Archive for category Rental Documents

Revised Wisconsin Legal Blank Forms Will Be Available on Monday, February 17th

As I hope most of you are aware, Wisconsin passed a new law that will great affect landlord-tenant law – Act 76.  Whenever the law is changed, there is usually a need to revise and/or update your rental documents to comply with the law.  That is definitely the case with the changes from Act 76.

As such, I have had to update many of the rental documents that are sold at Wisconsin Legal Blank.

The new law becomes effective March 1, 2014.  So for those of you that use the WLB forms you will want to use these revised forms for any new tenancies that commence on or after March 1, 2014.

The following Wisconsin Legal Blank forms have been revised:

 

1.   Residential Rental Agreement (#19)

The changes made to this form are very important.  As of March 1, 2014, it will be required that all residential rental agreements include certain language that provides notice of domestic abuse protections.  Act 76 states that a rental agreement will be void and unenforceable if it allows a landlord to terminate a tenancy for a crime and the rental agreement fails to include the domestic violence notice language.  As a result of having to add this additional language verbatim the Residential Rental Agreement form will be much longer.

Several other changes and modifications were made to this form as well including:

a.   Revision of the “Extermination Costs” section

b.  Addition of a “Non-Waiver” section

c.  Addition of a “Criminal Activity Prohibited” section

d.  The “Notice to Vacate” section was modified to clarify the law better regarding terminating a lease for term.  The 30 day notice required to terminate a month to month tenancy was changed to 28 days to coincide with Wisconsin statutes.

e.  The “Abandoned Property” section was modified to comply with the law changes in Act 76

f.  Additional language was added to clarify that operating a business or providing child care services are not allowed in the rental unit.

g.  Additional language was added in the section entitled “Security Deposit” to state that if the repair costs for tenant damages are not known in time for the sending of the security deposit transmittal letter that a “good faith” estimate may be used.

f.  Clarifying language was added to the “Breach and Termination” section.

 

2.   Residential Lease Renewal or Notice To Vacate (#970) — Was updated to comply with Act 76′s changes regarding abandoned property.

 

3.  Notice of Rent Increase (for Month to Month Tenant) (#332) – Was updated to comply with Act 76′s changes regarding abandoned property.

 

4.  Check-In / Check-Out Sheet (#997 and #993) — Was updated to to comply with Act 76 with regards to the title and the “When To Use” explanation as well as some stylistic changes.

 

5.  Rental Application (#996) – Eliminated some sections that were not needed and could possibly cause problems for landlords, added some additional instructions for applicant, restructured the layout of the form, and reworded much of the language at the bottom of the signature page.

 

6.  Nonstandard Rental Provisions (#984) — Rewrote the “When To Use” section to better explain the purpose of a NSRP document, removed the “Miscellaneous Matters” section of the form, revised the statutory references, and fixed some grammatical issue.

 

I can’t stress enough how important it is to use updated/revised forms when they become available.  I still see landlords using the Residential Rental Agreement that was drafted over 10 years ago.  There are important reasons that rental documents are updated: (1)  To comply with law changes, (2) To eliminate problem language that has caused landlords problems.  Each new version of these forms are supposed to make your life easier.  Using old forms is just an invitation for problems.  Effective, March 1, 2014, failing to use the revised Residential Rental Agreement may result in your Agreement being declared void and unenforceable.

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New & Improved Nonstandard Rental Provisions Form Available at Wisconsin Legal Blank

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As many of you know, I draft the various landlord-tenant law forms that are sold at Wisconsin Legal Blank Co., Inc.  In light of the recent court of appeals decision (Keyes & Gruner v. Waldbillig et. al) that I referenced in an earlier blog post, I have made some additions and revisions to WLB’s Nonstandard Rental Provisions Form.  As such, a new and improved Nonstandard Rental Provisions form is now being sold at Wisconsin Legal Blank.

The date of the new form is May 29, 2013.

I would strongly encourage landlords and management companies to start to using the new form as soon as is legally possible.

The new form includes an added provision that allows alandlord to deduct re-rental costs as allowed under Wis. Stats. sec. 704.29 from a tenant’s security deposit – this was the specific deduction that was at issue in the Keys & Gruner v. Waldbillig et. al. Court of Appeals case referenced in my earlier post.

The new Nonstandard Rental Provision form also includes a provision addressing the withholding of “holdover” damages as set forth in Wis. Stats. sec. 704.27, from a tenant’s security deposit.

Finally, I made some grammatical changes and reworded a few provisions in the old Nonstandard Rental Provisions form to make them more straightforward and clear.

So to best protect yourself, I would encourage you to pick up the new Nonstandard Rental Provision form dated May 29, 2013 from Wisconsin Legal Blank.

DISCLAIMER:  For those of you who may think that I am “pushing” the new Nonstandard Rental Provisions form because I receive a portion of the sale proceeds, that unfortunately is not the case : ).  I am paid up front by WLB for my time to draft the forms and revise them as needed based on changes in the law.  So I have no vested interest in you purchasing the new form other than I don’t want you to be caught in the same situation as the landlord was in the Keyes & Gruner v. Waldbillig  et. al court of appeals case. : )

 

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Court of Appeals Decision Reminds Landlords To Review Their Nonstandard Rental Provisions Before Making Deductions from A Tenant’s Security Deposit

The Wisconsin Court of Appeals, in an unpublished decision dated May 9, 2013, held that a landlord wrongfully withheld a portion of his tenants’ security deposit for costs incurred when attempting to re-rent the rental unit.

As I have mentioned in a prior post, Wisconsin law essentially allows a landlord to deduct only three things from a tenant’s security deposit: (1) damage, waste, or neglect, (2) rent, (3) utilities.  Any other items that a landlord would like to deduct from a tenant’s security deposit must be included in a separate written document entitled “Nonstandard Rental Provisions” (NSRP), in order to be legally deducted.  So if what you want to deduct something from your tenant’s security deposit and it is not one of the 3 items listed above and not set forth in your NSRP, it will most likley be considered an illegal deduction.

In Keyes and Gruner v. Waldbillig et. al (2012AP1180), two tenants broke their lease with their landlord by moving out prior to the last day of the lease term.  The landlord wrote the tenants a letter explaining to them that there would be charges against the their security deposit to cover the cost of advertising and marketing the apartment and that his property management company charged him $100 per showing to show the unit to potential new tenants.

The landlord’s managment company showed the tenants’ vacated unit 6 times for a total of $600 in costs to the landlord prior to finding a new tenant for the unit.  The landlord sent the tenants their security deposit itemization letter explaining that he witheld $600 of their security deposit to cover the costs to re-rent the unit.

Under Wisconsin law, specifically Wis. Stats. 704.29, if a tenant breaks their lease or is evicted, a landlord is required to make reasonable efforts to mitigate the tenant’s damages by trying to re-rent the unit.  The same statute also says that a tenant who has broken his/her lease or is evicted can be held responsible for all lost rent and all reasonable expenses of listing and advertising the vacant unit which were incurred by the landlord while trying to re-rent the unit.

But this landlord failed to have a NSRP that allowed him to deduct for the re-rental costs.  As an aside, if the landlord had just opted to withhold the lost rent incurred while trying to re-rent the unit from the tenants’ security deposit instead of the re-rental costs, he also most likley would have prevailed even without having the NSRP regarding re-rental costs since rent owed is an allowable security deposit deduction.  Instead, the landlord deducted $600 in showing fees from the tenants’ security deposit even though he did not have a NSRP in place that allowed him to do so.

Had the landlord had such a NSRP in place, it is my opinion that his deductions from the tenants’ security deposit would have been proper (assuming that the court would agree that $100 per showing is reasonable) and he would not have lost the case and been required to pay double damages and the tenants’ attorney’s fees.

The moral of the case is that just because the law allows a landlord to hold tenants responsible for the costs to re-rent if they break their lease, does not mean that the landlord can legally withhold those costs from the tenants’ security deposit.  In order to be able to legally do that, the landlord must have a NSRP in place which allows for the deduction of re-rental costs allowed under Wis. Stats. 704.29.

Does your NSRP contain such a clause?  Do you even have a NSRP docuement?  If not you may want to contact Wisconsin Legal Blank, which sells a very good Nonstandard Rental Provisions document which I have drafted, that will protect you.

 

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Top 10 Pitfalls That Landlords Should Avoid

Those of you that missed the last AASEW membership meeting on Monday, April 15, 2013, missed a great meeting and a great presentation.  The featured presenter was John “Dr. Rent” Fischer, a Wausau-area landlord and rental property manager, who spoke to a packed house that Monday.  John’s presentation was dynamic, educational and at times pretty darn funny.

With John’s permission, I am providing you with a link to John’s handout from the meeting which was entitled “Top Ten Pitfalls That Landlords Should Avoid.”

Like any good Top 10 list (a la David Letterman), John presented these pitfalls in reverse oreder based on importance.  The pitfalls to avoid included:

10.  Mailing the 5 Day Notice

9.  Digging The Hole Too Deep

8.  Incomplete Applications

7.  Not Asking The Right People (about your rental applicant)

6.  Auto-Renewing A Lease

5.  14 Day Notice (or NOT)

4.  “Do-It-Yourself” Leases or Rental Forms

3.  Misuse of CCAP

2.  Carpet Cleaning

1.  That Lease is HOW LONG?

As John stated during his presentation, there are a lot of things that are beyond our control that make life as a landlord very difficult at times.  As such, we certainly do not want to make life more difficult for ourselves based on a lack of knowledge of landlord-tenant laws . . . unless we are masochists, that is.

The AASEW has another great meeting scheduled for May 20, 2013 at 7 pm at the Best Western Midway in Brookfield about “How To Finance Real Estate Transactions In The Current Economy.”

 

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So Are Illegal Provisions In Wisconsin Residential Rental Agreements Severable Or Not?

 

 

SHORT ANSWER:  Yes . . . and No.

LONG ANSWER:   The newly passed law referred to as the Landlord’s Omnibus Law (Act 143) adresses this issue but provides contradictory answers.

In newly created sec. 704.02 of the Wisconsin Statutes, the law states quite clearly that the provisions of a rental agreement or lease are severable.  Specifically, it states that if any provision of a rental agreement is rendered void or unenforceable by reason of any statute, rule, regulation or judicial order, the invalidity or unenforceability of that provision does not affect the other provisions of the rental agreement that can be given effect without the legal provision.

So according to sec. 704.02, the answer to question posed in the title of this blog post would be a resounding “Yes.”

BUT . .

In the very same law, the legislature also decided to create a new section 704.44 that copies a regulation from ATCP 134 entitled (Residential Rental Provisions), specifically ATCP 134.08 entitled “Prohibited Rental Agreement Provisions,” which sets forth 7 things that cannot be included in a Wisconsin residential rental agreement – which I affectionately refer to as the 7 Deadly Sins.

The legislature also decided to add an 8th and 9th provision that cannot be included in residential rental agreements in Wisconsin.  So now I have to refer to the outlawed provisions as “The 9 Deadly Sins” which just doesn’t have the same ring to it.  : (

The 9 provisions that if included in a residential rental agreement will render the agreement void are:

1.   Any provision that allows a landlord to do any of the following because a tenant has contacted an entity for law enforcement services, health services, or safety services: (a) increase rent, (b)  decrease services, (c)  Bring an action for possession of the premises, (d)  refuse to renew a rental agreement, (e)  threaten to take any action under pars. (a) to (d).  This is one of the new clauses added by the legislature is Act 143.

2.  A provision that authorizes the eviction or exclusion of a tenant from the premises, other than by judicial procedures as provided under ch. 799.

3.  A provision that provides for an acceleration of rent payments in the event of tenant default or breach of obligations under the rental agreement, or otherwise waives the landlord’s obligation to mitigate damages as provided in s. 704.29.

4.  A provision that requires payment by the tenant of attorney fees or costs incurred by the landlord in any legal action or dispute arising under the rental agreement.  This subsection does not prevent a landlord or tenant from recovering costs or attorney’s fees under a court order under ch. 799 or 814.

5.  A provision that authorizes the landlord or an agent of the landlord to confess judgment against the tenant in any action arising under the rental agreement.

6.  A provision that states that the landlord is not liable for property damage or personal injury caused by negligent acts or omissions of the landlord.  This subsection does not affect ordinary maintenance obligations of a tenant under s. 704.07 or assumed by a tenant under a rental agreement or other written agreement between the landlord and the tenant.

7.  A provision that imposes liability on a tenant for any of the following: (a) personal injury arising from causes clearly beyond the tenant’s control, (b) property damage caused by natural disasters or by persons other than the tenant or the tenant’s guests or invitees.  This paragraph does not affect ordinary maintenance obligations of a tenant under s. 704.07 or assumed by a tenant under a rental agreement or other written agreement between the landlord and the tenant.

8.  A provision that waives any statutory or other legal obligation on the part of the landlord to deliver the premises in a fit or habitable condition or to maintain the premises during the tenant’s tenancy.

9.  A provision that allows the landlord to terminate the tenancy of a tenant if a crime is committed in or on the rental property, even if the tenant could not reasonably have prevented the crime.  This is the other new clause added by the legislature in Act 143.

So according to sec. 704.44, the answer to question posed in the title of this blog post would be “yes  . . . unless it is one of the 9 deadly sins which if included in a Wisconsin residential rental agreement or lease would not be severable and in fact would render the entire agreement void.”

Why can’t the law be more simple and clear?

 

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Newly revised Landlord-Tenant Law Forms Available at Wisconsin Legal Blank on April 2 and April 3, 2012.

Wisconsin’s Landlord Omnibus Law (Act 143) went into effect today – April 1, 2012.  As a result of the new law it was necessary for me to update many of the landlord-tenant law forms that are sold at Wisconisn Legal Blank.

 

As of Monday, April 2, 2012, the following revised forms will be available:

1.   Residential Rental Agreement  (Form #19)

-  Added language required in order for landlord to be able to dispose of tenant’s abandoned property immediately after they vacate.

-  Added language about any illegal clause in the rental agreement being severable from the n9on-illegal clauses.

-  Correction of some grammar and punctuation mistakes.

2.   Nonstandard Rental Provisions (Form #984)

-  Added langauge required in order for landlord to be able to dispose of tenant’s abandoned property immediately after they vacate.

-  Revised language as to when landlord must return security deposit or supply security deposit itemization letter when tenant vacates prior to end of lease term.

-  General revisions to the language of each nonstandard rental provision to comply better with the holding in the Tschantz case.

3.  Notice of Rent Increase in Month to Month Tenancies (Form #332)

-  Added langauge required in order for landlord to be able to dispose of tenant’s abandoned property immediately after they vacate.

4.  Residential Lease Renewal or Notice To Vacate (Form #970)

-  Added langauge required in order for landlord to be able to dispose of tenant’s abandoned property immediately after they vacate.

5.   Tenant Inspection Sheet (Check-In – Check-Out Form)

-   Revised the title of this form to comply with the title used in the new law.

NOTE:  It is now required that a landlord give this document to tenant’s upon occupancy.  So if you have not previously used this document you need to start doing so now.

 

As of Tuesday, April 3, 2012 the following revised forms will be available for purchase at Wisconsin Legal Blank

6.   5 Day Notice To Pay Rent or Vacate (Form #328)

-  Changed the word “may” to “shall” when advising the tenant that landlord is entitled to holdover damages of, at a minimum, double the daily rent for the holdover period.

-  Added a line for “Total Amount Due”

7.   5 Day Notice To Correct Breach or Vacate (Form #330)

-  Changed the word “may” to “shall” when advising the tenant that landlord is entitled toholdover damages of, at a minimum, double the daily rent for the holdover period.

8.  5 Day Notice To Vacate – Nuisance (Form #329)

-  Changed the word “may” to “shall” when advising the tenant that landlord is entitled toholdover damages of, at a minimum, double the daily rent for the holdover period.

9.   14 Day Notice To Vacate for Failure To Pay Rent (Form #768)

-  Changed the word “may” to “shall” when advising the tenant that landlord is entitled toholdover damages of, at a minimum, double the daily rent for the holdover period.

-  Added a line for “Total Amount Due”

10.   14 Day Notice To Vacate For Breach of Rental Agreement (Form #767)

-  Changed the word “may” to “shall” when advising the tenant that landlord is entitled toholdover damages of, at a minimum, double the daily rent for the holdover period.

11.   28 Day Notice Terminating Tenancy (Form #327)

-  Changed the word “may” to “shall” when advising the tenant that landlord is entitled toholdover damages of, at a minimum, double the daily rent for the holdover period.

12.  30 Day Notice To Correct Breach or Vacate (Form #325)

-  Changed the word “may” to “shall” when advising the tenant that landlord is entitled toholdover damages of, at a minimum, double the daily rent for the holdover period.

 

Sometime in the near future the following revised form will be available at Wisconsin Legal Blank:

13.   Rules & Regulations (Form #994)

-  Will inlcude major revisions including language, organization and format.

-  Will include revised language regarding a tenant’s responsibility for the actions of their guests, invitees and family members that will comply with the law and not run afoul of “Deadly Sin #8″ created by the new law.

 

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

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

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

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

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

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

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

So what do we have?

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

1.  Moratorium on evictions

2.  Severability of rental agreement provisions

3.  Disposition of abandoned property

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

5.  Acceptance of past due rents

6.  Withholding from and return of security deposits

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Here is the language of the new law:

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

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

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

 

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