Sell a rental property in Superior, WI

Good to know first: you don't need to do any of this to ask us for a number, and a title company handles the closing paperwork. This page is here if you want the background.

What happens to the lease when I sell?

The lease generally goes with the building. A landlord's interest can be transferred unless the lease expressly restricts it, so read yours for that clause. Lease provisions that aren't personal to the original parties can be enforced by or against a successor.

Selling doesn't walk you away clean by itself:

Can I bring a buyer through an occupied unit?

Yes, with notice. A landlord may, on advance notice and at reasonable times, show the premises to prospective purchasers. ATCP 134 defines advance notice as at least 12 hours, unless the tenant agrees to less. Entry is limited to inspecting, repairing, or showing, and only for the time reasonably needed.

That applies to us too, if we need to walk a unit. Give the notice, and tell the tenant who's coming and why.

Do my tenants have a right to buy first?

We found none for an ordinary rental sale. The one first-right rule we read is for condominium conversions. A lease can still grant one, so check yours.

Can I end the tenancy so I can sell it empty?

It depends on what kind of tenancy it is. A sale isn't its own ground for ending one, in anything we read.

Watch the rent check. A landlord who cashes rent after a lease ends, while planning to deliver the place empty, may have just created a month-to-month tenancy without meaning to. Decide before the lease runs out.

Never change locks or shut off utilities to clear a unit. Removing a tenant goes through the proper legal process, so get a Wisconsin landlord-tenant attorney if it comes to that.

What about security deposits?

Wisconsin's clock runs from the tenancy ending, not from the sale. The landlord must deliver or mail the deposit, less lawful deductions, within 21 days, with a written statement accounting for anything withheld. The same rule is also in chapter 704.

We didn't find a Wisconsin rule on how a deposit gets handed from seller to buyer in a sale. So put it in the contract: who holds each deposit, how much, and the credit at closing. Keep the receipts and the move-in records.

Do I have to tell tenants the owner changed?

Yes. Tenants must be kept informed of changes in the owner, manager, or person who accepts legal papers, by written notice within 10 business days of the change. Their original disclosure names those people in the first place, so it's worth reading what yours said.

Does a rental need a condition report?

The law covers property with 1 to 4 dwelling units, so a house or duplex you rent out is generally inside it. That's the report we explain on the report and buyer's notice page. If it was built before 1978, a federal rule also calls for disclosing known lead-based paint and hazards, and for landlords too when they rent it. A four-unit building is the upper edge, so check the unit count on bigger places.

What will the state tax take?

Ask a tax professional, since this is general only. Wisconsin excludes 30 percent of net capital gain on assets held more than a year when figuring state taxable income. That exclusion doesn't cover amounts treated as ordinary income from depreciation recapture, and long-held rentals often have some of that.

What can the city require of a landlord?

Here's what state law allows, and then what we can't tell you.

• A city may require owner registration only if it asks for just one contact name and contact details. It can't otherwise require certification or licensing.
• It can't require a rental to be inspected except on a complaint, under a set program, or where state or federal law requires it.
• Superior's code compliance officers and inspectors enter a rental only by invitation of the landlord or a tenant who lives there.

What we couldn't read: Superior's own municipal code, which sits on a site we couldn't open. So we don't know what it says about registering a rental in the city. Ask Code Compliance, Room 200, 715-395-7596, and ask whether anything is open on your address before you sell.

If you want out

We own rentals around the Twin Ports ourselves, and we buy occupied places. We'd want the lease, the rent history, the deposits, and any repair records. A sale to us doesn't change what you owe your tenants before closing. If the place is in good shape with solid tenants, another landlord buying through an agent may well pay more. Check that before you decide.