Inside Track: Landlord-tenant law: Rights, remedies, and changes under new Act 143:

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  • Inside Track
    March
    30
    2012

    Landlord-tenant law: Rights, remedies, and changes under new Act 143

    Tristan Pettit

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    A new landlord-tenant bill was recently signed into law, making significant changes and creating some confusion as to the ultimate impact on landlords and tenants. In this article, Milwaukee attorney Tristan Pettit explains the bill's major changes.

    Tristan PettitApril 4, 2012 – The Landlord’s Omnibus Bill (Senate Bill 466), signed into law by Gov. Scott Walker on March 21, 2012, makes significant changes to landlord-tenant law in Wisconsin, some of which may cause confusion in the future.

    According to Sen. Frank Lasee (R-De Pere), who introduced the bill in mid-February, the purpose of SB 466 “is to provide additional structure to standardize state statute for some of the most common issues that lead to conflicts between landlords and tenants.”

    However, due to the rapid pace at which this law was drafted and enacted, there are some confusing provisions that make it difficult to predict the long-term impacts.

    This article explains some of the major changes under the law, 2011 Wisconsin Act 143, effective April 1, 2012, including provisions on check-in lists, abandoned property, eviction moratoriums, and severability of rental agreement provisions, among others.

    Severability of rental agreement provisions

    Newly created Wis. Stat. section 704.02 allows for the severability of rental agreement provisions, such that any provisions declared void or unenforceable can be removed and the remaining provisions of the rental agreement may be enforced.

    In direct contradiction of the above, the new law also codifies the prohibited rental agreement provisions set forth in the Wisconsin Administrative Code’s Residential Rental Practices, ATCP 134.08 (known as the “seven deadly sins”), which, if included in a rental agreement, render the entire lease void and unenforceable against the tenant.

    Act 143 adds an “eighth deadly sin” to the list of prohibited provisions. Thus, any rental agreement that allows a landlord to terminate the tenancy of a tenant if a crime is committed in or on the rental property – when the tenant could not have reasonably prevented the crime – will render the rental agreement void against the tenant.

    Landlord-tenant law: Rights, remedies, and 
changes under new Act 143

    Disposal of tenant's abandoned property

    It will now be easier for a landlord to dispose of a tenant’s abandoned property. Act 143 allows landlords to dispose of a tenant’s personal abandoned property immediately, at the landlord’s discretion, as long as the landlord provides written notice of this intent at the time of entering into a rental or renewal lease agreement.

    Prior law required that a landlord hold a tenant’s abandoned property for 30 days after providing a tenant written notice, which is still required if the landlord fails to provide the tenant with the written notice described above.

    However, Act 143 creates an exception for prescription medicine or prescription medical equipment left behind by a tenant. Those must still be held by the landlord for seven days from the date of discovery.

    The new law creates another exception for certain vehicles. Prior to disposing of a tenant’s abandoned manufactured or mobile home or any titled vehicle, a landlord must give notice of the intent to dispose of the property, via personal service, certified or regular mail, to the tenant and any secured party of which the landlord has actual notice.

    The changes in the new law do not apply to self-service storage facilities.

    Disclosure of code violations

    Under Act 143, prior to entering into a rental agreement, accepting earnest money or a security deposit, a landlord must disclose to any prospective tenant any building or housing code violations if all of the following are applicable:

    1. the landlord has actual knowledge of the violation,
    2. the violation affects the rental unit or a common area,
    3. the violation presents a significant threat to the tenant's health or safety,
    4. the violation has not been corrected.

    Prior to Act 143, the regulations (ATCP 134.04(2)) required landlords to disclose “[a]ll uncorrected building and housing code violations of which the landlord has received notice from code enforcement authorities, and which affect the individual dwelling unit and common areas of the premises.”

    Information check-in sheet

    Under Act 143, a landlord is now required to provide a new tenant with a standardized information sheet that contains an itemized description of the condition of the property when the tenant takes occupancy. The tenant is given seven days to complete the check-in sheet and return it to the landlord.

    Specifically, “[a] landlord shall provide to a new residential tenant when the tenant commences his or her occupancy of the premises a standardized information check-in sheet that contains an itemized description of the condition of the premises at the time of check-in. The tenant shall be given 7 days from the date the tenant commences his or her occupancy to complete the check-in sheet and return it to the landlord.”

    This new section of the law appears to contradict itself. The first sentence appears to require a landlord to complete the check-in sheet since one would assume that in order to provide an “itemized description of the condition of the premises” the landlord must describe the condition of the property.

    But the second sentence infers that a landlord need only provide a blank check-in sheet and that the tenant must fill it out since the tenant “shall be given 7 days to complete the check-in sheet.” Previously, there was no information check-in sheet requirement.

    Holdover damages are mandated

    A landlord must now be awarded holdover damages when applicable. If a tenant continues to reside in the rental unit after his tenancy terminates, a landlord is entitled to, at a minimum, double the daily rent for the time period after the tenancy ended (i.e. the notice expired) until the tenant actually vacates the unit. Under previous law, holdover damages were “permissive” and some courts did not award them.

    Withholding from tenant's security deposit

    The new law codifies ATCP 134.06(3), which allows a landlord to withhold the following from a tenant's security deposit:

    1. damage, waste, or neglect,
    2. unpaid rent,
    3. utility bills that aren’t included in the rent,
    4. payment which the tenant owes for direct utility service provided by a government-owned utility, if landlord becomes liable due to tenant’s nonpayment,
    5. unpaid mobile home parking fees if landlord becomes liable due to tenant's nonpayment,
    6. other reasons authorized in a Nonstandard Rental Provision document.

    The new law also adopts the portions of ATCP 134.06, which state that a landlord cannot withhold from a tenant's security deposit for normal “wear and tear” or other losses that the tenant cannot reasonably be held responsible.

    Timing of return of security deposit

    The new law simplifies when a landlord must return a tenant’s security deposit or provide them with an explanation as to how the security deposit was applied, in certain situations.

    A key provision in the new law provides that if a tenant vacates the property before the termination date of the rental agreement, the landlord need not return the security deposit or send a security deposit itemization letter until 21 days after the rental agreement termination date, or if the landlord is able to re-rent the unit sooner than the termination date, 21 days after a new tenancy begins.

    Violations may constitute unfair trade practice/unfair method of competition

    Perhaps the most confusing, and therefore problematic, aspect of the new law is newly created section 704.95, which states that practices in violation of Wis. Stat. ch. 704 may also constitute unfair methods of competition or unfair trade practices under section 100.20.

    Section 100.20 allows for a tenant to sue a landlord for double damages and attorney’s fees. Previously, a tenant could only seek double damages and attorney’s fees if a landlord violated the regulations set forth in the Wis. Admin. Code ATCP 134.

    While the new law has codified some of those regulations, it is not clear whether section 704.95 now allows a tenant to argue that any violation of chapter 704 affords the same remedy.

    For instance, can a tenant now sue a landlord who improperly drafts or serves a 5-day notice to pay or quit the residence – since the law regarding notices is contained in chapter 704 – for double damages and attorney’s fees?

    Acceptance of past due rent

    The new law allows a landlord who has filed an eviction against a tenant for failure to pay rent to accept past due rent from the tenant after the termination of the tenant’s tenancy, and preclude a court from dismissing the landlord’s eviction action based solely on the landlord's acceptance of tenant’s past due rent from the tenant.

    Moratorium on evictions

    Act 143 creates Wis. Stat. section 66.1010, which prohibits any municipality from imposing a moratorium on eviction actions. Thus, municipalities can no longer enforce ordinances that contradict the new law.

    Application to commercial leases

    Act 143 applies to commercial leases, as well as residential leases, for the following:  moratorium on evictions, severability of rental agreement provisions, disposition of abandoned property, withholding from and return of security deposits, mandating of damages for holdover tenants, acceptance of past rent due, and the provision that any violation of chapter 704 may constitute an unfair trade practice.

    The new law excludes commercial leases from the new section on prohibited rental agreement provisions, but not other sections of the legislation. This is most likely an unintended consequence of the rapid pace at which this law was drafted.

    About the author

    Tristan R. Pettit, Marquette 1995, is a shareholder with the law firm of Petrie & Stocking S.C., Milwaukee, and is also the president of the Apartment Association of Southeastern Wisconsin, Inc. He publishes a blog devoted to landlord-tenant law issues at www.LandlordTenantLawBlog.com.