LRB-3410/1
PJK&CTS:jld:ph
2009 - 2010 LEGISLATURE
October 27, 2009 - Introduced by Representatives Roys, Jorgensen, Berceau and
Pope-Roberts, cosponsored by Senators Erpenbach and Wirch. Referred to
Committee on Housing.
AB527,1,4
1An Act to amend 710.15 (5r); and
to create 77.25 (19), 100.20 (1w) and 710.16
2of the statutes;
relating to: requirements before a sale or other transfer of a
3manufactured and mobile home community, providing an exemption from the
4real estate transfer fee, and providing a penalty.
Analysis by the Legislative Reference Bureau
This bill gives a residents' association (association) of a mobile or manufactured
home community (community) a 90-day right to make an offer to purchase the
community, and a 60-day right to enter into an agreement for the purchase after
making a timely offer, if the owner of the community receives an offer from a third
party for the purchase or other transfer of ownership of the community that the
owner intends to accept. If the owner receives such an offer, before unconditionally
accepting the offer, the owner must provide, by certified mail, to every resident of the
community and to the Wisconsin Housing and Economic Development Authority
(WHEDA), notice that includes the price and other terms of the offer, as well as a
statement that an association has 90 days from the date of the notice to make an offer
to purchase the community.
The bill requires the owner to consider any timely offer to purchase made by an
association and to negotiate in good faith. If an association and the owner enter into
an agreement for the purchase within 60 days after the association makes an offer,
the owner must allow the association a reasonable time beyond the 60-day period
to obtain financing, if necessary. The bill exempts the sale of a community to an
association from payment of the real estate transfer fee, which is a fee that is paid
by the grantor on a conveyance of real property and that is equal to 30 cents of every
$100 of the property's value.
The bill requires WHEDA, upon request by an association, to assist the
association in obtaining financing and to provide technical assistance. The bill
requires the owner to allow an association, its technical assistance provider, and any
prospective lender to have access to information regarding the community that the
owner has provided or would have provided to a prospective purchaser of the
community, such as the terms of any assumable financing, improvements to be made
to the property by the owner in connection with the sale, the appraised value of the
property, hazardous waste data, and income and operating expense information.
Some of the information must be made available at any time after the owner has
given notice to the residents, but some information need not be provided before the
owner accepts an offer to purchase from the association.
Under the bill, if an association makes a timely offer to purchase but the
association and owner do not reach an agreement on the purchase and, as a result,
the community will be retired from the rental housing market, the owner must
provide 120 days' notice of this to the residents.
The bill makes any owner that sells or otherwise transfers ownership of a
community without complying with the requirements of the bill liable to the
residents, in equal shares, in the amount of $50,000 or 50 percent of the gain realized
by the owner from the sale or other transfer, whichever is greater; any resident may
bring an action to enforce the liability. In addition, any resident may bring an action
for an injunction or actual damages. The bill also makes selling or otherwise
transferring a community in violation of the requirements under the bill an unfair
method of competition or an unfair trade practice. Generally, under current law,
unfair methods of competition and unfair trade practices are subject to enforcement
actions by the Department of Justice or the Department of Agriculture, Trade and
Consumer Protection, and to private actions for damages.
Under current law, if the owner or operator of a community seeks to retire the
community permanently from the rental housing market, the owner or operator may
terminate the tenancies of residents and occupants of the community by giving notice
to vacate 5, 14, or 30 days after giving the notice, depending on the length of a
resident's or occupant's lease. The bill changes the length of the notice that must be
given to a resident or occupant in this situation to 120 days.
Because this bill relates to an exemption from state or local taxes, it may be
referred to the Joint Survey Committee on Tax Exemptions for a report to be printed
as an appendix to the bill.
For further information see the state and local fiscal estimate, which will be
printed as an appendix to this bill.
The people of the state of Wisconsin, represented in senate and assembly, do
enact as follows:
AB527, s. 1
1Section
1. 77.25 (19) of the statutes is created to read:
AB527,3,2
177.25
(19) Of a community, as defined in s. 710.15 (1) (ad), to a residents'
2association, as defined in s. 710.16 (1) (b) 4., under s. 710.16.
AB527, s. 2
3Section
2. 100.20 (1w) of the statutes is created to read:
AB527,3,64
100.20
(1w) It is an unfair method of competition or an unfair trade practice
5for any person to sell or otherwise transfer ownership of a manufactured or mobile
6home community in violation of s. 710.16.
AB527, s. 3
7Section
3. 710.15 (5r) of the statutes is amended to read:
AB527,3,168
710.15
(5r) Notice requirements apply. The notice requirements of s. 704.17
9(1) (a), (2) (a)
, and (3) apply to a termination of tenancy under sub. (5m) (a)
and the.
10The notice requirements of s. 704.17 (1) (b), (2) (b)
, and (3) apply to a termination of
11tenancy under sub. (5m) (b) to
(em) and (g) to (k).
Subject to s. 710.16, if a community
12owner or operator seeks to retire the community permanently from the rental
13housing market, the tenancy of a resident or occupant may be terminated, as
14provided in sub. (5m) (f), if the owner or operator gives the resident or occupant
15written notice requiring the resident or occupant to vacate on or before a date at least
16120 days after the giving of the notice.
AB527, s. 4
17Section
4. 710.16 of the statutes is created to read:
AB527,3,20
18710.16 Requirements before sale or other transfer of manufactured
19and mobile home community. (1) Definitions. (a) The definitions given in s.
20710.15 (1) apply in this section.
AB527,3,2121
(b) In this section:
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1. "Authority" means the Wisconsin Housing and Economic Development
23Authority.
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2. "Heir" has the meaning given in s. 851.09.
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3. "Owner" means the owner of the community.
AB527,4,3
14. "Residents' association" means an organization, however structured, that is
2made up of residents of a community and in which membership is open to all
3residents of the community.
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5. "Technical assistance provider" means a person that assists residents in
5doing any of the following:
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a. Forming a residents' association.
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b. Making an offer to purchase a community.
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c. Arranging financing for the purchase of a community.
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d. Any other actions that facilitate the purchase or operation of a community.
AB527,4,15
10(2) Notice by owner. (a) Except as provided in sub. (7), if an owner receives
11an offer on or after the effective date of this paragraph .... [LRB inserts date], for the
12purchase or other transfer of ownership of the community that the owner intends to
13accept, before unconditionally accepting the offer the owner shall provide to every
14resident of the community, and to the authority, by certified mail with return receipt
15requested, written notice that includes all of the following:
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1. The price, terms, and conditions provided in the offer that the owner intends
17to accept or has conditionally accepted.
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2. A statement that a residents' association has the right for 90 days following
19the date of the notice to make an offer to purchase the community.
AB527,4,2320
(b) 1. If the owner enters into an agreement for the sale or other transfer of
21ownership of the community during the 90-day period after the date of the notice in
22par. (a), the agreement must be contingent on, and must expressly provide that it is
23contingent on, either of the following:
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a. The failure of a residents' association to make an offer to purchase within
2590 days after the date of the notice.
AB527,5,3
1b. If a residents' association makes a timely offer to purchase, the failure of the
2owner and residents' association to enter into a contract for the purchase of the
3community within 60 days after the date of the offer.
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2. If an agreement described in subd. 1. relates to the sale or other transfer of
5ownership of more than one community in more than one state, including Wisconsin,
6only the portion of the agreement that relates to the sale or other transfer of
7ownership of a community in Wisconsin is subject to and must include the
8contingency specified in subd. 1.
AB527,5,16
9(3) Offer by association. (a) For a period of 90 days after the date of the notice
10in sub. (2) (a), a residents' association shall have the right to make an offer to the
11owner to purchase the community. The owner shall consider and negotiate in good
12faith concerning any timely offer to purchase made by a residents' association. If the
13owner and residents' association enter into an agreement for the sale of the
14community within the 60-day period after the date of a timely offer, the owner shall
15allow the residents' association a reasonable time beyond the 60-day period to obtain
16financing for the purchase if additional time is necessary.
AB527,6,417
(b) Except as provided in par. (c), at any time after the owner has provided the
18notice under sub. (2) (a), the owner shall, upon request by a residents' association,
19allow reasonable access to the property by the residents' association, their technical
20assistance provider, and any prospective lender and shall make available to the
21residents' association, or the residents' association's prospective lender, any
22information regarding the community that the owner has or would have provided to
23a prospective purchaser of the community, except that disclosure of information
24regarding the community's profit margin or the identity of individuals who are
25delinquent in the payment of rent may be limited to the officers and directors of the
1association and the association's attorney and technical assistance provider and may
2be subject to reasonable confidentiality requirements. Information that the owner
3shall make available under this paragraph includes any of the following that is
4applicable:
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1. The terms of seller financing, including the amount, interest rate, and
6amortization rate.
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2. The terms of any assumable financing, including the amount, interest rate,
8and amortization rate.
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3. The legal description and a statement of appraised or assessed value of
10property included in any land trade involved in the sale or other transfer of
11ownership of the community.
AB527,6,1412
4. Improvements to the property to be made by the owner in connection with
13the sale or other transfer of ownership or any other economic concessions by the
14owner in connection with the sale or transfer.
AB527,6,1515
5. A survey and legal description of the property.
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6. A description of any easements appurtenant to the property and copies of all
17permits or licenses related to the property that are in force.
AB527,6,1918
7. An itemized list of monthly operating expenses, utility consumption rates,
19taxes, insurance, and capital expenditures for each of the past 3 years.
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8. The most recent rent roll, a list of current tenants, a list of currently vacant
21units, and a statement of the vacancy rate at the community for the 3 preceding
22years.
AB527,6,2423
9. Any data relating to the past and present existence of hazardous waste on
24the property or in close proximity to the property.
AB527,7,2
110. Any data relating to the water, sewer, and electrical systems of the
2community.
AB527,7,43
11. All income and operating expenses relating to the property for the 3
4preceding years.
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12. Any other information that may be required by the lender, which shall be
6kept confidential.
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(c) The owner is not required to provide the information under par. (b) 5. to 12.
8before 7 days after the owner accepts an offer to purchase from the residents'
9association.
AB527,7,1210
(d) Upon the request of a residents' association, the authority shall assist the
11association in acquiring financing for the purchase of the community and provide
12technical assistance to the association.
AB527,7,15
13(4) Recording. (a) An owner may record in the office of the register of deeds
14of the county in which the community is located an affidavit certifying any of the
15following:
AB527,7,1716
1. That the owner has complied with the requirements under this section. A
17copy of the notice sent under sub. (2) (a) may be recorded with the affidavit.