How Long Should A Landlord Save A Tenant's Lease and Other Rental Documents?
A while ago, I wrote a post recommending that landlords retain a denied rental applicant's application and related paperwork for at least 2 years from the date of denial. This post focuses on the situation where the landlord accepted the applicant, the applicant was your tenant, and the tenancy has ended for any reason. Under this scenario, how long should a landlord hold on to a past-tenant's rental documents (which would include the lease or month-to-month rental agreement, nonstandard rental provisions document, pet addendum, etc., etc.)?
The answer to this question, as in my prior post, depends on the "statute of limitations." A statute of limitations is a law that sets the maximum period in which a person can wait before filing a complaint or lawsuit against another person.
By entering into a lease or a month-to-month rental agreement (or any other rental document for that matter) with a tenant, you have entered into a contract. If a tenant refuses to take occupancy because the apartment was not in habitable condition as promised, the tenant could sue the landlord for breach of contract. If a landlord forgot to return a tenant's security deposit within the applicable time frame, the tenant could also sue the landlord for a breach of contract. Most violations of a lease or other rental agreement constitute a breach of contract.
The statute of limitations for filing a lawsuit based upon a breach of contract in Wisconsin is 6 years from the date of the breach. The safest course for a landlord is to retain a former tenant's rental file, including all contracts, for at least 6 years from the date the contract ended.
When it comes to the return of a security deposit, a landlord has 21 days after a lease has ended (or any other action set forth in Wis. Stat. § 704.28(4)) to return the security deposit or send a letter itemizing how the security deposit was applied. As such, a landlord would be prudent to retain the tenant's file and all contracts for at least 6 years after the deadline for returning the tenant’s security deposit (i.e., 6 years + 21 days from the date of any notice sent under Wis. Stat. § 704.28(4)).
If you forget to keep your past tenant's rental documents for at least 6 years, you could end up in the unenviable position of trying to defend yourself against a lawsuit filed by a past tenant whose tenancy you have no memory of. As such, you would have no documents to refer to, to refresh your memory, nor would you have any documents that you could use as an exhibit in court. Keep in mind that a tenant typically only has one landlord at a time, whereas you may have tens or hundreds of tenants simultaneously. It is probably safe to say that the tenant will have a better memory of you and his or her tenancy than you will have of them. Therefore, keeping all tenant-related documentation for as long as the past tenant can sue you is very important. With computers and the ability to save things digitally these days, a landlord has no excuse for not holding on to a tenant’s rental file for at least the length of the statute of limitations.
