In three recent Wisconsin Court of Appeals cases, landlords and property managers have used leases or rental agreements that violate one or more of the “10 Deadly Sins.”
The 10 deadly sins
The “10 Deadly Sins” are the 10 provisions listed in Wis. Stat. § 704.44 and Wis. Admin. Code § ATCP 134.08 that make a rental agreement void and unenforceable.
The tenants have claimed a refund of all rent paid as damages and want this amount to be doubled per Wis. Stat. § 100.20(5) and to receive attorney’s fees and costs. Some have been successful:
- Wis. Stat. § 100.20(1) prohibits “unfair methods of competition” and “unfair trade practices” in business, which include the practices prohibited by Wis. Admin. Code § ATCP 134.08.
- Wis. Stat. § 100.20(5) provides “any person suffering pecuniary loss because of a violation by any other person of … any order issued under this section may sue for damages … and shall recover twice the amount of such pecuniary loss, together with
costs, including a reasonable attorney fee."
Wis. Stat. § 704.44 Residential rental agreement that contains certain provisions is void.
Notwithstanding s. 704.02, a residential rental agreement is void and unenforceable if it does any of the following:
(1m) Allows a landlord to do
any of the following because a tenant has contacted an entity for law enforcement services, health services, or safety services:
(a) Increase rent.
(b) Decrease services.
(c) Bring an action for possession of the premises.
(d) Refuse
to renew a rental agreement.
(e) Threaten to take any action under pars. (a) to (d).
(2m) Authorizes the eviction or exclusion of a tenant from the premises, other than by judicial eviction procedures as provided under ch. 799.
…
(9)
Allows the landlord to terminate the tenancy of a tenant based solely on the commission of a crime in or on the rental property if the tenant, or someone who lawfully resides with the tenant, is the victim, as defined in s. 950.02 (4), of that crime.
(10) Allows
the landlord to terminate the tenancy of a tenant for a crime committed in relation to the rental property and the rental agreement does not include the notice required under s. 704.14.
Koble Investments v. Marquardt
2024 WI
App 26, April 23, 2024
In the Koble Investments case (Koble), one issue was what are the damages and consequences when a rental agreement is void and unenforceable for violating one of the 10 Deadly Sins in Wis. Stat. § 704.44. Another issue was whether a tenant
can recover double damages and reasonable attorney’s fees under Wis. Stat. § 100.20(5) when the lease does not contain a “Notice of Domestic Abuse Protections” required by Wis. Stat. § 704.14, even when there was no pecuniary loss as a result of the
Wis. Stat. § 704.44(10) violation.
The court held in Koble that the remedy for the rental agreement being void and unenforceable per the 10th Deadly Sin violation is that the landlord must return all rent previously paid to the landlord.
In addition, the court held that under Wis. Stat. § 100.20(5), the tenant is entitled to recover twice the amount of her pecuniary loss — that is, twice the amount of all payments she made under the void and unenforceable lease. In addition, her attorney
is entitled to recover his reasonable attorney fees and costs, including the attorney fees and costs incurred on appeal. The court perceived that the landlord had failed to respond and develop an argument that the claimed pecuniary loss — which was
all rent paid — was not caused by the landlord Koble’s violation of § 704.44(10) and § ATCP 134.08(10). Wis. Stat. § 100.20(5) permits a person who has suffered pecuniary loss “because of” a violation of Wis. Admin. Code § ATCP 134.08(10) to recover
double damages, attorney fees and costs.
The opinion in Koble has been published and is now legal precedent, so all Wisconsin circuit courts have to follow this as law. The landlord in Koble petitioned the Supreme Court of Wisconsin
to accept this case and hopefully overturn the Court of Appeals, but the Wisconsin Supreme Court only accepts a limited number of cases each year and is not obligated to take the Koble case.
See the Koble opinion.
Henchey
v. Wausau Landmark Corp.
Appeal No. 21AP1684, May 2, 2023
In Henchey, the issue was whether a tenant can recover double damages and attorney fees under Wis. Stat. § 100.20(5) when the lease violates Wis. Stat. § 704.44(9) by allowing a landlord to terminate a tenant’s tenancy “based solely on the commission
of a crime in or on the rental property if the tenant, or someone who lawfully resides with the tenant, is the victim, of that crime,” even when there was no pecuniary loss as a result of that ability/lease provision.
The Court of Appeals
held that some very common lease language prohibiting tenants from engaging in illegal activity on the premises or permitting the premises to be used for an unlawful purpose as well as prohibiting tenants from making excessive noise or engaging in
activities that would unduly disturb other tenants or neighbors, allowed the landlord to evict a tenant based on the commission of a crime. That language was said to commit the “9th Deadly Sin” in § 704.44(9). The unlawful purpose provision of the
rental agreement would permit the landlord to terminate a tenancy if a tenant made use of the premises for an unlawful purpose or permitted another to make use of the premises for an unlawful purpose even if a person who lawfully resided with the
tenant was a victim of that crime. Thus, the court found the lease violated § 704.44(9).
The opinion states the remedy is that the landlord has to refund all of the rent received during the course of the tenancy without offset for the value
of living in the apartment rent-free. The court also wrongfully concluded that under Wis. Stat. § 100.20(5), the tenant was entitled to receive double damages on his claim, costs and reasonable attorney fees even though the tenant was not damaged
because of the prohibited provision included in the lease. No crime was committed by the tenant or anyone else, and the tenant was not evicted. Actual eviction is not required, only that the landlord has the power to do so under the
lease provisions.
Henchey is an unpublished case from District III of the Wisconsin Court of Appeals. Therefore, the opinion is not precedent but can be used for persuasive value because it was authored by a single judge.
See the Henchey decision.
Hoffman v. Gribble
Appeal No. 2021AP1355, District IV, February 16, 2023
In Hoffman, just like in Koble, the issue was whether a tenant can recover double damages and attorney fees under Wis. Stat. § 100.20(5) when the lease does not contain a “Notice of Domestic Abuse Protections” required by Wis. Stat. § 704.14,
even when there was no pecuniary loss as a result of the illegal lease provision. The lease required the tenant “obey all lawful orders, rules, and regulations of all governmental authorities,” and was found to violate the 10th Deadly Sin and thus
was void and unenforceable.
The circuit court concluded that although the lease violated Wis. Stat. § 704.44(10) and Wis. Admin. Code § ATCP 134.08, the tenant failed to show he incurred a pecuniary loss as a result of the violation and
therefore is not entitled to damages under Wis. Stat. § 100.20(5). The court of appeals affirmed, finding the tenant had not shown a causal relationship between the pecuniary loss and the violation, and the tenant did not show a link “because of a
violation” as required by the plain and unambiguous language of Wis. Stat. § 100.20(5). The court of appeals decision unfortunately is not published.
See the Hoffman decision.
Updated rental forms
Landlords and property managers should always use rental forms that are lawful and that do not violate any of the 10 Deadly Sins. If there are legal violations or omissions in the forms they are using, they may wish to amend the forms they are using with
current tenants using the WRA Amendment to Residential Lease or Residential Rental Contract. The provisions found in the Rental Notice form may be used in the amendment, as applicable.
The way to prevent the “10th Deadly Sin” cited in the Koble and Hoffman cases is to be sure the rental agreement used includes a “Notice of Domestic Abuse Protections.” This notice appears in the WRA Residential Lease, Residential Rental
Contract and Rental Notice forms.
To protect against the Henchey outcome and violation of the “9th Deadly Sin,” landlords should revise their rental agreements, rules and regulations, nonstandard rental provisions, and any other rental documents that state a tenant can be evicted
for engaging in criminal activity or for disturbing other tenants. They should add a statement that indicates:
“No provision in this Rental Agreement authorizes landlord to terminate the tenancy of a tenant based solely on the commission of a crime in or on the rental property if the tenant, or someone who lawfully resides with the tenant, is the victim, as defined by s. 950.02(4), of that crime.”
This change was made to the WRA Residential Lease, Residential Rental Contract and Rental Notice forms in 2023.
Wis. Stat. §704.44 (2m) says a residential rental agreement is void and unenforceable if it “authorizes the eviction or exclusion of a tenant from the premises, other than by judicial eviction procedures as provided under ch. 799.” The Abandonment provision
in prior WRA rental agreements could be interpreted as excluding the tenant from the premises without using the judicial eviction procedures, so that language was removed from WRA rental forms in 2024.
Another concern is Wis. Stat. § 704.44 (1m), which states a residential rental agreement is void and unenforceable if it:
“allows a landlord to do any of the following because a tenant has contacted an entity for law enforcement services, health services, or safety services: (a) Increase rent, (b) Decrease services, (c) Bring an action for possession of the premises, (d) Refuse to renew a rental agreement, or (e) Threaten to take any action under pars. (a) to (d).”
To guard any concerns based on this provision, a retaliation prohibition provision was added to the WRA rental forms in 2024.
Access the revised rental forms
The updated 2024 versions of the WRA Residential Lease, Residential Rental Contract and Rental Notice forms are available in Transactions (zipForm edition) as well as the WRA Forms Library. Both products are automatically included with WRA membership
as member benefits.
Resources
Pages 6-7 of the February 2014 Legal Update, “Implementing 2014 Landlord/Tenant Legislation,” offer an explanation of the Rental Notice form.
