Let's say you're moving out of an apartment. You expect to get your security deposit back, right? But what if the landlord keeps it all, saying you caused damage? Or maybe you're a landlord and not sure what you can legally deduct from a tenant's deposit. 

In Wisconsin, arguments over security deposits are a common issue, sometimes even ending up in court. This guide explains Wisconsin Security Deposit Laws clearly and simply, so both landlords and renters know what to expect.

Understanding Wisconsin Security Deposit Rules

A security deposit is money a landlord collects from a tenant at the start of a rental. They're meant to protect landlords from financial losses if a tenant damages the property or doesn't pay rent. But they also protect tenants by ensuring landlords follow proper procedures. 

Being a new landlord in Wisconsin can present challenges if you don’t fully review and understand your state’s landlord-tenant laws, particularly those concerning security deposits. It’s not always as simple as collecting funds and returning them later. Proper handling of the deposit from the beginning is crucial, and Wisconsin law outlines specific requirements that landlords and tenants should be aware of.

Additionally, Wisconsin law includes certain protections for tenants facing challenging personal situations. Learn more about domestic violence in rental situations here. For example, there are specific guidelines for renters dealing with domestic violence that may impact their rental agreements and rights.

Security Deposit Amount in Wisconsin

Wisconsin law does not impose a strict limit on the amount landlords may charge for a security deposit. There’s no state-imposed cap on the security deposit amount a landlord can request. This flexibility means landlords can set the deposit as they see fit, based on factors like property value, location, and rental demand. 

However, any prepaid rent that exceeds one month’s rent is considered part of the security deposit under Wisconsin statutes. For mobile home lots, the security deposit cannot exceed two months' rent or $750, whichever is less. 

This arrangement offers landlords freedom, but it also places the responsibility on them to be fair and transparent. Tenants should carefully review their lease agreements to understand how much is being charged as a deposit and how that amount might affect what they must pay upfront.

Move-In Inspection: Protecting Security Deposits

In Wisconsin, this process is known as a “check-in procedure. This process involves carefully documenting the condition of the rental unit before you move in, creating a record that both you and your landlord can refer to when you eventually move out.  

Wisconsin Check-In Sheet Requirements

Under Wisconsin Administrative Code ATCP 134.06, landlords must provide tenants with an opportunity to document pre-existing defects at move-in. 

Within seven days of starting the tenancy, the tenant can give the landlord a written list of these defects. Additionally, the tenant may request a list of physical damages or defects charged to the previous tenant’s security deposit. The landlord is not required to reveal the former tenant’s identity or the exact amounts withheld from that deposit.

A comprehensive move-in inspection should cover every aspect of the property. Here’s a checklist to guide you:

  • Seven-Day Window: Tenants have seven days from the start of their tenancy to give the landlord a written list of any existing defects. This timeline is important. Missing the deadline could weaken a tenant’s claim later if disputes arise. Example: window lock, kitchen sink, or bathroom leaks.
  • Written Documentation: Written communication is critical. Whether it’s a paper form or an online submission, having a written record ensures there is a concrete document to refer to if disagreements surface later. Clear, dated records help both sides understand what was known at move-in.
  • Requesting Prior Damages: Tenants have the right to request a list of physical damages that led to charges against the previous tenant’s security deposit. The landlord must provide this list if it exists, helping new tenants see if there are recurring issues or known problem areas. The landlord, however, does not need to disclose the former tenant’s identity or how much was charged.

Tenant's Responsibilities During Move-In

Tenants should carefully inspect the rental unit upon move-in and promptly report any existing damages or defects to the landlord in writing. This early documentation helps protect the tenant’s security deposit from being charged for pre-existing issues at move-out.

A move-in inspection helps both tenants and landlords stay on the same page about the condition of the rental unit from day one. By taking time to note any existing damage, wear, or other issues, tenants can protect their security deposit from being used to pay for problems they did not cause. This process sets a fair and transparent foundation for the entire tenancy.

In today’s digital age, a smartphone is a useful tool. Take clear, time-stamped photos and a brief video tour to document the unit’s original condition. Follow the state’s check-in sheet requirements, pay attention to detail, and communicate openly with your landlord to avoid paying for damages you didn’t cause.

Remember, landlords must not only follow security deposit regulations but also respect tenants’ privacy and follow proper protocols when entering the rental unit.

What Can Landlords Deduct From Security Deposits?

Understanding what can be deducted—and what cannot—helps ensure that tenants know their rights. These rules not only aim to keep the process transparent but also to protect both sides from unfair practices. Below are the main areas that Wisconsin landlords can focus on when deciding what to deduct from a security deposit.

Unpaid Rent and Utility Bills

Landlords may deduct unpaid rent from the security deposit.  If, for example, the tenant skipped out on the last month’s rent, or left mid-lease without paying their full obligation, the landlord can deduct the unpaid amount from the deposit.

Beyond rent, utility bills can also come into play. If the rental agreement makes the tenant responsible for utilities such as electricity, gas, water, or sewer, and the tenant leaves these bills unpaid, the landlord often becomes responsible for settling the accounts to keep the property operational. 

In such cases, Wisconsin law allows landlords to deduct these unpaid utility charges from the security deposit. 

Damages Beyond Normal Wear and Tear

One of the most common reasons for deductions is to repair damage that goes beyond what is considered “normal wear and tear.” Every rental property experiences some level of wear over time—paint may fade, carpets may flatten, and appliance handles may loosen slightly. 

However, when damage results from abuse, neglect, or misuse by the tenant, the landlord can deduct the cost of repairs. Examples include large holes in walls, broken windows, damaged fixtures, or burned countertops. 

If the tenant’s actions cause the landlord to pay for professional cleaning, replacement of permanently stained carpets, or repair of broken appliances, these costs can be taken from the security deposit.

To ensure fairness, experts recommend that landlords document the property’s condition at both move-in and move-out.

Nonstandard Rental Provisions for Deductions

Beyond unpaid rent, utilities, and damage, landlords and tenants may sometimes agree in writing to other specific reasons for deposit deductions. They must be clearly stated and cannot be buried deep in the lease’s fine print without the tenant’s clear understanding and acknowledgment.

Common examples might include fees for breaking the lease early, costs for removing unauthorized pets, or charges for failing to return keys at move-out.  Legal experts advise landlords to make sure these documents are written in plain language and that tenants understand the implications before signing.

For landlords, the key to making justified deductions lies in solid record-keeping, honest communication, and strict adherence to Wisconsin’s landlord-tenant laws.

Returning the Security Deposit in Wisconsin

In Wisconsin, the law sets a clear timeline and specific requirements to ensure fair treatment of both landlords and tenants.

Timeline for Security Deposit Refunds

Landlords must return the tenant’s security deposit (or the remaining portion after deductions) within 21 days after the tenancy ends. This deadline is strict and applies whether or not there are deductions. Failing to meet this deadline could expose the landlord to legal consequences.

Providing an Itemized List of Deductions

If any portion of the deposit is withheld, the landlord must provide the tenant with a written, itemized list detailing each deduction. This list should include a description of the claimed damages or reasons for withholding and the corresponding amount retained for each item. 

For example, if the landlord deducted $100 for carpet cleaning and $150 for repairing a broken window, these charges should be listed separately with explanations. Transparency helps reduce disputes, and detailed records ensure both parties understand how the final refund amount was calculated.

Penalties for Landlords Who Fail to Comply

While not explicitly detailed in the provided content, landlords who fail to follow Wisconsin’s security deposit return rules may face legal penalties, including liability for damages, attorney fees, and potential penalties imposed by a court.

Bottom Line

Wisconsin’s security deposit law aims to keep things fair and transparent. Ensuring compliance with Wisconsin’s security deposit laws is essential for both landlords and tenants. By knowing the rules ahead of time, keeping honest records, and maintaining a respectful dialogue, both sides can avoid the drama and expense of deposit disputes