In 2018 three separate acts amended Chapter 703 of the Wisconsin Statutes. Chapter 703 is Wisconsin’s Condominium Ownership Act.  The amendments mostly took effect on April 18, 2018, but some will go into effect later in the year.  (For an in-depth review of the actual laws: 2017 Senate Bill 131, 2017 Assembly Bill 518 and 2017 Assembly Bill 818.)

Only a few of the changes will affect most associations, but it never hurts to have an idea of what the legislature spent its time on.

The Good – Makes Declaration Amendments Potentially Easier to Obtain

The Problem:  Before this act was passed declaration amendments for relatively large associations (30 or more units) were often difficult to obtain because of the mortgagee (bank) approval likely needed.  Most banks did not care about the amendment, but did not respond to the request.  Consequently, obtaining the bank’s consent was very difficult.

Solution:  2017 Wisconsin Act 333, which took effect on April 18, 2018, made it easier for condominium associations to amend their declarations by adding section 703.09(2m) to the statutes. This section allows a unit or the association to obtain first mortgagee (normally a bank) approval to a declaration amendment if the bank fails to respond.  To obtain this benefit, the act requires written notice to the bank delivered by certified mail that includes all of the following:

1. A copy of the proposed amendment;
2. A request for approval or disapproval;
3. A form upon which the mortgagee may indicate approval or disapproval; and
4. A statement that if the mortgagee fails to return the form or otherwise disapprove within 60 days from the date of the mailing of the notice, the first mortgagee will be considered to have given its consent to the amendment.

The Bad – Adds Additional Disclosure Requirements and Possible Fines

Perceived Problem:  It took too long and cost too much to obtain condominium disclosure information.

Action Taken:  2017 Wisconsin Act 303 principally dealt with limiting fees allowed to an association at the time of the sale of a unit for the numerous questions and issues that the association is asked. Some of the specifics include:

1. 703.20– limiting the amount an association can charge for the 703.33 disclosure requirements to the lesser of the actual costs or $50, unless the process under 703.205 is followed.
2. 703.205 – setting the procedure for increasing the amount of charges for payoff statements or 703.33 disclosures by doing all of the following:
   1. Providing written notice to the unit owners at least 48 hours before any meeting to consider any of the following:
      1. Establishing or increasing the fee;
      2. Entering into or modifying a management contract that does any of the following:
         1. Allows the manager to begin charging the fee; or
         2. If the manager already charges the fee, allows the manager to increase the amount of the fee.
   2. Adopting a written resolution at a meeting to take the actions above;
   3. Sending out written notice of the resolution within 48 hours of its adoption.
3. 703.33(1) – adding to the Executive Summary the last date it was prepared or revised.
4. 703.33(1)(h)11– adding to the reserve section of the Executive Summary the amount of the reserves on the date it was last prepared or revised.
5. 703.335 – is a new section that added to the statutes the procedure for someone to request a payoff statement. Upon request, the payoff statement must be provided within 10 business days without charge, unless the association has established the fee under the process set forth in 703.205 above.  Failing to provide the payoff statement within the deadline will cause the association to be liable for any actual damages or $350, whichever is less.

The Boring

2017 Wisconsin Act 102 requires a larger space be provided to the register of deeds for recording documents (by amending 703.11) and changed the information required to be placed on any plat amendment as a result of merger agreement between condominiums (by amending 703.275).

If you have any questions about these new laws, please feel free to contact us.