Chapter 707

707.31(3)(c) (c) If the transferor retains any special developer right but transfers other special developer rights to a successor who is not an affiliate of the developer, the transferor shall be liable for any obligations or liabilities imposed on a developer either by this chapter or by the time-share instrument relating to the retained special developer rights and arising after the transfer.

707.31(3)(d) (d) A transferor is not liable for any act or omission or any breach of a contractual or warranty obligation arising from the exercise of a special developer right by a successor developer who is not an affiliate of the transferor.

707.31(4) (4) Rights where foreclosure or tax sale.

707.31(4)(a) (a)

707.31(4)(a)1. 1. Unless otherwise provided in a mortgage instrument or deed of trust, in case of foreclosure of a mortgage, tax sale, judicial sale, sale by a trustee under a deed of trust, or sale under bankruptcy or receivership proceedings, of any time shares owned by a developer in the time-share property, a person acquiring title to all of the time shares being foreclosed or sold shall succeed, depending upon his or her request, to one of the following:

707.31(4)(a)1.a. a. All special developer rights.

707.31(4)(a)1.b. b. Any rights reserved in the time-share instrument under s. 707.25 allowing the developer to maintain sales offices, management offices, models and signs.

707.31(4)(a)2. 2. The judgment or instrument conveying title shall provide for transfer of only those special developer rights requested under subd. 1.

707.31(4)(b) (b) Upon foreclosure, tax sale, judicial sale, sale by a trustee under a deed of trust, or sale under bankruptcy or receivership proceedings of all time shares in a time-share property owned by a developer, all of the following shall occur:

707.31(4)(b)1. 1. The right to appoint, control or serve as the managing entity shall terminate unless the judgment or instrument conveying title provides for transfer of all special developer rights to a successor developer.

707.31(4)(b)2. 2. The developer shall cease to have any other special developer rights.

707.31(5) (5) Rights, liabilities and duties of successor.

707.31(5)(a) (a) A successor to any special developer right who is an affiliate of a developer is subject to all obligations and liabilities imposed on the transferor by this chapter or the time-share instrument.

707.31(5)(b) (b)

707.31(5)(b)1. 1. A successor to any special developer right, other than a successor described in par. (c) or (d), who is not an affiliate of a developer, is subject to any of the following obligations and liabilities imposed by this chapter or the time-share instrument:

707.31(5)(b)1.a. a. On a developer, which relate to a developer’s exercise or nonexercise of special developer rights.

707.31(5)(b)1.b. b. On the successor’s transferor, except as provided in subd. 2.

707.31(5)(b)2. 2. A successor described in subd. 1. is not subject to any of the following obligations and liabilities of the successor’s transferor:

707.31(5)(b)2.a. a. Liability for misrepresentations by a previous developer.

707.31(5)(b)2.b. b. Warranty obligations on improvements made by any previous developer or made before the property became a time-share property.

707.31(5)(b)2.c. c. Breach of any fiduciary obligation by any previous developer or any developer’s appointees.

707.31(5)(b)2.d. d. Any liability or obligation imposed on the transferor as a result of the transferor’s acts or omissions after the transfer.

707.31(5)(c) (c) A successor to only the right to maintain sales offices, management offices, models and signs under s. 707.25, if the successor is not an affiliate of a developer, may not exercise any other special developer right and is not subject to any liability or obligation as a developer, except the obligation to provide a time-share disclosure statement and any liability arising as a result of providing the time-share disclosure statement.

707.31(5)(d) (d) If a successor to all special developer rights held by a transferor is not an affiliate of the developer and has succeeded to those rights by deed in lieu of foreclosure, judgment or an instrument conveying title to the time shares under sub. (4), the successor may declare in a recorded instrument the intention to hold those rights solely for transfer to another person. Thereafter, until transferring all special developer rights, that successor may not exercise any of those rights other than any right held by the transferor to appoint, control or serve as the managing entity, and any attempted exercise of those rights is void. During any period in which a successor may not exercise special developer rights under this paragraph, the successor is not subject to any liability or obligation as a developer other than liability for his or her acts and omissions in appointing, controlling or serving as the managing entity.

707.31(6) (6) Preservation of purchaser’s claims and defenses.

707.31(6)(a) (a) Any claim or defense based on any written documentation which a purchaser may raise against the person who sold the time share to the purchaser is preserved against any assignee or successor to any of the following:

707.31(6)(a)1. 1. The contract of sale.

707.31(6)(a)2. 2. Any credit contract in connection with the sale of the time share which is executed by the purchaser and which may be retained by or assigned to the developer, an affiliate of the developer or a creditor having a contractual relationship with the developer.

707.31(6)(b) (b) Any recovery by a purchaser under par. (a) may not exceed the amounts paid by the purchaser under the contract.

707.31(6)(c) (c) Sellers and creditors shall include the following language in promissory notes executed in connection with the sale of time shares:

NOTICE

ANY HOLDER OF THIS CREDIT CONTRACT IS SUBJECT TO ALL CLAIMS AND DEFENSES WHICH THE DEBTOR COULD ASSERT AGAINST THE SELLER OF SERVICES OR PROPERTY OBTAINED PURSUANT TO THE CREDIT CONTRACT OR WITH THE PROCEEDS OF THE CREDIT CONTRACT. RECOVERY UNDER THE CREDIT CONTRACT BY THE DEBTOR MAY NOT EXCEED AMOUNTS PAID BY THE DEBTOR UNDER THE CREDIT CONTRACT.

707.31(7) (7) Extent of obligations. Nothing in this section subjects any successor to a special developer right to any claims against or other obligations of a transferor developer, other than claims and obligations arising under this chapter or any written documentation.

707.31 History History: 1987 a. 399.

707.32 707.32 Termination of contracts and leases of developer.

707.32(1) (1) Definition. In this section, “time-share property” does not include a campground.

707.32(1m) (1m) Authority of the association. The following contracts or leases relating to the time-share property which are entered into before the developer ceases under s. 707.30 (4) (c) to appoint a majority of the board of directors may be terminated without penalty by the association at any time after the developer ceases to appoint a majority of the board of directors, upon not less than 90 days’ notice to the other party to the contract or lease:

707.32(1m)(a) (a) Any management contract, employment contract, or lease of recreational or parking areas or facilities.

707.32(1m)(b) (b) Any contract or lease between the managing entity and a developer or an affiliate of a developer.

707.32(1m)(c) (c) Any contract or lease that is not bona fide or was unconscionable to the time-share owners when entered into under the circumstances then prevailing.

707.32(2) (2) Applicability to leases. This section does not apply to a lease if termination of the lease would terminate the time-share property or reduce its size, unless the real estate subject to the lease was included in the time-share property for the purpose of avoiding the right to terminate a lease under this section.

707.32(3) (3) Action by time-share owner. If no association is established under s. 707.30 (2), any time-share owner, individually or on behalf of the class of time-share owners, may maintain an action under sub. (1m) to terminate a contract or lease of the developer relating to the time-share property.

707.32 History History: 1987 a. 399.

707.33 707.33 Upkeep of units.

707.33(1) (1) Responsibility of managing entity and required access.

707.33(1)(a) (a) Unless otherwise provided in the time-share instrument, the managing entity shall be responsible for maintenance, repair and replacement of the time-share units and any personal property available for use by time-share owners in conjunction with the time-share units, other than personal property separately owned by a time-share owner.

707.33(1)(b) (b) Each time-share owner shall afford access through the time-share unit reasonably necessary for the purposes described in par. (a), but the managing entity shall promptly repair any damage to the time-share unit or personal property in the time-share unit which results from the access required under this paragraph.

707.33(2) (2) Alteration of unit. Subject to the time-share instrument, a time-share owner may not change the appearance of a time-share unit without the consent of the managing entity.

707.33 History History: 1987 a. 399.

707.34 707.34 Tort and contract liability.

707.34(1) (1) Actions against developer and the association.

707.34(1)(a) (a) An action in tort alleging a wrong done by a developer or a manager selected by the developer, or an agent or employee of either, in connection with any portion of the time-share property or other property which the developer or the manager has the responsibility to maintain may not be maintained against the association or any time-share owner other than a developer.

707.34(1)(b) (b) An action in tort alleging a wrong done by an association or by an agent or employee of the association or an action arising from a contract made by or on behalf of the association may be maintained only against the association.

707.34(1)(bm) (bm) If a tort or breach of contract action against an association under par. (b) is based upon conduct which occurred during any period of developer control, the developer is subject to liability for all unreimbursed losses suffered by the association or time-share owners, including costs and reasonable attorney fees notwithstanding s. 814.04 (1). Any statute of limitations affecting the right of action of the association or time-share owners under this paragraph is tolled until the period of developer control terminates.

707.34(1)(c) (c) No time-share owner may be precluded from bringing an action under this subsection because the person is a time-share owner or a member, officer or director of the association.

707.34(2) (2) Actions against time-share owner.

707.34(2)(a) (a) Except as provided in sub. (3), a time-share owner is personally liable for his or her acts and omissions.

707.34(2)(b) (b) Each time-share owner shall be liable to the association for any damage, except ordinary wear and tear, done to the time-share property by the time-share owner or a person using the time-share property under the rights of the time-share owner.

707.34(2)(c) (c) An action may not be maintained against a time-share owner merely because he or she owns a time share.

707.34(3) (3) Liability of volunteer directors and officers. A director or officer of an association who is not paid for services to the association is not personally liable for damages resulting solely because of his or her membership on the board or participation in association activities.

707.34(4) (4) Judgment lien. A judgment for money against an association shall be a lien against all of the time shares if properly entered in the judgment and lien docket under ch. 806, but, notwithstanding s. 806.15 (1), the judgment shall not constitute a lien against any other property of a time-share owner.

707.34 History History: 1987 a. 399; 1995 a. 224.

707.35 707.35 Insurance; repair or replacement of damaged property.

707.35(1) (1) Required insurance. Beginning not later than when a developer offers a time share for sale in a time-share property in which the number of time shares exceeds 12, the managing entity shall maintain all of the following insurance, to the extent reasonably available and applicable and not otherwise unanimously agreed by the time-share owners or provided by the developer or by a person managing a project of which the time-share property is a part:

707.35(1)(a) (a) Property insurance on the time-share property and any personal property available for use by time-share owners in conjunction with the time-share property, other than personal property separately owned by a time-share owner, insuring against all risks of direct physical loss commonly insured against, for not less than full replacement value of the property insured, exclusive of items normally excluded from property insurance policies.

707.35(1)(b) (b) Liability insurance, including medical payments insurance, in an amount determined by the managing entity but not less than any amount specified in the time-share instrument, covering all occurrences commonly insured against for death, bodily injury and property damage arising out of or in connection with the use, ownership or maintenance of the time-share property and time-share units.

707.35(2) (2) Notice requirement. If the insurance under sub. (1) is not reasonably available, the managing entity shall promptly mail or hand deliver notice of that fact to all time-share owners.

707.35(2m) (2m) Inspection of policies. The managing entity shall make copies of all insurance policies carried under sub. (1) available for inspection by the time-share owners during normal business hours.

707.35(3) (3) Contents of policy. Each insurance policy carried under sub. (1) shall provide all of the following:

707.35(3)(a) (a) That each time-share owner is an insured person under the policy whether designated as an insured by being named individually or as part of a named group or otherwise, as the time-share owner’s interest may appear.

707.35(3)(b) (b) That the insurer waives its right to subrogation under the policy against any time-share owner or members of the time-share owner’s household.

707.35(3)(c) (c) That an act or omission by any time-share owner shall not void the policy or be a condition to recovery by any other person under the policy unless the time-share owner is acting within the scope of his or her authority on behalf of the association.

707.35(3)(d) (d) That the policy is primary insurance not contributing with any other insurance in the name of a time-share owner covering the same risk covered by the policy, and the other insurance in the name of a time-share owner applies only to loss in excess of the primary coverage.

707.35(4) (4) Insurance trustee.

707.35(4)(a) (a) Except as provided in par. (d), any loss covered by the property insurance required under sub. (1) (a) shall be adjusted with, and the insurance proceeds from that loss payable to, the insurance trustee designated in the time-share instrument. If a trustee has not been designated or if the designated trustee fails to serve, the managing entity shall be the insurance trustee.

707.35(4)(b) (b) Except as provided in par. (c), the insurance trustee shall hold any insurance proceeds in trust for time-share owners and lienholders as their interests may appear and be determined in accordance with s. 707.24.

707.35(4)(c) (c) Subject to sub. (7), the insurance trustee shall disburse insurance proceeds for the repair or restoration of the time-share property, and time-share owners and lienholders may not receive payment of any portion of the proceeds unless there is a surplus of proceeds after the property has been completely repaired or restored, or there is a termination under s. 707.24.

707.35(4)(d) (d) This subsection does not apply if the property insurance required under sub. (1) (a) is provided by a person managing a project of which the time-share property is a part.

707.35(5) (5) Other insurance protection.

707.35(5)(a) (a) The time-share instrument may require the managing entity to carry any other insurance and the managing entity may carry any other insurance deemed appropriate.

707.35(5)(b) (b) An insurance policy issued under sub. (1) may not prevent a time-share owner from obtaining insurance for the time-share owner’s benefit.

707.35(6) (6) Certificates; cancellation.

707.35(6)(a) (a) An insurer that has issued an insurance policy under this section shall issue certificates or memoranda of insurance to any association and, upon written request, to any time-share owner, mortgagee or beneficiary under a deed of trust.

707.35(6)(b) (b) An insurer that has issued an insurance policy under this section may terminate the policy only as provided in s. 631.36, except that notice of cancellation or nonrenewal shall be mailed to the last-known address of the managing entity and each person to whom a certificate or memorandum of insurance has been issued.

707.35(7) (7) Damaged property; repair or replacement.

707.35(7)(a) (a) Any portion of the time-share property damaged or destroyed shall be repaired or replaced promptly by the managing entity unless any of the following occur:

707.35(7)(a)1. 1. Another person repairs or replaces it.

707.35(7)(a)2. 2. There is a termination under s. 707.24.

707.35(7)(a)3. 3. Repair or replacement would be illegal under any state or local health or safety statute or ordinance, including a zoning ordinance.