Wisconsin Rent-to-Own Lease Agreement
A Wisconsin rent-to-own agreement is a legally binding document that combines a standard rental contract with an option for the tenant to purchase the property during the lease term. This arrangement allows tenants the opportunity to secure buying rights while living in the property.
Wisconsin Rent-to-Own Lease Agreement
Tenant Obligations
Tenants have specific responsibilities under a rent-to-own agreement:
- Nonrefundable Fee: Tenants must pay a nonrefundable fee to secure their option to purchase the property.
- Purchase Offer: Should the tenant decide to buy the property, they are required to submit a purchase offer within a designated term.
- Failure to Purchase: If the tenant does not exercise their option to purchase within the specified period, they will forfeit the option fee and any related funds.
- Continuation of Lease: If the tenant chooses not to buy, the lease will continue as a standard rental agreement, with no further obligations at the end of the lease term.
Landlord Obligations
Prior to entering into a rent-to-own contract, landlords are obligated to issue a rental application. This process enables landlords to gather information about prospective tenants and evaluate their ability to meet tenant obligations.
Legal Citations
The relevant legal frameworks governing these agreements include:
- Landlord-Tenant Laws: Chapter 704 (Landlord and Tenant).
- Purchase Agreement Laws: Chapter 706 (Conveyances of Real Property; Recording; Titles).
Statutes
- Wis. Admin. Code §§ 134.06 – Security deposits
- Wis. Admin. Code §§ 134.06(2) – Security deposits
- Wis. Admin. Code §§ 134.06(4) – Security deposits
- Wis. Admin. Code §§ 134.06(1)(a) – Security deposits
- Wis. Admin. Code §§ 134.06(1)(b) – Security deposits
- Wis. Admin. Code §§ 134.05(4) – Earnest money deposits and credit check fees
- Wis. Admin. Code §§ 134.03(2a) – Rental agreements and receipts
- Wis. Stat. Ann. §§ 704.19(3) – Notice necessary to terminate periodic tenancies and tenancies at will
- Wis. Stat. Ann. §§ 704.15 – Requirement that landlord notify tenant of automatic renewal clause
- Wis. Stat. Ann. §§ 704.07(4) – Repairs; untenantability
- Wis. Admin. Code §§ 134.09(7) – Prohibited practices
- Wis. Stat. Ann. §§ 799.25(10) – Costs
- Wis. Stat. Ann. §§ 704.29(2)(b) – Recovery of rent and damages by landlord; mitigation
- Wis. Stat. Ann. §§ 704.17(1) – Notice terminating tenancies for failure to pay rent or other breach by tenant
- Wis. Stat. Ann. §§ 704.17(2)(b) – Notice terminating tenancies for failure to pay rent or other breach by tenant
- Wis. Stat. Ann. §§ 704.17(3) – Notice terminating tenancies for failure to pay rent or other breach by tenant
- Wis. Stat. Ann. §§ 704.05(2) – Rights and duties of landlord and tenant in absence of written agreement to contrary
- Wis. Stat. Ann. §§ 704.04(8) – Check-in sheet
- Wis. Stat. Ann. §§ 106.50(5m) – Open housing
- Wis. Stat. Ann. §§ 704.16 – Termination of tenancy for imminent threat of serious physical harm; changing locks
- Wis. Stat. Ann. §§ 704.05(5)(a) – Rights and duties of landlord and tenant in absence of written agreement to contrary
- Wis. Stat. Ann. §§ 704.05(5)(2) – Rights and duties of landlord and tenant in absence of written agreement to contrary
- Wis. Stat. Ann. §§ 704.45 – Retaliatory conduct in residential tenancies prohibited
- Wis. Admin. Code §§ 134.04(2) – Disclosure requirements
- Wis. Admin. Code §§ 134.04(1) – Disclosure requirements
- Wis. Stat. Ann. §§ 799.01(2) – Applicability of chapter
- Wis. Stat. Ann. §§ 799.40 – Eviction actions
- Wis. Admin. Code ATCP § ATCP 134.02(11) – Definitions
- Wis. Stat. § 704.02 – Severability of rental agreement provisions.
FAQs
A Wisconsin rent-to-own agreement is a legally binding contract that allows a tenant to rent a property with the option to purchase it during the lease term. The tenant pays a nonrefundable fee to secure their buying rights, and if they choose to buy, they must submit an offer within a specified period.
If the tenant fails to purchase the property within the designated term, they lose the option fee and any related funds. However, the lease continues as a standard rental agreement with no obligations at the end of the term.
Before entering a rent-to-own contract, a landlord should issue a rental application to collect information about the prospective tenant. This helps the landlord assess whether the tenant can fulfill their obligations under the agreement.
Yes, if the tenant decides to buy the property, the parties can convert the rent-to-own agreement into a residential purchase agreement, formalizing the sale.
In Wisconsin, landlord-tenant relationships are governed by Chapter 704, which outlines the rights and responsibilities of both parties in rental agreements.
Tenants should understand that the nonrefundable fee paid to secure buying rights is lost if they do not purchase the property within the specified term. This fee is critical as it represents their commitment to potentially buying the property.
Failing to submit an offer to purchase within the designated term results in the loss of the option fee and any related funds, but the tenant can continue living in the property under the standard lease terms.