This is the preview version of the Wisconsin State Legislature site.
Please see http://docs.legis.wisconsin.gov for the production version.
LRB-1843/1
KRP:emw
2021 - 2022 LEGISLATURE
September 15, 2021 - Introduced by Senators Cowles, Darling and Ringhand,
cosponsored by Representatives Kitchens, Knodl and Callahan. Referred to
Committee on Housing, Commerce and Trade.
SB561,1,10 1An Act to renumber and amend 703.15 (2) (a), 703.20 (1) and 703.20 (2); to
2amend
703.02 (1m), 703.15 (2) (a) (title), 703.20 (1) (title), 703.20 (3), 703.205
3(1) (a) and 703.33 (title); to repeal and recreate 703.20 (title); and to create
4703.15 (2) (a) 2., 703.15 (2) (a) 3., 703.20 (1) (a), 703.20 (1) (b) 2. to 9., 703.20 (1g),
5703.20 (1r), 703.20 (4), 703.20 (5) and 703.202 of the statutes; relating to: a
6condominium association's obligation to maintain records and allow a unit
7owner to inspect and copy those records; financial audits of condominium
8association records; access by condominium unit owners to records of an entity
9controlled by an association; and organizing a condominium association as a
10for-profit corporation.
Analysis by the Legislative Reference Bureau
This bill 1) makes various changes to a condominium association's obligation
to maintain records and allow a unit owner to inspect and copy those records; 2) gives
condominium unit owners a right to request an audit of the association's financial
records; 3) provides that a unit owner may inspect and copy records of an entity
controlled by the association to the same extent that the association may inspect and

copy those records; and 4) provides that, after the effective date of the bill, an
association may not organize or reorganize as a for-profit corporation.
Maintenance and inspection of association records
The bill provides that a condominium association must maintain all of the
following records (association records):
1. Minutes of meetings of the association and of the board of directors of the
association.
2. Records of actions taken without a meeting by the condominium unit owners
on behalf of the association or by the board of directors of the association.
3. Certain disclosure documents that the association is required under current
law to furnish to a seller of a condominium unit for the seller to provide to a
prospective purchaser of the unit.
4. Detailed, accurate records of the receipts and expenditures affecting the
common elements of the condominium.
5. Annual budgets prepared by the association.
6. Financial statements.
7. Bank statements and account statements, including statements for reserve
accounts.
8. Income and expense statements.
9. Insurance policies.
10. The most recent audit of the association's financial records, if any.
11. Contracts entered into by the association and any bids for those contracts.
12. Invoices and expense records.
The bill also provides that a unit owner may, with certain exceptions, inspect
and copy any association records created within the past six years. The association
may impose a reasonable charge for copies of any association records, including the
costs of labor and materials used to provide the copies, but may not charge an amount
that exceeds the estimated cost of production or reproduction of the copies or $50,
whichever is less.
Under the bill, an association for a condominium with 100 or more units (large
association) must maintain an Internet site on which the large association posts
current copies of association records that are subject to inspection and copying by
unit owners. The Internet site must include a protected electronic location that is
inaccessible to the general public and accessible only to unit owners and employees
of the large association. The bill provides that, upon a unit owner's written request,
the large association must provide the unit owner with a username and password
and access to the protected sections of the large association's Internet site.
Financial audits of association records
The bill provides that, beginning one year after the expiration of declarant
control of a condominium association, a majority of condominium unit owners may
request that the association arrange for an independent audit of the association's
financial records at the association's expense. Under the bill, if unit owners request
an audit within 36 months after the completion of a previous audit, the requesting
unit owners must pay the cost of the audit. Current law provides a similar
mechanism for unit owners to request an audit of an association's financial records

during the period of declarant control and for one year thereafter. Under the current
law provision, the lesser of three unit owners or the owners of 10 percent of the units
may request an audit.
Access to records of entity controlled by association
Finally, the bill provides that, if a condominium association controls an entity,
a condominium unit owner may inspect and copy records of the entity to the same
extent that the association may inspect and copy those records. Under the bill,
“control” means to directly or indirectly 1) own more than 50 percent of the ownership
interest of the entity; 2) have a controlling interest in the entity; or 3) have the power
to direct or cause the direction of the management or policies of the entity.
Organization of association entity
The bill provides that, after the effective date of the bill, a condominium
association may not organize or reorganize as a for-profit corporation. Current law
provides that the declarant of a condominium must establish an association to
govern the condominium and that the association must be organized as a profit or
nonprofit corporation or as an unincorporated association.
The people of the state of Wisconsin, represented in senate and assembly, do
enact as follows:
SB561,1 1Section 1. 703.02 (1m) of the statutes is amended to read:
SB561,3,52 703.02 (1m) “Association" means all of a condominium's unit owners acting as
3a group, either through a nonstock, nonprofit corporation or an unincorporated
4association
an entity that is organized as provided under s. 703.15 (2) (a), in
5accordance with its the condominium's bylaws and declaration.
SB561,2 6Section 2. 703.15 (2) (a) (title) of the statutes is amended to read:
SB561,3,77 703.15 (2) (a) (title) Establishment ; organization.
SB561,3 8Section 3. 703.15 (2) (a) of the statutes is renumbered 703.15 (2) (a) 1. and
9amended to read:
SB561,4,310 703.15 (2) (a) 1. Every declarant shall establish an association to govern the
11condominium not later than the date of the first conveyance of a unit to a purchaser.
12The association shall be organized Except as provided in subd. 2., the declarant may
13organize the association only
as a profit or for-profit corporation; nonstock, nonprofit

1corporation; or as an unincorporated association. After it the association is
2organized, the membership of the association shall at all times consist exclusively
3of all of the unit owners.
SB561,4 4Section 4. 703.15 (2) (a) 2. of the statutes is created to read:
SB561,4,65 703.15 (2) (a) 2. Beginning on the effective date of this subdivision .... [LRB
6inserts date], a declarant may not organize an association as a for-profit corporation.
SB561,5 7Section 5. 703.15 (2) (a) 3. of the statutes is created to read:
SB561,4,98 703.15 (2) (a) 3. An association that exists on the effective date of this
9subdivision .... [LRB inserts date], may not reorganize as a for-profit corporation.
SB561,6 10Section 6. 703.20 (title) of the statutes is repealed and recreated to read:
SB561,4,12 11703.20 (title) Association records; inspection by unit owners; financial
12audits.
SB561,7 13Section 7. 703.20 (1) (title) of the statutes is amended to read:
SB561,4,1414 703.20 (1) (title) Record keeping ; availability for examination.
SB561,8 15Section 8 . 703.20 (1) of the statutes is renumbered 703.20 (1) (b) (intro.) and
16amended to read:
SB561,4,1917 703.20 (1) (b) Financial records. (intro.) An association shall keep detailed,
18maintain appropriate financial records for at least 6 years, including all of the
19following:
SB561,4,24 201. Detailed, accurate records using standard bookkeeping procedures of the
21receipts and expenditures affecting the common elements, specifying and itemizing
22the maintenance and repair expenses of the common elements and any other
23expenses incurred. The records and the vouchers authorizing the payments shall be
24available for examination by the unit owners at convenient hours.
SB561,9 25Section 9. 703.20 (1) (a) of the statutes is created to read:
Loading...
Loading...