What a week it has been. Whatever that bug is that has been going around has struck my property manager, who has been out for most of the week. I have been flying solo here in the office and I will be the first to tell you that leaving me alone in the office for extended periods of time with no adult supervision is not the best idea.
I never did get around to doing my summary post from the March 31st version of the Dr. Rent Radio show, so we will make this blog post a 2-fer.
First of all, if you tune in to tonight’s Dr. Rent Radio Show (5 PM on 93.3 FM, WNRB-LP, or online at www.wausauhmong.org) we will first cover a question that is very timely. With all of the natural disasters that have happened in our area lately (flooding and the weekend tornados in the Merrill area), what is a landlord’s responsibility to a tenant when a property has been damaged by weather related causes? What about the tenant’s personal property that was damaged? What if the property is no longer habitable? After that question, we will get into tonight’s main show topic, which is security deposit withholding. I taught a Landlord-Tenant Law class in Appleton over the weekend, and it still amazes me how many landlords don’t fully understand what can and what cannot be taken from a tenant’s security deposit.
On last week’s Dr. Rent Radio Show, we didn’t have any questions and spent the entire show on our main topic of discrimination and fair housing. We did a summary of the basics as it is only a 1 hour radio show and I have attended fair housing classes that took an entire day. My favorite trick question is… Is Discrimination Legal? The answer is actually yes. Discrimination is only illegal when the basis of the discrimination is because of a class that has been protected by either Federal, State, or local (city/county) law.
Because local protected classes vary, I didn’t discuss them on the show. I did though spend time on the 7 federally protected classes, which include Race, Color, Sex, National Origin, Religion, Handicap and Familial Status. Most of these are self explanatory, but we did spend some extra time on Handicap, giving a summary of reasonable accommodations/modifications and again going over how service animals are covered, and the difference between a service animal and a comfort animal. We also spent some time on familial status, because this is the single biggest violation that I see happen. Basically, families with children can not be treated any differently that families without. Landlords cannot steer based on children, even if the intent was good (afterall, the road to h*** is paved with good intentions). For example, because of safety hazards from stairs and upper level balconies, a landlord prefers to have young children in lower level units. Although the safety concerns may be valid, upper vs. lower unit is a parent decision, and steering a family with children toward a lower unit would be illegal. Also, if you have 2 per bedroom occupancy standard and the family has two children, teenage boy and teenage girl and they are looking at a 2 bedroom unit, you as a landlord might see this as a very bad idea. But again, that is the decision of the renter, not your decision as a landlord.
The State of Wisconsin has also declared those 7 classes as protected, and to them has added 6 more, including Age, Martial Status, Lawful Source of Income, Sexual Orientation, Ancestry and Status as a Victim of Domestic Violence. Here, the most common problem I see landlords make is in the area of Lawful Source of Income. It is not unusual to income qualify tenants, however many landlords want verifiable, GARNISHABLE income. If they end up taking a tenant to court, they want to be able to collect on that eventual judgment. Certain sources of income, such as Social Security Income or SSDI, cannot be garnished. Although this restriction on garnishable income makes sense from a business standpoint, it would be illegal discrimination. It is legal to discriminate based on the amount of income (setting an minimum income level), and also to establish standards on stability of income. However, as long as the source of that income is legal, and can be verified, it is allowed. If a landlord requires $1000 in monthly income for a $400 per month apartment, the person with the $1000 per month job is just as qualified as the person with the $1000 social security check.
I started the discussion by saying it was legal to discriminate, and then proceeded to spend most of the radio show saying when discrimination could not be done. So, when can you legally discriminate? When are classes NOT protected?
Pets would be one area. Not only can you discrimate against pets, you can discrimate against type (maybe cats are okay but not dogs), or size (maybe any pet is okay as long as it is under 15 lbs for example). It should be pretty clear through state laws that smokers are not protected, so you can establish a non-smoking policy. Not only is it legal to discriminate based on credit history, rental history (i.e. previous housing references), and to a large extent criminal history; it is a very good idea from a business point-of-view to do so. We already mentioned that even though source of income is protected, amount and stability are still valid reasons to make a rental decision. Of course my favorite non-protected class includes liars. If I find any false information on an application, that application is denied. Period. Every Time. Don’t even bother asking about a co-signer, co-signers are for people who are honest about their situation… they are NOT for people who tried to get one past me and failed to do so.
We were running out of time on the show, so we only briefly touched on how discrimination happens. We talked about how language in advertising can be discriminatory. For example… “The perfect bachelor pad” = sex/marital status/familial status. “Ideal for Empty Nesters” = age/familial status. “Behind St. Paul’s Church” = religion. Other ways that discrimination happens in steering (as we discussed earlier), different levels of underwriting, and different lease terms.
The basic key to being compliant with fair housing laws was to BE CONSISTANT. What lease terms you offer apply to everyone; what underwriting you do applies to everyone one. It is not just the law, it is simply the right thing to do.
The week before, March 31st, we had a great question from a tenant. This tenant had to break their lease and with the landlord’s permission, they sub-let the apartment. The sub-lessor paid rent to the tenant, the tenant paid rent to the landlord. However, the sub-lessor wanted a rent certificate. The tenant had gotten a rent certificate from the landlord and just figured the sub-tenant was S-O-L because they were not on the lease with the landlord.
Actually, this is one of the reasons why I recommend against subletting. The tenant becomes the landlord. Technically the tenant can not claim the homestead credit for that time when they were not living their. Also, the sub-tenant can get a homestead credit if they were living there, and they don’t get this from THE landlord, they get this from THEIR landlord, which in this case was the tenant. (Of course, the landlord has no obligation to fill out the rent certificate, but that is a question we covered back when tax season began). So wait, does this mean that the rent paid to the tenant by the sub-lessor was actually income, that should have been reported when filing your taxes? Yepper!
Our main topic on that March 31st show was a program that I had written titled Landlord and Tenants Rights (& Wrongs). This was a presentation designed to be presented to the general public and therefore could include landlords as well as tenants. It covered some basic rights that tenants have as well as some basic landlord rights.
Right to Exclusive Possession – The tenant has the right to use the property. The landlord can only enter with 12 hours advance notice for specific reasons. There are exceptions to the notice requirement for emergencies and the landlord is able to change the notice requirements through the use of Nonstandard Rental Provisions.
Right to Safe and Code-Compliant Housing – Again, a tenant right. The landlord has an obligation to keep areas in repair that they have control over. The landlord must provide things they agreed in the contract to provide. The landlord is required to make structural repairs and comply with housing codes. However, tenants must also understand that issues that were caused by their negligence or improper use, they can be held liable for. Also, tenants have an obligation to comply with those housing codes that apply to them.
Right to Collect Rent – The landlord has the right to their money, even if the tenant vacates before lease end or is evicted. The two parts to a rental agreement (the tenant’s right to live in the property and the landlord’s right to be paid rent) are seperable. An eviction will end those occupancy rights WITHOUT ending the tenant’s obligations. A landlord does have a duty though to mitigate tenant damages, or in other words, make a reasonable effort to find a new tenant.
Right to be Fairly Considered for Housing – As we have already talked about the protected classes and discrimination, you get the point.
Right to Have Details – A tenant right, landlords must disclose the exact unit the tenant is being considered for before accepting any earnest money. Landlords must also disclose any non-rent charges and what utilities are not included in the rent. The landlords must provide tenants with their contact information, and an address (in Wisconsin) for service of process. If a rental property is in foreclosure, this also must be disclosed to the tenant.
Right to Get Security Deposit Back – This was the topic of tonight’s radio show, so I will blog about this in much more detail next week.
Right to “Double Down” – Tenant’s have the right to double damages if a security deposit is wrongfully withheld, or not returned at all. Landlords are also entitled to double damages if a tenant committed damage that could be construed as “waste”. If a tenant is in the property after their right to be there ends, the landlord is also entitled to double rent.
Right to Know What’s Right – Here, I explain where these laws can be found (WI SS 704 and ATCP 134) as well as discuss the Consumer Protection phamlet titled “Landlords and Tenants – The Wisconsin Way”.
I closed it with The Right to Ask Questions – Which is where I provide my contact information. Remember, you can send your landlord/tenant questions to me at email@example.com.
Until tonight’s radio show… HAPPY RENTING!