Archive for category Screening Tenants

Screening Prospective Tenants Is a Must — That Includes Commercial Tenants

Those of you that have attended my seminars or read prior blog posts of mine are well aware that in my opinion screening prospective tenants is the single most important part of landlording.

These sentiments apply to commercial tenants as well as residential tenants.  Just because your tenant is a corporation, LLC or some other business entity does not make make them legitimate.

A corporate tenant can also fail to pay rent, damage your property, and otherwise be a nightmare.  In fact some tenants can hide behind an empty shell of a corporation (or partnership or LLC) and actually turn out to be a commercial tenant from hell.

I was recently interviewed by Colleen Henry of Ch. 12 News about one such “professional” tenant from hell.  This tenant moved her business into her landlord’s rental unit and refused to move out even though she had not paid rent for months.  She bounced her check for the security deposit.  She bounced her check for the 1st month’s rent.  She refused to make any other rental payments.  She ignored her landlord’s pleas to pay rent or move.  Once her landlord began the process to evict her, she filed bankruptcy.  By doing so all creditors, including her landlord, were precluded from attempting to collect from her (including the filing of an eviction action against her) until they received permission from the bankruptcy court.  And this wasn’t the first landlord that this tenant did this to.  She had done this to landlords before.

Tenants such as this one make good landlords want to get out of the business.

My recommendation to landlords who are or have been in this difficult situation is not to give up and get out of the business but rather take the time to educate yourself about landlord tenant law so that you are better equipped to handle such a situation in the future.  Chances are the better educated you are the better chance that you will not rent to the tenant from hell because you will have learned enough to know that you ALWAYS, ALWAYS must screen your tenants before signing a lease and/or handing them the keys to your property.

 

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New CCAP Bill Introduced

A new CCAP bill (Senate Bill 526) was introduced on January 30, 2014 by Senators Grothman, Taylor, Schultz, Harris, and Risser.  A public hearing has already been held.

Current law allows for any criminal charge to remain on CCAP even if the charge was dismissed.

This new bill, if passed, would require the Director of CCAP to remove a case involving a misdemeanor or felony from CCAP within 120 days after being notified that the case or charge has been dismissed (and not read into the record for the purposes of sentencing the defendant), the defendant was found not guilty, or the case was overturned on appeal and dismissed.

I am a fan of open records and not removing information about open records that are on CCAP.  While I personally do not have a problem with a criminal charge being removed if the defendant was found not guilty or the case was overturned on appeal and dismissed, I still believe that doing so still interferes with open records, but I can bite my tongue nonethless.

On the other hand, I have a huge problem (and concern) with a criminal case being removed from CCAP solely because it was dismissed.

Many people unfamiliar with the criminal justice system assume that if a case was dismissed that that means that it was filed in error.  While that certainly does occur, that is not the typical situation in which a case is dismissed.  The majority of criminal cases are dismissed, not becasue they were impropely filed, but rather because the victim witness did not appear at trial to testify against the defendant and therefore the State could not prove their case.  This happens quite often especially in crimes involving domestic violence.

When I was younger (and stupider) I used to do some criminal defense work.  I finally quit being a criminal defense attorney after I represented a young man that was charged for the 8th time with Domestic Violence – Battery.  It was alleged that he beat up his girlfriend.  All 8 times it was alleged that he beat up his girlfriend.  I attempted to meet with my client to prepare for trial.  He refused, just smiled, and told me that it was not necessary.  I told him that I could not represent him properly if we didnt prepare.  He told me again not to worry and that there would not be a trial.  I reminded him that there was a “no contact” order in place and that he was not allowed to contact the alleged victim so how would he know if she was or was not going to appear in court to testify against him.  He smiled and said he would never do anything against the law.

The trial date came and the victim did not show.  As a result the District Attorney was forced to dismiss the charge against my client as without the victim the DA could not meet their burden.  My client smiled at me and said “See, I told you you didnt need to worry – no trial.”  He then walked out of the court room.

Even though I was young and stupid, I was not naive.  I knew very well that this individual most likley had talked to the victim and either threatened to harm her if she came to court to testify against him or he actually did harm her to make sure she understood.  The same thing probably happened the prior 7 occassions as well.

I would not want to rent to this person.

Under this new CCAP bill, those 8 criminal charges for DV-Battery against my client would be removed from CCAP and a future landlord would not even know they had been filed or that s/he would be renting to a person that felt it was acceptable to beat up his girlfriend whenever he couldn’t control his anger management issues.

If you have similar examples from propspective rental applicants that you have screened recently, please forward the details to me directly at tpettit@petriestocking.com.  Let’s make sure the politicians are aware that this type of behavior does actually occur and how it may hurt our industry, if such a law is passed.

Thanks

T

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CCAP Is Under Attack Again

When Senator Marlin Schneider lost re-election a few years ago, I thought that the attacks against Wisconsin’s Consolidated Court Automation Programs (CCAP) would disappear.  Well they did — for a while.  But Senator Lena Taylor along with Representatives Goyke, Sargent, Kessler, Hebl and Pope haven taken up the torch and are trying to prevent the public from accessing CCAP once again via Senate Bill 234/Assembly Bill 253.

These two bills were introduced on July 31, 2013, and if passed will negatively affect access to “open records” in the following ways:

1.  Two separate CCAP databases would be created.  One for a privileged few and another with less information for the general public.  The current CCAP database would only be available for judges, court commissioners, other court, state, local, agency employees, law enforcement and law enforcement employees, lawyers, journalists, licensed debt collectors, employees for financial institutions, and realtors — and landlords (see below correction note).  A second more restrictive database would be available for everyone else.

2.   The more restrictive database accessible by the general public would only provide case information after a court has done one of the following:  (1) made a finding that a person is guilty of a criminal charge, (2) made a finding that a person is liable in a civil matter, (3) ordered a judgement of eviction, or (4) issued a restraining order or injunction.  If one of those 4 things did not yet happen — the general public will not even be able to access that information.

3.   All information related to a criminal or civil case in which a finding or order related to the case or charge is reopened, vacated, set aside, or overturned on appeal, would be removed from the more restrictive CCAP database.

4.   If a user searches for a person’s name on CCAP and then denies that person employment, housing, or another public accommodation, the user must inform the person that a CCAP search was performed on them.  Failure to tell the person could result in a $1,000 fine.

5.   Upon receipt of a written request, the Director of State Courts must remove from the general public database, any information relating to a case if there was no finding of criminal guilt or civil liability, order of eviction, or issuance of a restraining order, or if the finding or order was subsequently reopened, vacated, set aside, or overturned.

What does this mean to landlords and property managers? ————— See correction note at end of post.

Short Answer:  You will have a much more difficult time screening any prospective tenants.  And as a result of being able to review only select information you may end up renting to someone that you otherwise would not have, resulting in increased costs to you such as eviction costs, damage to your property, lost rent.

Long Answer:

You will be unable to learn about any pending criminal cases, eviction cases, money judgment cases, restraining orders, that an applicant might have pending until the case is concluded and has resulted in a judgment or conviction.

So if the person that has applied to live in your rental property is currently charged with a drug crime, you will have no way of knowing that — lucky you.  Nor would you be aware that the reason an applicant is applying to rent your unit is because their current landlord is currently evicting them.  You would also be unable to learn that an applicant is currently being sued by their landlord for damaging the rental property they just left.  You also would be unable to learn that the applicant is being sued for not paying other bills.  Essentially, you would lose access to information that would be very helpful in determining if this applicant would be a successful tenant with you.

If the applicant that wants to rent your property has been evicted in the past and a motion to reopen the judgment of eviction has been filed when you are evaluating the applicant’s application — that information would be off limits to you.  If the applicant ever had an eviction judgment or money judgment case reopened and vacated  — regardless of the reason — you also would not be able to learn that information.  Believe it or not, some courts have been known to grant a motion to reopen/reconsider and vacate a judgment of eviction, solely because the tenant already vacated the unit at the time they filed to motion to reopen/reconsider.  If this bill were to be signed into law, and that was to occur, you the landlord, would never even have the chance to learn that there was an eviction judgment against the applicant you are screening.

If you use CCAP as part of your screening process (is there any landlord in Wisconsin who doesn’t?) you must advise the tenant (in writing to CYA) that you performed a CCAP search on them if you end up not renting to them.  Failing to so so could end up costing you $1,000.

A person could write the Director of State Courts and ask them to remove any information on CCAP regarding any criminal case ever filed against them if it did not result in a conviction.  So the individual that I represented 17 years ago when I was a young lawyer trying to decide is I wanted to be a criminal defense lawyer, who had been charged with 8 domestic violence -battery misdemeanor counts over the course of 3 years for beating his girlfriend — never to be convicted of any of them because the victim was too scared to appear in court to testify — would be able to remove any mention of  being charged with those crimes.  Do you think he would be a good tenant?

In the case of a civil matter — such as an eviction or money judgment — if there was no finding of liability or an eviction judgment entered than any reference to that case would be removed from CCAP, upon receipt of a request to do so by the person.  So if the person applying to rent your unit has had prior evictions filed against them in which the landlord decided to not proceed because the tenant moved out before the court date, that information could be removed.  Remember all those stipulated dismissals that you entered into with a tenant to vacate, so that you could avoid a trial?  If this bill passes, none of those would show up in the general population CCAP database because they were dismissals.

I guess “public records” are really not so “public” after all.  Hopefully this bill will not see the light of day and will die a quick death.

CORRECTION 08/05/13 —- I received a t/c from Rep. Evan Goyke, one of the authors of the bill, and he pointed out that under his bill “landlords” would be able to access the full version of CCAP as they would be included in the group of “chosen few” who would still be able to access CCAP as we currently know it.  See proposed sec. 758.20(3)(a)(8).   I appreciate him calling me to point that out and I apologize for inadvertantly posting incorrect information about the bill

 

 

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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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East Side Landlord “Think Small” Seminar Event on March 13th

Make plans to attend the fourth East Side Landlord Think Small event hosted by UWM!

This event is free and open to all interested landlords, with a special focus on Milwaukee’s East Side.

This spring’s event promises to be very engaging with featured presenter Attorney Tristan Pettit, who focuses his practice on representing landlords and management companies in landlord-tenant law matters.

Topics will include screening potential tenants and recent updates to landlord-tenant laws in Wisconsin.

As always, there will be networking time to share ideas with fellow attendees, Q&A time with the presenter, and light refreshments will be served.

Event Details

Date: Wednesday, March 13, 2013

Location: Chapman Hall on the UWM Campus, 2310 E Hartford Ave, Regents Room (2nd Floor)

Time: 4:30pm-6:00pm

Please RSVP to Heather Harbach at harbach@uwm.edu.  Your registration helps us in our planning for this event. Please feel free to share this with other landlords that might find this session interesting! If you have further questions, please contact Heather Harbach, UWM Neighborhood Relations Liaison by e-mail at harbach@uwm.edu or by calling 414-229-4451.

Hope To See You There!

 

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

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

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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