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Good News For Rental Property Investors - Rental Weatherization Program Is Eliminated

Posted by Tristan R. Pettit, Esq. in Investing In Rental Property / Comments

I apologize for the delay in getting this post published but there is good news for rental property investors -- the much maligned rental weatherization program was eliminated as part of the passing of the state budget (2017 Wisconsin Act 59) which was signed into law on September 21, 2017 and the program will sunset as of January 1, 2018.

Back in 1979 the legislature passed a law requiring that all rental properties be weatherized prior to the property being sold. The Department of Safety and Professional Services developed minimum energy efficiency standards which focused on windows, patio doors, inward-swinging exterior doors, weatherstripping, caulking, moisture control and insulation. The program went into effect in 1985 with the goal that all rental properties being transferred would meet a minimum of energy conservation standards. So prior to a rental property being sold, the seller had to have an inspection, make any necessary repairs as advised by the inspector, and obtain a certificate of compliance with the program.

To avoid this obstacle, in practice, the buyer of the property typically entered into a stipulation agreeing to meet the requirements within 1 year of purchase. The new owner frequently did not have an inspection or make any improvements within the one year period. However, there was very little enforcement of the program and as a result an open stipulation for compliance would remain open indefinitely or until there was another sale of the rental property.

Under the latter scenario, the program requirements became an impediment when the initial purchaser wanted to sell the rental property to another because the open stipulation would be discovered at the last minute and real estate agents, attorneys, title companies etc. ended up running around to figure out what needed to be done to satisfy the stipulation so as not to impede the sale.

So while the program had high hopes and goals, it was not implemented very well and caused delay and confusion. The program will now end as of the first of the year.

Tristan is a shareholder with the law firm of Petrie+Pettit and focuses his practice in the area of landlord-tenant law representing landlords and property management companies throughout Wisconsin.

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