Wisconsin Security Deposit Laws: Details And Timelines

What are the rules for returning security deposits in Wisconsin? How long does a landlord have to make the return? What about making deductions? Understanding Wisconsin security deposit laws can help all parties handle the rental process smoothly and avoid potential disputes.

This article covers the laws and guidelines for handling security deposits in Wisconsin. You'll learn about key timelines, permissible deductions, and best practices for both landlords and tenants. We'll explore the legal requirements and processes that govern security deposits, from the moment a tenant moves in until after they've moved out.

For property owners and renters, knowing these rules can protect your interests and contribute to a positive rental experience. Get a handle on the most important aspects of Wisconsin's security deposit laws and how they affect your rights and responsibilities.

Maximum security deposit amount

Wisconsin security deposit law doesn't set a maximum deposit amount, giving landlords flexibility in what they charge. However, it's wise to consider market rates, as charging too much may make it hard to find tenants and increase your vacancy rates.

Other than security deposits, landlords might have other one-time fees:

• Pet deposit: If tenants have pets, landlords might charge a pet deposit to cover the costs of potential damages.
• Key deposit: Landlords might charge a refundable deposit for the keys to the property to make sure the tenant returns the keys when they leave.
• First and last month’s rent: Some landlords might charge the first and last month’s rent as a form of deposit to protect against damages and help cover costs if a tenant fails to pay rent.
• Utility deposit: For properties where utilities are part of the rental agreement, the landlord may charge a deposit to cover the cost of unpaid utility bills.
• Move-in fee: In some situations, landlords might charge a non-refundable fee to cover the costs of preparing the unit for the new tenant.

Timeline to return a tenant's security deposit

Wisconsin security deposit laws require landlords to return security deposits within 21 days after the tenant moves out — or when the rental agreement terminates. This timeline applies whether the property owner returns the full security deposit or takes deductions that lead to a partial or no refund.

In situations wherein the return amount is $0, the landlord still must provide a letter detailing the reasons for the deductions within the 21-day time period.

If a landlord fails to return the deposit or provide an itemized statement of deductions within 21 days, this is a violation of Wisconsin law and may mean penalties.

Deductions from security deposits

The whole purpose of a security deposit is to protect the landlord and the property. Here are some of the legal reasons a landlord can make deductions:

Unpaid rent

If a tenant fails to pay rent and the landlord starts the eviction process, the security deposit can apply toward this unpaid amount. Landlords should do the following if they need to deduct unpaid rent:

• Provide notice: Landlords must serve the tenant with the appropriate eviction notice, such as a 5-day or 14-day notice to pay or vacate. The specific notice required depends on the lease terms and the situation.
• Documentation: Keep records of unpaid rent details such as the dates and amount the tenant owes.
• Return of deposit: After the tenant leaves the property, the landlord must return the deposit minus any unpaid rent within 21 days.

Property damage

Landlords can deduct costs to repair damages that are beyond normal wear and tear. Examples include the following:

• Intentional damage: This refers to harm deliberately caused by the tenant, such as breaking windows, creating large holes in walls, or acts of vandalism within the property.
• Accidental damage: Scenarios in which the tenant damages the property by accident, such as pet urine stains on carpets, scratches on hardwood floors, or broken fixtures from accidental impacts.
• Neglect: This refers to damages resulting from the tenant's failure to notify the landlord of necessary repairs or maintenance. Examples include mold from unreported leaks, appliance damage due to ignored maintenance needs or worsening structural issues from unreported minor damages.

Normal wear and tear means the deterioration of property that naturally happens over time. This includes things like the following:

• Faded paint or minor scuffs on walls.
• Worn carpet in high-traffic areas.
• Minor scratches on countertops or floors.

The line between normal wear and tear and damage can sometimes be unclear, especially when pets are involved. In the r/landlord forum on Reddit, user felixfelicis5697 from Wisconsin shared that "Landlords can't charge for routine carpet cleaning. Our landlord acknowledged our cat and raised our deposit because of her, yet they want to keep part of it for cleaning cat hair. Isn't this normal wear and tear?"

In the same Reddit thread, user PostingSomeToast responded: "Pets cost extra to clean up after. Your landlord covered that with a deposit to give you a chance to have a pet cleaning done at your own expense. You didn't do that, so your landlord used part of the deposit charged for that purpose to pay for that purpose."

Unpaid utilities

The lease agreement should specify which utility bills the tenant is responsible for paying. The landlord might become responsible if a tenant moves out and doesn't pay their electricity, gas, water, or other expenses. In these scenarios, the landlord can deduct unpaid utility costs from the security deposit to cover these expenses.

Other costs

The written rental agreement should specify other costs that a landlord can deduct from the security deposit, including the following:

• Cleaning fee: The lease agreement might include cleaning costs if a tenant doesn't leave the property clean when they move out.
• Legal fees: The lease might allow the deduction of legal fees incurred due to tenant violations of the lease terms, such as eviction proceedings.
• Key replacement: If the lease does not include a key deposit and the tenant vacates without returning the keys, the landlord can deduct the cost of replacing lost or damaged keys or changing the locks from the security deposit.
• Nonstandard rental provisions: Any nonstandard rental provisions in the rental agreement, such as pet damages or early termination fees.

Deduction letter requirements

If you need to make deductions from the security deposit, landlords must provide a detailed letter that includes the following:

• Itemized list of deductions: Provide a detailed breakdown of each deduction. If there are repairs, list the specific repairs and their costs. For unpaid rent, specify the amount and the dates the tenant didn't pay. Provide the same details for any other costs.
• Descriptions of damages: If available, describe any damage to the property and support descriptions with photos or other documentation.
• Documentation: Include any relevant documentation, such as repair invoices or copies of unpaid utility bills, that supports the deductions.
• Contact information: Provide your contact information for any questions or disputes regarding the deductions.

Rental unit inspections

Inspecting the rental property at move-in and move-out is always a good idea to set the right precedent for the landlord-tenant relationship, as well as transparency regarding the condition of the property. Here are the Wisconsin laws addressing this:

Move-in

When tenants move into a rental unit, they have seven days from the first date of the rental agreement to inspect the property and inform the landlord of any issues or defects. Tenants also have a right to request a list of damages charged to the previous tenant's security deposit.

This aspect of Wisconsin security deposit laws allows tenants to document existing issues and verify the landlord's handling of previous deposits.

Move out

Wisconsin doesn't require the landlord to conduct a move-out inspection at the end of the lease agreement, but it's a good idea to do one anyway. If both Wisconsin landlords and tenants participate in the walkthrough together, it can help avoid disputes about the condition of the property.

Property sales and security deposits

In cases wherein the landlord sells the rental property to another investor, Wisconsin law specifies the following rules regarding security deposits:

• Transfer the security deposit: The original landlord can transfer the security deposits to the new property owner. In this situation, the original landlord must inform the tenant of the new owner's name and address. The new rental property owner then becomes responsible for following Wisconsin security deposit laws for these deposits.
• Return the tenant's security deposit: The original landlord can choose to refund security deposits directly to the tenants. If the landlord decides on this option, they must notify the new owner that they've returned the deposit to the renter.

Tenant's role in a security deposit refund

There are steps tenants can take to get back as much of their security deposit as possible. These include the following:

• Move-in: Actively participate in the move-in inspection. This is your chance to document any issues with the rental unit so that you don't face improper deductions in the future.
• Maintenance: Understand your role in maintaining the rental property. This includes keeping the unit clean, reporting any maintenance issues quickly, and not damaging the property beyond normal wear and tear.
• Move out: Be sure to give the landlord proper notice when it's time to move out. Then, thoroughly clean the unit, remove your personal belongings, and repair any damages you made during the tenancy. Examples could be filling holes in the wall from nails, touching up paint, and replacing any broken fixtures.
• Document condition: Take photos or videos of the cleaned and repaired unit as evidence of its condition when you leave.
• Return keys: Hand over all keys, fobs, or access cards to your landlord.
• Provide forwarding address: Give your landlord your new address to return your security deposit.

Security deposits and tenant's rights

What do you do if your landlord doesn't return your security deposit within the required 21-day timeframe? Here are the steps you can take:

• Contact the landlord: First, communicate with your landlord about your security deposit. Reach out via phone or email to ask about the status of your deposit and when you can expect its return. (Note the date, time, and content of this conversation. If you send an email, save a copy for your records. This initial contact sets the stage for resolving security deposit disputes amicably before escalating to more formal measures.)
• Demand letter: If the landlord doesn't comply, send a formal demand letter asking for the return of the deposit.
• Documentation: Keep documentation of all interactions, the status of the property, and any other details. You'll need this evidence if legal action becomes necessary.
• File a complaint: You can submit a complaint with the Wisconsin Department of Agriculture, Trade and Consumer Protection (DATCP). Provide them with all relevant information and documentation. The DATCP may mediate the dispute or provide guidance on your next steps.
• Small claims court: Consider small claims court to recoup your security deposit. If you win, you can also seek reimbursement for your court costs.

Landlord compliance with Wisconsin security deposit law

Wisconsin landlords can use property management software like Azibo to help comply with the state's security deposit laws. Here's how:

• Tenant screening: Use Azibo to find reliable tenants who pay rent on time and are less likely to damage the property. This helps create a better rental situation and reduces issues related to security deposits.
• Lease agreement: Create Wisconsin-specific lease agreements that follow all laws and regulations. These should define tenant responsibilities, rent terms, and property rules. Wisconsin law requires landlords to disclose habitation issues, code violations, and tenant utility responsibilities with billing methods.
• Rent collection: Streamline rent collection with Azibo's platform, tracking and recording payments accurately. Easily keep financial records to account for security deposits and any deductions made for damages or unpaid rent.
• Maintenance: Allow tenants to submit maintenance requests online, facilitating timely repairs. Easily document the property's condition for thorough record-keeping.
• Document storage: Securely store all lease agreements, maintenance records, and tenant communication in one place. Having organized documentation helps manage compliance and supports any disputes regarding the security deposit.

Security deposit return Wisconsin

Wisconsin security deposit laws help create a fair process for landlords and tenants. Following these rules protects property owners' investments and establishes tenants’ rights.

Landlords should keep good records, communicate with the tenant, and follow the 21-day timeline to return security deposits. Tenants can help by noting the property's condition when they move in and review their lease to understand their rights about the deposit.

Knowing Wisconsin's security deposit laws helps both sides build a better rental relationship. It makes renting smoother and protects everyone's interests throughout the lease.

Wisconsin security deposit laws: FAQs

Can a landlord charge for cleaning in Wisconsin?

Yes, landlords in Wisconsin can charge a cleaning fee if specified in the rental agreement or if the cleaning is needed beyond normal wear and tear. Routine carpet cleaning can't be deducted from the security deposit unless it's due to damage or neglect.

Can a landlord charge for painting in Wisconsin?

Yes, landlords in Wisconsin can charge for painting if the tenant causes damage beyond normal wear and tear. They cannot charge for routine painting that is part of regular maintenance.

What if my landlord doesn't return my deposit in 21 days in Wisconsin?

Failing to return a deposit within 21 days in Wisconsin can lead to legal consequences for landlords. Tenants may be entitled to double damages, and landlords could face additional fines or penalties. This rule incentivizes property owners to act quickly when handling security deposits.