After a one week break from the radio show (because I had a speaking engagement that conflicted with the show), I will be back on the air tonight, Thursday, at 5 PM on WNRB-LP, 93.3 FM on your radio dial (if you are reasonably close to our transmitter).
A lot of really good questions came up since the last radio program. One question asks about new rental property construction. When doing research on rental properties, they learned that the more expenses you can shift to the tenant, the better you are able to control costs. Also, there is evidence that indicates that separately metering utilities makes the average tenant more aware of their utility use and is therefore sound environmental policy as well. Yet, many new construction units have heat and water included. Why?
Two questions are similar to each other. In one, a tenant vacated the property but left some large items of apparent value behind. These items were not left in the unit and were instead left in common areas (such as the yard), presumably so the tenant would be able to come by at a later date to pick them up. Can the landlord do anything with this property? A similar issue was not really a question, but is something I want to cover on the show because of a recent news article. An OTR truck driver left a car in a parking lot only to find it gone when he came back, with some items of high sentimental value within that vehicle. It turns out the car was not stolen per se, instead the property owner assumed it was abandoned and had it removed. The advice on what to do with stuff left on a landlord’s property changes somewhat if it is a motor vehicle. How are abandoned cars properly handled?
Although tax season is for the most part over, while doing a speaking engagement in Stevens Point last week, there was a discussion on rent certificates, what are landlords required to do, under what time constraints, etc. So, we will briefly cover what rent certificates are, when they are needed, and what a landlord’s responsibility is.
The final question is a perfect lead in for today’s topic. A tenant’s family member had died and the landlord had informed the family that the estate of the tenant would be responsible for the rent and other provisions of the lease until the landlord found a new tenant or the lease ended, whichever occurred first. The question was whether that was a true statement. I answered that question (and will on the radio show), but I also explained that soon that answer will change. That change is today’s main show topic. Governor Doyle signed Senate Bill 591 into law, and now known as Act 323 will create WI SS 704.165 as of May 27th, and limits to what extent an estate is liable for the rental terms after a tenant’s death.
Last week we answered a question about there being a law about property owners being required to replace the carpet after 10 years. There is no such law. Here, the market and housing codes dictate. Although it would have to be some really nasty carpeting to cause the property to be uninhabitable, when tenants are looking at apartments or rentals, a unit with updated flooring is a good sign of a property owner that is not afraid to invest money in the property for cosmetic fixes. Where this 10 year thing probably came from is that if a tenant damages the carpet to the point it needs to be replaced, the landlord can only charge full replacement cost if the carpet is new. Otherwise, the age of the carpet needs to be considered and depreciated. For example, if the property owner did get half of the “useful life” out of the flooring, then they can only charge the tenant with half of the cost, not the entire cost. So, how long is the useful life? That depends on many different issues and is taken on a case by case basis. However, in talking to many landlords all over the state, most courts will assume the useful life as 10 years unless the landlord can prove it is longer (or the tenant can prove it is shorter). In other words, if the tenant destroys 15 year old carpeting, it will be very difficult to get a money judgment in court (not impossible, just difficult).
Another question discussed last week had to do with the landlords obligations to mitigate damages. If a tenant breaks their lease (either they moved before lease end, or were evicted in the middle of the lease), the landlord can only hold them liable for the remaining rents if the landlord makes “reasonable efforts” to mitigate damages. If a landlord decided they have had enough problems with renters and after the eviction decided to sell the property instead of rent it out, they are NOT mitigating damages and cannot legally hold that past tenant liable for rents coming due under the contract. However, if the landlord is offering the property for sale OR for rent, and they are willing to take a tenant under the same terms and conditions as the one who broke the lease, then (depending on the type of advertising and other issues), that may be considered mitigating damages. But listing the property as For Sale only, and not willing to consider re-renting – you are not mitigating damages.
I get regular questions about apartment associations. I have mentioned that I am currently president of the Wisconsin Apartment Association. This is a trade association representing the rental housing industry with local affiliates all over the state. If you would like more information on the WAA, their website is http://www.waaonline.org. Many cities have their own apartment associations. Many are affiliated with our state association (such as local organizations in places such as Marshfield, Wisconsin Rapids, Green Bay, Appleton, Janesville, Waukesha, etc.). Some associations, such as those in Merrill, Wausau and Stevens Point are not associated with the WAA and are more stand-alone entities that focus primarily on local issues. I am a member of the Stevens Point association (the CWAA) and am a former member of the Wausau Area Apartment Association. Although no longer a member of the Wausau group, I still communicate with them on a regular basis and from time to time, on certain issues, with their permission, speak on their behalf. If you want more information on the WAAA, their website is http://www.wausaulandlords.com.
Finally, our main topic on our last show two weeks ago was the EPA’s new rules about Lead Based Paint, also known as the Renovate Right rules. These rules went into effect on April 22nd, but because education is very difficult to find – it will probably be a little bit of time before these rules are strictly enforced.
The rules impact anyone who is going to be doing remodeling or any other kind of work on residential properties built prior to 1978. If the work is going to disturb more than 6 square feet of painted surfaces, and is being done for compensation, you must be properly trained and state certified to do this work, or face fines in excess of $30,000 per violation.
For the most part, this rule will have the greatest impact on carpenters, painters and other construction/remodeling trades-people. Although this doesn’t impact owners doing work on their own property if they are owner-occupied, it does apply to landlords doing work on their own rental properties, because the tenant paying rent does qualify as “compensation” as far as these new rules apply.
The work must be done in a lead-safe manner that minimizes the amount of dust, and controls the dust that is created. What is working in a lead-safe manner? That is too long to explain in a blog post, and it is the purpose of the 8 hour, hands-on training course. I was able to find the course here being taught through NTC and spent $255 each for both me and my head of maintenance to attend the training. I then had to pay a $75 fee to license my company with the state (this will need to be renewed every two years). Once the company was licensed, I also had to spend $50 each to have myself and my service team leader also licensed as lead-safe workers through the state. These licenses must also be renewed every two years, and we will be required to take continuing education (or refresher training) every four years.
In addition to the training showing us how to work in a lead safe manner, the class explains what lead based paint is, how it affects people (especially children), what the greatest hazards are, what this law is and how it works, what the record-keeping requirements of this law are, and how to clean after the work is done and how to verify that the cleaning has been done properly.
What can I say… never a dull moment in the field of rental housing. So until the radio show at 5 PM tonight, HAPPY RENTING!!!