Chapter 707

707.37(2)(a) (a) 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.

707.37(2)(b) (b) 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.

707.37(2m) (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.

707.37(3) (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.

707.37(4) (4) Priority of lien. A lien under sub. (2) is prior to other liens except all of the following:

707.37(4)(a) (a) Liens of general and special taxes.

707.37(4)(b) (b) All sums unpaid on a first mortgage on the time share which is recorded before the assessment is made.

707.37(4)(c) (c) Mechanic’s liens filed before the assessment on the time-share unit, divided into the time share involved.

707.37(4)(d) (d) A lien under s. 292.31 (8) (i) or 292.81.

707.37(5) (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.

(Managing Entity)

By: ....

Officer’s title (or agent)

Address ....

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)

707.37(6) (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) and (b), 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.

707.37(7) (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.

707.37 History History: 1987 a. 399; 1993 a. 453; 1995 a. 224, 225, 227; 1997 a. 27, 35, 250, 252; 1999 a. 185; 2007 a. 18; 2011 a. 102; 2017 a. 365 s. 111.

707.38 707.38 Blanket encumbrances; liens.

707.38(1) (1) Definition. 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:

707.38(1)(a) (a) A lien for taxes and assessments levied by a public body which are not yet due and payable.

707.38(1)(b) (b) A lien for common expenses in favor of a homeowners’, condominium or community association which is not a judgment lien.

707.38(1)(c) (c) A lease.

707.38(1)(d) (d) A recorded agreement for the payment of reasonable fees or other compensation for management services performed on behalf of the time-share property.

707.38(1)(e) (e) Any interest arising from an agreement to sell or pledge the ownership interest in an individual time share.

707.38(1m) (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:

707.38(1m)(a) (a) The holder’s rights in the time-share property are subordinate to the rights of time-share owners upon recording of the nondisturbance agreement.

707.38(1m)(b) (b) 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.

707.38(1m)(c) (c) 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.

707.38(2) (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.

707.38(2)(b) (b) 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.

707.38(3) (3) Effect of other liens. Except as provided in s. 707.37 (2) to (6), 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.

707.38(4) (4) Lienholder’s rights.

707.38(4)(a) (a) Except as provided in s. 707.37 (2) to (6), 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.

707.38(4)(b) (b) 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.

707.38(5) (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.

707.38 History History: 1987 a. 399.

707.39 707.39 Initiative, referendum and recall.

707.39(1) (1) Definitions. In this section:

707.39(1)(a) (a) “Owner” means a person who, other than as security for an obligation, is an owner or co-owner of a time share or is an owner or co-owner of a unit that is not a time-share unit.

707.39(1)(b) (b) “Time share” does not include a time-share easement in a campground.

707.39(1)(c) (c) “Unit” does not include real property in which a time-share easement in a campground exists.

707.39(2) (2) Applicability. This section applies only to a project in which at least 50 percent of the votes are allocated to time shares.

707.39(3) (3) Address list. For purposes of this section, the managing entity shall keep reasonably available for inspection and copying by any owner all addresses, known to it or to the developer, of all of the owners, with the principal permanent residence address of each indicated, if known. The managing entity shall revise continually the list of addresses based on any new information it obtains, and the developer shall keep the managing entity advised of any information which the developer has or obtains.

707.39(4) (4) General provisions.

707.39(4)(a) (a) Each ballot prepared under subs. (5) to (7) shall contain all of the following:

707.39(4)(a)1. 1. A statement that the ballot will not be counted unless signed by an owner.

707.39(4)(a)2. 2. The date, not less than 30 days nor more than 180 days after the date the ballot is mailed, by which the ballot must be received by the person to whom it is to be returned, and a statement that the ballot will not be counted unless received by that date.

707.39(4)(a)3. 3. The name and address of the person to whom the ballot is to be returned.

707.39(4)(a)4. 4. No material other than what is required by this section.

707.39(4)(b) (b) Each ballot mailed under subs. (5) to (7) shall be mailed to the principal permanent residence of the owner to whom it is addressed, if known to the person responsible for mailing it, and that person shall procure and keep reasonably available for inspection for at least one year after the vote is calculated a certificate of mailing for each ballot mailed and the original or a photocopy of each ballot returned by the date specified in par. (a) 2.

707.39(4)(c) (c) If the developer or a person on behalf of the developer communicates with an owner, other than as expressly authorized by sub. (5), (6) or (7), on the subject matter of any petition or ballot prepared under any of those subsections, the expense of that communication may not be assessed directly or indirectly in whole or in part to any owner other than the developer.

707.39(4)(d) (d) The vote allocated to any time share and to any unit other than a time-share unit shall be counted as having been cast in accordance with the ballot of any owner of that time share or unit. If the ballots of different owners of the same time share, or of the same unit other than a time-share unit, are not in accord with one another, the vote allocated to that time share or unit shall be divided in proportion to the number of owners of the time share or unit voting each way and shall be counted accordingly. Any ballot that is not signed by an owner or is not received by the date specified under par. (a) 2. is void.

707.39(4)(e) (e) The managing entity shall take action reasonably calculated to notify all owners of the resolution of any matter considered under sub. (5), (6) or (7).

707.39(4)(f) (f) No right or power of an owner under this section may be waived, limited or delegated by contract, power of attorney, proxy or otherwise, in favor of the developer, an affiliate of a developer, a managing entity or a designee of any of them.

707.39(4m) (4m) Amendment to project instrument. The project instrument may be amended by the owners by direct initiative under sub. (5) or by referendum under sub. (6). An amendment adopted under sub. (5) or (6) shall be promptly recorded by the managing entity with a statement of the vote and becomes effective upon recordation.

707.39(5) (5) Direct initiative by owners.

707.39(5)(a) (a) The owners may amend the project instrument or any unrecorded document governing the project, or approve or reject any proposed expenditure, in accordance with this subsection or in any manner permitted by the project instrument or document.

707.39(5)(b) (b) An owner may deliver to the managing entity a petition containing the language of a proposed amendment and signed by the owners of at least one time share or other estate or interest in each of a number of units to which at least 33 1/3 percent of the votes are allocated or any smaller percentage specified by the document to be amended. A writing of not more than 750 words in support of the proposal may be attached to the petition and mailed with the ballots under par. (c).

707.39(5)(c) (c) Within 20 days after receiving the petition under par. (b), the managing entity shall mail to each owner a ballot setting forth the language of the petition and affording an opportunity to approve or reject the proposal, together with a copy of the writing, if any, attached to the petition. A writing of not more than 750 words from the managing entity recommending approval or rejection of the proposal may be mailed with the ballots.

707.39(5)(d) (d)

707.39(5)(d)1. 1. Within 10 days after the date specified under sub. (4) (a) 2., the managing entity shall examine the ballots that have been returned and determine the vote. A signature on the petition shall be treated for the purpose of sub. (4) (d) as a ballot from the signer indicating approval of the proposed amendment.

707.39(5)(d)2. 2. Except as provided in s. 707.20 (2), a simple majority of the votes counted shall be sufficient for the adoption of the proposal unless the document to be amended specifies a larger majority or, in the case of a proposed expenditure, the project instrument specifies a larger majority not exceeding 66 2/3 percent, except that no document may specify more than a simple majority for a proposal which the managing entity could effect unilaterally.

707.39(5)(d)3. 3. No proposal may be adopted by an initiative in which the ballots favoring the proposal represent less than 10 percent of the votes allocated to all owners.

707.39(5)(e) (e) A proposal adopted under this subsection may not be repealed or modified within 3 years after adoption except by another initiative under this subsection. After the 3-year period, the managing entity may not repeal or modify the result without the approval of the owners in a referendum under sub. (6). If the project instrument permits the managing entity to initiate a referendum for that purpose, no referendum may be initiated for that purpose more often than once every 3 years.

707.39(6) (6) Referendum of owners.

707.39(6)(a) (a) The owners may amend the project instrument by referendum, and the project instrument may specify other matters which the owners may determine by referendum and may permit the managing entity to select matters which the owners may determine by referendum.

707.39(6)(b) (b) If an amendment to a project instrument proposed by the managing entity, or other matter, is to be determined by referendum, the managing entity shall prepare and, not less than 30 days nor more than 180 days before the votes are to be counted, mail to each owner a ballot stating each matter to be determined and affording the opportunity to approve or reject each matter. The ballot may be accompanied by a writing of not more than 750 words from the managing entity recommending a particular decision.

707.39(6)(c) (c) Within 10 days after the date specified under sub. (4) (a) 2., the managing entity shall examine the ballots and determine the vote. Except as provided in s. 707.20 (2), a simple majority of the votes counted shall determine each matter in question unless the project instrument specifies a larger majority, but no matter may be determined by referendum unless the ballots favoring the majority decision represent at least 10 percent of the votes allocated to all owners.

707.39(7) (7) Recall of manager by owners.

707.39(7)(a) (a) In addition to any manner permitted by the project instrument, the owners may discharge the manager with or without cause in the manner provided by this subsection.

707.39(7)(b) (b)

707.39(7)(b)1. 1. An owner may prepare a ballot affording the opportunity to indicate a preference between retaining the present manager and discharging the present manager in favor of a new manager. A writing of not more than 750 words supporting discharge of the manager may be attached to the ballot.

707.39(7)(b)2. 2. A copy of the ballot and of any writing that is to be mailed with the ballots shall be delivered to the manager. Not less than 10 days nor more than 30 days after the ballot and writing are delivered to the manager, the owner who prepared the ballot shall mail to each owner the ballot and writing, if any, supporting discharge, and a copy of any written reply from the manager of not more than 750 words.

707.39(7)(c) (c)

707.39(7)(c)1. 1. Within 10 days after the date specified under sub. (4) (a) 2., the person who receives the ballots shall examine those that have been returned, determine the vote and promptly notify the manager of the result. If at least 66 2/3 percent of the vote, representing at least 33 1/3 percent of the votes allocated to all owners, favors discharging the manager, then all of the following shall occur:

707.39(7)(c)1.a. a. The developer shall be notified of the result and the ballots or photocopies of the ballots shall be given promptly to the manager.

707.39(7)(c)1.b. b. The developer shall diligently attempt to procure offers for management contracts from prospective managers. Any owner other than the developer also may attempt to procure such offers.

707.39(7)(c)2. 2. If the developer or any owner obtains an offer within 60 days after the date on which the vote was tabulated, the developer or owner shall promptly notify the developer and the owner who was responsible for tabulating the vote. If no offer is obtained from a prospective manager other than the current manager within the 60-day period, that period shall be extended for successive intervals of 30 days each until an offer is obtained.

707.39(7)(c)3. 3. At the end of any period under subd. 2. during which an offer from a prospective manager other than the current manager is obtained, the owner who prepared the ballot, or the developer if that owner so directs in a writing delivered to the developer, shall promptly prepare and mail to each owner a 2nd ballot stating the term and compensation provided by each offer that has been received and affording an opportunity to indicate a preference for any one of the offers or for retaining the current manager. A letter recommending that a particular offer be accepted or that the current manager be retained may accompany the ballot, and if the developer prepared the ballot, the developer shall enclose a copy of any letter submitted by the owner who was responsible for tabulating the vote.

707.39(7)(c)4. 4. The developer has no obligation under this paragraph and nothing need be delivered to the developer if the developer owned no estate or interest in any unit on the date that the first ballot was delivered to the manager and neither the developer nor the affiliates of the developer or the developer’s appointees caused the current manager to be hired.

707.39(7)(d) (d) Within 10 days after the date specified under sub. (4) (a) 2., the person who receives the ballots prepared under par. (c) 3. shall examine the ballots that have been returned, determine the vote, notify the manager of the result, and hold the ballots available for inspection by the manager and any proposed manager for at least 30 days. If more votes favor accepting a particular offer rather than retaining the manager, the manager shall be discharged 90 days after being notified of the result, except that if the ballot prepared under par. (b) was delivered to the manager before the current term of the manager began, the manager is discharged immediately upon being notified of the result. The person who received the ballots prepared under par. (c) 3. shall accept on behalf of the owners the offer that received the largest number of votes. The expenses under a contract accepted under this paragraph are time-share expenses.

707.39(7)(e) (e) A manager discharged under this subsection is not entitled because of the discharge to any penalty or other charge payable directly or indirectly in whole or in part by any owner other than the developer.