On April 16, Governor Scott Walker signed into law The Landlord’s Omnibus Bill (the “Bill”). The Bill, which significantly changes Wisconsin’s landlord-tenant law, is just one of the many legislative changes affecting the real estate industry made during the 2017-18 legislative session. Many of the Bill’s provisions, although not all, make the ownership of residential rental property less onerous. This article is intended to be a high-level discussion of a few of the more significant changes under the Bill.
The term “reasonable costs” regarding tenant-caused damage, as found in Wis. Stat. Section 704.07(3), has been clarified to include any material or labor provided by the landlord. Although a landlord must charge its time at a reasonable hourly rate, a landlord can now charge a tenant for the landlord’s time and effort, including time spent purchasing or providing materials, as well as retaining and supervising contractors.
Municipalities are now prohibited from requiring property owners to register with the municipality, or to obtain a certification or license, relating to the ownership or management of residential rental property. Furthermore, municipalities are prohibited from charging fees for registration of rental property, except for a one-time registration fee of $10 per building and a registration transfer fee in the event of a change of ownership.
Another benefit to landlords is that they can now charge applicants a larger amount for credit and background checks related to rental applications. Previously, landlords could charge the lesser of the landlord’s actual cost or $20. That amount has increased $5, allowing landlords to charge the lesser of the landlord’s actual cost or $25. Although the increase may be insignificant to some, this is a significant change for landlords with high applicant volume.
Perhaps the most significant changes relate to evictions. Previously, a tenant could demand a hearing before a judge by making any argument contesting the eviction. The result was a slower eviction process and busier court calendars. Now, a hearing contesting an eviction shall be scheduled before a judge only if a party “raises valid legal grounds for a contest”. This higher burden should result in a speedier eviction process, thereby reducing the costs incurred by landlords.
Similarly, tenants could previously stay (put on hold) an eviction by applying for Emergency Assistance. A 2009 Wisconsin Court of Appeals decision held that such a stay may only be in effect for a “reasonable period of time”. McQuestion v. Crawford, 2009 WI App. 35. Under the Bill, however, an Emergency Assistance stay may not be granted if a writ of restitution was already issued. Furthermore, if an Emergency Assistance stay is granted, the stay may not apply for more than ten working days. This new rule should also speed up the eviction process.
Furthermore, the Bill specifies that a landlord’s prior waiver of a violation or breach of the lease cannot be used as a defense to an action of eviction or claim for damages. A landlord can now be a “nice-guy”, looking past a tenant’s breach, giving the tenant a “second chance”, without worrying that the landlord has opened the proverbial door allowing the tenant to continue this same breach without recourse. This new provision is a win-win for both landlords and tenants.
These changes are just a few of the many coming from Wisconsin’s 2017-18 legislative session and the Bill. Keep in mind that some of the new rules only apply to rental agreements entered into or renewed on or after April 18, 2018. You can review the full text of the Bill here. Additional guidance and assistance may be obtained by contacting a member of the Law Firm of Conway, Olejniczak & Jerry Real Estate team.