Posts Tagged Foreclosures

GUEST POST: Is the Apartment Association of Southeastern Wisconsin Against the City of Milwaukee?

Is the Apartment Association against the City of Milwaukee?

After a recent meeting I received an email from an irate member who was offended by some of my commentary regarding the city of Milwaukee, it seemed the association had an anti-Milwaukee tone to its messages. Having committed much of my career to making Milwaukee, especially its central core, a better place to live I was initially surprised by the feedback, nonetheless it is a legitimate question and one deserving of a response.

First let me remind everyone that the association is an all-volunteer organization and we welcome the participation of all landlords (in fact we will be holding officer elections soon so please email me if you are interested). I would encourage anyone unhappy with something we are doing or saying to speak up and be heard. Write an article in the Owner, email me, or better yet join a committee or board of directors. We are an organization of almost 1000 members and the diversity of our perspectives and experiences is a strength we should draw from. That being said I will address this issue head on after first making the obligatory disclaimer that the thoughts expressed below are solely mine and in no way constitute an official position of the AASEW.

I am not against the City of Milwaukee, however I have significant concerns with its view towards residential property owners/investors. Having lived in the city my entire life I have witnessed first-hand the deterioration of many of our communities and the City’s inept response to address this crisis. A common refrain cited for this decline is absentee landlords who allow their properties to fall into disrepair and if only we could force them to be accountable our problems would be solved. While there is some truth to this it would be tantamount to saying our City’s larger decline is due solely to shifting macro-economic trends that decimated American manufacturing. While it is certainly part of the issue, a narrow focus on either cause over simplifies the problem at hand and leaves one ill equipped to develop effective solutions to address the problem.

Are absentee landlords who neglect their properties an issue in many communities? Absolutely but maintaining your property and being responsible to your neighbors should be a standard imposed on every property owner including owner occupied buildings. Focusing exclusively on landlords obfuscates the true nature of the problem and does nothing to solve it. This is a fundamental flaw in the thinking at city hall and has done as much to harm property values in the city as the financial crisis.

In my early 20’s I bought a house in Lindsay Heights that I did a first rate renovation on and was proud to call home. After years of battling with neighbors from hell, who were owner occupants, and receiving no succor from DNS, my alderman, or anyone else at city hall I rented out the property and moved to the suburbs. Ironically had this very property been subjected to the same standards of compliance as non-owner occupied properties in Lindsay Heights, I would probably still be living in the city of Milwaukee.

Further evidence of the City’s “tolerance” for landlords is their response to their growing portfolio of tax foreclosed properties. City hall has proposed a variety of creative solutions to deal with this problem including allowing tenants to use their Section 8 check to pay the mortgage the city would carry. Ironically very few of their solutions involve investors and established landlords within the city. Ponder this, our association alone as the wherewithal to buy every last city owned property and turn them back into productive assets, yet the city has not reached out to us once to have a serious conversation about how to make that happen.

It is clear to me as an investor that the city does not view our industry as a strategic partner in which to work hand and hand  to deliver low cost, high quality housing to its residents. It is a position that has led to disastrous results in many of our neighborhoods; one can only hope they understand the definition of insanity: doing the same thing repeatedly yet expecting a different result.

In conclusion Joe Dahl loves the city of Milwaukee and will stand next to any person and compare my investment and efforts to make it a better place. However I am very troubled by our leadership and its “tolerance” of landlords. It is my desire to see Milwaukee thrive, yet I am not naïve enough to ignore what happened to our counterpart in Michigan. It is my sincere hope the city recognizes it needs all hands on deck to achieve the former and avoid the latter……and yes city hall that includes landlords!

Joe Dahl

President AASEW


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State’s Budget Bill Amends Tenant Protection Act

On June 29, 2009 Governor Jim Doyle signed the 2009-11 state biennial budget bill into law.  This law in part made modifications to the Tenant Protection Act (starts on page 108) which offers tenants certain protections during the foreclosure process.  My earlier post on the Tenant Protection Act can be read here.

Specifically, the state budget bill modified the current law related to tenant protections in foreclosure actions as follows:

1.      ADDED – If  an eviction action seeks to remove a tenant whose tenancy was terminated as a result of a foreclosure judgment and sale, the complaint must identify that the lawsuit is an eviction that is being brought as a result of a foreclosure action.

2.     ADDED – A tenant cannot be named as a party in a foreclosure action unless s/he  has a lien or ownership interest in the property.  The fact that a tenant lives in the rental property that is being foreclosed upon is not enough to name them as a party in a foreclosure action.

3.     ADDED – If a tenant is improperly named as a party in a foreclosure action the court shall award the tenant $250 in damages plus his/hers reasonable attorney’s fees.

4.     DELETED – The portion of the Tenant Protection Act that required the exclusion of any tenant information related to foreclosure actions from appearing on CCAP.   That section was replaced with #2 above.

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Anyone interested in purchasing foreclosed properties will not want to miss the Apartment Association of Southeastern Wisconsin’s upcoming monthly meeting on Monday, May 18, 2009 at 7 pm at the Best Western Midway Hotel located at 1005 S. Moorland Rd. in Brookfield.

Attorney James Mulligan, an expert in the area of foreclosures, will be the key note speaker and will discuss how to purchase foreclosed properties as well as provide us with some common pitfalls to avoid. Also on hand will be Jason Fernhaber and Brian Meidam, rental property investors and current AASEW members. Both Jason and Brian have obtained many of their rental properties through the foreclosure process and will be there to answer any nuts and bolts questions that you may have on the process.

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A new law has recently been passed that will affect rental property owners that may be in the unfortunate position of having their properties foreclosed upon as well as those individuals that may be purchasing a property that has been foreclosed.  Sen. Lena Taylor’s bill referred to as the “Tenant Protection Act” (SB 78) was incorporated into the budget repair bill that was recently passed. 

The new law requires that the property owner notify any prospective tenant in writing that (a) a foreclosure action has been commenced, and (b) if a judgment for foreclosure has already been entered, the date when the redemption period expires.  Further any rental agreement that is entered into while a foreclosure action is pending must include a separate written statement, signed by the tenant, stating that the owner has provided the above notice to the new tenant.  The rental agreement will be voidable at the option of the tenant if it does not include the written statement.

With regard to current tenants, the new law requires that the plaintiff in the foreclosure action (typically a financial institution) give the tenants several notices advising them as to the status of the foreclosure action.  Failure to provide the notices will allow the tenant to be awarded $250 in damages plus reasonable attorney’s fees.

Also under the new law, if a tenancy is terminated as a result of a foreclosure judgment the tenant may retain possession of the unit for up to 2 months after the end of the month in which the sale of the property is confirmed (but the tenant must pay rent during this period at the same rate that was applicable prior to the confirmation).  Also the tenant may withhold rent in an amount equal to the security deposit during the last month of possession.  Furthermore, no eviction judgment for the removal of the tenant whose tenancy was terminated as a result of a foreclosure judgment, may be executed before the end of the second month after the foreclosure sale was confirmed.

Finally, if an eviction action was commenced against a tenant and their removal from the rental property was due to a mortgage foreclosure then no information regarding that eviction can be included on CCAP.

The newly enacted law can be viewed here (it starts on page 108)

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