The world is changing faster than we can track.
So much has changed since my last update on March 13. I was in court that day for a commercial landlord.
I would not have known that a few weeks later I would be working remotely due to Executive Order 2020-21 – placing law firms under the category of “non-essential businesses” and sending us home.
Below is the last photo I took from my office – Monday, March 23. It was a snowy, dreary day. Downtown was, and remains empty.
Updates
Since then, The Michigan Governor’s Executive Order 2020-19 has put a halt on residential tenant eviction actions until April 17, 2020. I would be very surprised if this is not extended to a later date.
One of the complexities is the lack of uniformity with the various states and municipalities. Some, particularly cities in California, have issued an “eviction moratorium” on residential and commercial tenancies. Some broaden the restrictions, prohibiting the landlord from increasing rent payments, charging late fees, etc…
In Michigan, the EO applies only to residential tenants (including those under land contracts). It carves out an exception and permits emergency evictions in the event a tenant poses a: “Substantial risk to another person” or “imminent and severe risk to property.”
Further, this EO does not remove a tenant’s obligation to continue to pay rent as otherwise required under the lease. However, Landlords cannot “make a demand for payment by personal delivery.”
Recently, to further assist tenants and others who cannot afford to pay for essential utilities, the Governor signed EO 2020-28 which restores water services to occupied residential homes.
Commercial Landlords?
EO 2020-19 and 28 does not apply to commercial properties.
However, the Michigan Supreme Court has ordered trial courts, in compliance with the “Shelter Order” EO 2020-21 to close except for “essential functions”.
Eviction of commercial tenants is not on the list of “essential functions.”
This has put many landlords and tenants in difficult situations. Check out this Detroit Free Press article from this morning describing the negative impact on tenants and landlords.
Rent Cancellation?
Consumer advocates and politicians are advocating for a rent cancellation.
Landlords are rightfully concerned that this could have a domino effect – if tenants do not pay rent, does that relieve landlords from the obligation to pay their mortgage, utilities, taxes?
So far, the Governor of Michigan has not mentioned the possibility of rent cancellation. No Bill in the legislature has been proposed recently on that topic.
Currently, the only Bill recently introduced in the Michigan legislature: “The Hotel and Lodging Price Protection Act” – an eleven page bill that would prohibit hotels and other temporary accommodations from price increases during the declared emergency.
What this means for Landlords:
You still have a right to get paid under your lease.
The rights of a landlord during this pandemic are ever changing. Keep aware of the changes.
Landlords – commercial and residential – will not have access to the courts for evictions until at least April 17 (likely longer) unless the situation is an emergency (physical harm – imminent and severe risk to property”).
Landlords and Tenants are both feeling the pain. It may be worth considering coming up with creative resolutions for the time being.
Questions? Comments?
E-mail: Jeshua@dwlawpc.com
Twitter: @JeshuaTLauka
Purpose Driven General Counsel 