COVID-19 Update: Late Fees - Tenant Resource Center - [TRC]



COVID-19 Update: Late Fees Prohibited until September 21, 2020

Hiya folks,

It seems like each time I'm getting ready to wrap up for the weekend, we get another update about how the state of Wisconsin is responding to COVID-19's impact on rental housing here in Wisconsin. Last week's surprise came in the form of a new addition to the Department of Agriculture, Trade, and Consumer Protection's (DATCP) regulations on tenant/landlord law, Chapter 134: Residential Rental Practices. DATCP is a governmental agency charged with regulating agriculture, trade, and commercial activity in Wisconsin. One of the areas DATCP works in is regulating the conduct of providers of rental housing (landlords) to protect the rights of consumers of rental housing (tenants). On Friday, April 25th, 2020, DATCP finalized a temporary addition to ATCP 134.09: Prohibited Practices, that prohibits landlords from charging late fees for late payment of rent and/or nonpayment of rent until September 21st, 2020. 

What follows is a brief post describing the language of the new regulation, where to find the regulation, and what we think it means for tenant/landlord law here in Wisconsin. 

As always, we are not attorneys and nothing in this post should be taken as legal advice. We are simply providing information about what this new law says, offering options, and discussing this new regulation in the context of existing state law and common practices. If you would like to get the opinion and analysis of an attorney, please check out our attorney referral list, here. 


 

ATCP 134.09(8)(d)

First, the text of the new regulation:

Section 1ATCP 134.09 (8) (d) is created to read:
(d) During an emergency declared pursuant to Wis. Stat. s. 323.10 and for the 90 days following the expiration of the emergency, no landlord may charge any tenant a fee or penalty for nonpayment of rent or late payment of rent.
Section 2. Effective date: This rule takes effect following publication as provided in Wis. Stat. s. 227.24 (1) (c).

 

The regulation modification, entitled Emergency Rule 2002 (EmR2002 for short), was published on April 25th, 2020, and it appears that the rules change went into effect on that same day. The listed expiration date on DATCP's website is September 21st, 2020. 

Here is the state's page on Emergency Rule EmR2002, with all related documents: https://docs.legis.wisconsin.gov/code/emergency_rules/all/emr2002.

And here is the rule text, which modifies ATCP 134: https://docs.legis.wisconsin.gov/code/register/2020/772B/register/emr/emr2002_rule_text/emr2002_rule_text.

 

What Does It Mean?

ATCP Chapter 134 regulates the behavior of landlords towards tenants and Section 09 of the chapter, entitled Prohibited Practices, provides a list of activities and business practices landlords are not allowed to engage in under state law, ranging from renting condemned properties, retaliating against tenants for exercising their rights, and confiscating personal property. ATCP 134.09(8), entitled Late Rent Fees and Penalties, governs when landlords can charge tenants late fees. A brief review of this subsection reveals that landlords can:

(a) only charge late fees if the late fees are authorized in the lease agreement

(b)must first apply any money they receive from a tenant to currently due rent, and then to any other charges, such as late fees, that the tenant still owes, and 

(c) cannot charge tenants late fees for late payment of late fees themselves.

EmR2002 adds a part (d) to that subsection so that it now also prohibits landlords from charging tenants late fees for late payment or nonpayment of rent during a statewide declared emergency and for 90 days following the end of that emergency. 

In practice, it looks like this will mean that a landlord cannot charge a tenant a late fee if the tenant is late on their rent in May, June, July, August, or September of 2020. Any currently unpaid late fees (say from late payment of March's rent or April's rent) do not appear to be affected by this order, nor do late fees assessed after the order expires. This will likely mean that if a tenant is late on their October 2020 rent payment, their landlord will be able charge them a late fee, assuming the tenant's lease authorizes the landlord to do so. 

Click here for DATCP's press release on the Emergency Rule.

 

 

 

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