Governor Evers and U.S. Congress Bar Most Evictions and Foreclosures to Help Combat COVID-19
This article was edited on 5/13/2020 to include a clarification from the Governor’s office regarding the right of landlords to evict a tenant who holds over after expiration of a lease.
Governor Ever’s Emergency Order #15 (the “Order”) broadly prohibits landlords from serving a notice terminating tenancy for any reason or for filing a lawsuit for eviction UNLESS the eviction is necessary to prevent “an imminent threat of serious physical harm to another person.” No evictions are allowed and no notices terminating tenancy can be issued for any other breach of lease such as failure to pay rent, noise issues, or failure to maintain the unit. However, Governor Evers’ office confirmed to us that landlords may still evict for a tenant’s failure to vacate at the end of a lease. Likewise, landlords are prohibited from delivering a writ of restitution to the sheriff, and sheriffs are prohibited from enforcing a writ, except where failure to evict will “result in an imminent threat of serious physical harm to another person,” or for a holdover tenant who was evicted.
The Order likewise broadly prohibits foreclosures from proceeding. Mortgagees cannot commence a foreclosure action or move forward with a sheriff’s sale of an already foreclosed upon mortgage. In fact, even scheduling a sheriff’s sale is prohibited, regardless how far out the sale would be. The Order further prohibits sheriffs from conducting sheriff’s sales, acting on any order of foreclosure or executing a writ of assistance in connection with a foreclosure. The right to foreclose on abandoned properties is not affected by the Order.
Of small comfort, the Order states it does not relieve tenants or mortgagors of the obligations under their mortgages and tenancies. Thus, once the Order is lifted, tenants and mortgagors who ignored their obligations may face evictions and foreclosures due to those failures.
The Federal government likewise took steps to prevent foreclosures and evictions. The CARES Act, among other protections it offers, prohibits servicers of federally-backed mortgage loans from initiating a foreclosure process, moving forward with a foreclosure judgment or order of sale, or from moving forward with foreclosure related evictions or foreclosure sales for at least 60 days from March 18, 2020. This prohibition on foreclosures applies to residential real property 1 – 4 family homes that are insured by the Federal Housing Administration or the Nation Housing Act, that are guaranteed under parts of the Housing and Community Development Act, or that are guaranteed or insured by the Departments of Agriculture or Veterans Affairs, as well as loans purchased or securitized by Fannie Mae or Freddie Mac. This prohibition does not apply to vacant or abandoned properties.
The CARES Act also prohibits evictions for non-payment of rent for any dwelling occupied by a tenant where the property participates in many types of federally assisted housing. This includes housing programs covered by the Violence Against Women Act, the rural housing voucher program of the Housing Act, or that has a federally backed mortgage loan or multifamily mortgage loan. In other words, it will broadly affect all properties insured, guaranteed, supplemented, protected or assisted by those programs, HUD, Fannie Mae or Freddie Mac. The federal moratorium will last for 120 days beginning on the date the Act is enacted, and prohibits the landlord from filing for eviction for nonpayment of rend or other fees or charges. It also broadly prohibits landlords from issuing a notice to vacate the property for the same 120 day period, and requires the notice, if issued, to be at least a 30 day notice. It is not clear what these notice requirements and restrictions apply to as they do not fit within the usual framework of Wisconsin landlord-tenant law.
The CARES Act importantly does not forbid evictions for any reason OTHER than nonpayment of rent. However, though eviction may be allowed by the CARES Act, the Order still more broadly restricts evictions in Wisconsin.
Landlords with tenants who choose to destroy their leased premises or who chose to violate their lease obligations will be left with little room to protect their rights during the period the Order is in effect. If faced with such a problem tenant, it is important to consult an attorney regarding what steps are allowed to protect the landlord during the period the Order is effective.
DISCLAIMER: The information provided is for general informational purposes only. This post is not updated to account for changes in the law and should not be considered tax or legal advice. This article is not intended to create an attorney-client relationship. You should consult with legal and/or financial advisors for legal and tax advice tailored to your specific circumstances.