Property insurance on the time-share property and any personal property available for use by time-share owners in conjunction with the time-share property, other than personal property separately owned by a time-share owner, insuring against all risks of direct physical loss commonly insured against, for not less than full replacement value of the property insured, exclusive of items normally excluded from property insurance policies.
Liability insurance, including medical payments insurance, in an amount determined by the managing entity but not less than any amount specified in the time-share instrument, covering all occurrences commonly insured against for death, bodily injury and property damage arising out of or in connection with the use, ownership or maintenance of the time-share property and time-share units.
(2) Notice requirement.
If the insurance under sub. (1)
is not reasonably available, the managing entity shall promptly mail or hand deliver notice of that fact to all time-share owners.
(2m) Inspection of policies.
The managing entity shall make copies of all insurance policies carried under sub. (1)
available for inspection by the time-share owners during normal business hours.
(3) Contents of policy.
Each insurance policy carried under sub. (1)
shall provide all of the following:
That each time-share owner is an insured person under the policy whether designated as an insured by being named individually or as part of a named group or otherwise, as the time-share owner's interest may appear.
That the insurer waives its right to subrogation under the policy against any time-share owner or members of the time-share owner's household.
That an act or omission by any time-share owner shall not void the policy or be a condition to recovery by any other person under the policy unless the time-share owner is acting within the scope of his or her authority on behalf of the association.
That the policy is primary insurance not contributing with any other insurance in the name of a time-share owner covering the same risk covered by the policy, and the other insurance in the name of a time-share owner applies only to loss in excess of the primary coverage.
Except as provided in par. (d)
, any loss covered by the property insurance required under sub. (1) (a)
shall be adjusted with, and the insurance proceeds from that loss payable to, the insurance trustee designated in the time-share instrument. If a trustee has not been designated or if the designated trustee fails to serve, the managing entity shall be the insurance trustee.
Except as provided in par. (c)
, the insurance trustee shall hold any insurance proceeds in trust for time-share owners and lienholders as their interests may appear and be determined in accordance with s. 707.24
Subject to sub. (7)
, the insurance trustee shall disburse insurance proceeds for the repair or restoration of the time-share property, and time-share owners and lienholders may not receive payment of any portion of the proceeds unless there is a surplus of proceeds after the property has been completely repaired or restored, or there is a termination under s. 707.24
This subsection does not apply if the property insurance required under sub. (1) (a)
is provided by a person managing a project of which the time-share property is a part.
The time-share instrument may require the managing entity to carry any other insurance and the managing entity may carry any other insurance deemed appropriate.
An insurance policy issued under sub. (1)
may not prevent a time-share owner from obtaining insurance for the time-share owner's benefit.
An insurer that has issued an insurance policy under this section shall issue certificates or memoranda of insurance to any association and, upon written request, to any time-share owner, mortgagee or beneficiary under a deed of trust.
An insurer that has issued an insurance policy under this section may terminate the policy only as provided in s. 631.36
, except that notice of cancellation or nonrenewal shall be mailed to the last-known address of the managing entity and each person to whom a certificate or memorandum of insurance has been issued.
(7) Damaged property; repair or replacement. 707.35(7)(a)(a)
Any portion of the time-share property damaged or destroyed shall be repaired or replaced promptly by the managing entity unless any of the following occur:
Repair or replacement would be illegal under any state or local health or safety statute or ordinance, including a zoning ordinance.
Fifty percent of the time-share owners of undamaged or undestroyed time-share units and 80 percent of the time-share owners of damaged or destroyed time-share units vote not to rebuild.
A decision not to rebuild the damaged property is made by another person empowered to make that decision.
Unless the time-share instrument provides otherwise, all of the following apply if the entire time-share property need not be repaired or replaced:
The insurance proceeds attributable to the damaged area shall be used to restore the damaged area to a condition compatible with the remainder of the property.
The insurance proceeds attributable to time-share units that are not rebuilt shall be distributed as if those units constituted a time-share property in which all time shares had been terminated under s. 707.24
The cost of repair or replacement of the time-share property in excess of insurance proceeds and reserves shall be a time-share expense.
Notwithstanding s. 707.05
, this section may be varied or waived in the case of a time-share property in which none of the time-share units may be used as dwellings or for recreational purposes.
History: 1987 a. 399
Disposition of surplus funds.
Unless otherwise provided in the time-share instrument, any surplus funds derived from the time-share owners or from property belonging to the time-share owners or their association and held by a managing entity, which are remaining after payment of or provision for time-share expenses and any prepayment of reserves, shall be paid to the time-share owners in proportion to their time-share liabilities, credited to the owners to reduce their future time-share liabilities or used for any other purpose as the association decides.
History: 1987 a. 399
Assessments for time-share expenses; lien. 707.37(1)(a)(a)
Until assessments for time-share expenses are made against the time-share owners, the developer shall pay all time-share expenses.
When assessments for time-share expenses are made against the time-share owners, assessments for time-share expenses shall be made at least annually, based on a budget adopted at least annually by the managing entity and in accordance with the allocation set forth in the time-share instrument under s. 707.22 (1)
. Except as provided in pars. (c)
, no time-share owner may be excused from payment of his or her share of time-share expenses unless all of the time-share owners are excused from payment.
A developer may be excused from the payment of the developer's share of the time-share expenses which would have been assessed against the time shares during a stated period during which the developer has guaranteed to each purchaser in the time-share disclosure statement, or by agreement between the developer and a majority of the time-share owners other than the developer, that the assessment for time-share expenses imposed upon the time-share owners would not increase over a stated dollar amount. If the developer makes such a guarantee, the developer shall pay any amount of time-share expenses incurred during the guarantee period which was not produced by the assessments at the guarantee level from other time-share owners.
To the extent required by the time-share instrument, any time-share expense benefiting fewer than all of the time-share owners may be assessed only against the time-share owners benefited.
Assessments to pay any judgment against the association may be made only against the time shares in the time-share property when the judgment was entered, in proportion to their time-share liabilities.
If any time-share expense is caused by the misconduct of a time-share owner, the managing entity may assess that expense exclusively against that time-share owner's time share.
Any past due assessment or installment shall bear interest at the rate established by the managing entity or the time-share instrument.
If time-share liabilities are reallocated, assessments for time-share expenses and any installment not yet due shall be recalculated in accordance with the reallocated time-share liabilities.
All assessments for time-share expenses, until paid, together with interest and actual costs of collection, constitute a lien on the time shares on which they are assessed, if a statement of time-share lien is filed under par. (b)
within 2 years after the date on which the assessment becomes due. The lien shall be effective against a time share when the assessment became due regardless of when within the 2-year period it is filed.
A statement of time-share lien shall be filed in the land records of the office of the clerk of circuit court of the county where the time-share property is located, stating the description of the time-share property and the time share, the name of the time-share owner, the amount due and the period for which the assessment for time-share expenses was due. The clerk of circuit court shall index the statement of time-share lien under the name of the time-share owner in the judgment and lien docket. The statement of time-share lien shall be signed and verified by an officer or agent of the association as specified in the bylaws or, if there is no association, a representative of the time-share owners. On full payment of the assessment for which the lien is claimed, the time-share owner shall be entitled to a satisfaction of the lien that may be filed with the clerk of circuit court.
(2m) Liability for assessments upon transfer.
A time-share owner shall be liable for all time-share expenses assessed against the time-share owner and coming due while the time-share owner owns a time share and until the time-share owner notifies the managing entity in writing of the transfer of the time share. In a voluntary grant of a time share, the grantee shall be jointly and severally liable with the grantor for those time-share expenses which are assessed against the grantor up to the time of the voluntary grant and for which a statement of lien is filed under sub. (2)
, except as provided in sub. (3)
, without prejudice to the rights of the grantee to recover from the grantor the amounts paid by the grantee for the assessments. Liability for assessments may not be avoided by waiver of the use or enjoyment of any part of the time-share property or by abandonment of the time share for which the assessments are made.
(3) Statement of unpaid assessments.
Any grantee of a time share is entitled to a statement from the managing entity setting forth the amount of unpaid assessments for time-share expenses against the grantor. The grantee is not liable for, nor shall the time share conveyed be subject to a lien which is not filed under sub. (2)
for, any unpaid assessment against the grantor in excess of the amount set forth in the statement. If the managing entity does not provide the statement within 10 business days after the grantee's request, it is barred from claiming any lien against the grantee which is not filed under sub. (2)
before the request for the statement.
(4) Priority of lien.
A lien under sub. (2)
is prior to other liens except all of the following:
All sums unpaid on a first mortgage on the time share which is recorded before the assessment is made.
Mechanic's liens filed before the assessment on the time-share unit, divided into the time share involved.
(5) Form of statement of time-share lien.
A statement of time-share lien is sufficient for the purposes of this chapter if it contains the following information and is substantially in the following form:
STATEMENT OF TIME-SHARE LIEN
This is to certify that .... owner(s) of time share No. .... in ...., a time-share property (is) (are) indebted to ...., the managing entity, in the amount of $.... as of ...., .... (year) for (his) (her) (its) (their) proportionate share of time-share expenses for the period from (date) to (date), plus interest thereon at the rate of ....%, costs of collection, and actual attorney fees.
Officer's title (or agent)
Phone number ....
I hereby affirm under penalties of perjury that the information contained in the foregoing Statement of Time-Share Lien is true and correct to the best of my knowledge, information and belief.
Officer (or agent)
(6) Enforcement of lien.
A lien may be enforced and foreclosed by a managing entity, or any other person specified in the time-share instrument, in the manner provided in s. 707.28 (2)
. The managing entity may recover costs and actual attorney fees. The managing entity may, unless prohibited by the project instrument or time-share instrument, bid on the time share at foreclosure sale and acquire, hold, mortgage, and convey the time share. Suit to recover a money judgment for unpaid time-share expenses shall be maintainable without foreclosing or waiving the lien securing the time-share expenses. Except as provided in s. 707.28 (4)
, suit for any deficiency following foreclosure may be maintained in the same proceeding. No action may be brought to foreclose the lien unless brought within 3 years after the recording of the statement of time-share lien and, except as provided in s. 707.28 (3) (a)
, unless 10 days' prior written notice is given to the time-share owner by registered mail, return receipt requested, to the address of the time-share owner shown on the books of the managing entity.
(7) Financial records.
A person who has a duty to make assessments for time-share expenses shall keep financial records sufficiently detailed to enable the person to comply with s. 707.48
. All financial and other records shall be made reasonably available for examination by any time-share owner or the time-share owner's authorized agent.
Blanket encumbrances; liens. 707.38(1)
In this section, “blanket encumbrance" means any mortgage, lien or other interest which secures or evidences an obligation to pay money or to convey or otherwise dispose of all or any part of a time-share property, affects the time-share property or time shares owned by more than one time-share owner and permits or requires the foreclosure or other disposition of the time-share property to which it attaches, but does not include any of the following:
A lien for taxes and assessments levied by a public body which are not yet due and payable.
A lien for common expenses in favor of a homeowners', condominium or community association which is not a judgment lien.
A recorded agreement for the payment of reasonable fees or other compensation for management services performed on behalf of the time-share property.
Any interest arising from an agreement to sell or pledge the ownership interest in an individual time share.
(1m) Nondisturbance agreement.
If delivery of a time-share disclosure statement is required under s. 707.41 (2)
, a developer whose project is subject to a blanket encumbrance shall, before transferring a time share, obtain from the holder of the blanket encumbrance a nondisturbance agreement, which shall be recorded in the office of the register of deeds under s. 706.05
, for the benefit of the purchaser and the purchaser's successors in interest, by which the holder agrees to all of the following:
The holder's rights in the time-share property are subordinate to the rights of time-share owners upon recording of the nondisturbance agreement.
The holder and any successor or assign, or any person who acquires the time-share property through foreclosure or by deed in lieu of foreclosure or in fulfillment of the blanket encumbrance, shall take the time-share property subject to the rights of time-share owners.
The holder and any successor acquiring the time-share property under the blanket encumbrance may not use or cause the time-share property to be used in a manner which would prevent the time-share owners from using and occupying the time-share property in a manner contemplated by the project instrument and time-share instrument.
(2) Release from blanket encumbrance. 707.38(2)(a)(a)
If a blanket encumbrance becomes effective against a time share after purchase of the time share, the time-share owner is entitled to a release of the time share from the blanket encumbrance upon payment of an amount proportionate to the ratio that the time-share owner's time-share liability bears to the total time-share liability of all time shares subject to the blanket encumbrance. Upon receipt of payment, the holder shall promptly deliver to the time-share owner a release of the blanket encumbrance covering that time share.
Upon release under par. (a)
of a time share from a blanket encumbrance, the managing entity may not assess or have a lien against that time share for any portion of the expenses incurred in connection with the blanket encumbrance.
(3) Effect of other liens.
Except as provided in s. 707.37 (2)
, after creation of a time-share property, all liens which are not blanket encumbrances exist only against individual time shares in the same manner and under the same conditions as liens or encumbrances may arise or be created upon or against separate parcels of real property owned in individual ownership.
Except as provided in s. 707.37 (2)
, the holder of a lien against an individual time share in a time-share property shall have the lien rights preserved against a purchaser of the time share unless the purchaser objects and shows within the time specified in par. (b)
that the project instrument is invalid, void or voidable.
The developer shall give a purchaser written notice, by certified mail or personal delivery, that the developer has assigned a receivable related to the time share to the lienholder and that the time-share owner has 30 days to object and show the invalidity or defect of the project instrument. A purchaser who fails to assert an objection as provided in this paragraph may not raise the issue in any later action for enforcement of the collection of the receivable or enforcement of the lien by the lienholder.
(5) Service of process.
If a lien is to be foreclosed or enforced against all time shares in a time-share property, service of process in the action upon the managing entity, if any, shall constitute service upon all of the time-share owners for the purposes of foreclosure or enforcement. The managing entity shall promptly forward, by certified or registered mail, a copy of the process to each time-share owner at his or her last address known to the managing entity. The cost of forwarding shall be advanced by the holder of the lien and may be taxed as a cost of the enforcement proceeding. This notice does not suffice for the entry of a deficiency or other personal judgment against any time-share owner.