So in my opinion, a pet deposit is not a securtiy deposit and is if improperly withheld is not subject to double damages and atty. fees claims. But I am sure that there are tenant advocates who would wholeheartedly disagree with me.

I have not had to litigate this issue so I do not know how a court would handle such a situation. I do not believe there is any Wisconsin caselaw on the issue either.

Good question.

The short answer to your questions as to whether or not deducting $X from a tenant’s security deposit due to damage and then not repairing the damage is fraud — is “no”, not in my opinion. If a tenant causes damages — it is damage whether or not it is repaired. If the landlordd were to sell the property and not repair the damage, s/he would get a lower offer due to the damage that was caused. So the landlord still realizes the damage even if s/he doesnt make the repairs.

There is not caselaw on this specific issue other than what I reference in the blog post. A tenant advocate can certainly argue otherwise. So I am not saying that my view is correct — it is just my view but one that I believe is legally sound and would be comfortable making in court.

For example, let’s say I install new carpeting for a tenant. The tenant stays for 6 months and during that time causes several stains on the carpet. I hire a carpet cleaner to remove the stains but they will not come out. I may elect not to replace the carpet in that situation as the carpet is relatively new and in otherwise good condition save for the stains. Even though I have not replaced the carpet, I still have been damaged as I have 6 month old carpet with permanant stains in it.

As a result, the next tenant may not pay the same rent because of the stains or if I am selling the property the new buyer may elect to tear out the carpet as a result of the stains and thus their offer would be less as the carpet with stains is of no value to them.

But it wouldnt make since to tear up otherwise perfectly good carpet in that scenario especially if the stains could be covered by an area rug — but nontheless I have still been damaged as a result of the stains on the carpet due to the tenant’s carelessness. If I keep a portion of the tenant’s security deposit for that damage, no fraud has been committed. In that situation many landlords will charge the tenant for the cost of the cleaning and an amount that will compensate them for the damage and not end up replacing the carpet. I think that a tenant would prefer this alternative rather than to be responsible for paying for the enter replacement of the carpet due to the stains. But a landlord should still be compensated for the loss in value due to the stains.