Mistakes are frustrating but they’re also part of being human.
You’ll have to allow yourself the grace to trip over your own intentions and plans from time to time; to make the wrong choice, go the wrong way, misinterpret some good advice.
The problem with making mistakes that involve your Green Bay rental property is that those mistakes are often expensive. There are so many laws, regulations, and requirements to keep up with when you’re renting out a property, those mistakes sometimes seem inevitable.
They don’t have to be.
Two things in particular can help you when you’re trying to avoid legal landmines that often show up during the leasing period, the tenancy, and certainly the periods when you’re providing maintenance services or preparing for a renewal or a move-out. Those two things are:
Professional Green Bay property management. Property managers know the laws and focus on remaining compliant. We take classes, attend conferences, and stay up to date on all the existing and pending legislation that impacts your investment.
A strong lease agreement. This is often your best defense against legal missteps and conflicts that can turn into court battles.
We’ll talk about both those points in depth today, but what we want to focus on is your lease agreement. Come with us as we explore the importance of having a lease agreement that’s both legally compliant and legally enforceable. We’ll make sure you don’t leave anything necessary out of your own lease.
What Is the Purpose of a Lease Agreement, You Ask?
We’re glad you asked, actually. It’s always shocking to us how many landlords are out there renting homes to tenants without signing an official lease agreement. This is dangerous for you, for your property, and even for those residents.
A lease agreement signed by landlords and tenants is a legally binding contract that sets forth what is being provided (a property) and what is being paid (the rent, security deposit, etc.). The purpose of this contract is to set forth the responsibilities of each party. You’ll state your expectations of the tenant and you’ll be transparent about what they should expect from you.
The purpose of a lease is protection. The purpose is consistency. This gives you a starting point if there are any questions during the tenancy. If rent is late, the lease will tell you how much of a late fee to collect. If the tenant is preparing to move out, the lease will express how much notice is necessary.
Never rent out a Green Bay home without a written lease agreement.
Tips on Where to Get a Green Bay Lease Agreement
If you’ve never rented out a property before, you might be wondering where to even find a lease. Should you just download a template from the internet?
No. You should not.
And here’s why.
Almost everything can be found on the internet. We understand how easy it might seem to find a lease that looks good, copy and paste it into a document of your own, and hand it over to the tenants to sign. This is not a good idea, actually, and here’s why:
1. You can’t trust everything on the internet (Duh). | 2. You need a lease agreement that’s specific to the state of Wisconsin | 3. Do you know who wrote that lease? Probably not an attorney. Nor a property manager. |
When it’s time to provide a lease to your tenants, you want to make sure that lease is both legally compliant in Wisconsin (so you’re not putting yourself at risk for lawsuits or complaints or claims) and also legally enforceable in Wisconsin (in case you need to evict or go to court).
Here are some of our tips and resources on where to get a lease agreement:
Ask a Green Bay property manager. This is why we’re here. This is why we’re writing this blog. We want to make sure your’e feeling empowered and supported, and we’re here to offer our services whether you’re a landlord with a single rental home or a real estate investor with a vast portfolio of properties. You don’t have to do everything alone. You can reach out for support from an expert. Like us. We can talk to you about the lease you’ll need to protect your property and your interests when a tenant is living in your rental home.
Talk to an experienced landlord/tenant attorney. A legal lease agreement can be provided by a lawyer. Look for someone who has experience in real estate law, property management law, and all of the laws around eviction, habitability, security deposits, and other concerns (which will be addressed in your lease). If you’re not sure where to find an attorney but you know that’s where you want to get your lease agreement in addition to some legal advice, we can make a referral.
Professional organizations and associations. Consider groups like the National Association of Residential Property Managers (NARPM) or the Wisconsin Apartment Association will have lease templates that can work for you. Get in touch with the city of Green Bay as well, which provides fact sheets and resources to landlords looking for help.
Any of these points of contact will be better than a random internet search when you’re looking for a lease agreement.
What to Include in your Green Bay Lease Agreement
Every lease agreement must start with the obvious contact information and the address of the rental property. Make sure you include the name of the people on the lease, how they can be reached, and the name of the property owner and how you can be reached. If you’re working with a Green Bay property manager, their contact information must be included as well. If you’re working with a Green Bay property manager, of course, they’re likely taking care of all the leasing details for you.
Let’s take a look at which legal clauses and terms are most important in helping you avoid disaster. Make sure you’re including these things in your lease.
Rent Collection Policy
It’s important that you have a detailed, transparent, and clear rent collection policy in your lease agreement. You don’t want your tenants to have a good excuse for not knowing when rent was due or how much to pay. The elements of a solid rent collection policy include:
Amount that’s due. Be specific and inclusive of all pet fees, additional charges, or any other costs that are on top of the base rental amount. Put a final, all-inclusive figure in the lease. Mae sure you indicate whether utilities are included or paid separately or in addition to the rent.
Date the rent is due. Normally rent is due on the first of the month. So, make sure the lease indicates that. If you’re allowing rent to be paid on a different day of the month, make sure it’s in writing. Your lease should state what happens if the first of the month (or other due date) falls on a Saturday, a Sunday, or a holiday. Is it due the following business day? Or is it still due on that day?
Grace periods. Many lease agreements will allow for a grace period. So, maybe rent is due on the first but not considered late until the third. Be specific. Your lease should state when rent is officially late.
Late penalties. Once rent is late, what are the penalties for that late payment? If you’re going to charge a late fee, that must be included in your lease. You have to indicate how much the late fee will be and when and how it will be collected. Include other penalties and consequences to late rent, including eviction.
Be prepared to enforce your rent collection policies. This is an important part of the lease agreement that you’ll want to discuss with your tenants before they actually sign the lease and move in.
Security Deposit Amount and Return
With any discussion of rent comes the corresponding discussion of security deposits.
A security deposit is charged in order to protect you against property damage, lease breaks, and unpaid rent. Your lease must reflect how much of a security deposit you collect. And while Wisconsin has no limit on how much you’re able to ask, you want to remain competitive and be smart about how much cash you’re asking a tenant to come up with in order to move into your property. Collect this amount at the lease signing, and let the lease indicate the receipt of that amount.
To avoid disputes, claims, and court appearances, make sure your lease reflects how a tenant can get a full refund of the security deposit. When you’re clear about what you expect the property to look like when they move out, you’ll both be in a better position. Landlords in Wisconsin can withhold money from the security deposit for:
Unpaid rent
Unpaid utilities
Cleaning costs (to return the property to how it looked when the tenant took possession)
Early termination of the lease
Property damage exceeding normal wear and tear
That last bullet point is where most legal pitfalls can occur. What you might consider damage could easily be interpreted as normal wear and tear by your tenants. Make sure you’re documenting everything, including and especially the deductions you’re making from the deposit.
Finally, make sure the security deposit section of your lease states that you’ll return the deposit to your tenant’s last known address within 21 days of move-out. This is the legal requirement in the state.
Landlord and Tenant Responsibilities
Your lease needs to establish who is responsible for what during the tenancy.
Landlord Responsibilities Defining the landlord's responsibilities sets expectations for tenant rights and expectations. What to include:
(These are examples. You might have tenants listed as responsible for lawn care, etc. in your own lease). | Tenant Responsibilities Clearly stating tenant responsibilities helps avoid potential conflicts over maintenance and upkeep. What to include:
|
Conditions for Terminating the Lease
You’ll want your lease to include a termination clause as well. This is essential because it allows either party to end the lease under certain circumstances, protecting both parties' interests. Make sure this section includes grounds for termination on your end (for example, non-payment of rent or breach of lease terms). Include the notice period that’s required for the tenant to terminate the lease and the reasons under which they might be permitted to do so if it’s not the natural end of the lease term.
Tenant Privacy
Tenants are entitled to be left alone in their homes. While this is a property you own, it’s also the home where your tenants live. Avoid disputes with your tenants and legal complaints lodged against you by implementing a notice period, and include it in the lease. If you’re planning to conduct an annual inspection or a maintenance walk-through during the tenancy, you’ll want the lease to reflect that as well.
Disclosures and Legal Addenda
Make sure your lease agreement includes all of the necessary disclosures and addenda, including information about lead paint and:
Past Code Violations (Section 2.18). Disclosure of any current or past code violations is required to ensure tenants are aware of the property’s condition.
Shared Utilities (Section 2.19). Landlords must provide a list of shared utilities and the formula for dividing costs among tenants, promoting transparency and fairness in utility billing. If your tenants are required to establish and pay their own utility accounts, this will matter less for you and your lease.
Sex Offender Notice.
Electronic Delivery Disclosure.
Notice of Domestic Abuse Protections.
This does not cover everything that you’ll need to include in your lease agreement. However, these are the most important parts of the lease that will help you avoid those legal landmines, which we’ll talk about now.
Legal Landmines and Laws You Don’t Want to Ignore
Where are you most likely to make a legal mistake? Based on our experience managing rental properties in Green Bay, the following legal landmines are the most dangerous for rental property owners. These are the potential problems against which a good lease will protect you.
Fair Housing Violations
Fair housing laws have been established for decades. At the federal level, there are seven protected classes against whom you cannot discriminate when it comes to choosing tenants or managing your investment property. You cannot make decisions or take actions based on a person’s:
Race
Color
Religion
National Origin
Familial Status
Sex
Disability
The Wisconsin state went even further. You cannot discriminate based on creed, source of income, or gender identity, either.
It’s easier than you think to violate a fair housing law. The wrong language in your marketing can create a dispute. Screening one tenant to different standards than another can look like discrimination.
You need to know the difference between a service animal and an emotional support animal, and why they’re not pets.
Security Deposit Issues
Security deposit mistakes can be costly, too. If you’re too late in returning the tenant’s security deposit to them, or if you withhold money for reasons that the tenant believes is unlawful, they can sue you for the amount of the deposit, plus court costs and legal fees. This is not a battle you want to participate in. When you make deductions, make sure you have the documentation necessary to back them up, and always return the deposit in enough time. Ask the tenant for a forwarding address before they move out so you have a reliable place to send the deposit. Otherwise you’ll have to send it to their last known address, which is potentially your property.
Eviction Mistakes
You’ll need a lawful reason to evict your tenant before the end of the lease. You cannot change the locks, nor can you shut off the utilities, and you don’t want to show up at the property ready for a fight. All of those things will only lead to major legal trouble for you.
Before you can evict, you need to provide a notice that lets the tenants know you’re terminating their lease. Then, you have to file in court and wait out the process. Maybe your tenants will leave before the eviction or rectify the situation that is leading you to evict, but if they don’t, prepare for your day in court.
We always recommend that you talk to a Green Bay property manager or an attorney before you attempt to evict a tenant.
We recommend you talk to a Green Bay property manager or an attorney before you create a lease agreement, too.
This blog shows you why.
Let’s talk about what we can do to create a better lease agreement for you and your tenants. Please contact us at Blue Frog Property Management.
For after-hours emergency maintenance issues, call
1-888-832-0258