AB781,16,1114 (b) If the unit owners of adjoining units that may be merged desire to merge
15the units, the unit owners, after 30 days' written notice to all other unit owners, shall

1prepare and execute appropriate instruments under this subsection. An amendment
2to the condominium instruments shall assign a new identifying number to the new
3unit created by the merger of the units and shall allocate to the new unit all of the
4undivided interest in the common elements and rights to use the limited common
5elements and the votes in the association formerly appertaining to the separate
6units. The amendment shall reflect an allocation to the new unit of the liability for
7common expenses and rights to common surpluses formerly appertaining to the
8separate units. An amendment to a declaration under this paragraph shall be
9adopted either under s. 703.09 (2) or by the written consent of the owners of the units
10to be merged, the mortgagees of those units, if any, and the board of directors of the
11association.
AB781,16,1612 (c) Plats and plans showing the boundaries and dimensions of the new unit
13together with the new identifying number or letter shall be prepared. The plats and
14plans shall be certified as to their accuracy and compliance with this subsection by
15a civil engineer, architect, or licensed land surveyor authorized to practice in this
16state.
AB781,16,2417 (d) After appropriate instruments have been prepared and executed, they shall
18be delivered promptly to the owner or owners of the merged unit upon payment by
19the owner or owners of all reasonable costs for their preparation. Those instruments
20are effective when executed by the owner or owners of the merged unit and recorded
21in the office of the register of deeds of the county where the property is located. The
22recording of the instruments is conclusive evidence that the merger did not violate
23any restriction or limitation specified by the condominium instruments and that any
24reallocations made under this subsection were reasonable.

Note: Provides a procedure for merging adjoining condominium units based on
current procedures for: relocating boundaries between adjoining condominium units [s.
703.13 (6), stats.]; and separation of a unit into one or more units [s. 703.13 (7), stats.].
The procedure includes a simplified means of amending the declaration.
AB781, s. 24 1Section 24. 703.15 (1) of the statutes is amended to read:
AB781,17,92 703.15 (1) Legal entity. The affairs of every condominium shall be governed
3by an association which that, even if unincorporated, is constituted a legal entity for
4all purposes. Except for matters reserved to the association members or unit owners
5by this chapter, the declaration, or the bylaws, all policy and operational decisions
6of the association, including interpretation of the condominium instruments,
7bylaws, rules, and other documents relating to the condominium or the association,
8shall be made by its board of directors. This subsection does not affect the deference
9accorded to, or the standard of review of, an action of the board of directors by a court.
Note: Clarifies the prevailing, but not always known, view of the role of the
association board of directors: with the exception of matters reserved to association
members or unit owners by ch. 703, the declaration, or bylaws, all policy and operational
decisions of the association are made by the board. Policy and operational decisions
include, but are not limited to, interpretation of condominium instruments, bylaws, rules,
and other documents relating to the condominium or the association.
AB781, s. 25 10Section 25. 703.15 (3) (b) 1. of the statutes is amended to read:
AB781,17,1311 703.15 (3) (b) 1. Make contracts and incur liabilities , including borrowing funds
12in the name of the association in the manner specified in the bylaws under s. 703.10
13(2) (f)
.
Note: For illustrative purposes, expressly provides that a condominium
association, subject to any restrictions and limitations specified by the declaration, may
borrow funds in the name of the association in the manner specified in the bylaws as part
of its general authority to make contracts and incur liabilities. The exercise of this
authority by an association is subject to current s. 703.25, relating to the tort and contract
liability of an association.
AB781, s. 26 14Section 26. 703.15 (3) (b) 8. of the statutes is created to read:
AB781,17,1615 703.15 (3) (b) 8. Purchase goods and services jointly with other condominium
16associations or other persons.

Note: Expressly authorizes a condominium association, subject to any restrictions
and limitations specified by the declaration, to purchase goods and services jointly with
other condominium associations or other persons.
AB781, s. 27 1Section 27. 703.15 (4) (d) 1. of the statutes is amended to read:
AB781,18,82 703.15 (4) (d) 1. At meetings of the association every unit owner is entitled to
3cast the number of votes appurtenant to his or her unit, as established in the
4declaration under s. 703.09 (1) (f)
. Unit owners may vote by proxy, but, the proxy is
5effective only for a maximum period of 180 days following its issuance, unless
6granted to a mortgagee or lessee. If only one of multiple owners of a unit is present
7at a meeting of the association, the owner is entitled to cast the votes allocated to that
8unit.
Note: For convenience, indicates by cross-reference that the number of votes
appurtenant to a condominium unit is established in the declaration.
AB781, s. 28 9Section 28. 703.155 (7) of the statutes is created to read:
AB781,18,1410 703.155 (7) Representation of condominium or noncondominium property. A
11master association may represent condominium or noncondominium property on
12behalf of one or more condominiums and property under a different form of
13ownership or for the benefit of the unit owners of one or more condominiums and the
14owners of other property.
Note: Clarifies the authority of a master association to represent either
condominium property or noncondominium property: (a) on behalf of one or more
condominiums and property under a different form of ownership; or (b) for the benefit of
the unit owners of one or more condominiums and the owners of other property.
AB781, s. 29 15Section 29. 703.16 (2) of the statutes is renumbered 703.16 (2) (a).
AB781, s. 30 16Section 30. 703.16 (2) (b) of the statutes is created to read:
AB781,19,317 703.16 (2) (b) During the period of declarant control of the association under
18s. 703.15 (2) (c), if any unit owned by the declarant is exempt from assessments for
19common expenses until the unit is sold, the total amount assessed against units that
20are not exempt from assessments may not exceed the amount that equals nonexempt

1units' projected percentage share of common expenses, based on the anticipated
2common expenses set forth in the annual budget under s. 703.161 (2) (a). The
3declarant is liable for the balance of the actual common expenses.
Note: Provides that, during the period of declarant control, if a unit owned by the
declarant is exempt from assessments for common expenses until the unit is sold, the
total amount that may be assessed against units that are not exempt from assessments
may not exceed the units' projected percentage share of common expenses; the declarant
is liable for the balance of the actual expenses.
AB781, s. 31 4Section 31 . 703.16 (3) to (9) of the statutes are renumbered 703.165 (2) to (8),
5and 703.165 (2), (4), (5) (intro.) and (8) (form), as renumbered, are amended to read:
AB781,19,176 703.165 (2) Liability for assessments. A unit owner shall be liable for all
7assessments, or instalments thereof, coming due while owning a unit , including any
8assessments coming due during the pendency of any claim by the unit owner against
9the association or during any period in which the unit is not occupied by the unit
10owner or is leased or rented to any other person
. In a voluntary grant, the grantee
11shall be jointly and severally liable with the grantor for all unpaid assessments
12against the grantor for his or her share of the common expenses up to the time of the
13voluntary grant for which a statement of condominium lien is recorded, without
14prejudice to the rights of the grantee to recover from the grantor the amounts paid
15by the grantee for such assessments. Liability for assessments may not be avoided
16by waiver of the use or enjoyment of any common element or by abandonment of the
17unit for which the assessments are made.
Note: Expressly provides that a condominium unit owner is liable for any
assessments coming due during the pendency of any claim by the unit owner against the
association or during any period the unit is not occupied by the unit owner or is leased
or rented to any other person. While the new language is within the scope of current
language, it is added for clarification.
AB781,20,6 18(4) Statement. Any grantee of a unit is entitled to a statement from the
19association or the executive board, setting forth the amount of unpaid assessments
20against the grantor and the. The grantee is not liable for, nor shall the unit conveyed

1be subject to a lien which that is not filed under sub. (4) (3) for, any unpaid assessment
2against the grantor in excess of the amount set forth in the statement. If an
3association or a board of directors does not provide such a statement within 10
4business days after the grantee's request, they are barred from claiming under any
5lien which that is not filed under sub. (4) (3) prior to the request for the statement
6against the grantee.
AB781,20,10 7(5) Priority of lien. (intro.) All sums assessed by an association but unpaid
8for the share of the common expenses chargeable to any unit constitutes a lien on the
9unit and on the undivided interest in the common elements appurtenant thereto
A
10lien under this section is
prior to all other liens except:
AB781,20,11 11(8) (form)
AB781,20,1212 Statement of Condominium Lien
AB781,20,1813 This is to certify that .................... owner(s) of unit No. ..... in ....................
14Condominium (is) (are) indebted to the association in the amount of $.......... as of
15.........., .... (year) for (his) (her) (its) (their) (proportionate share of common expenses
16of the Condominium) (damages to the condominium) (penalties for violation of
17condominium declaration, bylaws, or rules)
for the period from (date) to (date), plus
18interest thereon at the rate of ....%, costs of collection, and actual attorney fees.
AB781,20,1919 Association
AB781,20,2020 By: ..........................
AB781,20,2121 Officer's title (or agent)
AB781,20,2222 Address
AB781,20,2323 Phone number
AB781,21,3
1I hereby affirm under penalties of perjury that the information contained in the
2foregoing Statement of Condominium Lien is true and correct to the best of my
3knowledge, information, and belief.
AB781,21,44 ...............................
AB781,21,55 Officer (or agent)
Note: See Sec. 34 of the bill, which creates an expanded definition of "assessments"
for purposes of the above lien provisions.
AB781, s. 32 6Section 32. 703.161 of the statutes is created to read:
AB781,21,8 7703.161 Annual budget. (1) Application. This section applies to any
8condominium that includes at least one unit that is restricted to residential use.
AB781,21,10 9(2) Requirement. An association annually shall adopt and distribute to all unit
10owners an annual budget setting forth all of the following:
AB781,21,1311 (a) All anticipated common expenses and any amounts to be allocated to a
12statutory reserve account under s. 703.163 and to any other funds for future
13expenditures.
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.
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