Authors: Attorney John C. Mitby & Attorney Elizabeth L. Spencer
Phone: 608-575-4077, 608-257-0945
Email: email@example.com, firstname.lastname@example.org
Condominium law experienced several changes this spring when 2017 Wisconsin Act 303 was enacted. The Act, now law, affects three areas: fees, executive summaries, and payoff statements.
1.The fee changes include that, associations may now only charge fees for initial disclosure documents.
Disclosure Information from Seller to Buyer that must be furnished before closing.
Sellers of units are required to disclose to the buyer:
- Copies of proposed or existing declaration,
- The bylaws, and any rules or regulations,
- A copy of the proposed or existing articles of incorporation,
- A copy of any proposed or existing management contract,
- Employment contract or other contract affecting the use, maintenance, or access to all or part of the condominium,
- A copy of the projected annual operating budget,
- A copy of any lease to which the unit owners or the association is a party to,
- A description of any contemplated expansion,
- A copy of the floor plan, and
- An executive summary.
Now, an Association may only charge the actual cost or $50, whichever is less, unless the Association has approved a greater fee for the Disclosure Materials. The Association may only charge a fee above the $50 limit or increase the existing amount by providing written notice to all unit owners, adopting a written resolution at a meeting, and providing written notice to all unit owners describing the type of fee established or increased and the amount within 48 hours of adoption.
Disclosure Information from Seller to Buyer if the Material Changes before closing.
If the Disclosure Materials are changed or amended, so long as it does not materially affect the rights of the buyer, prior to the closing of a unit, the updated documents shall be provided to the seller to give to the buyer.
Now, the Association may only charge the actual costs or $15 for these updated documents.
Payoff Statements for Unpaid Assessments or other Obligations
No fee may be charged unless a second statement is requested within 2 months. In which case, a fee may not exceed $25 unless the Association has approved a greater fee.
Now, the Association may only charge greater than $25 or increase the fee amount by providing written notice to all unit owners, adopting a written resolution at a meeting, and provide written notice to all unit owners describing the type of fee established or increased and the amount within 48 hours of adoption.
2. The new law also affects the contents of the executive summary of the disclosure documents. Previously executive summaries have only been required to include information regarding the following in clear plain language:
- Condominium Identification,
- Expansion Plans,
- Special Amenities,
- Maintenance and repair of units,
- Maintenance and repair and replacement of common elements,
- Rental of units,
- Unit alterations,
- Fees on new units,
- Amendments, and
- Other restrictions or features.
Now, the Association must also include:
- The amount of a condominium’s reserve balance,
- First right of purchase,
- Transfer fees,
- Disclosure document fees, and
- Payoff statement fees.
3. The new law also creates a procedure under which a unit owner may request a payoff statement from the Association. A unit owner may submit to the Association a written request for a payoff statement. Within 10 business days of the request, the Association must provide a written pay off statement. If the Association does not provide the statement within the deadline the Association is liable for actual damages caused by the Association’s failure or $350, whichever is less.
What does this mean for condominium associations?
Associations need to review their fees for compliance with the new law and determine if they need to proceed with formal meetings to change the amount they are charging. They also need to review any prepared executive summary to ensure that it contains the additional contents required by the new law.