Handling security deposits properly is a fundamental part of being a landlord in Wisconsin.
Landlords must understand the security deposit laws, because a landlord who fails to comply is liable to the tenant for twice the security deposit and all of the tenant’s attorney’s fees. This can easily lead to the landlord having to pay the tenant thousands of dollars, even in cases where the tenant damaged the property or was behind on rent.
Here are eight key things every landlord should know about properly handling security deposits in Wisconsin:
- One Month’s Rent: Any amount paid by a tenant to a landlord in excess of one month’s rent is considered part of the security deposit. This means that if the landlord collects several months of rent at a time, and if the tenant moves out before the advanced rent is used, it becomes especially important to account for and return the remaining funds to the tenant on time.
- Deposit Holding: Wisconsin landlords are not required to keep security deposits in a separate account. However, it is good practice for the landlord to not only use a separate account to hold the security deposits, but also to use software or keep good records so that the landlord knows the amount of security deposits it holds and to whom the money belongs.
- Timing for Returning Security Deposits: In Wisconsin, a landlord must deliver to the tenant his or her security deposit and an accounting (often referred to as a 21-day letter) of any deductions withheld from the security deposit within 21 days of: (1) if the tenant vacates on the last day of the lease, then the last day of the lease, (2) if the tenant vacates prior to the last day of the lease (or if the tenant is evicted before the lease ends), then the last day of the lease or the date the landlord begins leasing the premises to a new tenant, whichever is sooner, (3) if the tenant vacates after the last day of the lease (or if the tenant is evicted after the lease ends), then the date on which the landlord learns that the tenant has vacated or has been removed (i.e. evicted) from the premises. When in doubt, sooner is better.
- Legal Deductions: Landlords can only deduct from the security deposit for unpaid rent, utilities, damages beyond normal wear and tear, and fees specifically enumerated in nonstandard rental provisions, provided the tenant individually initialed each nonstandard rental provision and that the nonstandard rental provisions otherwise comply with Wisconsin law.
- Don’t List Every Possible Deduction: The security deposit accounting, or 21-day letter, is not the landlord’s opportunity to list every amount owed to the landlord. Only charges related to the legal deductions should be stated in the security deposit accounting. Remember, the accounting is only to account for what happened to the deposit; it is not a demand letter. If there is a balance due to the landlord, the landlord may wish to include a separate letter informing the tenant of all amounts due to the landlord; however, each letter should be titled in a way
- Documentation: Keeping detailed records of the property’s condition before and after tenancy, including photos and inspection reports, can help support any deductions made from the security deposit.
- Tenant Rights: Tenants have the right to dispute any deductions from the security deposit and can pursue legal action if they believe deductions were made unfairly or unlawfully.
- Small Claims Court: If a dispute arises over the security deposit, either party can seek resolution through small claims court. However, landlords must be able to justify any deductions made. If you need to appear in small claims court, it’s vital to have a seasoned attorney on your side who represents clients in security deposit disputes…
An attorney like Michael G. Heller of Heller Law Offices.
With over 14 years of experience in landlord-tenant law, Attorney Heller has a deep understanding of the legal intricacies involved in security deposit disputes and other rental matters.
Recognized for his exceptional legal skills, Attorney Heller has been named a Super Lawyers Rising Star from 2018 to 2024, an honor awarded to only 2.5% of attorneys.
Attorney Heller’s success in representing landlords stems from his attention to detail, comprehensive and up-to-date knowledge of local landlord-tenant laws, and unwavering dedication to his clients’ needs.
If you’re facing a security deposit dispute or need to retain an attorney for legal guidance on landlord-tenant matters, Attorney Michael Heller is here to help.
Contact Attorney Heller today to schedule a consultation and protect your rights as a landlord.
The information published by Heller Law Offices, LLC is available for the reader’s convenience, is general in scope, and shall not be considered legal advice on any subject matter. No attorney-client relationship exists between the reader and Heller Law Offices solely because the reader engages with this Website and blog. Only a formal written retainer agreement establishes an attorney-client relationship.
The information contained in the blog is not a substitute for legal advice from a licensed attorney. Each situation is unique, and the information in the blog may not pertain to the reader’s situation. An analysis of the reader’s specific situation is required to provide accurate legal advice.
All information contained in the blog is based upon, or relates to, the laws and administrative code of the State of Wisconsin.