It’s another Thursday and time for another installment of the Dr. Rent Radio show on WNRB-LP, 93.3 FM. The show is on the air from 5 PM to 6 PM. For those of you who have been listening to the Dr. Rent show on the internet using our live stream, I must unfortunately let you know it looks like that won’t be possible again for a while. The funding our small, volunteer-driven radio station had for streaming our broadcasts has run out, so until more funds can be found (from donations or grants), we are back to just our radio broadcast only. (Let me know if you are interested in making a donation to the radio station, or if you are interested in underwriting mine, or someone else’s show – donations are tax deductible by the way!)
Since my blog post yesterday on the basically “market rate” apartments being proposed on the river front using WHEDA tax credits designed for low income housing, I have learned a lot more about this WHEDA program. I have been researching information WHEDA has on their website, and talking with a couple of landlords around the state who are much more familiar with this program that I am. I will share, on the air on tonight’s radio show what I have learned so far. I think the basic problem is that WHEDA has an interesting definition of what they consider “low income.”
Yesterday was also what will probably be the last meeting of the Weston Chronic Nuisance Ordinance Task Force. The last step is just to add the recommendations we made to the current draft, review the final draft, and if the word-smithing matches our intent, it will be ready to present to Weston’s Public Safety committee. As time permits on the show, I will share with you a preview of some of the specifics which, in my admittedly biased opinion, is the best chronic nuisance ordinance in the state.
I am in the middle of my Landlord-Tenant Law class at UWMC, and a few questions came up while we were discussing the ATCP rules (134 to be specific) that I felt many people (landlords AND tenants) have, so I will hit those questions on the air as well. First, in Wisconsin a landlord has 21 days to return the security deposit. But, 21 days from when? Well, 21 days from “surrender”. What does that mean? So, we will answer the question – 21 days from when? With that question, we will discuss what actually is the Security Deposit. ATCP 134 says that any money received in excess of one month’s pre-paid rent is the Deposit, but what does that actually mean?
Last week was a very informative show. We covered the question about whether or not a property manager could represent the property owner in small claims court. In most counties, yes, that is not a problem. However there are a few counties, Milwaukee County especially, that have gotten very “letter of the law”-ish (versus intent of the law) on who can represent themselves. A good idea would be to make sure by calling the Clerk of Courts in your county and asking if they have a problem with this.
A tenant called me because the landlord billed them for the water used in the unit, and it was a pretty big bill for nearly a year worth of use. The lease no where indicated that the tenant was responsible for the water bill. Per state law, it is assumed utilities are included unless the rental agreement makes them the responsibility of the tenant. The tenant had no obligation to pay the bill (again assuming it was not covered in the lease or another agreement between the parties). If the landlord tried to evict the tenant for non-payment of the water bill, they would not be successful.
As a follow up, the tenant did pay the water bill as they were worried about the possibility of being taken to court. Does that mean they have to pay future water bills? The answer there is probably. Although not covered in the contract, often the terms of the contract can be “trumped” based on the actions of the parties. For example if a lease ends January 31st, but the tenant doesn’t move and continues to pay the rent, AND the landlord continues to accept the rent, the rental agreement shall continue (based on the action of the parties). In this case, the landlord billed the tenant for water, and the tenant paid the bill for water… it is very likely that the court will see the action of paying the water bill as an acceptance of that responsibility. To not be responsible for the future bills, you may be in “lawyer land.”
Finally, if a tenant wants to break their lease, there are a few clauses in a lease that will make the agreement void. If there is a lease provision that makes the attorney fees of the landlord the responsibility of the tenant, that is a violation of ATCP 134.08 (3) and the Wisconsin Supreme Court decided that would void a lease. Many people (including attorneys) will tell you that any violation of 134.08 will void the lease. That is not technically true. The Supreme Court was specific in their 4-3 decision that they were only talking about (3), which covers attorney’s fees. However, based on the arguments used in that case, it would not surprise me if a court would use that case to void ANY provision covered in 134.08, which includes clauses that allow eviction without going through court, allows for acceleration of rent payments, and a few other items.
Other provisions that could void a lease is language that would make a police call a lease violation. Also, if the tenant is in a renewal term of an automatically renewing lease and the landlord never reminded the tenant of the automatic renewal clause before it kicked in; a landlord cannot enforce that renewal against a tenant. Finally, a landlord not disclosing to a new tenant that they are in a foreclosure also gives the tenant the right to void the lease, which I will discuss more on.
Of course, the topic of last week’s show was what rights tenant’s have if their landlord is faced with a foreclosure action. Normally when a property is sold, the leasehold interest goes with the property. If the tenant has 9 months left on their lease, the new owner has to honor that. However, if the property is foreclosed, any interest in the real estate that is subordinate to the mortgage (which almost always includes the leasehold interest of the tenant) gets knocked out and on the day the new owner (often the bank) gets the deed to the property, it is theirs and if they want the tenant out, they can get the tenant out. Tenants were often named as co-defendants in foreclosure actions to ensure that the mortgage did, in fact, wipe out any leasehold rights. Both of these things changed with some recent changes in the law.
Recently passed WI SS 704.35 protects new tenants. If a foreclosure action has been commenced, the landlord must notify a prospective tenant IN WRITING that a foreclosure action has been commenced, and if a judgment has been entered, when the redemption period ends. The rental agreement needs to confirm this with a separate written statement attached to the lease that is signed by the tenant acknowledging this. Without this separate statement, the tenant can void the lease. Existing tenants were also given new protections under WI SS 846.35.
When a bank forecloses on a landlord, a tenant must be sent copies of notices so they know what is going on. The tenant needs to get a notice that the foreclosure action has been filed, within 5 days of filing. The tenant needs to get notice that a judgment was entered within 5 days of it happening and be told when the redemption period ends. Once the confirmation hearing is scheduled, they need to be told the time and date of that hearing. All of these notices either need to be officially “served” or mailed certified, return receipt requested.
Once the foreclosure is done, the new owner (often the bank) cannot just remove the tenant. The tenant has the right to stay living there for two months after the end of the month that the confirmation happened. Also, because the new owner is not very likely to give the tenant their deposit back, the tenant can legally withhold their deposit for the last month’s rent.
Also, although the tenant must receive these various notices, they cannot be named in the notice unless their ownership interest is more than just a standard lease. If the bank doesn’t notify the tenant as they should, or if the tenant is named as a party in the foreclosure action, the fine against the bank is $250, which is paid to the tenant. The tenant can also recover their attorneys fees.
So, as always, lots of good information to tune in for… and of course, this will be the second time I am trying out my new closing song, by Alvin and the Chipmunks. So, until then… HAPPY RENTING!