Landlords with Illegal Provisions in Leases: Still Crazy after All These Years

Many landlords I know use a nice looking residential lease that they found on the internet or in a form book acquired at the bookstore. They have been renting to tenants for years using it without a hitch. Their lease has stood the test of time.

All is good … right?

No problems … right?

Maybe not.

Herein lays the rub. Wisconsin has issued and does enforce ATCP 134. The Wisconsin Administrative Code, Chapter ATCP 134, specifically ATCP 134.08, sets forth the ten provisions that cannot be included in a Wisconsin residential rental agreement.

Here is the rule as of today:

ATCP 134.08 Prohibited rental agreement provisions — rental agreement that contains certain provisions is void.

Notwithstanding s. 704.02, Stats. (* See Note 1), a rental agreement is void and unenforceable if it does any of the following:

ATCP 134.08(1) (1) 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:

ATCP 134.08(1)(a) (a) Increase rent.

ATCP 134.08(1)(b) (b) Decrease services.

ATCP 134.08(1)(c) (c) Bring an action for possession of the premises.

ATCP 134.08(1)(d) (d) Refuse to renew a rental agreement

ATCP 134.08(1)(e) (e) Threaten to take any action under pars. (a) to (d).

ATCP 134.08(2) (2) Authorizes the eviction or exclusion of a tenant from the premises, other than by judicial eviction procedures as provided under ch. 799, Stats.

ATCP 134.08(3) (3) Provides for an acceleration of rent payments in the event of tenant default or breach of obligations under the rental agreement, or otherwise waives the landlord’s obligation to mitigate damages as provided under s. 704.29, Stats.

(4) Requires payment by the tenant of attorney fees or costs incurred by the landlord in any legal action or dispute arising under the rental agreement. This subsection does not prevent a landlord or tenant from recovering costs or attorney fees under a court order under ch. 799 or 814, Stats.

ATCP 134.08(5) (5) Authorizes the landlord or an agent of the landlord to confess judgment against the tenant in any action arising under the rental agreement.

ATCP 134.08(6) (6) States that the landlord is not liable for property damage or personal injury caused by negligent acts or omissions of the landlord. This subsection does not affect ordinary maintenance obligations of a tenant under s. 704.07, Stats., or of a tenant under a rental agreement or other written agreement between the landlord and the tenant.

ATCP 134.08(7) (7) Imposes liability on a tenant for any of the following:

ATCP 134.08(7)(a)             (a) Personal injury arising from causes clearly beyond the tenant’s control.

ATCP 134.08(7)(b)       (b) Property damage caused by natural disasters, or by persons other than the tenant or the tenant’s guests or invitees. This paragraph does not affect ordinary maintenance obligations of a tenant under s. 704.07, Stats., or of a tenant under a rental agreement or other written agreement between the landlord and the tenant.

ATCP 134.08(8) (8) Waives any statutory or other legal obligation on the part of the landlord to deliver the premises in a fit or habitable condition, or to maintain the premises during the tenant’s tenancy.

ATCP 134.08(9) (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 a victim, as defined in s. 950.02 (4), Stats., of that crime.

ATCP 134.08(10) (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, Stats (**See Note 2).

* Note 1:  This rule is an exception to Section 704.02 Severability of rental agreement provisions. Section 704.02 says: “The provisions of a rental agreement are severable. If any provision of a rental agreement is rendered void or unenforceable by reason of any statute, rule, regulation, or judicial order, the invalidity or unenforceability of that provision does not affect other provisions of the rental agreement that can be given effect without the invalid provision.”

** Note 2: Notice should look like this:

NOTICE OF DOMESTIC ABUSE PROTECTIONS

 (1) As provided in section 106.50 (5m) (dm) of the Wisconsin statutes, a tenant has a defense to an eviction action if the tenant can prove that the landlord knew, or should have known, the tenant is a victim of domestic abuse, sexual assault, or stalking and that the eviction action is based on conduct related to domestic abuse, sexual assault, or stalking committed by either of the following:

 (a) A person who was not the tenant’s invited guest.

 (b) A person who was the tenant’s invited guest, but the tenant has done either of the following:

1. Sought an injunction barring the person from the premises.
2. Provided a written statement to the landlord stating that the person will no longer be an invited guest of the tenant and the tenant has not subsequently invited the person to be the tenant’s guest.

(2) A tenant who is a victim of domestic abuse, sexual assault, or stalking may have the right to terminate the rental agreement in certain limited situations, as provided in section 704.16 of the Wisconsin statutes. If the tenant has safety concerns, the tenant should contact a local victim service provider or law enforcement agency.

 (3) A tenant is advised that this notice is only a summary of the tenant’s rights and the specific language of the statutes governs in all instances.

Unfortunately, many of the internet or store-bought leases are not Wisconsin-specific. They may be great for use in some states, but not for use here in Wisconsin.

Landlords cannot claim ignorance either. The warnings are out there. There are many articles on the internet and we see continued legal cases and informative publications from the various government folks warning landlords that if they have illegal language in their leases, then the leases are invalid.

What happens when one of these provisions is detected by the tenant? The result can be very bad for the landlord and very good for the tenant.

In fact, the Wisconsin Supreme Court held in one case that because the landlord’s lease contained an illegal provision, the entire lease could be thrown out. This result can occur even if the landlord never tried to enforce the “illegal” provision. This was the result in the case of Baierl v. McTaggart when the lease contained an illegal provision allowing for attorney’s fees in favor of the landlord.  The court could also allow a counter lawsuit for double damages and attorney’s fees by the tenant under a sister ATCP section.

Make sure your rental agreements do not contain illegal provisions. If you spot one, take it out. Failure to take it out may result in your lease being declared unenforceable against the tenant and may even expose you to a counter lawsuit for double damages and attorney’s fees by the tenant.

The upshot of all of this is that you should use great care in selecting and using a residential lease form you obtain from a vendor.  Make sure your lease complies with Wisconsin Law. If you are careless, it could come back to bite you.