ATCP 134 contains specific rules regarding when and how a landlord can charge a rental applicant for the cost of their credit report. As background, ATCP 134 is the chapter of the Administrative Code of Wisconsin that sets forth 21 requirements that Landlords must follow or else risk getting sued for double damages and attorney’s fees by the applicant or tenant.
The applicable portion of the rules regarding credit checks is located at ATCP 134.05(4). This section says that:
1. A landlord may charge a rental applicant the actual cost of their credit check up to $20.
- So if the actual cost to the landlord to order the report is only $10 then the landlord can only require the applicant to pay $10.
2. In order to charge the applicant the credit report fee the landlord must obtain the report from a consumer reporting agency that compiles and maintains files ona nationwide basis.
- So a landlord can only charge the applicant the fee if s/he is obtaining the credit report from one of the “Big 3″ (Experion, Equifax, or Trans Union)
- Thus a landlord cannot charge the tenant for the cost of the report if they are obtained from a local or regional consumer information dateabase, credit brokers, credit resellers etc.
3. The Landlord must notify the applicant of the cost before ordering the report.
4. The landlord must provide a copy of the credit report to the applicant if the applicant is paying for the report.
5. The landlord cannot charge the applicant for the cost of the credit report if the applicant provides the landlord with a copy of his/her credit report (obtained from one of the “Big 3″) that is less than 30 days old.
- If you are faced with this situation, I would strongly advise the landlord to still order a nmore recent report at their own expense to insure that the report provided by the tenant has not been modified.
#1 by Admin on June 30th, 2009
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written by Scott Franken, June 09, 2009
Reading about the Rent Recovery Service offered in this months newsletter sounded interesting. Question; Can I charge or add an extra $15 fee to a new tenant for this service before I use it? I would tell them when they vacated my unit and they did not owe any back rent they would have the money returned. If they owed me money and did not pay up I would use the $15 to report them to the Rent Recovery Service. Is this legal? Is there a disclaimer I can have them sign?
#2 by Admin on June 30th, 2009
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written by Tristan R. Pettit, June 10, 2009
Scott – Thanks for your question and for visiting the site.
I like the way you think. Unfortunately it is my belief that you would be in violation of the Wisconsin Administrative Code – ATCP 134 if you added a provision in your rental agreement requiring a tenant to pre-pay you the $15 to use Rent Recovery Service in case they should vacate and owe your past rent or damages.
ATCP 134.08(3) states that a landord cannot include in a rental agreement a provision that would require payment by a tenant for the landlord’s attorney’s fees or costs for any legal action or dispute arising under the rental agreement.
Charging a tenant the $15 cost that Rent Recover Service charges you for collection attempts on a debt would, in my opinion, be charging the tenant for a “cost” “incurred by the landlord” “in a dispute arising under the rental agreement.”
If this language was included in your rental agreement it is my opinion that not only could the tenant sue you for double damages and atty. fees but under the Baierl v. McTaggart case your rental agreement could be declared unenforceable as against the tenant. If you are interested in reading the Baierl case it can be found at 245 Wis. 2d 632, 629 N.W.2d 77, 2001 WI 107. My law firm represented the landlord in that case and he had one of the 7 illegal provisions (as set forth in ATCP 134.08) in his rental agreement and even though he didn’t try to enforce against the tenant, he still lost the case.
#3 by scott on December 27th, 2010
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as in your atcp previous post, i believe if a lease is invalid there are non contract remedies. this was a quote by justice crooks in his opinion on the baierl case.
My question is. what are “non contract remedies” or what is included in non contract remedies?
rent and late fee due?
damages to property?
#4 by Tristan R. Pettit, Esq. on December 27th, 2010
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The primary non-contract remedy referred to in Baierl is the doctrine of “unjust enrichment. Unjust enrichment is a doctrine that states that a person should not be permitted to unjustly enrich himself at the expense of another and should be required to provide restitution for property or benefits received, retained, or taken. For example just becasue a lease is declared unenforceable against a tenant due to the inclusion of an illegal clause, the landlord should still be entittled to some form of payment for the period of time that the tenant used and occupied the unit. To allow otherwise would allow the tenant to have been unjustly enriched as s/he lived in the unit and received a benefit — a roof over their head — and should have to reimburse the landllord for that benefit. Since the contract is not enforceable anymore due to the illegal provisions, the landlord would have to pursue a tenant based on a theory of unjust enrichment to recover money for the benefit that the tenant received by living and using the rental property.
Quantom meruit is another non-contract doctrine that would apply when services are provided. It technically means “as much as is deserved” and is a legal theory that a person or business that provides a service to a client would use if the tenant allowed the work/services to be completed and didnt pay for that work. It measures recovery under an implied contract to pay compensation as the reasonable value of the services.
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#5 by John on November 10th, 2012
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So, if I understand correctly, I cannot charge a tenant for a credit report unless I order one directly from one of the big 3? Or can I order, for instance, a TransUnion credit report from a credit bureau such as this one http://www.cbacredit.com?
#6 by Tristan R. Pettit, Esq. on November 11th, 2012
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You cannot charge the tenant for the credit report (up to $20) if you purchase it from a reseller. It do not know if this company is a reseller or not. Typically yes, you can only charge if the credit report is pruchased from one of the big 3 – credit bureaus as they are the only companies that compile the info on a nationwide basis. Some people may disagree with me but that is my interpretation of the Regulation.
#7 by Pete on April 26th, 2013
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Tristan, I am a relatively inexperienced renter in WI and I have come across a landlord who is trying to charge me a “nonrefundable mandatory $100 credit/background check and administrative fee” in order to accept my rental application. I have offered to provide my own credit report as allowed under ATCP 134 and the landlord says it is not good enough. Is this fee a violation of ATCP 134? Would the $100 be considered an “earnest money deposit” which must be refunded or applied to the rent? Thanks.
#8 by Tristan R. Pettit, Esq. on May 1st, 2013
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Pete — Thanks for your comments/questions. I am not allowed to give legal advice via this blog unfortuantely and your questions are seeking legal advice. I would suggest that you retain a lawyer that represents tenants to advise you.
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