Archive for category Tenant Damage

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

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!

Tags: , ,

Landlords May Want To Pursue Tenants for Holdover Damages As Well As Other Damages

After a landlord has had her rental property returned through an eviction action or the tenant vacating of their own accord, a landlord has the option of pursuing the ex-tenant for money damages.  I have explained in previous posts, that a typical eviction lawsuit includes three causes of actions against the tenant.  First, return of the rental property (“eviction”).  Second, a claim for past due rent and other fees allowed under the rental agreement.  Third, physical damages to the rental property and holdover damages.

When it comes to the third claim, I often see landlords pursue physical damages to the unit (and cleaning charges) and fail to even consider pursuing holdover damages.  This is often because the landlord is not aware that holdover damages exist and/or she is unfamiliar with them.  Hopefully this blog post will rectify that situation.

Holdover damages are allowed per sec. 704.27,Wis. Stats., which states that if a tenant remains in possession of the rental unit without the consent of the landlord after expiration of the lease or termination of the tenancy, the landlord may recover damages from the tenant for the tenant’s failure to vacate the unit within the time required.

Sec. 704.27 further states that, in absence of proof of greater damages, the landlord may recover a minimum damages amount for the tenant’s holdover of twice the rental value apportioned on a daily basis.

A tenant becomes a “holdover” tenant once their tenancy has been terminated and they remain living in the rental premises without the landlord’s consent.  A tenancy is terminated under any number of scenarios.  For example:

1.    A tenancy terminates when when a 5 day notice for failure to pay rent has been properly served on the tenant and 5 days have passed and the tenant has failed to cure the breach or vacate the rental unit.

2.   A tenancy also is terminated when a 14 day notice to vacate due to breach has been properly served on the tenant and the tenant fails to vacate at the end of the 14 days.

3.   A tenenacy terminates when a tenant is under a month to month tenancy and has been properly served with a 28 day notice and the tenant fails to vacate.

4.   A tenency terminates if a lease expires, no renewal has occurred, and the tenant remains living in the rental unit.

Under all of the above situations, the tenant has now become a “holdover tenant” which entitles a landlord to “holdover damages.”

Holdover damages are much more easy to prove up in court than physical damages.  All a landlord needs to do to prove holdover damages is to establish the date that the tenancy terminated and the date that the tenant actually vacated the rental unit.  The rest is just simple math — calculating the daily rent for the period of the holdover.

When pursuing physical damages to a rental unit, a landlord must prove the following:

1.   That the unit was not previously damaged prior to the tenant moving in — this is often done via photographs, video, testimony, or a check-in check-out sheet, or a combination of any of the above).

2.   That the damages were  caused by the tenant or the tenant’s guests or invitees.

3.    That the damages are actually “damages” and not merely normal “wear and tear.”

Maybe you have experienced this yourself, but I have noticed that tenants are readily willing to admit that they did not pay rent, but they will fight you tooth and nail if you argue that they damaged your rental property or failed to clean it prior to vacating.  Once a tenant learns that you intend to pursue them for damages and cleaning costs, out come the multitude of excuses, such as . . .  I didnt’ break that door, my brother did that when he was drunk, you should sue him  . . .  that urine soaked carpeting was like that when I moved in 5 years ago, must’ve been the prior tenant’s cat that used the carpeting as a litter box (even though the carpet is still physically wet 5 years later) . . . etc. etc.

Since tenants often take issue when a landlord pursues them for physical damages, the landlord is often forced to go through with an evidentiary hearing in order to obtain her judgment.  Add to that, the fact that a tenant has the right, at no additional cost, to request a de novo review of the hearing if they do not like the result, and a landlord can expend a lot of time and money pursuing her damage judgment.

Since most tenants are often “uncollectible” it often does not make practical sense for a landlord to go forward.  She will only lose time and money . . . both of which will never be recovered.  Whetehr or not to pursue money damages against a tenant at all is a decision that only the landlord can make based on their specific situation.

When a landlord pursues holdover damages against a tenant there seems to be fewer requests on the tenant’s part for a damage hearing.  Oftentimes, the court commissioner will explain to the tenant what holdover damages are and that they are “statutory” in nature and thus only require  that one factual issue be determined – when the tenant vacated the rental unit.

This is not to say that a tenant won’t still request a hearing if a landlord pursues only holdover damages against them.  They still might (although the frequency of the request is much less than when a landlord pursues physical damages, in my opinion).  And they certinaly may request a hearing if the landlord pursues both holdover damages and physical damages against them.  Nonetheless, even if an ex-tenant does request a hearing, the time spent prepping for the hearing to prove holdover damages, and the exhibits necessary to be introduced at such a hearing, are much less involved than for a damage seeking physical damages

So while tenants may not like holdover damages, the law provides for them and a landlord has every right to avail herself of them.

ADDED 8/2/11 at 5:53 pm — It should be noted that in Milwaukee County I have been told repeatedly that landlords cannot seek both physical damages to the rental unit and holdover damages against a tenant.  In Milwaukee County, the courts have indicated that it is their interpretationof sec. 704.27 that a landlord may only recover holdover damages if the landlord cannot prove greater physical damages to the unit.  I believe this interpretation of the statute to be incorrect.  I believe — just as the commentor below has stated — that a landlord is entitled to holdover damages of twice the rental value apportioned on a daily value as a minimum for the tenatn’s holdover unless she can prove greater damages for the holdover.  Physical damages should be treated separately.  The language “in absence of greater damages” set forth in sec. 704.27 is not referring to physical damages at all.  Nonetheless, a landlord should be prepared that they may be told to choose to elect either holdover damages or physical damages in Milwaukee County.

The Vincenti v. Stewart, 107 Wis. 2d 651, 321 N.W. 2d 340 (Ct. App. 1982) further addresses this issue.  the Court of Appeals refers to the Committee Comments to sec. 704.27, at pages 654-655 of its decision, and explains that the recovery of twice the rental value only establishes a minimum damages amount for a tenent holding over.  The Court explains that in some circumstances greater damages can be proven as a result of the tenant’s holdover.  It is clear in from the Vincenti opinion that the “greater damages” language refers to greater damages due to the tenant’s holdover only and  NOT greater damages in general (i.e. physical damages to the unit).

Tags: , ,

Small Claims Jurisdictional Limit Increased To $10,000

Wisconsin’s small claims jurisdictional limit was increased from $5,000 to $10,000 effective July 1, 2011.  This increase was included in Governor Walker’s 2011-2013 Budget Bill.

The jurisidictional limit for small claims in Wisconsin was set at $5,000 back in 1995 and has remained the same for 16 years.

I see this as a positive change for debt collectors and potentially landlords. 

All eviction actions — regardless of the amount of rent owed — must be brought in small claims court as small claims has exclusive jurisdiction of all eviction actions.  Because of this, a landlord is allowed to receive a judgment for past due rent well beyond $5,000.  So this jurisdictional change will not affect the amount of any past due rent judgement.  But until now, a landlord was limited to obtaining a judgment for $5,000 or less in small claims for any physical damages to the rental property caused by the tenant.  So this increase in small claims jurisdictional limit will be advantageous for landlords in such a situation.

Additionally, this change will also positively affect landlords bringing straight collection actions (which does not include a cause of action for eviction) against  ex-tenants that skipped out owing past-due rent and/or damages greater than $5,000.

Since most tenants are not collectible, I am not sure if this change will greatly affect landlords . . . but it certainly won’t  hurt them. 

It should be noted that this increase in the small claims jurisdictional amount does NOT apply to third-party complaints, personal injury lawsuits, or tort claims.

Tags: ,

Must A Landlord Actually Repair Tenant-Caused Damage Before The Landlord Can Deduct The Cost From A Tenant’s Security Deposit?

This issue keeps raising its head over and over and over . . .  so I feel compelled to address it.  The question:  Must a landlord have completed the repair of tenant-caused damages to a rental unit before being legally able to deduct the repair costs from the tenant’s security deposit?

I personally believe the answer to that question is “No” – the repair work does not need to be completed prior to a landlord being able to deduct the repair cost from the tenant’s security deposit.

Wisconsin law does not provide landlords with a direct answer to this question.

The Wisconsin Administrative Code, ATCP 134, does not address this issue.  This is what ATCP 134 does say:

ATCP 134.06(2)(a), entitled Returning Security Deposit, states that within 21 days after a tenant surrenders the rental premises, the landlord shall deliver or mail to the tenant the full amount of the security deposit held by the landlord, less any amounts properly withheld by the landlord under sub (3).

ATCP 134.06(3), entitled Security Deposit Withholding; Restrictions, lists what items can be deducted from a tenant’s security deposit.  I wrote a blog post on this topic previously.

ATCP 134.06(4), entitled Security Deposit Withholding; Statement of Claims, states that if any portion of a security deposit is withheld by a landlord, the landlord shall, within the time period and manner specified under sub (2) deliver or mail to the tenant a written statement accounting for all amounts withheld.  The statement shall describe each item of physical damages or other claim made against the security deposit, and the amount withheld as a reasonable compensation for each item or claim.

Chapter 704 of the Wisconsin Statutes which deals with Landlord Tenant issues does address the issue.

I am also not aware of any Wisconsin case law that answers the question.

Here are my reasons for believing that it is legal for a landlord to deduct the costs to repair tenant-caused damage from the tenant’s security deposit prior to the repair work being completed.

1.   Nowhere in ATCP 134 does it state that the repair work must be completed prior to the landlord being able to deduct the costs of repair from the tenant’s security deposit.  If the drafters of ATCP 134 meant for repair work to have been completed prior to any deduction being made from a tenant’s security deposit then they had the opportunity to require that in the regulation.  For whatever reason, the drafters chose not to write that into the regulation.  As such, such a requirement should not be read into the regulation if it is not there.

2.   The repair of tenant-caused damage to a rental unit cannot always be completed within 21 days of a tenant surrendering the rental unit.  There are a multitude of legitimate reasons why repair work may not be able to be completed within 21 days, such as: contractor time constraints, financial constraints, or the simple fact that the sheer amount of repair work that needs to be completed is too large to allow it to be completed in 21 days.  Just because a contractor can’t complete the work within the 21 days, or the landlord does not have the money to make the repairs within 21 days, or the work cannot be completed within 21 days — such as in the case of fire and smoke damage, or water damage – does not absolve the tenant from responsibility for the cost of repairs. 

3.   DATCP, in its own analysis of ATCP 134, has stated that the repair work need not be completed prior to the drafting of the security deposit transmittal letter to the tenant.  In 1999, after a major overhaul was completed to ATCP 134, DATCP published a document entitled a Summary of ATCP Chapter 134 Revisions.  In its summary, DATCP states on page 3:

  (Note: if repair costs are not known within 21 days, a written accounting must still be provided. In this case, a “good faith estimate” may be made.

So those are my three reasons for believing that a landlord is legally able to deduct the cost to repair tenant-caused damages from a tenant’s security deposit even if the repair work was not completed within 21 days. 

What are your thoughts on this question?  Do you have any additional reasons why you would answer the question as I did?

——-

I would like to thank Atty. Heiner Giese for providing me with a copy of the Summary of ATCP Chapter 134 Revisions published by the DATCP and for suggesting that I write a blog post on this issue many, many months ago.  I would also like to thank Atty. Evan Knupp for being the most recent person to ask me this question — within the last hour as a matter of fact – which finally caused me to write the post that you just read.

Tags: ,

Pursuing a Money Judgement Against An Ex-Tenant . . . Should You Even Bother?

Once you have evicted a tenant and have your property returned to you, you are confronted with the decision of whether to invest the time and money to pursue the ex-tenant for money damages or not.

Some of my landlord clients always pursue the ex-tenant for money judgments.  Of that segment of landlords, some will obtain their judgment, docket the judgment, and then sit on it hoping that the tenant will eventually pay it off (plus 12% interest) when they need to obtain a loan to purchase a home.  Other landlords that I work with will not only obtain the judgment against the tenant but they will  also proactively attempt to collect on that judgment via garnishment actions.

On the opposite end of the spectrum, are landlords that never seek a money judgment against a tenant as they consider it to be a waste of time and would merely result in “throwing good money after bad” because the tenant is not collectible.  Still other landlords opt to try and collect from past tenants via alternative means such as using the service of Rent Recovery Services — which allows you to report the ex-tenant’s debt to the 3 credit bureaus without the need to obtain a judgment.

There are many options for a landlord to choose from when it comes to collecting against an ex-tenant.  There is not one correct option for all situations and for all landlords.   The correct option depends on many factors.  I will sift through all of the information (or the lack thereof)  that my client has about the tenant that could assist in the collection process.  Sometimes a discussion regarding the client’s financial situation is needed.  Determining  my client’s ultimate goal is a must.

It is my personal opinion that time should be taken up front to discuss these matters with a client so that there are no false illusions going forward.  Many landlords are astonished to learn that once they obtain a  judgment that they must spend more time and money to collect on that judgment.  It is important to remember that a judgment is merely a piece of paper saying that your ex-tenant owes you money, it does not mean that you will get paid.  Collecting on a judgment is a whole different ballgame  . . . .  and a different blog post.

Tags: , ,

A De Novo Hearing Is A “Second Kick at the Cat”

Under Wisconsin law, a Court Commissioner cannot decide a contested eviction action — that must be decided by a judge.  However a court commissioner can preside over and decide a hearing on a landlord’s 2nd and 3rd causes for action for money damages.  Typically this includes claims for past due rent, physical damages to the rental property or holdover damages.

In Milwaukee County, due to the large number of cases,  if a tenant diputes the landlord’s claims for damages, the matter must first be heard by a Court Commissioner.  The Court Commissioner will issue a determination based on the evidence presented.  If either the landlord or the tenant does not agree with the decision of the Court Commissioner, either party has the aoutomatic right to request a de novo hearing before the circuit court judge. 

De novo literally translates to “anew;” “afresh;” or ”a second time.”

A de novo hearing is essentially a “do over”  — the parties have the opportunity to present their evidence over again to the judge.  They are not restricted to the evidence that they presented in the prior hearing before the court commissioner.  New evidence can be presented or old evidence can be removed.

De novo hearings are often referred to incorrectly as “appeals.”  A de novo hearing is an opportunity to redo your case.  An appeal is a review of a lower court’s decision for error.

A de novo hearing is a “second kick at the cat,” if you will.

NOTE:  I currently own a cat.  I have had cats as pets in the past.  I love cats.  By using the above phrase “a second kick at the cat” I am not suggesting or condoning the hurting of a cat.  No cat’s were harmed in the writing of this blog post.

Above is a video clip from a seminar that I presented last year about de novo hearings.

Tags: , ,

To “Walkthrough” or Not To “Walkthrough” That Is The Question

At the end of a tenancy a tenant or a landlord often requests a walkthrough of the rental unit prior to turning in the keys and delivering possession of the unit back to the landlord.  A walkthrough is just that — the tenant and the landlord walk through the rental unit and make observations of the condition of the unit.  It is at this time that a landlord may point out damage to the rental that occurred during the tenancy and which the tenant will be held responsible for.  A landlord might also note if the tenant did not adequately clean the unit or some of the appliances (typically this is the stove and/or refrigerator) and indicate that the tenant’s security deposit will be deducted accordingly.

When I first began working with landlords over fifteen years ago, I often encouraged them to conduct walkthroughs with their tenants.  I would recommend that they conduct the walkthrough a few hours before the lease termination date or the end of the tenancy.  That way, if damages were identified, or areas were not cleaned properly, the tenant would have time to go back and make the repairs or better clean the area.  My reasoning was that this was a win-win situation for both the landlord and the tenant.  The tenant could go back and fix things thus insuring that they received their security deposit back and the landlord would not have to spend time or money repairing damage or cleaning the unit and could thus turn the unit over more quickly.

Over the years, I have made a complete 180 degree turn on the issue of walkthroughs.  I no longer recommend that my landlord clients do walkthroughs with their tenants — or at a minimum I point out some of the drawbacks of the walkthrough.

It is important to note that conducting a walkthrough with a tenant prior to their vacating is not required.  I am not aware of any federal, state or municipal law that requires a landlord to conduct a walkthrough with his/her tenant.  I am aware that many a tenant will demand a walkthrough with their landlord.  Just because one is asked for - or even demanded – does not mean that the landlord must agree to it.  Nothing is wrong with telling a tenant to drop off their keys at the office and then after are long gone checking out the condition of the apartment.  In fact this is what I often reccomend that landlords do these days.

My primary reason for no longer recommending that landlords conduct walkthroughs with their departing tenants has to do with the pressure of the moment.  I guess a secondary factor is that more and more tenants are unpredictable these days.  Let me explain . . .

The main motivation for a tenant during a walkthrough is to determine what amount of their security deposit they will be getting back from their landlord.  The tenant has already removed their belongings (at least hopefully), done any repairs that they are willing to do, and done any cleaning that they think is necessary.  The tenant’s mindset is that they are basically “outta here” and at least mentally, they have moved onto bigger and better pastures – whether that be a new home or a different apartment.  The tenant has no interest in getting sweaty by engaging in additional cleaning or having to go purchase some more screws or nails or putty to make a repair.

Because of this mindset, a tenant is not interested in being told by their soon to be ex-landlord that they didn’t clean well enough or that they will have to pay for damaging the rental unit.  Instead, the tenant is ready to argue, scratch, and claw, to protect what they feel is theirs — the security deposit.  Any attempt by the landlord to hinder the return of “their” money is typically not well-taken.

So what ends up happening during many of these walkthroughs is the landlord and tenant have an argument.  I recall one client that informed me she was physically attacked by a tenant during a walkthrough.  Another landlord that I know was verbally threatened when the tenant was told at the conclusion of a walkthrough that x, y and z would be deducted from their security deposit.

No landlord is interested in a confrontation with their tenant — especially not a soon to be ex-tenant.  We are not paid enough to put ourselves in situations.  Even more common than physical attacks and verbal threats, is the scenario in which the landlord just wants to get the walkthrough over with.  All of you know what I am talking about —  you quickly peruse the unit, with the tenant looking over your back, and just to avoid confrontation, or because you feel intimidated by the moment (or the tenant in some cases), or because it is human nature (for most of us) to shun an uncomfortable situation, you tell the tenant that everything looks good and sign off on the check-in/check-out sheet.  Only later, after the pressure of the moment has subsided and the tenant is no longer breathing down your neck, you realize that you really should have charged the tenant for damage to this or failure to clean that.

At that point, it is a little too late to change your mind however, at least from a legal standpoint.  You have already told the tenant that everything looks good and you have already signed off on the check-out form.  Now, you decide that you want to withhold some money from the tenant’s security deposit to repair this or clean that.  The tenant receives his security deposit itemization letter from you (within 21 days after vacating) and is surprised and upset to see that a portion of his/her deposit has been withheld.

I have seen this scenario play out time and time again.  The tenant, who is now upset as they feel they were lied to, decides to sue the landlord for improper deductions from their security deposit and seeks double damages pursuant to ATCP 134 and sec. 100.20(2) , Wis. Stats. and their actual attorney’s fees to be paid by the landlord.   The landlord is now stuck taking time out of their day to appear in court to defend against this lawsuit or to pay a lawyer to defend them in court.

I recall a past client who ended up in exactly this situation.  A walkthrough was conducted with the tenants.  I asked my client to look at the check-out form that she used.  I saw that the form said that everything was in “good” condition and was signed by my client and both tenants.  I also noted that scribbled across the top of the check-out form were the words “under protest.”  I asked my client who wrote those words.  She replied, that she did.  I asked her when she wrote them.  She said that she wrote them about 1 week after the walkthrough had taken place — so obviously the check-out form that the tenants were given did not contain these words.  I then asked my client what the heck she meant by “under protest.”    I was told that  my client felt intimidated and threatened by the tenants during the walkthrough and therefore she didn’t really mean that the unit was returned in “good” condition.

I’m sure you can imagine all of the legal challenges that this would create had this actually gone to trial.  Earlier in my representation of the client and prior to the tenants vacating, I had told her that she was not required to do a walkthrough with her tenants.  After I finished looking at the check-out form, asking my questions, and listening to my client’s answers, I asked her why she had put herself in such a precarious situation — one in which she felt scared and intimidated — especially when she was not legally required to do so?  My client didn’t provide me with an answer.

FYI, I totally believed that my client felt threatened during the walkthrough —  she was a much older lady, both tenants had criminal records including battery of one another, one of the tenants had issues with alcohol and the other with drugs, and one of the tenants had physically attacked another individual in front of my client earlier in the tenancy.  I had also observed the tenants “act up” in court during an earlier court hearing.  These tenants were not the type of people that understood the word “reasonable” or had even heard the word “rational” for that matter.

But I digress.  The point of the story is that my client never should have put herself in that situation in the first place.  She could have waited until the tenants had vacated and conducted a thorough examination of the unit at her leisure and with no one breathing down her back.

Situations like the above, have caused me to re-think my advice to my landlord clients about doing walkthroughs with their tenants.  There really is no reason to put yourself in that type of pressure situation if you do not want to.

I’m interested in learning what your thoughts are regarding walkthroughs?  Do you conduct them?  If so, why?  If not, why?  What are some interesting (funny, scary, disgusting) experiences that you have encountered during a walkthrough?

Tags: ,