Just a Landlord

Featuring: How To Navigate Eviction Moratoriums

We are excited to announce Attorney Tristan Pettit’s Landlord Boot Camp will be held on November 14th, 2020. 

Due to recent changes impacting the CDC National Eviction Moratorium, we delayed the event to include the most timely information on navigating the current Moratoriums. 

The Saturday, November 14th event will be held as a live-streamed webinar from 8:30 AM -5:00 PM with live Q & A from 5-6 PM. 

Enjoy these advantages of the new virtual format:

• Attendees will receive a searchable PDF Boot Camp manual, making it easier to search and reference items in the future.
• A recording will be available to attendees for 14 days after the event to re-watch portions that you want a deeper understanding of.
• Attend the event from the comfort and safety of your home. 
• As in prior Boot Camps, the live Q & A session is part of this event.
• You will receive all of the same information normally presented in Landlord Boot Camp PLUS the latest information on navigating the CDC and CARES Act eviction moratoriums. 

For pricing and registration click here:  

https://aasew.org/event-4043452

www.aasew.org

https://www.pbs.org/newshour/show/could-federal-investment-prevent-an-eviction-crisis

DESMOND: In June, cities like Cleveland and Milwaukee saw evictions spike 30 to 40 percent above normal level when moratoriums expired.

[Ignores a greater than 30% overall decrease in 2020 evictions Year to date through June 30th. – Tim]

DESMOND: And it also doesn’t solve the landlord’s financial problems. You know, eviction right now, though, is kind of the only tool we’ve given to landlords, right? We haven’t seen a serious investment in housing from the federal government.

[Agreed – Tim]

DESMOND: And so when you’re a landlord and you’re in a pinch, you kind of reach for that pink slip.

[No landlord wants or wins when there is an eviction, rather they generally never recover the money lost. An eviction is either failure to screen or the tenant met with circumstances afterward. – Tim]

DESMOND: You know, we need a national moratorium on evictions. We need to say, look, in this pandemic, the home is medicine. The home is safety. And we have to protect that. Americans deserve that level of protection. Property owners need to pay their bills, too. And so we don’t just need moratoriums. We also need rent relief.

[There is no need for a moratorium if proper need-based rent subsidies are in place. Agreed that property owners need to pay their bills. The outcome if they can’t is chronicled at https://bit.ly/MoratoriumImpact – Tim]

DESMOND: We need a serious investment from the federal government with the recognition that everyone needs a stable, affordable place to live in normal times and especially during this pandemic. That’s true.

[Agreed – Tim]

Housing Choice Voucher Wait List. A random lottery will be held from the applicants with 3000 families to be added to the waitlist.

Why will only 3,000 applicants be selected in the lottery to be on the wait list?

The wait list will be limited to 3,000 applicants so that they will have a reasonable expectation that they may receive a Housing Choice Voucher within a 2- to 3-year time period.

This shows how great the need is for expanded rent assistance.

The AASEW has done a lot of great things for the industry and sustainable rental housing.

One that benefited many owners was the change to Sheriff moves to eliminate the mover, which is a large portion of the costs.  

Our attorneys, working against their own personal interest, changed the law to allow LLCs to be represented by a member or agent, rather than requiring an attorney. This saves a lot of money as well as making the case less confrontational.

Here are the laws passed through the work of the AASEW in:

2018  https://bit.ly/3bryZ0Y
2016  https://bit.ly/2Lj7NXM
2014  https://bit.ly/3dCRRM1
2012  https://bit.ly/2zx3NQZ

It is important that we work together as an industry for the betterment of all.

I have a number of people ask me about the prior post stating there is an eviction moratorium for Section 8 Voucher recipients. Below is the analysis from the Congressional Research Service.

https://crsreports.congress.gov/product/pdf/IN/IN11320

Eviction and Rental Payment Protections

CARES Act Section 4024(b) prohibits landlords of certain rental “covered dwellings” from initiating eviction proceedings or “charg[ing] fees, penalties, or other charges” against a tenant for the nonpayment of rent. These protections extend for 120 days from enactment (March 27, 2020).

Section 4024(c) requires landlords of the same properties to provide tenants at least 30 days-notice before they must vacate the property. It also bars those landlords from issuing a notice to vacate during the 120- day period. In contrast to the eviction and late fee protections of Section 4024(b), which are expressly limited to nonpayment, Section 4024(c) does not expressly tie the notice to vacate requirement to a particular cause. Thus, Section 4024(c) arguably prohibits landlords from being able to force a tenant to vacate a covered dwelling for nonpayment or any other reason until August 23, 2020 (i.e., 120 days after enactment, plus 30 days after notice is provided).

Section 4024(b)’s and (c)’s protections, however, do not absolve tenants of their legal responsibilities to pay rent. Tenants who do not pay rent during the eviction grace period may still face financial and legal liabilities, including eviction, after the moratorium ends.

What properties does the CARES Act protect?

The CARES Act’s eviction protections only apply to “covered dwellings,” which are rental units in properties: (1) that participate in federal assistance programs, (2) are subject to a “federally backed mortgage loan,” or (3) are subject to a “federally backed multifamily mortgage loan.”

Covered federal assistance programs include most rental assistance and housing grant programs, including public housing, Housing Choice Vouchers, Section 8 Project-Based Rental Assistance, rural housing programs, and the Low Income Housing Tax Credit (LIHTC) program.

A “federally backed mortgage loan” is a single-family (1-4 units) residential mortgage owned or securitized by Fannie Mae or Freddie Mac or insured, guaranteed, or otherwise assisted by the federal government. The term includes mortgages insured by the Federal Housing Administration and the Department of Veterans Affairs, and the Department of Agriculture’s direct and guaranteed loans. The act defines a “federally backed multifamily mortgage loan” almost identically to “federally backed mortgage loan” except that it applies to properties designed for five or more families.

Researchers estimate that roughly 12.3 million rental units have federally backed financing, representing 28% of renters.

The CARES Act includes a 120-day moratorium on evictions, late fees and other penalties for properties with federally backed mortgages (Freddie Mac/ Fannie Mae/ FHA /VA / HUD), beginning March 27th.

These prohibitions also extend to tenants receiving Section 8 vouchers.

Owners of properties with the government backed mortgages or tenants on rent assist are prohibited from serving eviction notices or filing evictions until July 25th. The law also requires a 30 day notice to evict, effectively not allowing evictions until August 24th.

This does not apply to tenants that are not receiving rent assist or living in a federally mortgaged property.

That said we are not charging late fees during this unprecedented time and urge other owners to do the same, because it its the right thing.

In WI you cannot evict or give notice for nonpayment to any tenant until 5/27/2020. The rent is, however, still due.

I will argue that it is in not only the tenants’, but also your best interest to work on payment plans for tenants who fell behind because of loss of income when you factor in the costs of unit turns.

Try mediation if you are having trouble working out a reasonable repayment plan. Maybe try meditation too. 🤔

We posted a bunch of resources to help tenants get through this at: https://apartmentsmilwaukee.com/r/

You can copy the page content into an email to your tenants, and edit out our contact info.

The Fall 2019 Apartment Association Landlord Tenant Law Boot Camp is October 26, 2019

Even though I know the law well, we’ve sent our staff. It is good for them to hear the rules from someone else. Plus if they learn one new thing, it more than pays the modest cost.

Wisconsin landlord tenant law has changed dramatically in 2012, 2014, 2016 and 2018 to Wisconsin’s Landlord Tenant Law with Act 143, Act 76, Act 176 and Act 317.

Tristan obviously knows the latest law, but that’s the easy part. He also is one of the most prolific landlord tenant attorneys in Southeastern WI. That gives him great insights into how the courts are ruling today and what the most recent “Gotcha’s” are.

At $189 for members, it is far cheaper than learning from your mistakes. Not only does it help prevent costly errors, you also will learn how to legally screen better, thereby reducing evictions, and other things that will result in profitability.

AASEW Landlord Boot Camp 2019
WHEN: Saturday, October 26, 2019
WHERE: Four Points Sheraton 5311 S. Howell Avenue, Milwaukee, Wisconsin, 53207 (Across from the airport)

Registration opens at 7:10 AM

The seminar runs from 8:30 to 5 PM with a 30 minute break for a complimentary lunch. There will be a one hour question and answer session afterwards, ending promptly at 6 pm. Many will find the Q&A invaluable, therefore you may wish to arrangements to stay until 6 pm.

Updated to include the latest law changes and court rulings!

INCLUDED: 100 plus page manual to help you put what you learn into practice.

More info and sign up at http://LandlordBootCamp2019.com

From a Fair Housing perspective, you probably must account in some manner for the value of the Section 8 payment when calculating an income multiplier guideline.

I’ve read of the argument made in other jurisdictions that if an owner is using a rent multiplier, that it should be on net rent to the tenant. This is probably not a workable answer for either tenant nor the owner. If the net payment by the tenant is $20 with a three times multiplier, a $60 per month income is not going to cover living expenses like heat and lights. A good discussion of this issue from a while ago is at: Bigger Pockets

In WI you must include the value of child support, food stamps and perhaps* Rent Assistance Vouchers in income calculations. So if the gross rent is $800 and the tenant receives $700 RA, $500 in food stamps, they would need to earn $1200 additional to meet the three times multiplier.

*Wisconsin Lawful Source of Income definition:

Wis Admin Code DWD 220.02(8)  “Lawful source of income” includes, but is not limited to, lawful compensation or lawful remuneration in exchange for goods or services provided; profit from financial investments; any negotiable draft, coupon or voucher representing monetary value such as food stamps; social security; public assistance; unemployment compensation or worker’s compensation payments.

There is a 1995 federal case, Knapp v. Eagle Property Management Corp, that found the value of Section 8 vouchers are not required to be included as income.

But that was nearly 25 years ago. Sentiments have changed over that time. I believe that if Knapp was tried today the court would find against the owner on this question as concepts like disparate impact were not widely argued then. Today we are restricted by HUD in using criminal records in screening because of the disparate impact on members of protected classes.

The plain language reading of the WI code makes not including the voucher value in the rent multiplier calculation open to expensive litigation, which the Knapp court determined that their insurer had no duty to defend.

To form your own opinion on this and other WI fair housing standards, a good starting point is:

“STATE OF WISCONSIN Fair Housing Plan Analysis of Impediments to Fair Housing and Actions to Overcome Them Update to the 2015-2019 Consolidated Plan”

https://www.hud.gov/program_offices/healthy_homes/smokefree

This rule is helpful for private owners who wish to ban smoking, as well as offering a marketing opportunity, I guess, for owners that permit smoking.

I agree with HUD on this, the advantages of smoke-free housing outweigh any market advantage of allowing smoking.

https://archives.hud.gov/news/2016/pr16-184.cfm

HUD’s smoke-free rule will reduce damage and maintenance costs associated with smoking. According to the Centers for Disease Control and Prevention (CDC), HUD’s national smoke-free policy will save public housing agencies $153 million every year in repairs and preventable fires, including $94 million in secondhand smoke-related health care, $43 million in renovation of smoking-permitted units, and $16 million in smoking-related fire losses. It is estimated that smoking causes more than 100,000 fires each year nationwide, resulting in more than 500 deaths and nearly a half a billion dollars in direct property damage.

Of small properties with affordable rents (below the regional median), only those without debt service are viable. Only 25 percent of mortgaged properties have positive cash flow (Garboden and Newman, 2012). Taken together, these quantitative analyses and our own findings described in the following suggest that much of the stock is financially precarious, which could theoretically lead to under maintenance, abandonment, and conversion.

https://www.huduser.gov/portal/sites/default/files/pdf/UrbanLandlords-HCV-Program.pdf   at page 9