Security Deposit Limits and Handling

• There are no limits to how much a landlord can ask for a commercial security deposit.

• Lessors can mingle the security deposit with other funds, and there’s no specific return date.

• Most lessors return the deposit within 21 days, the same as with residential deposits. However, there’s no law requiring them to return it within 21 days, so it might sometimes be longer, like 30 to 60 days.

• The laws of Wisconsin can change depending on the county. Most counties don’t require interest. However, Madison has a mandatory annual rent credit. It should be equal to the interest rate the Wisconsin Department of Financial Institutions states is appropriate for real estate money held in an escrow account.

Right of Entry for Inspections and Repairs

• Unlike residential contracts, there’s not a specific notice period the landlord must give for inspections. As such, they generally stick to the residential period, which is at least 12 hours.

• The tenant cannot reasonably withhold the lessor’s right of entry, especially for inspections.

• Depending on the lease type, the repair and maintenance responsibilities can differ.

• If the lessee pays a full-service lease, also known as a gross agreement, then the lessor must pay for maintenance and repairs. A net contract is the opposite, where the tenant pays all of the repairs and maintenance.

Environmental Responsibilities

• The landlord must keep the property in line with environmental laws. As such, they often add an environmental indemnity clause in any lease.

• During the lease term, the tenant must follow all environmental laws. The indemnity ensures that if they cause environmental harm, that the lessor isn’t responsible.

• The lessee is liable for all cleanup costs, licenses, and fees regarding environmental waste and materials used in their business.

Notice Requirements

• Monthly commercial leases often follow the notice periods for residential agreements. This period is 28 days’ notice.

• Agreements with no end date have a five (5) day notice period. Further, thanks to the specified end date, fixed-term leases have no notice period.

• Lessors and tenants can end a fixed lease early if they have reasonable cause. Reasonable causes include landlord harassment and repeated lease violations.

• Should the cause not be valid, penalties can apply. These penalties can be paying the rent in full, losing the security deposit, or suing at the small claims court, among others.

Include Required Disclosures

Only the federal disclosure is required in a Wisoncin commercial contract:

• Lead-Based Paint Disclosure: Buildings built before 1978 might have lead-based paint. Landlords must confirm the presence of the paint and disclose its hazards.