It’s Thursday and time for another installment of the Dr Rent Radio show. It has been an eventful week with Monday evening being the public hearing on the proposal being fielded in the City of Wausau to make it a law that landlords who live outside of Marathon County and own rental property in Wausau have a registered agent within Marathon County. That will just be one of the thing we will talk a little bit more about on the Dr Rent show, and very soon on the Citizen Wausau main page will be my column on this whole thing.
Other main show topics besides these new Wausau proposed codes will include a new proposal to change how much you can file a claim for through the Small Claims system, and how much it will cost to file those claims. Although Senate Bill SB352 will raise the $5,000 limit on Small Claims cases, it doesn’t raise it for everyone and flies in the face of the entire concept of “equal treatment under the law”.
We also have a couple of questions to address. The first really doesn’t have much to do with renting, but does have to do with real estate. Does the $8,000 first-time home-buyer tax credit apply if the purchase is done through a Land Contract where the actual deed doesn’t transfer? Also, last night at my Landlord-Tenant law class we were going over ATCP 134 and we had a great discussion on returning security deposits – what do you do when there are multiple tenants on the lease, how to make out the check returning the deposit? Any time left over, we will continue our discussion on the new lead-based paint renovation rules.
Last week’s Dr Rent show was just filled with questions. The first had to do with what rights a tenant has when their landlord has been foreclosed on. The laws that address this (WI SS 704.35 and WI SS 846.35) are very new. If you are going to rent a place that is in the process of being foreclosed on, the landlord must notify you of the foreclosure status in writing before you sign the lease. If they don’t, the tenant has the right to void the lease. If you are already a tenant when the foreclosure starts, the bank can no longer just kick you out once the sheriff sale is confirmed. They have to give you two full months, and since the odds on you getting your deposit back from the bank are slim to none, you also are allowed to withhold your deposit from the last month’s rent. If you are named in the foreclosure action by the bank as a co-defendant as a tenant, the court can award you $250 + attorneys fees from the bank that named you.
We also got off of the rental topic for a question that talked about 1099-S forms. These are forms that when a property is sold, the closing agent has to provide to the seller. A copy goes to the seller and a copy goes to the IRS so that the proper taxes can be calculated from the sale proceeds. However, if there is no closing agent, does a 1099-S form still need to be filed, and if yes, by whom? Yes, the form needs to be filed. There is a long list of who should file it, if there was no such party involved, you keep going down to the next person. This list goes: closing agent identified in the Uniform Settlement Statement, person who prepared closing statement, buyer’s attorney (if they did most of the closing paperwork), seller’s attorney (if they did most of the closing paperwork), the dispersing/escrow company, the mortgage lender, the seller’s broker, the buyers broker, and finally if this was cash sale between buyer and seller and none of those other parties existed, the buyer has to fill out the form and give it to the seller. The only time a 1099-S does not need to be filled out is if the sale was for less than $600, or the sale falls under the homestead capital gains exemption.
A question about how to determine how much rent to charge I legally can’t really answer, as that would be considered price-fixing. I did briefly discuss some ways of determining rent which includes figuring out what your monthly expenses are in the property, and also “shopping” the competition to see what similar units are going for in your rental market.
Often the questions I get from tenants involve situations where the landlord, not knowing the rental laws (or sometimes not caring), made a mistake. A question I got from a tenant about a landlord that did not return their earnest money was not one of these cases. The tenant had paid with the application, a deposit equal to one month’s rent. Per Wisconsin rule, that is considered to be earnest money and is refundable except in a few specific cases. The tenants were approved but before they signed the lease, they found a different rental until somewhere else they liked better. And, this is one of those specific cases. If a tenant is turned down, the earnest money gets returned. If a tenant changes their mind before they are approved, the earnest money gets returned. If they sign the lease, the earnest money either gets applied towards the rent, the deposit, or returned to the tenant. However, if the tenant is approved AND THEN backs out, the landlord can withhold their actual damages from the earnest money, which can include lost rents. So, in this case, it is within the landlord’s rights to not return that deposit.
If you haven’t tuned in before, why not make tonight your first time? The Dr Rent Radio Show is broadcast on WNRB-LP, 93.3 FM in the Wausau area from 5-6 PM. You can also use your computer to tune in from anywhere in the world as we are live streaming at http://wausauhmong.org/WNRB.htm.
Until later this evening… HAPPY RENTING!