By Attorney Tristan R. Pettit
This is a long blog post, but I sincerely hope that you take the time to read it all the way until the end. It is very important that you know what you will be facing soon. This may be one of the biggest, if not the biggest, issues facing the residential rental industry in the last 30 years that I have been a practicing attorney representing many of you.
The Koble Investments case (“Koble”) which is a Wisconsin Court of Appeals case from District III, was published this week and is now law in the State of Wisconsin. The Court’s holding in Koble is that if a landlord has a void lease (i.e., the lease contains one of the “10 Deadly Sins” as set forth in Wis. Stat. § 704.44) the remedy is for the complete disgorgement of all rent previously paid to the landlord.
Stated another way, if you have a provision in your lease that violates any of the “10 Deadly Sins” as set forth in Wis. Stat. 704.44, your lease is void and unenforceable, and you must now return all rent that you received from the tenant during the tenant’s entire tenancy.
As you can imagine, this remedy could completely wipe out small to mid-size landlords in Wisconsin and if many tenants in a large rental complex come together to sue a larger landlord seeking reimbursement of all rent paid or join in a class action lawsuit against a larger landlord, they too could be seriously damaged.
While the landlord in the Koble case will be petitioning the Supreme Court of Wisconsin to accept and decide this case and hopefully overturn the Court of Appeals, the Wisconsin Supreme Court only accepts a limited number of cases each year and is not obligated to take the Koble case. Additionally, the landlord in Koble at both the circuit court level and at the Court of Appeals level did not raise the best argument available to him which was that if your lease is void, it automatically defaults to a month-to-month tenancy per Wis. Stat. 704.01(2) and therefore the tenant must still pay the landlord rent and that the landlord should not be required to return all rent received from the tenant throughout the tenant’s tenancy.
Additionally, the landlord in Koble also waived the argument that having a void lease, which can occur unintentionally, is not the same as an auto repair shop failing to obtain a customer’s permission to repair damage in the customer’s car and provide an estimate of the cost of that repair to the customer prior to commencing the repair work (which is what the same Wisconsin Court of Appeals held in an unpublished case in 2023). Furthermore, the landlord in Koble, failed to develop an argument against the remedy of returning all rent received during the entire tenancy back to the tenant and failed to advise the court that such a holding would decimate a large part of the residential rental industry in Wisconsin.
Since the above arguments were not raised by the landlord in Koble, or were waived, those arguments are essentially lost and cannot be raised by the parties. Thus, the burden falls on the various Landlord Trade Associations throughout the state to take action and provide this information and raise these arguments to the Wisconsin Supreme Court by filing an amicus (“friends of the court”) brief requesting that the Wisconsin Supreme Court accept the case and render a just decision based on the actual law before permanently damaging the residential rental industry in the state.
The publication of the Koble case is very detrimental to all Wisconsin landlords because tenants and their attorneys will now have an even greater reason to argue that all rental leases that they have entered into with their landlord or property management company in the last six (6) years are void and contrary to Wis. Stat. § 704.44.
Tenants have no reason not to raise such an argument every chance they get, because if they prevail, they will receive a windfall of several thousands of dollars and have been able to live for free for months if not years. And if they are not able to convince the court to rule in their favor, their case is just dismissed and there is no penalty to the tenant.
So, I anticipate that we will see even more tenants trying to attack landlords’ rental documents arguing that they are void then we have already encountered since May of 2023. Because of such arguments, I have had to revise the rental agreement and other rental documents that I draft for Wisconsin Legal Blank two times in the last year, just to be safe, not because I think that they contain any language that violates any of the “10 Deadly Sins.”
I have made the revisions to protect you as it is always better to be safe than be sorry. You must ensure that you are using the most current version of both the Residential Rental Agreement and the Rules and Regulations form that I draft, and which are sold at Wisconsin Legal Blank, which are dated October 20, 2023. The most current Nonstandard Rental Provisions document, which I also revised out of an abundance of caution, is dated March 4, 2024.
No one can foresee what arguments will be made by tenants against their landlord’s rental documents in the future, but rest assured, the arguments will come. It may be necessary for you to have your rental documents reviewed and revised to ensure that you do not have any language that violates any of the “10 Deadly Sins” as set forth in Wis. Stat. § 704.44.
Just as important, if you happen to be on the wrong end of one of these cases and the tenant is arguing that your rental documents are void and unenforceable and that you should be required to return all rent that the tenant has paid to you during their entire tenancy, please make sure to contact the Rental Property Association of Wisconsin, Inc. or your local landlord trade association.
Also make sure that you retain an attorney to represent you that understands and is knowledgeable about Wisconsin landlord-tenant law as there are arguments and defenses that can and should be raised that unfortunately were not raised in Koble.
By Attorney Heiner Giese, RPA Legal Counsel
You won’t need to use a notary public anymore when filing documents in court such as an affidavit of service for a notice terminating tenancy or a process server’s affidavit regarding service of a summons and complaint. The current requirements for a “declaration under oath” were replaced effective March 29, 2024 by 2023 Wisconsin Act 245. Here is an explanation from the State Bar of Wisconsin:
The new legislation permits unsworn declarations to be used in place of affidavits in most civil litigation settings. Specifically, the law amends Wis. Stat. § 887.015. The new law provides that the unsworn declaration must be in substantially the following form:
I declare under penalty of false swearing under the law of Wisconsin that the foregoing is true and correct.
Signed on the ___ day of _______[month], ____ [year], at __________ [city or other location, and state or country].
The newly enacted version of § 887.015 provides that where the law of Wisconsin requires or permits use of a sworn statement (e.g., a notarized affidavit), a declaration under penalty of false swearing may be used instead. The statute identifies five exceptions where an unsworn declaration may not be used, including for a deposition, an oath of office, or a deed or other real estate instrument intended to be recorded.
The RPA will contact Milwaukee City Attorney Evan Goyke to ask for changes to City forms now requiring a notarization, such as the Property Registration forms.
HB4768, The Landlord Retaliation Act, is working its way through the General Assembly.
The purpose for the legislation is to prevent a landlord from retaliating against a tenant who complains about property conditions. That behavior is already prohibited by law, but the advocates of this bill feel the existing law doesn’t sufficiently punish landlords.
Among a list of triggering actions, the new version states that if a tenant simply requests a repair then a landlord is prohibited from making management decisions like raising rent, refusing to renew a lease or change any term of service for one year after that request is made.
This is not limited to major maintenance problems. Almost every request for repair could trigger the prohibition. Multiple maintenance requests within a year are not uncommon, so the liability of this bill will often be continuous.
The biggest problem with the bill is a presumption that the landlord is guilty of retaliation if they make any of the prohibited management decisions within the year after the request for maintenance is made.
Read the Full Article Here
Learn about Milwaukee County Housing Services new program called LIFT (Landlord Incentives to Foster Tenancy).
When:
Where:
Milwaukee County Housing Services
600 W Walnut St #100
Milwaukee, WI 53212
How to RSVP:
Email alexi.millard@milwaukeecountywi.gov
The U.S. Department of Housing and Urban Development (HUD) announced $30 billion in renewal funding for the Housing Choice Voucher Program (HCV). This funding will help Public Housing Authorities (PHAs) continue to provide assistance to families and individuals who are in need of affordable housing options.
[Note: The Housing Authority of the City of Milwaukee is set to receive over $39 million.]
By Samuel A Walker, City Assessor
What is Mass Appraisal?
Why Use Mass Appraisal?
Did you miss the last RPA Landlord Boot Camp in April? Are you wondering when the next one will be so you don't miss out again?
Or are you like the attendees who attended a Boot Camp, and want to take the next one to make sure you keep your skills sharp?
Or are you the like the attendees who completed a Boot Camp maybe a year or two ago and really want to "sharpen the pencil"?
Don't worry! The RPA is working on scheduling the next Landlord Boot Camp for November. So stay tuned!
The U.S. Department of Housing and Urban Development (HUD) on Thursday announced new guidelines that aim to apply the provisions of the Fair Housing Act to the use of generative artificial intelligence (AI) in the realm of housing.
HUD released separate pieces of guidance aimed at applying Fair Housing Act provisions to two key areas of concern in which AI use could impact the fair application of housing services: the tenant screening process and “its application to the advertising of housing opportunities through online platforms that use targeted ads,” HUD said in its announcement.
How much did assessments increase in Milwaukee in 2024?
All of the city's 15 aldermanic districts saw assessments rise, though there was quite a range in terms of how much they increased, according to the Assessor's Office.
At the high end, the assessed value of residential property increased 26.85% in District 1 on the city's north side, while District 4 that encompasses much of downtown and the near west side saw the smallest increase at 14.02%.
The range depends on the neighborhood and should generally be aligned with other comparable homes in the area.
Is it possible for an assessment to increase without any upgrades being made to the home? If so, how?
Yes. Assessments are based on a comparison of homes to similar ones that have sold over the past year. Thus, property owners can see values go up even if they have not made improvements — and even if they don't intend to.
What is a 'maintenance year' for property assessments and what does that mean for 2024?
Last year was a "maintenance year," when assessments from 2022 were used and values were updated "when changes warrant," according to the Assessor's Office website. Changes could include new construction, changes in parcel size, remodeling, demolition and more. They do not necessarily result in a change in value.
In a "revaluation" year like 2024, assessed values for most properties will change.
"In a revaluation, the assessor looks at the prior years' sales to update assessments citywide, in addition to the property changes and corrections reviewed for a maintenance assessment," the website states.
How can you appeal your assessment?
Property owners in Milwaukee have until 4:45 p.m. on May 20 to file an appeal of their assessments.
The first step to filing an appeal is to contact the Assessor's Office.
The Assessor's Office can be reached:
The second step is to request an appeal form and return it by 4:45 p.m. on May 20.
The office recommends that evidence be submitted with appeals. For residential property owners, that could be a copy of a recent appraisal, recent market analysis from a local real estate agent, photos of the inside or outside of the home showing areas that need maintenance, and photos showing features that weren't part of the home as of Jan. 1 of the current year but that are listed on the Assessor's Office's property record card.
Read Full Article Here (Milwaukee Journal Sentinel)
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