In the Dirt: A Real Estate Legal Update

Owners and managers of multifamily rental properties are facing a growing number of challenges. The Wisconsin Department of Agriculture, Trade and Consumer Protection (DATCP) reported more than 1,900 formal complaints were filed, and there were more than 6,000 contacts to their hotline, related to landlord/tenant disputes last year making it the number one category of complaints, and a massive increase since 2018 when there were 1,188 complaints. Clearly landlord/tenant conflicts are escalating and will continue to rise if some pending proposals are enacted.

Governor Tony Evers announced the spiritual successor to the Wisconsin Emergency Rental Assistance program (WERA) as part of the proposed 2023-2025 biennial budget. With the WERA program set to conclude upon the official end of the COVID-19 Emergency Order in May, Evers proposed a $60 million investment into “civil legal aid, focusing on creating a statewide right to counsel in eviction proceedings.”

This proposal also calls for a searchable database of the history of rental properties, more property inspection programs in Milwaukee, and requires landlords to disclose building code violations to prospective tenants (even if the landlord has no actual knowledge of the violation). Further, local governments would be able to impose more requirements onto landlords than under state law, such as:

• Limit information a landlord may obtain to consider a tenant;
• Require landlords to disclose certain information to tenants and report that information to the municipality;
• Impose new requirements and fees related to inspections; and
• Impose moratoriums on evictions.

This program would be a drastic departure from WERA, which focused primarily on rental assistance to lower-income households during the COVID-19 pandemic, to create increased governmental protections for tenants. 

Changes are also proposed at the federal level. In January the White House put forth its “Blueprint for a Renters Bill of Rights.” This Blueprint would not be law, but rather provide guidance to federal agencies and indicates the Biden Administration’s willingness to act on behalf of tenant advocacy.

The Blueprint calls for tenant access to:

• Safe, quality, accessible, and affordable housing;
• Clear and fair leases;
• Education, enforcement, and enhancement of renters rights;
• The right to organize; and
• Eviction prevention, diversion, and relief.

If the agencies act on the Blueprint recommendations, landlords may encounter more regulatory oversight in protecting their property and livelihoods. This isn’t a full analysis of either proposal, but a reminder that landlords and property managers should pay attention considering the breadth of the changes being considered.

Most landlords own rental property to provide safe and welcoming homes for their tenants, but if these initiatives are passed, all residential landlords and property managers will encounter unprecedented challenges from leasing to evictions.