Wisconsin

Sen. Baldwin seeks hearing on Russian manipulation of social media.

It’s one thing to read about the Milwaukee County sheriff’s sales — it’s something else to witness the process where a family’s home is sold on the cheap to a slumlord.

Watching that process play out helped spark two legislators, one a Milwaukee Democrat and the other a rural Republican banker, to mount a nearly 11⁄2-year effort to pass bills aimed at opening up the cloistered process and keeping bad landlords from buying more properties at auction.

Assembly bills 690 and 691, which call for allowing counties to conduct sheriff’s sales online and take steps to ban problem landlords and tax delinquents from buying properties, were unanimously approved by the state Senate on Tuesday and sent to Gov. Scott Walker for his signature.

To get a sense of how the process serves as a pipeline to provide good and bad landlords with new inventory, Reps. Evan Goyke (D-Milwaukee) and Terry Katsma (R-Oostburg), attended a sale in December 2016.

“It was striking just how unregulated it was,” Goyke said. “It was a free-for-all.”

Goyke said the lawmakers attended the session after seeing stories in the Journal Sentinel that described how some landlords buy properties at the sales and do little or nothing to fix up the properties before renting them out. Some landlords stop paying property taxes and accumulate fines for building code violations, all while collecting rent from tenants. Ultimately, the property is seized by the city for back taxes.

The auctions where foreclosed properties are sold to the highest bidder are conducted by the sheriff in each Wisconsin county. In Milwaukee, the sales are held on Monday mornings in a windowless room in the basement of the Safety Building.

Particularly frustrating to the lawmakers was how well-known problem landlords knew their way around the sales and were able to use the government-sanctioned sales to buy new inventory.

Indeed, Will Sherard, the infamous 77-year-old Milwaukee landlord, sat down next to the legislators.

Katsma “leaned over to me and said ‘isn’t that the guy from the paper,’ “Goyke said of Sherard, who was jailed by a federal judge in 2011 for repeatedly failing to pay $700,000 to an escrow account for city workers to do the lead abatement work. This year, he didn’t pay $39,728 in building code fines until he was threatened with jail time.

The first bill is aimed at broadening the pool of potential buyers at sheriff ’s sales by allowing counties to conduct the sales via the internet.

Goyke said hopefully potential buyers who are intimidated by the process would participate if it were online.

The second piece of legislation bans problem landlords who owe back taxes or court-ordered building code fines from restocking their inventories by buying more properties at sheriff’s sales.

Kimberly Montgomery, a lobbyist for the City of Milwaukee, said the bills are good for the city since

they’re aimed at people who have been abusing the process for years.

“It’s not to punish those who comply (with the law) and are good landlords,” she said.

Last year, about 1,200 properties were auctioned at the sheriff’s sale in Milwaukee.

Buyers are only required to produce 10% of the sale price in order to purchase a property at the sale. The down payment must be in cash or a cashier’s check. The remainder of the payment is due after the sale is approved in Circuit Court.

There is no background check conducted, and known slumlords who owe thousands of dollars in fines or back taxes can purchase properties at the sales.

“It’s frustrating in the basement of the Safety Building properties could be sold to an actor who was being sued on the fourth floor of the (adjoining) courthouse,” Goyke said, noting that current law does not allow sheriff ’s staff to turn down a potential buyer.

“Nobody had illusions that these were good guys or took care of their properties or pay their bills,” Goyke said.

In addition to banning individuals who owe taxes or court-ordered building code fines from buying additional properties at the sheriff ’s sale, the legislation would also ban limited liability companies and their owners from buying if any owe delinquent fines and taxes.

A representative of the LLC would have to swear under oath that none of the LLC’s owners owe back property taxes or building code fines. State law allows LLC owners to keep their identities secret.

If the representative is later found to have lied on the required sworn statement, the bidder and the person who signed the affidavit could be fined up to $1,000 if a judge determines the falsehood was made knowingly.

The bills attracted no opposition and were supported by a variety of entities including the Cities of Milwaukee and Madison, and associations representing sheriff’s, counties, mortgage bankers and landlords.