Act 76 which will become effective on March 1, 2014 has changed Wisconsin law with regard to who may file an eviction action and who can appear in court to prosecute an eviction.
Current law only allows the person or entity “entitled to the possession of the property” to file an eviction action. Typically this would be the owner of the rental property. As such, a management company or another third party cannot currently be named as the plaintiff in an eviction action — only the owner can.
In the past, the Milwaukee County Court Commissioners where monitoring this issue closely, even going so far as to look up the tax bill for the rental property online while the case was in court to insure that the named plaintiff in the eviction lawsuit was the owner named on the tax bill. If they were not, the case would either be dismissed or adjourned to allow the owner to be substituted as the plaintiff and appear in court.
Act 76 will amend sec. 799.40(1), Wis. Stats., and as of March 1, 2014, an eviction lawsuit may be filed by either:
1. The person entitled to possession of the property (i.e. owner), OR
2. An agent of the person entitiled to possession of the property as long as they are authorized to do so in writing.
So in the very near future, it will be legal for a property management company to file an eviction lawsuit on behalf of one of their clients (the owner) as long as the owner has authorized the property management company to do so in their management contract or a separate writing.
Similarily, Act 76 will also change who may appear in court to represent the named party in an eviction action.
Current law allows a person entitled to possession of the property (which can be a person, business entity, trust etc.) to appear by the person himself or herself, an attorney, or a full-time employee. As a result, landlords that had transferred their rental properties into a LLC (limited liability company) for liability protection were required to appear in court by an attorney unless they could prove that they were a full-time employee of the LLC (which was typically not the case).
So under current law, if an LLC was the owner of the rental property — and thus was required to be the named plaintiff — it could only appear in court through a lawyer. A member of the LLC, even if it were a single member LLC, could not appear in court to represent the LLC. To those of you who understand the basics of what is referred to as the “corporate fiction” of a business entity and understand that a business entity (even a sole member LLC) is distinct and separate from the individual person, this made sense. Nonetheless, from a practical perspective it was frustrating to many smaller landlords that had opted to move their rental real estate into a LLC that they could no longer appear in court to prosecute an eviction.
Act 76 has eliminated the requirement that the person be a full-time employee of the business entity in order to appear in court on its behalf.
As of March 1, 2014, it will be acceptable for a party in any small claims lawsuit to appear in court by himself/herself, by an attorney, by a member (as defined in sec. 183.0102(15), Wis. Stats.), by an agent, by an authorized employee of the person, or by an agent of the member or an authorized employee of the agent.
So pretty much anyone can now appear in court to represent an owner or management company on an eviction as of March 1, 2014.
It is important to remember that this law change applies to all small claims actions, not just evictions. So this change will affect small claims collections lawsuits, replevins etc. Additionally, the new law applies to ALL parties – not just landlords. So a tenant will now also be able to appear in court by an agent or authorized employee.
While I am no Nostradamus, I think it is fair to say that this particular change in the law will result in bit of confusion and congestion in eviction court. It may also result in some eviction cases being dismissed if the landlord does not have a firm grasp of landlord-tenant law and small claims procedure. For those of you that are interested in appearing in court yourself, I would reccomend that you educate yourself accordingly. Attending the AASEW’s Landlord Boot Camp on March 8, 2014, to insure that you know what you are doing would not be a bad idea.
And for those of you that have better things to do than waste an afternoon sitting in eviction court, you still will have the ability to hire an attorney to represet you ; )