Wisconsin Supreme Court Update: Notice to Condominium Owners and Associations
In Walworth State Bank v. Abbey Springs Condominium Association (2016), the Wisconsin Supreme Court ruled 5-2 that condominium associations may not prohibit present and future unit owners from the use and enjoyment of recreational facilities as a penalty for unpaid condominium association assessments.
Condominium associations generally impose monthly or yearly “assessments” on individual unit owners and tenants to cover the costs for maintenance and utilities incurred by the condominium community. In the case before the Wisconsin Supreme Court, the Abbey Springs Condominium Association had membership policies which forbade current and subsequent unit owners from using common areas until all unpaid assessments were paid in full. This meant that the purchaser of a unit would be responsible for payment of delinquent assessments from prior owners of that particular unit before access to recreational facilities would be granted. In other words, the unpaid assessments were tied to the unit, not the former condominium owner.
The Court’s majority opinion authored by Justice Rebecca Bradley held that this policy, in the context of a condo unit that has been purchased in a foreclosure sale, violated well-established foreclosure law and imposed an undue burden on new condominium purchasers. In a foreclosure action, judgment is entered which eliminates “all right, title, interest, lien or equity of redemption of [an association] in and to the foreclosed units.” Walworth State Bank v. Abbey Springs Condo. Assoc., 2016 WI 30 ¶ 2. By prohibiting new owners from the use and enjoyment of the premises, Abbey Springs was self-reviving its lien against the unit in violation of Wisconsin law.
If you are a condominium owner, tenant, or buyer, it is important to keep up-to-date with the state laws concerning condominiums. Before selling and purchasing this type of property, it is imperative that you consult with a qualified attorney. John M. Kelly, Attorney at Law, LLC has 42 years of experience assisting clients in the sale, purchase, and administration of real estate. Call today to learn more about the complex system of laws governing these transactions.
