By Attorneys Dan Schmeeckle and Ross Slovensky
When it comes to leasing commercial real estate, Wisconsin law demands a high level of formality and clarity. The statute of frauds - as codified in Wisconsin Statutes. §§ 706.02 and 704.03 - governs the creation and enforceability of contracts for the transfer of an interest in land, including commercial leases.
The purpose of the statute of frauds is to ensure “reliable evidence of the existence and terms of the contract and to prevent fraud”[1] and requires certain contracts to be in writing and signed by the parties. The most common types of contracts to which the statute applies are contracts that involve the sale or transfer of an interest in land and contracts that cannot be completed within one year. This means that a commercial lease for more than one year must comply with the statute of frauds.
Wis. Statute § 706.02 creates the general rule that any conveyance of an interest in real property for more than one year must be in writing to be legally enforceable. To satisfy the statute, a commercial lease must:
(a) Identify the parties (landlord and tenant);
(b) Include a description of the property;
(c) Specify the interest being conveyed (e.g., exclusive use of commercial space);
(d) Identify the lease term, consideration (a "promise for a promise:" i.e. you can use the land for a fee), interest conveyed (specific unit, access to common areas, etc.) and any other material terms;
(e) Be signed by or on behalf of all parties, including the party creating the interest,
Commercial leases may run afoul of Wis. Statute § 706.02 by not complying with any singular element of the law. For example, a commercial lease that is not signed by the landlord, does not fully describe the property to be leased, or does not identify how much rent is owed, risks being invalidated for violating the statute of frauds.
In addition to the requirements of this statute commercial leases for more than one year must also comply with Wis. Statute § 704.03. This statute provides that a commercial lease over one year in length must first meet the requirements of Wis. Stat. § 706.02 and in addition must:
(a) Be in writing and signed;
(b) Set forth the amount of rent;
(c) Set forth the time of commencement and expiration of the lease; and (d) Include a reasonably definite description of the premises. To illustrate, a land conveyance referring to a “farm” was not sufficiently definite under the statue of frauds because a person might not know which parcel or parcels were being described.[2] In a separate case, a Wisconsin court invalidated a commercial lease because the lease did not set forth the amount of rent owed or provide sufficient information to determine the amount of rent due. [3] Under the statute, the takeaway is simple but crucial: always reduce the lease to writing. Verbal promises, handshake deals, or other oral agreements are unlikely to stand up in court.
Wisconsin Statutes. §§ 706.02 and 704.03 reflect a clear policy: long-term commercial leases must be documented in writing. For businesses making significant investments in location and infrastructure, ensuring the lease is legally enforceable isn't just a good practice - it's essential protection.
If you're entering into or renewing a commercial lease, we would recommend that you meet with one of our talented attorneys at Anderson O’Brien,LLP to draft or review the agreement. A well-structured lease minimizes confusion, reduces risk, and preserves the stability that commercial tenants and landlords rely on.
[1] Kocinski v. Home Ins. Co., 147 Wis. 2d. 728, 433 N.W.2d 654 (Ct. App. 1988).
[2] Wadsworth v. Moe, 53 Wis. 2d 620, 193 N.W.2d 645 (1972).
[3] MPI Wright LLC v. Goodin Co., 2025 Wisc. App. LEXIS 113.