Wisconsin landlords benefit immensely from understanding the Wisconsin security deposit law, as doing so can help them avoid disputes, inaccurate deductions, missed timelines, and unnecessary tension with tenants during the move-out process.
In this guide, you’ll learn everything you need to know about these regulations, including maximum amounts landlords can request, how to store deposits, whether interest applies, legal reasons to deduct, returning deposits, handling disputes, and more.
Statutes Regulating Wisconsin Security Deposits
Wisconsin’s security deposit laws are laid out in Section 704.28 of the Wisconsin Statutes, which explains when landlords may withhold funds from a residential security deposit and what deductions they may take. These rules work together with Wisconsin Administrative Code ATCP 134.06, which adds requirements for collecting, handling, and returning deposits.
Maximum Security Deposit Amounts Under Wisconsin Law
Wisconsin law does not cap the amount a landlord may collect for a security deposit. Property owners can set the amount that suits their rental property, and that figure does not change based on lease type, contract length, or other details.
Wisconsin law also does not create any notable exceptions that limit deposit amounts for specific situations.
Security Deposit Storage Regulations
Wisconsin law does not set any regulations that govern how landlords must store security deposits. The state does not require a specific account type, a receipt, or notice to the tenant. Landlords can simply choose a storage method they deem suitable.
Security Deposit Interest in Wisconsin
Wisconsin law does not require landlords to place security deposits in interest-bearing accounts, and landlords do not have to pay interest on any funds they hold.
Making Security Deposit Deductions
Security deposit deductions help preserve the overall condition of a rental property. Tenants sometimes fail to pay rent or leave damage beyond normal wear and tear, and landlords rely on deposit funds to cover lost expenses and repairs to bring the unit back to a safe and functional state.
When Landlords Can Deduct
Wisconsin landlords may deduct from a tenant’s security deposit for the following reasons:
- Damage beyond normal wear and tear that requires repair
- Unpaid rent or other amounts owed under the rental agreement
- Costs to remove abandoned belongings left in the unit
- Cleaning expenses needed to restore the property to proper condition
- Repairing unauthorized alterations or changes made by the tenant
When Landlords Can’t Deduct
Wisconsin landlords may not deduct from a tenant’s security deposit for the following reasons:
- Ordinary wear and tear that develops through typical use
- Costs tied to aging, natural deterioration, or expected depreciation
- Minor cosmetic issues that do not require real repair
- Standard cleaning completed during routine turnover
- Problems caused by conditions that fall under landlord responsibility
Necessary Documentation to Accompany Deductions
Wisconsin law requires landlords to provide tenants with a written, itemized statement whenever they deduct from a security deposit. The statement must outline each deduction and its cost. Landlords do not have to include receipts or invoices unless the tenant requests them.
What to Do When Deductions are Greater Than the Deposit
Sometimes, tenant damage or unpaid charges exceed the amount held in the deposit. When that happens, the landlord may request payment from the former tenant for the remaining balance. Wisconsin rules do not set a specific deadline for this request, but landlords must send the required itemized statement within 21 days after the tenant moves out.
If the tenant refuses to pay, the landlord can send the debt to a collections agency or file a claim in Wisconsin small claims court to recover the additional costs.
Returning Security Deposits to Tenants
Wisconsin law outlines how landlords must return any remaining security deposit funds after making all eligible deductions.
Required Timeline for Return
Wisconsin landlords must return the remaining balance of the security deposit within 21 days after the tenant surrenders the rental unit. The 21-day timeline begins when the landlord regains possession of the property, whether by move-out, lawful abandonment, or another form of legal surrender.
Method for Return
Landlords may return the deposit by check or another reasonable method. Wisconsin law also requires landlords to provide a written, itemized list of deductions whenever they withhold any portion of the deposit.
Penalties for Late Return
If a landlord misses the 21-day deadline, the tenant may be entitled to recover the full deposit. When a landlord wrongfully withholds funds, Wisconsin law allows courts to award tenants double the amount withheld, along with additional costs and reasonable attorney fees.
Security Deposit Disputes
Tenants who disagree with how a landlord handles their security deposit have the right to raise a dispute. They typically start by reviewing the itemized statement, contacting the landlord directly, requesting clarification in writing, or pursuing mediation or legal action if they can’t gain traction with the landlord.
As a landlord, prepare for security deposit disputes by using detailed move-in and move-out checklist tools, staying on top of accounting and bookkeeping, and adding clear terms within your lease agreement. Strong documentation, reliable timelines, and a solid understanding of Wisconsin laws will also go a long ways towards supporting a landlord’s best interests.
Using Condition Reports to Document Damage
Landlords in Wisconsin who manage security deposits benefit from using detailed move-in and move-out condition reports to capture the unit’s actual condition at key points, helping landlords track changes, clarify damage, and simplify decisions about deductions.
Consider using property management software to create digital reports with photos and videos directly from a smartphone. Thorough documentation before and after tenancies provides clear evidence, which often makes security deposit deductions straightforward and easier to defend.
Sign up for a free TurboTenant account to streamline documentation and protect your rentals with confidence.
FAQs: Wisconsin Security Deposit Law
Can a landlord deduct painting from a security deposit in Wisconsin?
A landlord may deduct painting costs only when a tenant leaves damage that goes beyond normal wear and tear. Routine repainting tied to typical turnover stays the landlord’s responsibility and does not qualify for a deduction.
Are nail holes considered normal wear and tear in Wisconsin?
Small nail holes from lightweight decor usually count as normal wear and tear in Wisconsin. Larger holes, wall anchors, or excessive markings may qualify as damage, which allows a landlord to deduct the cost of repairs.
Does the landlord or tenant have to pay for carpet cleaning in Wisconsin?
A landlord may charge for carpet cleaning only when a tenant leaves stains, strong odors, or damage that exceeds ordinary wear and tear. Basic cleaning tied to routine turnover remains the landlord’s responsibility and cannot justify a deduction.
What happens if a landlord doesn’t return a security deposit within 21 days in Wisconsin?
If a landlord misses the 21-day deadline, the tenant may seek to recover the full deposit. When a landlord wrongfully withholds funds, courts may award double the amount withheld, along with additional costs and reasonable attorney fees.
