Chapter 703

703.14 History History: 1977 c. 407.

703.15 703.15 Association of unit owners.

703.15(1) (1) Legal entity. The affairs of every condominium shall be governed by an association that, even if unincorporated, is constituted a legal entity for all purposes. Except for matters reserved to the association members or unit owners by this chapter, the declaration, or the bylaws, all policy and operational decisions of the association, including interpretation of the condominium instruments, bylaws, rules, and other documents relating to the condominium or the association, shall be made by its board of directors. This subsection does not affect the deference accorded to, or the standard of review of, an action of the board of directors by a court.

703.15(2) (2) Organization of association.

703.15(2)(a) (a) Establishment; organization.

703.15(2)(a)1. 1. Every declarant shall establish an association to govern the condominium not later than the date of the first conveyance of a unit to a purchaser. Except as provided in subd. 2., the declarant may organize the association only as a for-profit corporation; nonstock, nonprofit corporation; or unincorporated association. After the association is organized, the membership of the association shall at all times consist exclusively of all of the unit owners.

703.15(2)(a)2. 2. Beginning on March 13, 2022, a declarant may not organize an association as a for-profit corporation.

703.15(2)(a)3. 3. An association that exists on March 13, 2022, may not reorganize as a for-profit corporation.

703.15(2)(b) (b) Power and responsibility prior to establishment. Until an association is established, a declarant has the power and responsibility to act in all instances where this chapter, any other provision of the law, or the declaration require action by the association or its officers.

703.15(2)(c) (c) Declarant control.

703.15(2)(c)1. 1. Except as provided in par. (d), a declarant may authorize the declarant or persons designated by him or her to appoint and remove the officers of the association or to exercise the powers and responsibilities otherwise assigned by the declaration or this chapter to the association or its officers. A declaration may not authorize any declarant control of the association for a period exceeding the earlier of any of the following:

703.15(2)(c)1.a. a. Ten years in the case of an expandable condominium.

703.15(2)(c)1.b. b. Three years in the case of any other condominium.

703.15(2)(c)1.c. c. Thirty days after the conveyance of 75 percent of the common element interest to purchasers.

703.15(2)(c)2. 2. The period of declarant control begins on the date that the first condominium unit is conveyed by a declarant to any person other than the declarant. If there is any other unit owner other than a declarant, a declaration may not be amended to increase the scope or the period of the declarant control.

703.15(2)(d) (d) Meeting to elect directors. Prior to the conveyance of 25 percent of the common element interest to purchasers, an association shall hold a meeting and the unit owners other than the declarant shall elect at least 25 percent of the directors of the executive board. Prior to the conveyance of 50 percent of the common element interest to purchasers, an association shall hold a meeting and the unit owners other than the declarant shall elect at least 33 1/3 percent of the directors of the executive board.

703.15(2)(e) (e) Calculation of percentage. The calculation of the percentage of common element interest conveyed to purchasers under pars. (c) and (d) shall be based on the percentage of undivided interest appertaining to each unit which has been conveyed assuming that all the units to be completed are included in the condominium.

703.15(2)(f) (f) Elections after expiration of declarant control. Not later than 45 days after the expiration of any period of declarant control, an association shall hold a meeting and the unit owners shall elect an executive board of at least 3 directors and officers of the association. The directors and officers shall take office upon election.

703.15(3) (3) Powers of the association.

703.15(3)(a) (a) Powers. An association has the power to:

703.15(3)(a)1. 1. Adopt budgets for revenues, expenditures and reserves and levy and collect assessments for common expenses from unit owners;

703.15(3)(a)2. 2. Employ and dismiss employees and agents;

703.15(3)(a)3. 3. Sue on behalf of all unit owners; and

703.15(3)(a)4. 4. Exercise any other power conferred by the condominium instruments or bylaws.

703.15(3)(b) (b) Conditional powers. Subject to any restrictions and limitations specified by the declaration, an association may:

703.15(3)(b)1. 1. Make contracts and incur liabilities, including borrowing funds in the name of the association in the manner specified in the bylaws under s. 703.10 (2) (f).

703.15(3)(b)2. 2. Regulate and impose charges for the use of common elements.

703.15(3)(b)3. 3. Cause additional improvements to be made as a part of the common elements.

703.15(3)(b)4. 4. Acquire, hold, encumber and convey any right, title or interest in or to real property.

703.15(3)(b)5. 5. Grant easements through or over the common elements.

703.15(3)(b)6. 6. Receive any income derived from payments, fees or charges for the use, rental or operation of the common elements.

703.15(3)(b)7. 7. Grant or withhold approval of any action by a unit owner or other person which would change the exterior appearance of the unit or of any other portion of the condominium.

703.15(3)(b)8. 8. Purchase goods and services jointly with other condominium associations or other persons.

703.15(4) (4) Roster of unit owners; meetings of association.

703.15(4)(a) (a) An association shall maintain a current roster of names and addresses of every unit owner to which notice of meetings of the association shall be sent.

703.15(4)(b) (b) Every unit owner shall furnish the association with his or her name and current mailing address. No unit owner may vote at meetings of the association until this information is furnished.

703.15(4)(c) (c) No regular or special meeting of the association may be held except on at least 10 days’ written notice delivered or mailed to every unit owner at the address shown on the roster or unless waivers are duly executed by all unit owners.

703.15(4)(d) (d)

703.15(4)(d)1. 1. At meetings of the association every unit owner is entitled to cast the number of votes appurtenant to his or her unit, as established in the declaration under s. 703.09 (1) (f). Unit owners may vote by proxy, but, the proxy is effective only for a maximum period of 180 days following its issuance, unless granted to a mortgagee or lessee. If only one of multiple owners of a unit is present at a meeting of the association, the owner is entitled to cast the votes allocated to that unit.

703.15(4)(d)2. 2. If more than one of the multiple owners is present, the votes allocated to that unit may be cast proportionally among the owners unless the condominium instruments expressly provide otherwise, but unanimous agreement is conclusively presumed if any one of them purports to cast the votes allocated to that unit without protest being made promptly by any of the others to the person presiding over the meeting or until any one of the multiple owners files a statement with the secretary of the association stating that thereafter the vote must be cast proportionally.

703.15(4)(e) (e) Unless otherwise provided in this chapter, and subject to provisions in the bylaws requiring a different majority, decisions of an association shall be made on a majority of votes of the unit owners present and voting.

703.15(5) (5) Unit owner’s interest in association’s property. No unit owner may have any right, title or interest in any property owned by the association other than as holder of a percentage interest in common elements appurtenant to its unit.

703.15 History History: 1977 c. 407; 1979 c. 110 s. 60 (12); 1995 a. 225; 2003 a. 283; 2021 a. 166.

703.15 Note NOTE: 2003 Wis. Act 283, which affected this section, contains extensive explanatory notes.

703.15 Annotation Although the statutory definition of a “unit” under s. 703.02 (15) controls, it may be altered by other statutory provisions that look specifically to the declaration to define the substantive rights and obligations of unit owners. Sub. (4) (d) 1. explicitly allows the declaration to determine the number of votes appurtenant to each platted unit. Northernaire Resort & Spa, LLC v. Northernaire Condominium Ass’n, 2013 WI App 116, 351 Wis. 2d 156, 839 N.W.2d 116, 12-1707.

703.15 Annotation Sub. (3) lists the powers of condominium associations, including the conditional power of an association to acquire, hold, encumber, and convey any right, title, or interest in or to real property. The ownership of intangible property such as trademarks is not enumerated among the powers granted by this chapter. It is a well-established principle of statutory interpretation that the express mention of one matter excludes other similar matters that are not mentioned. The legislature, in drafting this chapter, was fully capable of granting condominium associations the power to own intangible property such as trademarks and trade names. It did not do so. Ritter v. Farrow, 2021 WI 14, 395 Wis. 2d 787, 955 N.W.2d 122, 18-1518.

703.15 Annotation Sub. (3) (a) 4. grants to associations broad authority to construct its bylaws as it sees fit, but any powers not enumerated under sub. (3) held by an association must be expressly conferred in either the condominium instruments or bylaws. Ritter v. Farrow, 2021 WI 14, 395 Wis. 2d 787, 955 N.W.2d 122, 18-1518.

703.15 Annotation Advising Developers in Operating Community Associations. Pardon. Wis. Law. Mar. 2004.

703.155 703.155 Master associations.

703.155(1) (1) Definition. In this section, “master association” means a profit or nonprofit corporation or unincorporated association which exercises the powers under s. 703.15 (3) on behalf of one or more condominiums or for the benefit of the unit owners of one or more condominiums.

703.155(2) (2) Delegation. If a declaration provides that any of the powers described in s. 703.15 (3) are to be exercised by or may be delegated to a master association, all provisions of this chapter applicable to an association apply to the master association, except as modified by this section or the declaration.

703.155(3) (3) Powers limited. Unless a master association is the only association for a condominium under s. 703.15 (1), it may exercise the powers set forth in s. 703.15 (3) only to the extent expressly permitted in the declarations that are associated with the master association or expressly described in the delegations of power from those condominiums to the master association.

703.155(4) (4) Liability limited. If a declaration provides that the executive board may delegate certain powers to a master association, the members of the executive board have no liability for the acts or omissions of the master association with respect to the exercise of those powers following delegation.

703.155(5) (5) Unit owners; rights and responsibilities. The rights and responsibilities of unit owners with respect to the association set forth in s. 703.15 apply, in the conduct of the affairs of a master association, only to those persons under sub. (6) who elect the executive board of a master association, whether or not those persons are unit owners.

703.155(6) (6) Master association; election of executive board. Notwithstanding s. 703.15 (2) (f) and whether or not a master association is also an association described in s. 703.15 (1), the instrument creating the master association and the declaration of each condominium the powers of which are assigned by the declaration or delegated to the master association shall provide that the executive board of the master association shall be elected after the period of declarant control in any of the following ways:

703.155(6)(a) (a) All unit owners of all condominiums subject to the master association may elect all members of the executive board.

703.155(6)(b) (b) All members of the executive boards of all condominiums subject to the master association may elect all members of the executive board.

703.155(6)(c) (c) All unit owners of each condominium subject to the master association may elect specified members of the executive board.

703.155(6)(d) (d) All members of the executive board of each condominium subject to the master association may elect specified members of the executive board.

703.155(7) (7) Representation of condominium or noncondominium property. A master association may represent condominium or noncondominium property on behalf of one or more condominiums and property under a different form of ownership or for the benefit of the unit owners of one or more condominiums and the owners of other property.

703.155 History History: 1985 a. 188; 2003 a. 283.

703.155 Note NOTE: 2003 Wis. Act 283, which affected this section, contains extensive explanatory notes.

703.16 703.16 Common expenses and common surpluses.

703.16(1) (1) Disposition of common surpluses. All common surpluses of the association shall be credited to the unit owners’ assessments for common expenses in proportion to their percentage interests in the common elements or as otherwise provided in the declaration or shall be used for any other purpose as the association decides.

703.16(2) (2) Funds for payment of common expenses obtained by assessments.

703.16(2)(a) (a) Funds for the payment of common expenses and for the creation of reserves for the payment of future common expenses shall be obtained by assessments against the unit owners in proportion to their percentage interests in the common elements or as otherwise provided in the declaration.

703.16(2)(b) (b) During the period of declarant control of the association under s. 703.15 (2) (c), if any unit owned by the declarant is exempt from assessments for common expenses until the unit is sold, the total amount assessed against units that are not exempt from assessments may not exceed the amount that equals nonexempt units’ budgeted share of common expenses, based on the anticipated common expenses set forth in the annual budget under s. 703.161 (2) (a). The declarant is liable for the balance of the actual common expenses.

703.16 History History: 1977 c. 407; 1991 a. 39; 1993 a. 453; 1995 a. 224, 227; 1997 a. 27, 250; 1999 a. 185; 2003 a. 283; 2015 a. 195 s. 83.

703.16 Note NOTE: 2003 Wis. Act 283, which affected this section, contains extensive explanatory notes.

703.16 Annotation The definition of “unit” under s. 703.01 (15) encompasses a property on which there is no constructed unit. Aluminium Industries v. Camelot Trails, 194 Wis. 2d 575, 535 N.W.2d 74 (Ct. App. 1995).

703.161 703.161 Annual budget.

703.161(1) (1) Application. This section applies to any condominium that includes at least one unit that is restricted to residential use.

703.161(2) (2) Requirement. An association annually shall adopt and distribute to all unit owners an annual budget setting forth all of the following:

703.161(2)(a) (a) All anticipated common expenses and any amounts to be allocated to a statutory reserve account under s. 703.163 and to any other funds for future expenditures.

703.161(2)(b) (b) The amount and purpose of any other anticipated association expenditure.

703.161(2)(c) (c) The amount in any statutory reserve account under s. 703.163 or any other funds held for future expenditures.

703.161(2)(d) (d) Any common surpluses.

703.161(2)(e) (e) The amount and source of any income, other than unit owner assessments.

703.161(2)(f) (f) The aggregate amount of any assessment to be levied against unit owners and the purpose of the assessment.

703.161 History History: 2003 a. 283.

703.161 Note NOTE: 2003 Wis. Act 283, which affected this section, contains extensive explanatory notes.

703.163 703.163 Statutory reserve account.

703.163(1) (1) Definitions. In this section:

703.163(1)(a) (a) “Reserve funds” means funds derived from assessments against unit owners that are deposited in a statutory reserve account. The term does not include funds for ordinary operations, including amounts held for operational contingencies.

703.163(1)(b) (b) “Statutory reserve account” means a separate account established under this section to hold reserve funds.

703.163(1)(c) (c) “Statutory reserve account statement” means a statement indicating whether a statutory reserve account has been established for a condominium and, if there is no statutory reserve account, how it is anticipated that future expenditures for the repair and replacement of common elements will be funded.

703.163(2) (2) Application; other reserve accounts not affected.

703.163(2)(a) (a)

703.163(2)(a)1. 1. Except as provided in subds. 2. and 3., this section applies to condominiums consisting exclusively of units that are restricted to residential uses.