I Want My Money Back!!!!

Things are getting back to normal in Dr. Rent’s little world.  After an April that just started off horrendous, routine is quickly returning.  Tonight’s episode of the Dr. Rent Radio Show is “in the can” and ready to be broadcast tonight at 5 PM.

Because their was no [new] show last week, two weeks worth of questions have come up, so I got to do one of my favorite things, which of course is a show of nothing but questions.  The questions that we will hit include:

–         A lease ends in the middle of winter and the landlord doesn’t want it to, how can the landlord extend out this lease?

–         A landlord doesn’t want to renew the lease of their tenant, how do they make them aware of this?  And, how far in advance can the landlord give the tenant this notice?

–         Tied into the previous question, what are the landlord’s rights about putting up a For Rent sign and advertising the property, even if the current tenants are still in the property and under lease?

–         A tenant hasn’t paid their electricity bills and now the power has been shut off.  The tenant is vacating the property, is the landlord going to get stuck paying that unpaid electric bill?

–         For the term of a lease, the tenant has been paying all of the utility bills.  However, upon reviewing the lease because of a different issue, they notice that the landlord actually marked the boxes that the landlord should have been paying those bills.  Is the tenant entitled to a refund from the landlord?

–         A tenant left a property owing a large amount of money, can the landlord garnish their wages?  What steps does the landlord have to go through?  Are there times when wages cannot be garnished?

–         Finally, a tenant wants out of their lease and has located a replacement tenant that is suitable to the landlord.  The landlord is willing to add this new tenant to the lease, but are they obligated by law to take the original tenant off of the lease?

Almost all of this week’s questions came from landlords, but don’t forget, I do answer questions that come from tenants also.

Our show from two weeks ago (which was re-broadcast in an encore presentation last week) covered some questions that came from current events and the main topic was one of the biggest issues that landlords and tenants have – security deposits.

The question related to natural disasters.  With the flooding that our area experienced and the recent tornado that caused a large amount of damage in the Merrill area, what is the responsibility of a landlord when a rental property is damaged by these natural disasters which are out of pretty much everyone’s control.

If the property is damaged to the point where it is no longer habitable, the tenant may vacate the property and surrender it back to the landlord, essentially breaking their lease.  Not only does the lease terminate, any pre-paid rents paid by the tenant get returned to them.  The deposit also gets returned to the tenant, because arguably the damage caused by the tornado or flood are not the tenant’s fault.  If the property is damaged but habitable and the tenant doesn’t wish to move, the tenant can reduce the amount of rent that they pay to coincide with their diminished use of the unit.  How much can they reduce the rent?  Welcome to lawyer land – that varies and is taken on a case by case basis.  The one thing that the tenant cannot do is fully abate the rent (i.e. not pay any rent because of the damage) AND still live there.  If the property can be lived in, at least some rent is due.

What about all of the tenant’s property that was damaged in the unit because of the tornado and flood?  Does the landlord have to pay for that?  Isn’t that why the landlord has insurance?  No… it is not.  The landlord is not liable for any personal property of the tenant that was damaged from a natural disaster.  The insurance policy of the landlord covers the building and structure itself.  The only personal property covered is that which belongs to the landlord, the kitchen appliances for example.  This is why almost every landlord recommends (and some of them even require) renter’s insurance.  This is (relatively low cost) insurance that a renter buys for the purpose of insuring their property within the rental.

If the property is damaged where the tenant can’t live there, but is quickly able to be fixed and the tenant doesn’t want to end the lease, does the landlord have to cover the tenant’s living expenses in the mean time?  Does the landlord have to pay for the tenant’s hotel room while the apartment is getting repaired?  No.  Although the landlord doesn’t have to pay for the tenant’s temporary lodging, the landlord would not charge any rent on the apartment until it is ready to be re-occupied.  This is the “standard” language in most residential rental agreements.

Our main topic of the show was security deposit withholding.  What can a landlord take out of the deposit; and more importantly, what can the landlord NOT take out of the deposit.

Basically, oversimplified – RENT, DAMAGES, UTILITIES.  Without some other contractual provisions, the only thing that can come out of a deposit is unpaid rent, damages to the unit cause by tenant waste, damage, or neglect, and unpaid utility bills that the tenant was responsible for paid to a government-owned utility where the landlord will become liable for the bill if it is not paid.  That is it.  Period.  If not one of those three things, it cannot come out of the deposit.

However, the law does allow for additional things to come out of a deposit if an additional agreement is made between the landlord and the tenant.  This separate agreement is called “Nonstandard Rental Provisions.”  Each separate provision on the Nonstandard Rental Provision form needs to be gone over with the tenant in person.  The tenant then signs or initials each separate provision as a way of acknowledging the landlord went over it with them.  Common things that are added to security deposit withholdings include unpaid late fees and other fees, pet fines, re-renting fees, unpaid utility bills other than those already allowed, etc.

Even though the law allows for additional items to come out of the deposit, the law specifically forbids taking money out of the deposit for normal wear and tear items.  Specifically mentioned in the law are the examples are routine painting and routine carpet cleaning.  Even if these items are added into the lease through a Nonstandard Rental Provision, they are not allowed.

The big question that comes as when are the charges done because of routine cleaning caused by normal wear and tear, and when is the cleaning needed because of tenant neglect that goes beyond normal wear and tear.  That is the million dollar question.  When does normal wear and tear end and neglect begin?  There is no “one size fits all” answer, it is taken on a case by case basis.  How many people lived there?  Were there children?  Were their pets?  How long did they live there?  These are all items that need to be taken into consideration.  Two apartments are left in the exact same condition.  It is possible that if it was a family of 5 that lived their for three years, that you cannot take the cleaning out of the deposit because it is normal wear and tear.  On the other hand, the same condition left behind by a single guy who only lived there for 5 months may very well legally come out of a deposit.

The other thing we talked about on the show for the last two weeks was the time frame for getting the deposit (or the itemized statement indicating what was withheld from the deposit) back to the tenant.  This has to be done within 21 days of when the tenant “surrenders” the property back to the landlord.  This is NOT the same of when the tenant moves out.  “Surrender” is a legal term clearly defined by the law (ATCP 134.06).

Surrender is the last day of the lease term UNLESS the tenant vacates prior to the last day of the lease term AND notifies the landlord IN WRITING that they HAVE VACATED.  If the tenant holds over, then it is when the landlord knew (or should have known) that the tenant moved out.  If the tenant is being evicted, it is when the Writ is executed unless the landlord is aware that the tenant vacated sooner.  Sound complicated?  That is because it is.  Even many courts and judges have a misunderstanding of the legal definition of surrender.

Finally, we covered what the potential penalties are for missing the 21-Day deadline.  If the deadline is missed completely, the tenant is entitled to double the deposit back, plus court costs and reasonable attorney fees.  If amounts were due back to the landlord, they can counter-sue.  If the deposit is returned within the 21 days, but something was taken out of the deposit that was not supposed to be, then the tenant is allowed to double that amount that was wrongfully withheld (again plus court costs and reasonable attorney’s fees).

Let’s just do a quick example.  A tenant paid a $500 deposit.  The landlord deducted $100 for an unpaid water bill, and $100 for ROUTINE carpet cleaning and returned a check to the tenant for $300 along with the statement explaining those two charges.

If the landlord missed the deadline and returned it to the tenant after 25 days… the tenant would be able to double the deposit to $1,000.  The landlord could counter-sue for the water bill of $100.  So instead of the landlord owing the tenant $400 if they returned the deposit in time in the proper way, they will end up owing $900 plus costs.

If the landlord returned it within the proper deadline, the tenant could not double the entire deposit, they could only double that carpet cleaning charge.  The tenant could sue for $200 in addition to the $300 they already received.  In this case, instead of owing the tenant $400 if they did it the right way, they will probably end up paying a total of $500, plus costs.  (And it is that “plus costs” that can really kill you as a landlord.  Court costs alone are nearly $100, and because these cases are very easy wins for attorneys, tenants can easily find someone to take the case and legal fees alone can easily top $1,000.  OneJanesvillearea landlord who didn’t return a deposit after the property because uninhabitable because of a natural disaster ended up having the court award the tenant over $30,000 in legal fees.)

My advice… the deposit is the tenant’s money.  It is really not worth it playing games with it.  If the tenant owes you money that can legally come out of the deposit, take it out of the deposit – but DON’T nickel and dime them for wear and tear items.  The cost of being wrong is fairly severe.

NOTE:  The Dr. Rent Radio Show can be heard Thursdays from 5 PM to 6 PM on 93.3 FM, WNRB-LP in the greater Wausauarea; and can be heard everywhere else online at www.wausauhmong.org.

HAPPY RENTING!

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About drrent

Wausau, Wisconsin Landlord, past president of the Wisconsin Apartment Association, Host of the Dr Rent Radio Show on WNRB-LP, 93.3 FM, Wausau, WI
This entry was posted in ATCP 134, Carpet Cleaning, Court, Double Damages, Legal Fees, Questions, Security Deposit, Untenantability, WNRB and tagged , , . Bookmark the permalink.

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