Wisconsin DOJ announces $1.7M settlement with Milwaukee landlord

Wisconsin Attorney General Josh Kaul announced Wednesday that a $1.7 million settlement had been reached with a Milwaukee-based landlord and property management company for violating the state’s landlord-tenant law.

Kaul filed a lawsuit against Youssef “Joe” Berrada and Berrada Properties Management, Inc. in November 2021. A complaint said Berrada Properties Management illegally charged late rent fees to tenants, illegally required tenants to pay costs and attorney fees for evictions and conducted renovations in a way that “shows little to no regard for tenants living in the building.”

The company owns nearly 9,000 apartment units in Milwaukee and Racine, according to the Wisconsin Department of Justice.

“This is a landmark agreement for housing in the Milwaukee area and for Berrada Properties tenants in particular,” Kaul said during a press conference Wednesday.

Kaul said he believes the $1.7 million settlement is the largest settlement for a housing case in state history. Berrada Properties Management has to pay a civil forfeiture of over $986,000, and attorney fees and costs of nearly $250,000 under the agreement. 

The settlement has been sent to the state Legislature’s Joint Finance Committee for approval, Kaul said.

“We hope the Finance Committee will move quickly,” he said.

Lawsuit against Berrada Properties Management filed in 2021

The 2021 complaint said Berrada Properties Management enforces “illegal rental provisions including charging tenants attorney fees at the time they file an eviction.”

The complaint also said the company charges late rent fees of $100 a month, and has been known to throw away tenant property during renovations.

“To make renovation projects easier and less expensive, defendants push existing tenants out of newly acquired apartments by telling existing tenants to leave their apartment, even though many tenants have a contractual right to stay,” the complaint said.

Rachel Fox Armstrong, the development and communications manager for Legal Action of Wisconsin, said she believes progress has been made since the lawsuit was filed. Legal Action of Wisconsin helps represent tenants who are faced with eviction.

“When the Department of Justice filed this suit in 2021, we slowly started to see a change in Berrada business practices for the better,” Fox Armstrong said during the press conference. “Berrada cases used to make up the majority of our clients, and now we see them in court considerably less often.” 

Kaul said Berrada Properties Management has already returned over $1 million to tenants for late rent payments since the lawsuit was filed.

WPR was unable to reach any representatives of Berrada Properties Management Wednesday.

Berrada forced to start $1.3M credit account for rental assistance grants

As part of the agreement, Berrada Properties Management has to implement programs to “remediate harm,” Kaul said during the press conference.

“That’s the purpose of the agreement, is to try to both address the allegations that we raised, but also to ensure that we’re doing more to support folks who are facing potential violations of the housing laws,” he said.

The company will have to start a $1.3 million credit account for rent assistance grants for tenants.

As part of the settlement, the company has agreed to “vacate and seal eviction judgments affected by late rent fees or attorney fees that the state alleged were illegally charged to tenants,” Kaul said.

Berrada Properties Management will participate in an income-based rental program for up to 300 tenants for the next three to five years. That program will be overseen by Milwaukee-based Community Advocates.

Maudwella Kirkendoll, the chief operating officer of Community Advocates, said in Milwaukee, 90 percent of evictions are due to tenants not paying rent.

“Oftentimes, this disproportionately affects low-income families, primarily women of color with children,” Kirkendoll said. “These families often lack natural resources and safety nets to weather short-term hardships such as car repairs, medical emergencies or job interruptions.”

Kirkendoll said Community Advocates helps over 50,000 households each year with energy and heat assistance and eviction prevention services.

Kaul said Berrada Properties Management will also participate in a restitution program that requires them to pay tenants who “paid late rent or attorney fees that were not authorized, who didn’t get credit for their security deposits,” or who had property “confiscated.”

According to Kaul, Berrada Properties Management estimated more than $850,000 will be paid to tenants under that program.