I'm Being Sued by a Tenant! Do I lawyer up? Racine WI

40 Replies

So I received notice that I am being sued by our last tenant in Racine Wisconsin.

The back story is that I had a property management company taking care of the single family property but I was notified about issues with the home and or tenant. So a few months after the tenant moved in there was water in the lower level of the house which had a bedroom and family room, about 255 sq ft of the 1750 sq ft home. I went back and forth with the PM company for a month troubleshooting some possible issues before getting a foundation company in there. Turns out there needed to be some drain tile installed. After we found out about the drain tile, about two weeks later then tenant had bedbugs in the property. We were told to not have anyone in the property until that was taken care of. That took 2.5 months before the house was safe again. Once we got the go ahead I scheduled the foundation company to come in and take care of the work. They came in and did the work almost 2 months later and it took about a month to get the areas back in order, new carpet and baseboards back on. The tenant then moved out a month early and abandoned the property.

After cleaning the property and getting it back in order we used all of their deposit plus a little over 2K. We sent the 2K they owed to collections. Then a little over two months later the property management company and I are being sued for a little over 8K. They want half of their rent back for the months the work was being done on the two rooms. They want 2K for grievance. And they want us to pay for half of their bed bug treatment.

I don't think most or any of this will stand in court. We tried to move forward on the basement work as fast as we could. We were never dragging our feet. The bed bug issue we proved was the tenants that brought them in because we lived in the property before and had our new house tested and we did NOT have bed bugs so they would have had to bring them in. And grievance I don't believe is a thing with rentals, correct?

This would be the first time I would be going to a trial. Is small claims that difficult that I can't represent myself or should I lawyer up? I had one go to the initial appearance since we live out of state. Or do I see if they will drop their claim if we drop the counter claim for the 2K? I would entertain this just to save me time and money.

@Ryan Behnke Check to see if you can even have a lawyer in small claims court. Did you send documentation to your tenants showing what you spent on repairing problems they caused. Did you test the rental for bedbugs? They did not have full enjoyment of their rentals but you were charging full price. Your PM might be able to represent you. 

@Tim Herman Yes, in Wisconsin you can have a lawyer in small claims. We did have a bed bug company to the rental and they are the ones that treated the property before we could do any of the work to the lower level rooms. We also had a bed bug company test our new home with results showing we do not have bed bugs. The PM company did send the tenant a list of the repairs that were done to the home within the appropriate time frame.

Based on what you wrote it seems like you have a weak case against the tenant. The place was uninhabitable for many months waiting to get repaired yet you expected them to keep paying rent?? Then you want to take their security deposit at the same time.

Some states are more tenant friendly than landlord friendly when it comes to residential landlord/tenant law disputes. You could make the best case in the world and still lose and judge rules in the tenants favor. The judgment could go on your credit and impact your scores and borrowing ability in the future. 

Have you looked at websites like Rocket Lawyer for initial consult? Maybe you could meet a litigation attorney locally to get their opinion. Sometimes it cost 200 to 300. They generally have experience with case and court law to say what is likely to happen. Not what is fair and just in your eyes but what the odds say will happen when the facts of the case and potential communication missteps are presented to the judge. Some judges are looking for reasons to rule in the tenants favor every time so landlords tend to have to have an airtight case where all steps were properly followed to win the verdict in their favor.

Good luck. No legal advice given. 

lawyer will cost you probably half of what they are suing for and you could still lose.

your not that far away drive up there spend the night go to court pitch your case.. and see how it comes out.

You kept their deposit and sent them to collections after renting what sounds like a terrible property to rhem (at least during the time they were there). ? 

I think you made a very poor business decion in sending them to collections, and you are reaping the consequences of that.  If I were you, Id try to settle outside of court and chalk it up to the price of learning.

@Joel Owens sounds about right.  This really sounds like a bit of penny wise pound foolish.  You admit in your post there were some pretty significant issues with the property that at least arguably rendered the home uninhabitable.  You kept the entirety of her deposit (it's not clear what the grounds were for doing so) and then sued her for the balance and turned it over to collections.  I'm a lawyer in a landlord friendly state, and I would not want to be standing in front of a judge arguing this  one.  In landlord/tenant disputes, you need to make sure your hands are really clean or they can go sidewise on you real fast and in unpredictable ways.  Small claims down here is like the wild west and it's basically almost totally up to the judges (forget the law).  Maybe you didn't have the intent to be a slumlord (sounds like you tried to be diligent), but your intent is probably irrelevant and the court will just look at how long it took to fix the issues.  Maybe you had the right keep the deposit and send her to collections, but that doesn't mean you should have.  Final note, sure  there's the bed bugs issue, but that seems pretty insignificant in comparison to the other issues and bed bugs are just a way of life in the landlord/tenant arena.  My advice is to get a lawyer and get this resolved out of court.  

I'm seeing everyone's point. Also this house was not uninhabitable. It's a trilevel 4 bed 1.5 bath. The lower level was effected by water which was one bed room and a family room, not the living room.

What should we have done different? Should I have offered a credit off of their rent for the time the repairs were happening?

@John Chapman you said bed bugs are a way of life with rentals. How do you handle that? The laws for Wisconsin that I read were you would have to prove it was brought in by a tenant. With a multi unit I would assume that the landlord would just treat it because of shared walls and it would be hard to prove. But with a single family it would be easier to prove since we lived there before these tenants.

Also their deposit covered the last months rent, the unpaid water bill that they never paid, unpaid electric, as well as cleaning the house and garage that they abandoned.

Again I see everyone's point and I'm glad I asked because seeing things through a different point of view helps a lot.

There is a big difference between initial attorney consult maybe 200 to 300 bucks or so and having an attorney litigate a case.

In a lot of situations the landlord needs GUIDANCE based on what they did in past events. The attorney can review the docs and say what they think should happen next for the most expedient and least expensive solution. Very few cases should be litigated in court due to the costs and time involved. Most settle out of court first.

Ryan you really need to connect with a local eviction/litigation attorney to at least review your docs and communication with the situation and what their opinion is to do next.   

Great attorneys do not try to take on every case and pump up fees to the max with their clients. Instead the good ones will give the best advice they feel gets to a quick resolution and not makes them the most instant money. If they feel it needs to go to court they will also say that.

No legal advice given. 

I tend to agree with the other comments, you may have had the right to send to collections but that doesn't mean you should. This is somewhat a people pleasing business and we are encouraged to provide a safe clean place to live. Which you are trying now. Personally I would've cut rent while work was in progress. Hopefully you can settle quickly out of court and move on. Best wishes sent.

@Ryan Behnke , I'm not sure it matters, but standing water in any area of the house is going to be considered by most to be gross and to render the house uninhabitable.  Moreover, it's the kind of situation where an opportunistic tenant is going to make mold claims.  

Here's how I would have probably handled it.  First, I would have offered to release them from the lease without penalty and offered to give them their full deposit back (assuming they didn't trash the place.)  That's just the right thing to do when you can't deliver a home in the condition it's supposed to be in.  It also garners goodwill because they now have the choice to stay in the home.  If they take you up on it, then this makes it much easier to get the repairs done.  (Major repairs to tenant-occupied homes are very difficult.)  

Second, if the tenant chose to stay, then I would have covered the bedbug treatment as a courtesy.  Again, builds goodwill and most likely you're going to have to pay for it anyway since I'm guessing you're renting to a pool of tenants that does not have the funds to pay for this treatment.  Also, it ensures treatment is done correctly (don't let tenants do pest control themselves, it never works out). I've been landlording for over 12 years, and I can tell you more often than not, covering stuff like this (even when it's the tenant's fault) builds goodwill and loyalty that pays off far more than whatever the upfront cost is.  

Third, I would not have sent that debt to collections.  The tenant most likely doesn't have the money and it jacks with the tenant's life beyond your relationship with the tenant.  You forced the tenant to sue you to get that collections off his or her record and/or made the tenant mad enough to do so.

Fourth, I would not have withheld the deposit the way you did.  Unpaid utilities, sure. Everything else sounds like make ready stuff.  And with one month left on the lease?  I would not have kept that last month's rent given everything the tenant had been through.

Lots of lessons to learn, but it sounds like you want to do the right thing and tried to handle it above board.   Maybe just a softer touch in the future would be my parting thought.

I understand keeping at least part of the deposit for unpaid stuff and even the bed bugs, assuming you can prove that. But making them pay full rent price for a house they couldn't fully used is something I dont agree with and I dont see a court siding with you on this one. The contract is for the full house not a partial house. Doesnt matter if they still have plenty of room to live in...thats not what the contract says. If you want this to go away quickly I would give in to half rent for the months they were troubled by the water/foundation repairs. The rest is up to you to decide if its worth the time/effort/money to fight for. 

I'm in agreement with John Chapman's comments.  Been landlording in Wisconsin for nearly 20 years and think the bad luck you saw this year could've been dealt with differently.  Avoid court if you can.  Drop your claim against them and get you place back in the market in great condition for the next tenants.  Different communities in Wisconsin will be tenant friendly more than others.  I'm not familiar with the court's disposition in Racine/Kenosha, but the dollars at stake are not worth the risk.

What type of notice did you receive regarding the lawsuit? ie, was it a letter saying they intend to sue you or was it a subpoena to appear in court? There's lots of "I'm going to sue you!" talk to landlords but is this more than that?

If so, then I highly recommend at least meeting with an attorney. I agree with the others that a rent reduction would have been appropriate but at this point, you'll have to make the best of the situation. Does the management company have an attorney they work with? Maybe that would be a good place to start.

@Ryan Behnke I'm in New Jersey and here if you don't have that security deposit is an interest baring account, no matter what you go to court for you will lose. No matter what part of the lease your in or what the situation. Also here in nj if thier is an issue that the tenant can not live in the property the land lord is responsible to pay for a hotel or alternative housing until the space is available. Your suing for money you've already taken. Good luck

@Ryan Behnke . 2.5 months is way too long to allow the downstairs of your property to be uninhabitable. You should have prioritized getting it fixed much faster than that. I would get a lawyer and settle this out of court.

@Ryan Behnke , does your rental agreement have a mediation clause? You might want to try mediation instead. However, you could offer their deposit back even before that plus something for the inconvenience and maybe the whole thing goes away. Court is always the worst option in my experience. I do agree that having a consultant with a litigator will help you weigh your options, possible outcomes and costs.

As a contractor, I feel you should have handled the water leak immediately.  I would reach out to the renter and ask to just drop the whole thing. Nobody owes anybody anything and see if they will just drop it.  Good luck.

@Ryan Behnke

Yea standing water for months? Significant habitability problem The tenants sound like stand up people pushed beyond endurance. They aren’t trying to take you to the cleaners here.

I’m not trying to pile on, but if they had moved out and sued to recover the cost of a hotel, etc I think it’s pretty likely they would have won. PLUS damages. And trashing their credit?

You made your problem their emergency. Do you see how wrong that was? In MA, so used to erring on the side of caution, but really this is an integrity of business issue.

BTW bedbugs can be on clothes so the tenants can legitimately claim all those folks in and out of the house might have brought them in.

On a practical note, reputations stick and I’d hate to be dealing with inspectors, zoning etc. on other projects if this was known widely.

An apology and a check (less than they are suing you for)and immediate action to repair their credit might go a long way here.

This is what I’ve heard trial lawyers call “a bad set of facts”.

We all make mistakes. Good luck and hope you can make it right.

Are your former tenants using a lawyer or self-sueing you? If they are self-sueing try and settle it yourself out of court.  Drop your collection and come to some agreement on their dollar amount.

If they have hired an attorney DO NOT try to settle without an attorney.  Go toe to toe with an attorney as a lay person is a horrible idea.  They will be less willing to settle with a lay person because they know they could win in court if you self-represent.  Yes it might cost you $1k to settle with an attorney but its better than any resolution that would come out of you v. an attorney.

Also, don't hire an attorney to represent both you and the PM in this instance.  The attorney you hire should only be concerned with protecting your rear end.  

On a side note, I think you need a new PM (based on the details you gave here). Going back and forth multiple times about a water leak shouldn't happen.  If the PM doesn't know what the issue is within in the first 2 weeks of the issue, they need to bring in experts.  Now if it was your choice not to hire a pro then I would consider this a live and learn situation for you. You don't mess around with water.  One for the property's sake and two because tenants get angry when their personal items get damaged. (Even though that's what renter's insurance is for...)

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