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No Hidden Late Fees: Wisconsin Prohibits Residential Landlords from Charging Fees and Penalties for Late Rent Payment during the COVID-19 Pandemic

The coronavirus pandemic has led to the vast majority of states across America issuing orders affecting the rights of landlords, tenants, and financial institutions. Here in Wisconsin, Governor Evers issued Emergency Order #15, placing a temporary ban on eviction actions from March 27, 2020 through May 26, 2020, a period of 60 days. As a result, landlords cannot file any new eviction actions during this 60-day period, and cannot continue with any eviction actions that were already filed, but not yet resolved, when Emergency Order #15 was enacted over a month ago.

Emergency Rule EmR2002.

More recently, the Wisconsin Department of Agriculture, Trade and Consumer Protection adopted Emergency Rule EmR2002 (temporarily creating Wis. Admin. Code s. ATCP 134.09 (8) (d)), prohibiting landlords from charging fees or penalties for any missed rent payment or any late rent payment both during the public health emergency which is set to expire May 26, 2020, and 90 days following the public health emergency (“Emergency Rule”). Though the Emergency Rule was just recently announced, the ban prohibiting landlords from charging fees or penalties for late or unpaid rent takes effect, retroactively, back to April 25th. As such, landlords are still permitted to charge fees or penalties for any late or missed rent payments prior to April 25th when the Emergency Rule took effect.

The Emergency Order Only Applies to Residential Landlords and Tenants.

Importantly, the Emergency Rule modifies Wisconsin Administrative Code Chapter ATCP 134, which relates to Residential Rental Practices. As such, the rule only applies to residential landlords. That said, it is imperative that residential landlords not only follow the Emergency Rule while it remains in effect, but also the other regulations set forth in ATCP 134. Failure to do so would open you up to potential litigation, as an injured tenant may recover double damages along with costs and reasonable attorneys’ fees. See Wis. Stat. § 100.20(5).

The Pending Lawsuit Against Gov. Evers’ Safer at Home Order.

The Emergency Rule is unlikely to be affected by the outcome of the pending lawsuit challenging the extension of the Safer at Home mandate because it expires at the earliest of the following three times: (1) 150 days after the emergency rule is published in the official state newspaper; (2) 90 days after the expiration of the public health emergency; or (3) 90 days after rescission of the proclamation of the public health emergency. Accordingly, with the Wisconsin Supreme Court set to issue a ruling on the lawsuit filed against Governor Evers’ Safer at Home Order, the Emergency Rule was drafted to remain in effect regardless of the outcome of that case. Should the Supreme Court strike down Governor Evers’ extension of the Safer at Home Order, landlords must remain conscientious of the Emergency Rule, as it would still remain in effect 90 days after the rescission of the Safer at Home Order.

Rent Is Still Due.

As with the order placing a temporary ban on eviction actions, the Emergency Rule does not relieve an individual of his or her obligation to make rent payments. Nonetheless, the Emergency Rule provides an additional form of temporary relief to the tenant, while placing yet another restriction upon landlords.

As the coronavirus recedes, and the Safer at Home Order and other Emergency Orders expire, landlords with tenants who have fallen behind on their rent obligations will need to have a plan in place and at the ready. 

© 2020 Davis|Kuelthau, s.c. All Rights ReservedNational Law Review, Volume X, Number 128

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About this Author

Blake Nold Litigation Attorney Davis Kuelthau Law Firm
Associate

Blake Nold is a member of the firm’s Litigation Practice in Davis|Kuelthau’s Milwaukee office.

Blake earned both his Bachelor of Arts and Master of Business Administration degrees from Assumption College, where he was a student-athlete on the Football team. He graduated from Marquette University Law School cum laude, and served as the Senior Articles Editor of the Marquette Law Review. Blake won the Silver Quill Award for the outstanding student article published in the Marquette Law Review with his article “Codify This: Exculpatory Contracts in Wisconsin...

414.225.1441
Mike van Someren Real Estate Attorney  Davis Kuelthau Law FIrm
Associate

Mike is a member of the real estate, commercial finance, and corporate practice groups at Davis and Kuelthau. He regularly counsels clients in all aspects of commercial real estate transactions, including providing advice on entity selection and formation, drafting purchase and sale agreements, offers to purchase, performing due diligence, and negotiating and drafting agreements with municipalities and other stakeholders. He has extensive experience counseling clients on land use and zoning matters, such as drafting easements and restrictive covenants, and providing advice regarding project requirements under local zoning laws. Mike also represents landlords and tenants in the drafting and negotiation of retail, healthcare, industrial and office lease agreements.

In addition to his commercial real estate work, Mike advises clients on corporate matters. He focuses specifically on corporate governance issues, business to business contract review and negotiation and business to consumer contract drafting. Mike represents clients in merger and acquisition transactions, negotiating and drafting stock purchase and asset purchase agreements and performing due diligence research.

Representing clients on commercial finance transactions, Mike addresses their capital needs, including structuring joint ventures, raising cash from investors through the sale of securities in private placements, as well as tax credit financing when available. Mike also represents borrowers and lenders in the negotiation and drafting of loan documents.

414.225.1433