A business that leases real estate and improvements (buildings, etc.) in the form of space for offices, a warehouse, a restaurant, a nail or hair salon, a clothing store, a coffee shop, or other commercial (nonresidential) space will usually be required to sign a written contract known as a commercial lease agreement.
The tenant (the business occupying the space) who signs a commercial lease agreement is generally expected to be a more savvy, sophisticated, and informed tenant (also known as a lessee) than a tenant in a residential lease, and the law usually does not provide a commercial tenant with the same protections as residential tenant receives.
Because the law does not provide a commercial tenant with many protections, it is up to the commercial tenant to read, understand, and negotiate protections in a proposed lease agreement before signing it, as most every paragraph in a commercial lease agreement can have a significant impact on a business’s operations and financial stability.
A commercial landlord’s responsibilities are generally determined by the specific language in the written lease agreement and the state's contract law.
Contract law in most states recognizes an implied duty of good faith and fair dealing between parties to a contract, and a landlord who does not perform its responsibilities under a commercial lease in good faith or who is not fair in its dealings with the tenant may be in breach of the landlord’s implied duty of good faith and fair dealing.
In Wisconsin, a business that leases commercial space such as offices, warehouses, or retail locations is typically required to enter into a commercial lease agreement. Unlike residential tenants, commercial tenants are considered more knowledgeable and are expected to understand and negotiate the terms of their leases. Wisconsin law does not provide the same level of protection to commercial tenants as it does to residential tenants, making it crucial for the business (lessee) to carefully review and negotiate the lease terms to safeguard their interests. The obligations of a commercial landlord in Wisconsin are primarily dictated by the lease agreement itself and state contract law. While specific protections may not be statutorily provided, there is an implied duty of good faith and fair dealing in contractual relationships that requires both parties, including the landlord, to act honestly and fairly in the performance of their contractual obligations. A landlord's failure to adhere to this duty may constitute a breach of contract. It is advisable for businesses to consult with an attorney to ensure their rights are protected when entering into a commercial lease agreement.