SB 1063

This bill prohibits landlords from charging application fees to prospective tenants. The bill also modifies certain requirements when a landlord charges a fee to a tenant for a credit check or background check.

Current statutes do not specifically address application fees charged by a landlord for consideration of a rental application. However, the Department of Agriculture, Trade and Consumer Protection has promulgated rules defining an “earnest money deposit” as the total of all payments or deposits “given by a prospective tenant to a landlord in return for the option of entering into a rental agreement in the future, or for having a rental agreement considered by a landlord,” which includes an application fee. DATCP rules require a landlord to fully refund an earnest money deposit if 1) the landlord rejects the rental application or refuses to enter into a rental agreement with the applicant; 2) the applicant withdraws the rental application before the landlord accepts the application; or 3) the landlord fails to approve the rental application within a specified period. If the landlord approves the application and the applicant fails to enter into the rental agreement, the landlord generally may withhold from the earnest money deposit an amount sufficient to compensate the landlord for actual costs and damages incurred because of the prospective tenant’s failure to enter into the rental agreement. If the applicant enters into the rental agreement, the landlord must apply the earnest money deposit as rent or as a security deposit or return it to the tenant.

The bill prohibits a landlord from charging a prospective tenant an application fee or accepting earnest money from a prospective tenant any portion of which includes an application fee. The bill defines an “application fee” as any charge or fee imposed by a landlord on a prospective tenant for the landlord’s review and consideration of an application for tenancy under a rental agreement. An application fee does not include an authorized credit check or background check fee (discussed below).

Under current law, a landlord may require a prospective tenant to pay the landlord’s actual cost, up to $25, to obtain a credit report on a prospective tenant. If the prospective tenant is not a Wisconsin resident, the landlord may also require the prospective tenant to pay the landlord’s actual cost, up to $25, to obtain a background check. Before requesting a credit report, a landlord must notify the prospective tenant of the charge. The landlord may not require a prospective tenant to pay for a credit report if the prospective tenant provides the landlord with a credit report that is less than 30 days old before the landlord requests a credit report from a credit reporting agency. A landlord that requests a credit report or background check must provide the prospective tenant with a copy.

The bill requires a landlord to give a prospective tenant a reasonable opportunity to provide to the landlord a credit report before the landlord may charge the tenant for the cost of obtaining a credit report from a credit reporting agency. The bill also allows the tenant to provide a credit report that is less than six months old, rather than 30 days old. The bill creates similar provisions for background checks. The bill also establishes a time frame for a landlord to provide to a prospective tenant a copy of a credit report or background check report obtained by the landlord and charged to the tenant and allows the tenant to specify whether the copy is provided in digital or print format or both.