Security Deposits: 5 Things Landlords Need to Know

rental agreement document

A security deposit is a common part of the property rental process that can lead to frustration and legal issues. While a landlord doesn’t necessarily need to know every line of the Wisconsin landlord tenant law, a property owner should know the basics of setting, deducting from, and collecting security deposits.

Is there a maximum amount of security deposit that can be charged in Wisconsin?

No. Presently, there is no limit on the amount of security deposits that can be charged in Wisconsin. Local municipalities may have set amounts for security deposits, and should be consulted for information before renting a property.

What does the landlord need to provide before and after receiving a security deposit?

There are legal requirements that a landlord must meet before and after receiving the security deposit. The landlord must provide a sheet for the tenant to document the condition of the rental property and let them know the deadline for return (a minimum of seven days). A copy of the rental property agreement needs to be given to the tenant. Other information needs to be provided as well, including (but not limited to):

  • any habitation issues,
  • any code issues,
  • any utilities that need to be covered by the tenant (and how the amount of utilities is billed to the tenant),
  • notice that a request can be made about any charges deducted from the previous tenant’s security deposit.

If the security deposit is a cash payment or if the tenant requests a receipt, the landlord needs to provide a receipt to the tenant. The receipt needs to include the amount of the payment, date received, and other required information.

When can a landlord keep the security deposit?

A landlord can keep the security deposit for several reasons:

  • Tenant damage to the property (beyond normal wear and tear),
  • Unpaid utilities or rent,
  • Cleaning costs,
  • Early termination of the lease for rent under the remaining lease term and reasonable costs to market/re-rent.

It should be noted that property damage can not be as minor as dirty curtains or a nail hole in the wall. Landlords may keep a security deposit for some of these reasons (this list is not all-inclusive nor a guarantee that they are appropriate for withholding in your circumstances):

  • Holes in the drywall
  • Faucets that don’t work due to tenant damage
  • Window treatments that have been removed
  • Pest problems that are so severe an exterminator needs to be called
  • Holes or large rips to the carpet
  • Mold on any surfaces

Another reason for withholding all or part of a security deposit is cleaning costs. These costs can be deducted from the security deposit if there is significant cleaning that needs to be done in the unit. Wisconsin law assumes that all rental properties are cleaned after a tenant moves out. Normal cleaning, such as a light cleaning of the kitchen, is not grounds for deducting from the security deposit.

The amount of missed rent payments or utility payments can also be deducted if spelled out in the property rental agreement. If a landlord has questions about whether to deduct funds, the landlord should contact a local lawyer for advice.

How can I protect myself from disagreements with tenants about the security deposit?

There are many ways a landlord can avoid any conflicts regarding the security deposit with tenants:

  • Screen tenants legally during the selection process. (Ask an experienced lawyer for ways landlords can legally vet potential tenants.)
  • Use a legal rental agreement that follows local regulations. (Contact a local lawyer for information.)
  • Keep a signed legal rental agreement on file.
  • Take photos of the property to document the condition of the rental before tenants move in.
  • Provide a standard condition report to all tenants, and file the document in case of future issues.
  • Keep careful documentation of all rental payments.
  • Record the date when tenants give notice.
  • Take photos of damage after tenant moves out.

When does the security deposit need to be returned?

In Wisconsin, a landlord has to return the security deposit or provide a statement with a list of deductions taken from the security deposit within 21 days after a tenant has left the property or when the rental agreement terminates, whichever is first. If the tenant threatens any legal recourse, a landlord can contact a  local attorney for information specific to the situation.

Filing for Chapter 7 Bankruptcy in Wisconsin: Your Questions Answered

The decision to file for bankruptcy is a serious one—and one that can be fraught with mistakes. The mistakes come with the many steps involved in the process (such as, but not limited to): deciding whether to declare Chapter 7 or 13 bankruptcy, compiling the necessary paperwork, navigating through the Chapter 7 bankruptcy means test, filing in the Eastern or Western District of Wisconsin.

The whole process of declaring Chapter 7 bankruptcy can be complicated, which is precisely the reason it can become necessary to hire an experienced lawyer. An experienced lawyer can guide those filing for bankruptcy (debtors) through the entire process. The goal of Chapter 7 bankruptcy is to ease the debt load and discharge debts.

What is Chapter 7 Bankruptcy?

Chapter 7 bankruptcy, otherwise known as liquidation bankruptcy, is the legal process for discharging debts. After filing, a trustee is appointed by the court to use nonexempt property to pay off debts, such as (but not limited to) medical or credit card debt. Some debts, such as a car or home loan, can be wiped out if the property is not wanted. Once the process is started, creditors cannot contact debtors about collection; there are exceptions, such as when the eviction process was started by a landlord prior to filing and because the debtor did not pay rent. When the process is finalized, the debt is cleared and the creditor is not allowed to collect on the debt (with a few exceptions). Examples of these exceptions are:

  • Child or spousal support,
  • Court fines,
  • Student loans (with a few exceptions),
  • Income taxes (with a few exceptions).

Who can file for Chapter 7 Bankruptcy?

Those wishing to file for Chapter 7 bankruptcy need to pass the means test. This basically means that the income of the individual or couple filing must fall under a certain amount; this is determined by reviewing past financial documents. There are certain circumstances where an individual or couple can still file even when the income exceeds the median income. A bankruptcy lawyer can provide more information on these situations.

When can I file Chapter 7 Bankruptcy?

Debts can only be discharged under Chapter 7 bankruptcy every 8 years and 6 years after a Chapter 13 bankruptcy. After a Chapter 7 bankruptcy debt discharge, a Chapter 13 bankruptcy cannot be filed for another 4 years. A bankruptcy filing stays on a credit report for 10 years.

Do I need a lawyer to file for Chapter 7 Bankruptcy?

No. However, an experienced bankruptcy lawyer can be an invaluable help when navigating through the process of filing for Chapter 7 bankruptcy.

The materials on this website are provided for informational purposes only and do not constitute legal advice. These materials are intended, but not promised or guaranteed to be current, complete, or up-to-date and should in no way be taken as an indication of future results. Transmission of the information is not intended to create, and the receipt does not constitute, an attorney-client relationship between sender and receiver. You should not act or rely on any information contained in this website without first seeking the advice of an attorney.

How do I transfer property to my child?

Estate planning worksheet for writing a will

The question of how to transfer property to a child is far more difficult to answer than it was years ago. The transfer of any real estate property is a legal and financial matter. An individual or family should always consult an attorney and financial advisor when considering transferring a home, cabin, land, or any other property.

The exact means for the property transfer is different and should be determined based on the exact circumstances. Contact a  real estate attorney and financial advisor to decide on the best way to transfer property. Along with a consultation, use these other tips for a sound property transfer between a parent and child.

Avoid verbal agreements.

Parents and children should have many conversations when considering a property transfer. Some of the discussions should be between the parent and child who want to transfer the property. If there is agreement on the transfer, the property transfer should be documented as a legal property transfer to the child. This can be done through estate planning, such as via a will or trust, or with a deed. Verbal statements such as, “when I die, you get the house” likely will not withstand legal challenges and is not a guarantee that the child can take ownership of a property.

If there are other children or family members involved, it is recommended that other conversations occur. The transfer of a property, such as a family home or cabin, can affect other members of the family both emotionally and financially. Open communication with other family members can minimize any drama that could arise in the future.

Consider the options and timing.

There are many different ways to transfer property to a child. The transfer can occur as part of a trust, either as a revocable or irrevocable trust. A will is another estate-planning document that can clearly spell out the desire for a property transfer to a child. The transfer can also occur via a legal property deed transfer. In addition to the exact means of transfer, the timing of the property transfer also needs to be factored into the decision.

Property transfers, both immediate and via estate planning, comes with financial implications. For example, if the property transfer is made from a parent to a child with significant debts, the transfer can lead to issues because the property is now considered the child’s asset. The timing of the property transfer, either now or in the future, can affect the finances and costs of both parties.

Consult the professionals.

With so many aspects to consider, a property transfer should always occur with advice from the professionals. The property transfer should be documented legally by an experienced real estate attorney, both for the protection of the parent and the child.

The materials on this website are provided for informational purposes only and do not constitute legal advice. These materials are intended, but not promised or guaranteed to be current, complete, or up-to-date and should in no way be taken as an indication of future results. Transmission of the information is not intended to create, and the receipt does not constitute, an attorney-client relationship between sender and receiver. You should not act or rely on any information contained in this website without first seeking the advice of an attorney.

What is a warranty deed in Wisconsin?

Wisconsin property deeds, the documents used to legally transfer property between two parties, fall into a few different categories. Two of them are: Warranty Deed and Quit Claim Deeds. Both types of deeds include a legal description of the property (beyond just the address), grantor (current property owner), and grantee (new property owner). Most Wisconsin property deeds need a signature.

The Wisconsin property deed needs to be filed in the county where the property is located. The difference between the deeds are the guarantees included the Wisconsin property deeds. To determine the type of deed that suits the situation, contact a local real estate attorney that can offer advice and draft a legally-sound deed.

Warranty Deeds

A Warranty Deed offers the most guarantees of all the Wisconsin property deeds, meaning that the grantor is responsible for transferring clear title. The Warranty Deed offers guarantees or covenants to the grantee, such as:

  • The grantor guarantees that they are the lawful owner.
  • The grantor guarantees that the property is lien-free and is not subject to any claims by third parties.
  • The grantor guarantees that the title is clear.

Quit Claim Deeds

A Quit Claim Deed is a Wisconsin property deed with no guarantees. Because of the lack of protection for the grantee, Quit Claim Deeds are typically used in situations where there is some degree of trust. These situations could include the transfer of interest during a divorce, when property is transferred to a living trust, or during a transfer from an individual to a corporate entity. Under a quit claim deed, the grantor transfers their interest in the property to the grantee.

A warranty deed and quit claim are the two most commonly used Wisconsin property deeds. Other types of Wisconsin property deeds might be useful to the situation; contact anexperienced real estate attorney to get legal advice specific to the situation. In addition to advising on the right type of Wisconsin property deed, an experienced real estate attorney can guide the parties through the process and ensure that every document and step is legally sound.

The materials on this website are provided for informational purposes only and do not constitute legal advice. These materials are intended, but not promised or guaranteed to be current, complete, or up-to-date and should in no way be taken as an indication of future results. Transmission of the information is not intended to create, and the receipt does not constitute, an attorney-client relationship between sender and receiver. You should not act or rely on any information contained in this website without first seeking the advice of an attorney.

20 Reasons to Hire a Wisconsin Real Estate Lawyer

Real estate matters are a big deal with long-term implications, both financial and legal. The only party that can give legal advice in these significant matters are real estate lawyers. Because a real estate lawyer does not work on commission, real estate lawyers dispense unbiased advice because they have no interests in the matter.

With so many documents and steps in the real estate transaction, real estate lawyers can also be invaluable when navigating through a real estate matter. Real estate lawyers can break down documents and the process for clients, allowing them to make an informed decision. The lawyers can identify issues throughout the process and assist in resolving matters. Real estate lawyers can also advice clients of legal risks involved in the transaction, both short- and long-term. If the transaction results in legal conflict, a real estate lawyer can assist in the resolution.

With so many advantages of hiring a real estate lawyer, potential homeowners, business owners, farm managers, developers, landlords, and other parties can benefit from the services of a real estate lawyer. In Wisconsin, a real estate lawyer can assist with these matters. (This list is not all-inclusive. Contact a local real estate lawyer for a consultation pertaining to the specific matter.)

Real Estate Lawyer Services

  1. Purchasing rental properties
  2. Selling a home to a child or family member
  3. Buying a home from a parent
  4. Purchasing a home
  5. Title examinations
  6. Zoning issues
  7. Resolving Homeowner Association issues
  8. Construction contract review and issues
  9. Drafting land contracts
  10. Resolving conflicts with property titles
  11. Drafting development agreements
  12. Filing liens
  13. Resolution of boundary line disputes
  14. Purchasing land
  15. Drafting land rental agreements
  16. Reviewing offers to purchase a property
  17. Selling land
  18. Renting land to another party
  19. Drafting and negotiating brokerage agreements
  20. Dealing with restrictive covenants

The materials on this website are provided for informational purposes only and do not constitute legal advice. These materials are intended, but not promised or guaranteed to be current, complete, or up-to-date and should in no way be taken as an indication of future results. Transmission of the information is not intended to create, and the receipt does not constitute, an attorney-client relationship between sender and receiver. You should not act or rely on any information contained in this website without first seeking the advice of an attorney.

Starting a Wisconsin Business? Avoid these Legal Mistakes

why do small businesses fail

The first days of a new business are filled with decisions that can make or break a business. Along with a registration process, starting a new business comes with marketing, logistical, and legal decisions. While the latter may not be at the top of a new small business owner’s checklist, legal decisions can have positive and negative impacts on the health of the business. To avoid the negative consequences, avoid these common legal mistakes that small business owners make when starting a business.

Choosing a business entity without considering options

One of the most important decisions for any new business owner, choosing the business entity, has long-lasting legal and financial implications. There are many options, such as sole proprietorship, a limited liability company (LLC), partnership, and corporation. The type of business entity determines required documentation and tax payments, specifics of the resolution of liability issues, and whether raising money is possible. Choosing the wrong business entity can negatively impact both business and personal finances; contact an experienced business lawyer to determine the best business entity for the specific business situation.

Not drafting a partnership agreement

Entering into a business partnership is a common practice that can come with pitfalls, especially when a formal Partnership Agreement is not drafted. The Partnership Agreement is a legal document that should be drafted by a lawyer and customized for every party involved in the business. The document should include financial details, responsibilities of each partner, and information for a smooth conflict resolution and transition (if a partner wants to leave the business). All these details should be on paper; a verbal agreement or the absence of any Partnership Agreement can lead to serious conflicts and legal situations that could have been prevented.

Neglecting to put deals in writing

Documentation with other parties can feel like another unnecessary step, but actually serves as a protective safeguard. This applies even to subcontractors, which is often a necessary part of running a small business. Before subcontracting any work with other parties, contact an experienced business to draft a Confidentiality Agreement that ensures proprietary information is kept confidential and an Independent Contractor Agreement to put details of the arrangement down on paper.

Not establishing a hiring protocol

The hiring process comes with its own set of requirements. Specifically, certain paperwork needs to be obtained and kept on file. A business should also draft an Employee Offer Letter that spells out the details of the job, steps of conflict resolution, and includes any rules or regulations your employees need to be aware of. A few minutes of preparation and research can save a new business owner many headaches now and in the future.

The materials on this website are provided for informational purposes only and do not constitute legal advice. These materials are intended, but not promised or guaranteed to be current, complete, or up-to-date and should in no way be taken as an indication of future results. Transmission of the information is not intended to create, and the receipt does not constitute, an attorney-client relationship between sender and receiver. You should not act or rely on any information contained in this website without first seeking the advice of an attorney.

Business Contracts Every Small Business Should Have

small business owner with contractSmall business owners are busy professionals with a long task list. Often lost on the to-do list is securing the contracts that contribute to long-term success—and prevent negative legal issues later. Fortunately, the task doesn’t have to be cumbersome if the right legal professionals are consulted. Note, too, that there is value in consulting a local lawyer knowledgeable in local regulations.

This list of business contracts is not inclusive; there are other business contracts necessary for day-to-day operations. To get a comprehensive list and customized contracts, contact an experienced business lawyer.

Partnership Agreement

Drafting a Partnership Agreement is an important step in starting a business (including choosing an entity, more information here) that can have long-term ramifications. A Partnership Agreement is between all parties that invest in a business and should include the financial details, rights, and responsibilities.

The Partnership Agreement should detail the parties involved in the business, how profits and losses are handled, steps to be followed if a partner wants to leave the business, duties of each party, conflict resolution steps, and any process information for adding a partner. Because the details in the document need to be as specific as possible, contact a lawyer to draft this important contract. The absence of a Partnership Agreement may lead to serious conflicts and legal situations that could have been prevented.

Independent Contractor Agreement

Outsourcing services is an essential step for most small businesses. After all, there are some processes that make more financial sense to outsource as opposed to hiring an employee (and incurring those costs). In addition to independent contractors, this contract can also be used to short-term employees and consultants. An Independent Contractor Agreement details the exact nature of the relationship and that the business is not responsible for financial and tax obligations incurred for an employee.

Employee Offer Letter

Hiring an employee is a process that should be formalized before the first employee is hired. This eliminates any situations that can turn into a headache later, both legal and financial. An Employee Offer Letter explicitly spells out the details of the job, such as the position title, responsibilities, and finances. “At will” language should be included to indicate that the position can be terminated by the company or employee. The Employee Offer Letter should also specify other details, such as conflict resolution and that a Confidentiality Agreement should be signed.

Confidentiality Agreement

A Confidentiality Agreement is a vital part of business asset protection. This contract ensures that business proprietary information is kept confidential. This document should be signed by any party (employee or otherwise) that needs access to proprietary information or may develop products, strategies, or services that may become proprietary.

The materials on this website are provided for informational purposes only and do not constitute legal advice. These materials are intended, but not promised or guaranteed to be current, complete, or up-to-date and should in no way be taken as an indication of future results. Transmission of the information is not intended to create, and the receipt does not constitute, an attorney-client relationship between sender and receiver. You should not act or rely on any information contained in this website without first seeking the advice of an attorney.

What type of business entity should I choose?

person signing a document for starting a businessStarting a new business is a process with an extensive amount of decisions. One of the most important decisions for any new business owner, choosing the business entity when incorporating, is more abstract, but has significant legal and financial implications for the future. Specifically, the type of business entity determines required documentation and tax payments, specifics of the resolution of liability issues, and whether raising money is possible.

With so much at stake, settling on the right business structure is a decision that should be made after much thought and advice. This article is not meant to give the latter, only to inform potential business owners of the basic types of business. For expertise specific to the situation, contact a local lawyer that can assist with the decision, filing the correct paperwork, and any other best-laid practices that can prevent serious issues.

Sole Proprietor

A sole proprietor business structure is the picture that most people associate with a business. The business owner manages all daily operations, assets, and liabilities. Under this business structure, the owner is personally responsible for all liabilities. Sole proprietor businesses are appropriate for many different kinds of businesses, including service-oriented and at-home businesses.

Partnership

A partnership is a business structure with multiple owners. Because there are multiple partners, the profits, taxes, and liabilities are shared. With several owners, the partners are all personally responsible for liabilities. Practically, this business structure is ideal because owners can share the workload, benefits of business services (i.e. marketing, operational needs, supply purchasing, etc.) and contribute individual expertise.

Limited Liability Company

A LLC is right for company owners who want to limit their personal responsibility for liabilities (plus other advantages and disadvantages which can be discussed with a lawyer or business adviser). Often, a limited liability company is comprised of different owners with differing amounts of investment. If an owner wants to leave the company, they are only responsible for the amount invested.

Corporation

A corporation is an entity that is formed and taxed. Managers are not personally responsible for the liabilities, though a corporation can be expensive to form. A corporation can be funded by a pool of investors and run by directors. Because of the entity structure, extensive records are required and the profits are distributed to investors.

The materials on this website are provided for informational purposes only and do not constitute legal advice. These materials are intended, but not promised or guaranteed to be current, complete, or up-to-date and should in no way be taken as an indication of future results. Transmission of the information is not intended to create, and the receipt does not constitute, an attorney-client relationship between sender and receiver. You should not act or rely on any information contained in this website without first seeking the advice of an attorney.

Why should you draft a business succession plan?

hands of family business where they are doing business succession planningBusiness succession is a long-term plan that many Wisconsin business owners neglect—and with dire consequences. Our state is certainly not alone; a recent survey done by Nationwide stated that as many as three out of five business owners across the United States have not initiate the business succession process.

While it may not always be pleasant to think about the unexpected illness or personal circumstances that can pull a business owner away (though it can be enjoyable to consider retirement), the effort can be incredibly valuable when those situations occur. Business succession plans can be vital for the short-term (such as when an owner is ill) and long-term survival of a business (after a partner’s retirement). The effort can also be useful for selecting long-term strategies that can make the business transition financially feasible.

The business succession process inevitably boils down to the question, “who is the next owner/partner best for the business?” On a family farm or in a family-owned process, the answer (or answers) might be obvious as the next generation has indicated their interest. Non-family managers might also be candidates; identifying those parties is vital to the success of the business. If the next owner is actually numerous parties in a partnership, it can be helpful to identify their roles and put the financial details of the transition down on paper.

A good succession plan also addresses the issue of continuity, both during a short-term emergency (i.e. illness, personal emergency, etc.) and when an owner or partner decides to leave the business. This aspect of the plan addresses the interim and transitional situations and how to keep the business running—and succeeding—for the long-term.

By undertaking the business succession process early, areas of growth can also be identified and addressed. Put simply, what areas does the next generation of leaders need to learn to effectively manage the business? For continuity and success, it’s best to train and learn earlier so the next leader—or group of leaders—can gain experience now, such as when the owner wants to step away for a vacation or family need.

Another reason for tackling business succession early is the sheer amount of time it takes to develop and finalize a business succession plan. The planning process involves many different aspects that should involve the consulting of key financial consultants and legal experts. The process involves multiple steps that can take years to completely address and finalize.

Since lawyers are an integral part of ensuring that the business succession plan meets all legal criteria, it makes sense to start by contacting an experienced local business lawyer. A business lawyer can ask all the right questions and create a custom (and legally sound) business succession plan that contributes to success long after the owner or partner has stepped away.

The materials on this website are provided for informational purposes only and do not constitute legal advice. These materials are intended, but not promised or guaranteed to be current, complete, or up-to-date and should in no way be taken as an indication of future results. Transmission of the information is not intended to create, and the receipt does not constitute, an attorney-client relationship between sender and receiver. You should not act or rely on any information contained in this website without first seeking the advice of an attorney.

20+ Reasons Your Business Needs a Lawyer

business owners shaking over contract that a lawyer draftedA successful business is started and run with more than just in-depth knowledge of the selected industry. Legal knowledge is an integral part of start-up and day-to-day operations, saving the business from the expenses of a legal mistake or a legal action.

An experienced local business lawyer can be invaluable in many different situations, from navigating local Wisconsin zoning laws to resolving contract disputes. The list of situations that lawyers can assist with are long. This list of legal issues are just a few reasons to contact a lawyer to resolve conflicts and avoid the proverbial legal hot water.

  1. Starting a business (entity selection such as a LLC, LLP, C Corp, etc.)
  2. Purchasing a business
  3. Strategic legal and tax planning
  4. Operating agreements
  5. Drafting and editing by-laws
  6. Change of entity
  7. Buy-sell agreements
  8. Buy-back agreements
  9. Redemption agreements
  10. Drafting legal contracts
  11. Contract disputes
  12. Business torts
  13. Sale and acquisition of business assets and/or a business entity
  14. Business merger
  15. Dissolution of business entity
  16. Distribution of business assets to creditors and stakeholders
  17. Business succession plan
  18. Farm succession plan
  19. Property rental agreements
  20. Land rental contracts
  21. Collecting unpaid bills and debts
  22. Terminating a business

The materials on this website are provided for informational purposes only and do not constitute legal advice. These materials are intended, but not promised or guaranteed to be current, complete, or up-to-date and should in no way be taken as an indication of future results. Transmission of the information is not intended to create, and the receipt does not constitute, an attorney-client relationship between sender and receiver. You should not act or rely on any information contained in this website without first seeking the advice of an attorney.