Wisconsin Security Deposit Laws in 2025

Introduction to Wisconsin Security Deposit Laws

If you're renting out property in Wisconsin, getting security deposits wrong can cost you—literally. I've seen landlords lose thousands in penalties simply because they didn't return a deposit on time or tried to charge for normal carpet wear. Wisconsin's security deposit laws are strict, and tenants know their rights.

The good news? Once you understand the rules managing security deposits is straightforward. Let us walk through what you need to know.

How Much Can You Charge?

Wisconsin keeps it simple. You can charge up to one month's rent for an unfurnished unit, or two months' rent if the place comes furnished. That's it.

This is what catches some landlords off guard, you can not increase the security deposit mid-lease, even if you raise the rent. If your tenant signs a lease at $1,200 per month and you later bump it to $1,300 that original $1,200 security deposit stays put.

Also, forget about creative workarounds. Some landlords try calling extra fees "pet deposits" or "cleaning deposits" to get around the limit. Wisconsin law doesn't allow this—everything counts toward that one or two-month maximum.

Quick exception: If you live in your property and it has three units or fewer these limits donot apply to you. The same goes for college dorms and similar student housing.

The 21-Day Rule (This One's Critical)

You have exactly 21 days from when your tenant moves out to return their security deposit. Not 22 days,not sometime this month but twenty-one days.

Miss this deadline, and things get expensive fast. Under Wisconsin law, if you don't return the deposit within 21 days, you forfeit your right to keep any of it—even if the tenant owes you money or damaged the property. The entire amount goes back to them.

It gets worse. If your tenant sends you a written demand and you still do not pay up within seven days, they can sue you for double what you withheld plus their attorney fees and court costs.

Modern property management software like Hemlane can help you avoid these headaches by automating deposit tracking and setting reminders before deadlines hit. When you're managing multiple properties, it's easy to lose track of dates—and that's when penalties add up.

What You Can Actually Deduct

Wisconsin law allows deductions for specific things:

• Unpaid rent or late fees
• Utility bills are still in your name
• Actual damage that is beyond normal wear and tear
• Cost to rekey if they don't return all the keys
• Removing abandoned belongings

But this is where landlords run into trouble because you cannot deduct for normal wear and tear. It does not matter what your lease says, state law overrides it.

Normal Wear vs. Damage: Where Landlords Get It Wrong

I have reviewed countless security deposit disputes and this is where most problems start. Landlords see worn carpet or faded paint and assume they can charge for it. They cannot.

Normal wear and tear that cannot be charged

• Paint that's faded or slightly scuffed after a three-year tenancy
• Worn out carpet in high-traffic areas but not stained or torn
• Minor nail holes from hanging pictures
• Toilets or sinks with stains from regular use
• Cabinet doors that stick a bit

Actual damage that can be charged:

• Fist-sized holes punched in walls
• Carpet with bleach stains or cigarette burns
• Broken appliances due to misuse
• Smashed windows
• Missing cabinet doors

The distinction matters. One landlord I know tried charging $800 for carpet replacement in a unit where the tenant lived for four years. The carpet was worn but not damaged. The tenant sued, won double damages and the landlord ended up paying $1,600 plus legal fees.

Pro tip: Take detailed photos with timestamps when tenants move in and out. Hemlane and similar platforms let you store these digitally with automatic date stamps that hold up much better in court than random phone photos.

Do Not Forget About Interest

If you hold a security deposit for more than a year, you owe your tenant 5% annual interest which starts accruing after year one.

Let us say you collected a $1,500 deposit and your tenant stays three years. You owe them $150 in interest (5% of $1,500 for the two years after the first). This gets returned with the deposit, and you can't reduce it even if you make other deductions.

Some Wisconsin cities set their own rates. Madison ties its rate to the Federal Home Loan Bank savings rate, which changes periodically. Always check your local ordinances.

When Things Go Wrong: What Tenants Can Do

If you mess up a security deposit return, Wisconsin tenants have real teeth in pursuing you:

They'll typically start with a demand letter sent via certified mail. If you ignore it, they can file in small claims court which handles amounts up to $10,000 more than enough for most deposits. They do not need a lawyer because the filing fee is minimal and if they win, you are paying their costs.

It is worse if a court finds you acted in bad faith like inventing damage charges or ignoring the 21-day deadline you could owe double damages plus their attorney fees. Repeat offenders risk fines between $100 to $1,000 per violation and potentially losing the ability to collect security deposits in the future.

Practical Steps to Protect Yourself

After working with hundreds of Wisconsin landlords this is what actually works:

Before tenants move in

• Complete a detailed move-in inspection together
• Take photos or video of every room including close-ups of existing damage
• Have both parties sign off on the condition report

During the tenancy

• Keep records of all maintenance and repairs
• Document any issues as they arise
• Respond promptly to repair requests (this prevents small problems from becoming security deposit battles)

When tenants move out

• Schedule a walk-through inspection within 48 hours if possible
• Take the same detailed photos you did at move-in
• Calculate any legitimate deductions immediately
• Send an itemized list with receipts for any work done
• Return the remaining deposit within 21 days

This is where property management software becomes genuinely useful. Hemlane, for instance, lets you track the entire deposit lifecycle—from collection through itemized deductions to final return—with automatic deadline reminders and digital documentation. When everything's in one system with timestamps and receipts, you're protected if a dispute ends up in court.

The Bottom Line

Wisconsin's security deposit laws favor tenants, but they are not unfair they just require landlords to be organized and honest. Charge the right amount, document everything, distinguish between normal wear and damage, pay interest when required and return deposits on time.

Get these steps right, and security deposits become routine instead of risky. Get them wrong, and you are looking at penalties that far exceed whatever you tried to withhold.

The landlords who avoid problems are not necessarily the ones with the nicest properties but they are the ones with good systems in place. Whether you use property management software, detailed spreadsheets or a reliable calendar system, having a process makes all the difference.

Just do not forget that 21-day deadline. Seriously.

Frequently Asked Questions

What is the law on returning security deposits in Wisconsin?

In Wisconsin, landlords are required to return a tenant's security deposit within 21 days after the tenant vacates the property. If there are deductions for damages or other lease violations, the landlord must provide an itemized statement detailing these deductions.

What can be withheld from a security deposit in Wisconsin?

In Wisconsin, landlords can withhold from a security deposit for unpaid rent, damage to the property beyond normal wear and tear, and other breaches of the lease agreement such as unpaid utility bills that the tenant is responsible for.

Can a landlord charge for cleaning in Wisconsin?

Yes, in Wisconsin, a landlord can deduct cleaning costs from the security deposit if the cleaning is necessary to return the rental unit to the same level of cleanliness it was at the start of the tenancy, based on the condition noted in the move-in inspection report.

Can a landlord charge for painting in Wisconsin?

A landlord in Wisconsin can charge for painting if it is necessary to repair damage caused by the tenant that goes beyond normal wear and tear. However, if painting is required due to normal wear and tear, the cost should not be passed onto the tenant.

Do landlords have to paint between tenants in Wisconsin?

There is no specific legal requirement in Wisconsin that landlords must repaint between tenants. It typically depends on the condition of the property and the agreement between the landlord and the new tenant. Repainting may be done as needed based on wear and tear or at the landlord's discretion.

Can landlords charge for carpet cleaning in Wisconsin?

Landlords in Wisconsin can charge for carpet cleaning if the need for such cleaning is due to more than normal wear and tear. If the carpet cleaning is needed to address conditions documented during the move-in inspection that go beyond normal use, the cost can be deducted from the security depos