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: , ,