Link to full Article on Rent Cafe's Website
The next RPA Landlord Boot Camp will be held on Saturday, April 13, 2024.
Sign-ups will begin soon, please watch for more information via email in the future!
Why should you attend Landlord Boot Camp?
This in-person event will be held at the Sonesta Milwaukee West. The day includes lunch and a downloadable PDF of the course materials. (Printed materials available for an extra cost.)
HACM is the Housing Authority of the City of Milwaukee.
We apologize for any delays some of you may be experiencing with scheduling inspections. Your patience is greatly appreciated.
Here are some general rules of thumb for inspections:
ANNUAL INSPECTIONS
Approximately 120 days prior to your HACM tenant lease end date, you and your tenant should receive a notice telling you either when your inspection will be (approximately 90 days prior to lease end) or that your unit does not need to be inspected this year. If the lease ends in an odd month, (Jan, Mar, May, etc) the unit will have to be inspected before the lease is renewed in 2024.
Annual inspection dates are non-negotiable. An adult must be present to let our inspector in. If we cannot access the unit, the unit will fail inspection, and we will determine when the reinspection will take place.
You don’t have to wait for our call or a letter. By using the portal, you can check for any upcoming inspections!
NEW TENANT INSPECTION / REINSPECTION
Within 48 hours of receiving a Request for Tenancy Approval (RFTA) form from you or your prospective tenant, the owner/agent should expect a call from either a Leasing and Contract Specialist to discuss rent reasonableness, or from Jose Guzman to set up an inspection.
To set up a reinspection you must contact jose.guzman@hacm.org 414-286-5658.
Message from HACM (Housing Authority of the City of Milwaukee):
Beginning March 1, 2024, we will no longer mail out rent increase forms. Up until this time, we have typically mailed out rent increase forms 150-120 days prior to lease end dates along with annual inspection notices.
We are now providing a generic rent increase form on our website. You can also request one from stephen.fendt@hacm.org. Please complete and sign the form, have your tenant sign it, and return it to us at section8leasing@hacm.org no less than 90 days prior to the lease end date.
We ask that you be proactive and monitor the lease end dates for your HACM tenants so you know when future rent increase forms are due. If you are on the Landlord Portal, and we encourage all of you to go there and register, you can see your lease renewal dates by clicking on the “Unit Info” icon.
MADISON — Gov. Tony Evers, together with the Wisconsin Housing and Economic Development Authority (WHEDA), announced today that two new loan programs, Restore Main Street and Vacancy-to-Vitality, are now available and expected to spur the development of new affordable housing units across the state.
“Expanding access to safe, reliable, affordable housing statewide in Wisconsin is critical to addressing our state’s pressing workforce challenges while connecting the dots to ensure our kids, workers, and families can be successful and thrive,” said Gov. Evers. “As we revitalize main streets and turn vacant commercial spaces into affordable residential units, we are building a brighter future for our workforce, our economy, and our state. I am proud that, through these new programs and investments we made in the budget, we are able to help Wisconsinites access the safe, stable housing they deserve.”
“Together, these new programs give us even more opportunities to add much-needed affordable housing in both urban and rural areas of our state that are desperate for safe, stable homes for working individuals, families, and seniors,” said WHEDA Executive Director Elmer Moore Jr.
Access to safe, reliable, and affordable housing is a critical part of helping address the workforce challenges facing the state. For years, Gov. Evers has proposed robust provisions and investments in expanding access to housing statewide, including in his 2023-25 proposed budget. The governor was glad to have the Wisconsin State Legislature join him in supporting this critical effort. The 2023-25 biennial budget signed by Gov. Evers provides one of the largest state investments in workforce housing—$525 million—in state history, including measures to fund both the Main Street Housing Rehabilitation Revolving Loan Fund and Loan Program, now called Restore Main Street, and Commercial-to-Housing Conversion Revolving Loan Fund and Loan Program, now called Vacancy-to-Vitality. Both programs were created earlier this year as part of a bipartisan package of bills Gov. Evers signed to help expand access to safe, affordable housing for working families.
The Restore Main Street Loan Program provides loan funding for building owners to cover the costs to improve housing located on the second or third floors of an existing building with commercial space on the ground level. Borrowers can apply for up to $20,000 per housing unit or 25 percent of the total rehabilitation cost at a low-interest rate of three percent or one percent in municipalities with a population of less than 10,000.
The Vacancy-to-Vitality Loan Program allows a developer to apply for a loan to cover the costs of converting a vacant commercial building to workforce or senior housing. Developers can apply for up to $1 million or 20 percent of the total project cost, including land at a low-interest rate of three percent or one percent in municipalities with a population of less than 10,000 or senior housing.
Both programs require municipalities to take steps to reduce the cost of the eligible project by voluntarily revising ordinances or regulations that affect the project on or after Jan. 1, 2023. Municipalities are also required to have updated the housing element of their comprehensive plans within five years.
For additional information about the loan programs, please visit WHEDA’s website here.
An online version of this release is available here.
Read the Full Paper Here
The FTC put out a 161-page paper. On page 22 the paper references fees in Rental Housing:
Comments from individual consumers about rental housing fees stated that leasing companies advertise monthly rents that do not include fees for mandatory ancillary services that unexpectedly and significantly increase renters’ monthly expenditures. The comments stated that leasing companies do not always identify the purpose of these fees.
Consumer and policy groups noted that landlords do not adequately disclose many unavoidable fees or fail to explain the purpose of fees, and supported a rulemaking pertaining to fees in connection with rental housing, including apartments, house rentals, and manufactured housing communities (“MHCs”).
The National Consumer Law Center (“NCLC”) conducted a survey of legal services and nonprofit attorneys that identified many unavoidable fees faced by tenants, and recommended that the FTC require that online platforms for rental advertisements disclose all fees, including fees charged before and after signing rental leases.
Private Equity Stakeholder Project supported enhanced fee disclosure requirements and upfront disclosure of the costs of goods and services to protect consumers and the economy at large. The comments also recommended that the FTC investigate unfair or deceptive practices related to housing fees and provide guidance on fees.
The comments also recommended that a rule prohibit certain rental-related fees as invalid per se because they are exploitative and target captive renters who often come from vulnerable groups. The comments stated that fees make rental housing even more unaffordable and jeopardize access to future housing and financial stability.
From the footnote:
NCLC noted that the survey was conducted between November and December of 2022, and showed that tenants face an array of unavoidable fees, including rental application fees, sometimes charged even if landlords know applications will never be approved, excessive late fees, utilities-related fees, processing or administrative fees, convenience fees, insurance fees, notice fees, trash fees, pest control fees, technology fees, common area and amenity-related fees, inspection fees, and mail sorting fees.
By Shawn Woedl, President of National Real Estate Insurance Group
When it comes to settlement methods, you have two options to choose from: Replacement Cost, or RC, and Actual Cash Value, also referred to as ACV. These two options determine how your claims payout is settled in the event of a loss. So, what’s the difference? Depreciation.
Regarding property insurance, depreciation represents the estimated reduction in value based on how much useful life is determined to be left in the damaged property. This is calculated by an adjuster, factoring in criteria such as age and general wear and tear.
Both RC and ACV account for depreciation. However, one settlement method allows for reimbursable depreciation whereas the other does not.
REPLACEMENT COST (RC)
This settlement method allows claims to be settled with reimbursable depreciation. Replacement Cost coverage requires you to be insured to a higher valuation per square foot but provides you with more financial protection.
For example, a kitchen fire at your property causes a partial loss, totaling $30,000 in damage. The deductible on this property is $3,000, so the insurance carrier will pay no more than $27,000. An assigned claims adjuster visits the property to determine how much useful life was left in what was damaged.
The actual cash value of the loss after depreciation is determined to be $15,000. You will receive a payment of $12,000 (the actual cash value minus the deductible). That $12,000 will go towards the necessary repairs and replacements. If expenses exceed that amount, you will pay out of pocket.
Let’s say the cost of repairs totaled $20,000. With provided receipts, a second check for reimbursable depreciation will be issued for an additional $5,000. Replacement Cost allows you to recoup some or all of the depreciation that was taken from you. The only part that is not recoverable is your deductible.
ACTUAL CASH VALUE (ACV)
Actual Cash Value policies pay the depreciated cost to repair or replace your damaged property and/or its contents. ACV coverage pays you for what the property and/or its contents are worth at the time of loss. Coverage with this settlement method is typically 20-25 percent cheaper than an RC policy and allows you to be insured to a lower value per square foot. However, ACV does not allow you to recover any depreciation.
For example, the same $30,000 kitchen fire occurred at a property with an ACV settlement method and a $3,000 deductible. The adjuster depreciates $15,000 from the loss. You will be issued a check for $12,000 (actual cash value minus the deductible). With an ACV policy, $12,000 is all you can recover from this $30,000 fire loss.
What you may not know is you can do whatever you want with that money- fix the damage or cut your losses, sell the property as is, and use the money to buy a car.
As a side note, depreciation is extremely difficult to determine until the loss occurs. It is based on the date of the last updates, not the original year built. Everything depreciates at a different rate, but the average is about 1% annually. Although roofs deteriorate much quicker due to weather exposure.
Read the Full Article Here
A paper by Aviv Caspi and Charlie Rafkin
This is a 76-page paper out of Memphis TN by Stanford RegLab and MIT Economics. You may not want to read a 76-page paper, so some highlights from this paper follow. (The statements in bold are highlighted for your convenience, not highlighted in the paper.)
Seeking to assist tenants, 17 cities and four states recently passed “Right to Counsel” programs that guarantee defense attorneys in eviction cases.1 This expansion represents perhaps the most significant shift in U.S. eviction policy in the past two decades, aside from temporary pandemic-era measures. Yet whether attorneys actually stop evictions is unclear.
The RPA has stated in the past that attorneys may hinder the process, stretching out the time a tenant remains in the property and therefore increases the amount of money the tenant owes in the end. This can also have negative impact on good tenants because security deposits may need to increase to cover the increased risk a non-paying tenant bears.
Despite landlord- friendly eviction law, providing an attorney reduces tenant eviction judgment rates within 90 days by 27 percentage points (50%). However, attorneys’ effects persist only when they can connect tenants to other services. Once a concurrent emergency rental assistance program expires, effects on judgments at 90 days shrink by about 70% and are indistinguishable from zero. Attorneys have little effect on informal outcomes and bargaining.
In Wisconsin, such "other services" can be Ross IES on Milwaukee's northwest side, which offers Emergency Rent Assistance once a year to tenants who are facing eviction. Another service that assists tenants and landlords with bargaining (coordinating payment agreements, etc.) is Mediate Wisconsin. RPA had Mediate Wisconsin at our recent Trade Show and they have been speakers at prior events.
Approximately 40% of tenant applicants prefer a lawyer to receiving $1,000. It costs about $350 to hire an eviction defense attorney in Memphis.
So in essence, 60% of tenants prefer receiving money than hiring an attorney.
By Gary D. Koch, Petrie + Pettit
Evictions are typically matters handled exclusively through the state court system, in whichever county the property is located. Every now and then, though, we have to make a trip to federal court to assist a landlord. This most frequently arises when a tenant files for bankruptcy protection.
Bankruptcy is authorized by the United States Constitution and is codified in Title 11 of the United States Code. There are 15 “chapters” of code, but the most common of those in this context are Chapter 7 and Chapter 13. The bankruptcy protections provided by filing under either chapter are extremely powerful, and can stop an eviction in its tracks.
Chapter 7 bankruptcies are relatively short-lived. The filing of a Chapter 7 bankruptcy creates an automatic stay of any action to collect on a debt, including past-due rent, or to continue any action to recover an interest of the “bankruptcy estate”, which includes the tenant’s right to continued occupancy of the rented premises.
Chapter 7 bankruptcies are typically open for four to six months before the case is closed. If the case results in a “discharge,” most debts which existed at the time of the filing are wiped out. Rent incurred before the case was filed is generally discharged in a Chapter 7 bankruptcy.
Chapter 13 bankruptcies usually run for a much longer duration. These bankruptcies may repay some amount of the existing debt to creditors, but do so over a 3 to 5 year period. The filing of a Chapter 13 bankruptcy also creates an automatic stay against collection or recovery.
There are a few exceptions to the automatic stay. Most relevant to a landlord, is that if a judgment of eviction is entered by the state court before the bankruptcy is filed, the landlord can still execute the writ and remove the tenant from the property. Be aware, however, that there is an exception to this exception, so there are limited circumstances when even a previously granted judgment of eviction is halted by a bankruptcy filing!
In all other circumstances, whether a Chapter 7 or a Chapter 13 is filed, in order to move forward with an eviction action, including serving a notice terminating the tenancy, the landlord will need permission from the Bankruptcy Court to do so. We obtain this permission by filing a Motion to Lift the Automatic Stay.
For Chapter 7 bankruptcies, the process of obtaining a lift of the stay requires a specific basis to file and may take as long as the life of the bankruptcy itself, so doing so may be an exercise in futility. Once the Chapter 7 discharges, dismisses or closes, the landlord can proceed against the tenant for any debt incurred after the date the Chapter 7 case was filed. Lifting the stay may allow the landlord to begin the process a few weeks earlier than the end of the bankruptcy.
For Chapter 13 bankruptcies, though, given their much longer duration, lifting the automatic stay is a viable option for the landlord. There need to be grounds for the motion, such as failure of the tenant to pay rent after the filing of the bankruptcy. The Bankruptcy Court will also likely give the tenant a “second chance” with the first motion, and order that any rental arrears incurred after the date the case was filed be included in the repayment plan, but may also order that any future missed rent payments will result in an immediate lifting of the stay.
Evictions are complicated enough, but when you add in a bankruptcy as well, navigating both the state AND federal courts becomes a minefield. Petrie + Pettit has shepherded may clients through both court systems and stands ready to assist you.
By Atty Heiner Giese
The Rental Property Association of Wisconsin, Inc. held its annual membership meeting at the Sonesta Hotel in Wauwatosa on November 20, 2023. An election was conducted for positions on the Board of Directors with the following results:
Out of four candidates, these three incumbent Board members were elected by majority vote for two year terms ending November 2025:
The new Board will elect a president and an executive committee at its next meeting.
BECOME A MEMBER - JOIN TODAY!
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