Lease Case Analysis

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An interesting question could arise on remand if it is ultimately determined that the Goldammers breached the lease — whether they waived any objections to the unlawful attorney’s fees provision.

A number of statements by the court suggest that, by seeking specific performance of the lease, they did just that.

The court stated at one point, “The tenants are aware that the attorney’s fees provision is prohibited by the ATCP regulation but nonetheless are opting for specific performance. In so doing, the tenants may not pick and choose which of the provisions they will adhere to in the future and then rely on the rationale in Baierl to prevent the landlord from asserting his or her rights under the lease.”

The court added, “By the tenant’s very action, he or she wants enforcement of the lease and is responsible for the terms of the lease. We therefore hold that while a landlord cannot seek damages for abandonment of a lease that has an ATCP violation, a tenant who seeks to prospectively enforce the lease has waived his or her rights pursuant to Baierl in the event of a breach on the part of the tenant.”

	Links Wisconsin Court of Appeals Related Article Tenant, not landlord, may enforce illegal lease

These statements could be read to mean that tenants seeking to enforce the lease waive objections to all provisions of that lease, including the unlawful attorney’s fees provision.

On the other hand, it could be interpreted to waive only the rights expressly conferred by the decision in Baierl, but reserving any objections conferred by the administrative code.

The court interpreted the Goldammers’ arguments in this case to seek avoidance of any responsibilities they may have under the lease. In addition, the Dawsons were not seeking to enforce the attorney’s fees provision.

Thus, regardless of how broad the court’s language may appear, it can easily be limited to apply only to the lawful provisions of the contract. This would be the more sensible interpretation, but the court of appeals’ decision creates plenty of opportunity for argument to the contrary.

– David Ziemer

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David Ziemer can be reached by email.