the tenant access to the personal property remaining in the leased space until the tenant redeems the property by paying the owner any rent and other charges that are due. 

4.   The owner may sell the property after providing two notices to the tenant, and if the tenant does not redeem the property within fourteen days after the date of the second notice. 

5.   The new law provides that the second notice of default may be sent via certified mail or by first class mail with a certificate of mailing.

6.   If the tenant does not redeem the property, then an owner who wishes to sell the property, must publish an advertisement of the sale once a week for two consecutive weeks in a newspaper of general circulation where the self-service storage facility is located.

6.     The new law eliminates the old requirement that an owner’s advertisement of the sale of the abandoned property include the nubler of the space where the property was located.

7.     The old law required that any sale of the abandoned property be conducted in a “commercially reasonable manner.”  The new law states that the sale must meet one of the following requirements: (a) the property is offerred as a single parcel or multiple parcels at a public sale attended by three or more bidders, (b) the property has been offerred to at least three persons who deal with the type of personal property offerred for sale and is sold in a provate transaction, or (c) the property is sold in another manner that is commercially reasonable.

8.   The new law allows the owner or operator of the self-service storage facility to do the following with the property if they do not want to sell the property, if the value of the property is less than $100 and proper notice is provided: (a) donate it to a non-profit organization, (b) dispose of it in a solid waste facility, (c) recycle it, (d) remove it in another reasonable manner.

9.   The old law allowed “any person” to bring a civil lawsuit for a violation of the self-service storage facility laws — this resulted in a very well known 2008 lawsuit entitled Cook v. Public Storage Inc., in which the owner/operator was sued by the parents of a tenant, who happened to also store some of their belongings in the tenant’s self-service storage units.  The new law allows only the “lessee” (tenant) to bring such a lawsuit.

For those of you owning and operating self-service storage facilties and units I hope the new rental agrrement, Notice of Default #1, and Notice of Default #2, prove helpful in assisting that you follow the applicable laws.

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Wisconsin Supreme Court Rules Against Landlord in Maryland Arms Case and Chooses To Avoid Answering The Bigger Question

Jul 14

Posted by Tristan R. Pettit, Esq. in Caselaw, Rental Agreements, Tenant Damage | 6 Comments

The Wisconsin Supreme Court filed its opinion in this very important case on July 7, 2010.  While the majority opinion ruled against the landlord it did not go so far as to say that a landlord and tenant could not allocate liability for damage (when neither party was negligent in causing the damage) in their rental agreement. 

If you would like to review the specific facts of the case and the arguments made by both sides please revisit my posts of May 29, 2009 and October 15, 2009.

The Court was split, so there is a majority opinion, a concurring opinion, and a dissenting opinion.  So if you are brave enough you can read all three opinions which encompass 37 pages and can be read here.  The Wisconsin Law Journal provides a very good summary of the decision if  you are not feeling ambitious enough to read all 37 pages.

As an attorney who primarily represents landlords, I must admit that I had a mix of emotions after I finished reading the opinion.  I was upset that the majority opinion held that the landlord should be responsible for damage to his rental property that was caused by the tenant leaving her hair dryer plugged in overnight.  I was also frustrated by the fact that the major issue in the case — whether or not a landlord and tenant can allocate liability through the language of the rental agreement — was not addressed by the majority opinion, thus providing little guidance to landlords in the future.  On the other hand I was also grateful that the majority decided to “pass the buck” and not address this issue becasue, quite frankly, if the majority had addressed that issue, I believe they would have said “no” a landlord cannot allocate liability on a tenant for damage that was not casued by the negligence of the tenant.

The majority opinion held that the landlord should be held responsible for the damage because the rental agreement (which was drafted by the landlord) was ambiguous when it came to who would be held liable for damage in a situation where neither the tenant not the landlord were negligent in causing the damage.  The majority rested its decision on a very well established principle of contract law that any ambiguity in a contract  should be construed against the drafter of the contract.  The majority said that since the contract terms did not unambiguously state that the tenant would be liable for the damage under the specific fact situation in this case, then the landlord should be liable for the damage.

The majority declined to address the very important issue that the AASEW and other landlord associations were concerned about in this case — whether a landlord can add a lease provision assigning liability to a tenant for damages (when the damages is not caused by the tenant’s negligence) or whether doing so would be a violation of Wis. Stat. sec. 704.07.  So essentially the “Supremes” chose to dodge the issue, which in effect means that nothing prevetns a landlord from allocating liability to a tenant for such damage in a rental agreement under similar facts.  What this also means is that should a landlord make such an allocation and hold a tenant responsible for similar damage, the tenant can argue that such contract language violates sec. 704.07, and the courts will have no guidance as to how to rule. 

It was a missed opportunity by the Supremes to add to Wisconsin Landlord-Tenant law.  However, based, on the tortured analysis (my view) of the majority opinion, if the court had addressed the allocation of liability issue it would have most likely resulted in a holding that would not allow a landlord and tenant to allocate liability — which would have been even worse.  So in the end maybe it was best that the issue was not addressed.

Justice Ziegler, who agreed with the majority opinion, wrote a concurring opinion to add that  her view of Wisconsin law is that a landlord and tenant are not prohibited from allocating liability by contract as long as it is done clearly (i.e. no ambiguity) and is otherwise enforceable by law.

The dissenting opinion, which begins on page 18 and is authored by Justice Prosser, stated that not only are a landlord and tenant allowed to allocate liability in a rental agreement but that that is exactly what the parties to this lawsuit did and that the majority opinion is ignoring the clear meanign of the language in the rental agreement.  The dissent did not find the lease to be ambiguous at all.  The dissent, quite correctly in my opinion, points out the absurd nature of the majority opinion by saying that ”imposing responsibility on the landlord for damage caused by a tenant, when the landlord cannot control risks created by the tenant” (like keeping a hair dryer plugged in overnight) defies economic logic.

The dissent, being very pragmatic, actually takes the time to address what the practical effect the majority decision will have on landlords by stating, “When the landlord is made responsible for abnormal damages that is actually caused by tenants, the landlord must spread the resulting expense among all tenants by charging higher rent.  When a tenant is made liable for damage that is caused by that tenant, the landlord is better able to control rent and the tenant has an economic incentive for prudent stewardship of the premises.” 

Which of the three opinions seem more reasonable and logical to you?

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BLOG COMMENT: What If Tenant Does Not Give You Proper Notice To Vacate? . . . and Other Questions.

Apr 5

Posted by Tristan R. Pettit, Esq. in ATCP 134, Rental Agreements | 4 Comments

I recently received a very good question through my blog but because it was posted under my “About The Author” section I don’t think enough people would see it so I decided to reprint it as a post.

THE QUESTION:

Good Morning,
I will start by saying thank you for this forum, I find it very helpful and one of a kind.  I know you must be very busy but I was hoping you could point me in the right direction regarding a question I have.  I am a landlord and I had tenants move without giving a 90 day notice which was one of the provisions I set within their lease.  I think this is a breach of contract and if so can I to take them to court?  Would it still be filed by small claims, and is there a time limit I must file within?  Can I even file for this?  Thanks for your time.

THE ANSWER:

Thank you for your kind words and I am happy to hear that my blog is helpful to you.

You did not mention if your rental agreement was a periodic tenancy (month to month or something similar) or a lease for term (1 year lease etc.).  I will assume that it is the latter.

If a tenant breaks a lease for term and moves out prior to the ending of the term a landlord has a duty to make reasonable efforts to re-rent the unit.  The tenant will remain responsible for paying rent if the landlord is unable to find a tenant to re-rent.  The tenant will also be responsible for paying the costs incurred by the landlord to re-rent the unit.  The applicable statute dealing with this issue is Sec. 704.29, Wis. Stats.

If you have a term lease that states the tenant must give 90 days notice if they plan to move out at the end of the lease term and the tenant completes the lease term and then moves out but fails to give the landlord notice then you have an entirely different situation then when a tenant breaks a lease and moves out early.  In this situation the tenant completed the full term and actually did not breach the lease.  Because it was a lease for term and the tenant completed the full term of the lease the landlord cannot hold the tenant responsible for an additional 3 month’s of rent (over and above the lease term) just becasue the tenant failed to give the 90 day notice — the reason being that the tenant did complete the term of the lease.  Such a notice provision in lease is legal and are included to assist the landlord so that the landlord will be alerted by the tenant if the tenant intend to leave at the end of the term BUT a landlord should not solely rely on the tenant to provide that notice.  It is the landlord’s job to determine whether or not a tenant intends to enter into a new lease after the full term of the initial lease is completed.

It is good practice for a landlord to send a reminder to the tenant prior to the 90 days notice period (or whatever notice is set forth in the rental agreement) and either (1) advise the tenant that the lease will not be renewed and providing the tenant with move out instructions, or (2) include a new lease and ask the tenant to sign the documents and return them within X days if they intend to stay for another term.  If the tenant does not return the newly signed lease to the landlord within the requisite time period then the landlord may choose to follow up with a telephone call to the tenant if s/he wants to but it is not necessary and the landlord may assume that the tenant will not be renewing the lease and the landlord should began to advertise and make efforts to re-rent.

To try and hold the tenant responsible for an additional 90 days rent beyond the completed rental term because the tenant did not provide the landlord with the 90 day notice that they would be vacating at the end of their lease would be in violation of both ATCP 134.09(3) and Sec. 704.15, Wis. Stats., regarding “automatic renewal clauses.”

To address the second issue that you raised in your comment (assuming it is not moot because of the above answer) small claims has jurisdiction over any civil lawsuits that are seeking $5,000 or less in damages.  So if you were attempting to collect 3 months of rent from a tenant (and they have already moved out thus negating the need to file an eviction) then as long as the 3 month’s of rent is less then $5,000 you would file that collection action in small claims.  See sec. 799.01(d), Wis. Stats.  If you were seeking damages greater than $5,000 then you would need to file suit in large claims and pay the higher filing fee.

Addressing the next issue raised in your comment, individual persons are allowed to represent themselves in court whether in large claims or small claims (whether or not that is advisable is a separate question that I will not address).  Business entitites (corporations, LLC’s etc.) are not allowed to be represented in large claims lawsuits by a non-attorney — you would need to hire a lawyer to represent your business entity in large claims. 

In small claims actions, the law carves out a small exception and will allow a business entity to be represented in court by a full-time employee of the business entity.  Sec. 799.06(2), Wis. Stats.  Milwaukee – more than any other county – is enforcing this strictly and requires a copy of a W2 from the employee issued by the entity to verify this.  Managing members or sole members of an LLC are not considered to be a full-time employee of the LLC unless they are paid income by the LLC.

For additional discussion on this topic please refer to my May 15, 2009 post, July 21, 2009 post, July 30, 2009 post, and Sept. 2, 2009 post.

Your final question, asks if there is a time limit in which you must file a lawsuit against your tenants for failure to give the requisite 90 day notice to you prior to vacating.  As I mentioned above, depending on your specific fact situation and the type of rental agreement you are using, you may not even have a claim against your tenant for the 3 month’s rent.  However, assuming you do have a claim it would be a claim for breach of contract and the statute of limitations for breach of contract claim is 6 years from the date of the breach.

I hope that helps

T