ATCP 134, one of the main codes that we rely on to guide us in understanding tenant-landlord law, has changed. Effective November 1 of this year. There are a lot of changes. Some of those changes were made in order to make ATCP 134 consistent with the changes to Wis. Stat. 704 over the last several years.
We were told that the changes were going to be purely technical (making it so the administrative code and the governing statutes are consistent), but upon reading the changes, it seems like there are some pretty substantial changes, not just technical ones. We wish we'd noticed sooner and there were lots of agencies looking out for this, but it's only us - and we missed it this time!
So, this is our first pass at what this may mean for our readers out there - the tenants, the landlords, those in helping professions who need to keep an eye on these things. Please read through, look at the different versions, and let us know if you think we've got it right. Or . . . not.
The rules/laws themselves, which are guiding our analysis:
- An itemized list of changes to ATCP 134
- The old version of ATCP 134
- The new version of ATCP 134, effective November 1, 2015
The Big Changes:
1. Security Deposit Rules
A. Landlords are no longer required to send to tenant's last known address. (old ATCP 134 vs. new ATCP 134) There is no legislative suggestion about where the landlord should deliver or mail the security deposit return, if the tenant doesn't leave a forwarding address.
B. Landlords are no longer required to write checks with all tenants' names on the check. (old ATCP 134 vs. new ATCP 134) Previously, when landlords were returning security deposits via checks, drafts and money orders, they were required to make those checks/drafts/money orders out to all the tenants on the lease unless they designated someone in writing to receive the payment. Now, they are no longer required to make it out to everyone, and there is no legislative suggestion about who those checks/drafts/money orders should be made out to.
C. Accepting a partial payment of a security deposit may/may not mean tenants waive their right to the full amount. (old ATCP 134 vs. new ATCP 134) Previously, when landlords returned a partial payment of a security deposit, a tenant could cash that check, and still pursue legal action against the landlord for the rest of the security deposit which they believed was wrongfully withheld. Now, there is no clear direction. This is, as of yet, untested. There seem to be 2 possible ways of interpreting this change:
1. Tenants still have the same rights (it's just not explicit). Tenants could "accept" (cash or deposit) a partial payment, and could still pursue the rest as wrongfully withheld.
2. If tenants cash a partial payment they could be waiving rights to the remaining portion of the money owed. They might legally be accepting the payment as the final settlement. As such, the tenants would not be allowed to "accept" the partial payment, if they believed that they were owed more then that amount. This makes us believe that, if they were disputing the security deposit return, they'd have the right to double the amount that they'd already received (but hadn't accepted) when pursuing "double the amount wrongfully withheld."
D. Landlords no longer allowed to automatically take mobile home parking fees out of a security deposit. (old ATCP 134 vs. new ATCP 134) Previously, "unpaid mobile home parking fees" were one of the regular, allowable deductions from security deposits. Now, the language has been changed to be consistent with Wis. Stat. 704.28, and landlords are not allowed to deduct for "mobile home parking fees," but rather, "monthly municipal permit fees" (kind of a property tax equivalent for mobile home owners).
E. The timing for the return of a security deposit has been changed, making it consistent with Wis. Stat. 704.28, which was changed in 2013 Wisconsin Act 76. ATCP 134 no longer starts the 21-day security deposit return countdown when the premises is "surrendered," rather, it begins when the lease ends or when a new tenant's lease begins on the rental, or when the premises is known to be vacated (but only if the tenant was evicted for holding over). (old ATCP 134 vs. new ATCP 134)
Big changes have been made to carpet cleaning guidelines, as set forth by DATCP. What was previously in a written opinion, now appears in a note in the regulation making the information more accessible.
The old version said, "a landlord may not withhold from tenant’s security deposit for routine painting or carpet cleaning, where there is no unusual damage caused by tenant abuse."
The new version says: "A lease may include a contractual provision requiring the tenant to pay for routine carpet cleaning. OAG 4−13. Even if the lease includes the permitted provision, the cost for routine carpet cleaning may not be collected by the landlord in advance because all prepayments in excess of one month’s rent must be treated as “security deposit.” Even if the lease includes the permitted provision, a landlord may not deduct the cost of routine carpet cleaning from the security deposit, which cannot be withheld for normal wear and tear under sub. (3)."
So basically, we see that this means:
- A landlord may have a provision in their lease requiring a tenant to pay for carpet cleaning.
- If the landlord asks for payment of carpet cleaning up front, it is to be treated as security deposit, and accounted for in exactly the same way. It must therefore be returned, if the landlord cannot show that it was necessary due to tenant "damage, waste or neglect."
Changes were made eliminating the clarifying administrative code and copied/pasted directly from Wis. Stat. 704.07. Those changes have been made to ATCP 134 are about the disclosures that are required before/while entering into a rental agreement. Previously, a landlord was required to disclose "uncorrected building code violations" (now, it requires that the landlord has "actual knowledge" of those violations). Previously, there was no requirement that the building code violation be severe in order to be disclosed, but now it must "present a significant threat to the prospective tenant's health or safety."
The upshot is, these disclosures have been eliminated: "All uncorrected building and housing code violations of which the landlord has received notice from code enforcement authorities, and which affect the individual dwelling unit and common areas of the premises. Disclosure shall be made by exhibiting to the prospective tenant those portions of the building and housing code notices or orders which have not been fully complied with. Code violations shall not be considered corrected until their correction has been reported to code enforcement authorities."
The new disclosures from Wis. Stat. 704.07 are: "Any building code or housing code violation to which all of the following apply: 1. The landlord has actual knowledge of the violation. 2. The violation affects the dwelling unit that is the subject of the prospective rental agreement or a common area of the premises. 3. The violation presents a significant threat to the prospective tenant’s health or safety. 4. The violation has not been corrected"
Smaller Changes Which Might End Up Having a Big Impact
- Section 2: The definition of "premises" has been changed significantly, to include "property covered by the lease."
- Section 4: "Pierce v. Norwick" is incorrectly numbered. The new version of ATCP 134 says that it is "202 Wis. 2d 588 (1996)" but it is actually "202 Wis. 2d 587 (1996)."
- Section 6: The intro to ATCP 134.06(3) (giving guidelines for deductions from security deposits), states that landlords can only withhold "amounts reasonably necessary to pay for" the deductions that are named.
- Section 6: Landlords are explicitly barred from deducting expenses due to "normal wear and tear" in the section allowing for deductions due to "tenant damage, waste or neglect."
- Section 11: This section significantly changes around ATCP 134.08, the section explaining what rental provision would make a lease void and unenforceable.
- This post is not a complete list of changes! To see that, go here.
- We aren't attorneys here at the TRC! And this isn't legal advice, either. If what we've written doesn't sound right to you, consult with someone you trust. A list of housing attorneys is available here.
- It's hard to know what all of this will mean, and we can't tell you that. Where there is no written guidance, judges will have to do their best to guess what these laws mean. We wish them luck.
Note: This blog post was corrected on 6/29/16, by deleting a line in the carpet cleaning section.