AB723: Bill Text

AB723, s. 3 Section 3. 703.165 of the statutes is created to read:

AB723,3,15 703.165 Budget and reserve requirements. (1) Annual budget. (a) No later than the first day of the 6th month beginning after the effective date of this paragraph .... [revisor inserts date], and annually thereafter, each board of directors shall prepare and distribute to all unit owners a detailed annual budget setting forth all of the following:

AB723,3,16 1. All anticipated common expenses and common surpluses.

AB723,3,17 2. The amount and purpose of each anticipated expenditure from reserves.

AB723,3,18 3. The amount and source of all anticipated contributions to reserves.

AB723,3,19 4. The amount in the reserve account.

AB723,3,20 5. The total amount of assessments to be levied against unit owners.

AB723,3,21 6. The amount and source of any other income of the association.

AB723,3,23 7. The amount and purpose of any other anticipated expenditure by the association.

AB723,4,3 (b) An annual budget adopted by a board of directors under par. (a) shall provide for reasonable reserves in the reserve account in accordance with the long-range reserve account plan under sub. (2) (b).

AB723,4,9 (2) Reserve account; budgeting and reserve plan. (a) No later than the first day of the 4th month beginning after the effective date of this paragraph .... [revisor inserts date], the board of directors shall establish a reserve account for the association, to hold all reserves. The reserve account shall be an interest-bearing, federally insured account at a bank, savings bank, savings and loan association or credit union.

AB723,4,17 (b) The board of directors shall develop and annually evaluate and revise, as necessary, a long-range reserve account plan. In accordance with this plan, the board of directors shall annually determine the amount that is necessary to be contributed to the reserve account for the needs of the condominium, assess unit owners a sufficient amount for contributions to reserves and deposit the assessments collected into the reserve account. In developing and evaluating the long-range reserve plan and in providing for reasonable reserves under sub. (1) (b), the board of directors shall take into consideration all of the following:

AB723,4,19 1. The results of any independent professional reserve study conducted on behalf of the association.

AB723,4,22 2. The estimated cost of the repair or replacement of all major common elements that have a remaining useful life of less than 20 years and that the association has the duty to repair or replace.

AB723,4,23 3. The estimated remaining useful life of all major common elements.

AB723,4,24 4. The amount of interest or other earnings attributable to the reserve account.

AB723,5,3 5. An estimate of the total annual contribution to the reserve account that is necessary to meet the obligations of the association to repair and replace common elements.

AB723,5,5 6. A comparison between the amounts held in the reserve account and the anticipated costs to repair and replace, as necessary, the common elements.

AB723,5,10 (3) Use of reserve account. Except as provided in sub. (4), the funds in the reserve account, including accrued interest, may be used only for major repairs and replacement of common elements. Funds in the reserve account may not be used for routine expenditures such as normal or routine repair or maintenance of common elements or customary services such as snow or trash removal.

AB723,5,13 (4) Special withdrawals or transfers from reserve account. The board of directors may withdraw or transfer funds from the reserve account for a purpose other than those specified in sub. (3) if all of the following conditions are met:

AB723,5,16 (a) The amount and specific purpose of the withdrawal or transfer from the reserve account is approved at a special meeting of the association by the affirmative vote of at least 51% of unit owners having 66% or more of the votes.

AB723,5,19 (b) The board of directors creates a repayment schedule that specifies the time period for repayment of the withdrawal or transfer and that contains a schedule of periodic amounts for the repayment of the withdrawal or transfer.

AB723,5,20 (c) The term of the repayment schedule is not longer than 7 years.

AB723,5,23 (d) The amount of the withdrawal or transfer is not greater than 40% of the total value of the reserve account at the time the withdrawal or transfer is approved under par. (a).

AB723,5,24 (e) No other withdrawal or transfer from the reserve account is outstanding.

AB723,6,4 (5) Reporting requirements. Beginning in 2001, the board of directors, on behalf of the association, shall annually, no later than March 31, record in its minutes and with the register of deeds of the county where the condominium is located a report on the reserve account of the association setting forth all of the following:

AB723,6,6 (a) A statement of the amounts held in the reserve account at the beginning and at the close of the previous one-year period.

AB723,6,8 (b) The amounts and sources of funds added to the reserve account during the previous one-year period.

AB723,6,11 (c) The amounts expended from the reserve account during the previous one-year period and a description of the purposes for which the amounts were expended.

AB723,6,15 (6) Audit. Upon the written request of any unit owner, the board of directors shall contract with an independent certified accountant to audit the reserve account and provide the results of the audit to the requesting party. The board of directors may require the requesting party to pay the reasonable costs of the audit.

AB723, s. 4 Section 4. 703.33 (1) (d) of the statutes is amended to read:

AB723,6,23 703.33 (1) (d) A copy of the projected annual operating budget for the condominium including reasonable details concerning setting forth all anticipated common operating expenses, anticipated expenditures from the reserve account for repair or replacement of common elements, the amount in the reserve account, the estimated monthly payments by the purchaser for assessments, including anticipated contributions by the purchaser to reserves, and the estimated monthly charges for the use, rental or lease of any facilities not part of the condominium.

AB723, s. 5 Section 5. Initial applicability.

AB723,7,3 (1) The treatment of section 703.33 (1) (d) of the statutes first applies to copies of the projected annual operating budget furnished on the first day of the 6th month beginning after the effective date of this subsection.

AB723,7,4 (End)