Q1 Report - Issue Spotlight: Junk Fees and Court Costs

In providing assistance to rental households, one of the largest unmet needs for tenant advocacy stems from fines and fees that renters face that are either not authorized by their rental agreement or are excessive. These types of fees are commonly referred to as “Junk Fees” and include excessive late rent fees, escalating penalties that are not based on actual costs associated with remedying issues, penalties for not maintaining renters insurance, and bounced payment penalties.

For many renters, challenging the legitimacy of these charges presents a seemingly insurmountable obstacle. In some cases, tenants fear retaliation and nonrenewal of their rental agreement in the event they complain about charges throughout their tenancy. The Tenant Resource Center’s housing counseling services can empower tenants with information and referrals about the law and other resources, but it cannot provide legal advice or advocate for tenants’ rights in their cases.

As a part of the Tenant Resource Center’s work in response to the COVID-19 pandemic, the EDDP works in conjunction with Dane County’s emergency rental assistance program, Dane CORE. Dane County and the City of Madison administer Dane CORE through community organizations including the Tenant Resource Center, Urban Triage, and Community Action Coalition of South Central Wisconsin.

The Dane CORE Program and EDDP has provided Dane County with a rare opportunity to examine junk fees and other charges in greater detail by requiring additional details and oversight of these charges. Many of these charges get significantly more scrutiny in the processing of emergency rental assistance. The EDDP has afforded further ability for advocacy, with our partners negotiating with landlords, evaluating limitations under the law, and litigating these issues. Since the launch of the “Dane CORE 2.0” in September 2021, the Tenant Resource Center has withheld a total of $109,000 in junk fees. WIth an average rent in Dane County at $1,200/month, this $109,000 represents an additional 90 months of rent that would’ve otherwise gone to paying these costs.

Court Costs and Attorneys Fees

Wisconsin law prohibits landlords from charging their tenants court costs and attorney fees, unless a court orders those costs be paid by a tenant. However, landlords frequently try to pass these costs – especially the filing fees associated with an eviction action – on to their tenants.

These costs create significant obstacles on Dane County renter households, who already face significant rent burdens and an inability to cover their monthly bills. In most cases, these costs are added onto a tenant’s rent ledger without any consideration or discussion of whether they’re legally the responsibility of the tenant. Further adding to the pressure surrounding these costs, many landlords will add these charges to the ledger at the onset of the case while tenants are worried about their housing stability.

Many tenants will pay these costs, either not knowing they are unlawful or because they would rather pay an unlawful fee than to risk losing their housing or upsetting their landlord. Legal representation plays an important role in empowering tenants with knowledge about their rights, educating landlords who may not know these are unlawful fees, and reducing the fees charged to the tenant they are representing. The goal is that representation in individual cases will result in fewer landlords overall trying to charge these unlawful fees.