Selling a House with Renters in Wisconsin: What Landlords Need to Know
Selling a property with existing tenants in Wisconsin requires careful navigation of state-specific landlord-tenant laws. Wisconsin landlords must honor existing lease agreements when selling rental property, though they have options including selling to investors, waiting until lease expiration, or negotiating with tenants for early termination.
Wisconsin law provides specific protections for tenants during property sales, including the requirement that new owners honor existing lease terms. Failing to follow proper procedures can result in legal complications, delayed sales, and potential liability for both the seller and buyer.
Key Considerations
Scenarios
Decisions
Scenarios
Decisions
Scenarios
Decisions
Relevant Documents
Assignment of Leases
A legal document that transfers the landlord's rights and obligations under existing lease agreements to the new property owner, ensuring continuity of the tenancy terms.
Cash for Keys Agreement
A document that formalizes an arrangement where the property owner offers financial incentive to tenants to vacate the property voluntarily before the sale or closing date.
Early Lease Termination Agreement
If the seller and tenants mutually agree to end the lease early before the sale, this document outlines the terms of that agreement, including any compensation or notice periods.
Estoppel Certificate
A document signed by tenants confirming the terms of their lease, current rent amount, security deposit held, and that the landlord is not in default. This provides assurance to potential buyers about the status of existing tenancies.
Notice to Tenants of Intent to Sell
A formal written notice informing tenants of the property owner's intention to sell the property. This document helps establish clear communication and may be required by law in many jurisdictions.
Property Disclosure Statement
A document where the seller discloses known material defects and other important information about the property, including the presence of tenants and the terms of their occupancy.
Real Estate Purchase Agreement
The contract between seller and buyer that should specifically address the existence of tenants, the status of their leases, and how those leases will be handled during and after the sale.
Rent Roll
A document that lists all rental units, current tenants, lease terms, monthly rent amounts, security deposits, and payment histories. This provides potential buyers with a clear picture of the property's rental income.
Security Deposit Transfer Agreement
A document that formalizes the transfer of tenant security deposits from the seller to the buyer, including accounting for all deposits and accrued interest where applicable.
Relevant Laws
Wisconsin Statute § 704.19 - Notice of termination of tenancy
When selling a property with tenants in Wisconsin, landlords must provide proper notice to terminate a tenancy. For month-to-month tenancies, at least 28 days' notice is required. For year-to-year tenancies, at least 90 days' notice before the end of the lease is required. This law is relevant because sellers must understand the timeline constraints for delivering possession to new buyers.
Wisconsin Statute § 704.09 - Transferability; effect of assignment or transfer; remedies
This statute establishes that when a property is sold, the new owner automatically assumes the rights and obligations of the existing lease. This means that a property sale does not automatically terminate existing leases, and the new owner must honor the terms of existing rental agreements. Sellers must disclose active leases to potential buyers.
Wisconsin Statute § 704.05 - Rights and duties of landlord and tenant in absence of written agreement to contrary
This law outlines the basic rights and responsibilities of landlords and tenants in Wisconsin. When selling a property with tenants, both the seller and buyer must understand these obligations, including maintenance responsibilities and access rights. The law requires reasonable notice (usually 24 hours) before showing the property to potential buyers.
Wisconsin Statute § 704.07 - Repairs; untenantability
This statute defines landlord and tenant responsibilities for repairs and maintenance. When selling a property, the current owner remains responsible for maintaining the property in a habitable condition until ownership transfers. This is important for sellers to understand as they navigate the sale process while still having tenants in place.
Wisconsin Statute § 706.09 - Notice of conveyance document
This law relates to the recording of property transfers and providing notice of ownership changes. When selling tenant-occupied property, the new owner should ensure proper recording of the deed and notification to tenants about the change in ownership. This helps establish the legal relationship between the new owner and existing tenants.
Regional Variances
Major Cities in Wisconsin
Milwaukee has additional tenant protections beyond state law. Landlords must provide at least 28 days' notice for month-to-month tenancies (instead of the state minimum of 28 days). The Milwaukee Department of Neighborhood Services also enforces stricter housing codes that must be addressed before property transfers. Sellers must disclose any outstanding DNS violations to potential buyers.
Madison has some of the strongest tenant protections in Wisconsin. The city requires 60 days' notice for terminating month-to-month tenancies when selling a property (compared to 28 days under state law). Madison also has a Tenant Resource Center that provides free counseling to tenants facing displacement. Additionally, landlords must provide information about tenant rights during the sale process.
College Towns
Properties near UW-Madison often have special considerations due to the academic calendar. Leases typically run August to August, making mid-year sales more complicated. Sellers should be aware that displacing student tenants mid-semester can face additional scrutiny from local housing authorities. Campus area leases are often signed 6-8 months in advance, further complicating sales with tenants.
In Eau Claire, particularly near UW-Eau Claire campus, there are local ordinances requiring additional inspections when rental properties change ownership. Sellers must ensure properties meet current rental housing standards before closing. The city also maintains a rental registry that new owners must update within 30 days of purchase.
Rural Counties
Door County has specific regulations regarding seasonal and vacation rentals. Properties with tourist rooming house permits or seasonal rental licenses may have different rules when selling with existing rental agreements. The county requires notification to the health department when such properties change ownership.
Bayfield County has unique considerations for lakefront and seasonal rental properties. The county requires additional environmental inspections when transferring rental properties, particularly for septic systems. Sellers must disclose any rental income history for the past three years to potential buyers.
Suggested Compliance Checklist
Review Existing Lease Agreements
1 days after startingCarefully review all current lease agreements to understand tenant rights, lease terms, and obligations. Wisconsin law (Wis. Stat. § 704) protects tenants' rights to remain in the property until their lease expires, even when ownership changes. Note any special provisions, termination clauses, or renewal options that might affect the sale.
Prepare Property Disclosure Statement
7 days after startingWisconsin law requires sellers to disclose known defects that would significantly reduce the property's value or unreasonably endanger occupants (Wis. Stat. § 709.03). This disclosure must include issues related to the property's condition, including those that might affect tenants. Be thorough and honest, as failure to disclose can lead to legal liability.
Draft Notice to Tenants of Intent to Sell
10 days after startingWhile Wisconsin law doesn't specifically require notifying tenants of your intent to sell, providing written notice is a professional courtesy and helps maintain good relations. The notice should explain your plans, reassure tenants about their rights, and outline how showings will be handled. Wisconsin law (Wis. Stat. § 704.05(2)) requires landlords to give at least 12 hours advance notice before entering a tenant's unit for showings.
Prepare Rent Roll Document
14 days after startingCreate a comprehensive rent roll that includes details about each tenant, their lease terms, monthly rent amounts, security deposits held, and payment history. This document is essential for potential buyers to understand the rental income and tenant situation. Be accurate, as buyers will rely on this information when making their purchase decision.
Request Estoppel Certificates from Tenants
21 days after startingAsk each tenant to complete an estoppel certificate that verifies the terms of their lease, current rent, security deposit amount, and confirms they have no claims against the landlord. This document protects both the seller and buyer by establishing the facts of the tenancy. In Wisconsin, while not statutorily required, this is a standard practice in investment property sales.
Consider Early Lease Termination Options
28 days after startingIf you prefer to sell the property vacant, explore legal options for early lease termination. In Wisconsin, you cannot unilaterally terminate a lease simply because you want to sell. Options include: 1) Waiting until leases expire naturally, 2) Negotiating voluntary early termination with tenants, or 3) Selling with tenants in place. If pursuing early termination, you'll need tenant agreement in writing.
Draft Early Lease Termination Agreement (if applicable)
35 days after startingIf tenants agree to terminate their lease early, create a formal agreement documenting the terms. This should include the termination date, any financial compensation offered, handling of security deposits, and release of liability. Wisconsin law doesn't specify requirements for mutual termination agreements, but having clear written terms protects both parties.
Consider Cash for Keys Agreement (if applicable)
42 days after startingIf you're offering financial incentives for tenants to vacate early, formalize this in a Cash for Keys Agreement. This document should clearly state the amount offered, move-out date, property condition requirements, and when/how payment will be made. This is a legal contract, so be specific about all terms and conditions to avoid disputes.
Prepare for Security Deposit Compliance
49 days after startingWisconsin law (Wis. Stat. § 704.28) has specific requirements for security deposits. When selling, you must either: 1) Transfer all security deposits to the new owner and notify tenants in writing, or 2) Return deposits to tenants. If transferring, prepare documentation showing deposit amounts, any deductions made, and accrued interest if applicable.
Draft Security Deposit Transfer Agreement
56 days after startingCreate an agreement between you and the buyer documenting the transfer of all security deposits. Wisconsin law requires the new owner to assume responsibility for these funds. The agreement should list each tenant, deposit amount, and acknowledge the buyer's acceptance of this liability. This protects you from future claims by tenants for their deposits.
Prepare Assignment of Leases
63 days after startingDraft a document that formally transfers all lease agreements from you to the buyer. This should list all current leases, their key terms, and state that the buyer assumes all landlord rights and responsibilities. In Wisconsin, this assignment is typically included in the purchase agreement but can also be a separate document for clarity.
Negotiate Real Estate Purchase Agreement with Tenant Provisions
70 days after startingWhen finalizing the purchase agreement, ensure it addresses the existing tenancies. Include provisions about lease assignments, security deposit transfers, prorated rent at closing, and representations about the accuracy of tenant information provided. Wisconsin law (Wis. Stat. § 706.01) requires real estate transfers to be in writing, and addressing tenant matters clearly helps prevent post-closing disputes.
Notify Tenants of New Ownership
77 days after startingAfter closing, Wisconsin law requires notifying tenants of the change in ownership, including the new owner's name and address for service of process and where rent should be paid (Wis. Stat. § 704.09). While this is technically the new owner's responsibility, coordinating this communication helps ensure a smooth transition and fulfillment of legal obligations.
| Task | Description | Document | Days after starting |
|---|---|---|---|
| Review Existing Lease Agreements | Carefully review all current lease agreements to understand tenant rights, lease terms, and obligations. Wisconsin law (Wis. Stat. § 704) protects tenants' rights to remain in the property until their lease expires, even when ownership changes. Note any special provisions, termination clauses, or renewal options that might affect the sale. | - | 1 |
| Prepare Property Disclosure Statement | Wisconsin law requires sellers to disclose known defects that would significantly reduce the property's value or unreasonably endanger occupants (Wis. Stat. § 709.03). This disclosure must include issues related to the property's condition, including those that might affect tenants. Be thorough and honest, as failure to disclose can lead to legal liability. | Property Disclosure Statement | 7 |
| Draft Notice to Tenants of Intent to Sell | While Wisconsin law doesn't specifically require notifying tenants of your intent to sell, providing written notice is a professional courtesy and helps maintain good relations. The notice should explain your plans, reassure tenants about their rights, and outline how showings will be handled. Wisconsin law (Wis. Stat. § 704.05(2)) requires landlords to give at least 12 hours advance notice before entering a tenant's unit for showings. | Notice to Tenants of Intent to Sell | 10 |
| Prepare Rent Roll Document | Create a comprehensive rent roll that includes details about each tenant, their lease terms, monthly rent amounts, security deposits held, and payment history. This document is essential for potential buyers to understand the rental income and tenant situation. Be accurate, as buyers will rely on this information when making their purchase decision. | Rent Roll | 14 |
| Request Estoppel Certificates from Tenants | Ask each tenant to complete an estoppel certificate that verifies the terms of their lease, current rent, security deposit amount, and confirms they have no claims against the landlord. This document protects both the seller and buyer by establishing the facts of the tenancy. In Wisconsin, while not statutorily required, this is a standard practice in investment property sales. | Estoppel Certificate | 21 |
| Consider Early Lease Termination Options | If you prefer to sell the property vacant, explore legal options for early lease termination. In Wisconsin, you cannot unilaterally terminate a lease simply because you want to sell. Options include: 1) Waiting until leases expire naturally, 2) Negotiating voluntary early termination with tenants, or 3) Selling with tenants in place. If pursuing early termination, you'll need tenant agreement in writing. | - | 28 |
| Draft Early Lease Termination Agreement (if applicable) | If tenants agree to terminate their lease early, create a formal agreement documenting the terms. This should include the termination date, any financial compensation offered, handling of security deposits, and release of liability. Wisconsin law doesn't specify requirements for mutual termination agreements, but having clear written terms protects both parties. | Early Lease Termination Agreement | 35 |
| Consider Cash for Keys Agreement (if applicable) | If you're offering financial incentives for tenants to vacate early, formalize this in a Cash for Keys Agreement. This document should clearly state the amount offered, move-out date, property condition requirements, and when/how payment will be made. This is a legal contract, so be specific about all terms and conditions to avoid disputes. | Cash for Keys Agreement | 42 |
| Prepare for Security Deposit Compliance | Wisconsin law (Wis. Stat. § 704.28) has specific requirements for security deposits. When selling, you must either: 1) Transfer all security deposits to the new owner and notify tenants in writing, or 2) Return deposits to tenants. If transferring, prepare documentation showing deposit amounts, any deductions made, and accrued interest if applicable. | - | 49 |
| Draft Security Deposit Transfer Agreement | Create an agreement between you and the buyer documenting the transfer of all security deposits. Wisconsin law requires the new owner to assume responsibility for these funds. The agreement should list each tenant, deposit amount, and acknowledge the buyer's acceptance of this liability. This protects you from future claims by tenants for their deposits. | Security Deposit Transfer Agreement | 56 |
| Prepare Assignment of Leases | Draft a document that formally transfers all lease agreements from you to the buyer. This should list all current leases, their key terms, and state that the buyer assumes all landlord rights and responsibilities. In Wisconsin, this assignment is typically included in the purchase agreement but can also be a separate document for clarity. | Assignment of Leases | 63 |
| Negotiate Real Estate Purchase Agreement with Tenant Provisions | When finalizing the purchase agreement, ensure it addresses the existing tenancies. Include provisions about lease assignments, security deposit transfers, prorated rent at closing, and representations about the accuracy of tenant information provided. Wisconsin law (Wis. Stat. § 706.01) requires real estate transfers to be in writing, and addressing tenant matters clearly helps prevent post-closing disputes. | Real Estate Purchase Agreement | 70 |
| Notify Tenants of New Ownership | After closing, Wisconsin law requires notifying tenants of the change in ownership, including the new owner's name and address for service of process and where rent should be paid (Wis. Stat. § 704.09). While this is technically the new owner's responsibility, coordinating this communication helps ensure a smooth transition and fulfillment of legal obligations. | - | 77 |
Frequently Asked Questions
Yes, you can sell your house in Wisconsin even if you have tenants living in it. The property can be sold with the lease intact, and the new owner generally must honor the existing lease terms. This is because in Wisconsin, when a property is sold, the lease transfers with it under the principle of 'assignment by operation of law.'
While Wisconsin law doesn't specifically require landlords to notify tenants of a sale, it's considered best practice to inform your tenants. This helps maintain a good relationship and can make the showing and sale process smoother. You should provide reasonable notice before showings, typically 24 hours as per Wisconsin Statute § 704.05(2).
No, you cannot evict tenants simply because you want to sell your property. In Wisconsin, you can only evict tenants for specific legal reasons such as non-payment of rent, lease violations, or if the lease has expired. If you have a month-to-month tenancy, you can terminate it with proper notice (28 days in Wisconsin), but you cannot evict a tenant who is in the middle of a fixed-term lease just to sell the property.
When you sell your property, you should transfer the security deposits to the new owner and notify your tenants of this transfer in writing. Under Wisconsin Statute § 704.28, the new owner becomes responsible for returning the security deposits at the end of the tenancy. Make sure to document the transfer of deposits in your sales agreement to protect yourself from future liability.
You don't need your tenants' permission to show the property, but you must provide reasonable notice before entering, typically 24 hours as specified in Wisconsin Statute § 704.05(2). The tenant has the right to be present during showings, and you cannot force them to leave during showings. It's best to work cooperatively with your tenants to establish a showing schedule that minimizes disruption to their lives.
The new owner must honor the terms of any existing fixed-term lease until it expires. They cannot raise the rent or change other lease terms during this period. However, once the lease expires, the new owner can offer a new lease with different terms, including higher rent, or convert to a month-to-month arrangement with proper notice of any changes as required by Wisconsin law.
If your tenant has a month-to-month lease, either you or the new owner can terminate it with proper written notice. In Wisconsin, this requires at least 28 days' notice before the next rent due date. This gives you more flexibility when selling, as the new owner can choose to either continue renting to the current tenants or terminate the tenancy if they wish to occupy the property themselves or make significant renovations.
Yes, you can offer your tenants a 'cash for keys' agreement to incentivize them to move out early. This is legal in Wisconsin as long as it's truly voluntary and not coercive. The agreement should be in writing and specify the amount, move-out date, and condition requirements. This approach can be beneficial if you believe the property will sell for a higher price without tenants or if potential buyers want vacant possession.
In Wisconsin, you should disclose the existence of all current leases to potential buyers. You should provide copies of all lease agreements, information about security deposits, and any history of lease violations or disputes. Wisconsin's real estate disclosure laws (Wis. Stat. § 709.03) require sellers to disclose material facts that could affect the property's value, which includes information about current tenancies.
If the buyer wants to occupy the property themselves, they still must honor any existing fixed-term lease until it expires. For month-to-month tenancies, the new owner can terminate the tenancy with proper notice (28 days in Wisconsin). Some sales contracts include contingencies that the property will be delivered vacant, in which case you would need to legally end all tenancies before closing, either by waiting for leases to expire or through mutual agreement with your tenants.