Current through August 26, 2024
(1) ACCEPTING AN
EARNEST MONEY DEPOSIT. A landlord may not accept an earnest money deposit or
security deposit from a rental applicant until the landlord identifies to the
applicant the dwelling unit or units for which that applicant is being
considered for tenancy.
Note: A credit check fee authorized under sub.
(4) is not an "earnest money deposit" or a "security deposit." See definition
of "earnest money deposit" under s.
ATCP 134.02(3).
(2) REFUNDING OR CREDITING AN EARNEST MONEY
DEPOSIT.
(a) A landlord who receives an
earnest money deposit from a rental applicant shall send the full deposit to
the applicant by first-class mail, or shall deliver the full deposit to the
applicant, by the end of the next business day after any of the following
occurs:
1. The landlord rejects the rental
application or refuses to enter into a rental agreement with the
applicant.
2. The applicant
withdraws the rental application before the landlord accepts that
application.
3. The landlord fails
to approve the rental application by the end of the third business day after
the landlord accepts the applicant's earnest money deposit, or by a later date
to which the tenant agrees in writing. The later date may not be more than 21
calendar days after the landlord accepts the earnest money deposit.
(b) A landlord who receives an
earnest money deposit from a rental applicant shall do one of the following if
the landlord enters into a rental agreement with that applicant:
1. Apply the earnest money deposit as rent or
as a security deposit.
2. Return
the earnest money deposit to the tenant.
(c) A person giving an earnest money deposit
to a landlord does not waive his or her right to the full refund or credit owed
under par. (a) or (b) merely by accepting a partial payment or credit of that
amount.
(3) WITHHOLDING
AN EARNEST MONEY DEPOSIT.
(a) A landlord may
withhold from a properly accepted earnest money deposit if the prospective
tenant fails to enter into a rental agreement after being approved for tenancy,
unless the landlord has significantly altered the rental terms previously
disclosed to the tenant.
(b) A
landlord may withhold from an earnest money deposit, under par. (a), an amount
sufficient to compensate the landlord for actual costs and damages incurred
because of the prospective tenant's failure to enter into a rental agreement.
The landlord may not withhold for lost rents unless the landlord has made a
reasonable effort to mitigate those losses, as provided under s.
704.29,
Stats.
Note: See Pierce v. Norwick,
202 Wis. 2d 588 (1996), regarding the award of damage claims for failure to
comply with provisions of this chapter related to security deposits. The same
method of computing a tenant's damages may apply to violations related to
earnest money deposits.
(4) CREDIT CHECK FEE.
(a) Except as provided under par. (b), a
landlord may require a prospective tenant to pay the landlord's actual cost, up
to the amount specified in s.
704.085(1) (a), Stats., to obtain a consumer credit
report on the prospective tenant from a consumer reporting agency that compiles
and maintains files on consumers on a nationwide basis. The landlord shall
notify the prospective tenant of the charge before requesting the consumer
credit report, and shall provide the prospective tenant with a copy of the
report.
(b) A landlord may not
require a prospective tenant to pay for a consumer credit report under par. (a)
if, before the landlord requests a consumer credit report, the prospective
tenant provides the landlord with a consumer credit report, from a consumer
credit reporting agency that compiles and maintains files on consumers on a
nationwide basis that is less than 30 days old.
Paragraph (b) does not prohibit a landlord from obtaining a
more current consumer credit check at the landlord's
expense.
