AB1038: Bill Text

1995 Assembly BILL 1038

March 18, 1996 - Introduced by Representatives Grothman, Albers, Duff, Goetsch, Ladwig, F. Lasee, Lazich, Olsen, Schneiders, Vrakas, Walker, Ward, Wasserman, Ziegelbauer and Zukowski, cosponsored by Senators Rosenzweig and Petak. Referred to Committee on Housing.

AB1038,1,7 An Act to renumber chapter 704; to amend 100.20 (5), 100.20 (6), 100.26 (3), 100.26 (6), 704.05 (5) (a) (intro.), 757.69 (1) (d), 799.05 (3) (b), 799.206 (3), 799.44 (4), 799.45 (1), 799.45 (2) (b), 799.45 (2) (c), 799.45 (3) (a) and 799.45 (3) (b); to repeal and recreate 100.26 (6); and to create subchapter I (title) of chapter 704 [precedes 704.01], subchapter II of chapter 704 [precedes 704.91], 799.45 (2) (bg) and 799.45 (3) (am) of the statutes; relating to: residential rental practices, powers of court commissioners and providing a penalty.

Analysis by the Legislative Reference Bureau

Current law addresses some issues related to the rental of residential property, such as certain lease requirements and how to terminate a tenancy. The Wisconsin administrative code provides regulations related to other rental practices. This bill establishes those residential rental practices regulations in the statutes. With some specified exceptions, the provisions in the bill apply to the rental of all dwelling units in the state.

The bill requires a landlord, before accepting any earnest money or security deposit, to disclose to a prospective tenant any uncorrected building or housing code violations and any other conditions that affect the habitability of the premises. A landlord must also disclose whether charges for utilities are included in the rent and, if not, the basis for allocating the charges among the tenants. The bill requires a landlord to provide a tenant with a receipt for any earnest money or security deposit received from a tenant and prohibits a landlord from retaining any amount of an earnest money deposit if the landlord rejects the rental application, except for actual expenses, up to $25, incurred to verify the application if the rejection was based on omissions or false statements in the application.

If a landlord requires a security deposit, a tenant must be given at least 7 days after the beginning of the tenancy to inspect the premises and notify the landlord of any damages or defects existing at the beginning of the tenancy. In addition, a tenant may in writing request the landlord to furnish a written itemized description of all damages or defects for which deductions were made from the previous tenant's security deposit. The landlord must return a security deposit within 21 days after the last day for which a tenant is legally liable for rent. If, however, a tenant vacates the premises before the end of the lease term, the landlord must return the security deposit within 21 days after the tenant vacates the premises, the landlord receives written notice from the tenant of his or her intention to vacate before the end of the lease term or the landlord receives all rents and other charges for which the tenant is legally liable under the lease, whichever is latest. If the landlord retains any portion of the security deposit, the landlord must provide a written accounting to the tenant within that same time period. The bill specifies the reasons for which a landlord may retain any of the security deposit, including such reasons as damage to the premises and nonpayment of rent or utility charges for which the tenant is responsible. A landlord may not retain any portion of a security deposit for normal wear and tear to the premises. Any damage to a dwelling unit during a tenancy is rebuttably presumed to have been caused by the tenant.

The bill addresses promises made by a landlord to repair a premises and requires a landlord to specify the anticipated date of completion. The bill specifies provisions that may not be included in a rental agreement, such as a provision that relieves the landlord from liability for property damage or personal injury caused by negligent acts or omissions of the landlord. The bill also prohibits a landlord from taking certain actions. For example, except under specified circumstances, a landlord may not enter a dwelling unit except at reasonable times upon 12 hours' advance notice for the purpose of inspecting, repairing or showing the premises. Another prohibited action is terminating a tenancy or constructively evicting a tenant by reducing heat, water or electricity to the dwelling unit in retaliation against the tenant for reporting a code violation or joining or organizing a tenant's union or organization. The bill provides that the penalties that apply to a violation of the rental practices set out in the administrative code, such as double damages and reasonable attorney fees, also apply to a violation of the rental practices regulations provided for in the bill.

Current law requires the return date on the summons in an eviction action regarding a Wisconsin resident to be not less than 5 nor more than 30 days after the date of issuance of the summons. This bill limits the maximum return date period to 15 days after the date of issuance of the summons and requires a hearing within 5 working days after the return date when the eviction is contested. Under current law, a court commissioner, if delegated by a judge and with the approval of the chief judge, may perform numerous tasks, including issuing arrest and search warrants, conducting initial appearances in traffic and county ordinance cases, hearing petitions for commitment and conducting initial return appearance and conciliation conferences in small claims actions. This bill allows a court commissioner, if delegated by a judge and with the approval of the chief judge, to conduct eviction action trials, except jury trials, in small claims actions.

For further information see the state and local fiscal estimate, which will be printed as an appendix to this bill.

The people of the state of Wisconsin, represented in senate and assembly, do enact as follows:

AB1038, s. 1 Section 1. 100.20 (5) of the statutes is amended to read:

AB1038,3,6 100.20 (5) Any person suffering pecuniary loss because of a violation by any other person of any provision of subch. II of ch. 704 or of any order issued under this section may sue for damages therefor in any court of competent jurisdiction and shall recover twice the amount of such pecuniary loss, together with costs, including a reasonable attorney's fee.

AB1038, s. 2 Section 2. 100.20 (6) of the statutes is amended to read:

AB1038,3,16 100.20 (6) The department may commence an action in circuit court in the name of the state to restrain by temporary or permanent injunction the a violation of any provision of subch. II of ch. 704 or of any order issued under this section. The court may in its discretion, prior to entry of final judgment make such orders or judgments as may be necessary to restore to any person any pecuniary loss suffered because of the acts or practices involved in the action, provided proof thereof is submitted to the satisfaction of the court. The department may use its authority in ss. 93.14 and 93.15 to investigate violations of subch. II of ch. 704 or of any order issued under this section.

AB1038, s. 3 Section 3. 100.26 (3) of the statutes is amended to read:

AB1038,4,5 100.26 (3) Any person who violates s. 100.15 or 100.19 or any provision of subch. II of ch. 704, or who intentionally refuses, neglects or fails to obey any regulation or order made or issued under s. 100.19 or 100.20, shall, for each offense, be fined not less than $25 nor more than $5,000, or imprisoned in the county jail for not more than one year or both, except that a landlord, as defined in s. 704.915 (5), may not be imprisoned for a violation of any provision of subch. II of ch. 704 or of any regulation or order that is made or issued under s. 100.20 and that is related to residential rental practices.

AB1038, s. 4 Section 4. 100.26 (6) of the statutes is amended to read:

AB1038,4,11 100.26 (6) The department of justice or any district attorney may commence an action in the name of the state to recover a civil forfeiture to the state of not less than $100 nor more than $10,000 for each violation of subch. II of ch. 704 or of an injunction issued under s. 100.18, 100.182 or 100.20 (6) or an order issued under s. 100.20.

AB1038, s. 5 Section 5. 100.26 (6) of the statutes, as affected by 1995 Wisconsin Acts 27 and .... (this act), is repealed and recreated to read:

AB1038,4,21 100.26 (6) The department, the department of justice, after consulting with the department, or any district attorney may commence an action in the name of the state to recover a civil forfeiture to the state of not less than $100 nor more than $10,000 for each violation of an injunction issued under s. 100.18, 100.182 or 100.20 (6). The department of agriculture, trade and consumer protection or any district attorney may commence an action in the name of the state to recover a civil forfeiture to the state of not less than $100 nor more than $10,000 for each violation of subch. II of ch. 704 or of an order issued under s. 100.20.

AB1038, s. 6 Section 6. Chapter 704 of the statutes, as affected by 1995 Wisconsin Acts 27 and 56, is renumbered subchapter I of chapter 704 [precedes 704.01].

AB1038, s. 7 Section 7. Subchapter I (title) of chapter 704 [precedes 704.01] of the statutes is created to read:

AB1038,5,1 Chapter 704

AB1038,5,3 Subchapter I General provisions

AB1038, s. 8 Section 8. 704.05 (5) (a) (intro.) of the statutes is amended to read:

AB1038,5,8 704.05 (5) (a) Procedure. (intro.) If a tenant removes from the premises and leaves personal property, or if the landlord elects to have the landlord or his or her agent remove and store the property under s. 799.45 (3) (am), the landlord may do all of the following:

AB1038, s. 9 Section 9. Subchapter II of chapter 704 [precedes 704.91] of the statutes is created to read:

AB1038,5,11 Chapter 704

AB1038,5,13 Subchapter II Residential rental practices

AB1038,5,16 704.91 Scope of application. This subchapter applies to the rental of any dwelling unit located in this state, except that it does not apply to the rental or occupancy of a dwelling unit that is any of the following:

AB1038,5,19 (1) Operated by a public or private institution if the rental or occupancy is incidental to detention or the provision of medical, geriatric, educational, counseling, religious or similar services.

AB1038,5,21 (2) Operated by a fraternal or social organization for the benefit of its members only.

AB1038,5,23 (3) Subject to a contract of sale if the occupant is the purchaser or a person who succeeds to the purchaser's interest.

AB1038,5,25 (4) Located in a hotel, motel, boarding house, lodging house or other similar premises and the rental or occupancy is on a transient basis.

AB1038,6,2 (5) Furnished free of charge, or free of charge to an employe even though conditioned upon employment in and about the premises.

AB1038,6,4 (6) Subject to a rental agreement covering premises used by the occupant primarily for agricultural purposes.

AB1038,6,5 704.915 Definitions. In this subchapter:

AB1038,6,8 (1) "Building or housing code" means laws, ordinances or governmental regulations concerning the construction, maintenance, habitability, operation, occupancy, use or appearance of any premises or dwelling unit.

AB1038,6,11 (2) "Dwelling unit" means a physical structure or that part of a physical structure that is primarily used as a home, residence or place of abode. The term includes a mobile home or mobile home site.

AB1038,6,15 (3) "Earnest money deposit" means the total of any payments or deposits, however denominated or described, given by a prospective tenant to a landlord in return for the option of entering into a rental agreement in the future, or for consideration by the landlord of a rental application.

AB1038,6,21 (4) "Form provision" means a written rule, regulation or rental or contract provision that has not been specifically and separately negotiated and agreed to by the tenant in writing. Any provision appearing as part of a preprinted form is rebuttably presumed to be a form provision unless it is handwritten, or unless it is preprinted in type that is not smaller than 12-point type size and signed by the tenant.

AB1038,6,25 (5) "Landlord" means the owner or lessor of a dwelling unit that is subject to a rental agreement, or any agent acting on the owner's or lessor's behalf. The term includes a sublessor other than a person who subleases an individual unit that the person occupies.

AB1038,7,3 (6) "Mobile home" means a unit designed to be towed or transported and used as a residential dwelling. The term does not include a unit used primarily for camping, touring or recreational purposes.

AB1038,7,6 (7) "Mobile home site" means a plot of land that is rented or offered for rental to accommodate a mobile home. The term does not include a plot of land that is rented to accommodate a mobile home that is any of the following:

AB1038,7,7 (a) Occupied on a strictly seasonal basis.

AB1038,7,8 (b) Owned and occupied by a mobile home park operator.

AB1038,7,11 (8) "Owner" means one or more persons vested with all or part of the legal title to a premises or all or part of the beneficial ownership and right to present use and enjoyment of a premises. The term includes a mortgagee in possession.

AB1038,7,13 (9) "Person" means an individual, partnership, corporation, association, estate, trust or any other legal or business entity.

AB1038,7,16 (10) "Premises" means a dwelling unit, the physical structure of which it is a part and all appurtenances, grounds, areas, furnishings and facilities held out for the use or enjoyment of the tenant or tenants generally.

AB1038,7,19 (11) "Rental agreement" means any agreement, whether oral or written, for the rental or lease of a dwelling unit or premises. The term includes contracts, rules and regulations that are incidental to, or adopted under, a rental agreement.

AB1038,7,23 (12) "Security deposit" means the total of all payments and deposits given by a tenant to the landlord as security for the performance of the tenant's obligations. The term does not include rent payments made in advance if such prepaid rent does not exceed the sum of 4 rent payments.

AB1038,8,2 (13) "Tenancy" means occupancy, or a right to present occupancy under a rental agreement. The term includes periodic tenancies and tenancies at will but does not include the occupancy of a dwelling unit without consent of the landlord after the expiration of a lease or the termination of a tenancy.

AB1038,8,8 (14) "Tenant" means a person occupying, or entitled to present or future occupancy of, a dwelling unit under a rental agreement. The term includes persons occupying dwelling units under periodic tenancies and tenancies at will, persons holding over after termination of tenancy until removed from the dwelling unit by sheriff's execution of a judicial writ of restitution issued under s. 799.44 and persons entitled to the return of a security deposit or an accounting for the security deposit.

AB1038,8,14 704.92 Rental documents; deposit receipts. (1) Copy of rental agreement rules. A rental agreement and any rules or regulations established by the landlord, if in writing, shall be furnished to a prospective tenant for inspection before the rental agreement is entered into and before any earnest money or security deposit is accepted from the prospective tenant. Copies shall be given to the tenant when the rental agreement is entered into.

AB1038,8,19 (2) Receipt for tenant deposits. Immediately upon accepting any earnest money or security deposit, the landlord shall provide the tenant or prospective tenant with a written receipt for the deposit that states the nature of the deposit and its amount. Unless requested by the tenant, a receipt is not required if payment is made by a check bearing a notation describing the purpose for which it was given.

AB1038,8,23 704.925 Disclosure requirements. (1) Identification of landlord or authorized agents. (a) Except as provided under par. (c), the landlord shall disclose to the tenant in writing, at or before the time a rental agreement is entered into, the name and address of all of the following:

AB1038,8,25 1. Any person who is authorized to collect or receive rent or manage and maintain the premises, and who can readily be contacted by the tenant.

AB1038,9,4 2. The owner of the premises or other person authorized to accept service of legal process and other notices and demands on behalf of the owner. The address disclosed under this subdivision shall be an address within the state at which service of process can be made in person.

AB1038,9,6 (b) The landlord and any successor of the landlord shall keep tenants informed of any changes in the information required under par. (a).

AB1038,9,8 (c) This subsection does not apply to an owner-occupied structure containing no more than 4 dwelling units.

AB1038,9,11 (2) Code violations and conditions affecting habitability. Before entering into a rental agreement with or accepting any earnest money or security deposit from a prospective tenant, a landlord shall disclose to a prospective tenant:

AB1038,9,19 (a) All uncorrected building or housing code violations of which the landlord has received notice from code enforcement authorities, which affect the individual dwelling unit or common areas of the premises and which materially affect the safety or habitability of the dwelling unit. Written disclosure shall be given to the prospective tenant concerning those portions of the building or 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.

AB1038,9,22 (b) Any of the following conditions affecting habitability, if the landlord knows or could know on the basis of a reasonable inspection of the condition's existence, whether or not notice has been received from code enforcement authorities:

AB1038,9,24 1. That the dwelling unit lacks hot and cold running water, plumbing or sewage disposal facilities in proper operating condition.

AB1038,10,4 2. That heating facilities serving the dwelling unit are not in safe operating condition, or are not capable of maintaining a temperature in the dwelling unit of at least 67 degrees Fahrenheit at a height of 3 feet above floor level in the center of a room when the air temperature outdoors is above minus 10 degrees Fahrenheit.

AB1038,10,10 3. That the electrical wiring, outlets, fixtures or other components of the electrical system are not in safe operating condition. If the dwelling units are metered separately and electrical service to the dwelling unit has been disconnected due to nonpayment by, or at the request of, the previous occupant, the landlord must disclose that condition under this subdivision only if the landlord has actual knowledge of the condition's existence.

AB1038,10,14 4. Any structural or other conditions in the dwelling unit or premises which constitute a substantial hazard to the health or safety of the tenant or create an unreasonable risk of personal injury as a result of any reasonably foreseeable use of the premises other than negligent use or abuse of the premises by the tenant.

AB1038,10,21 (3) Utility charges. A landlord shall disclose to a prospective tenant whether charges for water, heat or electricity are included in the rent before entering into a rental agreement with or accepting any earnest money or security deposit from the prospective tenant. If individual dwelling units and common areas are not separately metered and the charges are not included in the rent, the landlord shall disclose the basis on which charges for utility services will be allocated among individual dwelling units.

AB1038,11,2 704.93 Earnest money deposits. (1) Refund or credit of earnest money deposit. (a) If a rental application is rejected by a landlord, the entire amount of any earnest money deposit shall be refunded to the prospective tenant, less any actual costs, not exceeding $25, incurred for verification of the application or for a credit check if the application contained omissions or falsifications that contributed wholly or in part to the rejection.

AB1038,11,5 (b) If a rental agreement is entered into, the entire amount of any earnest money deposit shall be applied toward the payment of rent or a security deposit or returned to the tenant.

AB1038,11,11 (2) Limitations on earnest money withholding. (a) No portion of an earnest money deposit may be permanently withheld by a landlord in excess of actual costs and damages incurred because of the failure of a prospective tenant to enter into a rental agreement. An earnest money deposit may not be permanently withheld as compensation for lost rents unless the landlord has made reasonable efforts to mitigate the rental loss in the manner provided in s. 704.29.

AB1038,11,14 (b) Upon a written request by any person giving an earnest money deposit, the landlord shall provide that person with a written statement accounting for all amounts permanently withheld from the deposit.

AB1038,11,16 704.935 Security deposits. (1) Check-in procedures; preexisting damages. Whenever a security deposit is required, the landlord shall do all of the following:

AB1038,11,20 (a) Upon accepting a deposit, inform the tenant that he or she may inspect the dwelling unit and notify the landlord of any damages or defects existing at the beginning of the tenancy. The tenant shall be given at least 7 days after the beginning of the tenancy for the inspection and notification.

AB1038,12,2 (b) Upon the written request of a tenant, furnish the tenant with a written itemized description of any physical damages or defects for which deductions from the previous tenant's security deposit were made. The landlord may note, in connection with the damage description, whether the damage or defect has been repaired by the landlord. The landlord is not required to disclose the previous tenant's identity or the amounts withheld from the previous tenant's security deposit.

AB1038,12,6 (2) Return of security deposits. (a) Except as provided in par. (b), a landlord shall return all security deposits to the tenant, less any amounts withheld by the landlord, within 21 days after the last day for which the tenant is legally liable for rent.

AB1038,12,12 (b) If a tenant vacates the premises before the end of the lease term, provides the landlord with written notice of his or her intention to vacate the premises before the end of the lease term and pays all rents and other charges for which the tenant is legally liable under the lease, the landlord shall return all security deposits to the tenant, less any amounts withheld by the landlord, within 21 days after the latest of the following:

AB1038,12,14 1. The day on which the landlord receives the notice from the tenant of his or her intention to vacate the premises before the end of the lease term.

AB1038,12,16 2. The day on which the landlord receives all rents and other charges for which the tenant is liable under the lease.

AB1038,12,17 3. The day on which the tenant vacates the premises.

AB1038,12,19 (c) All security deposits returned to a tenant shall be returned by the landlord in person or by mail to the last-known address of the tenant.

AB1038,12,24 (3) Limitations on security deposit withholding; rebuttable presumption. (a) Except for other reasons clearly agreed upon in writing at the time that the rental agreement is entered into, other than in a form provision, security deposits may be withheld only for tenant damage, waste or neglect of the premises or for nonpayment of any of the following: