When does the 21-day period begin for security deposit returns or accounting purposes?

By Atty. Gary D. Koch of Pettit Law Group S.C.

When a tenant vacates at the end of a tenancy, the landlord must return the tenant’s security deposit and/or account for any funds withheld from the deposit. This blog post focuses on the timing of that return/accounting. Tristan has drafted prior blog posts that discuss the security deposit accounting letter itself:

How to Draft a Legal 21-Day Letter

The Ever-Important Security Deposit Transmittal Letter (or 21-Day Letter)

The deposit or accounting must be “delivered or mailed” to the tenant, per Wis. Stat. § 704.28(4)(c), within 21 days of the latest of:

• If the tenant vacates on the termination date of the rental agreement, the termination date of the rental agreement;

• If the tenant vacates or is evicted before the termination date of the rental agreement:

  • the date on which the tenant’s rental agreement terminates; or

  • if the landlord re-rents the unit before the tenant’s rental agreement terminates, the date on which the new tenant’s tenancy begins; or;

• If the tenant vacates or is evicted after the termination date of the rental agreement, the date on which the landlord learns that the tenant has vacated the premises or has been removed from the premises under s. 799.45 (2).

The above statutory section addresses all three potential vacate dates concerning the rental agreement termination date – on, before, and after. Please note that determining the actual “termination date” of a rental agreement does, in some instances, have some nuance, but that’s a discussion for another blog post.

Here are some practical examples of the above timing:

• If you have a tenant on a term lease that ends on September 30th and the tenant vacates on September 30th, the counting of the 21 days begins on September 30th, and you have through October 20th to return and/or account for the security deposit.

• If you have a tenant on a term lease that ends on December 31st, and the tenant vacates on September 30th, you must make “reasonable efforts” to mitigate the tenant’s damages by attempting to re-rent the rental unit. 

  • If you are unsuccessful in re-renting the unit despite reasonable efforts, the counting of the 21 days begins on December 31st, and you have through January 20th to return and/or account for the security deposit.

  • If you successfully re-rent the unit for November 1st, you have through November 21st to return and/or account for the security deposit.

• If you have a tenant on a term lease that ends on September 30th, but the tenant holds over and does not vacate until October 15th, the counting of the 21 days begins on October 15th, and you have through November 4th to return and/or account for the security deposit.

Note that, in all the above examples, and in every circumstance, if you begin counting the 21 days from when the tenant vacates, you should always be in compliance with the statutory timing of the security deposit/accounting return.

It should be noted that this blog post focuses on the latest (or last) day that you can send the deposit and/or accounting and comply with the law. There is absolutely nothing that precludes you from sending the deposit or accounting early.  It is highly recommended that, to avoid any potential issues, you should deliver or mail the security deposit or accounting as early as possible.  Failure to do so can be an expensive mistake. 

Finally, the law does not require you to list all amounts that the tenant owes you within 21 days.  Rather, it only requires you to account for how the security deposit was applied within 21 days.

This blog post was drafted by Atty. Gary D. Koch of Pettit Law Group S.C.