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Welch Group warns landlords could face large liabilities after appellate decision; lawmakers consider bills to unlock housing funds
Summary
A Welch Group representative told the Madison Common Council Executive Committee on July 1 that lawmakers are working on housing bills to unlock developer funding and that an appellate court decision called the “Cobley” case could expose landlords to retroactive rent-recovery liabilities if a lease contains an illegal provision.
A Welch Group representative told the Madison Common Council Executive Committee on July 1 that lawmakers are working on a suite of housing measures, and warned that an appellate court decision — identified in the briefing as the “Cobley” case — could expose landlords to large rent-recovery liabilities if a lease contains an illegal provision.
Why it matters: council members were told the court interpretation could threaten small landlords and reduce available housing stock if owners face large retroactive liability for past rents. At the same time, the Welch Group said legislative proposals aim to make a previously established developer loan program usable by allowing “stacking of incentives,” and that a broader housing package could include development-by-right, accessory dwelling units and TIF/TID reforms.
The Welch Group representative summarized the appellate issue for the committee: “If there's any provision in your lease that is illegal and somebody sues over it, they can and their, the judgment is in their favor, they can then go back and get all the rent that they've paid since the beginning of their term because that 1 provision in the lease,” the representative said, adding the speaker was not an attorney and was summarizing the court’s holding.
On legislative work, the Welch Group representative said more than $500,000,000 had been appropriated previously to a loan program that developers had not used because of program restrictions; lawmakers are considering changes that would allow incentives to be combined so developers would find the loans financially viable. The representative also described work with Representative Brooks and others on a broader package that could address development-by-right, accessory dwelling units, plat approval rules and TIF/TID reform.
Committee members discussed the potential implications for Madison and the timing of any bills. The Welch Group representative said Representative Brooks has convened stakeholders — the League, developers, builders and realtors — to seek consensus before filing legislation, and that timing remained uncertain because much of the legislature’s attention was focused on the budget.
Next steps: the Welch Group representative said the firm and city would continue to monitor and engage on the housing bills and the appellate case; no formal action was taken by the committee at the meeting.
