Collection Fees vs Attorney’s Fees

So… am I the only one who thinks that Mother Nature played a very evil joke on us all with a nice stretch of days in the 50’s and then waiting for the official arrival of spring to hammer us with a foot of very heavy and wet snow?

It was a very interesting week.  I blogged about how great my weekend was.  But then the snows came.  I did attend the Wausau City Council Meeting where, by a 10-1 vote, I can now officially use the term “400 Block” when I am talking about the 400 Block.  That City Council meeting will make this weeks Dr. Rent Radio show a little bit interesting.

As you probably know, I am pre-recording the shows while I am taking classes to finally, after spending almost half of my life in real estate, get a real estate license.  I recorded the first half of the show after I got home from work and before heading over to City Hall.  I didn’t get home until about 9 PM, and then didn’t start recording the second half of the show until after supper.  I had just finished the second half of the show and was going to save the file when my computer crashed.  So, I then got to start again from the last time I saved the file and record the second half of the show a second time.  So, if the first half doesn’t segue that well into the second half, now you know why.  And, if it does blend well and you never noticed the transition… well… then I guess I am just that good… LOL.

The main topic of tonight’s Dr. Rent Radio Show is a meeting that I attended Tuesday.  It was a meeting of landlords who own property on the near East Side of Wausau and it was discussing creating a neighborhood group for this area (similar to existing neighborhood groups such as Wehrle Park and Longfellow.  This proposed group would cover an area from 6th Street on the West, going east to the rail road tracks; and, from Forest Street on the South and going North to Franklin Street.  We discussed the history behind forming such a group, strengths this area has that can be built on, things we would like to see changed, and ideas on things that we (as landlords) could do.

Before getting to the main topic, we have a couple of questions to talk about.  A landlord had a question about animals related to disabilities.  They knew that they have to allow service animals, but what about “comfort animals” that are prescribed by a doctor?  And, what if it wasn’t just one animal but two, and what if the specific animal is a high-risk breed of dog?

We also had a question about mice?  Are mice in a residential rental a tenant problem or a landlord problem?

Speaking of questions, on last week’s Dr. Rent Radio Show, we had a large number of really good questions.  Let’s recap those briefly.

Is a two person per bedroom occupancy standard in all counties?  Not exactly.  This question came from someone who had taken one of my classes.  The two person per bedroom is my personal occupancy limitations.  Each landlord can make their own, or choose to go with whatever municipal codes allow.  Each municipality has a different standard, and it is not going to be as easy as X per Bedroom.  Instead, they are normally based on some type of square foot formula and the permitted occupancy levels that I have seen can be ridiculously high.

How many cats are allowed in (city)?  Each municipality will have its own rules on numbers of cats and dogs, and whether the cats need to be licensed.  Your best bet would be to call the city/town/village in question and ask them?

Where can you get rental forms?  If you are a member of an apartment association, you can normally get forms through that association.  Also, if you are a Realtor, the ZIPForms program has most forms you would need for rentals.  Some of the best forms on the market are those made by Wisconsin Legal Blank.  You can google that name to purchase directly from them.  Or, they are also available in Wausau at the Janke Book Store.

I signed a lease for longer than a year and now I need to break it, I heard that leases for longer than a year are not valid according to WI SS 704.03, is that true?  No, it is not true.  All that 704.03 says about leases longer than a year is that they need to be in writing.  Leases longer than a year have different notice requirements for landlords, but they are just as valid as shorter term agreements (assuming they are in writing).

Does a lease need to state an exact start and end date to be valid?  Sort of.  The start and end date need to be identifiable, but that is not the same as listing the exact date.  A lease for 13 months that starts February 1st, 2011 would be valid  Even though it doesn’t say when it ends, you can figure it out.  Also, the lease could say it has a 1 year term that starts the first day of the month after an occupancy permit has been issued.  Even though the lease doesn’t have an exact date, the date could be figured out by getting a copy of the occupancy permit.

Tenant didn’t have any heat because landlord didn’t fix the furnace.  Tenant bought some electric space heaters and then withheld the rent, telling the landlord they would hold the rent until the heat was fixed.  The landlord evicted them for non-payment.  Can they do that?  Yes.  If the landlord breaches the lease such as in the case described here, the tenant has two options.  They can either vacate the property terminating their lease.  Or, they can partially abate the rent to make up for their diminished use because of the landlord breach.  However, if the tenant remains on the property, they can never fully abate the rent.  So, if you stay in the property, you can hold some rent hostage (as for how much, you are in lawyer-land with that question).  However, if you stay in the property and don’t pay any rent… yes… the landlord can evict.

Finally, a question I am getting asked a lot.  Now that the Dr Rent Show is getting pre-recorded, when will I start archiving the shows for download as a podcast?  I am hoping to start doing this in April… but don’t hold me to that.. that is NOT a promise.

The main topic of last weeks show talked about a recent court decision that adds clarity to the attorney’s fees provision  that will void residential leases.  A few years ago, the Wisconsin Supreme Court decided that the entire lease will be void and unenforceable if the landlord violates ATCP 134.08 (3) by requiring “payment, by the tenant, of attorney’s fees or costs incurred by the landlord in any legal action or dispute arising under the rental agreement.”  What if the lease has a provision to allow the landlord to recoup collection fees if the account goes into collection, is that the same thing?

According to District IV of the Wisconsin Court of Appeals, that answer is no; even if the collection agent is an attorney.

In Case 2008AP1967, Frederick Schoenleber v. Central Wisconsin Properties (L.C. 2007CV152), the court decided “the plain language of the regulation does not prohibit a landlord from including a lease provision allowing it to recover a collection agent’s fee.  Had the agency [DATCP] intended its regulation to prohibit a landlord from recovering any of the costs incurred during the course of a dispute with a tenant, the regulation would have been more broadly drafted.  On its face, however, the regulation prohibits a landlord only from including a lease provision that allows it to recover attorney’s fees and costs, that is, the fees and costs of an attorney doing the work of an attorney.  A lease provision allowing a landlord to recover a collection agent’s fee does not violate that prohibition, regardless of the professional or occupational status of the person doing the collection.”

What I do not know, is whether this case has been, or will be published.  A published case is important because then it can be used to set a precedent in similar court cases.

Well, I am guessing my break from snow removal to get this blog post written is about over, so I should get back to work.  So, until later… HAPPY RENTING!

The Dr. Rent Radio Show is broadcast (most) Thursdays from 5 PM to 6 PM on 93.3 FM, WNRB-LP in the greater Wausau area, and can also be heard online at http://71.98.63.236:88/listen.pls.

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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 ATCP 134, Cats, Forms, Lease, Legal Fees, Questions, Service Animals, Untenantability, WNRB and tagged , , , . Bookmark the permalink.

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