Wisconsin recently passed legislation which affects the duties of a Homeowner’s Association (HOA). The new HOA law, 2021 Wisconsin Act 199, created Section 182.01(7) and 710.18 of the Wisconsin Statutes (the “Act”).
If you are a member, officer or director of an HOA, or considering purchasing a property with an HOA, you should be aware of how this new law affects you.
Of immediate note, under the new law, HOAs must annually file public notices with the Department of Financial Institutions (DFI) containing general information and contact information. This information will be searchable on the DFI website and will be helpful to find HOA contact or other general information. Initial public notices for HOAs are due January 13, 2023.
General Recommendations – Immediately Review your HOA Documents
It is prudent that any HOA should immediately review its recorded Covenants and Restrictions, Articles of Organization, and Bylaws. Many of the statutory mandates of the Act are subject to those HOA provisions.
After such a review, an HOA will consider whether it will allow the Act provisions apply or override the Act provisions by HOA documentation
A professionally managed HOA should be conversant with the Act and be in compliance. However, with the many member-managed HOAs, their members, board and offices will need to address the Act’s impact on their documentation, rules and regulations.
Public Access to HOA Information
The State of Wisconsin will establish a statewide searchable filing system for notices required to be filed by HOAs.
HOAs will be required to file a notice with the DFI. Specifically, this notice is required for all existing or new HOAs and to be filed under DFI prescribed forms.
The notice required to be filed must contain all of the following:
- The name and mailing address of the HOA, and if applicable, the name and mailing address of any management company for the HOA.
- The name of the county and city, village, or town in which the residential planned community is located.
- The name, mailing address, and electronic mail address or daytime telephone number for an individual who is authorized to respond on behalf of the HOA to requests for copies of the covenants and documentation related to the residential planned community.
- If the HOA posts information related to the residential planning community on an Internet site, the address of the Internet site.
Timing of Filing of Notice
The notice must be filed within the following timelines:
Existing HOAs: no later than 30 days after January 1, 2023
New HOAs: no later than 30 days after the HOA is created.
Penalty for Non-Compliance
If a Wisconsin HOA is not in compliance with Notice filing, it may not do any of the following until the HOA files the required Notice:
- Charge a late fee for or other fine for any unpaid assessed owe by any residential owner
- Charge a fee in connection with any transfer of ownership of a residential lot that the HOA would otherwise be authorized to charge under the covenants and restrictions.
Wisconsin HOA Covenants and Restrictions
If an HOA is created to manage or regulate or enforce covenants and restrictions for a residential planned community, the covenants and restrictions are required to be recorded with the Register of Deeds in every county in which the residential planned community is located.
Note: Customarily, the developer of the residential planned community will organize the HOA and will record the covenants. An owner would be able to confirm this fact by reference to the title insurance policy received at the time of purchase.
Notice of HOA Meetings to Property Owners
Under Wisconsin law, HOAs must provide notice of HOA meetings at least 48 hours before the meeting. This notice must:
- Be in writing
- Be sent to last known electronic address of an owner
- Be sent by 1st class mail to last known post office address
Note: If the Covenants and Restrictions or the HOA By-Laws provide otherwise, then the Covenants and Restriction or the HOA By-Laws control.
Request for Documents
Unless otherwise provided for in the Covenants and Restrictions, if the owner requests copy of covenants and restrictions, HOA may not charge more than the lesser of: (i) the actual cost of providing or (ii) $50.
Suspension of Rights
An HOA must provide written notice to a residential lot owner prior to suspension of any of the owner’s rights for failure to timely pay assessments, unless suspension without notice is authorized by the community’s covenants and restrictions.
Under the new law, if a lot owner provides a request for a payoff statement, an HOA is required to provide without a fee, a payoff statement for a date not more than 30 days after the date of the request, within 10 business days after the request is made.
For other payoff statement requests, procedures and charges are enumerated.
We frequently represent individuals and landowners in their legal matters, focusing primarily on providing business and real estate legal services in Washington, Ozaukee, Dodge, and Fond du Lac County and the communities of West Bend, Jackson, Slinger, Hartford, Kewaskum and other surrounding communities.
Originally published: January 6, 2023.
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Disclaimer: The information contained in this post is for general informational purposes only and is not legal advice. Due to the rapidly changing nature of law, Schloemer Law Firm makes no warranty or guarantee concerning the accuracy or completeness of this content. You should consult with an attorney to review the current status of the law and how it applies to your unique circumstances before deciding to take—or refrain from taking—any action. If you need legal guidance, please contact us at 262-334-3471 or [email protected]