Most owners of residential rental properties (“landlord”) have experience with tenants who do not pay rent or utility bills. As of January 1, 2015, Wisconsin Statute section 66.0809 allows landlords to shift the burden of collecting unpaid municipality utility bills to the municipality. This assumes the municipality adds unpaid utility bills to the real estate tax bill at the end of the year. This only applies to municipality provided utilities; it does not apply to private utilities.
To get this result, the landlord must write to the municipality and provide the municipality with the names and addresses of the landlord and tenant. The landlord may also need to provide a copy of the lease to the municipality showing that the tenant is responsible for paying the utility charges. The municipality will then send its bills to the tenant in the tenant’s name. When the tenant vacates, the landlord must notify the municipality of the tenant’s departure. The written notice must be delivered to the municipality within 21 days after the date on which the tenant vacates, and the notice must provide the forwarding address of the tenant and the date that the tenant vacated. The municipality will then be responsible for sending past-due notices to the tenant.
When the tenant fails to pay, the municipality, after either a notice of arrears is given or after past-due charges are certified, has a lien against the tenant. The municipality may provide notice to the tenant of the lien or file the lien with the clerk of courts. Once the lien is established, the municipality collects from the tenant like any other lien holder.
Landlords should take advantage of this new law because the law requires a municipal utility to give a landlord who has triggered the law notice of a tenant’s unpaid utility charges. If a utility fails to provide this notice timely, the landlord would not have to pay the tenant’s unpaid utility bill and would avoid having the unpaid charges added to the landlord’s property tax bill for the property. However, if the municipality does provide proper notice to the landlord of the tenant’s failure to pay the charges, the municipality may continue to place the unpaid charges on the landlord’s property tax bill for the property. If the landlord pays the charges, the municipality must transfer its lien on the tenant’s assets to the landlord. Currently, municipal groups are drafting forms for utilities to use to transfer this lien on a tenant’s assets to landlords. Landlords would be able to use this form to file the lien with the court.
Menn Law Firm regularly advises clients on landlord/tenant matters. For further information on this topic, please contact Atty William P. McKinley at William-McKinley@mennlaw.com. All of Menn’s attorneys may be reached at (920) 731-6631.