W.R.A.P it up with a Bow? The Wisconsin Rental Assistance Program

By Attorney Jennifer Hayden of Petrie + Pettit S.C.

The Division of Energy, Housing, and Community Resources has partnered with the Wisconsin Community Action Program Association to provide “direct assistance” for struggling Wisconsin tenants by way of 25 million dollars allocated to agencies across the state. Tenants who meet certain income and need eligibility can apply for the funds through the Wisconsin Community Action Program Association which will then issue payment directly to the Landlord on behalf of the Tenant.  Since this program will require the tenant to apply directly for the monies, if you have not already done so, you should open up a dialogue with your tenants about this assistance so they can educate themselves.

In general, adult residents of Wisconsin with a household income at or below 80% of the county median income in the month of or prior to the application date may be eligible to receive up to $3,000 per individual which can be used toward rent owed or security deposits.
Funding will be available on a first-come, first served basis, and the Program will expire once CARES Act funding is exhausted.

Additional information on this Program, including complete eligibility criteria, application documentation requirements, and the distribution process for the rental assistance should be available shortly, along with information on a proposed “Second Initiative.” Initial information can be found here.

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.

WEBINAR: Landlording In The Time of Coronavirus

I hope that everyone is staying healthy, safe and sane.  

Attorney Jennifer Hayden (also of Petrie + Pettit) and I presented a 1 hour webinar for the Apartment Association of Southeastern Wisconsin (AASEW) on April 29, 2020 entitled "Landlording In The Time of Coronavirus."  In the webinar, Jen and I spoke about the various Emergency Orders and Laws that impact Landlords, some "best practices" related to issues caused by the Cornavirus/COVID-19, and what you can expect when eviction court is up an running.

Here is a link to the webinar if you are interested in viewing.

Thanks

DATCP's Temporary Emergency Rule Prohibiting the Charging of Late Fees Is In Effect

UPDATED on July 9, 2020

On, April 25, 2020, with little publicity, the Department of Agriculture, Trade and Consumer Protection (DATCP) published a temporary emergency rule (20-R-02) modifying Wis. Admin Code ch ATCP 134 (“Residential Rental Practices”) creating a temporary prohibition on the charging of late fees or late rent penalties for any missed rent payments during the COVID-19 health emergency and during the 90 days following the health care emergency or until August 27, 2020 unless the public health emergency is extended.  This rule only applies to residential housing.

The emergency rule will expire at the earliest of:
1. 150 days after the emergency rule is published,
2. 90 days after the expiration of the public health emergency (which is currently set to expire on May 26, 2020) , or
3. 90 days after the recission of the proclamation of the public health emergency.

UPDATE July 9, 2020

On June 25, 2020, the Joint Committee for Review of Administrative Rules has determined that DATCP did not have the authority to make the above Emergency Rule prohibiting late fees.  Not only did the Committee strike down the Emergency Order, but legislators then drafted legislation the prohibits DATCP from creating such a rule in the future.  

No information was provided as to whether or not the Committee's ruling applies retroactively but going forward landlords are again able to charge late fees. 

CARES Act Eviction Restrictions Apply to More Landlords Than You Think

The following is a guest post written by Atty. Jennifer Hayden of Petrie + Pettit S.C. 

We’ve previously discussed the impact of the recent extension of the Stay at Home Order by Governor Evers.  However, under Section 4024 of the CARES Act, Landlords who have residential tenants in a “covered dwelling” that participates in a “covered housing program” (as defined in section 41411(a) of the Violence Against Women Act of 1994 or the rural housing voucher program under section 542 of the Housing Act of 1949 or has a “Federally backed mortgage loan” or a “Federally backed multifamily mortgage loan”, have additional prohibitions on what they may or may not do with regard to terminating a tenancy and filing an eviction against their tenant until July 25, 2020 (120 days after the enactment date of March 27, 2020). 

Just a warning, this post is a little dry and technical but the law is dry and technical so there is not a lot to work with. ; ).  Try not to fall asleep as this is important.

What is the eviction moratorium under the CARES Act?

It consists of two key provisions which contain two sub provisions.

The first provisions is

1. Through July 25, 2020, a landlord of a “covered dwelling” may NOTdo any of the following:

(a) make, or cause to be made, any filing with the court of jurisdiction to initiate a legal action to recover possession of the covered dwelling from the tenant for nonpayment of rent or other fees or charges; or

          Translation:   You can’t file an eviction based on non-payment of rent or other amounts owed to you by the tenant.

(b) charge fees, penalties, or other charges to the tenant related to such nonpayment of rent.

          Translation:   You can’t charge a late fee if your tenant doesn't pay rent.

The second provision is 

2. Additionally, a landlord of a “covered dwelling” also may not:

(a) require the tenant to vacate the covered dwelling unit before the date that is 30 days after the date on which the lessor provides the tenant with a notice to vacate; or

          Translation:   You must give a tenant at least a 30 day notice to vacate.

(b) issue a notice to vacate for the non-payment of rent until after the expiration of the 120 day period.

          Translation:   You can’t serve a notice to vacate for failure to pay rent until after July 25, 2020.

So what does all of this mean exactly? 

It means that a landlord of a “covered dwelling” cannot serve a notice to vacate for the failure to pay rent until after July 25, 2020 and even if a landlord waits to serve a notice to vacate for failure to pay rent after July 25, 2020, that notice must give the tenant 30 days.

What is the end result of all of this?

A landlord of a “covered dwelling” is prohibited from filing an eviction against a residential tenant until after August 27, 2020. 

Interestingly, the Act doesn’t mention anything about notices or evictions for non-rent breaches.  Thus, it appears to leave open the possibility that a landlord can serve a 30 Day Notice for a non-rent breach during the 120 Day Period. 

Do these restrictions apply to my rental property?

These restrictions apply to landlords that own federal housing rental programs covered by VAWA (Violence against Women Act), which includes:

• Public housing,

• Section 8 Housing Choice Voucher program,

• Section 8 project-based housing,

• Section 202 housing for the elderly,

• Section 811 housing for people with disabilities,

• Section 236 multifamily rental housing,

• Section 221(d)(3) Below Market Interest Rate (BMIR) housing,

• HOME,

• Housing Opportunities for Persons with AIDS (HOPWA),

• McKinney-Vento Act homelessness programs,

• Section 515 Rural Rental Housing,

• Sections 514 and 516 Farm Labor Housing,

• Section 533 Housing Preservation Grants,

• Section 538 multifamily rental housing,

• Low-Income Housing Tax Credit.

What does a “Federally backed mortgage loan” or a “Federally backed multifamily loan” mean?

The language used to define a “Federally backed mortgage loan” or a “Federally backed multifamily mortgage loan” encompasses more properties than anticipated.  

The CARES Act defines a “federally backed mortgage loan” as any loan which:

1. is secured by a first or subordinate lien on residential real property (including individual units of condominiums and cooperatives) designed principally for the occupancy of from 1 to 4 families, including any such secured loan, the proceeds of which are used to prepay or pay off an existing loan secured by the same property; and
2. is made in whole or in part, or insured, guaranteed, supplemented, or assisted in any way, by any officer or agency of the Federal Government or under or in connection with a housing or urban development program administered by the Secretary of Housing and Urban Development or a housing or related program administered by any other such officer or agency, or is purchased or securitized by the Federal Home Loan Mortgage Corporation or the Federal National Mortgage Association.
   

A “Federally backed multi-family mortgage loan” is similarly defined to include any loan other than temporary financing such as a construction loan which:

1. is secured by a first or subordinate lien on residential multifamily real property designed principally for the occupancy of 5 or more families, including any such secured loan, the proceeds of which are used to prepay or pay off an existing loan secured by the same property; and
2. is made in whole or in part, or insured, guaranteed, supplemented, or assisted in any way, by any officer or agency of the Federal Government or under or in connection with a housing or urban development program administered by the Secretary of Housing and Urban Development or a housing or related program administered by any other such officer or agency, or is purchased or securitized by the Federal Home Loan Mortgage Corporation or the Federal National Mortgage Association.

So once Governor Evers’ Order prohibiting the service of notices terminating tenancy and the filing of evictions has passed on May 27, 2020, landlords that own a “covered dwelling” will still have their hands tied behind their back by the CARES Act, until July 25, 2020.

It is important to be aware that both Legal Action and Legal Aid have been requesting that Commissioners and Judges confirm that a landlord (plaintiff) is not prohibited from filing an eviction based on the CARES Act.  So expect challenges on this issue and bring proof showing that your rental is not a “covered dwelling” and that you do not have a “Federally backed mortgage loan” or “Federally Backed multifamily loan” on the rental property.

It is also important to remember that like its Wisconsin Safer at Home counterpart, the CARES Act does still requires the tenant to pay rent during the 120 period.  But if they don’t, a landlord cannot do anything about it until July 26, 2020.

An Update on Milwaukee County Small Claims Court

I know that everyone is anxious to learn when and how Milwaukee County will be proceeding with evictions in the future.  I have attended several virtual Small Claims Bench/Bar Committee Meetings, which include attorneys representing both landlords and tenants as well as Milwaukee County Judges and Court Commissioners, and those issues are being discussed.

Please understand that the courts do not have all of the answers at this point.  This is a work in process.  Just as we all are, the courts are working their way through this pandemic and it’s fallout.  As more information and direction is given by the Court, I will update everyone.  For now this is what we know . . .

• We know that Governor Evers has extended the Safer at Home Order until May 26, 2020 at 8 am.
• We know the Wisconsin Supreme Court has suspended all in-person court appearance through April 30, 2020.
• We know that the Chief Judge of Milwaukee County has currently suspended all small claims court appearances through May 15, 2020.
• We know that the amount of people that go through Milwaukee County’s Small Claims Court is greater than any other court in the state.
• We know that Milwaukee County Small Claims Court has never been set up to handle virtual court appearances in the past.
• We know that we are dealing with a pandemic that has created a lot of uncertainty.
• We know that everything is fluid and could change multiple times in the future.

Milwaukee County is taking the Small Claims Court backlog very seriously.  After dealing with the speedy trial demands in criminal court, the Small Claims backlog is paramount.  The Court realizes that even once the Orders are lifted, that with the amount of people that file through Small Claims Court every day, will not allow for the necessary social distancing that will be required, until a vaccine is created.  As such, there is just no way that Milwaukee County Small Claims Court can handle hundreds of people appearing in person in Room 400 every day.  That would just be a “hot spot” in the making.

As such, Milwaukee County Small Claims Court will be re-configuring Room 400 to allow for virtual court appearances via Zoom.  The court envisions the need to conduct virtual court appearances into the summer and fall of 2020.

Since Small Claims Court has never held virtual court appearances before, it will be necessary for it to start slowly until it works everything out and is able to implement processes and procedures.  Initially Small Claims Court will focus on all pending evidentiary hearing involving collection (non-eviction matters) in which both the creditor and debtor are represented by attorneys.  This will allow the Court to have the respective attorneys assist in preparing witnesses to testify via Zoom and to generally move the process along. The current plan is to be able to hear these cases prior to May 18^th. The hearings will be held in the same date order in which they were scheduled.  The new hearing will occur at the same time of day as they were originally scheduled.

The goal is to formalize the process for conducting evidentiary hearing in collection cases and then to add more and more types of cases and different types of court appearances.  The Court is considering handling all initial appearances via paper – meaning that the defendant will need to file a written Answer.  This is still being debated.

Small Claims Court intends to staff the Court with 4 court commissioners in order to tackle the backlog of cases.  The Court will be in charge of sending out Zoom invites to the represented parties.  It will be up to the attorneys representing the creditors and debtors to adequately instruct their witnesses on how to testify using Zoom.  It is anticipated that testimony via telephone will continue to be permitted. The Court Commissioners will also have the ability to adjourn any pending evidentiary hearings if necessary due to technological problems or otherwise.  All of these cases will be live-streamed on YouTube to comply with the right to public access to our court system. Once the case is concluded the court proceeding will be removed from YouTube.

The Court is still discussing how it will handle collection cases, and eviction cases, in which either one or both of the parties are not represented by counsel.  As you can imagine, it will be extremely difficult to send Zoom invites to pro se litigants that may not even have access to WI-FI or know what Zoom is.  This is most likely why the Court is starting the process with collection cases involving attorneys on both sides.

In the interim, Small Claims Court will continue to review emergency eviction filings that involve the imminent threat of serious physical harm to another person.  To date, Judge Colon indicated that he has heard 3-4 of those cases and has granted 1 eviction judgement and issued a writ.

I realize that most of you reading this post are involved in the Landlord-Tenant law world and that you are wondering how the Court will handle eviction cases and when they will start hearing those cases.  We all want to know the answers to those questions.  The court is very aware that evictions are important and need to be heard.  As I have stated before, this is a work in progress and I will update you as the Court provides us with more information.

A Deep Dive Into Governor Evers’ Emergency Order #15 – Temporary Ban on Evictions and Foreclosures

My office has received a lot of questions about Governor Evers’ Emergency Order regarding a temporary ban on evictions and foreclosures in the last few days. There appears to be a lot of misunderstanding or confusion over the Order so I will attempt to clarify the Order and answer many of the questions that I have received.

First off, it is important to keep in mind that all we know for certain is what the Order says.  If the Order doesn’t state something or doesn’t even address the topic then we do not know for certain.  Everything else is just educated guessing, wishful thinking, or mere argument and speculation.  For ease of reference, I will refer to each of the eleven (11) numbered paragraphs of the Order separately. 

Evers’ Order went into effect on March 27, 2020 and continues for 60 days.

1. Landlords are prohibited from serving any notice terminating tenancy for failure to pay rent.

This one is pretty straightforward.  During the 60 day period of this Order, landlords cannot serve a tenant with a 5 day notice or a 14 day notice for failure to pay rent. 

This section of the Order does not address whether or not a landlord can talk with a tenant about not paying their rent, send the tenant a rent invoice, or a letter advising the tenant that rent was not paid.  I am not suggesting that Landlords do any of the above, I am merely stating what the Order says and does not say, as those are the questions that I am being asked.  So nothing in the Order prohibits a landlord from communicating with a tenant about unpaid rent.  The Order does prohibit a Landlord from sending a tenant a notice for failure to pay rent.

2. Landlords are prohibited from serving any notice terminating tenancy unless the notice is accompanied by an affidavit attesting to the reasonable belief, and the basis thereof, that a failure to commence eviction proceedings will result in an imminent threat of serious physical harm to another person.

Translated this means that a landlord cannot serve a 5 day notice or 14 day notice for a non-rent (or behavioral) breach unless the breaching behavior is so severe that to not move forward with evicting the tenant will result in an imminent threat of serious physical harm to another person. 

The Order does not provide any examples of what situations would fall under this narrow exception.  I assume that a landlord could move forward with serving a non-rent notice on a tenant if there was physical abuse of a tenant by another tenant.  I suppose that a Landlord could also serve a non-rent notice on a tenant if the tenant physically injured or threatened to injure a property manager, leasing agent or maintenance person.

Please keep in mind that a court will scrutinize any notice served and filed under this narrow exception on a case by case basis.  Due to the severity of the pandemic and the overwhelming need to self-isolate, I believe that a Court will require that a pretty high hurdle be met before they will allow such an eviction to move forward.  For instance, does the use of the word “imminent” in the Order preclude a Landlord from serving a non-rent notice on a tenant if the abuser has alreadycaused physical harm to another?  Or will it be assumed that if harm has already occurred that it will continue to occur will meet this narrow exception? We just don’t know the answer to these questions; each judge will be analyzing each specific scenario separately and on a case by case basis.

It is important to remember that if a landlord has a situation where it believes there is an imminent threat of serious physical harm to another person, that the landlord must be willing to put the basis for its belief into a personal affidavit which must be signed before a notary.  

It appears that this section of the Order would also preclude a Landlord from serving a 28 day notice for any reason or no reason at all on a month-to-month tenant because such a notice would not be based on a reasonable belief of imminent threat of serious physical harm.

The question that comes up quite frequently and has landlords uncertain is whether or not a landlord can send a tenant under a lease for a specific term, a notice of non-renewal if the lease ends within the 60 day period of the Order.  A notice of non-renewal does not really terminate a tenancy (the fact that the initial lease period ends is what terminates the tenancy) however, if the point of the Governor’s Order is to keep tenants in their apartments and not have them out looking for a new place to live, then serving a notice of non-renewal when the end of the term is within the 60 day period, would be contrary to that.  Again, I do not know this for certain.  What about if the lease ends after the 60 day period?  Can a landlord serve a notice of non-renewal during the Order if it won’t apply until after the Order expires?  Probably so, but we don’t know for sure.  Please read section 5 below for further analysis of this issue.  

3. Landlords are prohibited from commencing a civil action of eviction unless the following conditions are met:

a. The eviction action is not based on a failure to pay rent, and

b. The judicial action seeking eviction is accompanied by an affidavit attesting that the eviction is not based on a failure to pay rent and to a reasonable belief, and the basis thereof, that a failure to proceed with the eviction will result in an imminent threat of serious physical harm to another person.

This section of the Order is pretty much the same as #1 and #2 above except it addresses the filing of an eviction action rather than the service of a notice terminating tenancy.  The same issues and concerns raised above would apply under this section as well.

A major concern that is not addressed in the Order, is what happens to the pending eviction lawsuits that were filed and served prior to the commencement of the Governor’s Order?  This is not addressed so we don’t know for certain. It is however important to remember that prior to the Governor’s Order, the both the Wisconsin Supreme Court and the Chief Judge of various counties throughout Wisconsin, also issued temporary emergency orders and that those orders will need to be reviewed also.  To my knowledge these other Orders do not specifically answer that questions either.  We will have to wait and see what happens with the pending evictions.  Most likely they will be adjourned but what about the service of process requirements that landlords must comply with?

4. Landlords may not deliver a writ of restitution to the sheriff, nor may the sheriff act on eviction orders unless the following conditions are met:

a. The eviction was not based on a failure to pay rent, and

b. The writ or restitution is accompanies by an affidavit attesting that the eviction is not based on a failure to pay rent and to a reasonable belief, and the basis thereof, that a failure to process with the eviction will result in an imminent threat of serious physical harm to another person.

The section of the Governor’s Order prevents a landlord that has already been granted a judgment of eviction and issued a writ from filing that writ with the sheriff for execution, unless it falls under the same narrow exception mentioned earlier - a reasonable belief that failure to proceed would result in the imminent threat of serious physical harm to another person.

A common question of many landlords that I have spoken with is what will happen to the writs that were issued by the court but not yet filed with the sheriff, or the writs that were filed with the sheriff but not yet executed, since a writ is supposed to be valid for 30 days from the date that it was issued.  Are the non-filed writs and the non-executed writs all going to become void during the 60 days of the Governor’s Order?  Can all writs that fall into this category be “stayed” until after the Order expires?  It doesn’t seem equitable to require a landlord to file a new eviction and obtain a new judgment of eviction and a new writ, when all of those matters occurred prior to the Governor’s Order. 

5. Nothing in the above order shall be construed to affect the operation of Wis. Stat.  § 704.25.

Wis. Stat. §704.25 is entitled “Effect of holding over after expiration of lease; removal of tenant.”  This is the section of the Governor’s Order that I feel is the most unclear.  One interpretation of this section is that a landlord can still serve a notice of non-renewal and/or file an eviction against a tenant that has held over beyond the term of their tenancy.  Another interpretation could be that any tenant that becomes a holdover during the 60 day Order will still be responsible for any damages incurred by the landlord as a result of their holding over?  If I had to guess I would say, the latter interpretation is probably the view that a court would take.  But again, we don’t know for certain.

Wis. Stat. § 704.25(3)  specifically addresses what the terms of the tenancy are when a tenant holds over and basically states that if the holdover tenant offers rent, and the landlord accepts the rent, that a month to month tenancy is created under the same terms and conditions as the original lease.

It is my opinion that the above paragraph is what the Order is referring to when it states that nothing shall be construed to affect the operation of Wis. Stat. 704.25.  But we do not know for sure. 

6. Remote Notarization is permissible for purposes of this Order

This section is reasonable in light of the goal to self-isolate.

7. Mortgagees are prohibited from requesting from commencing a civil action to foreclose upon real estate.

8. Mortgagees are prohibited from requesting or scheduling a sheriff’s sale of the mortgaged premises.

9. Sheriffs may not conduct sheriff’s sales of mortgaged premises nor ma sheriffs act on any order of foreclosure or execute any writ of assistance related to foreclosure.

I am pleased that Governor Evers addressed one major concern of landlords in these three sections of the Order – what happens to the landlord that cannot meet its financial obligations because it is not receiving rent payment from its tenants as a result of COVID-19?  While it is true that it will be extremely difficult for tenants to pay their rent if they have lost their job or had their hours cut, a large majority of landlords rely on their tenants’ rent payments in order to pay their mortgage, utilities, taxes, insurance etc.

This section of the Order prevents the landlord’s lender from foreclosing against the landlord‘s rental property during this 60 day period. Hopefully we will see an additional order or possibly legislation giving such a reprieve for the payment of taxes, insurance, utilities etc.  We all have serious concerns about whether or not we, our families, and our businesses will survive this pandemic.  Without further assistance the smaller landlords out there, which includes the majority of landlords, will not survive.

10. Nothing in this Order shall be construed to affect the ability to commence a civil action to foreclose upon real estate under Section 846.102 of the Wisconsin Statutes.

I have not received any questions related to this section of the Order and don’t feel that comment is necessary.

11. No provision in this Order shall be construed as relieving an individual of their obligations to pay rent, make mortgage payments, or any other obligations an individual may have under a tenancy or mortgage.

This section is key and unfortunately it is being overlooked by many.  Tenants are still responsible for paying their rent.  If they don’t pay their rent and if they don’t otherwise enter into some form a rent deferment agreement with their landlord, the tenant can still be evicted after the Order expires for not paying rent during the Order.  The same applies to landlords.  You still need to pay any missed mortgage payments at some time or else suffer the consequences. 

I have no idea how long this pandemic will last, but it is pretty clear that it will continue for the near future, and in the meantime many will be unable to meet their financial obligations.  The effect on the housing market and affordable housing, which was already in short supply, is going to be catastrophic and difficult to even think about.

Since it will be a while before the courts are handling evictions again, I hope that everyone reading this, both landlords and tenants, realize that it would be in everyone’s best interests to work together and come up with solutions that can keep everyone afloat until such time that we can once again stand closer than 6 feet.

Stay safe, stay healthy, and look out for one another.

T

3/27/20 - Further Update On Court Closures and Related Issues Pertaining to COVID-19

Things continue to be very fluid when it comes to eviction court and what the various counties are doing, or not doing, in lieu of the COVID-19 pandemic and the Governor’s Safer at Home Order.

As you are aware from my earlier posts, Milwaukee County courts suspended in=person court proceedings through April 3, 2020 as a pandemic precaution.

On March 22, 2020, the Wisconsin Supreme Court issued two Administrative Orders, one which postponed all civil and criminal jury trials through May 22, 2020, and the second which suspended most in-person proceedings and provided that, subject to certain exceptions, all court proceedings in Wisconsin Courts are to be conducted via remote audio-visual technology if practicable.

In response to the Supreme Court’s Orders, the Chief Judge in Milwaukee County on March 23, 2020, issued some additional guidelines (The Second Emergency and Temporary Guidelines) and extended its Emergency and Temporary Orders until May 15, 2020. The Chief Judge wrote that the guidelines that are in place in the Milwaukee County court system are to “ensure the continuous performance of the court’s essential functions and operations, yet seek to mitigate the exposure, and further spread of the virus.  The guidelines also “incorporate use of teleconferencing to minimize contact, when appropriate; follow social distancing practices; and temporarily suspend some non-essential court functions.”

With regard to small claims cases (which includes evictions) the Milwaukee County Second Temporary and Emergency Order states as follows:

1. All small claims appearances are suspended through May 15, 2020, or until further Order of the Court.  Any such matters currently set for a date on or prior to May 15, 202, will be rescheduled by the Clerk via written notice.
2. No one may appear in person for hearing between now and May 15, 2020, or until further Order of the Court, unless it is an emergency matters, without the express advance approval of the Judge or Court Officer assigned to such matter; it is expected that this will be limited to such things as Requests for Sta of Writs of Restitution.  Any emergency matters may be conducted via telephone or video, at the discretion of the Judge hearing such matter.

The Supreme Court Orders and Milwaukee County’s guidelines leave a lot of unanswered questions, understandably so, since we are all learning how to handle such an unprecedented event as COVID-19.

A Small Claims Bench/Bar Meeting has been scheduled for March 27, 2020 with the small claims presiding Judge Pedro Colon and attorneys representing both landlords and tenants.  Many interesting questions will be raised with regard to the Service of Process statute for evictions and what effect, if any, the court’s adjournments, will have on the pending evictions.  There will also be discussion about how the court will deal with the backlog of cases once the court resumes in-person hearing.

As I learn more, I will continue to update you.

Thanks

T

Governor Evers Prohibits Notices Terminating Tenancy and Eviction Actions for Sixty Days Unless There is Imminent Threat of Serious Physical Harm

Governor Evers issued an Order today prohibiting notices terminating tenancy, eviction actions and the filing of writs unless based on the imminent threat of serious physical harm to another person for the next sixty (60) days.

In relevant part, the Order states as follows:

1. Landlords are prohibited from serving any notice terminating a tenancy for failure to pay rent.

2. Landlords are prohibited from serving any notice terminating a tenancy unless the notice is accompanied by an affidavit attesting to the reasonable belief that a failure to commence eviction proceedings will result in an imminent threat of serious physical harm to another person.

3. Landlords are prohibited from filing an eviction unless the following conditions are met:

     a. The eviction action is not based on a failure to pay rent, and

     b. The judicial action seeking eviction is accompanied by an affidavit attesting that the eviction is not based on a failure to pay rent and to a reasonable belief that a failure to proceed with the eviction will result in an imminent threat of serious physical harm to another person.

4. Landlords may not deliver a writ of restitution to the Sheriff, nor may the Sheriff act on eviction orders unless the following conditions are met:

     a. The eviction order was not based on a failure to pay rent, and

     b.The Writ of Restitution is accompanied by an affidavit attesting that the eviction is not based on a failure to pay rent and to a reasonable belief  that a failure to proceed with the eviction will result in an imminent threat of serious physical harm to another person.

The Order does specify that it does not relieve a tenant of the obligation to pay rent or any other obligation “an individual may have under a tenancy.”

The Order also prohibits your lender from filing a foreclosure action against you, if you happen to be having difficulty meeting your obligations since you may not be receiving rent from your tenants, for 60 days.

We will continue to keep you apprised as this situation develops.

Hang in there.

GUEST POST: City of Milwaukee “Stay at Home” Order - UPDATED 4.28.20

This is a guest post from Atty. Jennifer Hayden of Petrie + Pettit S.C.

As many of you know, the City of Milwaukee Commissioner of Health issued a “Stay at Home” Order effective at 12:01 a.m. on March 25, 2020.  There is no specified end date or time. 

Except for the specific exceptions listed, all individuals currently living within the City of Milwaukee are ordered to stay at home or at their place of residence.  All businesses with a facility in the City, except Essential Businesses and Operations, are required to cease all activities at facilities located within the City except Minimum Basic Operations or employees working from home.

Numerous businesses are impacted, but a few provisions seem particularly relevant to landlords, property owners and management companies.

The first of these provisions is at the end of Section 4, Prohibited Activities and states as follows: “A landlord or rental property manager shall not enter a leased residential rental premises unless a maintenance emergency exists.”  I interpret this to mean that there could be an issue with entering a tenant’s apartment for things such as inspections, routine maintenance, and, in most circumstances, showing an occupied apartment to a prospective tenant.

 UPDATE 4/28/20: The above has been extended until May 26, 2020 at 8 am per Governor's Order #28

Outside of this specific prohibition, leaving home to perform work providing essential products and services at Essential Businesses or Operations or to otherwise carry out activities specifically permitted, including Minimum Basic Operations is permitted.  An Essential Business or Operation includes Professional Services such as real estate services.

 UPDATE 4/28/20: The above has been extended until May 26, 2020 at 8 am per Governor's Order #28

Additionally, businesses are allowed to continue to perform Minimum Basic Operations including (a) The minimum necessary activities to maintain the value of the business’s inventory, ensure security, process payroll and employee benefits, or for related functions and (b) The minimum necessary activities to facilitate employees of the business being able to continue to work remotely from their residences.  Employees must comply with Social Distancing Requirements, to the extent possible, while carrying out these operations.

Social Distancing Requirements include: maintaining social distancing of six (6) feet between people; washing hands with soap and water for at least 20 seconds as frequently as possible or using hand sanitizer; covering coughs or sneezes (into the sleeve or elbow, not hands); regularly cleaning high-touch surfaces; not shaking hands; and following all other public health recommendations issued by DHS and the U.S. Centers for Disease Control.

At this point, we don’t have much guidance on any specifics related to this Order or its enforcement, but we will be updating this post as this situation continues to unfold.   

Building Management and Building Maintenance Are Considered To Be "Essential" Under Governor's Emergency Safer At Home Order

On March 24, 2020, Governor Evers authorized Andrea Palm, Secretary-Designee for the Department of Health Services to Issue Emergency Order #12 entitled the Safer At Home Act.

With regard to landlords and property managers, the Order states that those involved in building management and building maintenance are considered to be "essential" and therefore may leave their residence to provide services or perform work necessary to offer, provide, operate, maintain, and repair Essential Infrastructure.

Landlords and Property Manager are also mentioned in #3 of the Order entitled "Prohibited Activities" which states that Landlord or rental property managers shall avoid entering leased residential premises unless emergency maintenance is required.

So if you have a vacant rental unit and need to show it to a prospective tenant, that is fine.  However, if the tenant still resides in the rental unit then you are not allowed to show the unit to a prospective tenant.

The Order takes effect at 8 am on March 25, 2020 and remains in effect until 8 am on April 24, 2020.

UPDATE 4/28/20: The above has been extended until May 26, 2020 at 8 am per Governor's Order #28

Stay Healthy

T

Freddie Mac and Fannie Mae Offer Multifamily Property Owners Mortgage Forbearance If They Suspend All Evictions For Tenants Affected By The Coronavirus

On March 23, 2020 the Federal Housing Finance Agency (FHFA) announced that Freddie Mac and Fannie Mae will offer multifamily property owners mortgage forbearance with the condition that they they suspend all evictions for renters unable to pay rent due to the impact of the coronavirus.

The eviction suspensions would need to remain in place for the entire duration of the time that the property owner remains in forbearance.  The forbearance is available to all multifamily properties with a Freddie Mac or Fannie Mae backed performing multifamily mortgage negatively affected by the coronavirus pandemic.

For more information please read the entire FHFA notice.

GUEST POST: What Are Landlords Supposed To Do In This Age of COVID-19?

This is a guest post by Atty. Jennifer Hayden of Petrie + Pettit S.C.

Updated on 3-24-20

What the H*ll Are We Supposed to Do Now?

We honestly have no idea. We are in uncharted waters. But we do know that under the shelter of each other, we all survive.

These are our current suggestions based on the ever-changing information we are being provided with. Please let us know your thoughts, comments and suggestions below.

Daily Operations – Keep it Sane and Clean

With prospective tenants, handle everything possible by e-mail or mail. If you have to meet them in person, follow the CDC recommendations and gloves, hand sanitizer and social distancing. You can ask prospective tenants if they have cold or flu symptoms (as long as you ask every prospective tenant the same question) and decline to show them a unit if they confirm. If a current tenant informs you that they are not willing to allow prospective tenants into their unit while they are residing in it based on health concerns, we suggest you abide by that request. Similarly, if a current tenant is self-isolating or quarantining, his or her unit should not be shown to prospective tenants.

UPDATE: The City of Milwaukee Order from the Commissioner of Health prohibits a landlord or rental property manager from entering a leased residential rental premises unless a maintenance emergency exists, effective at 12:01 a.m. on March 25, 2020. Although we don’t have much guidance on the specific interpretation of these orders and later language suggests that real estate services are a professional service and an essential business, the specific language regarding entry into an apartment with a residential tenant to show the apartment to prospective tenants gives me pause.

If you haven’t done so already, immediately implement cleaning and sanitizing recommendations set forth by the Center for Disease Control and Prevention (“CDC”) for all public areas. You may wish to consider closing or restricting access to any non-essential public areas such as community rooms or fitness centers. Although this could theoretically give rise to a claim for rent abatement or that you breached a tenant’s lease, given the circumstances and the forced closure of other businesses, it is a defensible position.

Communicate regularly with current tenants to keep them informed and confident that you are following the recommendations of the CDC and any applicable orders from government entities or agencies.

Unpaid Rent

Consider instituting a consistent deferment or repayment plan for tenants who contact you and inform you they may not be able to make rental payments due to a COVID-19 related layoff or job loss.

Mediate Milwaukee has informed us that they will be continuing to perform mediations for free and by phone.

You can continue to issue notices for the non-payment of rent. As you saw in Tristan’s prior blog posts, most counties have restricted eviction actions in some capacity but are still accepting filings. Whether it is ultimately faster to file now and potentially have the case adjourned or to wait until the courts are holding hearings again and then file depends on the exact timing of any adjournments and how the court handles new filings once the court has resumed its normal practice. We have been getting notice that previously scheduled hearings in Milwaukee County are now being adjourned into June.

You should continue to issue notices for non-rent breaches, particularly those related to behavioral issues or conflicts between tenants. As more and more people are going to be home all day, we do expect to see some increases in these issues. Though you ultimately will not be able to proceed with an eviction action for some time, having issued notices will put you in the best position to proceed once you are able to do so.

What if a Tenant has COVID-19?

This one is tricky. This is our current advice. Its probably subject to change as this situation continues to evolve.

1. In general, a tenant is not required to inform his or her landlord if the tenant has tested positive for COVID-19 or has been exposed to it. As a result, landlords should not ask tenants if they have tested positive for COVID-19 or have been exposed to it, or the landlord may be violating privacy laws.

2. However, if a tenant requests that maintenance or staff come into their unit, you can confirm whether there is a anyone in the unit with cold or flu-like symptoms so that your staff can take necessary precautions.

3. If you have a confirmed or suspected case of COVID-19 at your property, you should notify your local public health department immediately for guidance and next steps on communicating with tenants.

4. If you have learned that a tenant is self-isolating/quarantining, you must respect the quarantine and take reasonable steps to respond. It is reasonable to send a notification to your staff that they should not enter the tenant’s unit without a manager’s approval.

5. If you believe that a tenant has tested positive or been exposed to the virus, you should put your pandemic plan into action.

We will continue to update these posts as this situation develops. Please feel free to let us know your thoughts and tips for navigating these new challenges.

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

Landlords Are Allowed, and Even Required, To Provide Answers To A Census Taker About Their Tenants

With the census fast approaching, I have been getting many questions from clients as to whether or not they must provide census workers with information about their tenants.

The short answer to the question is "yes."   If a census taker has attempted to contact and obtain answers to the census questions from your tenant, and been unable to do so, the census taker is allowed to, and in fact is required to, contact the landlord or manager of the rental property to obtain the requested information about your tenant.

Typically, providing personal information about your tenant to a third party is not something that you want to do unless you enjoy being sued ; )  But providing a census worker with the answers to the questions regarding your tenants is one of the few exceptions to this rule.   The Department of Commerce has clearly stated that landlords and property managers of rental property will not be in violation of any privacy laws if they provide the requested information about their tenants to the census taker.  In fact, if a landlord refuses to provide the census worker with the requested information about his/her tenants, s/he may be fined up to $500.

The applicable law is found at Title 13 of the Code of Federal Regulations (CFR), Chapter 7, Subchapter II, Sections 221 and 223.

If you just clicked on the above links and attempted to read the two code sections . . . you are a glutton for punishment. The code sections are difficult to read,yet alone understand, and are full of legalese.  I have attempted to summarize the key parts of code sections for you below.

1.   If a census taker is unable to contact the tenant and obtain the census info from the tenant, then the landlord or manager must assist the census employee in answering the census questions regarding their tenants.

2.   The landlord or manager may ask to see the census workers identification before divulging any information.

3.   The first question that the census worker will ask is whether or not the apartment unit was occupied on April 1, 2020.

4.   If the unit was not occupied by anyone on April 1, 2020, then the census worker's questions for you should be done.

5.   Assuming that the unit was occupied on April 1, 2020, then you should provide the census worker with answers to as many of the census questions as possible.  You are not supposed to guess - if you don't know the answer, just say so.

6.   You are not breaking any privacy laws by answering the census taker's questions about your tenants.

7.   You may be fined up to $500 for failing to provide the census taker with the requested information.

In summary, if the census taker is unable to reach your tenant and/or obtain answers to the questions on the census questionnaire form, then you as the landlord or manager are required to assist the census taker by providing him or her with any information that you know.  Failure to do so may result in a $500 fine.

After you are done answering the census taker's questions about your tenant, you may want to talk to your tenant about how important it is to complete their census questionnaire next time -- in part so that you don't have to spend your limited time, doing your tenant's work for him/her ; )

HUD Issues It's Guidance Memo Regarding How To Evaluate A Tenant/Applicant's Request for An Assistance Animal But Fails to Provide Much Clarity

On January 28, 2020 HUD published its Memorandum/Notice on how best to assess a tenant/applicant’s request to keep an assistance animal as a reasonable accommodation under the Fair Housing Act.

You can find the entire memorandum here.

HUD had been promising for months to publish a notice/memorandum that would provide landlords with some clarity when it came to health care provider letters purchased online to support a tenant’s request to keep an assistance animal.  I know that I was looking forward to HUD’s memo and some much-needed clarity.

Needless to say, I was disappointed, as were other attorneys and commentators that have blogged about HUD’s latest guidance.  The memorandum really does not provide any clarity whatsoever.  While HUD does acknowledge that letters purchased on the internet are not reliable evidence of a disability or a disability-related need for an ESA -- “In HUD’s experience, such documentation from the internet is not, by itself, sufficient to reliably establish that an individual has a non-observable disability or disability-related need to an assistance animal” --- housing providers have known that for years.

In fact, HUD states that it is providing this memo as guidance to help landlords distinguish between a person with a non-obvious disability who has a legitimate need for an assistance animals and a person without a disability, who simply wants to have a pet or avoid the costs and limitations imposed by landlords’ pet policies, such as pet fees or deposits.  But after I finished reading the 19 pages, I did not come across anything new or helpful that helps me or my clients make that distinction.   

Much of the information in the memorandum has been published before and therefore is not new.  Much of the memo quotes from the Joint Statement from DOJ and HUD on Reasonable Accommodations which was published back in 2004.

I encourage everyone to read the entire memo.  Rather than regurgitate everything in the memo I have chosen to select certain passages or language that I found interesting, informative and/or controversial.

1.  FHA complaints concerning the denial of reasonable accommodations and disability access comprise 60% of all FHA complaints.
2. Landlords should not reassess request for reasonable accommodations that were granted prior to the issuance of this HUD guidance memo.
3. HUD’s memo does not expand or alter a landlord’s obligations under the Fair Housing Act (FHA) or HUD’s implementing regulations.
4. Landlords may not deny a RA request on the grounds that the tenant/applicant has not yet provided the information until they have been provided a “reasonable opportunity to do so.”
5. Besides information from a health care provider, the following can be used as confirmation of a disability:(1) A determination of disability from a federal, state or local government agency;(2) Receipt of disability benefits or services; (3) Eligibility for housing assistance or a housing voucher received because of disability.
6. Some types of impairments will, in virtually all cases, be found to result in a determination of a disability such as deafness, blindness, intellectual disabilities, partially or completely missing limbs or mobility impairments requiring the use of a wheelchair, autism, cancer, cerebral palsy, diabetes, epilepsy, muscular dystrophy, bipolar disorder, post-traumatic stress disorder, traumatic brain injury, obsessive compulsive disorder, and schizophrenia.
7. If the tenant is requesting a unique animal that is not commonly kept in households, such as reptiles (not turtles), barnyard animals, monkeys, kangaroos, and other non-domesticated animals, the tenant has the substantial burden of demonstrating a disability-related therapeutic need for the specific animal or the specific type of animal.
8. As a best practice, the landlord should make a determination as to whether or not to grant the tenant/applicant’s RA request generally within 10 days of receiving the documentation.
9. A landlord may not charge a fee for processing a RA request.
10. Before denying a RA request, the landlord is encouraged to engage in a good-faith dialogue with the tenant/applicant which is referred to as the “interactive process.”
11. Landlords may not require a health care professional to use a specific form, to provide notarized statements, to make statements under penalty of perjury, or to provide an individual diagnosis or other detailed information about a person’s physical or mental impairment.
12. When it comes to unique animals (i.e. those not commonly kept in households) it may be helpful for the patient/tenant to ask their health care professions to provide information related to (1) the date of the last consultation with the patient/tenant, (2) any unique circumstances justifying the patient/tenant’s need for the particular animal or type of animal, (3) whether or not the health care professional has reliable information about this specific animal or whether they specifically recommend this type of animal.

There you have it.  Everything is much clearer now isn’t it?!?

Wisconsin Landlords Cannot Require a Tenant to Pay A Non-Refundable Pet Deposit

Wisconsin law does not allow a landlord to charge a tenant a non-refundable pet deposit.

I know of some landlords that require tenants with a pet to post both a non-refundable pet deposit (to cover the cost of cleaning the carpets to remove dander) and a refundable pet deposit (to cover any damage caused by the pet).  Unfortunately, non-refundable pet deposits are not allowed in Wisconsin because they meet the definition of a security deposit and all security deposits are refundable.

Reasoning:

ATCP 134’s definition of a “security deposit” states that a security deposit “means the total of all payments and deposits given by a tenant to the landlord as security for the performance of the tenant’s obligations, and includes all rent payments in excess of 1 month’s prepaid rent.” Wis. Admin. Code ch. ATCP 134.02(11).

What is a pet deposit if not a “deposit given by a tenant to the landlord as security for the performance of the tenant’s obligations?”  The tenant’s obligation under this scenario would be to not allow his or her pet to damage the rental unit.  So legally speaking, a pet deposit is the same as a security deposit.

A Wisconsin landlord may only keep a security deposit, or a portion of a security deposit, for the amounts reasonably necessary to pay for:

1. Tenant damage, waste or neglect of the premises;
2. Unpaid rent which the tenant is legally responsible for;
3. Payment that tenant owes under the rental agreement for utility services provided by the landlord but not included in rent;
4. Payment for the direct utility service provided by a government-owned utility;
5. Unpaid monthly municipal permit fee assessed against the tenant by a local unit of government;
6. Any other item set for in the NSRP.

Wis. Stat. § 704.28 (1) and Wis. Admin. Code ch. ATCP 134.06(3).

So, if there is no damage, waste or neglect caused by the tenant’s pet, then a Landlord may not withhold a security deposit or a portion of a security deposit.  Charging a pet deposit to cover the cost of routine carpet cleaning, absent damage to the carpet, is not allowed.  A non-refundable security deposit is not allowed in Wisconsin and therefore neither is a non-refundable pet deposit.

So if you currently require tenants to post non-refundable pet deposits, you need to be aware that under Wisconsin law, that deposit will be considered to be a security deposit and is subject to all of the security deposit requirements, including the requirement to send a written itemization of any withholdings from the deposit. 

If you do not treat your non-refundable pet deposits as a security deposit and fail to follow the security deposit withholding laws and rules, then you run the potential risk of being sued by your tenant for making an improper security deposit withholding and potentially being liable for double damages and the tenant’s attorney’s fees. Ouch.

The Next LANDLORD BOOT CAMP will be held on April 25, 2020.

The 21st Landlord Boot Camp will be held on Saturday, April 25, 2020.

To sign up now you can go to www.LandlordBootCamp2020.com or you can call the AASEW directly at (414) 276-7378 or email Joyce at joannajoyceb@gmail.com

Below are more details about the event.

Thanks

T

The Apartment Association of Southeastern Wisconsin's Landlord Boot Camp can help you navigate these treacherous waters and learn how to run your properties with less hassles.

WHO: Taught by Attorney Tristan R. Pettit of Petrie + Pettit S.C.

Attorney Tristan Pettit has given similar landlord-tenant law seminars to fellow attorneys, landlords, and property management organizations that charge their members $400-$500. This is your opportunity to learn all of the same information at a huge discount through the Apartment Association.

WHEN: April 25, 2020 from 8:30 am - 5 pm. Q+A from 5 pm - 6 pm

Registration opens at 7:10 AM. The seminar will run from 8:30 am to 5 pm with a half hour lunch break. There will be a one hour question and answer session afterwards, ending promptly at 6 pm. Many will find the Q&A invaluable, therefore you may wish to make arrangements to stay until 6 pm.

WHERE: Four Points by Sheraton at 5311 S. Howell Ave in Milwaukee.

INCLUDED:

• 100 plus page manual to help you put what you learn into practice.

• LUNCH

PRICE:

• AASEW Members $189
• Non-Members $329
• Boot Camp + 12 month AASEW membership - $330

Wisconsin landlord-tenant laws are constantly changing. To help keep you up to date those who attended in the past three years receive a $40 discount.

What you will learn at the Spring 2020 Landlord Boot Camp:

Landlord Boot Camp covers everything that you need to know about residential Landlord Tenant law in Wisconsin, as amended in March 2012 by Act 143, in March 2014 and again in March 2016 with the passage of ACT 176, and again in April of 2018 with Act 317 including:

1. How to properly screen prospective tenants.

2. How to draft written screening criteria to assist you in the selection process.

3. How to comply with both federal and state Fair Housing laws including how to comply with “reasonable modifications" and “reasonable accommodations" requests.

4. How to legally reject an applicant.

5. What rental documents you should be using.

6. Best practices to avoid violating ATCP 134 and being sued by your tenant for double damages and actual attorney's fees.

7. How to properly draft a security deposit itemization letter.

8. How to avoid DATCP investigations and Civil Investigative Demands (CID's).

9. How to draft a good Notice for Breach so that it will not be defeated in court.

10. When you should use a 5 day notice, 14 day notice, 28 day notice.

11. The best way to serve a notice terminating tenancy.

12. Learn the "Ins and Outs" of the judicial eviction process.

13. How to prepare for your eviction trial in court.

14. Whether or not it is worth it to pursue a money judgment against your tenant.

15. Learn about the two types of garnishment action

GUEST POST: Short-Term Rentals Are More Complex Than You Think. Are They Right for You?

This is a guest post by Atty. Jennifer M. Hayden of Petrie + Pettit S.C.

With the rise of short-term rental (STR) sites like Airbnb, Homeaway, and VRBO, you may be wondering if turning your home or rental property into a short-term rental is the way to go.  There are many benefits to short-term rentals including an increased income stream and as a result, many are considering making the switch.  However, before jumping on board the STR bandwagon, be aware that you will need to address issues such as licensing, local ordinances, taxes, insurance and more if you want to rent your property for the short-term.

Licensing

According to the Wisconsin Department of Agriculture, Trade and Consumer Protection (“DACTP”) if you are charging rent to a tourist or transient occupant for any amount of time then you are operating a tourist rooming house” and are required to purchase a license through the state.  Wisconsin defines a  “tourist or transient occupant” as a person who travels to a location away from his or her permanent address for a short period of time for vacation, pleasure, recreation, culture, business or employment. 

Your local municipality (village, town, city or county) may also require you to be licensed through the municipality as well and may have different code requirements for properties engaged in commercial activity. 

Local Ordinances

Cities, villages, towns and counties may impose additional regulations on your short-term rental such as limiting the total number of days that the property can be rented, prohibiting rentals for less than a certain number of days, requiring registration fees, imposing inspections or nuisance regulations, or limiting the number of occupants based on bedrooms.

Taxes

With limited exceptions, you will need a seller’s permit from the Wisconsin Department of Revenue if you are operating a short-term rental.  You will need to collect and remit state sales and use taxes and, additionally, any applicable county sales tax, municipal room tax, local exposition tax, special district tax or premier resort area tax. 

Insurance Coverage

Even if you are planning on renting your home out for only a single occasion, you should check with your insurance company in advance regarding coverage.  Once you rent all or part of your home out, most insurance companies will consider this a business use and your general homeowner’s policy will likely deny coverage for any incident related to the business use.  Without insurance coverage, liability may fall to you, personally. 

Short-Term Lodging Marketplaces

If you want to market your short-term rental you will most likely use a short-term lodging marketplace.  A lodging marketplace provides a platform through which an unaffiliated third party offers to rent your short-term rental to a person and collects the rent from that person.  If you list your property for rent through a lodging marketplace that marketplace is required to register with the Department of Revenue for a license and is responsible for collecting state-imposed taxes. 

Additional Requirements

You may be prohibited from renting your property on a short-term basis.  Your Condominium Association Bylaws, Homeowner’s Association, Subdivision Covenants, Tenant’s Organization, or Lease may prohibit short-term rentals entirely or impose additional requirements. 

While short-term rentals offer many benefits, there are many issues that must be addressed prior to listing your STR on Airbnb, Homeaway, or VRBO.  If you would like to discuss whether short-term rentals are right for you, please give us a call.