Residential landlords in Wisconsin now face liability under the Wisconsin Consumer Act (WCA) following the Wisconsin Court of Appeals’ decision in Koble Invs. v. Marquardt, 412 Wis. 2d 1, 7 N.W.3d 915 (Ct. App. 2024).

The WCA aims to:

• simplify, clarify and modernize the law governing consumer transactions
• protect customers against unfair, deceptive, false, misleading and unconscionable practices by merchants.

In the Koble case, the Court found that the landlord violated the WCA by serving a five day eviction notice during the COVID-19 moratorium. Specifically, the landlord attempted to “enforce a right with knowledge or reason to know that the right does not exist” in violation of Wis. Stat. § 427.104. Penalties for WCA violations can be severe, including the payment of attorney’s fees.

Additionally, the Koble Investments decision found the landlord violated Wis. Stat. § 704.44, which voids rental agreements that contain certain lease provisions.

Including any of the following provisions in a residential lease will make the lease void and unenforceable:

(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:

(a) Increase rent.

(b) Decrease services.

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

(d) Refuse to renew a rental agreement.

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

(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 in Wis. Stat. §. 704.29.

(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 chapter 799 or 814.

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

(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 Wis. Stat. §. 704.07 or assumed by a tenant under a rental agreement or other written agreement between the landlord and the tenant.

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

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

(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 or assumed by a tenant under a rental agreement or other written agreement between the landlord and the tenant.

(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.

(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 Wis. Stat. §. 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 Wis. Stat. §. 704.14.

The landlord in the Koble case violated § 704.44(10) because the rental agreement allowed the landlord to terminate the lease for a crime committed in relation to the rental property without providing the proper notice.

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.

The Court ordered Koble Investments to repay the tenant for all payments that were made under the unenforceable lease as a result of Koble’s violation.

KEY TAKEAWAYS

• Landlords must not attempt to enforce a right against tenant when they know or should know the right does not exist.
• Residential leases must comply with Wis. Stat. § 704.44.

Landlords should regularly review their residential leases to ensure compliance with Wisconsin statutes. If you are a landlord and you have any questions, the team of knowledgeable attorneys at Anderson O’Brien, LLP would be happy to assist you in ensuring your leases comply with Wisconsin law.