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All Leases Not Created Equal in Wisconsin

The Post-Crescent
April 28, 2004

Each week, the real estate section of the newspaper features investment properties for sale, describing them as an ideal source of supplementary income. Owning rental properties can be a good way to make money.

Anyone who intends to be a residential landlord in Wisconsin needs to be aware of several potential pitfalls.

Most of the standard form leases found in office supply stores are not designed for use in Wisconsin. The state has some relatively unique rules on residential leases.

A recent Wisconsin Supreme Court decision held that the inclusion of an improper provision within a lease rendered the entire lease invalid.

Given the consequences, anyone planning on being a residential landlord would be well served by having leases reviewed by someone knowledgeable regarding Wisconsin landlord-tenant law.

Among the prohibited terms appearing most often in “off-the-shelf” form leases:

  • Provisions obligating the tenant to pay the landlord’s costs and attorneys’ fees in any action to enforce the lease.

  • Provisions authorizing a tenant’s eviction by means other than the process outlined in state statutes.

  • Provisions that accelerate the payment of rent upon a tenant’s default or otherwise purport to waive a landlord’s duty to mitigate his or her damages

The inclusion of any of these terms in a lease may render the entire lease unenforceable, and excuse the tenant from obligations.

There are other sorts of lease terms that may only be enforced against a tenant in Wisconsin if they are provided to the tenant in a document titled “Nonstandard Rental Provisions.”

These include provisions allowing landlords access to apartments without adequate notice and provisions that allow the landlord to seize the tenant’s property without using the normal legal process. Most “off-the-shelf” leases contain at least one of these provisions; few are formatted in a manner consistent with Wisconsin law.

Security deposits represent another potential headache for landlords. Security deposits may only be withheld for certain reasons, including unpaid rent, damage above and beyond ordinary wear and tear, and unpaid utility bills.

All deductions from a tenant’s security deposit must be accompanied by a written, itemized list of charges, and a full accounting must be provided to the tenant within 21 days of the tenants’ surrender of the apartment. Failure to comply with the rules governing security deposits can result in the tenant being awarded double damages and attorneys’ fees.

The rationale for these rules is sound: Landlords have significantly greater bargaining power than tenants, and in order to level the playing field, tenants were given some significant protections.

At times, these rules are used by tenants as a weapon to escape their obligations. To avoid having this happen, landlords should make sure their leases are appropriate for use in Wisconsin.

Michael Lokensgard is an attorney with the Appleton firm of Godfrey & Kahn. He can be reached by e-mail at molokensgard@gklaw.com.

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