QUESTION:
In a residential lease is it legal to put a “no-move out” clause for the winter months such that the tenant owes a fee if he moves out during certain months? Can there be any fees charged in a lease, in general, if the tenant moves out early and breaks the lease or subleases?

ANSWER:
The problem is liquidated damages are illegal in WI residential leases. Having this in your rental docs probably invalidates the entire lease. Unfortunately our Supreme Court had decided that a lease that contains a provision prohibited by ATCP 134.08 is unenforceable by the landlord. While you may never have a tenant push this issue, if you were to end up in court it will be painfully expensive as you will have to pay the tenant’s attorney and double damages.

Wis. Admin. Code § ATCP 134.08(2) provides, “Prohibited rental agreement provisions. No rental agreement may: (2) Provide for an acceleration of rent payments in the event of tenant default or breach of obligations under the rental agreement, or otherwise purport to waive the landlord’s obligation to mitigate damages as provided under s. 704.29, Stats.” The described fees would appear to violate this provision because they impose a penalty upon the tenant which may be viewed as an acceleration of rent. If the fees are high enough, a landlord might not apply his or her best efforts to try to get the property rented again. The landlord does have a duty to try to mitigate the loss and try to get the unit rented again. In essence the fees appear to be liquidated damages that violate § ATCP 134.08(2).

Any lease that includes a provision that violates § ATCP 134.08 is unenforceable by the landlord against the tenant under the Wisconsin Supreme Court decision in Baierl v. McTaggart, 2001 WI 107 http://www.wisbar.org/res/sup/2001/98-3329.htm. The illegal provision makes the lease invalid from the landlord’s perspective. When the landlord attempted recoup his losses when the tenants breached their lease and moved out early, the tenants were able to escape liability. This result was reached even though the landlord did not try to use the illegal provision and the tenants suffered no harm whatsoever due to the inclusion of the provision. If you have a lease with an illegal clause, the entire lease turns into a month to month tenancy.