Posts Tagged Legislation

“Landlord Preemption Bill” Signed Into Law

Dec 28

Posted by Tristan R. Pettit, Esq. in Legislation | 4 Comments

It is nice to finally see some landlord-friendly laws being passed in the state of Wisconsin.

On December 7, 2011, Senate Bill 107 (commonly referred to as the “Landlord Preemption Bill”) was signed into law by Governor Scott Walker as 2011 Wisconsin Act 108.  This new law creates Section 66.0104 of the Wisconsin Statutes and prohibits municipalities from enacting an ordinance that places certain limits or requirements on a landlord.

Specifically, section 66.0104 prohibits any city, village, town or county from enacting an ordinance that prohibits a landlord from obtaining and using any of the following information with respect to a tenant or prospective tenant:

  1. Monthly household income
  2. Occupation
  3. Rental history
  4. Credit information
  5. Court records, including arrest and conviction records, to which there is public access
  6. Social Security number or other proof of identity.

The new law also prevents a municipality from limiting how far back in time a prospective tenant’s credit information, conviction record, or previous housing may be taken
into account by a landlord.  It also prevents a municipality from prohibiting or limiting when a landlord can enter into a rental agreement for a rental unit with a prospective tenant or show a rental unit to a prospective tenant during the tenancy of a current tenant.

Additionally, the new law prohibits a municipality from enacting an ordinance that places requirements on a landlord with respect to security deposits, earnest money or pre or post tenancy inspections that are in addition to the requirements currently set forth in Wisconsin Administrative Code ATCP 134.

If a municipality has an ordinance on its books that conflicts with sec. 66.0104 than that ordinance is no longer applicable and may not be enforced.

This new law will positively affect landlords throughout the state, but most especially in Madison and its environs.  I think as a result of Wisconsin Act 108 the city of Madison’s Code just lost a few pounds.

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Governor Walker Signs 2 Pro-Landlord Bills Into Law

Dec 9

Posted by Tristan R. Pettit, Esq. in Attorney's Fees, Legislation | No Comments

Just wanted to let everone know that in the last few days Governor Walker has signed into law two bills that will positively affect landlords.

-  On December 7th, Governor Walker signed SB 107 (2011 Wisconsin Act 108) which relates to prohibiting municipalities from creating ordinances that put limits on landlords.  If you would like more detail on this law please see my prior blog post on the topic.  Here is a link to the legislative history of the bill.

- On December 7th Governor Walker also signed into law SB 12 (2011 Wisconsin Act 92) which creates a presumption that a tenant’s attorney’s fees should be capped at 3 times the amount of damages at issue when a tenant sues a landlord for an alleged violation of ATCP 134.  If you would like more information on this see my prior blog post.  Here is a link to the legislative history of the bill.

 

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Update on Landlord Pre-Emption Bill

Oct 10

Posted by Tristan R. Pettit, Esq. in City of Madison, Legislation, Screening Tenants, State of Wisconsin | 2 Comments

It has been awhile since I updated everyone on the pro-landlord legislation that is being addressed in Madison.  Senate Bill 107 (SB 107) — referred to as the Landlord Pre-Emption Bill —  has been passed by the Wisconsin Senate and is currently being reviewed by the House this term (AB 155).

You may recall that SB 107 prohibits any municipality from enacting any ordinance that limits a landlord from obtaining or using various types of information about a tenant or prospective tenant, such as household income, occupation, court records, rental history, and credit information, or limits how far back in time a prospective tenant’s
credit information, conviction record, or previous housing may be considered.

The bill has received much opposition from local municipalities and their lobbyists, not for the substance of the bill, but rather for the fact that if passed, the law will
restrict a municipality’s ability to draft certain ordinances.  Essentially the municipalities feel this to be a breach of their own sovereignty and an example of the state overstepping its bounds.  Many feel that this is really just a Madison problem — since it is the City of Madison that has enacted many of these restrictions on what information a landlord can consider when making a rental decision – and therefore should be dealt with at the city level.

Another group of critics believe that the bill discriminates against African-Americans.  Four Dane County Board Supervisors, two Madison City Council members and one Madison School Board member, sent a letter to Governor Walker and legislators on September 7, 2011, asking that the provision of the bill that will allow landlords to deny housing to tenants with criminal histories be removed because is discriminates against African Americans.

They argue that allowing a landlord to deny a rental applicant housing based on his/her criminal convictions will unfairly affect African-Americans because while they
only comprise 6% of the state’s population they account for almost 50% of those with arrest and conviction records.  Thus the critics of the bill argue that to allow a landlord to deny a rental applicant based on his/her criminal record is to allow landlords to deny housing based on race.

The critics are relying on the doctrine of “disparate impact.”  The disparate impact doctrine holds that certain laws may be discriminatory and illegal – even if the law is neutral on its face — if they have a disproportionate “adverse impact” on members of a minority group.

This disparate impact argument is ignoring a key ingredient – one’s choice to engage in criminal activity.  One’s race is not something that a person has control over – we are born into a certain race.  On the other hand, individuals do have control over whether or not they engage in criminal activity.  Committing a crime is a volitional act.  Being born African-American is not.  We are dealing with apples and oranges here.

Disparate impact arguments are often raised when a law unintentionally affects a minority group through no fault of their own.  This small group of critics, are trying to apply the disparate impact doctrine to individuals that made a voluntary decision to engage in criminal activity.

 

UPDATE – 10-28-11 — On Wed. Octo 26, 2011, By a vote of 59-34 the Assembly voted to suspend a rulling on AB155.  An amendment was made by Rep Chris Taylor (D-Madison) that would protect some local control within the bill – the amendment was tabled by a vote of 60-33.

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City of Madison Proposes New Legislation That Will Make A Landlord Become His Tenant’s Babysitter

Aug 10

Posted by Tristan R. Pettit, Esq. in City of Madison, Legislation | 4 Comments

In an attempt to curtail house parties or “keggers” in the city of Madison, a new ordinance has been proposed.  Legislative File Number 23310, would create section 25.10 of the Madison General Ordinances to prohibit what is referred to as “nuisance parties.”  The ordinance would require the police to provide a landlord with notice of a nuisance party that occurred at his rental property and require the landlord to take appropriate measures to prevent future nuisance parties from being held by his tenant at the rental property.  The ordinance would also allow the police to fine the landlord between $100-$5,000 if his tenant held a second nuisance party within a 12 month period.

A ”nuisance party” is defined as a social gathering that, by reason of the conduct of the persons in attendence, results in one of more violations of 17 enumerated ordinance violations, including but not limited to: selling or giving away intoxicating liquors without a license, procuring and furnishing alcohol to minors, intentionally encouraging the comsumption of alcohol by minors, disorderly conduct, obstructing street and sidewalks etc. etc.

Under the proposed ordinance, if a beer barrel is visible to the public, even if it is located in the back yard, side yard, or on the porch of the property, and one or more of the above-noted ordinance violations is present, that gathering will be considered a nuisance party.  Looks like the days of sitting on the porch drinking from a keg are over for the college kids.

Any person who is the “owner, occupant, tenent or otherwise has rightful possession . . . of any premise, who either sponsors, conducts, hosts, invites or permits a social gathering or party on said premises which becomes a nuisance party . . . is deemed to be in violation of the ordinance.”  By this wording it appears that the city thinks that a landlord is inviting, permitting or encouraging a tenant to have a house party if the landlord does not prevent it from occurring.  How about a different possibility —– the landlord was not aware of the party.

Essentially this ordinance, if passed —- heck, it is MADISON, of course it will be passed —- will make a landlord responsible financially for any tenant that has a ’kegger.”  Yes, I understand that these parties can be dangerous and can be a nuisance to neighbors, and I am not taking issue with the need to stop so called “nuisance parties.”  But trying to hold a landlord responsible for his tenant’s actions is not the way to solve the problem of house parties.  Landlords are not their tenants babysitters.  While a landlord may wear many hats . . . housing provider, bill collector, maintenance person, social worker etc . . .  we are not babysitters.

An article in the Daily Cardinal from July 27, 2011, quotes Alderman Scott Resnick, who is against the proposal, as saying “it makes the landlord play babysitter to a number of house parties.”  Resnick indicates that he is against the proposal because there are already laws and ordinances available that prevent overcrowding and disturbing the peace.” Resnick also stated that involving landlords is not the way to address problems with underage drinking and large house parties near campus.

The part of the ordinance that concerns me the most is the sub-part entitled  (6) “Owner’s Failure To Prevent A Second Nuisance Party.”  The first sub-section states that within 10 days of the police breaking up a nuisance party, the police must notify the landlord of the violation of the nuisance party ordinance.  It also states that the landlord must give the tenant a 5 day notice for breach of the rental agreement for having the nuisance party.  But the kicker is contained in the second sub-section which states that if another nuisance party occurs at the same property within a 12 month period and the same occupants are responsible for the party, the police SHALL send the landlord a second notice of the nuisance party ordinance violation and the landlord SHALL be subjected to a forfeiture.

So under this proposed ordinance, a landlord can be fined even though legally he is unable to terminate his tenant’s tenancy or file an eviction prior to the tenant hosting a second nuisance party.

Unless things have changed since I went to college, most tenants operate under a one year lease agreement with their landlords.  When a tenant is under a lease agreement for a specific term (as opposed to a month to month tenancy) and breaches the term of his rental agreement, a landlord is required to serve the tenant with a 5 day notice which allows the tenant the right to cure the breach and remain a tenant.  A landlord legally cannot terminate his tenant’s tenancy after the first breach if the tenant is under a lease for a specific term.

So let’s walk through this in the context of a nuisance party:

1.   A tenant hosts a nuisance party

2.   The landlord is notified of the party by the police or neighbors and serves the tenant with a 5 day notice for breach of lease.

3.   The tenant cures the breach by not having another party within the ”cure” period.

4.   That same tenant decides to host a second house party within 12 months of the first shindig, thus committing a second breach of the lease.

It is only at this point that a landlord can serve the tenant with a 14 day notice (which does not afford them the right to cure the breach) terminating the tenancy and proceed to evict the tenant if he fails to vacate the rental property at the end of the 14 days.  But by this time, under the proposed ordinance, the landlord can already be hit with a fine from the city for his tenant’s actions.

Now, Madison’s proposed ordinance does include a section (8) entitled “Affirmative Defenses” which states that “it shall be an affirmative defense to a charge of violating the ordinance, if the landlord has evicted or is dilligently attempting to evict all tenants and occupants of the property who are responsible for the nuisance parties.”

Based on this language it would appear that some leniency may be given to a landlord who is attempting to evict a tenant that has hosted two keggers within a 12 month period.  But why not draft the ordinance so that the landlord cannot be fined until after he is legally able to remedy the problem under Wisconsin landlord-tenant law.  A landlord should not be able to be fined by the city for violating a municipal ordinance for failure to control his tenant, when state law prevents him from doing anything about the problem yet.

Personally, I think the entire ordinance is ridiculous.  Landlords are not their tenants babysitters.  People should be held responsible for their own actions.  But if the city of Madison is going to attempt to hold landlords responsible for their tenants behavior, then it should at least make sure that a landlord has the legal ability under state landlord-tenant law to rectify the tenant’s behavior by terminating his tenancy and filing an eviction action against the tenant, before the police are allowed to fine the landlord for allegedly not handling the problem.

 

 

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Two Pro-Landlord Bills Are Proposed

May 12

Posted by Tristan R. Pettit, Esq. in Legislation | 1 Comment

Two new bills have been proposed in Madison and both of them are pro-landlord.

Landlord Pre-Emption Bill

Rep. Robin Voss has proposed what is being referred to as the Landlord Pre-Emption Bill (LRB 1296/3).  This bill prohibits any municipality from enacting an ordinance that does any of the following to a residential landlord:

1.  Prohibits or limits a landlord from obtaining or using various types of information about a tenant or prospective tenant, such as household income, occupation, court records, rental history, and credit information.

2.  Limits how far back in time a prospective tenant’s credit information, conviction record, or previous housing may be considered by the landlord.

3.   Prohibits the landlord from showing a rental property to a prospective tenant, or from entering into a rental agreement for a rental property with a prospective tenant, while the current tenant is living there.

Rep. Voss is currently seeking co-sponsors for this bill.

UPDATE – 6/14/11:  This propsed bill (Senate Bill 107) was referred to the committee on Insurance and Housing on 5/26/11.  A public hearing was held on 6/8/11.  Two amendments were made to the bill and the proposed bill passed committee by a vote of 4-3.  Here is a recent article in the Capital Times on the bill.

Water/Electric Bill (LRB 1393/1)

The second pro-landlord legislation that is out there would help landlords who have had the unfortunate experience of having a tenant’s delinquent utility bill place on their property tax bill.

LRB 1393/1 would prohibit a municipal utility that provides electric or water service to a rental dwelling from using the current arrearage collection procedure , as long as the lwner of the property has provided the utility with written notification of the name and address of the tenant who is responsible for paying for the service.  th eutility service may also request a copy of the rental agreement in which the tenant assumes responsibility for paying for the utility charges.  Once the owner has provided the written notice of the tenant’s name and address, the utility may not use the current arrearage collection procedure.

UPDATE: 6/14/11 – This propsed legislation (AB 182) was referred to the committee on Energy and Utilities on 6/13/11.

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Repeal of Expanded 1099 Requirements Signed Into Law

Apr 18

Posted by Tristan R. Pettit, Esq. in 1099's, Legislation | 7 Comments

President Obama has officially signed H.R. 4, the “Comprehensive 1099 Taxpayer Protection and Repayment of Exchange Subsidy Overpayments Act of 2011” into law.   This new law retroactively repeals  prior 1099 reporting rules for landlords that were added by 2010 legislation (i.e. the Small Business Jobs Act of 2010 and the Patient Protection and Affordable Care Act – better known as Obamacare).

Prior to the 2010 legislation, it was generally required that if you were a landlord that was engaged in the trade or business of landlording, that you were then required to report to the IRS via a 1099 form any payments totalling at least $600 to a single person. Typically, this involved paymetns for services.  It should be noted that there were a number of exemptions from the law’s reporting requirements notably including payments to corporations. 

This essentailly meant that unless you were a full-time landlord, you did not need to comply with the reporting requirements as you were not in the trade or business of landlording.

Then in 201, two pieces of legislation were passed.

Under Obamacare, as of 2012, it was added that payments for goods more than $600 in a 12 month period needed to be reported as well as services. Obamacare further provided that, beginning in 2012, payments to non-tax-exempt corporations—which had previously been exempt from the reporting requirement—would be subject to information reporting.

Additionally, the Small Business Jobs Act of 2010 provided that, subject to limited exceptions, a person receiving rental income from real estate would be treated as engaged in the trade or business of renting property for information reporting purposes.  In particular, rental income recipients making payments of $600 or more to a service provider  in the course of earning rental income would have to provide an information return to the service provider and the IRS.  This would included all landlords, even if they worked full-time doing something other than landlording, and just rented out a duplex on the side.

After much backlash, the House introduced, H.R. 4, which repeals the provisions of Obamacare and the Small Business Jobs Act  referenced above.

Essentially, with President Obama, signing into law H.R. 4, the reporting rules now revert back to what they were before the 2010 legislation (Obamacare and Small Business Jobs Act) was passed.  We are now back to where we were before the government started monkeying around with things in the first place.

I guess if nothing else it gave me some topics to blog about : )

 

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New Law Limits Landlords From Pursuing A Deceased Tenant’s Estate

Jun 25

Posted by Tristan R. Pettit, Esq. in Collections, Legislation | 1 Comment

Governor Doyle recently signed into law 2009 WI Act 323 which creates a new section to Chapter 704 of the Wisconsin Statutes regarding Landlord-Tenant Law.

The new section 704.165, Wis. Stats., is entitled “Termination of Tenancy at Death of Tenant”

Below is a summary of the new law:

1.     If a residential tenant dies and had a term lease, his/her tenancy will be terminated  60 days after the landlord learns of the death or the expiration of the rental term, whichever occurs first.

2.     If a residential tenant dies and was under a periodic tenancy (i.e. month to month) then the tenancy will terminate 60 days after the landlord  becomes aware of the death.  If the deceased tenant’s estate provides proper notice to terminate the tenancy under sec. 704.19, Wis. Stats. then the tenancy may be terminated even earlier as outlined in 704.19, Wis. Stats.

3.     Neither the deceased residential tenant nor his/her estate will be liable for any rent after the tenancy is terminated.

4.     The landlord must still attempt to mitigate the deceased tenant’s damages by making attempts to re-rent the unit before the tenancy terminates.

5.     Nothing in this new section relieves another adult tenant who resides at the rental property (and who did not die) from their obligations under the rental agreement or otherwise.

6.     A landlord may not contact or otherwise communicate with a member of the deceased tenant’s family in an attempt to obtain rent for which the family member has no liability.

7.     This new law first applies to tenancies and rental agreements that are entered into on or after May 12, 2010.

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