The CARES Act's Effect on Evictions in Wisconsin - Tenant Resource Center - [TRC]



The CARES Act's Effect on Evictions in Wisconsin

Hiya folks,

As all of us at Tenant Resource Center continue to adapt to life and work under quarantine and the various social distancing protocols issued by local, state, and federal authorities, we want to send a heartfelt thanks to all of the individuals, groups, and other organizations working to assist those affected by COVID-19. We truly appreciate being a part of such a supportive community and are thankful to be able to play a role, however small, in responding to the pandemic in a way that affirms our mission of housing justice for all. We hope that this page will help further that mission while also providing information that proves valuable to all parties involved in rental housing in Wisconsin.

Today's topic is the Coronavirus Aid, Relief, and Economic Security Act, or CARES Act, signed into law by President Trump on March 27th, 2020. This act is designed to address the economic fallout resulting from the COVID-19 pandemic here in the United States. While the entire bill is several hundred pages long, the section that caught our attention is Section 4024, entitled "Temporary moratorium on eviction filings". What follows is our explanation of this section, what we think it means for tenants, landlords, and service providers in Wisconsin, additional resources for folks looking to learn more about their rights and responsibilities as they pertain to the CARES Act, and tenant/landlord law more generally here in Wisconsin. 

As always, we would like to note that we are not attorneys and nothing contained in this post should be considered or taken as legal advice. We are simply providing resources, offering options, and discussing the CARES Act in the context of existing state law and common practices. If you want a professional legal opinion on how your situation is affected by this piece of legislation, we highly recommend contacting an attorney here in Wisconsin who has experience in housing law. See here for a list of several attorneys who may be able to help. With that said, let's dive in!


 

The CARES Act, Section 4024: Temporary moratorium on eviction filings

It may be a cliché, but when it comes to folks asserting their rights in tenant/landlord interactions, knowledge is power. Knowing what rights you have can make all the difference when faced with a rental housing crisis, and the conditions created by COVID-19 have only served to emphasize that fact in the past several weeks. Click here for a more comprehensive overview of how several executive orders issued by Wisconsin Governor Tony Evers have affected areas of tenant/landlord law, specifically evictions and landlord entry, here in Wisconsin.

Here is the text of Section 4024 of the CARES Act.

The Facts

  1. The CARES Act includes an eviction moratorium only for "covered properties", not all rentals. See below for more on covered properties.
  2. The eviction moratorium in the CARES Act began the day the law was enacted, March 27th, 2020, and will remain in effect for 120 days. It will expire on July 25th, 2020, unless Congress extends it with additional legislation.
  3. The CARES Act only prohibits landlords from serving eviction notices and/or initiating eviction actions (filling in court) for nonpayment of rent, or other fees, penalties, or other charges related to nonpayment of rent. 
  4. If the tenant lives in a "covered property", their landlord cannot "charge fees, penalties, or other charges to the tenant related to such nonpayment of rent." In other words, landlords cannot assess late fees if their tenants are covered by the CARES Act's eviction moratorium.
  5. Once the federal eviction moratorium expires on July 25th, 2020, landlords will have the right to serve eviction notices again, but "may not require the tenant to vacate the covered dwelling unit before the date that is 30 days after the date on which the [landlord] provides the tenant with a notice to vacate". In other words, landlords will need to give tenants at least 30 days to correct lease violations or vacate before filing in court. If landlords of covered properties must serve their tenants eviction notices for nonpayment of rent, those notices must provide tenants with at least 30 days to either cure the nonpayment or quit the premises. 
  6. The CARES Act defines "covered property" as any property that participates in a covered housing program, as defined by 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.
  7. The CARES Act does not cancel rental payments or create any kind of rent forgiveness program. It is just a temporary ban on most evictions.

For Tenants

 

Covered Properties

The first question tenants ask about the CARES Act is, "How do I know if I am protected by the federal moratorium in the CARES Act?"

The short answer: It's complicated. Common types of covered properties include housing that participates in Section 8, Section 42, and other programs where a tenant's rent is determined by their income or they live in an "income-restricted" unit, meaning that they needed to make under a certain amount of money a year to qualify for the unit. It is important to note that just because you do not receive rental assistance or live in an income-restricted unit, that does not necessarily mean that you do not live in a property that is covered by the CARES Acts' moratorium, as your landlord may still participate in one of these programs or have a federally-backed mortgage.

The long answer: If you are a tenant, it may make sense to start by asking your landlord if they A) know about the federal moratorium and B) know if any of their properties are covered by it. However, the qualifications for this are complex enough that landlords may not even be aware that their properties are covered by the federal moratorium. Unfortunately, the federal government has not released a comprehensive list of all properties covered by the CARES Act. To make matters worse, the regulations governing these covered properties are executed by several different federal agencies, including Housing and Urban Development, the U.S. Department of Agriculture, the Internal Revenue Service, and two government sponsored enterprises (GSEs), Fannie Mae and Freddie Mac, that deal with mortgage guarantees.

Some of the data about covered properties are relatively easy to access, some require registering an account on a governmental or third party website, and some appear to be available only to property owners themselves. There are several resources under development right now so folks can determine whether they are protected by the CARES Act's eviction moratorium. Tenant Resource Center is also in the process of creating a database of local properties, so people in our service area (currently just Dane County, Wisconsin) can easily see if they qualify for protections under the CARES Act. Check back soon to see if your address is on the list! In the meantime, here are links to some of the online tools to look up your address and see if you qualify:

1) National Low Income Housing Coalition's tool: https://nlihc.org/federal-moratoriums

2) ProPublica's tool: https://projects.propublica.org/covid-evictions/

2) Augrented's tool: https://augrented.com/cares/

3) Freddie Mac's tool: https://myhome.freddiemac.com/renting/lookup.html

4) Fannie Mae's tool: https://www.knowyouroptions.com/rentersresourcefinder

Sometimes, a tenant's actual address may not be the address listed in these databases. If you live in a multifamily building and/or in an apartment complex, try looking up the address that shows up when you Google the name of your complex. If you need help navigating these tools, please contact Tenant Resource Center at 608-257-0006, and one of our housing counselors will attempt to help you find out if you are covered by the CARES Act.

Consequences and Enforcement

The next question tenants ask about the CARES Act is, "What happens if I think I live in a covered property and my landlord gives me an eviction notice?"

The short answer: Document it. Save it. Don't ignore it. Respond to it.

The long answer: As we said before, some landlords may not even know about the federal moratorium, let alone whether or not their property is covered by it. If you receive an eviction notice for non-payment of rent and/or late fees at any point between May 27th, 2020 and July 25th, 2020, document the notice, either by keeping the notice and making copies of it, or by taking a picture of the notice and sending it to yourself via email. It is always a good idea to keep extra copies of things like eviction notices, in case you need to prove when they were served and other things like that.

Next, you could use one of the tools listed above to see if your address is covered by the moratorium. If it is, respond to the eviction notice in writing, informing the landlord that you believe that the notice may be invalid because you are protected under the CARES Act. If you are covered, hopefully the landlord will respond to you, letting you know to disregard the notice. If this doesn't happen and the landlord proceeds with the eviction process, it is still a good idea to take the matter seriously and show up to the hearing, sometimes called a joinder conference, once the courts reopen later in the year. For more information about the eviction process, see here.

It is possible that a judge or court commissioner would not be willing to hear an eviction case if the landlord improperly served the tenant an eviction notice for nonpayment of rent during the federal moratorium and the tenant's unit is a covered property, as defined by the CARES Act. A tenant could raise this fact during their hearing or trial and see how the courts interpret this situation. Since we are not a law firm and cannot give legal advice, we can't say for certain what would happen in that case. We encourage tenants in that position to contact an attorney if they can.


For Landlords

Since the pandemic began, we have heard from several landlords with questions about the CARES Act and federal relief more broadly. If landlords are unsure of whether or not their properties are included as "covered properties" under the CARES Act's eviction moratorium, a good place to start would be searching one of the databases listed above. Also, it would be wise to determine if any of your tenants participate in a federal assistance program such as Section 8 or Section 42, or if your mortgage loan or multifamily mortgage loan is federally backed. If your property shows up in one of these databases or if you can verify that your tenants participate in a federal assistance program or you have a federally backed mortgage, you are subject to the provisions in Section 4024 of the CARES Act. 

One question from landlords is, "How do I determine if my mortgage is federally backed?"

The short answer: Ask your mortgage servicer and/or look it up online.

The long answer: The Consumer Financial Protection Bureau (CFPB) has a page on this subject, see here: https://www.consumerfinance.gov/ask-cfpb/how-can-i-tell-who-owns-my-mortgage-en-214/. Start by calling or emailing your mortgage servicer; they are obliged to tell you, to the best of their knowledge, the contact information of who owns your mortgage. The CFPB page contains a link to download a letter with sample language for making that request of information. Since the CARES Act's eviction moratorium cares (no pun intended) about federally backed mortgages, it may be useful to use the online look-up tools made available by Fannie Mae and Freddie Mac, the two government-sponsored enterprises (GSES) that back mortgages. See here for Fannie Mae's: https://www.knowyouroptions.com/loanlookup and here for Freddie Mac's: https://ww3.freddiemac.com/loanlookup/.

Another question from landlords is, "What can I do about rent payments?"

The short answer: Try to work with your tenants to reach a mutually agreeable solution.

The long answer: Many tenants have been directly or indirectly affected by the pandemic. For many, that means a temporary or permanent layoff, for others, a deceased friend or family member. These are trying times, especially for folks who are more economically vulnerable and don't have the ability to draw on savings, investment accounts, or rely on temporary financial assistance from friends or family. Most tenants may want to pay the entirety of their rent, but many simply do not have the financial means of doing so at this time. One potential route landlords could pursue is setting up payment systems wherein tenants pay what they can for the duration of the crisis, in part to prevent the accrual of a massive back balance, but more importantly as a show of good faith to landlords, many of whom may also be feeling the financial strain of the pandemic. Rent goes to mortgage payments, property taxes, employees' wages, necessary upkeep and repairs, and many other things, and not having the ability to fulfill those obligations has consequences for landlords. Everyone has been impacted by the coronavirus in some way, so keeping that in mind while negotiating around something as essential and fundamental as housing will probably lead to better outcomes for all parties involved. An additional resource that may help tenants and landlords reach these solutions is Tenant Resource Center's mediation program, designed to help prevent landlords from needed to initiate the eviction process in the first place. See here for more information about this program: http://tenantresourcecenter.org/mediation

A final question from landlords is, "What relief is there for rental property owners and management companies in all this?"

The short answer: It's complicated. Just like with tenant relief, there are many pieces of legislation, executive orders, and resources from various public and nonprofit agencies that can be cobbled together to assist landlords impacted by COVID-19.

The long answer: An additional benefit to checking to see if your property is covered by the federal eviction moratorium is that, if it turns out that your mortgage is federally backed, Fannie Mae and Freddie Mac have announced moratoria on foreclosures as well, under Section 4022 of the CARES Act. See this page from the federal Consumer Financial Protection Bureau for more information about this: https://www.consumerfinance.gov/about-us/blog/guide-coronavirus-mortgage-relief-options/

In addition to foreclosure forbearance, some landlords may qualify for assistance under the Payroll Protection Program to help pay the wages of employees who would otherwise be laid off, either temporarily or permanently. See the Small Business Administration's website for more details: https://www.sba.gov/funding-programs/loans/coronavirus-relief-options/paycheck-protection-program.

Real estate attorneys will likely be another good resource that landlords can take advantage of. If you do not already have a relationship with one, check out the Wisconsin State Bar's attorney referral service, here: https://www.wisbar.org/Pages/BasicLawyerSearch.aspx.

 

Final Thoughts 

It's becoming more and more obvious that the consequences of the COVID-19 pandemic are not going to be contained to just the public health effects of the virus. The post-coronavirus economic landscape is going to be a rough one, regardless of your relationship to the rental housing world. Hopefully, folks will be able to take advantage of everything that they can to weather this storm and this one, temporary, limited-case moratorium will provide some relief for those who need it. So please, take the time to look and see if you qualify for the protections under this federal moratorium, whether you are a landlord or a tenant, and do what you can to let others know about it too. It could make a real difference for someone. 

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