When does a landlord get to keep someone’s security deposit?

| Apr 12, 2021 | Uncategorized |

Everyone involved in renting real estate takes some amount of risk. Tenants have the risks that come from lack of stability, as their landlord could evict them or terminate the lease often with little notice. Landlords take risks because their tenants could become nuisances or cause damage to the property. They could also refuse to pay rent and put the landlord in a position where they have no choice but to initiate stressful and expensive eviction proceedings.

Whether a tenant leaves of their own accord or a landlord forces them out of a rental unit, the security deposit for the property can become a sticky issue when the rental relationship ends. Tenants want their security deposit back, while landlords often want to keep that money. When can a landlord retain a tenant security deposit for any rental property in Wisconsin? 

Wisconsin law allows landlords to keep the security deposit in 4 scenarios

The law in Wisconsin is relatively generous to landlords. The state does not limit how much a landlord can charge for a security deposit. Unlike other states that only allow a single month’s rent for the deposit, Wisconsin allows landlords to set the deposit at the amount they think is reasonable for the condition of the property and the risks that they take.

Landlords also have the right to hold onto that security deposit in four distinct situations. As is common in most other states, landlords in Wisconsin can keep a security deposit to recoup unpaid rent or unpaid utilities. They also have the right to retain some or all of the deposit to cover the cost of property repairs for damages that exceed normal wear and tear.

Finally, landlords can include provisions in their contracts that have financial consequences. The violation of non-standard lease terms could incur penalties. These might include daily fees for overnights stays by a non-tenant or keeping an undisclosed pet. Landlords can recoup the cost assessed for these violations from the security deposit if a tenant has not paid them in full when they terminate the lease. 

Landlords need supporting documentation

When a tenant moves into a property, they have the right to perform an inspection and provide an inventory of pre-existing damages to the landlord within seven days of moving in. They also have the right to ask for a written list of all damages charged to the previous tenant.

Landlords will have to document the cost they must incur to repair the unit or provide an explanation of claims for unpaid rent or fees and send a written notice to their former tenant. Tenants have the right to respond, and conflicts about security deposits could occasionally wind up in civil court if the parties are unable to resolve it on their own through negotiations and a review of a lease.