What are the elements of differential association?

Collecting deliquent condo association dues in Wisconsin

• Regarding past due association fees for a condominium in Wisconsin: what are the options of the board to collect association dues, specifically foreclosure? Is there a monetary amount the owner must be behind before foreclosure? Can use of common elements be denied until dues are current? The specifics may be in here somewhere, but I don't see them: http://folio.legis.state.wi.us/cgi-bin/om_isapi.dll?clientID=7820877&infobase=stats.nfo&j1=703.01&jump=703.01&record={5257}

• Answer:

  Good morning, Rhinestone, To summarize briefly before explaining in conjunction with the relevant statutes: The association may indeed foreclose a lien on the unit for which the fees have not been paid. The statutes do not specifically allow you to restrict the use of common elements until fees are paid (but does state that the owner may not waive his right to use of these elements in lieu of payment), but your association's by-laws may provide for this. (The by-laws are a legal contract, and all provisions may be enforced.) The by-laws may prevent an owner from voting on any board action if he is in arrears and a lien has been filed. There is no minimum amount the unit owner must be in arrears before action may be taken. “Doing Business in Wisconsin” offers a very brief summary of actions you may take: “Lien Priority. Unit owners may be assessed for funds for the payment of common expenses and for the creation of reserves for the payment of future common expenses in proportion to their percentage interest in the common elements, or as otherwise provided in the condominium declaration. All assessments, until paid, constitute a lien on the condominium units on which they are assessed, if a statement of lien is filed within two (2) years after the date the assessment becomes due. Any grantee of a condominium unit is entitled to a statement from the condominium association or executive board, setting forth the amount of unpaid assessments against the grantor. Condominium liens have priority over first mortgages which are not recorded prior to the making of the assessment, and over all second mortgages, and may be enforced through foreclosure. Section 703.16.” CHAPTER 6 WISCONSIN REAL ESTATE LAW: 7. CONDOMINIUMS/TIMESHARES http://www.mbf-law.com/pubs/guiderefs/guide/chapter6.cfm The Wisconsin statutes you seek begin at 703.15 and continue from there. They're easiest to read here: Wisconsin Statutes: CHAPTER 703 CONDOMINIUMS http://www.legis.state.wi.us/statutes/Stat0703.pdf It is perhaps best to begin with the specific powers granted by the state to condominium associations. These may be found under 703.15(3): "POWERS OF THE ASSOCIATION. (a) Powers. An association has the power to: 1. Adopt budgets for revenues, expenditures and reserves and levy and collect assessments for common expenses from unit owners; 2. Employ and dismiss employees and agents; 3. Sue on behalf of all unit owners; and 4. Exercise any other power conferred by the condominium instruments or bylaws. (b) Conditional powers. Subject to any restrictions and limitations specified by the declaration, an association may: 1. Make contracts and incur liabilities. 2. Regulate and impose charges for the use of common ele-ments. 3. Cause additional improvements to be made as a part of the common elements. 4. Acquire, hold, encumber and convey any right, title or interest in or to real property. 5. Grant easements through or over the common elements. 6. Receive any income derived from payments, fees or charges for the use, rental or operation of the common elements. 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. Of particular note for your situation are (a)1, (a)4, b(1), (b)2 and (b)4. (It's important to keep your association's own rules in mind as you try to determine how to go about collecting the unpaid fees.) The portion of the statutes relevant to your question continue further down the page with 703.16: Common expenses and common surpluses. According to this section, condominium associations may assess fees for common expenses, file liens against the unit for unpaid expenses, and seek foreclosure. There doesn't appear to be a state minimum delinquency before foreclosure may be sought. Assessments and liability for assessments is covered in 703.16(2) and 703.16(3). Assessments *must* be paid by the unit owner. Owners may not waive their right to use of common areas to avoid payment of the fees, but the statutes do not address whether the association may restrict use of these common facilities until the fees are paid. This would depend on the association by-laws : "LIABILITY FOR ASSESSMENTS. A unit owner shall be liable for all assessments, or installments thereof, coming due while owning a unit. In a voluntary grant, the grantee shall be jointly and severally liable with the grantor for all unpaid assessments against the grantor for his or her share of the common expenses up to the time of the voluntary grant for which a statement of condominium lien is recorded, without prejudice to the rights of the grantee to recover from the grantor the amounts paid by the grantee for such assessments. Liability for assessments may not be avoided by waiver of the use or enjoyment of any common element or by abandonment of the unit for which the assessments are made." Before filing a lien against the unit owner, it is imperative that you ensure that he has received an accurate copy of a statement for the amount owed, the date the fees are/were due and the period for which the fees were assessed. 703.16(5) stipulates that ONLY the amount given on the statement may be claimed under a lien, and that the association must provide said statement within 10 days of the unit owner's request, or forfeit the right to file a lien on that amount. I'm going to assume that you've already provided such a statement in your attempts to collect this debt. You'll want to provide another before filing a lien, just to keep your collective backside covered. Under 703.16(4), the association may file a lien up to two years after the date the assessment became due: "(4) ASSESSMENTS CONSTITUTE LIEN. All assessments, until paid, together with interest on them and actual costs of collection, constitute a lien on the units on which they are assessed, if a statement of lien is filed within 2 years after the date the assessment becomes due. The lien is effective against a unit at the time the assessment became due regardless of when within the 2-year period it is filed. A statement of condominium lien is filed in the land records of the clerk of circuit court of the county where the unit is located, stating the description of the unit, the name of the record owner, the amount due and the period for which the assessment was due. The clerk of circuit court shall index the statement of condominium lien under the name of the record owner in the judgment and lien docket. The statement of condominium lien shall be signed and verified by an officer or agent of the association as specified in the bylaws and then may be filed. On full payment of the assessment for which the lien is claimed, the unit owner shall be entitled to a satisfaction of the lien that may be filed with the clerk of circuit court." Note that under 703.16(7), unpaid assessments may, at the option of the association, be assessed interest as well. Interest begins to accrue from the date the fees are due. In order to recover unpaid assessments (and interest and attorney's fees), associations have several options, including suit without foreclosure, foreclosure, and suit for deficiency after foreclosure. According to the statute, the association may sue for recovery without foreclosure or without waiving the lien against the unit. Additionally, associations may recover attorney's fees. Suit to foreclose the lien must be filed within 3 years from the date the lien was filed, and the unit owner must be given at least 10 days written notice of intent to foreclose, delivered by certified mail, return receipt requested. These options are covered under 703.16(8): "ENFORCEMENT OF LIEN. A lien may be enforced and foreclosed by an association or any other person specified in the bylaws, in the same manner, and subject to the same requirements, as a foreclosure of mortgages on real property in this state. An association may recover costs and actual attorney fees. An association may, unless prohibited by the declaration, bid on the unit at foreclosure sale and acquire, hold, lease, mortgage and convey the unit. Suit to recover a money judgment for unpaid common expenses shall be maintainable without foreclosing or waiving the lien securing the same. 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 following the recording of the statement of condominium lien. No action may be brought to foreclose the lien except after 10 days' prior written notice to the unit owner given by registered mail, return receipt requested, to the address of the unit owner shown on the books of the association." The statutes also provide a form for the statement of lien in 703.16(9): "(9) FORM OF STATEMENT OF CONDOMINIUM LIEN. A statement of condominium lien is sufficient for the purposes of this chapter if it contains the following information and is substantially in the following form: Statement of Condominium Lien This is to certify that .................... owner(s) of unit No. ..... in .................... Condominium (is) (are) indebted to the association in the amount of $.......... as of .........., .... (year) for (his) (her) (its) (their) proportionate share of common expenses of the Condominium for the period from (date) to (date), plus interest thereon at the rate of ....%, costs of collection, and actual attorney fees. Association 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 Condominium Lien is true and correct to the best of my knowledge, information, and belief. ............................... Officer (or agent)" You may be entitled to take other actions, depending on the provisions of your association's by-laws. Check these thoroughly for your options, and be certain to check with your attorney for specific procedures you may need to follow to ensure that any necessary paperwork is properly executed and filed. I hope this answers your question! If you require further assistance, please just ask for clarification. I’ll be happy to help. Recalcitrant tenants are never pleasant for anyone. I hope the situation is resolved quickly, with a minimum of fuss and inconvenience for you. --Missy Search terms: [ wisconsin statutes condominiums ], [condominium foreclosure wisconsin ]