Chapter 779

779.87(2)(a) (a) Surety. If a seller maintains an escrow account, all proceeds received under any regulated prepaid maintenance agreement shall be deposited in the escrow account for the benefit of any customer who suffers a loss of prepayments for maintenance due to the bankruptcy or cessation of business by the seller.

779.87(2)(b) (b) Not to be commingled. The seller shall not commingle the proceeds received under a regulated prepaid maintenance agreement with any other funds and any other funds which are commingled become a part of and shall be deposited in the escrow account. The seller may aggregate the proceeds received under several prepaid maintenance agreements in one escrow account.

779.87(2)(c) (c) Interest. The seller may withdraw and retain for his or her own use any interest payments received on the escrow account.

779.87(2)(d) (d) Not to be used prior to discharge. The seller may not withdraw or use the proceeds received under a regulated prepaid maintenance agreement which are deposited in an escrow account prior to the discharge of the prepaid maintenance lien under s. 779.91.

779.87(2)(e) (e) Not subject to attachment. Until all prepaid maintenance liens are discharged, the escrow account is not subject to garnishment, execution, levy, attachment or foreclosure except as provided under s. 779.92.

779.87(3) (3) Bond.

779.87(3)(a) (a) Surety. If a seller maintains a bond, it shall be issued by a surety company licensed to do business in this state.

779.87(3)(b) (b) Amount; filed. The principal sum of the bond shall be $25,000 at all times. A copy of the bond shall be filed with the department of financial institutions.

779.87(3)(c) (c) For benefit of customer. The bond shall be in favor of the state for the benefit of any customer who suffers a loss of prepayments for maintenance due to the bankruptcy or cessation of business by the seller. Any customer claiming against the bond may maintain an action against the seller and the surety.

779.87(3)(d) (d) Surety’s obligation. If the seller fails to perform maintenance under a regulated prepaid maintenance agreement, the surety shall either perform or procure the performance of that maintenance or pay the customer the amount of the prepayment made under the agreement.

779.87(3)(e) (e) No lien. If a seller maintains a bond under this subsection, a customer does not have a prepaid maintenance lien under s. 779.88.

779.87 History History: 1977 c. 296; 1979 c. 32 ss. 57, 92 (9); Stats. 1979 s. 779.87; 1995 a. 27.

779.88 779.88 Prepaid maintenance lien. Except as provided under s. 779.87 (3), a customer who makes a prepayment under a regulated prepaid maintenance agreement has a lien designated as a prepaid maintenance lien in the amount of the prepayment on all the proceeds contained in the escrow account, including all after acquired proceeds. This lien is preferred to all other liens, security interests and claims on such proceeds except other prepaid maintenance liens which attached at an earlier time.

779.88 History History: 1977 c. 296; 1979 c. 32 ss. 57, 92 (9); Stats. 1979 s. 779.88.

779.89 779.89 Attachment and preservation. All prepaid maintenance liens attach at the time of the first prepayment and shall be preserved from the time the lien attaches. It is not necessary to file or record any notice of the lien in order to preserve or perfect the lien although a customer may file this lien in the manner prescribed for perfecting liens under subch. III of ch. 409 regarding debtors who are located in this state.

779.89 History History: 1977 c. 296; 1979 c. 32 s. 57; Stats. 1979 s. 779.89; 2001 a. 10.

779.90 779.90 Notice of existence of lien. A person is deemed to have notice of a prepaid maintenance lien if:

779.90(1) (1) That person has actual knowledge or reason to know that the lien exists on the seller’s property;

779.90(2) (2) That person has reason to know that the seller regularly demands or accepts prepayments for maintenance;

779.90(3) (3) The seller engages in a type of business that generally requests or demands prepayment for maintenance; or

779.90(4) (4) The lien was filed as permitted in s. 779.89.

779.90 History History: 1977 c. 296; 1979 c. 32 ss. 57, 92 (9); Stats. 1979 s. 779.90.

779.91 779.91 Discharge of lien.

779.91(1) (1) A prepaid maintenance lien is discharged by:

779.91(1)(a) (a) Returning the amount of the prepayment to the customer who made the prepayment;

779.91(1)(b) (b) The expiration of the time period for the performance of all contract or other obligations secured by the prepayment; or

779.91(1)(c) (c) Lapse of the right to maintain an action.

779.91(2) (2) Upon discharge of a prepaid maintenance lien, any customer who filed the lien as permitted in s. 779.89 is subject to the requirements of s. 409.513.

779.91 History History: 1977 c. 296; 1979 c. 32 ss. 57, 92 (9); Stats. 1979 s. 779.91; 2001 a. 10.

779.92 779.92 Enforceability of lien. A prepaid maintenance lien is enforceable from the time it attaches until it is discharged. Any enforcement and foreclosure of a prepaid maintenance lien shall be in one civil action and shall be against the proceeds of the escrow account.

779.92 History History: 1977 c. 296; 1979 c. 32 s. 57; Stats. 1979 s. 779.92.

779.93 779.93 Duties of the department of agriculture, trade and consumer protection.

779.93(1) (1) The department of agriculture, trade and consumer protection shall investigate violations of this subchapter and attempts to circumvent this subchapter. The department of agriculture, trade and consumer protection may subpoena persons and records to facilitate its investigations, and may enforce compliance with such subpoenas as provided in s. 885.12.

779.93(2) (2) The department of agriculture, trade and consumer protection may in behalf of the state or in behalf of any person who holds a prepaid maintenance lien:

779.93(2)(a) (a) Bring an action in any court of competent jurisdiction to enforce and foreclose a prepaid maintenance lien under s. 779.92.

779.93(2)(b) (b) Bring an action for temporary or permanent injunctive or other relief in any court of competent jurisdiction for any violation of this chapter or attempt to circumvent this chapter. The court may in its discretion, prior to the entry of final judgment, award restitution to any customer suffering loss because of violations of this subchapter if proof of that loss is submitted to the satisfaction of the court.

779.93(2)(c) (c) Bring an action in any court of competent jurisdiction for recovery of civil forfeitures against any seller who violates this subchapter.

779.93 History History: 1977 c. 296; 1979 c. 32 ss. 57, 92 (9); Stats. 1979 s. 779.93; 1995 a. 27.

779.94 779.94 Penalties.

779.94(1) (1) Generally. A person who violates this subchapter shall forfeit not less than $100 nor more than $10,000 for each violation.

779.94(2) (2) Misuse of escrow funds. The use of the proceeds in an escrow account by a seller for any purpose prior to the discharge of the prepaid maintenance lien is theft by the seller and is punishable under s. 943.20. If the seller is a corporation, such misuse is also deemed theft by any officer, director or agent of the corporation responsible for the misappropriation. Any of the misappropriated proceeds which have been received as salary, dividend, loan repayment, capital distribution or otherwise by any shareholder of the corporation not responsible for the misappropriation is a civil liability of the shareholder and may be recovered and restored to the escrow account by action brought by any interested party.

779.94 History History: 1977 c. 296; 1979 c. 32 s. 57; Stats. 1979 s. 779.94.

subch. XI of ch. 779 SUBCHAPTER XI

FEDERAL LIEN REGISTRATION

779.97 779.97 Uniform federal lien registration act.

779.97(1) (1) Scope. This section applies only to:

779.97(1)(a) (a) Federal tax liens; and

779.97(1)(b) (b) Other federal liens, if any act of congress or any regulation adopted under an act of congress requires or permits notices of such liens to be filed in the same manner as notices of federal tax liens.

779.97(2) (2) Place of filing.

779.97(2)(a) (a) Notices of liens, certificates and other notices affecting federal tax liens or other federal liens shall be filed under this section.

779.97(2)(b) (b) Notices of liens upon real property for obligations payable to the United States, and certificates and notices affecting the liens shall be filed in the office of the register of deeds of the county in which real property subject to the liens is situated.

779.97(2)(c) (c) Notices of liens upon personal property, whether tangible or intangible, for obligations payable to the United States and certificates and notices affecting the liens shall be filed as follows:

779.97(2)(c)1. 1. If the person against whose interest the lien applies is a partnership or a corporation, as defined in 26 USC 7701 (a) (2) and (3), whose principal executive office is in this state, with the department of financial institutions.

779.97(2)(c)2. 2. If the person against whose interest the lien applies is a trust not covered under subd. 1., with the department of financial institutions.

779.97(2)(c)3. 3. If the person against whose interest the lien applies is the estate of a decedent, with the department of financial institutions.

779.97(2)(c)4. 4. In all other cases in the office of the register of deeds of the county where the person against whose interest the lien applies resides at the time of filing of the notice of lien.

779.97(3) (3) Execution of notices and certificates. Certification of notices of liens, certificates or other notices affecting federal liens by the secretary of the U.S. treasury, by the secretary’s designee or by any other official or entity of the United States responsible for filing or certifying notice of any other lien entitles them to be filed and no other attestation, certification or acknowledgment is necessary.

779.97(4) (4) Duties of filing officer.

779.97(4)(a) (a) If a notice of federal tax lien or a notice of revocation of a certificate of release is presented to the filing officer who is:

779.97(4)(a)1. 1. With the department of financial institutions, the filing officer shall cause the notice to be dealt with in accordance with s. 409.519 as if the notice were a financing statement within the meaning of chs. 401 to 411; or

779.97(4)(a)2. 2. Any other officer described in sub. (2), the officer shall make the endorsements required under s. 59.43 (1c) (e) and (f) and forthwith file or record the notice and enter it in the index under s. 59.43 (9). Notices under this subdivision are subject to s. 59.43 (4) (a).

779.97(4)(b) (b)

779.97(4)(b)1. 1. If a refiling of a notice of lien is presented to the department of financial institutions for filing, the filing officer shall cause the refiled notice of federal lien to be dealt with in accordance with s. 409.519 as if the refiling were a continuation statement within the meaning of chs. 401 to 411.

779.97(4)(b)2. 2. If a certificate of release is presented to the department of financial institutions for filing, the filing officer shall cause the certificate to be dealt with in accordance with s. 409.513 as if the certificate were a termination statement within the meaning of chs. 401 to 411, and the filing officer may remove the notice of federal lien and any related refiling of a notice of lien, certificate of nonattachment, discharge, or subordination from the files at any time after receipt of the certificate of release, but the department of financial institutions shall keep the certificate of release or a microfilm or other photographic record or optical disc or electronic record of the certificate of release in a file, separate from those containing currently effective notices of liens, for a period of 30 years after the date of filing of the certificate of release.

779.97(4)(b)3. 3. If a certificate of discharge is presented to the department of financial institutions for filing, the filing officer shall cause the certificate to be dealt with as if the certificate were an amendment that deletes collateral within the meaning of chs. 401 to 411.

779.97(4)(b)4. 4. If a certificate of nonattachment or subordination of any lien is presented to the department of financial institutions for filing, the filing officer shall cause the certificate to be dealt with as if the certificate were an amendment that deletes collateral within the meaning of chs. 401 to 411.

779.97(4)(c) (c)

779.97(4)(c)1. 1. If a refiled notice of federal lien or a certificate of nonattachment, discharge or subordination is presented for filing to any other filing officer specified in sub. (2), the officer shall permanently attach the refiled notice or the certificate to the original notice of lien and shall enter the refiled notice or certificate with the date of filing in any alphabetical federal lien index on the line where the original notice of lien is entered.

779.97(4)(c)2. 2. Except as otherwise provided in this subdivision, if a certificate of release or other document associated with a recorded notice of federal tax lien is presented for filing or recording with any other filing officer specified in sub. (2), the officer shall treat the certificate or document in the same manner as a notice filed or recorded under par. (a) 2. The officer shall also reference the certificate or document to the recorded notice of federal lien by document number in the index maintained under s. 59.43 (9).

779.97(4)(e) (e) Upon request of any person, the filing officer shall issue a certified copy of any notice of federal lien or any related refiling of a notice of lien, certificate of nonattachment, discharge or subordination filed on or after February 1, 1968. The officer may charge the fee specified under s. 59.43 (2) (b) for the copy. If the filing officer is the department of financial institutions, the filing officer shall include the information concerning the notice of federal lien, or notice or certificate affecting a federal lien, in the information communicated or otherwise made available in response to a request under s. 409.523 (3), and the fee charged shall be that charged in accordance with s. 409.525.

779.97(5) (5) Fees.

779.97(5)(a) (a) The fee for recording or filing and indexing each notice of lien or certificate or notice affecting the lien is the fee specified under s. 59.43 (2) (ag).

779.97(5)(b) (b) The officer may bill the district directors of internal revenue on a monthly basis for fees for documents recorded or filed by them.

779.97(6) (6) Uniformity of application and construction. This section shall be applied and construed to effectuate its general purpose to make uniform the law with respect to the subject of this section among those states which enact it.

779.97(7) (7) Short title. This section may be cited as the Uniform Federal Lien Registration Act.

779.97(8) (8) Tax liens and notices filed on or before February 1, 1968. Filing officers with whom notices of federal tax liens, certificates and notices affecting such liens have been filed on or before February 1, 1968 shall, after that date, continue to maintain a file labeled “federal tax lien notices filed prior to ....” containing notices and certificates filed in numerical order of receipt. If a notice was filed on or before February 1, 1968 any certificate or notice affecting the lien shall be filed in the same office.

779.97 History History: 1977 c. 29, 418; 1979 c. 89, 177, 223, 312, 355; Stats. 1979 s. 779.97; 1991 a. 39, 148, 304, 315; 1993 a. 70, 172, 214; 1995 a. 27, 201, 417; 2001 a. 10; 2003 a. 206; 2015 a. 48, 196.

subch. XII of ch. 779 SUBCHAPTER XII

LIENHOLDER; ACQUISITION OF PRIOR LIEN

779.98 779.98 Payment of prior real estate liens.

779.98(1) (1) Any person having a lien on real estate against which there is a prior lien may pay any or all of the items in sub. (2). The amounts paid shall be added to the payor’s lien, with interest from the date of payment at the same rate as when paid, or if no rate was provided for prior to such payment, at the legal rate of interest. Interest on amounts paid for items described in sub. (2) (d) shall be computed at the rate under s. 74.77. All sums so paid shall be collected as a part of and in the same manner as is the lien by virtue of which said payments are made and be entitled to the same priority.

779.98(2) (2) The items, any or all of which may be paid under sub. (1), are as follows:

779.98(2)(a) (a) Any past due or defaulted principal or interest of a prior lien.

779.98(2)(b) (b) Any interest or amortized installment due under a prior lien.

779.98(2)(c) (c) Premiums and assessment on insurance policies necessary to protect the security of the lienor making such payments or of any prior lien and authorized under the terms of either such lien.

779.98(2)(d) (d) Taxes or special assessments due and unpaid on any realty covered by the lien with interest, penalties and costs.

779.98(2)(e) (e) Any portion of a prior lien.

779.98(2)(f) (f) Any charge for improvements or any other item authorized by statutes or by the terms of any prior lien.

779.98(3) (3) Payments made under sub. (1) shall be proved by the affidavit of the person making the payment or the person’s agent or attorney, giving the items paid, the dates when paid and the description of the real estate on which the lien is claimed, shall have priority over any liens which were subsequent to the lien of the person making the payment at the date of such payments, and shall also have priority over any lien filed after such affidavit is recorded with the register of deeds of the county where the land is located. Said payments shall also be prior to any liens filed before the recording of such affidavit if such filing was made with knowledge of such payments.