Wisconsin Commercial Lease Agreement Template
Last Updated:
A Wisconsin Commercial Lease Agreement is fundamentally a mutually agreed contract between you and your property owner. This covenant grants you the privilege to use a premises for your business pursuits, for a negotiated duration and cost. It is designed to cater to the particular activities your enterprise plans to execute there. Ensure to comprehend every component of it prior to endorsing.
What are the related laws for Commercial Lease Agreements in Wisconsin?
Chapter 411 of the Uniform Commercial Code in the region specifically addresses leases. This encapsulates diverse methods, definitions, and provisions that regulate the establishment, alteration, execution, and violation of lease agreements.
As detailed in certain segments of the chapter:
- Section 411.103 describes definitions, cataloging various terms associated with lease contracts and their corresponding interpretations.
- Sector 411.219 manages risk of loss situations, elaborating on when and under what circumstances the risk of loss from commodities occurs.
- Section 411.506 establishes the statute of limitations in sorting out lease contract matters. It notes that the parties can curtail the limitations period to a bare minimum of a year.
Thank you for downloading!
How would you rate your free form?
Read on to learn more about Wisconsin Commercial Lease Agreement, including:
How to write a Commercial Lease Agreement
As an entrepreneur, you may be intimidated by intricate legal terminology. Yet, with a lucid plan and proper direction, you can assuredly create your lease contract. Let's delve into the fundamentals of a commercial lease agreement and adjust it to your requirements - think of this as your amiable, clear-cut advisor for traversing the realm of business leases.
1. Permitted Uses
The "Authorized Uses" stipulation clarifies how to utilize the leased premises. It distinctly outlines the sanctioned activities. These comprise industrial operations, clerical tasks, storing, distributing, and manufacturing and disseminating goods.
It's imperative to pinpoint all your planned business maneuvers in this section. This transparency wards off potential legal hiccups and assures effective management of resources. Provide comprehensive information to prevent future unforeseen circumstances. This comprehension maintains your business's momentum.
Industrial and light manufacturing, warehousing, office, distribution, and assembly, including designing, manufacturing and distributing branded merchandise and promotional products, including all activities incident or ancillary thereto and all other lawful uses and purposes.
2. Term and Option to Extend
(a) This refers to the lease duration and prolongations. It commences on the Start Date and concludes on the Termination Date. The possibility exists to elongate it for two additional biannual phases under equivalent conditions, although rent might escalate. Give the property owner a written warning 30 days prior to the term’s end for prolongation.
(b) "Duration" pertains to both your initial lease term and any possible extensions.
Translucent lease durations are pivotal for business strategy and functioning, as well as for potential extensions.
(a) The initial term of this Lease will commence on the Effective Date and expire on the Expiration Date. The Tenant may extend the Term of this Lease for [two] additional [two]-year extension term(s), on all the same terms and conditions (except for Rent, which will increase during extension Terms as provided below) contained in this Lease, by notifying the Landlord in writing of the Tenant’s election to do so not less than 30 days before the expiration date of the then-current Term, as the case may be.
(b) The initial term and any applicable extension term are referred to in this Lease as the “Term.”
3. Repairs and Maintenance
The segment on "Upkeep and Restorations" in your lease demystifies who takes charge of repairs. It envelops both interior and exterior predicaments, such as malfunctioning pipes or impaired masonry. The financial responsibility is on the landowner, not on you.
If a repair isn't handled promptly, you have permission to coordinate the necessary work and deduct it from your rent. Always keep a record of these occurrences for potential future needs. This specific clause is essential as it outlines repair duties and safeguards you from unanticipated expenditures.
From and after the Effective Date, and for the remainder of the Term, the Landlord shall perform ordinary maintenance and repair of the interior of the improvements on the Premises. In addition, the Landlord shall, at its own cost and expense without reimbursement by the Tenant, keep and maintain in good condition and repair, and make all necessary repairs and replacements to, the exterior walls, building slabs, foundations, structural parts and components, parking lots, gutters, downspouts, roof, roof membrane and coverings and any other part, component or system on the exterior of the Premises. The Landlord shall, at its own cost and expense without reimbursement by the Tenant, keep and maintain in good condition and repair, and make all necessary repairs and replacements to the sprinkler system, mechanical, HVAC, electrical and plumbing systems of the Premises. If the Landlord fails to perform any repair or replacement required to be made by the Landlord in this Lease, and the Landlord fails to cure such failure within 15 days after receipt of a written demand from the Tenant (or immediately, in the case of emergency repairs, including loss of heating and air conditioning), then the Tenant may make such repair or replacement and the Landlord shall reimburse the Tenant for the cost thereof. If the Landlord fails to pay such amount, then the Tenant may offset against the Rent due hereunder the amount so expended.
4. Alterations
"Modifications" delineates your prerogatives to adapt the leased domain. You have the liberty to adjust aspects without landowner approval, yet significant modifications become the proprietor's asset. You are free to take away personal items such as racks or equipment as long as the premises remain unharmed. Grasping this section can deter disagreements and assist in strategizing your business arrangement efficiently.
The Tenant may, at its own cost and expense and in a good workmanlike manner, make such alterations, additions, or improvements or erect, remove, or alter such partitions, or erect such racks, shelves, bins, machinery, furniture, fixtures, trade fixtures, equipment, and other personal property as it may deem advisable, without the consent of the Landlord. All fixtures and permanent alterations, additions, improvements, and partitions erected by the Tenant will be and remain the property of the Landlord during the Term, and will be abandoned by the Tenant at the expiration of this Lease. All racks, shelves, bins, machinery, furniture, equipment, and other personal property located in the Premises as of the Effective Date or otherwise installed by the Tenant may be removed by the Tenant at any time if the Tenant so elects. All such removals and restoration shall be accomplished so as not to damage the primary structure or structural qualities of the buildings and other improvements situated on the Premises.
5. Insurance
The "Coverage" stipulation safeguards both lessee and lessor. As the lessee, you require asset and liability coverage, designating the lessor as an additional beneficiary. The lessor takes care of insurance for harm to the property.
'Surrender of claim rights' prohibits insurance firms from recouping from the other participant following a loss. Your insurance provider should alert the lessor 30 days prior to termination. Comprehending these terms fortifies your enterprise financially.
(a) At all times during the Term, the Tenant shall maintain, at its sole cost and expense, policies of insurance containing the following insurance coverages (which policies shall name the Landlord as an additional insured):
(1) Property insurance with premiums paid in advance insuring the Tenant’s property using the standard Special Causes of Loss Form or equivalent for the full replacement value. The foregoing is referred to in this Lease as “Property Insurance.”
4
(2) Commercial general liability insurance with respect to the Premises in amounts not less than $1,000,000 per occurrence, $2,000,000 aggregate limit using current ISO forms or equivalent.
(b) The Landlord shall obtain and keep in force during the Term of this Lease a policy or policies of insurance covering loss or damage to the Premises, in the amount of the full replacement value thereof, as the same may exist from time to time, but in no event less than the total amount required by lenders having liens on the Premises, against all perils included within the classification of fire, extended coverage, vandalism, malicious mischief, flood (in the event same is required by a lender having a lien on the Property), and special extended perils ("all risk" as such term is used in the insurance industry). Such insurance must provide for a payment of loss thereunder to the Landlord or to the holder of mortgages or deeds of trust on the Premises.
(c) The policies required by this section must provide for standard waivers of any right of subrogation that the insurer of such party may acquire against the other party to this Lease, for losses that are actually insured against, even if the loss results from a negligent act or omission. The Tenant’s insurance company must provide the Landlord with a certificate of insurance on form ACORD-27 (for Property Insurance required to be carried under this Lease), or its equivalent, and ACORD-25 (for liability insurance required to be carried under this Lease), or its equivalent, which provides that the insurance may not be cancelled without giving the named insured at least 30 days’ prior written notice (or at least ten days’ written notice of cancellation in the event of the non-payment of premium). The Tenant may carry any required insurance under a blanket policy if that policy complies with the requirements of this Lease.
6. Events of Default
The "Instances of Default" provision enumerates behaviors that are deemed as infringements of your lease. Common instances incorporate neglecting rent dues, encountering bankruptcy, or not adhering to lease stipulations. Stay conversant with this segment and sidestep these snares to uphold a harmonious rapport with your property owner and navigate your business efficiently.
The following events will be deemed to be Events of Default by the Tenant under this Lease:
(1) The Tenant fails to pay any installment of the Rent hereby reserved when due, or any other payment or reimbursement to the Landlord required under this Lease when due, and such failure continues for a period of 30 days after the Tenant’s receipt of written notice of such nonpayment;
(2) The Tenant becomes insolvent, or makes a transfer in fraud of creditors, or makes an assignment for the benefit of creditors;
(3) The Tenant files a bankruptcy petition or Tenant is adjudged bankrupt or insolvent in proceedings filed against the Tenant;
(4) A receiver or trustee is appointed for all or substantially all of the assets of the Tenant; and
(5) The Tenant fails to comply with any term, provision, or covenant of this Lease (other than the foregoing in this section 18), and does not cure such failure within 30 days after written notice thereof to the Tenant, or such longer period as may be necessary to cure such default provided the Tenant has promptly commenced curing such default and is diligently proceeding to obtain such cure.
7. Holdover
The "Continuance" segment addresses scenarios when you prolong your lease. If you don't vacate by the closure of your lease period, you'll remit 125% of the customary rental for each continuance month. Ensure you comprehend the financial impact of overstaying and devise your departure approach suitably.
If the Tenant holds over after the expiration of the Term and does not surrender the Premises prior to the expiration of the Term, then for each such month that the Tenant is holding over, the Tenant shall pay to Landlord 125% of the Rent due under this Lease for each month.
What happens when a Commercial Lease Agreement expires?
Upon termination of a commercial lease agreement, various occurrences may transpire. I have unearthed some valuable assets that explain likely situations:
- Extend or Dissolve: Commercial tenants ought to resolve whether to extend or dissolve their lease contract well prior to its completion. Commencing this procedure 6 to 12 months beforehand is deemed an optimal strategy.
- Transition to Periodic Tenancy: If the initial lease is not extended or a new lease is not established, the lessee may manage to shift into a periodic tenancy, granted the landlord consents.
- Proprietor Occupies Space: Occasionally, when a commercial lease concludes, the landlord may opt to take possession of the property themselves, either for personal housing or commercial use.
- Potential for Legal Consequences: If predicaments arise towards the lease end, for instance, if a tenant has habitually lagged rent payments or breached the lease terms, the lease end might result in legal repercussions.
What are the penalties for breaking Commercial Lease Agreements?
Undoubtedly, repercussions for infringing a commercial lease agreement differ; however, some typical consequences include:
- Outstanding Rent: Frequently, a significant penalty for violating a commercial lease is that tenants are accountable for the outstanding rent based on the lease duration, even post-vacating the premises.
- Notification Period: Several commercial property owners request a notification period spanning between 30, 60, or 90 days when tenants elect to dissolve the lease.
- Termination Charges and Extra Expenses: Contingent on the lease agreement's provisions, commercial leases may impose termination fees and hold tenants liable for marketing costs incurred to secure a new tenant and potential cleaning charges.
- Legal Implications: Subject to the breach's circumstances and nature, issues unresolved within the lease might escalate to legal measures or result in court disputes.
As penalties' specifics may differ per lease agreement, it is pivotal to meticulously review the contract to grasp the precise terms and conditions concerning premature dissolution.