Wisconsin Supreme Court Adopts Landlords' position on Eviction Record Retention

NOTE: The below blog post which was posted on June 18, 2024, is reproduced from the Rental Property Association of Wisconsin's blog and was written by Atty. Heiner Giese, attorney for the RPA.

Since the Journal Sentinel and the other local news agencies won't report on this, I thought it was important for people to know.

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The Wisconsin Supreme Court today [06.18.24] issued it’s long-awaited ruling (Rule Petition 22-03) on how long eviction case records should remain available to public view via online access to court records.

The Court rejected the petition of Legal Action of Wisconsin for only a one-year retention and accepted the proposal of the Rental Property Association of Wisconsin and other landlords: 2 years retention if no money judgment entered and 10 years if a writ of restitution was granted.

The dissent by Justice Hagedorn (joined by CJ Ziegler and J. Rebecca Bradley) says a change to open records should have first been vetted by the Court's own CCAP committee and there should have been more consideration as to how restricting access to eviction filings is going to affect the business practices of landlords -- who are entitled to know the prior rental history of tenant applicants and will pass on the costs of more difficult screening to other tenants (J. Hagedorn does not say it, but an example of this is landlords requiring a double security deposit because they can't be sure if an applicant had prior evictions and is thus not a good risk).

The Order's effective date is delayed for one year to July 1, 2025 but the current law found in Wisconsin statute section 758.20 -- which requires no less than a 2 year retention for evictions where no money judgment was docketed and 10 years if a writ of restitution was issued -- was acknowledged by the Supreme Court and should continue to apply. Legal Action of Wisconsin had urged the court to overrule that statute and make its own rules but the court specifically declined to do so.

By Atty Heiner Giese

Wisconsin Supreme Court Rules on CCAP Eviction Records

Breaking News from the Rental Property Association of Wisconsin's website and Blog:

Wisconsin Supreme Court rules on CCAP eviction records

04/16/2024 11:30 AM

The Wisconsin Supreme Court rejected Legal Action’s bid to make eviction judgments disappear in one year instead of the statutory 10-year retention period.

The industry and good renters owe a large thank you to Attorney Heiner Giese, Rick Van Der Leest of the Green Bay and Appleton Associations, and Chris Mokler of the Wisconsin Apartment Association for making this happen. Rick and Heiner received mention by the Court at the hearing today.

Heiner’s comments:

Follow the statute: if no money judgment is docketed, then the case goes off CCAP after two years; if a writ was issued then the record is searchable for 10 years. Our goal has always been to encourage nonpaying tenants to move voluntarily, so landlords can dismiss a case without the trauma (for both parties) of having the sheriff do a forced moveout.

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Comments

• 04/17/2024 10:57 AM| Mike Cottrell (Administrator)

  I want to personally thank our legislative team and housing coalition group for the outstanding effort they put into being the watchdog for the industry.
  
  Tim Ballering, Heiner Giese, Joe Murray, Mark Kvetkovskiy,
  Rick Van Der Leest, Gary Goyke, & Chris Mokler.
  
  Mike Cottrell
  RPA | President
  

Matt Desmond, Author of "Evicted" Has Some Detractors, Including Myself.

I apologize for getting on my soapbox here, but most of you are either landlords or spend more than 40 hours a week representing landlords or working with them. If you don't fall into one of the above categories, you probably will not want to read this blog post.

I recommend that you read this recent article about Matt Desmond, the author of Evicted and now the author of Poverty. It is called "Princeton's Matthew Desmond Gets Everything Wrong About Poverty's Root Causes" authored by Aaron Brown. It points out that Desmond's analysis of statistics is poor, his conclusions are overly simple (for this complex world), and his engaging stories don't always support his conclusions.

I wish the article had also addressed the fact that out of all the landlords that Desmond interviewed for his book, Evicted, he chose to focus on one that wouldn't talk to him and another that failed miserably as a landlord, about which Desmond decided not to mention in his book.

Inner city landlord "Sharena" was one landlord that Desmond focused on in Evicted. What was never mentioned however is that Sharena lost all her inner-city rental properties to the city for failing to pay her real estate taxes PRIOR to Evicted being published. Why omit such an important fact if it came to light prior to your book being published? Probably because the failure of one of Desmond's two main landlords and her inner-city rental empire wouldn't support one of his hypotheses (not to mention a catchy slogan) that “The Hood is Good” (i.e., profitable) for landlords. If the “Hood was so Good” for landlords, why did Sharena end up losing all her rental properties? If the Hood was so Good for landlords, wouldn't Sharena be making so much money that she could pay her real estate taxes? Aaron Brown in the above-linked article addresses this issue and points out that it is not easy owning and managing rental properties in the inner-city and very few landlords are willing to do it for a myriad of reasons, and even fewer succeed. During my 28 years of representing landlords, I have had many a client think that they would strike it rich when they purchased properties in the inner city. Most of them failed and are no longer landlords. The "Hood is Good" is a catchy slogan but it is not accurate. It is very difficult owning and managing rentals in Milwaukee's inner-city.

The second landlord that Desmond chose to focus on in his book, an owner of a mobile home park on the South side, never even spoke to Desmond. Nor did Desmond speak to any of that landlord's employees. The fact that this owner would not speak to Desmond was downplayed in the book. Not being able to talk to this owner apparently made him a perfect landlord to focus on for Desmond. If the landlord won't speak to you then you don't have to worry about the landlord telling you facts or stories that might contradict your hypothesis (or conclusion?)

What about the other 10+ landlords that Desmond interviewed and who were willing to talk to him? Many of you know Tim Ballering who owns Affordable Rentals which owns and manages more than 700 units in the 53204 zip code. Tim is very involved in the Rental Property Association of Wisconsin (RPA) and is extremely involved in the industry. Tim knows more about Wisconsin's landlord-tenant law then I do. Tim has great ideas and sees the big picture and has practical real-world ideas on how to solve the problems that we are facing in the housing industry. He would have been a perfect subject for Desmond to focus on in Evicted. And most importantly, Tim's was willing to talk with Desmond. He was even interviewed by Desmond but was relegated to a footnote. Wouldn’t it have been more prudent (ethical?) to choose to focus on a landlord who would speak with you and provide you with information. My assumption is that Tim's, as well as the other willing landlords', stories, facts, and experiences didn't support Desmond's pre-ordained conclusion that the “Hood Is Good” and that landlords are bad. It’s much easier to talk about and profile a landlord that doesn’t talk and another that likes to brag about herself and her abilities and who failed miserably (but fail to mention that last part).

Please spend the time to read the article linked above.

How Does A Tenant's Bankruptcy Interfere with Your Eviction?

By Atty. Gary D. Koch of Petrie + Pettit S.C.

A tenant's filing of a bankruptcy, whether it is a Chapter 7 or a Chapter 13, stops your eviction cold under most circumstances!

Evictions are typically matters handled exclusively through the state court system, in whichever county the property is located. Every now and then, though, we have to make a trip to federal court to assist a landlord. This most frequently arises when a tenant files for bankruptcy protection.

Bankruptcy is authorized by the United States Constitution and is codified in Title 11 of the United States Code. There are 15 “chapters” of code, but the most common of those in this context are Chapter 7 and Chapter 13. The bankruptcy protections provided by filing under either chapter are extremely powerful, and can stop an eviction in its tracks.

Chapter 7 bankruptcies are relatively short-lived. The filing of a Chapter 7 bankruptcy creates an automatic stay of any action to collect on a debt, including past-due rent, or to continue any action to recover an interest of the “bankruptcy estate”, which includes the tenant’s right to continued occupancy of the rented premises. Chapter 7 bankruptcies are typically open for four to six months before the case is closed. If the case results in a “discharge,” most debts which existed at the time of the filing are wiped out. Rent incurred before the case was filed is generally discharged in a Chapter 7 bankruptcy.

Chapter 13 bankruptcies usually run for a much longer duration. These bankruptcies may repay some amount of the existing debt to creditors, but do so over a 3 to 5 year period. The filing of a Chapter 13 bankruptcy also creates an automatic stay against collection or recovery.

There are a few exceptions to the automatic stay. Most relevant to a landlord, is that if a judgment of eviction is entered by the state court before the bankruptcy is filed, the landlord can still execute the writ and remove the tenant from the property. Be aware, however, that there is an exception to this exception, so there are limited circumstances when even a previously granted judgment of eviction is halted by a bankruptcy filing!

In all other circumstances, whether a Chapter 7 or a Chapter 13 is filed, in order to move forward with an eviction action, including serving a notice terminating the tenancy, the landlord will need permission from the Bankruptcy Court to do so. We obtain this permission by filing a Motion to Lift the Automatic Stay.

For Chapter 7 bankruptcies, the process of obtaining a lift of the stay requires a specific basis to file and may take as long as the life of the bankruptcy itself, so doing so may be an exercise in futility. Once the Chapter 7 discharges, dismisses or closes, the landlord can proceed against the tenant for any debt incurred after the date the Chapter 7 case was filed. Lifting the stay may allow the landlord to begin the process a few weeks earlier than the end of the bankruptcy.

For Chapter 13 bankruptcies, though, given their much longer duration, lifting the automatic stay is a viable option for the landlord. There need to be grounds for the motion, such as failure of the tenant to pay rent after the filing of the bankruptcy. The Bankruptcy Court will also likely give the tenant a “second chance” with the first motion, and order that any rental arrears incurred after the date the case was filed be included in the repayment plan, but may also order that any future missed rent payments will result in an immediate lifting of the stay.

Evictions are complicated enough, but when you add in a bankruptcy as well, navigating both the state AND federal courts becomes a minefield. 

By Atty. Gary D. Koch of Petrie + Pettit S.C.

FAQ Regarding The Recent Decision on the Sealing of Eviction Records by the Wisconsin Supreme Court

This FAQ blog post was written by Atty. Heiner Giese who is the attorney for the Rental Property Association of Wisconsin, Inc. (RPA) formally known as the Apartment Association of Southeastern Wisconsin (AASEW)

The Wisconsin Supreme Court held an open administrative conference on October 9, 2023, to consider a petition (No. 22-03) filed by Legal Action of Wisconsin (LAW) concerning the retention of court records in eviction cases. Evictions are heard in small claims courts throughout the state. LAW’s petition asked the court to shorten court record retention rules so that cases where no money judgment was entered against a tenant would be deleted from the state CCAP filing system after one year. LAW’s petition did not seek to change the current rule that eviction cases with a money judgment remain public for 20 years.

1. So what exactly did the seven justices decide at their October 9 conference?

Exactly what they decided is not yet certain. While they took a 4-3 vote in favor of changing the record retention rules this has to be put in writing and formally issued as an order by the court. There may then be separate opinions by justices supporting or opposing the changes.

Contrary to the impression from some media coverage, any eviction where a landlord gets a judgment for back rent or even just a judgment for court costs if the tenant moves out WILL NOT “go away” after two years. Those eviction cases remain public for 20 YEARS.

2. Reporting by the media says the court “sided with tenant advocates.” Is that what happened?

The media might be interpreting the 4-3 vote as the majority siding with tenant advocates and the minority siding with landlord advocates. But while we don’t yet have a written order the majority vote clearly rejected LAW’s request for a one year record retention and declared that dismissed evictions would remain public for two years. Numerous tenant advocates and social agencies had filed comments in support of the one year rule. The media failed to look at the comment submitted by major Wisconsin rental property owner groups which opposed a one-year rule but suggested the court adopt a two-year rule. So this 4-3 decision actually sided with the landlords.

3. Are Wisconsin landlords generally in favor of a rule whereby dismissed evictions aren’t searchable anymore after two years?

Many owners would probably prefer a longer look-back period than two years. Some larger owners have policies whereby they want to know of any evictions filed against a prospective tenant for a time period of between three and seven years. Credit histories are generally maintained for seven years by credit reporting agencies, for example.

4. So why did the landlord groups propose a two-year rule?

For two reasons. First the existing Supreme Court Rule SCR 72.01(8) which governs all small claims cases including evictions already operates to remove many eviction records on CCAP two years after the case is closed. For example, of the 1,101 evictions filed in Milwaukee County in December 2019, 517 are not viewable by landlords using CCAP to screen tenants. Secondly, landlord groups supported a statute favorable to tenants passed in 2018. Section 258.20(2)(b) gives the Director of State Courts the authority to remove eviction cases after two years if no money judgment has been docketed. The statute also cuts the retention period to ten years from twenty years for cases where a writ of restitution was issued against the tenant.

5. Why were three justices opposed to the two-year rule if there wasn’t any strong opposition to it by any of the interested parties?

We’ll have to see what any dissenting opinions might say but of course this issue on eviction records doesn’t just involve tenants and landlords as interested parties. The public also has a strong interest in open records. Just because a current landlord and tenant might agree that an eviction record should be effectively sealed doesn’t mean that future landlords or other credit providers don’t have the right to see whether someone has a track record of not paying rent. Even private parties: if you are a person looking for a roommate to share an apartment you’d want to know if someone didn’t pay their rent three years ago, even if the eviction filed against them was dismissed because they moved out just before the court hearing.

6. At the oral hearing on the petition on September 7, 2023, tenant advocates proposed that the Wisconsin Supreme Court and not the Wisconsin Legislature should have ultimate authority over court record retention rules. Has that question been decided?

That legal question may not be covered when the court issues its written order. But it was revealing that Justice Rebecca Dallet, who voted with the majority, said that the court was not contravening an act of the legislature. She pointed out the two-year provision in section 758.20 and stated that the legislature “had the right to do that and we are implementing their policy.”

*******

This FAQ has been prepared by Atty Heiner Giese on behalf of the Rental Property Association of Wisconsin, Inc. (formerly AASEW) and other interested rental property owners and associations.

I Think That My Tenant Has Vacated the Rental Unit, What Do I Do Now? PART 1: Surrender of the Rental Unit

In an ideal world, the tenant would return their keys, remove all personal property (including trash), and leave the rental unit spotless. Then it would be clear that the tenant has surrendered the rental unit and, as there wouldn’t be any personal property remaining, there would be nothing to debate its abandonment. Unfortunately, that rarely happens.

In this situation, there are generally two main issues: (1) Has the tenant surrendered the rental unit (i.e. vacated and has no need to come back to clean, pick up personal property, or for any other reason); and (2) Has the tenant abandoned any remaining personal property.  In this post we will discuss the first issue: Has the tenant surrendered the rental unit?

Surrender of the Rental Unit:

The gold standard to confirm that a tenant has surrendered a rental unit is for the tenant to return the keys to the rental unit to the landlord. If the tenant has returned the keys to the landlord, he or she can’t get back into the unit and thus they are not planning to come back and clean or remove more personal property.

So, if it looks like a tenant may have left but not returned the keys, you should try and contact the tenant and get him or her to return the keys.

If that isn’t an option, the next best scenario would be for the tenant to sign a statement that he or she has surrendered the rental unit.

If that isn’t an option, the next best scenario is to talk with the tenant and have him or her tell you that he or she has surrendered the rental unit and then follow that conversation up with a letter to the tenant confirming the date and time you spoke with him/her and that he or she told you they had surrendered the rental unit.

If the tenant does not respond to any of your attempts to contact him or her, then you have to make a decision. Should you:

1. Play it safe and serve a notice for failure to pay rent, file an eviction, and have the Sheriff execute the writ.  This is the safest way to proceed, but also the most time-consuming and costly; or
2. Assume that the tenant has surrendered the rental unit and change the locks.

I have had to defend landlords who have chosen Option #2 and been sued by the tenant who claims the landlord engaged in an illegal self-help eviction by changing the locks without going through the judicial eviction process.  So such lawsuits do happen and it often takes quite a bit of money to resolve such lawsuits depending on the amount and quality of the personal property that was disposed of by the landlord.

Most of my clients are more risk adverse and always elect to follow option #1. But , I do have other client that are willing to take the risk and go for option #2.

If the landlord wants to pursue option #2, then I recommend that the landlord document the file with any and all attempts made to determine or confirm that the tenant has surrendered the rental unit. Examples would include:

• Memos to the file noting all the attempts the landlord made to contact the tenant to confirm he or she has vacated;
• Memo to file of all telephone calls to the tenant’s emergency contact or other known family members who confirmed that tenant has vacated;
• Interview neighbors and document the last time they saw the tenant (sometimes the next door neighbor will tell you that they saw the tenant pull up in a moving van the day before and load it up and then the tenant waived good-bye to them);
• You could run a CCAP search on the tenant to see if the tenant has been arrested and is in jail (in which case you will definitely need to proceed with the eviction process) or got a recent speeding ticket and gave a new address;
• Take pictures of the rental unit showing what, if any, personal property the tenant left behind (ideally it will be trash or items that aren’t necessary for day-to-day living like toiletries, mail with old dates and addresses on it, expired food, etc.).

The goal is to document the file so that if you opt to change the locks, and the tenant later sues you for performing an illegal eviction, you would be able to prove to a court that you did investigate and try to determine if the tenant had surrendered the rental unit and; further, that based on all the information you obtained, a reasonable person would have determined that the tenant had surrendered the renal unit as well.

Unfortunately, there is not a bright line test to determine whether or not a landlord is “safe” in changing the locks on the rental unit or if the landlord should instead go through with the eviction process. That is why the decision often hinges on the landlord’s aversion to risk.

Stay tuned for my next blog post - I Think That My Tenant Has Vacated the Rental Unit, What Do I Do Now? PART 2: Abandonment of Personal Property

Back To Basics - Notices Terminating Tenancy

By Atty. Gary D. Koch

A previous post discussed methods of service of notices terminating tenancy, leaving a discussion on the various notices that can be utilized for a later post. Welcome to that post!

When a landlord is in a situation where a tenancy needs to be terminated, the landlord must provide the tenant with a notice terminating the tenancy. This termination can be for a variety of reasons, or no reason at all (so long as the underlying termination is neither retaliatory nor discriminatory). The type of notice available to the landlord depends on the type of tenancy, as well as the reason for the termination. Wisconsin Statutes § 704.17 and § 704.19 provide the framework for notices.

For month-to-month tenancies, the landlord has the most options available for termination of the tenancy. The landlord can choose, upon the first breach (be it for failure to pay rent or any other non-rent breach) to issue to the tenant either a 5-Day curable notice terminating the tenancy, which gives the tenant the option to cure the breach or vacate, or a 14-Day non-curable notice terminating the tenancy, which only gives the tenant the option to vacate the unit. (Wis. Stat. § 704.17(1p)). The landlord can also issue a 28-Day notice terminating the tenancy for any reason, or no reason, so long as the termination is not for retaliatory or discriminatory reasons. (Wis. Stat. § 704.19(2) and (3)). With a 28-Day Notice, the tenancy must terminate at the end of a rental period, which is typically the end of a month.

For tenancies for a term of a year or less, or year-to-year tenancies, the landlord has the same available notices, but restrictions on when some can be given. In the instance of either a rent or non-rent breach, the landlord must first issue a 5-Day curable notice terminating the tenancy, giving the tenant the right to cure the breach. If the tenant does not cure or vacate, the landlord can start an eviction action. If the tenant cures or is otherwise allowed to remain in the premises after receiving a 5-Day curable notice, and if the tenant commits the same type of breach (either the failure to pay rent or some non-rent breach) within one year of the first breach, then the landlord can issue a 14-Day notice terminating the tenancy which does not provide the tenant the right to cure. (Wis. Stat. § 704.17(2)). The landlord can also issue a 28-Day notice terminating the tenancy, but that MUST terminate the tenancy at the end of the lease term.

For tenancies longer than a year, absent a contrary provision in the lease, the landlord must issue the tenant a 30-Day notice for any breaches (rent or non-rent). (Wis. Stat. § 704.17(3)). For these tenancies, the lease can provide for an alternative method of termination, so most leases for tenancies longer than one year make reference to the 5- and 14-Day methodology and statutes outlined above, so as to make such notices more akin to a notice to terminate a tenancy for a term of a year or less.

For ALL types of tenancies, the landlord can issue a 5-Day non-curable notice if the property is deemed a nuisance due to drugs or criminal gangs. (Wis. Stat. § 704.17(1p)(c), (2)(c) and (3)(b)). For ALL types of tenancies, the landlord can also issue a 5-Day non-curable notice in situations of criminal activity. (Wis. Stat. § 704.17(3m)(b)). Finally, for ALL types of tenancies, the landlord can issue a 5-Day non-curable notice where a tenant (or child of a tenant) faces an imminent threat of serious physical harm from another tenant if that tenant were to remain on the premises, and the threatened tenant provides necessary documentation substantiating that threat. (Wis. Stat. § 704.16(3)(b).

Because of the CARES Act, if the property is a “covered entity”, certain notices must provide the tenant with 30 days to act. It can make the terminology a bit more confusing, but the type of notice which can be given (curable, non-curable, termination) has not been changed because of the CARES Act.

For subsidized tenancies, there are different regulations which must be followed, so this blog post is targeted towards market rate rental units only.

As always, feel free to reach out to Petrie + Pettit for any assistance in determining which notice is the proper notice to issue, or for any other landlord/tenant matters.

FTC States That Landlords That Evict or Threaten to Evict Tenants Without Advising Them of Their Rights Under Eviction Moratoria May Be Engaging in Deceptive and Unfair Practices

On March 29, 2021, the Federal Trade Commission (FTC) and the Consumer Financial Protection Bureau (CFPB) issued a joint statement saying that Landlords that evict or threaten to evict Tenants without advising the Tenants of their rights under the various eviction moratoria may be engaging in deceptive and unfair practices and will be monitored and investigated. 

The FTC and CFPB added that there have been "reports that major multistate landlords are forcing people out of their homes despite the government prohibitions or before tenants are aware of their rights."

The joint statement goes on to say that "both agencies will be monitoring and investigating eviction practices, particularly by major multistate landlords, eviction management services, and private equity firms, to ensure that they are complying with the law.  Evicting tenants in violation of the CDC, state, or local moratoria, or evicting or threatening to evict them without apprising them of their legal rights under such moratoria, may violate prohibitions against deceptive and unfair practices, including under the Fair Debt Collection Practices Act and the Federal Trade Commission Act.  We will not tolerate illegal practices that displace families and expose them -- and by extension us -- to grave health risks."

So what does this mean to landlords?  It means that you should add some language to any notice that you serve a tenant, whether that be a 5-Day, 14-Day, 28-Day or 30-Day notice related to the non-payment of rent or any other non-rent related breach, advising your tenant that they may have protections under the CDC Eviction Moratorium or any other state or local moratoria that is applicable.

It also means that landlords should add similar language in every eviction complaint that they may file  as well as any other communication with your tenant that mentions eviction or the threat of eviction.

While you may not be a "major multistate landlord" you certainly don't want to be on the wrong side of an investigation by the FTC or CFPB.

CDC Extends Eviction Moratorium Until June 30, 2021

On Monday, May 30, 2021, the CDC Issued an Order extending the Eviction Moratorium until at least June 30, 2021.

The "guts" of the Order remain the same from the November 2020 Order which I have previously discussed in an earlier blog post.

Some of the modifications that were made in this most recent Order include the following:

1. Moratorium is extended until June 30, 2021

2. A signed Declaration by a tenant submitted under a previous order remains valid notwithstanding the extension and modification of the Order.  Covered persons do not need to submit a new declaration under this most recent Order.

3. While the Order does not prohibit evictions for engaging in criminal activity while on the leased premises, covered persons may not be evicted on the sole basis that they are alleged to have committed the crime of trespass (or similar state-law offense) where the underlying activity is a covered person remaining in a residential property despite nonpayment of rent.

4. Individuals who are confirmed to have, who have been exposed to, or who might have COVID-19 and take reasonable precautions to not spread the disease should not be evicted on grounds that they pose a health or safety threat to other residents.

As usual some of the language of the Order addressing the modifications is not as clear as everyone would like.  It will take time for this to flesh out.  The Courts and those of us that spend time in Court are learning new things every day.

While the extension of the Order may not be good news to all housing providers, it was certainly anticipated, since so much money has been set aside for emergency rental assistance.  Back in December of 2020 an additional $25 billion was set aside for emergency rental assistance in the U.S. for the payment of rent and rental arrears.  An additional $21.55 Billion in emergency rental assistance was provided under the American Rescue Plan in 2021 for renters and housing providers in the U.S.  

Milwaukee County and Waukesha County have already received the emergency rental assistance from the first $25 Billion and it is being disbursed by Community Advocates and other agencies.  Also, Landlords are allowed to complete the application for their residents for this new round of money, although I have heard that this is not always being followed.  So if your resident owes you past rent and/or is unable to pay their current rent make sure that you are reaching out for assistance.  Some of the agencies that my clients have had the most success with have been Mediate Milwaukee and Community Advocates.

With so much money in the pipeline and the third round not yet even available, I foresee the moratorium continuing throughout all of 2021.
 

THE MONEY IS FINALLY HERE . . . Learn How To Access Wisconsin's Emergency Rent Assistance Payments

As I am sure many of you have heard, back in December the Federal government agreed to set aside $25 Billion dollars for Rent Assistance as a result of Covid.  Of that large amount, Wisconsin was allocated a total of $386,777,591.50 to be divvied up as follows:

1. Brown County - $7,907,949.30

2. Dane County - $8,579, 734.30

3. City of Madison - $7,762,609.60

4. Milwaukee County - $10,629,017.80 -- (to be distributed by Community Advocates)

5. City of Milwaukee - $17,641,552.70 -- (to be distributed by the Social Development Commission (SDC))

6. Waukesha County - $12,082,683.60 --  (to be distributed by Community Advocates)

7. State of Wisconsin - $322,174,044.20

Both tenants and landlords have been waiting for months for this money to arrive and it is FINALLY here.

One of the nice thing about the Wisconsin Emergency Rental Assistance Housing Payments (often referred to as ERAP or WERAP) is that the Landlord is allowed to complete the application on behalf of the Tenant.  This was a very important change in case you have a Tenant that is qualified to receive the money but has refused in the past to apply for the emergency rent payments. 

Landlords can begin applying through Community Advocates on behalf of their tenants for both Milwaukee County and Waukesha County now.

It appears that there is still some logistics for the City of Milwaukee and the SDC to work out so they are not yet taking applications.

If your rentals are located outside of the city and counties of Milwaukee or Waukesha you will want to take a look at the WISCAP WERA website for more information and assistance. 

A Nicely Done News Report Explaining How the Eviction Moratorium is Negatively Affecting Both Tenants AND Landlords

I was interviewed by Reporter Caroline Reinwald of ch. 12 WISN yesterday on the CDC eviction moratorium and how it is negatively affecting both Tenants AND Landlords.  I thought Caroline did a very nice job of explaining the pains felt by both sides and was happy to be interviewed for the report.

The Landlords' Side of the Story

Have you noticed that landlords tend to be portrayed as evil and uncaring?  I'm reading lots of so-called news articles (that really are nothing but opinion pieces) with such sentiments.  The media also tend to treat all landlords as large companies making lots of money at the expense of tenants.  Did you know that the vast majority of landlords throughout the U.S. are small "mom & pop" landlords that own rental property in addition to working a full-time job?

Our own Milwaukee Journal-Sentinel likes to push this false narrative.  Despite myself and other landlords having spent literally hours on the phone with, writing emails to, or even meeting personally with J-S reporters, the paper still opts to ignore the facts and imparted knowledge provided, in order to continue the false narrative that landlords are evil. 

One individual, Nick Sakalis, has taken the lead in trying to tell the landlords' side of the story.  Below are several of his videos.  Please take the time to watch them, and share them if you are so inclined.  They are well-made and refreshingly don't just tell one side of the story.   They also explain an important point that the J-S tends to overlook, the fact that if landlords fail, tenants will also fail, as will the towns and cities that contain rental housing.  It seems short-sighted to continue to produce stories pushing the false narrative rather then trying to educate its readers about the long-term effects of continuing eviction moratoria without providing funding to keep both tenants and landlords afloat. 

Mr. Sakalis has also created a YouTube channel dedicated to collecting all landlord-related videos in one place. He has already assembled a fair amount of content and is adding to it everyday.  I will continue to post Nick's videos to my blog as they are created.

Perhaps one day the J-S will realize that landlords and tenants are not opposing forces and should not be trying to vilify the other. Rather landlords and tenants are two sides of the same coin.  What helps landlords also helps tenants and what helps tenants will also help landlords and by extension rental housing, municipalities, stores etc etc.  Is the Milwaukee Journal Sentinel listening . . .  probably not.

GUEST POST: Milwaukee Rental Housing Resource Center - A Collaboration

By Tim Ballering (justalandlord.com)

Yesterday's new contained many articles on Milwaukee’s Rental Housing Resource Center which is a collaboration to help both renters and housing providers. This was project was envisioned and started a couple of years ago. It became more relevant with the COVID economic crisis that has impacted the ability of folks to pay rent and avoid eviction.

The partners are a very diverse group: Community Advocates, Legal Aid, Legal Action, IMPACT, Mediate Milwaukee, Hope House, the City of Milwaukee, County of Milwaukee, and the Apartment Association of Southeastern Wisconsin.

The inclusion of the housing industry makes Milwaukee rather unique from other communities. Here we realize that housing and renters are two sides of a single coin. Both need the other to succeed.

Here is yesterday’s news:

• Milwaukee renters and landlords will have a central spot to get assistance with rent, part of an effort to reduce evictions. 
• Milwaukee Rental Housing Resource Center Hopes To Reduce Evictions  
• Rental Housing Resource Center to launch Dec 1. 
• Keeping the roof over your head: collaborative website helping those facing pandemic induced eviction 

GUEST POST: CDC Attorneys State That Landlords Can Challenge Tenants' Declarations In State Eviction Court

This is guest post written by Tim Ballering (JustALandlord.com)

The CDC attorneys have stated in federal court that owners are permitted to file evictions as well as challenge the veracity of a tenant's CDC Declaration. The CDC argues that owners can even obtain an eviction judgment, as long as the physical move is stayed until the end of the moratorium.

Most importantly, the Order does not prevent a landlord from filing an eviction action in state court. First, the Order expressly permits eviction for various reasons other than nonpayment of rent. See 85 Fed. Reg. at 55294 (property damage, criminal activity, etc.). Second, nowhere does the Order prohibit a landlord from attempting to demonstrate that a tenant has wrongfully claimed its protections. And third, even where a tenant is entitled to its protections, the Order does not bar a landlord from commencing a state court eviction proceeding, provided that that actual eviction does not occur while the Order remains in place. See id. at 55292 (“the order prevents these persons from being evicted or removed from where they are living through December 31, 2020”); id. at 55293 (defining “evict” as “to remove or cause the removal of”).

https://nclalegal.org/wp-content/uploads/2020/10/CDC-Response.pdf at page 42

The CDC attorneys further state that owners are permitted to sue tenants for nonpayment in civil court. This creates an interesting situation where an owner who is not receiving rent can garnish wages. 

Where tenants fail to pay rent, nothing in the Order precludes landlords from filing a breach of contract action seeking payment. Plaintiffs may prefer a different remedy, but they plainly have access to a judicial forum.

id. at page 43

This critical interpretation of the CDC Order is from its legal counsel, the US Dept. of Justice, in a brief in filed in the Brown v. Azar case, the federal court case in Atlanta seeking to overturn the CDC Order.

This is very different than what owners are being told by tenants' attorneys as well as local courts.

Personally I am not opposed to the moratorium if the tenant truthfully fills out the CDC Declaration, which includes an actual substantial loss of income, partial payments to the best of the tenant's ability and having applied for all applicable government assistance.

The concern is when tenants are using the CDC Order as a “Get Out Of Rent Free” card and submitting knowingly false Declarations. For example we received our first Declaration last week. The tenant listed SSI as her sole source of income on her application, so she did not suffer a substantial loss of income. She also has failed to apply for either the Community Advocates or the WRAP funding.

CDC and HHS Issue Order for Temporary Halt In Residential Evictions to Stop The Spread of COVID-19

On September 1, 2020, the Centers for Disease Control and Prevention (CDC) and Department of Health and Human Services (HHS) published an Agency Order temporarily stopping all residential evictions in the United States, in order to prevent the spread of COVID-19.

What Are the Effective Dates of this Order?

This order became effective immediately upon publication (presumed to be Sept 4, 2020) and continues through December 31, 2020.

What Is Prohibited under this Order?

Under this Order, a landlord, owner of a residential property, or other person with a legal right to pursue an eviction is prohibited from evicting any “covered person” from any residential property in any jurisdiction.

Who Is a “Covered Person” Under this Order?

A “covered person” is defined as any tenant, lessee, or resident of a residential property who provides to their landlord a written declaration under penalty of perjury that says:

1. The person has used best efforts to obtain all available government assistance for rent or housing;

2. The person expects to earn less than $99,000 in annual income for calendar year 2020 (or no more than $198,000 if filing a joint income tax return) or was not required to report any income in 2019 to the IRS or received a stimulus check pursuant to section 2201 of the CARES Act;

3. The person is unable to pay the full rent due to substantial loss of household income, loss of compensable hours of work or wages, lay-off or extraordinary out-of-pocket medical expenses;

4. The person is using best efforts to make timely partial payments that are as close to the full payment as the person’s circumstances may permit, taking into account other non-discretionary expenses;

5. Eviction would likely render the person homeless or force the person to move into and live in close quarters because the person has no other available housing options.

The Order defines “evict” and “eviction” to mean any action by a landlord to remove or cause the removal of a covered person from a residential property. This language is broad enough to cover the act of serving a notice terminating tenancy, the filing of an eviction, and the filing of a previously obtained writ of restitution with the Sheriff. 

Can A Landlord Still Pursue a Non-Rent Eviction During the Moratorium?

Nothing in the Order however prevents a landlord from pursuing an eviction based on a tenant that:

1. Engages in criminal activity;

2. Threatens the health or safety of other tenants;

3. Damages or poses an immediate and significant risk of damage to the property;

4. Violates any applicable building code, health ordinance, or similar regulation relating to health and safety; or

5. Violates any other contractual obligation, other than the timely payment of rent, including the non-payment of fees, penalties or interest.

What Are the Penalties for a Violation of this Order?

Any person that violates this Order may be subject to a fine of no more than $100,000 if the violation does not result in a death or one year in jail, or both, or a fine of not more than $250,000 if the violation results in a death.

Any organization that violates this Order may be subject to a fine of no more than $200,000 per event if the violation does not result in a death or $500,000 per event if the violation results in a death.

The U.S. Department of Justice may prosecute a violation of this Order seeking criminal penalties.

What about a More Restrictive State or Local Moratorium?

The Order does not apply in any State, local, territorial, or tribal area with a moratorium on residential evictions that provides for the same or greater level of public-health protection then this Order. The Order also states that it does not preclude State, local, territorial, and tribal authorities from imposing additional requirement that provide greater public–health protection and which are more restrictive that the requirements of this Order.

Are Tenants Still Responsible for Paying Their Rent During the Moratorium?

The Order states that this temporary eviction moratorium does not prevent any individuals of any obligation to pay rent or comply with any other obligations that a person may have under a tenancy, lease or similar contract. Nothing is the Order precludes the charging or collecting of fees, penalties, or interest as a result of the failure to pay rent. What the order does is prevent the landlord from removing the tenant for failure to pay rent until 2021.

Some Final Thoughts . . .

Arguably this latest moratorium protects tenants, but does it? Tenants are still required to pay the rent during the moratorium as well as late fees. If they don’t pay rent however all that happens is that the tenant cannot be evicted . . . for now. They can be evicted in 2021. Does anyone really think that a tenant negatively impacted by COVID-19 that cannot pay their rent today will have the money available to pay 5 month’s rent and late fees come January 1, 2021? How does this help tenants? It doesn’t. It is nothing more than the proverbial punting of the ball down the field. Everyone loses when a tenant is evicted.

Tenants are protected when their rent is paid and their landlord receives the rent payment so it can continue to pay its mortgage, taxes, utilities, and wages to its employees who maintain the rental property, spend money in local stores to help maintain the rental property. If the overarching goal is to actually help tenants then thought needs to be given to funding “portable” housing vouchers so that tenants that have lost their jobs due to COVID-19, will still be able to pay their rent and will continue to have a place to live in 2021. Delaying a tenant’s eviction for 5 months and having a landlord fail in the interim does not help anyone and it certainly does not stop a housing crisis.

The only way that a housing crisis can be avoided is if both tenants and landlords succeed. Trying to solve one end of the equation by kicking the ball down the field while at the same time completely ignoring the other end of the equation is short-sighted and honestly negligent

Residential Rental Evictions Down 30% Statewide

We have all heard reports that say residential rental evictions surged due to the Wisconsin eviction moratorium expiration in May.  When you look at a small time period (like the number of evictions that were filed after a 2+ month moratorium) you can always find numbers that will support your narrative. However, the real numbers show a 30% decline for the first six months of 2020 versus 2019. How can this be true, you ask? Listen to this podcast as WRA chief lobbyist Tom Larson and residential rental expert Tim Ballering from the Apartment Association of Southeastern Wisconsin (AASEW) break down the actual numbers and provide valuable insights into the eviction issue in Wisconsin.

The Wisconsin Supreme Court Struck Down Governor Evers’ Stay-At-Home Order, So I Can Now Serve Notices Terminating Tenancy and File Evictions, Right?

Written by Attorney Jennifer Hayden of Petrie + Pettit

The Wisconsin Supreme Court struck down Governor Evers’ Stay-At-Home Order, so I can send notices terminating tenancy and file evictions, right?

Ahhh, no. The Wisconsin Supreme Court’s decision is narrowly tailored to state that it is finding Emergency Order 28 to be unenforceable and focused much of its ire on “the assertion of power by one unelected official, Andrea Palm.” Conversely, it is Governor Evers’ Emergency Order 15 that restricts the ability of a Landlord to issue a notice, bring an action or file a writ unless the Landlord completes an affidavit stating its related to an imminent risk of serious physical harm to another person and that order has not been ruled on by the Wisconsin Supreme Court (You can read the decision here in its full glory: 

But I Can Issue a Notice Terminating Tenancy for the Non-Payment of Rent on May 27, 2020, right?

Ummm, maybe. If your property is impacted by the CARES Act you are prohibited from issuing a notice terminating tenancy for the nonpayment of rent until July 25, 2020 and the notice you use at that point for the non-payment of rent has to be a thirty day notice and can’t include any charges for late fees (see our prior blog article on this topic).

We also still have the DATCP rule prohibiting Landlords from charging late fees, so any notice should not include the non-payment of late fees (see our prior blog article on the DATCP rule).

Nothing at the state or federal level has prohibited you from sending tenants who aren’t paying rent a letter or invoice reminding the tenants of the balance due as long as it doesn’t threaten to terminate the tenancy.

Finally, although not specifically related to the ability to issue notices and file evictions, keep in mind that the Stay at Home Order is still in play for the City of Milwaukee (see our prior article on the City of Milwaukee STAY AT Home Order).  That order in Section 4, Prohibited Activities states: “A landlord or rental property manager shall not enter a leased residential rental premises unless a maintenance emergency exists.”

Is That All the Bad News if I Have a Tenant Who Hasn’t Paid Rent for Months?

Ah… It might not be. There are rumors of an effort to extend the prohibitions on issuing notices terminating tenancy or filing an eviction for the non-payment of rent in Wisconsin. We have not heard anything definitive on that potential. Additionally, there is the HEROES Act which in its current form, seeks to, among other things, prohibit the filing of eviction actions based on the non-payment of rent for a year for essentially all dwellings. Here is a link to the Act, but, full disclosure, it is 1815 pages long.

Update On Court Closures and Related Issues Pertaining to COVID-19 - UPDATED 3-19-20

UPDATED ON 3-19-20

Here is the latest on the court closures - 

Milwaukee County

Most of my firm’s pending eviction cases in Milwaukee County have been rescheduled for mid to late April.

The Milwaukee County Sheriff is no longer executing any writs that were previously filed and they are no longer accepting the filing of any new writs.  So, if your tenant is still living in the unit they will be allowed to do so until at least April 3^rd,  unless they voluntarily move out. The Sheriff could not provide me with a date that they would resume executing writs.

Waukesha County

The Waukesha County Chief Judge also signed an Order Regarding Emergency Temporary Measures that affects all court appearances – including evictions --- and  accompanying guidelines which became effective as of March 13^th.  Essentially the guidelines state that all contested matters requiring in-person appearances, including small claims, and any hearing where evidence will be taken by other than telephonic means (including all de novo hearings) are suspended until April 12, 2020. Clerks in the individual branches will schedule these proceedings as the Court’s calendar permits.  You should contact the clerk directly.  Any hearing that can be done by phone will proceed as scheduled, included but not limited to stipulated divorces, name changes, scheduling conferences, status conferences, motion hearings.  These are guidelines only; if any party has questions regarding scheduling with a specific court, they should contact the branch directly for guidance.  My firm has an initial appearance on an eviction scheduled for Monday and it is still on and we are appearing by phone. So it appears that Waukesha Co. will still accept new eviction filings.

Washington County

Washington County does not have any Emergency Temporary Order in place for COVID-19 but my firms was contacted by a Washington County court in which we have pending eviction matters and advised us that they were going to be adjourned until April 13th. We were told that the individual judges were each handling their pending calendars and cases as they saw fit.

Mediation

I was contacted by Mediate Milwaukee after they read my last blog post on COVID 19 and they indicated that they could be of assistance to landlords while the courts are shut.  They indicated that most of their landlord tenant mediation occurs via telephone with supplemental communication via email.  If you are interested in working out an informal resolutions with your tenant they may be of assistance to you.  If interested please contact Amy Holtz, Executive Director of Metro Milwaukee Mediation Services, Inc., at 414-939-8800 or amy@mediatemilwaukee.com

Milwaukee County Orders Emergency Temporary Orders Closing Eviction Court Due to COVID-19 Pandemic.

Well this has certainly been an “interesting” few days . . . and I assume that it will continue for the unknown future.  I know that I have seen more empty store shelves devoid of toilet tissue, Kleenex, and paper towels than I ever have before.  I’m sure that you have all been inundated with emails from your bank, vet, accountant, favorite restaurant and more, about COVID-19 and what changes are being made by those businesses in an attempt to mitigate the spread of the pandemic.  Well you can consider this blog post to be your email from your friendly Landlord-Tenant Law Attorney.

Effective today, March 16th, the Chief Judge in Milwaukee County ordered that all small claims court appearances, which include evictions, are suspended until after April 3, 2020, or until further Order of the Court.  Any court dates scheduled prior to April 3, 2020 will be rescheduled by the clerk and written notice will be sent out to the parties.

The Order goes on to say that no one may appear in person for any small claims hearing between now and April 3, 2020 or until further Order of the Court, unless it is an emergency matter, which has been approved by the judge or court commissioner.  The Court’s Guidance memo states that an emergency matter would be limited to such things as a Tenant’s request for stays of writs.

I have learned that the filing of an affidavit of default on a Stipulated Dismissal of an Eviction, when the tenant does not follow through on what they agreed to, is NOT considered to be an “emergency matter.”

Here is a copy of the Order and the attached guidelines for your review.

What does this mean to a landlord needing to file an eviction?

Well, while you are not precluded from drafting and serving notices terminating a tenancy and you are not precluded from drafting and serving an eviction lawsuit there are some practical matters with regard to the service of the eviction that may pose some concerns.

Wisconsin eviction law states that in eviction actions, the return date for a summons served upon a resident of Wisconsin shall be not less than 5 days nor more than than 25 days from the issue date, and service shall be made not less than 5 days prior to the return date. Wis. Stat. § 799.05(3)(b).

Most likely this pandemic and the restrictions enacted as a result will get worse before they get better.  I anticipate that the Emergency Temporary closure of the courts will be extended beyond April 3^rd.  While I hope that I am wrong, I don’t think that I will be.

So let’s say that you plan on filing your eviction within the next 3 weeks and set the return date for April 6^th for instance, what will happen if the court extends the closure until April 15^thor April 30^th?  Well, should the Court end up extending the Emergency Temporary Orders the Court it will have to adjourn your return date until whenever the Emergency Orders might be terminated.  Since we have no crystal ball, neither you nor I know when that will be.  Likely, if that happens, you will need to file an Amended Eviction Summons and reserve it so as to comply with the service requirements of Wis. Stat. § 799.05(3)(b) set forth above.  The result being that you would incur another service of process fee and your eviction would not get into court any sooner..

As I see it, a landlord or property manager has one of three options.  The first option is to file the eviction prior to April 3, 2020 and hope that they Emergency Orders are not extended, but if they are you will need to be prepared to file an Amended Summons and incur another service fee.  The second option would be to hold off on filing the eviction until the Emergency Temporary Orders have ended, whenever that will be.  The third option is to try and informally work with your tenant to come up with a resolution that works for both of you.

None of the options are ideal.  Whether or not a tenant pays their rent doesn’t affect the landlord’s obligation to pay its mortgage.  And if the tenant is engaging in a non-rent breach that is affecting the quiet use and enjoyment of the premises by other tenants, any further delay is certainly not a good option for the landlord or the other tenants.  Can you and the tenant arrive at a solution that works for both of you until the pandemic ends and the courts reopen?  I don’t know the answer to this question, but it appears that we are entering a brave new world, and we will need to be creative in order to survive.

Good luck and stay healthy.

T

The Nuts and Bolts of Emergency Assistance Stays

I recently had a client call me and advise that they received an Emergency Assistance letter and other documents from UMOS (one of the agencies that administer E.A. funds) for a client that they were in the process of evicting. Unfortunately, I had to advise the client that merely by the tenant having applied for Emergency Assistance, the eviction action would have to be "stayed" (i.e. delayed) per Wisconsin Law.

Below is the key information that Landlords need to know about E.A. stays:

Sec. 799.40(4) of the Wisconsin Statutes states that a court must stay an eviction action brought against a tenant that has applied for emergency assistance. The stay remains in effect until it is determined if the tenant is eligible for the assistance, and if they are, until that assistance is received. For any landlord that has been in this situation, you are aware that the stay can work a substantial hardship on the landlord who is now required to allow a tenant to remain in his/her property for free.

Even if the tenant is eventually awarded the emergency assistance money it typically does not cover the full amount of the past due rent owed and as such the landlord always has the option to decline the money. The tenant will then uses the assistance money for the security deposit on their next apartment.

However, even if the landlord declines the E.A. money the "stay" still applies while the tenant looks for a new apartment. If on the other hand the landlord elects to accept the E.A. money, the landlord must agree with the issuing agency that they will dismiss the pending eviction.

Here is a copy of a basic Emergency Assistance letter and documentation from UMOS.

Unfortunately an emergency assistance stay can delay an eviction for months. Such a situation is frustrating at best and an improper "taking" of a landlord's property at worse. In the case of McQuestion v. Crawford, 2009 WI App 35, from District I (Milwaukee) of the Wisconsin Court of Appeals, it was held that "implicit in the statute's mandate that a stay is required until the tenant receives the emergency assistance is a requirement that the tenant seek and find suitable permanent housing within a reasonable period of time."

What is a "reasonable" amount of time will still need to be determined on a case by case basis by a judge. Nonetheless, at least there will now be some required inquiry into the efforts made by the tenant to locate new housing and consideration made for the amount of time that this takes. Wisconsin landlords now have case law to support our arguments that the length of the stay is no longer reasonable.

If you would like to learn more about Emergency Assistance in general such as who may apply and other conditions that must be met before you can receive E.A. monies you should refer to Sec. 49.138, Wis. Stats.

Happy Landlording