2006 wisconsin realtors® association

Transcription

2006 wisconsin realtors® association
PETS IN RENTAL PROPERTIES
Tips on eliminating landlord and
tenant issues.
BEST OF LEGAL HOTLINE
Security deposits, unpaid utilities
and broken leases.
March 2006
WISCONSIN
$5.00
A PUBLICATION OF THE WISCONSIN REALTORS® ASSOCIATION
MAGAZINE
TM
NEWS.WRA.ORG
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YO U R S O U R C E F O R T H E L AT E S T R E A L E S TAT E N E W S
20
06
THE YEAR OF
OPPORTUNITY
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WISCONSIN REAL
REAL ESTATE
ESTATE MAGAZINE
MAGAZINE
WISCONSIN
THE OFFICIAL
OFFICIAL PUBLICATION
PUBLICATION OF
OF THE
THE WISCONSIN
WISCONSIN REALTORS
REALTORS®® ASSOCIATION
ASSOCIATION
THE
MARCH 2004
2006
MARCH
VOL. 20,
22, NO.
NO. 76
VOL.
Contents
FEATURES
COVER
10
Pets in Rental Properties
13
2005 Profile of Wisconsin Home Buyers and Sellers
19
REALTORS® Carry Message to the Capitol
Protect yourself against pet concerns in rental properties and
create a mutually respectful relationship with careful planning
and documentation.
What impact is the Internet having on real estate? Learn more in
part two of this month’s Home Buyers and Sellers report.
Pier regulation, health insurance for independent contractors
and eminent domain top the list of issues brought to lawmakers
at REALTOR® & Government Day.
ARTICLES
8
Property
Management
18
Get answers to recent questions
regarding property management
issues including security deposits,
unpaid utilities, vacation home
rentals, and broken leases.
Enhancing and Maintaining Value
In today’s market, knowing more can give
Best of the Legal Hotline
– Property Management Issues
Product Showcase
– Turbo Tax Software
Need a quick way to get your taxes
done on time? Turbo Tax software is
quick, easy, affordable and
confidential, and it stores your
information for next year!
12
Landlords May be Liable
22
Lautenschlager vs. Falk
14
Education and Products
26
Another Record Year as
Housing Sales Remain Solid
you the competitive edge. Use a property
manager to manage properties you own,
or add property management to your list
You may still be liable for
security deposits even after you
sell a property unless you include
release language in your leases.
of services. Learn more in this month’s
Why the WRA is endorsing
Attorney General Peg Lautenschlager
over Kathleen Falk… Get a full update
on the Democratic primary race for
attorney general.
feature by Fred Prassas, President of PCM
Management Group, La Crosse and
current President of IREM.
4
We’re in the second year of the
real estate CE biennium. Cross off
CE from your “to do” list and get
ahead of the game.
WISCONSIN REAL ESTATE MAGAZINE, MARCH 2006
Fourth quarter housing statistics
are in! 2005 marks consistent growth
and another record year in Wisconsin.
1
Real Estate
n o t e s
f r o m
t h e
w r a
Rick Staff to Serve as Consultant to WRA
T
he
Wisconsin
REALTORS®
Association (WRA) is happy to
announce that effective February
1, 2006, Rick Staff, former Vice President
of Legal Services, moved to an outside
consultant role with the WRA. Rick has
been living in La Crosse and commuting
to Madison for some time. Rick has
discussed a change in his relationship
with the WRA to accommodate his
family life. Given his long successful
history with the Association, the officers
of the WRA have enthusiastically
approved this new arrangement.
Rick will serve as a consultant to the
WRA for a period of three years. He
will use his skills and talents to provide
consulting services for the WRA on issues
such as DRL forms, DRL Curriculum
Council, legislative issues and lobbying,
etc. While his formal relationship with
us has changed, we are very pleased that
we will continue to benefit from Rick’s
expertise, experience and friendship as
he pursues his family interests and life in
La Crosse. Rick has opened a consulting
firm called Rick Staff Consulting and,
when appropriate under his agreement
with the WRA, will also provide
consulting services to real estate firms,
franchises and local associations.
Rick will mentor his replacement as well
as assist other legal staff at the WRA to
insure continuity in all legal services to
members. Contact Mike Theo at the WRA
with any questions regarding Rick’s role
with the WRA or other member legal
services issues.
Rick can be reached at the WRA for a
limited time at [email protected], but
after that his contact information will be:
Rick Staff Consulting
237 South 10th Street
La Crosse, Wisconsin 54601
E-mail: [email protected]
Business Phone: 608-785-7525
Cell: 608-575-2799
2006 GRI Scholarship Recipients
The Wisconsin REALTORS® Foundation
would like to congratulate the following 2006
GRI Scholarship recipients:
Darwin Scoon
Otto Bytof Coldwell Banker The Real
Estate Group
Katie Drescher - Coldwell Banker The Real
Estate Group
Janalee Hahn - Success Realty, Inc.
Otto Bytof REALTORS® Association
of Northeast Wisconsin
Gretchen Johnson - Properties of Door
County, LLC
Francine Kitkowski - Place Perfect Realty
Washington Board
Donald Hovde
Robert Schneider - First Weber Group
Amy Baumann - Century 21 Tri City Realty
Waupaca Shawano
Al Petrie
Benjamin Lyons - Shambeau and Lyons
Real Estate
Lacy Doleshal - Century 21 Gold Key Realty
Gary Schierl - Coldwell Banker The Real
Estate Group
2
Wendy Nichols - Century 21 Olympia
Wisconsin Real Estate MagazineTM is published by the
WISCONSIN REALTORS ASSOCIATION.
®
Trademark issued pursuant to Wisconsin state statute; federal trademark is pending.
Jeff Kitchen, CRS, GRI, Chairman
[email protected]
Roger Rushman, Chairman-Elect
[email protected]
Mike Spranger, ABR, CRS, GRI, Treasurer
[email protected]
William E. Malkasian, CAE, President
[email protected]
Editorial Staff
William E. Malkasian
Publisher
Robert Uhrina
Managing Editor
Terry O’Connor
Publication Editor
Nicole Breithaupt
Graphic Design & Layout
Wisconsin Real Estate Magazine, USPS 597-850,
ISSN 1548-0526, is published monthly by the
WISCONSIN REALTORS® ASSOCIATION, 4801 Forest Run
Road, Ste. 201, Madison, WI 53704. Periodical postage
paid in Madison, WI and additional
mailing offices. An annual subscription rate of $5 is
included in membership dues and a copy is mailed
to every paid REALTOR® and affiliate member of
the association. Nonmember subscription rate: $60.
POSTMASTER: please send address changes to the
WISCONSIN REALTORS® ASSOCIATION, 4801 Forest Run
Rd. Ste. 201, Madison WI 53704-7337
Permission to reprint or quote any material from this
issue is hereby granted, provided the Wisconsin Real
Estate Magazine is given proper credit in all articles
or commentaries, and the WISCONSIN REALTORS®
ASSOCIATION is provided with a copy of any reprint.
Advertising of third party products and services herein
does not imply endorsement by the WRA unless specifically stated. Furthermore, the WRA does not endorse,
approve, or otherwise warrant the accuracy or legality
of any information or content contained in advertisements. Any questions regarding advertising policies
should be directed toward the editor.
Contact Us:
4801 Forest Run Rd., Suite 201
Madison, WI, 53704-7337
(608) 241-2047 • (800) 279-1972
legal hotline: (608) 242-2296 • (800) 799-4468
general fax: (608) 241-2901
products/education fax: (608) 241-5168
legal hotline fax: (608) 242-2279
president fax: (608) 242-2267
e-mail: [email protected]
Web site: www.wra.org
WISCONSIN REAL ESTATE MAGAZINE, MARCH 2006
Inside
F
Bill Malkasian
WRA President
the wra
with Bill Malkasian
or REALTORS®, March signals the start
of spring and anticipation of a new
selling season. For the WRA, March
means we’re halfway through our fiscal year.
It’s a time when we evaluate the first half of the
fiscal year and make adjustments as necessary
for the second half.
Property management is one of the most important
income producing/retirement vehicles for
REALTORS®. Since many members don’t have
pension plans or retirement accounts, real estate is
an integral part of their portfolios. In addition, the
rental market helps drive the Wisconsin economy
and contributes heavily to the tax base.
Our issue this month includes lots of statistics – all
supporting what most of us have experienced:
2005 was a very good year for real estate. First,
there’s part two of the report on The Wisconsin
2005 Profile of Home Buyers and Sellers. I encourage
you to look at the statistics regarding what buyers
and sellers are saying about how and why they
use REALTORS®. The report also indicates a spike
in the use of the Internet by buyers searching for
homes online.
And it’s an important issue for us at the WRA.
Commercial and residential tenant/landlord issues
are in the forefront for our public policy team – just
after residential real estate. The team keeps a keen
eye on those issues.
The second article dealing with statistics is a
summary of the fourth quarter housing statistics
for Wisconsin. Here again, the statistics seem to
point out the obvious – 2005 was the best year on
record for home sales in our state. Visit www.wra.
org/Q405PressRelease to view the entire press
release.
I’m also pleased to announce that the March
edition of Corporate Report Wisconsin magazine
features a 16-page color insert of a roundtable
discussion between editor Scott Klug and our
executive committee. If you’re not a subscriber,
pick up a copy of this magazine to hear from
industry leadership.
This month our feature is property management,
with a cover story by Fred Prassas. Fred is the
current president of the Institute of Real Estate
Management (IREM), a professional organization
with nearly 17,500 individual members and
525 corporate members. We’re honored that a
WRA member is president of this prestigious
organization, which promotes ethical real estate
management practices.
Also, I want to take a moment to say a few “thank
you’s.” First, thank you to all of you who renewed
your membership with us for 2006 – over 90 percent!
I’m grateful to all of you, because without you, the
WRA would not be as strong as it is today.
Also, thank you to all of you who attended
REALTOR® & Government Day on February 15,
and attended Designation Week, February 2124. Both events were held in Madison and were
well attended – and we managed to dodge the
snowstorm that hit February 16.
The Appraisal Conference is next on our list
of events. It will be held March 21-22 at the HoChunk Casino, Hotel & Convention Center in
the Wisconsin Dells. We traditionally have large
representation from Wisconsin and the Midwest
at this conference – it’s one of our largest events,
and an important part of the WRA’s education
program.
In April, Chairman-elect Roger Rushman and I will
head out to hold a series of broker focus groups
around the state, so stay tuned. I’m anxious to visit
and hear what’s on your mind.
Sincerely,
Bill Malkasian, WRA President
WISCONSIN REAL ESTATE MAGAZINE, MARCH 2006
news.wra.org
3
Enhancing
Property
Management
and Maintaining Value
BY FRED PRASSAS, CPM
PRESIDENT, PMC MANAGEMENT GROUP
Investors in all types of properties
often credit their investment
success to the quality of their real
estate management organizations.
O
nce considered a service offered only to investors
in large apartments or commercial properties,
property management is impacting more real estate
transactions than ever before. Increasingly, for example,
REALTORS® and property managers are crossing paths in
both single family and small residential transactions. As a
consequence, REALTORS® who take the time to learn the
fundamentals of property management will serve themselves
and their clients well – particularly if they represent a client
or customer in a transaction where property management
becomes an issue.
Property Management Basics
First, let’s start with the fundamentals. Property management is
about maintaining and enhancing value for the owners of real
estate. It involves the administration, operation, marketing and
maintenance of real estate to achieve the goals of its owners. For
income producing properties, the primary goal usually is for
the property to reach its highest and best use, meaning that it
generates the highest Net Operating Income (NOI) possible and
is being used in the best possible way based on its location, size
and design.
The specific responsibilities of property managers vary greatly;
they depend upon the position they hold, the organization that
employs them, and the type of real estate they manage. Investors
in all types of properties – including residential condominiums,
large and small apartment buildings, shopping centers, office
buildings and even resorts and industrial properties – often
credit the success of their investment to the quality of their real
estate management organizations.
Condo Sales Often Bring REALTORS®
and Managers Together
The listing and sale of condominium units that are part of a
Condominium Association are among the transactions in which
REALTORS® and property managers most often interact.
REALTORS® involved in the purchase or sale of properties in a
Condominium Association will benefit from being familiar with
the facility’s governing documents and how it is operated, both
physically and fiscally. They should be aware that although the
board of directors officially manages the condominium, many
boards contract with professional managers to handle the
day-to-day operation and administration of the Association.
The Association is responsible for providing all of the services
that are specified in the Declaration and Bylaws. In Wisconsin,
Condominium Associations must comply with the requirements
specified under Chapter 703 of the Wisconsin Statutes.
WISCONSIN REAL ESTATE MAGAZINE, MARCH 2006
Property managers of condominiums work with the boards to
set the operating budget; to collect the homeowner assessments;
to maintain or arrange for maintenance of the property; to select,
train and manage on-site staff; and to meet with or conduct
meetings with the board and the homeowners. Managers also
are responsible for helping the boards operate their property
according to the governing documents of their Association. The
bottom line is that a well-run condominium association operates
within its budget, takes excellent care of the property, plans
for the future, and enforces rules and regulations; property
managers play a key role in all of these functions.
Managers work with boards to establish the annual budget for
their property. Budgets need to factor in annual revenues and
operating expenses, but also must take into account future
needs. Managers should know when major items such as roofs
and elevators should be replaced and help the boards plan for
these expenses through an intelligent reserve policy. As well,
managers should assist the boards in determining these longterm needs through a reserve study that estimates the remaining
life of major capital items and predictable operating expense
increases.
Managers also should prepare detailed, periodic financial
statements and provide them to the boards on a regular basis.
These statements should show all income, expenses, and how
well the property is operating as compared with the budget.
Management of an Association is a property management
specialty. Therefore, it can require specialized training in both
physical, fiscal and human resources operations as well as the
unique governance issues that arise when volunteer boards
make key decisions.
Small Investment Properties Another
Meeting Ground
In recent years, investors with smaller amounts of cash have
turned to real estate as an alternative to the more limited
investment returns offered in the stock market. This has provided
an opportunity for REALTORS® who may not specialize in
commercial sales to work with smaller-portfolio investors
and come in contact with the professional property managers
that many of them employ. Here again, REALTORS® working
with small investors can add value to their services by having
a working knowledge of what it takes to manage their clients’
investments successfully.
Several types of properties are attractive to smaller-portfolio
investors – including single-family homes, two-to-eight unit
apartments and some commercial properties. Of noteworthy
importance, growing numbers of investors are becoming
interested in resort condominiums. These properties often
5
Recognizing quality management
and danger signs of an undermanaged property can give you
an edge in today’s transactions.
can generate both high appreciation and investment income.
But, they require an understanding of two types of property
management skills; one is condominium management, as noted
above; the other calls for specialized marketing and maintenance
skills if the property is offered for rent on a daily or weekly
basis.
Some properties allow rental of units by the Homeowner or
Agent; others require that Homeowners participate in the
property-endorsed rental management program. When assisting
clients in either scenario, we will want to assure that our clients
have a full understanding of the rental management program,
the costs and the restrictions. Also, they should know that legal
restrictions prevent most developers from providing income
projections. As a consequence, understanding the market and the
techniques necessary to manage rental properties successfully
are critical to the properties’ solid financial performance.
Recommending a Property Manager
There are many characteristics to consider when asked to
evaluate or recommend a real estate management practitioner
or firm. And if you are working with small portfolio investors, a
number of practitioners and firms in Wisconsin may meet your
clients’ specifications.
6
Here are some questions that
can elicit valuable information
to guide the selection process:
1.
How long have you been a manager?
2. What level of experience do you have in
this particular market and with this type
of property?
3. What professional designations do you
hold and from whom?
4. Can you provide examples of the asset
improvement you have achieved with
some of the properties you’ve managed?
5. What are your educational credentials?
6. Can you provide some professional
references?
WISCONSIN REAL ESTATE MAGAZINE, MARCH 2006
The profession of property management is
both an evolving and rapidly expanding
field. Indeed property management
has emerged as a highly technical and
specialized segment of the real estate
industry.
Adding Property
Management to Your
Menu of Services
In light of the growth in the field of
property management, you may want to
offer these services to your clients. Many
REALTORS® are adding management
activities to their menu of services,
providing them with an additional source
of income. Numerous educational and
other resources are available to them to
help ensure their success.
One leading resource provider is the
Institute of Real Estate Management
(IREM®), an affiliate of the NATIONAL
ASSOCIATION OF
REALTORS®.
IREM has been the source for education,
resources, information and membership
for real estate management professionals
for more than 70 years. It is the most
respected
education
provider
for
commercial and residential real estate
managers, providing a comprehensive
curriculum of introductory through
advanced courses that cover the core
disciplines of real estate management and
the latest management techniques.
IREM promotes ethical real estate
management practices through its
credentialed
membership
programs,
including the CERTIFIED PROPERTY
MANAGER®
(CPM®)
designation,
the
ACCREDITED
RESIDENTIAL
MANAGER® (ARM®) certification, and
the ACCREDITED MANAGEMENT
ORGANIZATION® (AMO®) accreditation.
These esteemed designations certify
competence and professionalism for those
engaged in real estate management.
IREM has chapters in Milwaukee and
Madison and offers courses throughout
Wisconsin every year. For information
on these course offerings and the other
resources available from IREM, visit the
organization’s Web site at www.irem.org.
In addition, two introductory real
estate management courses are offered
periodically through the Wisconsin
REALTORS®
Association
and
the
NATIONAL
ASSOCIATION
OF
REALTORS®; they are “Introduction to
Managing Single Family Homes and Small
Residential Properties” and “Introduction
to Managing Small Business Properties.”
These introductory courses provide a great
opportunity for REALTORS® to get their
feet wet regarding property management,
even if they don’t plan to practice in the
field. More course information can be
found at www.coursecalendar.com or
www.wra.org/courseschedule.
Fred Prassas, CPM is President of the
Institute of Real Estate Management, Chicago,
IL, and was the 1992 President of WRA. He
is President of PMC Management Group,
La Crosse, which, through various operating
companies, manages apartment, condominium
and resort rental properties in Wisconsin and
Minnesota.
end
Property management is about
enhancing and maintaining value
for the owners of real estate.
Best of the Legal Hotline
The following property management questions were recently asked of the Legal Hotline.
Property Management
BY DEBBI CONRAD AND TRACY RUCKA
Automatic Renewals
A lease has an automatic renewal provision whereby the
tenant must give a 60-day notice if the tenant does not wish
to renew. What happens if the tenant does not give the nonrenewal notice? What happens if the tenant does not leave?
An automatic renewal provision is not enforceable against the
tenant unless the landlord gives the tenant written notice pointing
out the automatic renewal provision in a residential lease. Wis.
Stat.§ 704.15 requires that the landlord give this notice to the
tenant at least 15 days, but not more than 30 days, prior to the
tenant’s deadline for giving a non-renewal notice to the landlord.
If the landlord gives the § 704.15 notice and the tenant does
not give the non-renewal notice, the lease would apparently be
renewed as specified in the lease. If the tenant gives the nonrenewal notice, then the lease would end at the stated expiration
date. If the landlord does not give the § 704.15 notice, then the
lease again would end at the stated expiration date.
If a tenant remains in possession of the premises after the end of
the lease term, the landlord may begin eviction action, enter into
a new lease, or accept rent from the tenant, thereby creating a
month-to-month tenancy per Wis. Stat. § 704.25.
Breaking the Lease
The tenant’s lease goes through the end of August. The
tenant gave notice in the middle of March indicating that he
is moving out on or before May 15. The tenant is requesting
that the security deposit be mailed to him at his new address.
Is he allowed to break the lease?
Unless the tenant and landlord agree to early termination of
the lease, the tenant may not break the lease without legal
consequences. The tenant remains liable for the rent due on the
balance of the lease term, subject to the landlord’s duty to mitigate
as described in Wis. Stat. § 704.29. Rent that is currently due or
past due may be withheld from the security deposit.
8
The return of security deposits is regulated by Wis. Admin.
Code § ATCP 134.06. A detailed statement of claims must
be given with a return of any security deposit balance owed
within 21 days after the tenant “surrenders the premises,” as
defined in the rule. Failure to comply is a violation of Wis.
Stats. § 100.20(5), which allows the recovery of double damages,
costs, and attorney fees. See Legal Update 03.07, online at
www.wra.org/LU0307, for further discussion of security deposit
rules.
In cases where the amount withheld from the security deposit
does not cover the landlord’s actual damages, the landlord may
choose to proceed with a small claims action against the tenant
for remaining damages. The landlord may not sue for future rent,
that is, rent that is not yet due.
Tenant Buying a House
A real estate broker is working with a buyer who has a oneyear lease. The buyer/tenant gave the landlord a 60-day
notice to vacate. The buyer feels that he should be able to
get out of the lease because he is purchasing a home. Is that
correct?
There is no state law allowing a buyer to terminate a lease to buy a
home. However, the lease agreement between landlord and tenant
could have been negotiated to allow for such a termination. The
broker should advise the buyer to consult with an attorney, as real
estate licensees cannot provide legal advice.
Utilities Not Paid
The tenant is not paying the utilities that are part of the
tenancy. He has acknowledged that he needs to pay them,
but he has not and continues to refuse to do so. Does the
landlord have the right to give the tenant a five-day notice to
pay those bills or vacate?
The tenant is a month-to-month tenant so there is no written lease
agreement. The terms of the tenancy are based upon a verbal
agreement and any other indications of the parties’ agreement.
WISCONSIN REAL ESTATE MAGAZINE, MARCH 2006
Without a written rental agreement, there is always the risk of a
disagreement and the tenant might deny that he has acknowledged
that he must pay the utilities as part of his tenancy.
Wis. Stat. § 704.17(1)(b) provides that if a month-to-month tenant
commits a breach other than not paying rent, the landlord may
terminate the tenancy by giving the tenant at least 14 days’ notice
to vacate the premises. This notice terminates the tenancy and
the landlord may commence eviction proceedings in small claims
court if the tenant does not move out.
§ ATCP 134.04(3) provides that the landlord must disclose to the
tenant before entering into a rental agreement or accepting any
security deposit or earnest money if the charges for water, heat
or electricity are not included in the rent. If this was not done, the
tenant might be able to file a complaint with the Department of
Agriculture, Trade and Consumer Protection.
Vacation Home
Rentals
If you open a vacation home
rental service, must you have
a real estate license?
Negotiation of lease terms,
advertising and promotion of
rental units, or entry into a lease
by the rental agent are acts of real
estate brokerage, and therefore
require licensure. However,
rental agents who merely show
residential rental property, accept applications and provide
information to prospective tenants are not regarded as
within the definition of “broker.”
If a real estate license is required, then there must be an agency
agreement with the property owners. See the discussion of
the WB-37 rental listing and the WRA Property Management
Agreement in Legal Update 01.02, online at www.wra.org/
LU0102. Before providing brokerage services, the property
owners should check the local ordinances to make sure that
rentals are permitted under local zoning. Certain vacation
WISCONSIN REAL ESTATE MAGAZINE, MARCH 2006
rental businesses may also need to determine whether any lodging
licenses may be required, for example, if they are deemed to be
rooming houses or bed and breakfast establishments. For more
information regarding lodging licensing, visit dhfs.wisconsin.
gov/fsrl/index.htm.
Timing the Return of the Security Deposit
The tenant gave a 30-day notice but moved out sooner.
When does the 21-day window to return the security deposit
begin?
The security deposit or a statement of claims shall
be mailed or delivered within 21 days after the
surrender of the premises.
§ ATCP 135.06(2)(b) provides that a tenant
surrenders the premises on the last day of tenancy
provided under the rental agreement, except
that:
1. If the tenant vacates before the last day
of the tenancy and gives the landlord
written notice that the tenant has
vacated, surrender occurs when the
landlord receives the written notice.
If the tenant mails the notice to the
landlord, the landlord is deemed to
have received the notice on the second
day after mailing.
2. If the tenant vacates the premises after
the last day of the tenancy, surrender occurs
when the landlord learns that the tenant has
vacated.
3. If the tenant is evicted, surrender occurs
when a writ of restitution is executed, or the
landlord learns that the tenant has vacated,
whichever occurs first.
Failure to comply with the security deposit
rules may lead to penalties of double the
amount of the deposit plus attorney fees.
9
Dealing with Pets in Rental Properties
Planning and Documentation Help Protect Property Managers
BY DEBBI CONRAD
W
hile many property managers and landlords are reluctant to allow pets in their rental units, others have found that
careful screening and thoughtfully planned pet policies can create a mutually respectful relationship. The owner or
property manager may protect him or herself against many pet concerns with careful planning and documentation.
• Ask for a written pet “résumé” and references vouching for the
pet’s good behavior and the responsible attitude of the pet’s
owner.
• Put tenants with pets on month-to-month rental agreements
so that the tenancy may be quickly ended if there are
problems. This agreement may be documented on
the WRA Residential Rental contract form, which
was designed for use either as a lease or a monthto-month tenancy.
• Have written pet rules that, for instance, set limits
on the type and size of animal; require that pets be
neutered or spayed and that cats be de-clawed; require
that all pets be leashed when outdoors and relieve
themselves only in designated areas; require the tenant to
immediately pick up any pet waste; and prohibit any excessive pet
noise or disturbances. Ask to see documentation, when appropriate, and
enforce the rules that are established.
• Require an additional pet deposit (extra security deposit for pet damage) or
extra monthly rent for each animal residing in the rental unit. If you charge
both, carefully and clearly indicate the purpose of the extra charges in the
rental agreement and pet policies. Some tenants may contend that if monthly
pet rent is intended to cover pet damage, then any repair costs for damage
caused by the pet should not also be deducted from the pet deposit because
double charging is illegal.
• Most owners may charge pet owners higher security deposits, but not in
Madison and Fitchburg where local ordinances limit the amount of the total
security deposit to one month’s rent. All deposits, no matter what they are
called, fall under these restrictions. Owners should make sure there are not any
local ordinances limiting pet deposits for rental properties.
Do the same policies apply if a tenant has a
disability and has a service animal?
No, the rules change dramatically when it comes to service and
support animals. Service animals that assist persons with
disabilities are considered to be auxiliary aids and generally
are exempt from many of the owner’s pet restrictions, pet
deposits and extra pet rent. Service animals include guide dogs
for persons with vision impairments, hearing dogs for people with hearing impairments,
and emotional assistance animals for persons with chronic mental illness.
WISCONSIN REAL ESTATE MAGAZINE, MARCH 2006
In Wisconsin, Wis. Stat. § 106.50(2r)(bm) includes specific
rules about animals assisting persons with vision, hearing
or mobility disabilities. It is illegal for an owner or property
manager to refuse to rent to a tenant, evict the tenant,
require extra compensation or harass a tenant because he
or she keeps an animal that is specially trained to lead or
assist a tenant with impaired vision, hearing or mobility,
provided that:
• Upon request, the tenant shows to the owner or property
manager credentials issued by a school recognized by the
Department of Workforce Development as accredited to
train animals for vision, hearing or mobility assistance.
• The individual will be liable for any damage caused by
the animal and agrees to maintain sanitary practices with
respect to the animal’s toilet needs.
However, the owner is not required to accommodate
the service animal in owner-occupied rental housing if
the owner, or a member of his or her immediate family
occupying the housing, has been certified to be allergic to
the type of animal the prospective tenant possesses.
While seeing eye and hearing dogs are generally recognized
and accepted by the public, the idea of emotional support
animals is often met with some resistance. However, recent
research has demonstrated that emotional support animals
can be extremely effective at ameliorating the symptoms
of emotional disabilities, such as depression and posttraumatic stress disorder.
The federal Fair Housing Act and the Americans with
Disabilities Act (ADA) protect the right of people with
disabilities to keep emotional support animals,
even when a landlord’s policy explicitly
prohibits pets. The law generally requires
the owner or property manager to make
an exception to his no pet policy as a
reasonable accommodation. As long as
the requested accommodation does
not constitute an undue financial
or administrative burden for the
landlord, or fundamentally alter the
nature of the housing, the landlord
must provide an accommodation.
If a prospective tenant needs
an
emotional
support
animal, he or she should
request
a
reasonable
accommodation,
in
writing,
from
the
landlord or manager.
The request should
state that the tenant has a
disability and demonstrate
a relationship between his or
her ability to function and the
companionship of the animal. In
addition, the tenant should include a letter or prescription
from an appropriate professional, such as a therapist or
physician, verifying the need for the support animal. The
tenant need not disclose the details of the disability nor
provide a detailed medical history.
If a dog scratches the door or a cat ruins the carpet, what remedies does an owner have?
Tenant Damages. Wis. Stat. § 704.07(3)
(a) provides that the tenant is responsible for
repairing any damage to the rental property
caused by the negligence or improper use of
the premises by the tenant – or the tenant’s
pet. However, the landlord may choose to
repair the property him or herself and have
the tenant reimburse him for the reasonable
cost of the repair work – this is what
generally happens. The cost to the landlord
is presumed reasonable unless proven
otherwise by the tenant. The owner may only
charge for damages that go beyond normal
wear and tear.
Tenant Waste. If the cat is allowed to use the
carpet as a litter box and the bedroom carpet
and sub-flooring are ruined, this will likely
constitute waste. Tenant “waste” is a tenant’s
unreasonable conduct that results in physical
damage and a substantial decrease in the
value of the owner’s property. Waste may
result from a tenant’s intentional, voluntary
activity or from the tenant’s negligence or
failure to act. In Three & One Company v.
Geilfuss, 178 Wis. 2d 400, 504 N.W.2d
393 (Ct. App. 1993), the Wisconsin Court
of Appeals found that tenants who allowed
their cats to use the unit as a litter box
committed waste. If waste is found the owner
is entitled to double the damages pursuant to
Wis. Stat. § 844.19.
Security Deposit Withholding. Wis. Admin.
Code § ATCP 134.06 provides that
owners may withhold from security deposits
(including the pet deposit) for tenant damage,
waste or neglect of the premises, provided
the damage is in excess of normal wear and
tear. Only actual repair costs (materials, work
WISCONSIN REAL ESTATE MAGAZINE, MARCH 2006
the owner pays others to perform) may be
offset against the tenant’s pet deposit and/or
security deposit. If any portion of
the security deposit is withheld,
a detailed statement of the
amounts withheld from
the security deposit must
be delivered or mailed
to the tenant within
21 days of the tenant’s
surrender of the premises.
If the security deposit does
not cover the amount of the
damages, the owner may sue
the tenant for the balance in
small claims court.
11
RS
Landlords May be Liable
Even After They Sell a Property
BY RICK STAFF
R
EALTORS® not only broker the sale of rental properties,
they also own a large number of rental properties, which
they sell from time to time. Few rental property sellers,
REALTORS® or REALTOR® clients are aware that there is a
very dangerous and little-known trap for sellers of these rental
properties. As surprising as it may seem, if you sell a rental
property and transfer the security deposits to the buyer, you
may be sued a year later for double damages and attorney fees
because the rental property buyer failed to return the security
deposits to your old tenant!
How can this be?
Well, our legislature created §704.09(2)
of the statutes titled:
Effect of Transfer on Liability of Transferor.
This section reads as follows:
In the absence of an express release or a contrary provision in the lease,
transfer or consent to transfer does not relieve the transferring party of
any contractual obligations under the lease, except in the special situation
governed by s.704.25 (5).
What does this mean?
If the seller of a rental property doesn’t have a “time of sale”
release provision from the tenant in the lease or doesn’t obtain
one separately at the time of closing, the seller is still the landlord
as far as liability for failure to meet the landlord’s duties under
the lease goes. Assuming that you and your rental property seller
clients don’t want liability for the mistakes of the buyer of the
rental property, you need to include language in your leases or
get releases signed by all tenants at the time of closing.
WRA lease forms include the necessary language:
Upon voluntary or involuntary transfer of ownership of the
Premises, Landlord’s obligations under this Agreement are
expressly released by the tenant. The new owner of the Premises
shall be solely responsible for the Landlord’s obligations under
this Agreement.
If you are brokering the sale of a rental property and the seller’s
leases do not have the appropriate release language in them, you
should refer the seller to legal counsel to have appropriate release
documents drafted. Needless to say, the prospect of having to go
to each of the tenants and beg for them to sign a release out of
the goodness of their hearts is not something to look forward to.
However, the seller has to decide if the task of getting individual
12
tenant releases is worse then the threat of liability that will hang
over his head as long as any of his tenants are living in the property
under the existing leases.
On the bright side, REALTORS ® may be able to use information
like this and other similar language found on the WRA Web site
(www.wra.org) to develop relationships with local landlords.
Who knows – in exchange for a bit of help on this matter, you may
get the chance to list one of these rental properties …
Rick Staff
Rick Staff Consulting
[email protected]
608-785-7525
of Wisconsin
COMMISSION ADVANCES
OVER $200,000,000 ADVANCED
NO CREDIT CHECK
SIMPLE APPLICATION
All you need is a signed contract with no
contingencies except financing. We do business
with real estate agents throughout Wisconsin.
Local Office... Personal Service
CALL US NOW!
262-798-3820
www.ce-wisc.com
Affiliate Member: NAR, WRA and
Greater Milwaukee Association of REALTORS®
Official Registered Supplier for Realty Executives International
WISCONSIN REAL ESTATE MAGAZINE, MARCH 2006
2005
WI Profile of Home Buyers and Sellers
I
n February, we detailed the typical
Wisconsin home buyer and the
characteristics of the home search
in 2005, based on findings from the
2005 NATIONAL ASSOCIATION OF
REALTORS® Profile of Home Buyers and
Sellers. In this issue we look at findings
related to Wisconsin home sellers and
the relationship between buyers, sellers
and the real estate agent.
Home Seller Profile
The Wisconsin home seller in 2005 was
44, married, primarily Caucasian, with a
household income of $61,943. Homes sold
were largely in suburbs and small towns,
and it took an average of six weeks to sell
a home. A significant majority of sellers
reported receiving more than 95 percent of
the list price for their Wisconsin homes.
Agent Interaction
Agent and the Home Buyer
The percentage of Wisconsin homes
purchased through a real estate agent in
2005 remained the same as the previous
year (78 percent). Those searching for a
home searched for three weeks before
contacting an agent, and eighty-two
percent used only one agent in their
search. Sixty-four percent of respondents
said they would definitely use their agent
again or recommend him/her to others.
An agent’s reputation is the most
important factor to the Wisconsin home
buyer, followed by knowledge of the
neighborhood..
A high percentage of Wisconsin home
buyers were very satisfied with their
agent’s people skills and knowledge of the
purchase process. Seventy-nine percent
said they benefited from the agent’s help
in understanding the process, and fortyfour percent benefited from the agent’s
efforts in pointing out unnoticed features
and faults.
Agent and Home Seller
Eighty percent of Wisconsin home sellers
used an agent or broker. Determining
the listing price, scheduling showings,
negotiating with buyers, managing
paperwork and entering the property in
a multiple listing service were the topnamed real estate agent-assisted tasks.
Like home buyers, home sellers said the
reputation of their real estate agent was
the most important factor in choosing an
agent.
Of respondents who used an agent to
sell their Wisconsin home, 91 percent
indicated their agent utilized the Internet.
Seventy-six percent said their home was
listed on a multiple listing service. When
the deal was done, 53 percent of Wisconsin
sellers stated they would definitely use
their agent again or recommend him/her
to others.
For Sale By Owner (FSBO)
Seventeen percent of Wisconsin home
sellers sold their own home in 2005, up
from 14 percent in 2004. The median age
of the FSBO seller was 42 with a median
income of $42,500. Eighty percent of
those who sold their home without using
an agent or broker said they were very
satisfied with the selling process.
in an average of six weeks and the majority
of sellers receiving more than 95 percent
of the list price.
Since Wisconsin home sellers and buyers
find the Internet a valuable tool, agents
are wise to integrate the Internet into their
marketing and home search services.
While Wisconsin home buyers and sellers
express satisfaction with the services their
agents provide, there is a slight increase in
the number of homeowners who choose to
sell their own homes.
To view the complete report, go to
www.wra.org/WisProfileRPT.
Special
Report
Part 2
The median selling price of a FSBO home
in Wisconsin was $129,900 compared
to the agent-assisted selling price of
$174,900. The number one reason stated
by Wisconsinites for selling their home
themselves was to avoid paying a
commission fee. Only 14 percent of FSBO
respondents said they used the Internet
to market their homes. Forty-one percent
stated they would also sell their current
home themselves.
Conclusion
Home sellers continue to enjoy a healthy
market in Wisconsin, with homes selling
WISCONSIN REAL ESTATE MAGAZINE, MARCH 2006
13
Education & Products
Earn Your SRES® Designation!
More REALTORS® are realizing the benefit of earning the Senior
Real Estate Specialist designation. With the increasing number
of seniors in the market, you’ll be at an advantage with the SRES
designation and you’ll have the knowledge, experience and
expertise to successfully provide seniors with professional real
estate consultation services. The WRA is offering the SRES course
April 20-21, 2006 in Madison. To earn your SRES® designation, you
must complete this two-day course and pass an exam. In addition,
you must have documentation of at least three transactions with
senior clients (50 years or older) completed in the last 18 months.
If you do not have the required senior transactions, you’ll need
to submit at least two senior transactions prior to your annual
renewal date with the Senior Advantage Real Estate Council (the
first year’s membership is included in the registration fee).
Visit: www.wra.org/SREScourses
CRS Elective
Marketing with Microsoft Office
This course is not computer training. It is a course in personal
productivity designed to help residential real estate professionals
utilize the specific features of Microsoft Office that unfortunately
have been underutilized or ignored. You’ll learn the power
of the seamless integration between Outlook, Word, Excel,
and PowerPoint. This one-day workshop will demonstrate
how Microsoft Office can streamline your work, improve your
presentations, eliminate repetitive tasks, simplify your business,
and increase your productivity tenfold or more! Marketing with
Microsoft Office is a one-day CRS class that applies toward the
designation upon successful completion. Join us April 26, 2006 in
Madison. This course is co-sponsored by the CRS Chapter.
Visit: www.wra.org/CRScourses
Sales Pre-license
Madison & Milwaukee
The WRA is offering an eight-day accelerated 72-Hour sales
program on March 6-9 and 13-16, 2006 at the WRA in Madison
and on April 3-6 and 10-13, 2006 in Milwaukee. Brokers can
purchase a $50 discount coupon for only $10, which entitles your
new recruit to a $50 discount on the registration fee. Your new
recruits can be ready to take the exam as soon as they complete
the class. Ask them to call and register today – 1-800-279-1972!
This program is also available through self-study video or selfstudy Internet programs.
Visit: www.wra.org/SalesPLcourses
14
QuickStart
As you recruit, don’t forget to send your new agents to the fourday QuickStart Program (offered in two, two-day sessions). The
course contents include prospecting, open houses, incorporating
technology into your business, creating a business plan, working
with buyers and sellers, and money management, plus much
more. Modules 1 & 2 will be offered on April 12-13, 2006 and
Modules 3 & 4 on May 17-18, 2006 at the WRA, Madison. Upon
completion of the four modules and passing the exam, agents
can receive credit for the completion of GRI Course 1. Fee is only
$240; however, the WRA offers a new member discount of $40,
which makes the cost of this course only $200. It’s a fantastic price
for four days of instruction for your new agents.
Visit: www.wra.org/QScourses
Broker Pre-license
This course will be offered on April 3-6, 2006 and June 12-15,
2006 in Madison. This program is also available through a video
self-study version or a self-study Internet program. Completion
of this program, passing the broker exam and applying for your
broker’s license fulfills your 2005-2006 continuing education
requirements.
Visit: www.wra.org/BKPLcourses
Complete Your CE This Spring!
The second half of the biennium is here and REALTORS® have
until the end of the year to complete the necessary continuing
education courses to renew their licenses. The WRA is offering
several CE courses in the next few months.
CE3 - New Developments, and CE4B - Agency Law Revisions:
Bringing the Law to the Practice will be held in Milwaukee on
March 16 and in Madison on March 23.
CE1 - Issues Relating to Use of Approved Forms, Contract Law
and Real Estate Practice: Agency Agreements, and CE2 - Issues
Relating To Use of Approved Forms Contract Law and Real Estate
Practice: Conveyance Documents will be held in Milwaukee on
April 6 and in Madison on April 19.
Register today so you can take continuing education off your
“to do” list!
Visit: www.wra.org/CEcourses
Mark Your Calendar!
WRA Annual Convention • September 25-27, 2006
Marriott Madison West
WISCONSIN REAL ESTATE MAGAZINE, MARCH 2006
Education Registration Form
CONTACT INFORMATION
Attention Commercial Real Estate
Brokers:
Name ________________________________________________
Firm name ___________________________________________
The WRA is offering continuing education courses specifically
designed for the commercial real estate broker. All courses will
be held in Appleton. Choose one course or all four!
Address _______________________________________________
On April 12 take commercial CE1 - Issues Relating to Use of
Commercial Forms, Contract Law and Real Estate Practice: Agency
Agreements, and CE2 - Issues Relating to Use of Commercial
Forms, Contract Law and Real Estate Practice: Conveyance
Documents. Then, on April 19, attend CE3 - New Developments,
and CE4C - Issues Relating to Interaction with Other Real Estate
Service Providers.
Phone (W)______________________ (H)____________________
Two courses are offered each day - one in the morning and one
in the afternoon. Each course earns three hours of Wisconsin real
estate continuing education.
City ______________________ State _______ Zip ___________
*e-mail address ________________________________________
WRA member # _______________________________________
DATES AND FEES – Fill in information for course attending
Course _______________________________________________
Location ______________________________________________
Visit www.wra.org/CommercialCE for more information.
Date _________________________________________________
Appraisal CE
*Confirmation will be sent by e-mail, or you may check myWRA at
www.wra.org to verify course registration.
You can also complete some of your Appraisal CE through the
WRA’s Distance Learning Program. Courses available include:
Relevant Environmental Issues for Residential Appraisers
This four-hour course is designed for residential appraisers
interested in learning how current environmental concerns affect
property values.
Procedures for the Unusual Residential Appraisal Assignment
PAYMENT
Total $ ________
❏ Enclosed is my check made payable to the WRA.
❏ Charge my VISA/MasterCard. (Circle one.)
This four-hour course was developed for the experienced
residential appraiser who wishes to gain insight to the nuances
of valuing unusual residential properties. It is based on the use
of case studies developed to illustrate the unique challenges that
can arise from these residential assignments.
Card number _________________________ Exp. date ________
Economics of Residential Finance
This four-and-a-half hour course outlines the basics of the
mortgage lending and brokerage industries and how they provide
the background for residential valuation.
Register by Mail:
WISCONSIN REALTORS® ASSOCIATION
4801 Forest Run Road, Suite 201
Madison, WI 53704-7337
National USPAP
Register by Phone: (800) 279-1972 or (608) 241-2047
This seven-hour course focuses on recent changes to the
Uniform Standards of Professional Appraisal Practice (USPAP)
(Mandatory course).
Fee per course:
Appraisal Section Member - $60; USPAP: $130
WRA Member: $65; USPAP $140
Non member: $70; USPAP: $150
WISCONSIN REAL ESTATE MAGAZINE, MARCH 2006
❏ Special Services: Check here if you require special
services to attend. Attach a written description of needs.
Register by Fax: (608) 241-5168
Online Registration: www.wra.org
CANCELLATION POLICY: The WRA reserves the right to cancel
a course if not filled. Cancellations must be made in writing
prior to the start of the course and will be refunded, minus a
$25 administrative fee. Registrations cannot be transferred from
person to person.
15
2006
WISCONSIN REALTORS® ASSOCIATION
APPRAISAL
conference
Submitted for CE credits for WI appraisers and assessors,
MI and MN appraisers
March 21-22, 2006
Continuing education and updates on the latest developments in the appraisal industry.
Ho-Chunk Casino, Hotel & Convention Center
Wisconsin Dells
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2006 Appraisal Conference Schedule
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Sales & Mktg
Management
Pre-license
Education Calendar
Date
March 6-9; 13-16, 2006
April 3-6, 2006
April 3-6; 10-13, 2006
May 1-4; 8-11, 2006
June 12-15, 2006
Course
72-Hour Sales
36-Hour Broker
72-Hour Sales
72-Hour Sales
36-Hour Broker
Date
April 12-13, 2006
April 20-21, 2006
April 26, 2006
Course
Quickstart Module 1 & 2
SRES
Marketing with Microsoft Office–RS elective
Location
Madison
Madison
Madison
May 17-18, 2006
June 7-8, 2006
July 13-14, 2006
August 3-4, 2006
August 9-10, 2006
August 23-24, 2006
August 25, 2006
Quickstart Module 3 & 4
Quickstart Module 1 & 2
Quickstart Module 3 & 4
SRES
Quickstart Module 1 & 2
Buyer Agency
Buyer Agency Elective:
Effective Negotiating for RE Professionals
Quickstart Module 3 & 4
Madison
Madison
Madison
Brookfield
Madison
Appleton
Appleton
$240 (1)
$240 (1)
$240 (1)
$400
$240 (1)
$260 (1)
$130 (1)
$240 (1)
$240 (1)
$240 (1)
$410
$240 (1)
$270 (1)
$140 (1)
Madison
$240 (1)
$240 (1)
September 7-8, 2006
Real Estate CE
Conferences
Conventions
www.wra.org/CourseSchedule
Time
8:00 a.m. – 5:00 p.m.
8:00 a.m. – 5:00 p.m.
8:00 a.m. – 5:00 p.m.
8:00 a.m. – 5:00 p.m.
8:00 a.m. – 5:00 p.m.
Location
Madison
Madison
Milwaukee
Madison
Milwaukee
Regular Reg.**
$325 ❂
$255 ❂
$325 ❂
$325 ❂
$255 ❂
Early Reg. Thru Early Reg.
$240 (1)
$400
$149
Regular Reg.
$240 (1)
$410
$159
March 21, 2006
Appraisal Conference
March 22, 2006
Appraisal Conference
Ho-Chunk,
Baraboo
800-279-1972
Call to register
Real Estate Fraud: The Appraiser’s
Responsibility & Liability (7 hrs)
or- Appraising Environmentally Damaged
Residential Properties (3.5 hrs) and
Challenges of 2-4 Unit Residential Properties
Ho-Chunk,
Baraboo
800-279-1972
Call to register
Reviewing Residential Appraisal Reports
(7 hrs.) or- Scope of Work: Expanding Your
Range of Services (7 hrs.)
Date
March 9, 2006
March 14, 2006
March 16, 2006
March 16, 2006
March 21, 2006
March 23, 2006
April 3, 2006
April 4, 2006
April 6, 2006
April 6, 2006
April 11, 2006
April 11, 2006
April 11, 2006
April 12, 2006
April 12, 2006
April 12, 2006
Course
2005-2006 CE 1 & 2
2005-2006 CE 3-video
2005-2006 CE 4A-video
2005-2006 CE 3 & 4B
2005-2006 CE 2-video
2005-2006 CE 3 & 4B
2005-2006 CE 1 & 2
2005-2006 CE 3 & 4
2005-2006 CE 3 & 4
2005-2006 CE 2 & 1
2005-2006 CE 1-video
2005-2006 CE 3 & 4B
2005-2006 CE 1 & 2
2005-2006 CE 3 & 4B
2005-2006 CE 3 commercial
2005-2006 CE 1 & 2
Time
8:30 a.m. – 4:30 p.m.
9:00 a.m. – 12:30 p.m.
9:00 a.m. – 12:30 p.m.
9:00 a.m. – 5:00 p.m.
9:00 a.m. – 12:30 p.m.
9:00 a.m. – 5:00 p.m.
8:30 a.m. – 4:30 p.m.
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WISCONSIN REAL ESTATE MAGAZINE, MARCH 2006
17
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REALTORS® Carry
Message to Capitol
Hundreds Attend WRA REALTOR® & Government Day
H
BY MICHAEL THEO
undreds of REALTORS® from all
corners of Wisconsin took to the state
capitol on February 15 to talk about
key real estate and homeowner issues with
their legislators, as part of the 2006 REALTOR®
and Government Day program. This annual
event provides legislators the opportunity to
hear firsthand the impact of important pending
legislation directly from their REALTOR®
constituents.
The gathering also heard speeches at the end of
the day from Governor Jim Doyle and Attorney
General Peg Lautenschlager. The day ended
with a reception that allowed the attendees to
unwind, debrief on
the day’s activities and
network with fellow
REALTORS®.
• The intent of these new rules is to limit the size
and length of piers, based on the assumption
that all such structures have a detrimental
impact on water quality and aquatic habitat.
• The new proposed rules create new
dimensional standards that will be applied not
only to all new piers, but also retroactively to
all existing piers.
• While the DNR admits that this will likely
make thousands of existing piers illegal, they
don’t know how many for sure. In fact, they
are not sure how many existing piers we have
in the state.
• The
DNR
claims
that 99 percent of the
existing piers will be
“grandfathered,”
but
this estimate is based
upon a study of only
35 lakes (Wisconsin
has over 15,000 lakes)
during
September
2005 (toward the end
of the boating season).
Prior to this study, the
DNR estimated that
only 80 to 85 percent
of the piers would be
“grandfathered.”
On behalf of the
leadership and staff
at the WRA, we thank
every REALTOR® who
took the time from his
or her busy schedule
to participate. Your
investment of time is
an investment in your
business, your industry
®
and your customers and WRA Chairman Jeff Kitchen addresses members at REALTOR & Government Day.
clients. All members are
strongly encouraged to attend next year’s event
• In December, the DNR made some positive
in early spring.
changes to the rules that will seemingly
For the majority of members who could not attend
REALTOR® and Government Day, here are the
key messages attendees delivered to lawmakers
in Madison.
New Pier Regulations
WRA Message to Legislators: Pass legislation to
permanently grandfather existing piers that were
lawful when originally placed.
• The Department of Natural Resources (DNR)
is proposing new administrative rules to
regulate new and existing piers.
grandfather more piers. However, the rules
contain a provision (called the “recapture
provision”) that gives the DNR broad
discretionary authority to require EVERY pier
in the state (even those piers considered to
be “grandfathered”) to obtain an individual
permit, if the DNR determines the pier
will cause (a) significant adverse impacts
to the public’s rights or (b) material injury
to neighbor’s rights. The standards are not
defined, and the DNR has broad latitude in
interpreting them.
REALTOR® & Government Day ... continued on page 20 & 21
WISCONSIN REAL ESTATE MAGAZINE, MARCH 2006
19
• Over the last several weeks,
Representative Scott Gunderson and
Senator Neal Kedzie have brought all
the interested parties together in hopes
of resolving the outstanding issues
on piers. Through their leadership, a
compromise may be reached within
the very near future.
• The WRA is asking the Legislature
to pass legislation that prevents (a)
new standards from being applied
retroactively to existing piers that
were legal when placed, and (b)
creating vague standards that give the
DNR broad discretionary authority
to require any pier in the state to
obtain an individual permit and
cause waterfront property owners
tremendous uncertainty.
Taxpayer Protection Act
WRA Message to Legislators: Support
legislation to place before the voters a
constitutional amendment establishing
reasonable spending limits on state and
local governments.
• Legislative leaders in both Houses
have promised a vote this spring
on legislation to limit state and local
government spending in the state
constitution. The legislation has yet to
be introduced.
• Proposals currently being discussed
would accomplish this by placing
limits on revenues derived from most
taxes and fees, and would be based on
CPI (the Consumer Price Index) with
adjustments for growth in population,
students and new development.
• Voters would be allowed to change
these limits by referendum.
• A budget stabilization or emergency
fund would be established.
• The WRA supports reasonable
spending/revenue limits so long as
they are consistent with the following
principles:
Simple. The constitutional language
should be general and not overly
detailed to provide maximum
flexibility for statutory execution.
20
Limits tied to taxpayers’ ability to
pay. Spending limits should be based
on personal income growth and should
restrain the rate of growth in spending
without eliminating essential services
critical to Wisconsin’s quality of life.
Fees. Limits should be included on
revenues generated from fees as well
as taxes to avoid potentially dramatic
shifts in revenue sources.
Bonding. The ability to issue bonds
for economic development purposes
at the local level must be preserved.
Growth. New growth should be
encouraged by allowing communities
to retain the additional tax revenues
realized from new construction and
development.
Referendum. Local voters should
retain the authority to override any
spending limits by referendum.
Health Insurance for Independent
Contractors
WRA Message to Legislators: Support
SB 7 and AB 4, legislation allowing
contributions to individual Health
Savings Accounts (HSAs) to help
individuals who do not have employerprovided health insurance coverage.
Support other legislation that helps make
health insurance more affordable and
accessible for self-employed individuals.
• Many of America’s
45 million
uninsured citizens are self-employed
or work for small employers that
cannot afford to offer health insurance
benefits.
are
independent
• REALTORS®
contractors, not employees, many of
whom cannot afford individual health
insurance policies. Most receive
insurance coverage under a spouse’s
plan or have no coverage at all.
• SB 7 and AB 4 allow individuals to
contribute to a health savings account
on a pre-tax (tax deductible) basis to
cover qualified medical expenses,
helping to make health insurance
more affordable to self-employed
individuals like REALTORS®.
• This legislation is similar to provisions
vetoed by Gov. Doyle in the last state
budget, so even if passed by the
Legislature, it’s uncertain whether it
will become law.
• This legislation is part of the Senate
Republican spring agenda and is
expected to be voted on before the end
of March.
Eminent Domain
WRA Message to Legislators: Support
Assembly Bill 657, legislation designed to
protect homeowners from condemnation,
without hurting economic development.
• Last summer, the U.S. Supreme Court
in Kelo v. City of New London held
that single-family, owner occupied
homes could be condemned by
government and transferred to a
private third party for purposes of
economic development.
• In a dissenting opinion, Justice
O’Connor noted that under the
Court’s ruling all private property is
now vulnerable to being taken and
transferred to another private owner
so long as it will be put to a higher
and better use. She stated, “Nothing
is to prevent the state from replacing
any Motel 6 with a Ritz Carlton, any
home with a shopping mall, or any
farm with a factory.”
• Strong public outrage to this decision
resulted in an immediate and
emotional reaction by federal and state
legislatures to limit the use of eminent
domain for purposes of economic
development.
• While the WRA opposes the decision
in Kelo, we recognize that eminent
domain is an important economic
development tool used to redevelop
our existing communities.
• Accordingly, we have encouraged
the Wisconsin Legislature to develop
narrow legislation that protects
homeowners
without
hurting
economic development.
• Assembly Bill 657 restricts the ability
of government to:
– Condemn single-family,
owner-occupied homes; and
– Transfer them to a private third
party.
WISCONSIN REAL ESTATE MAGAZINE, MARCH 2006
• The bill has passed both Houses, but the version passed by the
Senate was slightly different due to two amendments. The bill is
now back in the Assembly, as both Houses must pass the same
version of the bill.
• The WRA is asking the Legislature to pass, and the Governor to
sign, an agreed-upon version of the bill, and protect homeowners
from condemnations that directly benefit private third parties.
Nonconforming Structures Destroyed By Natural Disaster
WRA Message to Legislators: Support SB 253, legislation intended
to protect the rights of homeowners to rebuild their nonconforming
structures if destroyed by natural disaster.
• A “nonconforming structure” is a home or building that does not
meet one of the dimensional requirements found in the current
zoning ordinance (e.g., height, setbacks, lot coverage ratio, etc.).
• Generally, a building becomes nonconforming because a
community changes the regulations after the home or building
is constructed.
• Current law protects the right of property owners to rebuild
their homes, but only if the home is:
– Located in a shoreland area regulated by county
shoreland zoning; and
– Destroyed by wind, fire, flood or vandalism.
• However, if a home is not located in a county shoreland zoning
area, no protections at the state level exist. Furthermore, if the
WISCONSIN REAL ESTATE MAGAZINE, MARCH 2006
home is destroyed by any other causes (e.g., mold, infestation or
something else outside the control of the property owner), the
home cannot be rebuilt.
• These restrictions impact the value of the property because
purchasers are obviously unwilling to pay the same amount for
a home with these restrictions as they would for the same home
with no restrictions.
• Lenders and insurance providers are also reluctant to offer
financing or issue insurance policies because these homes are
considered risky due to the fact that, if destroyed, they cannot
be rebuilt to the same configuration.
• Senate Bill 253 would:
– Allow ALL nonconforming structures to be rebuilt
if destroyed by natural disaster (e.g., violent wind,
vandalism, fire, or flood), no matter where the structures
are located.
– Expand the list of conditions under which a property
owner could replace his or her nonconforming structure
to include destruction by mold, snow or ice.
• The bill has passed both Houses and was awaiting Governor
Doyle’s signature into law. And, to the delight of all attendees,
the Governor actually signed the bill into law right there at
REALTOR® and Government Day!
21
Lautenschlager vs. Falk
T
he WRA Board of Directors
and REALTORS® Political
Action Committee Trustees
have endorsed incumbent Peg
Lautenschlager in the Democratic
primary for attorney general over
her challenger, Dane County
Executive Kathleen Falk.
BY JOE MURRAY
While this is the first major political
announcement for 2006, it certainly
will not be the last. The REALTORS®
Political Action Committee Trustees
and WRA Board will review virtually
every state candidate in every race
from the governor and U.S. Senate
to the state Assembly, and make
recommendations in favor of those
candidates who best support the
REALTORS®, homeowners and
property owners of Wisconsin.
One of the most important races
this year is the contest for attorney
general. The Lautenschlager-Falk
primary contest will be hotly
contested, expensive, and in the end,
very close.
Why Peg Lautenschlager?
The logical question is why did the
board of directors decide to support
Peg Lautenschlager over Kathleen
Falk? After all, both candidates
appear very similar on paper.
Both have strong environmental
credentials and a reputation as
solid progressives. But there are
important differences between the
two candidates, which makes our
endorsement clear.
The WRA has enjoyed a close
working relationship with Peg
Lautenschlager dating back to her
days in the state Legislature as a
Democratic state representative
What’s the Difference?
from Fond du Lac. When she was
first elected to the Assembly in
1988, the WRA did not support
her. But this didn’t stop her from
working with us on important
housing issues. By the time she
decided to leave the Assembly
in 1992,
she
had established
herself as a solid, pro-homeowner
legislator. Lautenschlager received
an 80 percent rating on key WRA
issues in her last term in the state
Legislature.
Peg Lautenschlager. Photo by: Michael DeVries, The Capital Times.
That same positive working
relationship between the WRA and
Peg Lautenschlager exists today
in her role as attorney general. For
example, when the WRA asked
for her support on the agency
modernization bill, our top priority
for this session, Lautenschlager and
her staff studied the bill immediately
and carefully. Convinced the bill was
“consumer friendly,” she put her
support in writing. With the strong
endorsement of the attorney general,
the agency legislation went on to
receive overwhelming bipartisan
support in the Legislature and was
signed into law by Governor Doyle
in December. The attorney general’s
support for this legislation was
critically important to our success.
Earlier in 2005, Peg Lautenschlager
again demonstrated her interest
in homeowner rights when the
U.S. Supreme Court announced
the controversial “Kelo” decision
regarding eminent domain – a
ruling that dramatically expanded
the power of government to take
private property. This ill-advised
ruling gave local governments
the power to confiscate private
homes not for a public purpose,
but in order to give it to another
private owner for commercial
development.
Lautenschlager
immediately
understood
the
negative implications of such a
ruling and began holding public
hearings to both educate the public
on the issue and to receive feedback
on what should be done in response.
As a result, Lautenschlager and a
bipartisan group of legislators have
drafted state legislation to address
the issue and protect homeowners
in Wisconsin.
So, for more than two decades,
the WRA and Peg Lautenschlager
have worked together on issues of
serious importance to Wisconsin
homeowners, property owners
and REALTORS®. Lautenschlager
has always shown a willingness to
listen and work toward agreeable
solutions. This
receptivity to
different and diverse ideas is the
primary reason we support Peg
Lautenschlager.
Lautenschlager’s primary opponent
on the other hand, Dane County
Executive Kathleen Falk, has
presided over county government
for nine years and made restrictive
land use policies her signature
issue.
Lautenschlager vs. Falk ... continued on page 26
WISCONSIN REAL ESTATE MAGAZINE, MARCH 2006
The Wisconsin Homeowners
Alliance (WHA) is a 501(C)(4)
THE VOICE OF THE WISCONSIN HOMEOWNERS ALLIANCE
organization dedicated to representing
the interests of Wisconsin homeowners
and protecting Wisconsin’s quality of life
ALLIANCE
one home at a time. As part of this effort,
W I S C O N S I N
the WHA conducts a series of statewide
Homeowner Insights for Wisconsin Decision
public opinion surveys designed to help us
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Homeowner Insights for Wisconsin Decision Makers
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and concern to homeowners with decision
interests of Wisconsin homeowners and protecting Wisconsin’s quality of life one home at a time. As part of
s a 501(C)(4) organization dedicated to representing the
makers around the state.
this effort, the WHA conducts a series of statewide public opinion surveys designed to help us understand what
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homeowners are thinking and talking about. This monthly publication is intended to share issues of importance
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of people ages
to 64 and
a 55
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percent
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the
availability
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concerns about rising economic cost
a home,
the cost saw
and
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of mortgage can be a significant
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affordable
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women
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barrier when deciding to buy.
them in the next year.
a second mortgage, one in
cannot
compete
economically
in the same light.
without first-class public schools—
. People ages 45 to 54 are
TAX ISSUES
TAXES
Many Wisconsin homeowners say that the 58 percent agree strongly.
A significant amount of Wisconsin
Interestingly, while clear majorities saw local services and the quality of
kers around the state.
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tax deduction for mortgage interest was
an influence when purchasing a home and More than two-thirds of people with
do not want to see it go away.
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local
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most as incentives, higher percentages of men were likely to see
exist between age, gender and regio
household incomes of $60,000 to
groups.
these
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gage payment,
while
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and 61 percent of women
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saw the quality of local services
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while 79 percent of men and 71 percent of women saw the quality
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system
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ence on women.
as an incentive.
of high-quality public education,
survey majorities of all Wisconsin residents see the quality of local
While significant
at it is a top EDUCATION
priority for their families and
public schools as an incentive to home ownership in their communities, there
s a high level of satisfaction with the qualare interesting regional variations. Statewide, 75 percent of us classify the quality of our
ecent survey, respondents emphasize the
public
as canan incentive to home buying. However, in the Milwaukee area a
ght people inlocal
10 agree
thatschools
Wisconsin
smallerpercent
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residents (66%) see their local schools as an incentive as compared to
ublic schools—58
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d-class technical
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to
wisconsin
homeowners
alliance
wisconsin
homeowners
alliance
The Economy
Indications are that the economic situation in the state, in
our communities and in our homes are presenting challenges to
homeowners and aspiring homeowners. In this most recent survey just
44 percent of respondents say the state is on the right track and 40 percent
say things are off on the wrong track. One person in five expects that things
will get worse for them in the coming year, while 45 percent expect things to
stay the same.
While economic conditions are not the only criteria that people use to rate the
direction the state and their communities are moving, money is a key factor.
Half of respondents report that the current economic situation in Wisconsin is
a barrier to buying a home, and 45 percent say the community economy is a
barrier. Almost two-thirds of homeowners say the cost of most homes in their
market is an obstruction to home ownership. One homeowner in five reports
having difficulty making his or her mortgage payment at least once in the
past year.
The bottom line? Fully 70 percent of state residents think it is either very
difficult (16%) or somewhat difficult (54%) for individuals and families to
own a home in Wisconsin.
Taxes
While taxes are a critically important factor affecting the
affordability of homes for the vast majority of Wisconsin residents,
the tax deduction on interest helps to mitigate the other barriers
to home ownership. Almost half (46%) of homeowners report
that the tax deduction on interest influenced their decision to
purchase their home a great deal or somewhat. At the same
time, half of homeowners and two-thirds of renters say
they have not heard or read about the Federal Tax Study
Commission report that recommends changes to mortgage
interest tax deductions. Among all respondents, 40 percent
strongly oppose a Study Commission recommendation to
replace the current home mortgage tax deduction with an
amount equal to 15 percent of the mortgage interest, and
43 percent strongly oppose eliminating the tax deduction
for home equity loans.
More significantly, this data suggests that middle-class
families would feel the effects of these changes more
strongly. Two-thirds of people ages 45 to 54 oppose
the 15 percent substitution recommendation (50%
strongly oppose). Middle income respondents are
also more strongly opposed to this idea. Almost half
(48%) of people earning $40,000 to $60,000 strongly
oppose this recommendation and a total of 66 percent
oppose the idea. Moreover, 72 percent of families with
household incomes of $60,000 to $80,000 oppose the
change.
The Wisconsin Homeowners Alliance is a 501(c)(4) organization dedicated to representing the interests of
Wisconsin homeowners and protecting Wisconsin’s quality of life one home at a time.
W W W . H O M E O W N E R S A L L I A N C E . O R G
wisconsin
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4/13/05 3:59:25 PM
Another Record Year as Housing
Sales Remain Solid in Fourth Quarter
Lautenschlager vs. Falk ... continued from page 22
BY DAVE CLARK
W
isconsin’s residential home sales set another annual record as existing
home sales in the fourth quarter of 2005 remained near the all time
high pace established in the fourth quarter of last year, according to the
most recent analysis of statewide existing home sales conducted by the Wisconsin
REALTORS® Association (WRA). Sales of existing homes in Wisconsin for the fourth
quarter of 2005 totaled an estimated 30,075 units, which is nearly unchanged from
the strongest fourth quarter on record, which occurred in 2004. Indeed, existing
home sales in Q4 2005 were just 0.3 percent off the Q4 2004 pace. Wisconsin’s home
sales only differed slightly from the nation and the Midwest region, with sales up
0.3 percent nationally and homes sales down just 0.4 percent in the Midwest.
“This is an amazing market,” said WRA Chairman Jeff Kitchen. “That home sales stayed
near their fourth quarter 2004 levels even as mortgage rates inched upward in recent
months is a true testament to the strength of this market,” said Kitchen. The two most
important factors driving this market are still low interest rates and strong job growth,
and he noted that although conventional 30-year fixed rate mortgages were up slightly
from their levels of last year, they remain low by historical standards. Furthermore, the
Wisconsin unemployment rate continues its downward movement, with fourth quarter
unemployment in the state now just over 4.6 percent.
Fourth Quarter Regional Sales Data
Comparing Q4 2005 with the same quarter the previous year, existing home sales were
up by solid margins in the less urban regions of the state. Specifically, home sales rose
18.1 percent in the Northern region and grew at an 8.6 percent pace in the Central region
on solid vacation home activity. Sales volume was essentially unchanged in the South
Central region, whereas the level of sales fell modestly in the Southeast (-4 percent) and
at a faster pace in the Northeast (-7.2 percent) and Western (-10.4 percent) regions.
Fourth Quarter Median Housing Price Data
Home prices in Q4 2005 were up by more than the annual inflation rate. As compared
to Q4 2004, median home prices increased 5.2 percent to $162,000, with four of the six
regions experiencing median price appreciation, and one region essentially unchanged.
“This is certainly an indication that the housing market remains healthy in Wisconsin
and that real estate is an excellent way to grow family wealth,” said WRA President
William Malkasian. He noted that although mortgage rates have increased a little more
than a half percent since June of last year, this does not appear to have caused sales
prices to fall statewide. “In fact, the only region in the state to see median values fall was
the Northern region, and this was likely due to the growing popularity of lower priced
second homes in the area, rather than systematic price discounting,” said Malkasian.
Prior to being elected county executive,
Falk’s support for extreme land use
restrictions was evident from her years as
the state’s public intervener. While that
office no longer exists in the same form, for
many years this office served as a taxpayer
funded law firm for many environmental
groups intent on stopping development.
When the WRA supported rules to allow
for new septic technology (Comm 83) that
would better protect the environment
while facilitating rural housing options,
Falk and others opposed the new systems.
As county executive, she continues to
oppose rural subdivisions and township
development in general.
When
the
WRA
announced
its
endorsement of Attorney General
Lautenschlager, a spokesperson for
Falk responded by noting that Falk “has
been fighting sprawl in Dane County for
nine years, so it’s not surprising that the
conservative REALTORS® would endorse
her opponent.”
That’s an interesting response given
the REALTORS® strong and continuing
support for comprehensive land use
planning and the state’s Smart Growth
Law. Moreover, the statement implies
that Peg Lautenschlager is an advocate
of “sprawl,” despite Lautenschlager’s
impeccable pro-environment record.
Yet it’s a good example of the difference
between Lautenschlager and Falk. The
attorney general will look at all sides
of an issue and make a decision on the
merits of the discussion. Kathleen Falk
starts with an agenda and philosophy that
emphasizes ways to “control” housing,
transportation and open space.
In the coming months you will see
additional information on this and other
key races. In the meantime, help us spread
the word on our endorsement of Peg
Lautenschlager in the Democratic primary
for attorney general.
WRA Online Housing Statistics: www.wra.org/HousingStatistics
26
WISCONSIN REAL ESTATE MAGAZINE, MARCH 2006
REFERRALS
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Boulder Junction • Mercer • Minocqua
Manitowish Waters • Area Referrals
Jim Tait III
Boulder Jct.
877-385-2077
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Jim Tait Sr.
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direct: 715.297.1953 toll free: 866.348.5300 fax: 715.849.5301
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©2005 Century 21 Real Estate LLC. CENTURY 21® is a licensed trademark to Century 21 Real
Estate LLC. Each Office Independently Owned and Operated. Equal Opportunity Company.
Equal Housing Opportunity. There is no guarantee that positions are available in your local area
and submitted information does not necessarily mean you are qualified for any positions. All
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Source: 2004 Ad Tracking Study. The survey results are based on 1560 telephone interviews (via
computer assisted program) with a national random sample of adults (ages 25-54) who have either
bought or sold a home within the past two years or plan to purchase or sell a home within the next
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