Free Wisconsin Commercial Lease Agreement

Everything You Need to Know About The Commercial Lease Agreement in Wisconsin

The commercial lease agreement in Wisconsin is a legally binding contract between a commercial property’s landlord and a tenant. The contract stipulates the rights and the responsibilities of the parties, as well as the terms for the agreement. As a result of the weightiness of the issues protected by the commercial lease agreement, you need to understand what all the provisions in the lease mean and how they will affect your business. In the state of Wisconsin, Administrative Code's ATCP 134 contains all the provisions that apply to the agreements between landlords and tenants in commercial leases. These provisions are aimed at ensuring fairness of the terms of the agreement while enhancing dispute resolutions strategies given the fact that the commercial lease agreement is not as protective of tenants as the residential leases.

  • Legal provisions addressed by Act 143 in commercial leases include:

    • The moratorium used on the eviction of tenants in the commercial property.

    • The procedures for disposing of abandoned property

    • The severability of the provisions of the commercial rental agreements.

    • The act provides leeway for landlords to receive holdover damages should they be called

    • The act also establishes the procedures and the rights on the receipt of any past due rent.

    • It sets the parameters within which landlords may withhold the security deposits, as well as the procedures for returning the security deposit.

    • This act also sets the conditions for when Chapter 704 is a violation and when the violation may be treated as a seemingly unfair trade practice.

Essential Elements of The Commercial Lease Contract

The terms and the conditions of commercial leases are not set in stone, and they are mostly negotiable. But, without an understanding of the terms of that lease and your options, it’s easy to make an expensive mistake. The lease elements you should be aware of include:

Lease Term

How long is the lease going to last? Is that period adequate for your business growth? Can you renew the lease after the end of that term? How will the terms of the lease change upon renewal?

Asking these questions will help you choose a lease whose term meets your business needs well. Note that the suitability of a lease often depends on the business level of growth – most startups and small business need short-term leases with the lease renewal option given the level of uncertainty associated with the business. A well-established business, on the other hand, runs well with a long-term Wisconsin commercial lease agreement. Keep in mind that the lease may be fixed-term or periodic. Fixed term leases have a predetermined end date, and neither party has to issue a lease termination notice.

On the other hand, the period lease lacks a predetermined end date, and either party can issue a lease termination notice to terminate the lease. While the change of terms and increase in rent is expected in most periodic leases, the change must be provided for in the fixed lease. Otherwise, the lease remains as it was.

Types of Leases in Wisconsin

Leases may also be differentiated by the rental payments and expenses shouldered by tenants.

Gross lease: In this arrangement, the tenant pays a fixed monthly base rent only, and the landlord caters for other property expenses and fees.

Net Lease: this lease allows the landlord to distribute the property expenses and fees to their tenants. The tenant may bear all or some of the expenses. These expenses include property taxes, insurance premiums and common area maintenance fees (CAM). The most common type of net lease is the triple net lease. Landlords prefer it because the tenant pays the base rent in addition to the cost of property taxes, insurance, CAM, utilities, and janitorial services.

Modified Gross Lease: this is a hybrid of the gross and the net leases. The tenant pays the base rent in addition to a portion of the property expenses.

Percentage lease: in this lease, the tenant pays the base rent in addition to a percentage of their gross income/ profit.

  • Other essential elements include:

    • The description of the property

    • Permitted uses of the commercial premise

    • Tenant improvement

    • ADA compliance

Remedies to Tenant Breaches

The tenant breaches may be monetary (failure to pay rent and other fees) or non-monetary (failing to open or operate, filing for bankruptcy, unlawful operations, or conducting liquidity sales, among others).

For the monetary breaches, the best remedy would be setting policies to prevent the breach from happening by having a provision stating that the landlord may recover future rent even if the tenant no longer possesses them, and that the tenant may accelerate the rent/ recover the difference and other reasonable costs once they re-rent the premises. For non-monetary breaches, the landlord may have to carefully consider whether or not the tenant has rights under the signed commercial lease to cure certain breaches like restricted use or failing to operate. In most cases, the tenant doesn’t have the right to cure if they fail to open.

Note that the commercial property lease agreement or your business lease agreement should also have a statement granting the landlord the right to mitigate its damages, and they should also take the most reasonable actions to diminish their losses.

To get started with commercial leases in Madison, Green Bay, Milwaukee, Appleton, La Crosse, Racine or any other city in Wisconsin, get our commercial lease agreement forms today at no cost.