How Do The Recent Covid-19 Orders Impact Landlords and Property Managers?

Landlords and property managers, as with nearly everyone else in our society, are struggling to find clarity under the rapid changes wrought by COVID-19. In Wisconsin, there seem to be more questions than answers, especially in the wake of the Governor’s recent Safer at Home Order (the “Order”). Although the Order has received many pages of press coverage, lesser-known orders from local counties and the Wisconsin Supreme Court also have a significant impact on how landlords and property managers should go about protecting their investments.

1. How does the Order impact landlords and property managers?

First—the good news. Landlords and property managers can still manage their properties, albeit at a reduced capacity.

Under the Order, landlords and property managers are specifically authorized to continue entering tenant spaces in order to conduct emergency maintenance and repairs. This portion of the Order is consistent with Chapter 704.05(2) of the Wisconsin Statutes, which allows landlords and property managers to enter tenant leased spaces without prior notice in situations where entry is necessary to “preserve or protect” the premises. Building management and maintenance is also included in the Order’s definition of “essential infrastructure.

Although landlords and property managers will need to consider entry on a case-by-case basis, the following are some do’s and don’ts as we navigate the near-constant changes over the past few weeks:

As is true with most cases, the “don’ts” can be worked around; however, we recommend that the tenant’s consent to enter units be obtained using a written form. Please contact a member of the Landlord/Tenant Team at the Law Firm of Conway, Olejniczak & Jerry, S.C. for further information on how best to navigate these issues.

2. What can landlords and property managers do if tenants start falling behind with rent payments or breach other lease provisions?

During the past week, many news outlets have sensationalized the Department of Housing and Urban Development’s “moratorium” on foreclosures and evictions as a result of COVID-19. Those news outlets often fail to report the “fine print” of the moratorium in that it only applies to FHA-insured, single-family mortgages. If your mortgage is not through a federally issued mortgagor, such as Fannie Mae or Freddie Mac, the federal moratorium should not apply to you. Likewise, the federal moratorium should not apply to multi-family units.

On March 27, 2020, Governor Evers issued another emergency order placing a temporary ban on evictions for a period of 60 days. Here is what this means for landlords and property managers:

• Landlords are temporarily prohibited from serving notices terminating tenancy (i.e. 5-day notices) based on a tenant’s failure to pay rent.

• Landlords may terminate tenancies for non-payment breach—violations of house rules and other non-standard rental provisions. However, those notices must be accompanied with detailed affidavits that a failure to terminate the tenancy and commence eviction proceedings creates an imminent threat of serious physical harm to another person.

What does this mean for landlords and property managers whose tenants have fallen behind on rent, will likely be falling behind starting in April, or whose tenants are violating various “house rules” and other provisions not dealing with rent?

For non-payment, it means that landlords are temporarily prohibited from issuing 5-day and 14-day notices for non-payment of rent.

For lease breaches other than for non-payment, the landlord must first make a determination that, in the absence of the termination notice, allowing this tenant to continue living in the unit threatens the physical safety of one or more other tenants (either in the same unit or in another unit).

For evictions that have already gone to judgment, the Governor’s order stays service of writs of restitution unless those writs are accompanied by the physical-threat affidavits.

As long as the stay remains in place, landlords should not issue any formal eviction notices in all but the most extreme of safety circumstances. However, landlords should continue to be diligent with their accounting. Likewise, the Governor’s order does not prohibit landlords and property managers from sending friendly reminders to their tenants when (1) payments start falling behind or (2) rules are not being followed. Written reminder letters to tenants will help to ensure that tenants remain informed about the expectations and will help to streamline terminations once the moratoriums are lifted.

Although we are in uncharted waters with the sorts of mass closures and myriad orders that have been issued in recent weeks, we do know that things will eventually reopen and hearings will move forward. It is important that landlords be diligent throughout this hopefully-brief period.

For more information, please contact a member of the Landlord Tenant Team.

Written By:
Attorney Joshua M. Koch