AB818,12,21 17(4) Options of first mortgagees. (a) Notwithstanding s. 703.165 (5) and
18subject to pars. (b) and (h), if the association acquires title to a unit at foreclosure sale
19or by deed in lieu of foreclosure under sub. (3) (b), the association may use the
20procedure under this subsection to require a first mortgagee of the unit to either
21release its first mortgage on the unit or take title to the unit.
AB818,12,2322 (b) The association may use the procedure under this subsection only if all of
23the following apply:
AB818,12,2524 1. There are no liens on the unit other than liens described under s. 703.165
25(5) (a) to (e).
AB818,13,2
12. The first mortgage on the unit was executed on or after the effective date of
2this subdivision .... [LRB inserts date].
AB818,13,63 (c) No later than 2 years after the date of delivery of the notice to unit owners
4under sub. (3) (a), the association may give written notice by certified mail and 1st
5class mail to a first mortgagee of a unit described under par. (a), along with a copy
6of the notice to unit owners, that includes all of the following information:
AB818,13,87 1. A statement that the association is raising funds under this section to repair
8or replace the defective common elements.
AB818,13,109 2. A statement that the association is the owner of the unit and that the first
10mortgagee has a first mortgage on the unit.
AB818,13,1311 3. An explanation of the options available to the first mortgagee under par. (d)
12and a deadline that is at least 60 days from the date on which the notice is sent by
13which the first mortgagee must select one of those options.
AB818,13,1514 (d) No later than the deadline specified in the notice under par. (c), a first
15mortgagee shall do one of the following:
AB818,13,1716 1. Notify the association that the first mortgagee will accept a quit claim deed
17for the unit from the association.
AB818,13,1918 2. Record a release of the first mortgage in the office of the register of deeds and
19notify the association that the lien of the first mortgage has been released.
AB818,13,2120 (e) If a first mortgagee takes the action described under par. (d) 1., all of the
21following apply:
AB818,13,2322 1. The association shall promptly deliver a quit claim deed for the unit to the
23first mortgagee.
AB818,14,324 2. The first mortgagee shall credit the fair value of the unit toward the first
25mortgage debt, interest, and costs. If any deficiency remains, the first mortgagee

1may apply to the circuit court for a judgment of deficiency. If there is any surplus,
2the first mortgagee shall pay the surplus into the circuit court, and the circuit court
3shall dispose of the surplus as provided under s. 846.162.
AB818,14,64 (f) If a first mortgagee takes the action described under par. (d) 2., the first
5mortgagee may petition the circuit court for a judgment related to the debt previously
6secured by the first mortgage.
AB818,14,97 (g) If a first mortgagee fails to take any of the actions described under par. (d)
8by the deadline specified in the notice under par. (c), the first mortgage is considered
9released, and the association may commence an action to quiet title to the unit.
AB818,14,1710 (h) If the association acquires title to a unit at foreclosure sale or by deed in lieu
11of foreclosure under sub. (3) (b) and the unit is encumbered by a construction lien
12described under s. 703.165 (5) (c) that is prior to a first mortgage on the unit, the
13association may use the procedure under pars. (c) to (g) to require the holder of the
14construction lien to either release the construction lien on the unit or take title to the
15unit. The association may not use the procedure under this subsection to require a
16first mortgagee of the unit to either release its first mortgage lien on the unit or take
17title to the unit unless the construction lien holder releases the construction lien.
AB818,17 18Section 17. 703.18 (2) (a) and (b) of the statutes are amended to read:
AB818,14,2419 703.18 (2) (a) Unless otherwise provided in the declaration and except as
20provided in par. (b)
, in the event of damage to or destruction of common elements of
21a condominium, the association shall promptly undertake to repair or reconstruct it
22the common elements to a condition compatible with the remainder of the
23condominium. All cost of the repair or reconstruction in excess of available insurance
24proceeds shall be a common expense.
AB818,15,8
1(b) However, if If a condominium is damaged to an extent more than the
2available insurance proceeds, the condominium shall be subject to an action for
3partition upon obtaining the written consent of the unit owners having 75 percent
4or more of the votes. In Except as provided in par. (c), in the case of partition, the net
5proceeds of sale together with any net proceeds of insurance shall be considered as
6one fund and shall be divided among all unit owners in proportion to their percentage
7interests in the common elements, and shall be distributed in accordance with the
8priority of interests in each unit.
AB818,18 9Section 18. 703.18 (2) (c) of the statutes is created to read:
AB818,15,1610 703.18 (2) (c) If the condominium was created on or after the effective date of
11this paragraph .... [LRB inserts date], a declaration may provide that the net
12proceeds under par. (b) shall be divided according to the unit owners' percentage of
13total fair market value as determined by following the procedure set forth in s. 703.28
14(4) (d), except that the appraiser shall determine the fair market value of each unit,
15including the unit's percentage interest in the common elements, as the unit and
16common elements existed immediately prior to the damage described under par. (b).
AB818,19 17Section 19. 703.22 (title), (2) and (3) of the statutes are amended to read:
AB818,15,18 18703.22 (title) Mechanics' Construction and suppliers' liens.
AB818,15,21 19(2) Any mechanics' construction lien or suppliers' lien under subch. I of ch. 779
20arising as a result of repairs to or improvements of a unit by a unit owner shall be
21a lien only against the unit.
AB818,16,6 22(3) Any mechanics' construction lien or suppliers' lien under subch. I of ch. 779
23arising as a result of repairs to or improvements of the common elements, if
24authorized in writing by the association, shall be paid by the association as a common
25expense and until paid shall be a lien against each unit in proportion to its the unit's

1percentage interest in the common elements. On payment of the proportionate
2amount by any unit owner to the lienor or on the filing of a written undertaking in
3the manner specified by s. 779.08, the unit owner shall be entitled to a release of his
4or her
the unit owner's unit from the lien , and the association shall not be entitled
5to assess his or her the unit owner's unit for payment of the remaining amount due
6for the repairs or improvements.
AB818,20 7Section 20. 703.28 (1) of the statutes is renumbered 703.28 (3) (a).
AB818,21 8Section 21. 703.28 (1m) (intro.) of the statutes is created to read:
AB818,16,109 703.28 (1m) All condominiums. (intro.) The following provisions apply to all
10condominiums:
AB818,22 11Section 22. 703.28 (2) of the statutes is renumbered 703.28 (3) (b) and
12amended to read:
AB818,16,1713 703.28 (3) (b) Upon removal under this subsection of any condominium
14property from the provisions of this chapter, the property shall be deemed to be is
15owned in common by the unit owners. The undivided interest in the property owned
16in common which that appertains to each unit owner shall be is the percentage of
17undivided interest previously owned by the unit owner in the common elements.
AB818,23 18Section 23. 703.28 (3) (intro.) of the statutes is created to read:
AB818,16,2119 703.28 (3) Existing condominiums. (intro.) The following provisions apply to
20a condominium created before the effective date of this subsection (intro.) .... [LRB
21inserts date]:
AB818,24 22Section 24. 703.28 (4) of the statutes is created to read:
AB818,16,2523 703.28 (4) New condominiums. The following provisions apply to a
24condominium created on or after the effective date of this subsection (intro.) .... [LRB
25inserts date]:
AB818,17,9
1(a) All or any part of condominium property may be removed from the
2provisions of this chapter if the unit owners of units to which at least 80 percent of
3the votes are allocated, or a greater percentage if required by the declaration, consent
4to removal in writing, the holders of all liens affecting any of the units consent to
5removal in writing, and a removal instrument is duly recorded. If all of the units in
6a condominium are restricted exclusively to nonresidential uses, the declaration for
7the condominium may specify a smaller percentage of the votes that are required for
8removal, except that the percentage may not be less than the percentage required to
9amend the condominium declaration under s. 703.09 (2).
AB818,17,1610 (b) The removal instrument under par. (a) shall be signed by the required
11number of consenting unit owners in the same manner as required in conveyances
12of real property. The removal instrument is effective when recorded in the office of
13the register of deeds of the county where the property is located and shall be recorded
14in every county in which any portion of the condominium is located. The removal
15instrument shall specify a date after which the removal instrument is void unless
16recorded on or before that date.
AB818,17,2417 (c) Upon removal under this subsection of condominium property from the
18provisions of this chapter, the property is owned in common by the unit owners.
19Unless the declaration provides for the use of the procedure under par. (d), upon
20removal, the undivided interest in the property owned in common that appertains
21to each unit owner is the percentage of undivided interest previously owned by the
22unit owner in the common elements. Upon removal, a lien against a unit is
23considered a lien against the percentage of the undivided interest in the property of
24the unit owner.
AB818,18,14
1(d) A declaration may provide that, upon removal under this subsection of
2condominium property from this chapter, each unit owner's undivided interest in the
3property after removal shall be determined under this paragraph, rather than under
4par. (c). The association shall select an appraiser who shall determine the fair
5market value of each unit in the condominium, including the unit's percentage
6interest in the common elements. The association shall deliver a copy of the
7appraiser's determination to each unit owner along with a notice that the unit owner
8may object to the determination within 30 days after the date of the notice. Unless
9the unit owners of units to which at least 30 percent of the votes are allocated timely
10object to the determination, the determination shall be final, and each unit owner's
11undivided interest in the property after removal shall be a percentage calculated by
12dividing the appraised fair market value of the unit, including the unit's percentage
13interest in the common elements, by the sum of the appraised fair market values of
14all units, including their percentage interests in the common elements.
AB818,25 15Section 25 . Initial applicability.
AB818,18,1816 (1) Approval of first mortgagee for amending declaration. The treatment of
17section 703.09 (2) and (2m) of the statutes first applies to an amendment to which
18the required number of unit owners consented on the effective date of this subsection.
AB818,18,2219 (2) Modification and correction of recorded condominium instruments,
20amendments, and addenda.
The treatment of section 703.095 of the statutes first
21applies to an amendment, addendum, or correction instrument recorded on the
22effective date of this subsection.
AB818,18,2523 (3) Description of units. The treatment of section 703.12 of the statutes first
24applies to a deed or other instrument affecting title to a unit executed on the effective
25date of this subsection.
AB818,19,4
1(4) Relocation of boundaries between adjoining units; separation of units;
2merger of units.
The treatment of section 703.13 (6) (e), (7) (c), and (8) (c) of the
3statutes first applies to plats and plans certified as to their accuracy and compliance
4with section 703.13 of the statutes on the effective date of this subsection.
AB818,26 5Section 26 . Effective dates. This act takes effect on the day after publication,
6except as follows:
AB818,19,107 (1) Relocation of boundaries between adjoining units; separation of units;
8merger of units.
The treatment of section 703.13 (6) (e), (7) (c), and (8) (c) of the
9statutes and Section 25 (4) of this act take effect on the first day of the 6th month
10beginning after publication.
AB818,19,1111 (End)
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