The following questions have been asked recently regarding the termination of leases and landlord tenant rights and obligations
Holdover tenants
The tenant had a six-month lease that expired at the end of the month, but the tenant did not move out nor would the tenant sign a new lease. What can the landlord do?
Per the terms of the lease the tenant no longer has the right to remain in possession of the unit. The landlord may begin an eviction action to remove the tenant from the premises. Alternately, the landlord may elect to create a month-to-month tenancy by accepting rent from the tenant. Wis. Stat. § 704.25 addresses the rights and obligations of landlords and tenants when a tenant stays past the expiration of a lease term. Except for statutory exemptions, the terms of the holdover tenancy remain the same as those of the original lease, including the payment of rent. A holdover tenancy may be terminated either by the tenant or the landlord with proper notice according to the rules for termination of month-to-month tenancies in Wis. Stat § 704.19.
Tenant vacating early: rent
A lease expires at the end of the month. The tenant decided to leave early and instead of paying the full month’s rent she subtracted five days’ rent because she was leaving early. The property owner wants to withhold the rent amount that is still due from the security deposit. Is this appropriate?
The written lease provides that the tenants are entitled to occupy the leased premises until the end of the month and the landlord is entitled to the full month’s rent. The tenants are not entitled to unilaterally prorate the rent because they vacated a few days early unless such a right is specifically stated in the lease or the landlord agrees.
Wis. Admin. Code § ATCP 134.06(3)(a)(2) provides that, “A landlord may withhold from a tenant’s security deposit only for the following: … Unpaid rent for which the tenant is legally responsible, subject to s. 704.29, Stats.”
Tenant vacating early: security deposit and duty to mitigate
The tenant decided he wanted to move out in two days even though his lease ran for several more months. Is the landlord required to return the tenant’s security deposit within 21 days of the tenant’s move or does the landlord wait until a new tenant is found and apply the deposit against any rent losses?
Security deposits, their return and charges against them are the most frequent area of dispute in landlord/tenant relations. The return of security deposits is regulated by Wis. Admin. Code § ATCP 134.06. Per the Code, the security deposit, less any withholdings, must be returned within 21 days of the tenant’s surrender of the premises. The code limits the basis upon which a landlord may withhold security deposits to tenant damage, waste or neglect, nonpayment of rent or utility charges, or other lawful reasons designated in nonstandard rental provisions and establishes the timing and manner of giving notice when all or part of a security deposit is withheld. A detailed statement of claims must be given with a return of any security deposit balance owed within 21 days after the tenant surrenders the premises.
§ ATCP 135.06(2)(b) provides that a tenant surrenders the premises on the last day of tenancy provided under the rental agreement, except that:
1. If the tenant vacates before the last day of the tenancy and gives the landlord written notice that the tenant has vacated, surrender occurs when the landlord receives the written notice. If the tenant mails the notice to the landlord, the landlord is deemed to have received the notice on the second day after mailing.
2. If the tenant vacates the premises after the last day of the tenancy, surrender occurs when the landlord learns that the tenant has vacated.
3. If the tenant is evicted, surrender occurs when a writ of restitution is executed, or the landlord learns that the tenant has vacated, whichever occurs first.
Failure to comply with these rules violates Wis. Stat. § 100.20(5), which allows recovery of double damages, costs and attorney fees.
If a tenant breaks his or her lease, the tenant remains liable for the rent payments for the balance of the lease term, subject to the landlord’s duty to mitigate, as stated in Wis. Stat. § 704.29. The landlord has a duty to lessen the damages by trying to re-rent the unit as soon as possible. The tenant will have to pay rent until a new tenant signs a lease and begins paying rent.
The landlord must advertise the unit in the same way he normally advertises vacant apartments and must show the unit to interested tenants, but is not required to rent that unit first. The landlord may charge the tenant the actual costs associated with re-renting the unit, but not for time spent.
See Legal Update 03.07, “Residential Rental Primer,” online at www.wra.org/LU0307.
Unknown lease terms
The landlord has a tenant who has been paying month to month. Now the property is being sold and part of the offer to purchase is that the buyer wants the tenant out before closing. The tenant has lived in the house for years but there is no documentation as to the lease terms. What does the agent do?
If it is a periodic tenancy, the landlord/seller may give timely written notice to terminate the tenancy. Per Wis. Stat. § 704.19, the amount of time for the notice will be determined by the length of the rental period, i.e., monthly, quarterly or yearly. If it is unclear what the actual agreement is between landlord and tenant, the seller may consult with legal counsel before entering into an offer to purchase agreeing to have the tenant vacate before closing. Because a buyer will take title to the property subject to the tenant’s rights, it is best for the seller to determine the tenant’s rights before entering into an offer. Although the seller may presume a month-to-month tenancy and elect to give a 28-day notice, the tenant may challenge the term and it may then be up to the court to determine the type of tenancy if the parties do not agree.
Winter evictions — forms
A duplex tenant with a month-to-month tenancy is delinquent with the rent for December and January. Does the landlord have the right to evict the tenant at this time of the year? What forms should the landlord use to start an eviction?
Wisconsin statutes do not prohibit evictions in winter. The landlord begins the eviction process by delivering written notice terminating the tenancy to the tenant following the Wis. Stat. § 704.17 requirements. Per § 704.17(1)(a), if a month-to-month tenant fails to pay rent when due, the tenancy is terminated if the landlord gives the tenant notice requiring the tenant to pay rent or vacate on or before a date at least five days after the giving of the notice and if the tenant fails to pay accordingly. The landlord must be careful that any date stated as the tenant’s deadline is five days after service of the notice or the case may be dismissed — using a notice that says “within five days service herein” is safer. In general, there is no mandatory form for giving a five day notice to a tenant for failing to pay rent or other violation of the rental agreement. The notice should clearly identify the tenant, the landlord and the property address. In addition, it is wise to include a specific description of the violation, the dates of occurrence and a paragraph stating that the tenant is not relieved of his or her responsibilities under the lease should the tenant elect to move.
Renting listed properties
A seller is in financial distress and may be facing foreclosure. A buyer had an offer that fell through but now the seller is willing to rent the home to this person. Can the seller rent the property? What would the client/tenant’s rights be if the home were to go into foreclosure?
The agent should advise the client to consult an attorney for advice on the legal implications of renting from a landlord/owner who is actively looking to sell the property as a “short sale” and could possibly be facing foreclosure. Generally speaking, a buyer would take title subject to the tenant’s rights under the lease and any offer would be drafted subject to the tenant’s rights.
That may not be true in the case of a foreclosure, however, because the tenant may be named as a party to the foreclosure lawsuit. The tenant will have notice of the pending foreclosure per the new Wisconsin law adopted to protect tenants’ rights. Federal and state law protections for tenants occupying property in foreclosure are discussed on Pages 11-12 of the June 2009 Legal Update, “Mortgage Foreclosure Scams,” online at www.wra.org/LU0906.
The statutes and regulations referenced in these questions and answers — and a host of other valuable reference materials — are available on the Residential Rental Resource Page, online at www.wra.org/Rental.
Tracy Rucka is a staff attorney for the WRA.