Principles of Brokerage

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Wisconsin Real Estate

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Table of Contents

Chapter 1:Wisconsin Rental Property Regulations

Chapter 2:Wisconsin Law and Regulation

Chapter 1 Wisconsin Rental Property Regulations

Landlord and Tenant Regulations

In addition to sale transactions, brokers commonly represent property owners seeking tenants for their property or individuals seeking rental property. Representing a landlord or tenant in a real estate transaction requires the broker to understand Wisconsin laws regarding lease agreements and tenant and landlord responsibilities. Brokers providing property management services will deal with these laws regularly.

Lease Agreement

Wisconsin defines a lease agreement as the transfer of possession rights to a property through a written document or an oral agreement. A lease agreement must contain an expiration date or term; the term can be stated as an event rather than a date. Lease agreements can include possession of personal property provided by the property owner along with the real property. One example is a rental property that provides furniture owned by the property owner.

Lease agreements are subject to all other conveyance and contract laws in addition to specific lease laws.

A rental agreement is a term used to describe an agreement in which the landlord and tenant establish terms such as the rent amount. A lease agreement is also a rental agreement.

Periodic Tenant

A periodic tenant maintains possession of the property without a valid lease. Rent is paid on a periodic basis. Terms can be; day-to-day, month-to-month, or year-to-year. The term of tenancy is determined by the frequency of rent payment.

Tenancy at Will

A tenancy at will includes a tenant with possession of the property with consent of the landlord but does not include a valid lease or payment of rent.

Tenancy, as discussed in this section, includes tenancy with a valid lease, periodic tenancy, and tenancy at will.

Written Lease Agreements

All written lease agreements must first meet requirements established in the valid contracts section for real estate conveyance. In addition to those requirements, written lease agreements must meet the following requirements:

Establishes rent amount or valuable consideration
Establishes date of possession
Establishes term or expiration of agreement
Description of property including any personal property included in the lease

A written lease agreement is required for leases of more than a year. A tenant with possession of the property that pays rent for more than a year without a lease that meets these requirements is considered a periodic tenant. The term of the periodic tenancy is determined by when rent is paid. For example, a tenant that pays monthly rent is a month-to-month tenant in the case of residential property. For commercial, non-residential, or agricultural property, a tenant with possession of the property for more than a year that does not have a valid lease is considered a year-to-year tenant regardless of the frequency of rent payments. The type of periodic tenancy effects the requirements for termination of tenancy, as discussed below.

An assignment of the property by the tenant to another party must be in writing if the assignment is effective for more than a year. The assignment must also include a description of the lease agreement and signature of both the assignor and assignee.

Written lease agreements will expire as determined in the lease. Early termination of a lease must be in writing and signed by the landlord and tenant if termination will occur a year or more before the contracted expiration date. Termination of a lease agreement with less than a year remaining may be either written or oral.

Residential Rental Property Regulation

Any residential property rented to a tenant by a lesser that is not a government agency, fraternal society, hotel, commercial agriculture property, or a private institution, must abide by the rules and regulations of this section.

When a landlord offers a written lease agreement, the rental rules and regulations and the agreement must be provided to prospective tenants before a lease agreement is signed. A copy of the documents must be provided when the lease is signed.

A receipt is given to the tenant for security deposits and earnest deposits at the time of signing, when the deposits are received. The receipt should provide the amount paid and the reason for the deposit. A receipt is only required for a check with a description on the memo line if the tenant requests a receipt.

Required Disclosure

The name and address of the following people need to be disclosed to the tenant at the time of agreement:

Property manager responsible for rent collection, property maintenance, and tenant contact
Property owner or representative of the owner capable of receiving legal documentation
Changes to the above information must be provided to the tenant in writing within 10 days

The following items must be disclosed by the landlord before a lease agreement is signed or an earnest deposit is accepted:

Any building codes or housing regulations currently in violation on the property for which the landlord has received notice and has not resolved. The tenant should be shown the affected areas to the unit and common areas as well as all documentation about the violation. The corrections must be filed with the agency before disclosure is no longer required.
One of the following conditions of the property which affect the habitability:
A unit with no cold or warm running water
A heating unit that does not keep the unit at least at 67 degrees Fahrenheit or that is not in safe working order
The unit doesn’t have a working or safely working electrical system
Any condition of the property which could pose a physical risk through normal and foreseeable use of the property
A unit without adequately functioning plumbing
A unit without adequate sewage renewal

Disclosure is required when the utilities of the unit are not covered in the rent payment and when utilities for common areas are not paid in the rent payment and are billed separately to tenants.

Earnest Money and Security Deposits

An earnest money deposit for rental property is any money provided to the landlord from the tenant that gives the tenant the right to lease the property in the future or pays the landlord to consider an application.

A security deposit includes all payments made more than one-month’s prepaid rent and any amount paid to the landlord as promise of compliance with tenant obligations.

The landlord must identify the specific unit being considered or reserved for the tenant before he or she can collect an earnest money or security deposit from that tenant.
A refund of the earnest deposit must be sent to the applicant the next business day after one of the following events:
The application is rejected
The application is withdrawn before approval
3 days after the landlord has not approved the application, the applicant may sign a statement agreeing to a longer approval period which may not exceed 21 calendar days

When a landlord receives an earnest money deposit and approves the application, the landlord must do the following:
The earnest deposit is applied to rent or the security deposit
Or, the earnest money deposit must be returned to the tenant

If the tenant fails to enter into a lease agreement after the landlord accepts the application he or she may do the following:
Withhold the earnest money deposit in the amount of damages incurred because of the non-compliance.
Landlords may not charge for lost rent unless he or she has made reasonable effort to lease the property to another tenant

A credit check fee may be charged during the application process for the actual cost to the landlord up to $20. This fee is used to pull a consumer credit report. The prospective tenant must be told about the fee prior pulling the report and the tenant must receive a copy of his or her report. The tenant may also provide a credit report that has been pulled within the previous 30 days.

Security Deposits and Check-in Procedures

Before a security deposit can be accepted the landlord must inform the tenant of his or her right to the following for the first 7 days of tenancy:

The tenant should inspect the unit and disclose all preexisting damage or defects to the property
The tenant may request a written list of all defects or damages charged to the previous tenant. This request may need to be in writing according to the needs of the landlord

Returning a Security Deposit

The landlord must refund a tenant’s security deposit within 21 days of surrender. The security deposit may be mailed in the full amount paid, less the amount withheld in compliance with law. The refund can be mailed to the last-known address or an address specified by the tenant. All checks or money orders should be made payable to all tenants or to a payee specified by all tenants. A tenant retains the right to a full refund even after the acceptance of a partial payment.

Security Deposit Uses

A landlord may withhold funds from the security deposit to pay for the following:

Damage to the property by the tenant
Waste or neglect of the property by the tenant
Unpaid rent which the tenant is legally liable for
Unpaid utility payments for which the tenant is legally liable
Payment of outstanding bills for which the landlord becomes liable
Outstanding mobile home parking fees
Other items agreed upon in the written lease agreement that meets the following criteria:
Any clause which includes additional uses for the security deposit must be labeled, “NONSTANDARD RENTAL PROVISIONS”
Each nonstandard provisions is explained to the tenant before signing the lease
The tenant may initial each provision to denote agreement and understanding of the nonstandard provision

The security deposit may not be used for normal wear and tear resulting through normal and acceptable use such as carpet cleaning or new paint

Statement of Claims

The landlord must mail the tenant a statement of claims that itemizes each repair made with the security deposit funds and the amount withheld from the deposit. Landlords may not falsify any claims in this document. The statement of claims is mailed or delivered with the security deposit refund.

Commitment to Repair

When a landlord commits to repair, clean, or update the premises, the landlord must specify a date for the repair or a range of dates that the cleaning will be preformed.

Commitments to repairs made before the lease agreement is signed must be provided to the tenant in writing.

The landlord is obligated to complete the repairs or work on the property as promised, the only exception is a delay beyond the landlord’s control. A written notice is provided to

the tenant explaining the reason for the delay and promising a new date of completion.

Prohibited Provisions

The following provisions may not be included in a written lease or a rental agreement:

Allow for eviction through any means besides judicial eviction procedures (CH 799)
A provision that increases or accelerates rent for breach or default of the rental agreement
A provision which reduces the landlords obligation to mitigate his or her own damages
Requiring the tenant to pay attorney’s fees for any case resulting from the lease agreement, this doesn’t include a court order requiring the tenant to pay the landlord’s costs
A provision that authorizes the landlord to confess judgment against the tenant
A provision that lowers or eliminates the landlord’s liability for damage to the property or personal injury resulting from the landlord’s negligence except for the repairs and items the tenant agrees to maintain
A provision that gives the tenant liability for the following;
Personal injury as a result of an occurrence outside of the tenant’s control
Damage to the property resulting from a natural disaster, the tenant’s guests, or an individual other than the tenant

A provision that relieves the landlord from his or her obligation to provide and maintain habitability of the premises

Prohibited Practices

Landlords are prohibited from the following practices in their rental business:

Rent or advertise condemned property
Enter a rented unit for any reason other than to make repairs, inspect the property, or show the property to prospective tenants, with appropriate notification
Enter a rental unit without giving the tenant at least 12 hours notice, any additional right to enter the property not provided by law should be included in the rental agreement as a NONSTANDARD RENTAL PROVISION
Entering a unit without notifying the occupants of his or her presence and presenting identification if requested
Attempt to automatically renew a lease without providing the required notice
Holding the tenant’s personal property in a manner not prescribed by law
Fail to hand over possession of the property as agreed upon in the agreement through any intentional act or through a matter within the landlord’s control
Evicting a tenant without using the legal eviction procedure
Misrepresent that following items to persuade a prospective tenant to enter into a rental agreement;
Unit location, features, or equivalency to other properties
The amount of payment or cost to the tenant through rent or other obligations
Non-disclosure of fees above and beyond the costs of rent
Implying that the tenant is being considered for another unit or property in a misleading way
Charging a late rent fee that is not established in the rental agreement
When rent is paid late, prepaid rent must be applied before a fee can be charged
Late fees may not be charged on unpaid rent fees
Terminate a tenancy or reject an automatic renewal clause, or take any action to force the tenant out of the property in retaliation for the following actions of the tenant;
Reporting a violation of the landlord
Suing the landlord for a violation
Joining a tenant’s union
Practicing his or her rights as a tenant

State and Local Legislation

The state rules and requirements established above take precedent over any conflicting local requirements.

Landlord and Tenant rights and responsibilities

A written and signed lease agreement establishes the rights and responsibilities of the parties. When a written lease agreement does not establish alternative terms, the following rights and responsibilities are established for the landlord and tenant:

All types of tenancy are subject to these rights and responsibilities unless otherwise stated in the written lease agreement, signed by both parties
Tenant maintains the right to exclusive possession of the property and any personal property included for the duration of the agreement when the tenant is not in default of the lease. The tenant’s right to possession is only altered by the landlord’s right to access.
The landlord has a right to access the property with the following requirements;
Advance notice must be provided to the tenant before the landlord may access the property
Access must be considered reasonable
Access is provided to allow the landlord to repair the property and to show the property to prospective tenants or buyers
Access is allowed if the landlord believes it is necessary to protect the property and the tenant is not present; in this case, the landlord has the right to access the property without notice and in any way that seems necessary to preserve the property

Landlord consent is required before the tenant may change the structure of the property, changing the structure could include decorating or adding to the property.
The tenant is prohibited from unlawful use of the property
The tenant may not use the property in a way that limits or interferes with another tenants use of the property, unit, or building
Tenants have a right to remove fixtures added by the tenant when the lease terminates. The tenant is required to return the property to its original condition or pay for repair upon removing a tenant fixture. If a fixture provided by the landlord was exchanged for the tenant’s fixture, the original fixture or one of equal value and condition must be replaced.
Personal property left by the tenant after expiration of the lease and surrender of the property may be handled in the following ways;
The landlord may provide storage for the property and may assess a lien on the property for the cost of storage. Written notice should be provided to the tenant within 10 days of incurred costs. Notice includes the daily cost of storage. The lien may not include other payments owed to the landlord such as outstanding rent or costs for repairs to the property. The cost of storage cannot include the cost of rent.
The landlord may not charge a storage fee for medical equipment or medicine left on the premises. These items must be returned to the tenant upon request.
The landlord also has the right to sell or otherwise dispose of personal property left on the premises by the tenant. The tenant must first be notified personally or by mail that the tenant has 30 days from the date of notification to get his or her items before they are disposed of. Proceeds of the sale, minus applicable storage charges and costs of the sale, are payable to the tenant for 60 days after the sale. If the tenant does not claim the sale proceeds in that time, the landlord has no further obligation to the tenant and sale proceeds are payable to the department of administration.
The landlord has the right to store the personal property left by the tenant without a lien. The landlord may return the property without requiring payment.
Any personal property left on the property is subject to these rules, regardless of if the property was owned by the tenant or a third party
The landlord retains all other rights allowed under the law

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