Tuesday, June 19, 2018

Understanding The New Condominium Sales Law

In the next few posts, I will discuss new laws affecting residential real estate sales or residential real estate litigation.  This post addresses 2017 Wis. Act. 303.

Effective April 18, 2018, condominium associations may charge condominium unit sellers a fee of up to $50.00 for furnishing the documents that a seller must furnish to a purchaser pursuant to the WB-14 Residential Condominium Offer To PurchaseSee Wis. Stat. § 703.20(2)(a).  This provision was apparently intended to prevent condominium associations from charging sellers extortionate fees for the required documents, though I suspect that some associations that have never before charged such a fee will now do so because this law expressly authorizes such charges.

Wis. Stat. § 703.33(1) requires condominium unit sellers to furnish certain documents to purchasers not later than 15 days prior to closing.  Effective July 1, 2018, the executive summary required under § 703.33(1)(h) must include the amount of the condominium association's reserve account balance when the association maintains such an account for repairs and replacement of the common elements.  This law imposes additional obligations on condominium associations rather than on condominium unit sellers, as associations are required to furnish all of the required information to sellers upon written request.  See Wis. Stat. § 703.20(2).  That being said, this law potentially benefits purchasers and burdens sellers.  I could foresee a diligent purchaser (or his tenacious lawyer) seeking to renegotiate the purchase price or void the purchase contract altogether upon disclosure that the condominium association has insufficient funds to finance repairs or replacement of its building roofs or parking lots.

Finally, effective July 1, 2018, Wis. Stat. § 703.335 requires a condominium association to provide a written payoff statement to a condominium unit seller or his agent upon written request.  This sounds like a positive development, as purchasers of condominium units often expect reassurances that they will not be responsible for dues and assessments that should have been paid during the prior ownership.  Unfortunately, this law has no teeth.  Under § 703.335(5), the liability of a condominium association to a seller for failing to provide a payoff statement within the statutory deadline - or at all- is capped at $350.00.  A condominium unit seller could sustain damages far exceeding $350.00 if the closing of the sale of his unit is delayed or lost as a result of the association's failure to timely provide the required payoff statement.

Please contact me at rudolphkuss@stevensandkuss.com if you are looking to buy or sell a condominium unit or if you were deceived in your purchase of a condominium unit.         

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