Most condominiums and homeowner associations (HOAs) are nonstock corporations under Wisconsin Chapter 181.  As such their members can make decisions one of three ways:

  1. Holding a meeting;
  2. Action by written consent (181.0704 Wis. Stat.). This may be used unless “limited or otherwise provided in the articles of incorporation or bylaws…”  For an association to act by written consent, the action must be “approved by members holding at least 80 percent of the voting power, or a different percentage, not less than 50 percent, specified in the articles of incorporation or bylaws.”  The written consents must be signed and dated after the date of the last meeting of the members and kept with the minutes
  3. Action by written ballot (181.0708 Wis. Stat.) This may be used “if permitted by the articles of incorporation or bylaws, any action that may be taken at an annual, regular or special meeting of members may be taken without a meeting if the corporation delivers a written ballot to every member entitled to vote on the matter, the ballot sets for the proposed action and provides an opportunity to vote for or against the proposed action.”  “Approval by written ballot … valid only when the number of votes cast by ballot equals or exceeds the quorum required to be present at a meeting authorizing the action, and the number of approvals equals or exceeds the number of votes that would be required to approve the matter at a meeting at which the total number of votes cast was the same as the number of votes cast by ballot.”


Continue Reading Condo and HOA Virtual/ZOOM Meetings in Wisconsin – How Legal Are They?

On September 1, 2020, Wisconsin’s WB-14 form become the standard form used by real estate brokers on behalf of their clients to purchase condominiums.  As drafted, it is a trap for the Seller, and any Broker using it should, at a minimum, cross out lines 158-160.  Although this new form offer may make the broker’s job easier, it puts Sellers (but not real estate brokers) at significant risk for no particular reason.

Specifically, WB-14 includes on lines 149-166 a “Contingency for Additional Condominium Information”.  If checked, which it likely always will be, it requires the Seller to deliver to Buyer at Seller’s expense, within 10 days of acceptance, if they exist, the following:

  1. Line 152 – Association financial statements “for the 2 two years.”
  2. Line 153 – Minutes of “the last 3 Unit owners’ meetings.”
  3. Line 154 – Minutes of “Condominium board meetings during the 12 months prior to acceptance of this Offer.”
  4. Line 155 – “Information about contemplated or pending Condominium special assessments.”
  5. Line 156 — The Association’s “certificate of insurance.”
  6. Line 157 – “The balance of reserve accounts controlled by the Association.”
  7. Line 158 – “Any Common Element inspection reports … held by the Association.”
  8. Line 160 – “Information regarding any pending litigation involving the Association.”


Continue Reading Wisconsin’s WB-14 Residential Condominium Offer to Purchase (CONDO SELLERS BEWARE)

As many of you know, on July 30, 2020, Governor Evers of Wisconsin issued Executive Order #82 declaring a public health emergency to combat COVID-19, and Emergency Order #1 requiring individuals, with certain exceptions, to wear face coverings if:

  1. “The individual is indoors or in an enclosed space, other than at a private residence; and
  2. Another person or persons who are not members of individual’s household or living unit are present in the same room or enclosed space.”

Neither order defines “private residence” and the statutes are of very limited help on whether the common element and/or limited common element of a condominium association is part of a unit owners “private residence.”  The manner of condominium ownership does very little to clarify the issue, since the common elements are owned by the various unit owners.  Hence, each unit owner has a real property ownership interest in the common element. 
Continue Reading Must Wisconsin Condominium Residents Wear a Face Covering (Mask) in Indoor Common Element

Yesterday, Governor Ever’s signed Emergency Order #15 which reiterated the public health emergency relating to COVID 19.  It’s title: “Temporary Ban on Evictions and Foreclosures” also implies that foreclosure actions can not be filed or advance.  That is not the case.  Here is what the Order states relative to Foreclosures:

“7. Mortgagees are prohibited from commencing a civil action to foreclose upon real estate.

8. Mortgagees are prohibited from requesting or scheduling a sheriff’s sale of the mortgaged premises.

9, Sheriffs may not conduct sheriff’s sales of mortgaged premises nor may sheriffs act on any order of foreclosure or execute any writ of assistance related to foreclosure.

10. Nothing in this Order shall be construed to affect the ability to commence a civil action to foreclose upon real estate under Section 846.102 [abandoned premises] of the Wisconsin Statutes.

11. No provision in this order should be construed as relieving an individual of their obligations to pay rent, make mortgage payments, or any other obligation an individual may have under a tenancy or mortgage.”

The Order expires on May 26, 2020.
Continue Reading Wisconsin Governor Ever’s Emergency Order and Foreclosures

Summary

If your Association excessively fines an owner, expect a court to find a way to penalize the association.

The Facts

In 2004 Mr. and Mrs. Mills (“Mills”) bought a home in the subdivision called Galyn Manor.  In 2007 Galyn Manor began fining Mills for a commercial work vehicle parked in their driveway in violation of the association rules.  Galyn Manor advised Mills that the fines would be $50 for each day that the commercial vehicle was parked on their property.  By the end of 2007, the fines amounted to $645.  In January of 2008, the association hired the Andrews Law Firm (“Law Firm”) to collect the fines.  Between 2008 and May of 2015 many demands for payment were made, and many payments were made.
Continue Reading Excessive Fines Cause Courts to Find Liability – A Lesson in Fair Debt Collection Practices

With the Spring 2020 Presidential Primary and election for various state court judges looming on the horizon, many of Wisconsin’s condominium associations are proactively deciding on how to delicately navigate and employ rules regarding unit owner rights with respect to displaying American flags and political campaign signs. Naturally, the close-quarters of condominium living presents a different set of circumstances unlike single family homeowners who are free to scatter an unlimited amount of political signs and flags about their property with impunity. The very concept of a condominium is grounded in shared space and shared cost; and while one unit owner’s patriotism or unwavering support for a particular political candidate may be viewed as noble, another unit owner may view the same support as distasteful or even offensive.
Continue Reading The Balance in Display of Patriotism and Political Support Under Wisconsin Condominium Law

Becker Boards Summit, LLC v. Summit at Copper Square Condominium Association – 2018 WL 6695279 ( 2018 Ariz.)

Issues:  The court in this case addressed two important issues:

  1. Can a Developer, before turnover, amend a Declaration to convert Common Element to Limited Common Element for the benefit of a Developer Unit?
  2. Can Developer contracts entered into before turnover be voided after turnover?


Continue Reading Declarant Contracts, Including Easements, can be Voided

IMPRESSION: Unit owners who initiate litigation over common elements do not necessarily recoup attorney fees from the association—even when their lawsuit is successful, and benefits the association as a whole.

DETAILS: A shared sewer system in Adams County, Wisconsin, was the focus of a recent dispute between the Sunset Condominiums at Northern Bay Owners Association (“Sunset Condo Assoc.”), and a unit owner of the Sunset Condominiums. Larson v. Castle at the Bay, LLC, 2018 WI App 71, 384 Wis.2d 633, 2018 WL 5307100.  Prior to 2013, the area’s local sewage system was mutually utilized by neighboring developments Timber Shores and Castle at the Bay—despite being considered a common element of Sunset Condominiums.  In 2013, Castle at the Bay declared partial ownership of the sewer system, and proceeded to impose a usage fee upon Sunset Condo Assoc. Rather than respond by threatening litigation, the Sunset Condo Assoc. chose a two-tiered amicable and less expensive approach: (1) agree to shared ownership of the sewer system; and (2) consent to Castle at the Bay’s obligatory usage fees. 
Continue Reading Stuck with the Tab: Initiating Suit Over “Common Elements” Without Association Approval can Lead to Unit Owners Covering Unexpected Attorney Fees

Facts: The facts in the case of Forrest v. The Ville St. John Owners’ Association, Inc., No. 2018-CA-0175 (La. Ct. App. Nov. 7, 2018) are straightforward.  In March of 2016 there was a fire.  It damaged common element and the Forrest unit.  The Association had two insurance policies: one for Property and one for Community Association Management Liability Coverage.  The Property policy was issued by Lloyd’s of London. Lloyd’s paid on its policy, for both the common element and unit damages, but the funds were insufficient to repair the common elements and the unit.  So the Association repaired the common elements.

Trial Court: The unit owner, Forrest, filed suit against the Association alleging breach of fiduciary duty and various other claims under state law. 
Continue Reading Insurance is NOT all the Same-Another Case Proving Why You Need an Insurance Committee

Castilian Hills Homeowners Association v. Chaffins, (Wash. Ct. App. Oct. 22, 2018)

The Facts

Homeowner bought home in 2004. In 2016, the homeowner failed to pay his $147 assessment.  The homeowners association (“HOA”) assessed a $20 late fee. The homeowner still did not pay, despite the normal language in the HOA governing documents about interest, the right to lien and reasonable attorney fees. After more notices, the HOA filed a lien for $525.52 and then a complaint against the homeowner seeking the $525, plus interest and attorney fees.   The homeowner argued to the court that the HOA was “required by statute to provide notice and an opportunity to be heard” prior to filing a foreclosable lien.
Continue Reading How to Turn $147 into $10,000 – the WRONG Way