For the past year and a half, the tenant side of landlord tenant law in Wisconsin has had serious ammunition when landlords provide their tenants with leases that are void and unenforceable under Wis. Stat. section 704.44 and Wis. Admin. Code ATCP 134.08.

One case is Koble Investments v. Marquardt (2022AP182), a Wisconsin Court of Appeals decision from 2024 that has recently been argued before the Wisconsin Supreme Court.

Koble involves a lease that was found void and unenforceable because it allowed a lease to be terminated if the premises was used for an “unlawful purpose” without including the notice of domestic abuse protections required by Wis. Stat. section 704.14.

About Koble

Under Koble v. Marquardt, the remedy for a tenant in a void and unenforceable lease is the return of all payments made under the lease. When viewed as a pecuniary loss under ATCP 134 and Wis. Stat. section 100.20(5), tenants are therefore entitled to double the amount of these payments as damages.

For tenants who often lack leverage in disputes, this ruling has made a significant difference in cases that involve the application of ATCP 134.08.

Speaking personally, my clients and I have used it to get evictions dismissed with favorable move-out dates and payment agreements on several occasions, and I know my colleagues have as well.​

At Issue: The Proper Remedy

However, the decision is currently under review by the Wisconsin Supreme Court, which recently heard oral arguments.

One of the issues under review is the proper remedy for a tenant when a landlord violates section 704.44 and ATCP 134.08. As previously noted, the current remedy prescribed by the Court of Appeals is the return of all payments under the lease. This is described in the decision as the “pecuniary loss” under section 100.20(5) and ATCP 134. However, as the decision states, Koble essentially conceded this point to Marquardt by failing to develop adequate counterarguments, particularly whether a finding of actual causation is required in determining whether there was a “pecuniary loss.”

Koble’s Arguments

In its briefing to the Supreme Court, Koble argued that a showing of a specific causal nexus between the pecuniary loss and the violation of ATCP 134.08 is required for a tenant to be awarded damages under section 100.20(5), and that the Court of Appeals impermissibly attached strict liability to the statute.

Highlighting the particular facts of the case, Koble argued there is no evidence that the lack of domestic abuse victim’s protections notification in the lease caused a pecuniary loss to Marquardt, or that such pecuniary loss would be all rental payments made under the lease.

In other words, Koble seems to be arguing that there is a requirement of “actual harm” reflected as a dollar amount and that such harm is not present.

Marquardt’s Arguments

Marquardt, on the other hand, argues that the return of all payments made under the lease is both sanctioned by law and appropriate as a remedial measure. Marquardt argues that ATCP 134 and Wis. Stat. chapter 704 do not directly speak on the proper remedy for a violation of ATCP 134.08, but that by using the term “void” it follows that a tenant is due reimbursement for money paid under the void lease and cites section 8.47 of the Wisconsin Landlord and Tenant Manual (State Bar of Wisconsin PINNACLE®) for support.

Marquardt further cites the provision in the “customer’s remedies” section of the Consumer Act which states that a customer under the act is entitled to return of all payments made under a void transaction as informative. If the Court finds that a residential tenant is a “customer” under the Consumer Act, as Marquardt also argues, this point may be more persuasive.

A Satisfactory Remedy?

In response to Koble’s claim that the relevant lease provision, assuming it violates section 704.44, did not harm the tenant because there was no attempt to enforce it, Marquardt argues that a tenant may feel trapped in a void lease and unable to report crimes in which they are the victim for fear they may be evicted.

Koble argues that chapter 704 does, in fact, directly speak on the remedy issue. Specifically, it cites Wis. Stat. section 704.01(2), which defines a periodic tenant as a tenant who holds possession of real property without a valid lease and pays rent on a periodic basis.

Therefore, in lieu of a finding of a pecuniary loss as specific damage caused by the violation of ATCP 134.08, damages under section 100.20(5) are non-existent and the void lease converts into a periodic tenancy. In this situation, the tenant would still be under an obligation to pay rent to the landlord who drafted the void and unenforceable lease but would, if they wished, be able to provide a 28-day notice to vacate after which all obligations under the periodic tenancy would cease.

Presumably, Koble would argue this is a satisfactory result because in lieu of a pecuniary loss (as defined by Koble’s causation theory, in which case the tenant could be provided damages under section 100.20(5)), a tenant could simply get out of the lease by providing a 28-day notice.

However, it should be noted that the tenant would have to take this measure to avoid being charged an additional month’s rent, even if the written lease they signed is determined void and unenforceable.

Legal Action of Wisconsin’s Amicus Brief

Koble further argues that, if the Legislature wanted to create a stronger remedy, it would further specify so in the statutes. In its Amicus Brief, Legal Action of Wisconsin (LAW) argues that this is unacceptable and contrary to law. LAW points to cases that have rejected mere severance of an illegal provision in the context of unfair trade practices, and characterizes Koble’s proposed remedy as a form of severance.

LAW also notes that the Supreme Court has determined that a primary purpose of ATCP 134.08 is to “eliminate [the prohibited] clauses and the intimidation of tenants that the inclusion of such unenforceable clauses poses,” and that therefore a return of all rent payments is the type of robust deterrent required to fulfill this function.

Finally, LAW expresses agreement with Marquardt that the remedial measures under Wis. Stat. section 425.305 are highly informative to the issue of damages under section 100.20(5) for violations of ATCP 134.08, and further supports the argument that the proper remedy is the return of all payments made under a void and unenforceable.

One could also argue that the purpose of section 704.01(2) is to establish tenancy rights and leasehold interests where the parties have agreed to a transfer of property without agreeing that the transfer be for a “definite period of time,” in contrast to a true lease under Wis. Stat. 704.01(1), and not to provide a remedy for violations of section 704.44 and ATCP 134.08.

An Effective Measure … for Now

It is unclear what the Wisconsin Supreme Court will ultimately decide, and the issue of proper remedy is one of several under review. Seen through the prism of “fairness,” there are undoubtedly those who will find fault in either Koble’s or Marquardt’s proposed solutions, if not both.

For now, it appears beyond dispute that the Court of Appeal’s sanctioned remedy is an effective measure in tenants with significant leverage when disputes over such leases arise.

This article was originally published on the State Bar of Wisconsin’s Public Interest Law Section Blog. Visit the State Bar sections or the Public Interest Law Section web pages to learn more about the benefits of section membership.