This rule revises the prohibition on certain rental agreement provisions so that the rule is identical to the new statute. This rule also incorporates the provision in s.
704.44, Stats.,
that declares the entire rental agreement is void and unenforceable if it contains any of the prohibited rental agreement provisions.
Confiscating personal property left behind by the tenant
The current rule prohibits the landlord from confiscating the tenant's personal property except as authorized by law or in accordance with a written lien agreement. The current rule also prescribes the form and manner in which the landlord and tenant may execute the lien agreement.
2011 Act 143 and
2013 Act 76 revised s.
704.05 (5), Stats., to give a landlord the discretion to dispose of personal property left behind by the tenant without a written lien agreement, as long as certain conditions are met. For example, there must not be a written agreement to the contrary, and the landlord must provide notice to the tenant of his or her intent not to store the property before the tenant enters into or renews a rental agreement.
This rule amends the current rule to more closely align it with s.
704.05 (5), Stats. It replaces references to a “written lien agreement" with a more general “written agreement" and imposes conditions on an agreement that allows a landlord to seize or hold a tenant's personal property.
Summary of, and comparison with, existing or proposed federal statutes and regulations
Federal law does not generally regulate landlord and tenant relationships or residential rental practices. The Federal Fair Housing Act of 1968 makes it illegal for a landlord to discriminate against a potential tenant because of a person's race, sex, national origin, or religion, and it prohibits certain discriminatory conduct.
Comparison with rules in adjacent states
Illinois, Iowa, Michigan, and Minnesota all have statutes or administrative rules governing residential rental practices. These laws address common topics such as rental agreements, security deposits, and other duties of landlords and tenants.
Summary of factual data and analytical methodologies
This rule modifies the current rule only to conform it to recent changes to the Wisconsin statutes. DATCP did not conduct any factual or data analysis.
Analysis and supporting documents used to determine effect on small business or in preparation of an economic impact analysis
DATCP has carefully reviewed the provisions of ch.
704, Stats., (as amended by
2011 Wisconsin Act 143 and
2013 Wisconsin Act 76) to ensure that changes to the rule align with the provisions of ch.
704. DATCP will also review the public comments on this rule before preparing a final analysis.
Effect on Small Business
DATCP anticipates that this rule will not have an economic impact on business. This rule makes changes to the current rule to align the rule with recent statutory changes to ch.
704, Stats. Accordingly, there are no changes in the rights or duties prescribed by current law.
DATCP Contact
Questions and comments related to this rule may be directed to:
Jennifer Heaton-Amrhein
Department of Agriculture, Trade and Consumer Protection
P.O. Box 8911
Madison, WI 53708-8911
Telephone (608) 224-5164
Initial Regulatory Flexibility Analysis
Rule Subject: Residential Rental Practices
Adm. Code Reference: ATCP 134
DATCP Docket #: 14-R-01
Rule summary
Wisconsin Act 143 was enacted on March 21, 2012. Act 143 made changes to ch.
704, Stats., that affect some of the provisions of the current rule relating to:
•
Disclosures required before entering into a rental agreement.
•
Returning security deposits.
•
Withholding security deposits.
•
Prohibiting certain rental agreement provisions.
•
Disposing of personal property left behind by a tenant.
•
Violations of Landlord Tenant law may constitute a violation of Unfair Trade Practices Law.
Wisconsin Act 76 was enacted on December 12, 2013. Act 76, among other things, made additional changes to landlord tenant requirements in ch.
704, Stats., including:
•
Disposing of personal property left behind by a tenant.
•
Damage to premises due to action or inaction of the tenant.
•
Check-in sheets.
•
Requiring notice of domestic abuse protections
•
Prohibition on rental agreement terms that allows landlord to terminate tenancy if a crime is committed in or on the rental property.
This rule makes revisions to ch.
ATCP 134 as necessary to conform to provisions of ch.
704, Stats., as amended, and ensure that enforcement of the rule will not change a right or duty provided by ch.
704, Stats.
Definitions
The proposed rule makes a minor, technical revision to the existing rule definition of “dwelling unit" to conform to recent changes in ch.
ATCP 125, Wis. Adm. Code.
The proposed rule revises existing rule definitions of “premises" and “rental agreement" to bring them into exact alignment with the most recent version of ch.
704, Stats.
Disclosures required before entering into a rental agreement
The current rule requires certain disclosures a landlord must make to the tenant before entering into a rental agreement with, or accepting any earnest money or security deposit from, a prospective tenant. These disclosures relate to various conditions affecting habitability, including uncorrected building code violations.
Act 143 created s.
704.07 (2) (bm), Stats., which requires disclosures relating to building code violations that are generally similar to the disclosures prescribed by the current rule.
This rule repeals and recreates the building code violation disclosure requirement to make it identical to the disclosure required by the statute.
Returning security deposits
The current rule establishes a minimum timeline for when security deposits must be returned to the tenant. In most cases, the landlord must return the security deposit with 21 days of the tenant vacating the property.
Act 143 created, and Act 76 amended s.
704.28 (4), Stats., which incorporates similar security deposit return requirements. Although under the statutory requirements, if the tenant vacates the property before the end of the rental agreement, and the landlord does not re-rent the property, the landlord must return the security deposit within 21 days of the last day of the rental agreement.
This rule amends the requirement to a return a security deposit to be identical to the statutory provision.
Withholding security deposits
Under the current rule, a landlord may withhold a tenant's security deposit only for specific reasons listed in the rule such as damage to the premises; unpaid rent; unpaid utilities or assessments that the landlord is liable for unpaid amounts; or other reasons specifically listed in the rental agreement as “nonstandard rental provisions."
Act 143 created s.
704.28 (1), Stats., which incorporates very similar (but not identical) provisions into the statute.
This rule makes minor changes to the wording of the provisions relating to withholding a tenant's security deposit to conform to the statute, but does not substantially change the requirements from the current rule. It also makes slight changes related to “nonstandard rental provisions" to conform to s.
704.28 (2), Stats., as created by Act 143 and amended by Act 76.
Prohibited rental agreement provisions
The current rule describes provisions that a landlord is prohibited from placing in a rental agreement, such as:
• Authorizing eviction by other than judicial procedure.
•
Acceleration of rent payments if tenant breaches obligations.
•
Requiring the tenant to pay landlord's attorney's fees in the event of a dispute.
•
Authorizing landlord to confess judgment against the tenant.
•
Relieving the landlord from liability for damage or injury caused by negligent acts or omissions of the landlord.
•
Imposing liability on the tenant for personal injury arising from causes clearly beyond the tenant's control.
•
Waive obligation on the part of the landlord to deliver and maintain the premises in fit or habitable condition.
Act 143 created and Act 76 revised portions of s.
704.44, Stats., which describe prohibited rental agreement provisions that are similar, but not identical, to provisions in the current rule. In addition, Act 143 created two new prohibited rental agreement provisions — allowing the landlord to do certain things because a tenant contacted law enforcement, health, or safety services; or allowing the landlord to terminate the tenancy if a crime is committed on the rental property. Act 76 refined this particular prohibition to clarify that it apply to a termination of tenancy based solely on the commission of a crime. Act 76 also adds an additional prohibition against rental provisions that allow termination for a crime committed in relation to the rental property and the rental agreement did not include the notice requirement relating to certain domestic abuse protections.
Further, Act 143 states that the entire rental agreement is void and unenforceable if it contains any of the prohibited provisions. The current rule does not have such a provision, but instead relies on a test established by the courts to determine whether the entire rental agreement is void based on the inclusion of a prohibited provision.
This rule revises the prohibition on certain rental agreement provisions so that the rule is identical to the new statute. This rule also incorporates the provision in s.
704.44, Stats.,
that declares the entire rental agreement is void and unenforceable if it contains any of the prohibited rental agreement provisions.
Confiscating personal property left behind by the tenant
The current rule prohibits the landlord from confiscating the tenant's personal property except as authorized by law or in accordance with a written lien agreement. The current rule also prescribes the form and manner in which the landlord and tenant may execute the lien agreement.
Act 143 created and Act 76 revised s.
704.05 (5), Stats., which allows a landlord to dispose of personal property left behind by the tenant at the landlord's discretion, as long as certain conditions are met. For example, there must not be a written agreement to the contrary, and the landlord must provide notice to the tenant of his or her intent not to store the property before the tenant enters into or renews a rental agreement.
This rule amends the current rule to more closely align with s.
704.11, Stats. It also replaces references to a written lien agreement with a more general written agreement. As with the current rule, this rule prescribes certain requirements and limitations on any agreement allowing the landlord to seize or hold a tenant's personal property.
Small Businesses Affected
The current rule and the proposed rule regulate transactions between landlords and tenants. Many landlords are small businesses. However, this proposed rule does not have any effect on any small business. The proposed rule does not change the duties and responsibilities of landlords in relation to their tenants. Instead, the proposed rule states the duties and responsibilities of the landlord and eliminates inconsistencies between the ch.
704, Stats., and ch.
ATCP 134, Wis. Admin. Code.
Reporting, Bookkeeping, and other Procedures
The proposed rule does not create any new reporting, bookkeeping or other procedures for small businesses.
Professional Skills Required
The proposed rule does not require any new professional skills by small businesses.
Accommodation for Small Business
Many of the businesses affected by this rule are “small businesses." For the most part, this rule does not make special exceptions for “small businesses". The nature of the subject matter does not lend itself to differentiating between types of businesses.
Conclusion
This rule will not have a significant adverse effect on “small business," and is not subject to the delayed “small business" effective date provided in s.
227.22 (2) (e), Stats.
DATCP will, to the maximum extent feasible, seek voluntary compliance with this rule.
ADMINISTRATIVE RULES
FISCAL ESTIMATE
AND ECONOMIC IMPACT ANALYSIS
|
Type of Estimate and Analysis
|
X Original ⍽ Updated ⍽ Corrected
|
Administrative Rule Chapter, Title and Number
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Ch. ATCP 134, Residential Rental Practices
|
Subject
|
Residential Rental Practices
|
Fund Sources Affected
|
Chapter 20 , Stats. Appropriations Affected
|
⍽ GPR ⍽ FED ⍽ PRO ⍽ PRS ⍽ SEG ⍽ SEG-S
|
|
Fiscal Effect of Implementing the Rule
|
X No Fiscal Effect
⍽ Indeterminate
|
⍽ Increase Existing Revenues
⍽ Decrease Existing Revenues
|
⍽ Increase Costs
⍽ Could Absorb Within Agency's Budget
⍽ Decrease Costs
|
The Rule Will Impact the Following (Check All That Apply)
|
⍽ State's Economy
⍽ Local Government Units
|
⍽ Specific Businesses/Sectors
⍽ Public Utility Rate Payers
|
Would Implementation and Compliance Costs Be Greater Than $20 million?
⍽ Yes
X No
|
Policy Problem Addressed by the Rule
|
The department enacted ch. ATCP 134, Wis. Adm. Code, in 1980 and the rule was revised in 1998. The existing rule regulates rental transactions between landlords and residential tenants as follows:
• Requires the landlord to provide to the tenant before entering into the rental agreement copies of the rental agreement and a receipt for any earnest money or security deposits that the tenant has paid to the landlord.
• Requires the landlord to disclose to the tenant before entering into the rental agreement the names and addresses of the owners and managers, code violations and other conditions affecting habitability, and any utility charges that the tenant may be required to pay.
• Prescribes procedures for accepting and withholding earnest money fees and credit check fees.
•
Prescribes procedures for handling security deposits.
• Prescribes procedures for promises to repair.
• Prohibits a landlord from including in rental agreements provisions that do the following:
• Authorize unlawful eviction.
•
Accelerate rent payments in event of tenant default.
•
Require the tenant to pay attorney's fees.
• Authorize the landlord to enter a plea in a court action on behalf of the tenant in which the tenant agrees to accept a judgment against the tenant.
•
Relieve the landlord from liability for property damage or personal injury caused by the landlord.
•
Impose liability on the tenant for property damage or personal injury not caused by the tenant.
•
Waive statutory or legal obligations of the landlord.
• Prohibits a landlord from:
• Advertising or renting condemned premises.
• Unauthorized entries.
• Automatically renewing a lease without notice.
• Unlawfully confiscating personal property.
• Engaging in retaliatory or self-help eviction.
• Charging late rental fees and other penalties not set out in the lease.
• Misrepresenting the dwelling units offered or the amount of all rent and non-rent charges.
• Failing to disclose all non-rent charges in connection with the representation of any rent amount.
2011 Wisconsin Act 143 was enacted on March 21, 2012. Act 143 made changes to ch. 704, Stats., that affect some of the provisions of the current rule relating to:
• Disclosures required before entering into a rental agreement.
• Returning security deposits.
• Withholding security deposits.
• Prohibiting certain rental agreement provisions.
• Disposing of personal property left behind by a tenant.
• Violations of Landlord Tenant law may constitute a violation of Unfair Trade Practices Law.
2013 Wisconsin Act 76 was enacted on December 12, 2013. Act 76, among other things, made additional changes to landlord tenant requirements in ch. 704, Stats., including:
• Disposing of personal property left behind by a tenant.
• Damage to premises due to action or inaction of the tenant.
• Check-in sheets.
• Requiring notice of domestic abuse protections.
• Prohibition on rental agreement terms that allows landlord to terminate tenancy if a crime is committed in or on the rental property.
This rule makes revisions to ch. ATCP 134 that are necessary to conform the rule to provisions of ch. 704, Stats. (as amended) and ensure that enforcement of the rule will not change a right or duty provided by ch. 704, Stats.
|
Summary of Rule's Economic and Fiscal Impact on Specific Businesses, Business Sectors, Public Utility Rate Payers, Local Governmental Units and the State's Economy as a Whole (Include Implementation and Compliance Costs Expected to be Incurred)
|
This proposed rule makes a number of minor modifications to the existing rule. However, these modifications simply align the rule with policy changes dictated by the legislature in 2011 Act 143 and 2013 Act 76. Therefore, any economic or fiscal impact would have been caused by that legislation, not this proposed rule.
Landlords and Tenants
Generally, relationships between landlords and tenants are governed by Chapter 704, Stats. and the existing ATCP 134, Adm. Rule. The legislature recently made a number of changes to Chapter 704, Stats. – some of which relating to subjects that are currently in Chapter ATCP 134, Adm. Code. This rule modifies the existing rule to ensure that there is no confusion between the rule and the recently revised statute.
Utility Rate Payers
The rule will have no impact on utility rate payers.
Local Governments
This rule will not impact local governments. Local governments will not have any implementation or compliance costs.
|
Benefits of Implementing the Rule and Alternative(s) to Implementing the Rule
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Benefits
This rule benefits landlords, tenants, and other interested parties by ensuring that the rule follows policies recently adopted by the legislature.
Alternatives
Not make changes to existing rule. This would mean a number of provisions of the existing rule would be similar to the statute; but worded slightly differently; which could cause confusion.
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Long Range Implications of Implementing the Rule
|
Same as Economic and Fiscal Impact discussed above.
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Compare With Approaches Being Used by Federal Government
|
Federal law does not generally regulate landlord and tenant relationships or residential rental practices. The Federal Fair Housing Act of 1968 makes it illegal for a landlord to discriminate against a potential tenant because of a person's race, sex, national origin, or religion, and it prohibits certain discriminatory conduct.
|
Compare With Approaches Being Used by Neighboring States (Illinois, Iowa, Michigan and Minnesota)
|
Illinois, Iowa, Michigan, and Minnesota all have statutes or administrative rules governing residential rental practices. These laws address common topics such as rental agreements, security deposits, and other duties of landlords and tenants.
|
Comments Received in Response to Web Posting and DATCP Response
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DATCP received no comments related to the economic impact in response either to the posting on the DATCP external website or the statewide administrative rules website. DATCP did, however, receive comments on the content of the proposed rule. DATCP will consider those comments as part of the public hearing process.
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Notice of Hearings
Agriculture, Trade and Consumer Protection
(DATCP DOCKET #: 14-R-01)
