Remedies for Commercial Landlords in Wisconsin When a Tenant Breaches
Joshua R. Welsh & Scott W. Brunner
Occasionally, landlord clients will ask whether they can utilize so-called “self-help” techniques in dealing with a problem tenant. For instance, a landlord may want to lock a tenant out of the leased premises or cut-off the power to the leased premises. This constitutes a “reentry” by the landlord and renders the leased premises unusable by the tenant. Such self-help reentry by a landlord could serve at least two purposes: (1) it likely puts pressure on the tenant to more immediately comply with the terms of the lease, typically the payment of outstanding rent; and (2) it may allow the landlord to seek a new tenant or establish an alternative use of the property, without terminating the lease and releasing the tenant from future liability, including prospective rent payments.
While it is inadvisable in certain circumstances, self-help reentry may be an option for commercial landlords in Wisconsin if properly and peaceably executed, contrary to what many mistakenly believe.
Self-help restrictions in Wisconsin are residential-specific
While self-help reentry is prohibited for residential leases under the Wisconsin Agriculture, Trade, and Consumer Protection (“ATCP”) regulations, there is no related prohibition for commercial leases. Section 710.10 of the Wisconsin Statutes, meanwhile, states that a landlord “may,” remove tenants via Chapter 799 eviction actions or Chapter 843 actions for possession, suggesting that there is more than one method of removing breaching tenants, and not limiting a landlord’s remedy to the judicial process. So, while it appears that no current statutory provisions expressly allow commercial self-help, no statutes or regulations expressly prohibit it, either, unlike the case with residential self-help. Thus, commercial landlords may be able to reenter their properties occupied by breaching tenants without crawling through the judicial eviction process.
How Wisconsin case law treats self-help
The commercial self-help right began through an old statute that has since been repealed, but old case law explaining this right is still instructive. The courts explained that “[A] lessor may re-enter and repossess the premises himself if in accordance with his lease, provided that he does not violate the provisions” of Wisconsin’s self-help law. Simhiser v. Farber, 270 Wis. 420, 423, 71 N.W.2d 412 (1955) (explaining the old, now-repealed self-help statute). The old standard was that, so long as a landlord did not use force, “stealth,” “stratagem,” or a “multitude of people,” self-help reentry was allowed. Quite simply, were self-help reentry invoked, it had to be done peaceably.
It would appear that the same is still true today; no statutes or regulations disallow the practice for commercial landlords, while additional, more recent cases have recognized the right.
Lease provisions and implementing self-help
What is most important for commercial landlords is the lease itself. The terms of the commercial lease dictate what the landlord may or may not do in the event of a default by a tenant.
A well-drafted lease will include specific provisions which allow the landlord, upon a breach of the lease by the tenant, to reenter the leased premises and eject all parties without terminating the lease. Upon such reentry, the landlord should then be entitled to either (1) accept the tenant’s surrender of the premises or (2) hold the tenant liable for the remainder of the lease term (less reasonable mitigation of damages). This second approach may allow the landlord to re-enter the premises and still hold the breaching tenant liable for prospective rent, without allowing the tenant to continue using the property.
Self-help reentry should be carefully considered
Self-help reentry is certainly not without risks. A landlord seeking to invoke such methods in lieu of a formal judicial eviction should carefully consult with its attorney. The judicial process affords a level of certainty and finality which does not exist with self-help reentry. It is nevertheless important for commercial landlords to know that, depending on the governing lease, it may be an available remedy.
The information contained herein is not intended as and should not be construed as legal advice. Please consult with legal counsel before taking any action based on this information.