AB781,21,1414 (b) The amount and purpose of any other anticipated association expenditure.
AB781,21,1615 (c) The amount in any statutory reserve account under s. 703.163 or any other
16funds held for future expenditures.
AB781,21,1717 (d) Any common surpluses.
AB781,21,1818 (e) The amount and source of any income, other than unit owner assessments.
AB781,21,2019 (f) The aggregate amount of any assessment to be levied against unit owners
20and the purpose of the assessment.
Note: Requires the condominium association for condominiums that include at
least one unit that is restricted to residential use to annually adopt and distribute to all
unit owners an annual budget setting forth:
1. All anticipated common expenses and any amounts to be allocated to a statutory
reserve account and to any other funds for future expenditures.
2. The amount and purpose of any other anticipated association expenditure.

3. The amount in any statutory reserve account or any other funds held for future
expenditures.
4. Any common surpluses.
5. The amount and source of any income, other than unit owner assessments.
6. The aggregate amount of any assessment to be levied against unit owners and
the purpose of the assessment.
If there is a statutory reserve account for the condominium, the annual budget
must provide reserve funds for the account. See s. 703.163 (8) (intro.), created by Sec. 33
of the bill, below.
AB781, s. 33 1Section 33 . 703.163 of the statutes is created to read:
AB781,22,2 2703.163 Statutory reserve account. (1) Definitions. In this section:
AB781,22,53 (a) "Reserve funds" means funds derived from assessments against unit owners
4that are deposited in a statutory reserve account. The term does not include funds
5for ordinary operations, including amounts held for operational contingencies.
AB781,22,76 (b) "Statutory reserve account" means a separate account established under
7this section to hold reserve funds.
AB781,22,118 (c) "Statutory reserve account statement" means a statement indicating
9whether a statutory reserve account has been established for a condominium and,
10if there is no statutory reserve account, how it is anticipated that future expenditures
11for the repair and replacement of common elements will be funded.
AB781,22,14 12(2) Application; other reserve accounts not affected. (a) 1. Except as
13provided in subds. 2. and 3., this section applies to condominiums consisting
14exclusively of units that are restricted to residential uses.
AB781,22,1715 2. This section does not apply to a small condominium unless the declarant or
16the association, with the written consent of a majority of the unit votes, elects to be
17governed by this section.
AB781,23,218 3. This section applies to a condominium consisting of both residential and
19nonresidential units if the declarant or the association, with the written consent of

1a majority of the unit votes of the residential units and a majority of the unit votes
2of the nonresidential units, elects to be governed by this section.
AB781,23,63 (b) This section does not affect a reserve account or a similar account existing
4on the effective date of this paragraph .... [revisor inserts date], or a reserve account
5or similar account established on or after the effective date of this paragraph ....
6[revisor inserts date], that is not a statutory reserve account.
AB781,23,14 7(3) New condominiums; establishment of statutory reserve account by
8declarant.
(a) Except as provided in par. (c), the declarant of a condominium that
9is created on or after the effective date of this paragraph .... [revisor inserts date],
10shall establish a statutory reserve account when the condominium is created and
11shall execute a statutory reserve account statement. The declarant shall determine
12the annual amount to be assessed unit owners for reserve funds after considering the
13factors under sub. (7) (a) to (e) and, if the condominium is a conversion condominium
14with more than 4 units, the report prepared under s. 703.33 (2) (cm) 1.
AB781,24,215 (b) Reserve fund assessments for the reserve account established under par. (a)
16may first be assessed on a particular unit when a certificate of occupancy has been
17issued that applies to that unit. The declarant may elect to defer payment of the
18accrued assessments for a particular unit until the first conveyance of that unit. The
19declarant may not defer payment of accrued reserve fund assessments for more than
205 years from the date the exterior construction of the building in which the unit is
21located is completed. The declarant is liable for all reserve fund assessments on a
22unit that accrue before the unit is conveyed. If there are accrued reserve fund
23assessments against a unit, the declarant shall disclose in writing to the first
24purchaser of the unit whether the declarant has included any accrued reserve fund

1assessments in the purchase price of the unit or, if not included, how any accrued
2assessment will be paid.
AB781,24,73 (c) The declarant may elect not to establish a statutory reserve account under
4par. (a) at the time the condominium is created or, at any time thereafter, may elect
5to terminate a statutory reserve account during the period of declarant control under
6s. 703.15 (2) (c). An election under this paragraph shall be made by executing a
7statutory reserve account statement.
AB781,24,16 8(4) New condominium; determination by association to establish statutory
9reserve account.
If a declarant has elected under sub. (3) (c) not to establish a
10statutory reserve account or to terminate an account, establishment of a statutory
11reserve account shall be addressed at the first annual meeting of the association held
12after, or at a special meeting of the association held within one year after, the
13expiration of any period of declarant control under s. 703.15 (2) (c). A statutory
14reserve account is established under this subsection with the written consent of a
15majority of the unit votes. If a statutory reserve account is established under this
16subsection, the association shall execute a statutory reserve account statement.
AB781,25,2 17(5) Existing condominiums; statutory reserve account unless elect
18otherwise.
The association for a condominium created before the effective date of
19this subsection .... [revisor inserts date], shall, within 18 months after the effective
20date of this subsection .... [revisor inserts date], or within 18 months after the
21expiration of any period of declarant control under s. 703.15 (2) (c), whichever is later,
22establish a statutory reserve account unless the association, with the written
23consent of at least two-thirds of the unit votes, elects not to establish a statutory
24reserve account. Upon the establishment of or the election not to establish a

1statutory reserve account, the association shall execute a statutory reserve account
2statement.
AB781,25,7 3(6) Election by association to establish or terminate statutory reserve
4account.
(a) If an association elects not to establish a statutory reserve account
5under sub. (4) or (5), or if an association elects to terminate a statutory reserve
6account under par. (b), the association may at any time thereafter elect to establish
7a statutory reserve account with the written consent of a majority of the unit votes.
AB781,25,128 (b) An association may, at any time with the written consent of at least
9two-thirds of the unit votes, terminate a statutory reserve account established under
10par. (a) or sub. (3) (a), (4), or (5) except that a statutory reserve account established
11by a declarant under sub. (3) (a) may not be terminated until after the expiration of
12any period of declarant control under s. 703.15 (2) (c).
AB781,25,1413 (c) Upon the establishment or termination of a statutory reserve account, the
14association shall execute a statutory reserve account statement.
AB781,25,19 15(7) Reserve fund. If there is a statutory reserve account for the condominium,
16the annual budget adopted under s. 703.161 shall provide for reserve funds. Reserve
17funds may be used as provided in sub. (8). The association shall determine the
18amount to be assessed unit owners for reserve funds after considering all of the
19following:
AB781,25,2020 (a) The reserve funds currently in the statutory reserve account.
AB781,25,2221 (b) The estimated cost of repairing or replacing common elements, other than
22routine maintenance.
AB781,25,2323 (c) The estimated remaining useful life of common elements.
AB781,26,3
1(d) The approximate proportion of the estimated cost of repairing or replacing
2common elements that will be covered by the statutory reserve account and the
3approximate proportion that will be funded by other means.
AB781,26,44 (e) Any other factor that the association considers relevant.
AB781,26,7 5(8) Use of statutory reserve account. (a) Except as provided in par. (b), funds
6in a statutory reserve account may be used for the repair and replacement of common
7elements, other than routine maintenance.
AB781,26,138 (b) Funds in a statutory reserve account may be used for normal repair or
9maintenance, customary services, or other operational costs in excess of amounts
10budgeted and any contingency funds available for these purposes, with the written
11consent of at least two-thirds of the unit votes. Funds from the statutory reserve
12account used under this paragraph must be replaced within 3 years from the date
13of withdrawal.
AB781,26,15 14(9) Permitted investment of reserve funds. Reserve funds may be invested
15in any of the investments listed under s. 66.0603 (1m) (a).
AB781,26,21 16(10) Liability immunity. No declarant, unit owner, association, or director,
17officer, manager, or employee of an association is liable in connection with the
18establishment or termination of, or decision not to establish or terminate, a statutory
19reserve account or for any deficiencies in the statutory reserve account that relate
20to the determination of amounts to be assessed for reserve funds. This subsection
21is in addition to any other liability protection available under law.
AB781,26,25 22(11) Recording of statutory reserve account statement. Each statutory
23reserve account statement executed under this section shall bear the name of the
24condominium as it appears on the declaration and shall be recorded with the register
25of deeds of the county where the condominium instruments are recorded.

Note: Requires a declarant or association to establish a "statutory reserve
account" to fully or partially fund repairs and replacements of common elements other
than routine maintenance, unless the declarant or association elects not to establish an
account.
The statutory reserve account provisions generally apply only to exclusively
residential condominiums, other than small condominiums. Small condominiums and
mixed-use (residential and nonresidential units) condominiums may choose to be
governed by the statutory reserve account provisions.
The statutory reserve account provisions expressly do not affect: (1) existing
reserve accounts or similar accounts; or (2) reserve accounts or similar accounts that are
not statutory reserve accounts established on or after the effective date of the bill.
The declarant must establish a statutory reserve account for a new condominium
(a condominium established on or after the effective date of the bill) but the declarant may
opt out of the requirement. If the declarant establishes a statutory reserve account,
assessments for the account may first be assessed against a particular unit when a
certificate of occupancy has been issued that applies to that unit. The declarant may defer
payment of assessments on a particular unit until the unit is conveyed, but for not more
than 5 years from the date the exterior construction of the building in which the unit is
located is completed. If there are accrued reserve fund assessments against a unit, the
declarant must disclose to the first purchaser of the unit whether any of the accrued
assessments are included in the purchase price and, if not, how any accrued assessment
will be paid.
If the declarant has opted out, establishment of an account must be addressed at
the first annual meeting of the association held after, or at a special meeting held within
one year of, termination of declarant control. A statutory reserve account is established
by the association with the written consent of a majority of the unit votes. If the declarant
has not opted out of the statutory reserve account requirement for a new condominium,
the association at any time after the expiration of declarant control may elect to terminate
the account with the written consent of at least two-thirds of the unit votes.
Existing condominiums (condominiums established before the effective date of the
bill) must, within 18 months after the bill's effective date, or within 18 months after the
expiration of declarant control, whichever is later, establish a statutory reserve account
unless, with the written consent of at least two-thirds of the unit votes, the association
elects not to establish an account.
More generally, an association may at any time elect to establish a statutory
reserve account, with the written consent of a majority of the unit votes, or to terminate
a statutory reserve account, with the written consent of at least two-thirds of the unit
votes.
Factors that a declarant or association is to consider in determining the amount
to be assessed unit owners for the statutory reserve account include: funds currently in
the account; the estimated cost of repairing or replacing common elements, other than
routine maintenance; the estimated remaining useful life of common elements; the
approximate proportion of the estimated cost of repairing or replacing common elements
that will be covered by the account and the approximate proportion that will be funded
by other means; and any other factor considered relevant. In the case of a conversion
condominium, the declarant must also consider the required report of an independent
architect or engineer.
Funds in a statutory reserve account may be invested in any investment in which
local governments are generally authorized to invest by statute.
Funds in a statutory reserve account may be used only for the repair and
replacement of common elements, other than routine maintenance, unless there is

written consent of at least two-thirds of the unit votes to use the funds for normal repair
or maintenance, customary services or other operational costs in excess of amounts
budgeted. If used for the latter purposes, the funds must be replaced within 3 years from
the date of withdrawal from the account.
A "statutory reserve account statement" must be executed when a statutory
reserve account is established or an election is made not to have or to terminate a
statutory reserve account. If an election not to establish, or to terminate, a statutory
reserve account is made, the statement must indicate how it is anticipated that future
expenditures for repairs and replacements of common elements will be funded. The
statement must be recorded with the register of deeds.
Finally, a declarant, unit owner, association, or director, officer, manager or
employee of an association is not liable in connection with the establishment or
termination, or decision not to establish or terminate, a statutory reserve account or for
any deficiencies in a statutory reserve account that relate to the determination of
amounts to be assessed for reserve funds.
AB781, s. 34 1Section 34 . 703.165 (title) and (1) of the statutes are created to read:
AB781,28,3 2703.165 (title) Lien for unpaid common expenses, unpaid damages, and
3unpaid penalties.
AB781,28,7 4(1) Definition. In this section, "assessments" means regular and special
5assessments for common expenses and charges, fines, or assessments against
6specific units or unit owners for damages to the condominium or for penalties for
7violations of the declaration, bylaws, or association rules.
Note: Creates a title for new s. 703.165 and a definition of assessment for use
throughout the section. The definition expands the scope of the lien provisions of current
s. 703.16 (3) to (9) (renumbered s. 703.165 (2) to (8) by Sec. 31 of the bill). Currently, those
lien provisions apply to failure to pay assessments for common expenses. The new
definition, in combination with the treatment of s. 703.16 (3) to (9) by Sec. 31 of the bill,
expands the coverage of the lien provisions to include failure to pay charges, fines, or
assessments for damages to the condominium and for violations of the declaration,
bylaws, or association rules.
AB781, s. 35 8Section 35 . 703.19 (8) of the statutes is amended to read:
AB781,29,69 703.19 (8) Preservation of the right of appeal. The owner of each unit taken
10shall have the individual right of may appeal of the necessity of taking and of the
11condemnation award made for the taking. An association shall have the right of A
12unit owner may
appeal of the necessity of taking of the common elements and the
13right of appeal of
, and the condemnation award made for the taking, of the owner's

1interest in the
common elements. An appeal by an association shall be binding upon
2the individual unit owners for the necessity of taking or the condemnation award
3made for the taking of the common elements.
The unit owners having an interest
4in the ownership of limited common elements may individually or as a group appeal
5the necessity of taking or the condemnation award made for the taking of the limited
6common elements.
Note: Repeals the right of an association to appeal the necessity of taking, and the
condemnation award made for the taking, of the common elements and the binding effect
of the appeal upon individual unit owners. The revision reflects the policy judgment that
individual unit owners should have the right of appeal. See also s. 703.195, created by
Sec. 36 of the bill, below, for a related provision.
AB781, s. 36 7Section 36 . 703.195 of the statutes is created to read:
AB781,29,9 8703.195 Acquisition of common elements by condemnors. (1)
9Definitions. In this section:
AB781,29,1110 (a) "Acquire" means to obtain title to real property by purchase or
11condemnation.
AB781,29,1312 (b) "Common elements" means all of a condominium except its units and any
13limited common elements.
AB781,29,1514 (c) "Condemnor" means a person specified in s. 32.01 (1) who has the authority
15to condemn property under ch. 32.
AB781,29,19 16(2) Applicability. This section applies to the acquisition by a condemnor of a
17portion of the common elements of a condominium that is created 6 months or more
18after the effective date of this subsection .... [revisor inserts date]. This section is in
19addition to any applicable provision in ch. 32.
AB781,30,9 20(3) Notice to unit owners and association. A condemnor who seeks to acquire
21a portion of the common elements of a condominium and who wishes to negotiate
22with the association instead of with each unit owner shall notify the association and

1each unit owner of the proposed acquisition, in writing, at least 30 days before
2delivery of the appraisal required under s. 32.05 (2) (b) or 32.06 (2) (b). The notice
3to the unit owners shall be sent by certified mail, requesting a return receipt signed
4by the addressee only. Notice is deemed complete on the date the addressee
5acknowledges receipt. The notice required under this subsection is in addition to any
6notice required under s. 32.05 or 32.06 and shall be provided simultaneously with the
7pamphlets that are prepared under s. 32.26 (6) and provided under ss. 32.05 (2a) and
832.06 (2a). The condemnor is responsible for the expense of sending the notice under
9this subsection.
AB781,30,11 10(4) Content of notice to unit owners. The notice to the unit owners required
11under sub. (3) shall, at a minimum, contain all of the following:
AB781,30,1212 (a) The name and address of the condemnor.
AB781,30,1313 (b) The legal description of the property to be acquired.
AB781,30,1514 (c) The public purpose for which the property is being acquired and a statement
15that the condemnor in good faith intends to use the property for that purpose.
AB781,30,1716 (d) The following statement in substantially identical language, in at least
1712-point bold type, if printed, or in capital letters, if typewritten:
AB781,30,2518 THIS NOTICE IS REQUIRED BY SECTION 703.195 OF THE WISCONSIN
19STATUTES. SECTION 703.195 OF THE WISCONSIN STATUTES PROVIDES
20THAT THE CONDOMINIUM ASSOCIATION OF WHICH YOU ARE A MEMBER
21MUST ACT AS YOUR AGENT TO CONVEY YOUR INTEREST IN THE
22AFFECTED PORTION OF THE CONDOMINIUM'S COMMON ELEMENTS IF
23YOU WISH. HOWEVER, YOU HAVE THE RIGHT TO NEGOTIATE WITH THE
24.... (NAME OF ACQUIRING AGENCY) ON YOUR OWN AND MAY REFUSE TO BE
25REPRESENTED BY THE ASSOCIATION.
AB781,31,10
1IN ORDER FOR YOU TO PROCEED TO NEGOTIATE WITH THE .... (NAME
2OF ACQUIRING AGENCY) ON YOUR OWN, YOU MUST WITHIN 30 DAYS
3AFTER RECEIPT OF THIS NOTICE SIGN THIS DOCUMENT AT THE
4INDICATED LOCATION AND DEPOSIT IT IN THE UNITED STATES MAIL. ....
5(NAME OF ACQUIRING AGENCY) HAS ENCLOSED FOR YOUR
6CONVENIENCE A POSTAGE PRE-PAID, ADDRESSED ENVELOPE FOR THIS
7PURPOSE. FAILURE TO SIGN AND RETURN THIS NOTICE MEANS THAT
8YOU CONSENT TO THE ASSOCIATION ACTING AS YOUR AGENT TO
9NEGOTIATE AND CONVEY YOUR INTEREST IN THE AFFECTED PORTION
10OF THE CONDOMINIUM'S COMMON ELEMENTS.
AB781,31,2011 IF THE ASSOCIATION ACTS AS YOUR AGENT, YOU WILL BE LEGALLY
12BOUND BY ANY DECISION OF THE ASSOCIATION'S BOARD OF DIRECTORS
13RELATING TO THE CONVEYANCE OF YOUR INTEREST IN THE AFFECTED
14PORTION OF THE CONDOMINIUM'S COMMON ELEMENTS. REGARDLESS
15OF WHETHER YOU CHOOSE TO NEGOTIATE ON YOUR OWN OR TO ALLOW
16THE ASSOCIATION OR ANY OTHER PERSON OR ENTITY TO NEGOTIATE ON
17YOUR BEHALF, YOU WILL RETAIN ALL RIGHTS TO CHALLENGE THE RIGHT
18OF CONDEMNATION, THE NECESSITY OF CONDEMNATION, OR ANY
19AMOUNT OF COMPENSATION AVAILABLE TO YOU UNDER CHAPTER 32 OF
20THE WISCONSIN STATUTES.
AB781,31,2321 (e) A prominent place for the unit owner to sign his or her name to indicate the
22unit owner's objection to the association acting as the agent for the unit owner in the
23conveyance of the common elements at issue.
AB781,32,6 24(5) Method of objecting by unit owner. A unit owner who objects to the
25association acting as the agent for the owner shall indicate the objection as provided

1on the form under sub. (4) (e) and send the form, within 30 days after the notice under
2sub. (3) is received, to the condemnor by U.S. mail to the address indicated on the
3notice. The objection is made when the completed form is mailed to the condemnor.
4Before initiating negotiations with the unit owner under s. 32.05 (2a) or 32.06 (2a),
5the condemnor shall provide the association and those unit owners who have
6objected a written list of all of the unit owners who have objected.
AB781,32,13 7(6) No objection by unit owner; association as agent. If a unit owner does not
8timely object under sub. (5), the unit owner is deemed to have consented to the
9association acting as the unit owner's agent in the conveyance of the common
10elements at issue and the association shall act as the agent for the unit owner in the
11conveyance to the condemnor of the unit owner's interest in the common elements
12at issue. Failure of the unit owner to object within the required time does not affect
13any other rights of the unit owner under ch. 32.
AB781,32,16 14(7) Method of conveyance. The association shall execute any conveyance
15under this section as the agent for each of the unit owners who did not timely object
16under sub. (5). Those unit owners shall be identified, by name, on the conveyance.
AB781,32,19 17(8) Objection by unit owner; unit owner retains rights. A unit owner who
18timely objects under sub. (5) retains all of his or her rights under ch. 32 with regard
19to the acquisition of the common elements at issue and to unit ownership.
Note: Provides a procedure for a condemnor who wishes to negotiate with the
association instead of with each unit owner for the acquisition of a portion of the common
elements (excluding limited common elements) for a public project. The procedure is
based on a Florida statute. [West's F.S.A. s. 73.073 (2001 Supplement).] "Acquisition"
refers to obtaining title to real property by purchase or condemnation.
In general terms, a condemnor who seeks to acquire a portion of the common
elements is required to notify the association and each unit owner. If a unit owner fails
to object to the association representing the unit owner in the property acquisition within
30 days after receiving the notice, the owner is deemed to have agreed to that
representation in any subsequent proceeding relating to the acquisition of the common
elements at issue.

A unit owner who timely objects to representation by the association in the
acquisition retains all of his or her rights with regard to the acquisition and all other
rights pertaining to unit ownership.
The optional procedure may be used only to acquire a portion of the common
elements of a condominium that is created 6 months or more after the effective date of
the bill.
AB781, s. 37 1Section 37. 703.20 (3) of the statutes is created to read:
AB781,33,102 703.20 (3) Declarant responsibilities for records. During the period of
3declarant control under s. 703.15 (2) (c), the declarant is responsible for creating and
4maintaining the financial and operational records of the association and shall turn
5the records over to the directors elected under s. 703.15 (2) (f). During the period of
6declarant control under s. 703.15 (2) (c) and for one year thereafter, upon written
7request to the association by the lesser of 3 unit owners or the owners of 10% of the
8units, not including units owned by the declarant, the association shall arrange for
9an independent audit of its financial records, but no request may be made for an audit
10within 24 months after the completion of a previous audit.
Note: Requires the creation and maintenance of, and provides means of access to,
financial and operational records of the association during the period of declarant control.
The declarant is responsible for the creation and maintenance of the records during the
period of declarant control and must turn the records over to the board of directors elected
after the period of declarant control expires.
Also, during the period of declarant control and one year thereafter, requires the
association to arrange for an independent audit of the association's financial records if
requested by the lesser of 3 unit owners or the owners of 10% of the units (not including
units owned by the declarant). A limit is provided on the frequency of requesting an audit.
AB781, s. 38 11Section 38. 703.24 of the statutes is repealed and recreated to read:
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