Assembly advances bill aimed at shady landlords

Legislation aimed at ensuring that deeds of foreclosed properties purchased at sheriff’s sales are promptly recorded in local courthouses has cleared the Assembly.

The bill, if enacted into law, would prevent some unscrupulous landlords from hiding their ownership of properties from municipal officials.

The bill, which passed on a voice vote Wednesday, largely mirrors 2015 legislation that requires the Milwaukee County Clerk of Circuit Court to have the sheriff’s deeds forwarded to the Register of Deeds office after a purchase is approved by a judge.

That bill was enacted at Milwaukee’s request after the Journal Sentinel reported how some central city landlords were buying properties at sheriff’s sales but failed to record the titles.

As a result, the former homeowners were still listed on city records as the property owners even though they lost the titles. The ex-owners would often continue to receive important notices from the city, such as tax bills, water bills and orders to repair code violations. About 14% of all third-party purchases at Milwaukee sales in 2013 and 2014 were not properly recorded, the Journal Sentinel found.

The new legislation requires court officials statewide to record the deeds, instead of trusting the buyers of the properties, who are sometimes slumlords buying rental properties at a deep discount.

Everybody has seen it has worked well in Milwaukee,” Rep. Joan Ballweg (R-Markesan) said. “That’s why we’re trying to synchronize it for every county.”

The bill requires the clerk in every Wisconsin county to notify the register’s office when a property is sold through a sheriff’s sale.The bill leaves it up to county officials to develop the process to ensure the deed is recorded.

The Assembly bill also requires that all foreclosure sale notices include the street address of a property, instead of only listing a tax code or legal description that many people do not know how to read.

“These common sense reforms make the foreclosure sale process more efficient and easier for all those involved in the process,” Ballweg said in a statement. A companion bill is pending in the state Senate. In a sheriff’s sale, foreclosed properties are sold to the highest bidder. In Milwaukee County the sales are held every Monday in the basement of the Safety Building. The sales are less frequent in smaller counties.

The lenders who wrote the mortgages on foreclosed properties often buy the properties in order to protect their investment. Run-down rental properties or homes that could be converted to rental properties, however, are often bought by central city landlords.

In an ongoing investigation, the Journal Sentinel has pointed out numerous ways that unscrupulous landlords have gamed the system, including failing to register deeds, hiding their identities in scores of limited liability companies and failing to pay taxes and fines.

Rep. Evan Goyke (D-Milwaukee) and city officials have been working on legislation that they hope will make the sheriff’s sales more transparent.