MUST READ … Why This Year’s Landlord Bootcamp Event Should Be Viewed as “Mandatory” The Collateral Damage of Koble Investments -v- Marquardt (Koble)

Date:  Friday, October 18, 2024

To:  All Rental Property Owners, Property Managers and Rental Real Estate Investors

If you have been attending our monthly meetings, reading our blog posts, or reading our email communications about Koble Investments, and before that case, Henchey, you understand the concern we have had about the collateral damage these cases were going to have on the rental housing industry, especially Koble since it has now been published and is the law of the State of Wisconsin.

Recall these cases argued that leases which violate Wis. Stat. §704.44, the 10 Deadly Sins, were deemed Void and Unenforceable, and the legal remedy was to award the tenant with all the rent they paid the landlord during their entire tenancy, plus double damages and attorney fees (ATCP 134.08).

We have been following cases that are being argued based on Koble, and as you are aware, the AANW, FVAA, RPA, KLA and the Realtors have filed an amicus (friends of the court) brief asking the Wis Supreme Court to accept Koble’s Petition to hear this case, and ultimately overturn Koble, which was published at the Court of Appeals level.  At this time, we have not seen any movement by the Wis Supreme Court on the petition filed by Koble, and our amicus.

Over the past couple of months now, we have seen a significant number of Plaintiff’s (tenants) attorneys seeking class certification, Wis. Stat. § 803.08, of a number of these cases across the State, including those against owners and managers who operate up and down the Fox Valley.  We have already told you that the Koble case would have detrimental consequences to our industry, and further reduce an already inadequate rental housing inventory across the state.  If these cases now receive class certification, the rental housing industry may not be recognizable in 2025 and beyond.  Those who get dragged into these class action lawsuits may well find their only reasonable solution to be bankruptcy.  This could include, but not be limited to the smaller mom and pop landlords/managers, but also some of the medium-sized operators, and perhaps some of the more vulnerable larger operators.

This is very likely the most consequential judicial action targeted at the rental housing industry of our lifetime.  Now more than at any other time, everyone should sign up for the Landlord Boot Camp, presented by Attorney Tristan Pettit, hosted by the AANW on Friday, November 8^th.  There has been enough change to how Landlord/Tenant Law is being interpreted by the courts, and DATCP, in part because of Koble but not solely, that every member or non-member who follows our association should get signed up before we are Sold Out like we were last year.  You will not find a better value for this Landlord/Tenant Law education than this event, and if you’re not a member, now is the time to take advantage of the non-member special we are offering that combines both membership and the boot camp.  This link will take you to the event on our website, where you can learn more, and get signed up as spots are filling up fast.  AANW 2024 Landlord Boot Camp  (Please note that once this fills up, there is no option to open more spots due to the facility seating limit.)

The Apartment Association of Northeast Wisconsin (AANW.org)

AANW Members:

Those who have attended our monthly meetings this year have heard the reference on more than one occasion...of the following:

"We must move beyond the narrow, nearly insufficient, and unstainable task of “Making Affordable Housing,” and begin to work on the broader, more sustainable, and meaningful work of “Making Housing Affordable.”  There is a difference, and this must not remain misunderstood by those who advocate for common sense policies that promote the sustainability of rental housing, and those responsible for legislating housing policies."

The above is just a small example of what we cover in our State of the Industry presentation/discussion session.

However, there is likely not a more representative article of the point being made above, than the one offered last week by the CATO Institute.  Entitled:

"The Government’s War on Starter Homes"

Once you read this article, take a step back and ask yourself what will happen down the road when some of these current developments are no longer bound by some local and or state requirement for tax credits and other financial incentives?

At the risk of sounding redundant, until we stop simply throwing money at these housing challenges and instead focus on true Root Cause Analysis and address these challenges head on, rather than treating symptoms, this merry-go-round will never stop.

Please read the article by clicking on the link below, and stop to reflect on our State of the Industry presentations that most recently were made in Aug/Sep.

The Government’s War on Starter Homes

Please note, if you missed this presentation in Aug, email us at Admin@aanw.org to get your name on the list that we are building to host a Zoom session to repeat this for those who were unable to attend the event.  We have had a lot of requests to find a way to repeat this PowerPoint presentation, and we are looking into hosting a Zoom session of this in October.

Thank you,

Rick Van Der Leest

Apartment Association of Northeast Wisconsin, Inc. | President

Register here: https://bit.ly/LandEng

Those of you who were able to attend our last general meeting likely understand better, now more than ever, the ever-changing landscape of operating as a residential rental property owner, property manager and investor.  One of the many topics we discussed had to do with evictions and their relationship with tenant screening standards. 

These two issues are an excellent example of several related issues (many of which we discussed this month at our meeting) that are “nested” and complex in developing common-sense solutions within a broad coalition of Stakeholders, from all points of view.

Members who were not able to attend this months meeting, can email us at admin@AANW.org to let us know if you are interested in attending a Zoom session, where we plan to walk through that presentation again.

The more educated everyone is on all of this, from as many points of view as possible before we have our September meeting with the candidates running for the State Senate and Assembly races, the better the quality of the questions and discussions we can have that evening.

Now to the specifics of this Blog Post…

The introduction to this article is below, and the link beyond that will take you to the full article.

“Landlords and local governments across the country could soon face legal consequences for kicking out renters who for decades have faced housing discrimination: People who dial 911 or are the subject of calls to police.

In American cities big and small, experts say many renters have for decades faced possible housing discrimination stemming from so-called 'crime-free' and 'anti-nuisance' property ordinances − rules that rely heavily on 911 call records. If a renter − or someone in their household − violates an ordinance by racking up 911 calls, the rules say they must leave their apartment, or be evicted…”

Click on the link below for the full story, and the link below that one will give you the PDF of the letter the Justice Department sent out on Aug 15^th, to all of the local and state governments, referred to in the article.

Evictions for making too many 911 calls happen. The Justice Department wants it to stop...

DOJ Crime Free & Nuisance Letter (8-15-2024) 

Please remember to email us and let us know of your interest in attending a Zoom session recap of our August meeting.

Thank you,

Rick Van Der Leest

Apartment Association of Northeast Wisconsin | President

The Cato Institute does a good job in this article to introduce the relationship between market prices and the various ways that governments have controlled them through different price control mechanisms in the past, present, and the related discussions for the future.

Additionally, highlighting what some of the historic unintended consequences have been when free market pricing mechanisms have been artificially managed and/or manipulated by well intended policy makers.

Currently, the consequences and failures of these proposals receives little debate and discussion, but this will and should change in order for the US to avoid making some extremely seriously flawed policy decisions that will do far more harm than good to the housing industry.

If we head down this path of price controls, the unintended consequences will not just negatively impact rental property owners and managers but will also act as a series of tipping dominos that will hurt our resident customers and their families as well.    

Click on the link below to read the article, or you can also simply listen to it:

Market Prices and Price Controls: An Introduction

~ Admin Support ~

The Apartment Association of Northeast Wisconsin

Dear Rental Property Owners, Property Managers and Investors -

There has been a great deal of coverage this entire year about several, less friendly ideas for both our Resident Customers (Tenants) and Owner/Managers, as potential solutions to the affordable housing crisis we have across this entire country.

All too often we are hearing or reading of ideas being thrown out by advocacy groups and politicians on both sides of the aisle at times, to jockey for position (votes) as elections loom.

We plan to dive a little deeper into some of these ideas as they relate to the rental housing industry next week, August 14^th, at our monthly meeting.  So please make sure you mark your calendars and sign up on our website so we can keep track of attendance.  We anticipate both the August and September meetings to be well attended given the subject matter, and timeliness given the election cycle we are in.  (Please note that the September meeting is planned to be a "Legislative Meet-and-Greet" event so please get signed up for this event as well.)

In our August meeting we will be discussing the State of the Rental Housing Industry with a brief recap of:

• Advocacy Efforts at the Federal and State Levels
• NAA Dollar of Rent Updates
• Our own Dollar of Rent Analysis (Updated)

After this we will take a deeper dive into what’s getting all the attention related to concepts like those listed below (and more):

• Rent Control
• Eviction Records: Sealing, Retention & Removal
• Just Cause Evictions
• Non-Renewal Restrictions and Requirements
• Screening Standards
• Junk Fees

The link to the article listed below does a good job of summarizing one of the key points above, Rent Control, and what we know about how we got here.  Note, there are several hyperlinks embedded in this article that we encourage you to click on and become familiar with.

Click below to go to this article…

https://www.vox.com/housing/365063/kamala-harris-housing-rent-control-landlords

We hope to see all our members at next week’s meeting, Wednesday, August 14th and next month's meeting, Wednesday, September 11th !!

The Apartment Association of Northeast Wisconsin

Looking to maximize your short-term rental investment?

Check out this informative blog post from AirDNA on cost segregation for short-term rentals. Learn how to save money and optimize your property’s financial performance!

Read it HERE.

Looking for a local, informative session to learn more about your short-term rental property in Green Bay? 

Don't miss the FREE Short Term Rental Property Owner Training on August 7, 2024, from 5:00 PM to 7:00 PM at Bay Beach Wildlife Sanctuary! Learn about important processes, ordinances, and policies. Register now and ensure your property meets all local requirements.

Location: 1660 East Shore Dr, Dick Resch and Family Learning and Conservation Center

Register Here

For more details, contact Melanie Skalmoski at Melanie.Skalmoski@greenbaywi.gov or (920) 448-3260.

#GreenBay #ShortTermRental #PropertyTraining #CommunityEvent

WARNING: This is a long blog post, but the subject matter of Eviction Records Retention, as well as Evictions in general, deserves nothing less than a comprehensive review.  We owe this to ourselves, as rental property owners and managers, and we owe this to our Residents...our Customers.

In discussing the Courts final ruling, it is important to put some context in the reasoning behind the position that the AANW, the FVAA and others who are part of our coalition of rental property housing providers, took on this issue.

The Context:

• More than 95% of our resident customers pay their rent on time, are good neighbors, maintain the property as expected, and do not violate the terms of their lease.  Therefore, they are not involved in eviction actions in the first place.
• Less than 5% of our residents, for a variety of reasons, most of which are outlined above, will find themselves in an eviction situation.  Often, the predominant reason is due to non-payment of rent.
• These two points above, is what some of us have come to call the “955 Principle”, for lack of any other way to articulate this.
• This is not to suggest at all that those who are involved in an eviction action do not need some form of assistance.  Indeed, they do, however, there are far better ways to get them this help, (including various eviction avoidance strategies and programs that need more development) that do not impact the majority of our residents (the 95%), than removing eviction records from the public’s view.
• As we have shown in our monthly meetings, removing these eviction records would negatively impact the 95% group as screening standards would increase, along with security deposits and rents, to offset additional business risk, making it harder to be accepted as an applicant.  Additionally, this same 95% group would now be competing for housing, “with” those who have evictions in their past rental history (the 5%) because no one can see them, as they would have been removed from public view.
• Additionally, as some owners/managers already have, and likely more would follow, to mitigate this increased risk in their businesses, they will migrate to a different niche in the rental housing market, where the lack of visibility of eviction records might present less risk to their business.
• Still others would just exit the rental housing market in its entirety, selling to new owners that would undoubtedly take on a higher cost of debt service, putting even more upward pressure on Rents.  
• Not an outcome any of us would like to see, but upward pressure on Rents and a reduction of Affordable Housing Stock would have indeed been an outcome of all of this.
• In a rental housing market that is already strained with demand exceeding supply, this is not at all fair to those residents who always pay their rent on time, are good neighbors, maintain the property as expected, and do not violate the terms of their lease.  In effect, the 95% become collateral damage and would suffer from the unintended consequences of, a well-intentioned proposal from Legal Action, but nevertheless flawed in its understanding of the impact to all the various stakeholders of this request.
• In 2018 the Wis Legislative branch put forth Wis Stat §758.20, that outlines among other things, how long eviction records should be retained out in the public domain.
• The Court already has a mechanism in place to review records access in CCAP through a steering committee that reviews these matters and considers the broader ramifications of changes in records retention to all the various stakeholders involved in proposed changes.
• Legal Action of Wisconsin’s (LAW) petition to the Court with 22-03, attempted to circumvent both the Legislative branches intent with this matter through the enactment of Wis Stat §758.20 in 2018, and the Court’s own committee established to review CCAP records retention.

Now to the Final Ruling of the Court:

• This has always been about how long eviction records would remain available in the public domain via the CCAP online access to court records.
• The Bottomline here is that the Court rejected the petition of Legal Action of Wisconsin (LAW) that suggested a one-year retention period and accepted the proposal of the AANW/FVAA, and our housing coalition partners we work with, first made in 2022, again in 2023, and finally once more in 2024.  2-Year Retention Period if no money judgement has been docketed, and a 10-Year Retention Period if a Writ of Restitution has been granted by the Court.
• During the Courts second open administrative conference, held on April 16, 2024, the Court ultimately came around to agreeing that they did not want to go against the Legislative branch’s establishment of law on this matter, through Wis Stat §758.20.  If you listen to this event, out on WisEye.org you will learn that the clarifying position statement that was submitted on behalf of the AANW and FVAA, dated April 10^th, 2024, certainly played a role in this discussion on April 16^th, and their final decision. 
• The Courts decision to effectively “stay in their lane” as the Judicial Branch of government, is to be applauded and respected.  Note that LAW was urging the Court to override this Statute, and in effect create their own law/rule.  The Court ultimately refused to comply with this request, as it should have. 
•  What did come out of this over 2 years of discussion, is that based on the comments from those who spoke before the Court, the application of Wis Stat §758.20 was not always being applied consistently across the court system, and that is not right to those who find themselves in an eviction action, so they will be taking the time necessary to make some changes to software, process definition and procedures to help make the application of the law and its own rules, consistent.  This is a good thing for all stakeholders involved.
• Thus the "effective date" of this ruling is July 1, 2025, but recall that Wis Stat §758.20 already requires nothing less than a 2-year retention period where no money judgement has been docketed, and 10 years when a Writ of Restitution has been issued.  Again, this is effectively exactly what the Court has ordered. 
• Justice Hagedorn's dissent (joined by Chief Justice Annette Ziegler and Justice Rebecca Bradley) confirms what many of us suspected they were having trouble with all along…which was why the court became involved in this rules petition in the first place.  As stated earlier, the court has its own process for handling rules review through its CCAP oversight and steering committee, and LAW circumvented that by filing this petition with the Court, as well as then seemingly ignoring the role the Legislative branch should have/could have played in this as well.  Justice Hagedorn stopped short of suggesting that owners and managers would increase screening standards for their customers/residents and what that would do to our 95% base.  But he does find a way to suggest that better solutions to matters such as this can more thoroughly be developed within a process that engages all the various stakeholders upfront, where a collaborative solution can be created and bought into by all concerned parties.  We could not agree more, and in fact this is a point made several times to the Court, when we spoke before them, as well as the document submissions that we provided. 

In closing, many of you have heard on more than one occasion that at least a part of why we have seen failed housing policies and or poorly thought through legislative housing bill proposals, while all of these are we are sure well-intended, is because too many times we have attempted to fix the symptoms, and not the disease.  The AANW and the FVAA stand ready to engage in meaningful, collaborative, root cause analysis and discussion to tackle the multiple housing issues we are facing.  In fact, some housing related associations, municipalities and legislative officials have already reached out to us to do just that, and we welcome more to do the same.

Rick Van Der Leest

Apartment Association of Northeast Wisconsin | President

Fox Valley Apartment Association | Director of Government Affairs

Attention Members:

A special thank you to Matt Norem, former Board Member and valued Business Partner.

Matt brought to our attention that it was not always easy to know if the form from Wisconsin Legal Blank (WLB) that you had on hand, was the most recent/current form.

We reached out to Attorney Tristen Pettit, who authors all of these forms and Rick Russell, owner of WLB to see what could be done to help our members with this.

Rick Russell, stepped up to create what we will call a Master List of the forms and their effective date, on their website.  You will find it along the left side of their home page, called "Current Rental Forms List/Dates".

You can find it here by clicking on this link...

Current Rental Forms/List

Making sure we are all using the most current forms, benefits both our Residents and our Owners and Managers of rental properties.

Everyone should also take this opportunity to sign up to receive WLB's email updates, as that will also let you know of form changes, among other new products, etc.  Look for the "Join Our Mailing List" area and sign up!!

Thank you again Matt for bringing this to our attention, and thank you Rick for helping us provide our members with tools to help them stay current with their forms!! 

Also, members do not forget when ordering forms directly through Wisconsin Legal Blank, you can use the Discount Code that has previously been emailed out to you.  Yet another "Membership Benefit" and our way to say we are grateful and value your membership.

We appreciate all of you, and hope to see you at our next members meeting,

Rick Van Der Leest

Apartment Association of Northeast Wisconsin | President