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December 2011

Renters May Face New Security-Deposit Obstacles

 

A relatively little-known provision of the “Tort Reform Act” passed in late October by the Wisconsin Legislature and signed into law by Governor Scott Walker could have a negative impact on renters. The act, sponsored by Representative Robin Vos (R–Burlington), places new restrictions on attorneys’ fees that could be awarded by a state court if the plaintiff wins the case.

Prior to the act, a renter who unjustly did not receive his or her security deposit back from a landlord could sue for double damages, along with costs and a “reasonable attorney’s fee.” The Wisconsin Legislature enacted this consumer-protection provision many years ago because of concerns landlords might unreasonably withhold security deposits.

Landlords typically require security deposits to be paid by the renter at the beginning of the lease so that they have the ability to pay for some or all of the necessary repairs caused by tenant damage during the term of the lease agreement. Unfortunately, security-deposit disputes continue to be a major complaint area for the Wisconsin Bureau of Consumer Protection and the bureau has often found that a landlord has unreasonably withheld a tenant’s security deposit. To a renter, the security deposit could be several hundred dollars to over a thousand dollars and, therefore, can be financially quite substantial. To be fair, the bureau has also found that a number of tenant complaints were not justified.

In a dispute, the renter often has little bargaining power to regain the security deposit unless he or she has the ability to take the landlord to court. Under the prior law, attorneys would often take the cases because of the ability to collect a “reasonable attorney’s fee” if their tenant client won the case.

However, the Tort Reform Act creates a new limit of “three times the amount of the compensatory damages awarded” by the court. This likely means many attorneys will quit bringing security-deposit cases, and the primary recourse for tenants will be to complain to a significantly downsized Bureau of Consumer Protection. In all, this is a likely a major setback for our state’s many hundreds of thousands of tenants. 

Wisconsin Bans Unwanted Text Messages

On the upside for consumers, the Wisconsin Senate recently passed legislation banning unwanted text messages for those who have registered their cell phones under the state’s Do-Not-Call Law. Senator Van Wanggard (R–Racine) is the lead sponsor of the bill and argues, “While some cell phone users may have unlimited test message plans, for others, these junk texts can cost 20 or 30 cents apiece. It adds up.” This bill is waiting for State Assembly action.


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