An End to Equal Justice Under the Law

First of all, I want to thank those of you who commented on yesterday’s blog post. This is a situation that has really been bothering me. I think discussing what is acceptable for an office work environment is important. My friend has determined that this truly is a “this is how we are, accept it or leave” corporate culture, and they are currently looking for other employment. Therefore, any article I do on that will be after they have left.

However, it is Thursday and my ponderings must lead away from HR issues and back into the realm of rentals. Last week was a pretty interesting show. In the question section of the show, we talked briefly about my thoughts on the $8,000 first-time home buyer’s tax credit (which I had already blogged about) and a quick explanation of what the Section 8 program is (which is something I really need to blog about).

We also had questions that talked about how long a tenant has to file a small claims action against a landlord who improperly withheld their security deposit. That time limit is 6 years, which is the same amount of time that a landlord has to file an action against a tenant if the tenant left owing the landlord money.

A more difficult question had to do with records retention. How long does a landlord need to keep old leases and old applications? My advice, as long as you reasonably can. For some with many rentals, too many years of record storage becomes a big deal. However, I know of some landlords with just a few units that can literally keep a lifetime of rental records in one banker’s box. Although there is no record retention requirement in Wisconsin’s landlord-tenant laws, if the properties are pre-1978, all of the paperwork that deals with Lead-Based Paint has to be kept at least 3 years. You probably want to talk with your accountant to see how long they recommend you keeping contracts and records for tax purposes. Also, the longer you can keep applications (including the rejected ones) the better, as these can be very useful in fighting fair housing complaints to show you have been consistent in your underwriting.

Finally, a landlord purchased a property and when the tenants left, the damages to the unit were significant. However, in looking at the lease that came with the property, it wasn’t even close to being compliant with our laws. (For example, the lease allowed 30 days for the return of the deposit {state law is 21}, etc.) Because this lease doesn’t even come close to being “enforceable”, can the landlord still pursue judgment against the tenants for the damages. ANSWER – YES. Although the landlord cannot enforce the terms of the lease as the lease is invalid and void (based on some of the language I saw in the lease), when the lease is voided, there is still a tenancy agreement. The tenancy becomes a month-to-month and is based off of the provisions outlined in WI SS 704 and ATCP 134. Because the damages done to the property were caused by breaches of the terms established by law, whether or not the lease was valid is irrelevant. Now, if you were chasing money for unpaid rent because they vacated before the end of the lease term, you would be out of luck. However, just because the lease isn’t valid, the tenants don’t have a carte blanc to destroy the property.

Our main topic last week was a bill to change the limits on Small Claims cases. Although raising the limits from $5,000 per case to $10,000 per case may make sense to many, the fact that Senate Bill 352 only allows certain people these higher limits flies in the face of equal justice for all in the court system.

Right now, the limit for a small claims case is $5,000 (there are some exceptions in eviction actions). Anyone who files a small claims case is subject to this same limit. The total fee is currently $94.50, however $22.00 of this is the “official” fee that the state imposes. It doesn’t matter who you are, that is the filing limit and that is the fee.

Under SB 352, those people who have filed 20 cases or less in the last year actually could file their case for up to $10,000. Those people who file more than 20 cases would be limited to the current $5,000 limit. The cost of filing an action would go up $11 for those who file 20 or fewer cases per year, however those who file more than 20 actions would see a $22 increase in fees.

This not only affects larger landlords who file more cases, I can see local companies such as Aspirus, Marshfield Clinic and Wisconsin Public Service really getting hammered hard by this, as they tend to do a lot of collections work through small claims. Basically, if Marshfield Clinic wanted to take someone to court in small claims, they would have to pay $22 more than they pay now and could sue for up to $5,000. HOWEVER, if someone wanted to take Marshfield Clinic to court, they could sue for up to $10,000 and pay $11 less than had it been the other way around. Someone explain to me how this is fair treatment under the law?

On tonight’s Dr Rent Radio Show heard on the air at 93.3 FM, WNRB-LP from 5-6PM, or on the web at http://wausauhmong.org/WNRB.htm we will first briefly talk about some ethical concerns that come up when doing market research on rentals by “shopping the competition.”

A few weeks ago we started our discussion of the new Renovate Right Rules as they relate to properties built before 1978. These are the new Lead-Based Paint rules put out by the EPA that go into full effect this coming April. We will summarize what we already discussed and continue our discussion on what these new rules are and how they affect you.

So, until 5 PM when I am back on the air – HAPPY RENTING!

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About drrent

Wausau, Wisconsin Landlord, past president of the Wisconsin Apartment Association, Host of the Dr Rent Radio Show on WNRB-LP, 93.3 FM, Wausau, WI
This entry was posted in Questions, Renovate Right Rules, SB 352, Small Claims, WNRB and tagged , , , , . Bookmark the permalink.

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