Landlords file lawsuit against city

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BELOIT — A group of landlords have filed a civil suit against the City of Beloit over its rental permit system, which the landlords contend became illegal after the legislature passed Act 176 this spring.

Attorney Bernardo Cueto, who represents the landlords, said the lawsuit was filed April 27. According to Act 176, he said, municipalities can only require rental units to be registered for the purpose of having an authorized contact person and associated address and telephone number. The information is designed to be used in the event of a potential emergency.

However, Cueto said Beloit still requires landlords to obtain a permit to rent property. The landlords can only get a permit if they’ve had a inspection which includes a fee of $40 per unit.

Cueto said Milwaukee, Wausau and La Crosse all got rid of their rental permit systems after passage of Act 176 because elements of the systems were considered illegal.

“The City of Beloit is the last city that is holding onto its program even though it’s violating state law,” he added.

Cueto said Beloit has 20 days to respond to the filing. Then the issue would be headed to a hearing before a circuit court judge.

Any fees collected after the bill was passed, he said, should be returned to the landlords who paid it. However, the real concern is changing Beloit’s ordinance that requires permitting of rental properties.

“We have no issue with a contact registry in the event of an emergency, but if they are going to make it difficult to rent — then we have an issue,” Cueto said.

The landlords are also concerned about one of their requirements of registration: the inspection process. Instead of the city asking tenants for permission to enter rental properties and obtaining a warrant if they can’t get in, the city is requiring landlords to let the city inspectors into their tenants’ homes.

Cueto said that is a potential violation of the Fourth Amendment and could expose landlords to liabilities for litigation. Cueto said the landlords wants to create ordinance changes making the city contact the tenants directly.

The current practice, he said, not only is violating tenants’ rights, but is putting landlords in an impossible position.

“They are risking getting fined by Beloit or violating their tenants’ rights,” Cueto said. “It comes down to individual rights. Tenants have a right to be secure in their home. Property owners have rights to be able to rent their property. This is government overreach.”

Cueto said he doesn’t like what amounts to a city “bullying” landlords into violating their tenants’ rights.

“With more government regulations comes higher rents and fewer rental properties, which means affordable housing can be more difficult to find,” he said.

When contacted about the issue, Beloit City Manager Lori Curtis Luther emailed a statement in which said the city is in receipt of the lawsuit filed against it. She said landlords that filed the lawsuit seek to "dismantle the rental inspection program by claiming that the new law prohibits municipalities from operating an inspection program to maintain very basic construction and maintenance standards in our neighborhoods."

"The city has been evaluating the new law which will require some minor changes to the program. The city has already made administrative changes to the program, and will be seeking city council approval of changes to the rental dwelling permit ordinance in the coming weeks," Curtis Luther said in her email.  

She said the city manager testified during the public hearings related to this new law and was instrumental in advocating against the drastic changes that were proposed by the supporters of the original bill.

"The city believes that the inspection program is vital to maintaining stability in our neighborhoods and providing for the most basic quality of living for our most vulnerable population," she said.

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