Landlords have a lot of responsibility, and they need to make sure that their property remains in good condition. The security deposit is a payment that the landlord holds to ensure the condition of the premises. Landlords must make sure that they understand the rules and laws regarding when and how they can retain a security deposit. Wisconsin Statute Chapter 704 and Wisconsin Admin Code Chapter ATCP 134 govern landlord-tenant relations.
What Can a Landlord Deduct from a Security Deposit?
There are some items that a landlord may deduct from a security deposit. A landlord must have proof of the deduction and must provide it to the tenant. Some of the things that a landlord may deduct include:
- Damages caused by the tenant – The landlord must be able to prove damages and show that the tenant caused them.
- Unpaid rent – If the tenant fails to pay rent, the landlord may deduct it from the security deposit.
- Unpaid utilities – The landlord may deduct unpaid utilities that were the responsibility of the tenant.
- Cleaning costs – A landlord may only deduct cleaning costs that go beyond normal costs that the landlord incurs for regular cleaning between tenants. For example, the costs to dispose of furniture or other items left behind can be deducted.
- Costs of rekeying if the tenant does not give the keys back.
Additionally, a landlord may deduct some items from a security deposit due to a tenant breaking the lease or moving out early. These include advertising costs to look for a new tenant and lost rent if the property goes unrented. The landlord does have an obligation to mitigate damages when possible. For instance, if a tenant moves out early, the landlord needs to take steps to find a new tenant as soon as possible.
What Can’t a Landlord Deduct?
There are some items that a landlord is not allowed to deduct from a tenant’s security deposit. You cannot deduct:
- Normal wear and tear – Normal wear and tear is expected and is not paid by the tenant. This includes things such as regular wear to carpets and walls, among other things.
- Routine cleaning costs – The landlord is expected to clean the premises after a tenant leaves.
The premises should be left in the same condition as when a tenant moved in, with the exception of normal wear and tear. The landlord cannot deduct from a security deposit without informing the tenant.
Return of Security Deposit
A landlord must follow the law regarding the return of a tenant’s security deposit. You must properly document any damages or other deductions. By law, the landlord must return a tenant’s security deposit within 21 days after the tenant moves out. The landlord must provide a written itemized list of any deductions from the security deposit. The landlord is required to mail the security deposit and/or the accounting of the withholding of the security deposit to the forwarding address of the tenant or the last known address. Keep proof of sending the letter.
Landlords should take care to ensure that the lease covers all aspects of the tenancy, including the security deposit. Legal disputes between landlords and tenants can be challenging. To learn more, contact our legal team at Moen Sheehan Meyer, Ltd. at (608) 784-8310 or online to schedule a consultation.