Homeowners Associations
LEGISLATION
A homeowners’ association (HOA) is a subdivision organization that creates and enforces rules relating to properties within its control. Typically, when a property is purchased within an HOA, the property owner automatically becomes a member of the HOA and is often required to regularly pay fees. HOAs can regulate the use of property and can have a great impact on the property owner’s rights.
Therefore, a buyer must understand any obligations, limitations or fees when considering purchasing a property in an HOA. The rules and regulations of HOAs are often included in covenants, conditions and restrictions (CC&Rs), subdivision covenants or deed restrictions. Additionally, HOAs often can assess fees when rules are violated by those regulated by the rules. A buyer is never required to write an offer on a property with an HOA, but when they agree to purchase a property within an HOA, they agree to honor all the rules, regulations and fees associated with such ownership.
HOA regulations can be innumerable, and since HOAs cannot undo the local zoning ordinances, HOA rules are more restrictive than the local zoning ordinance. Of course, while some HOAs regulate a great deal, others may choose to regulate very little.
Wisconsin’s law provides for a simple, straightforward statutory structure for HOAs.
Since HOA rules and regulations should be readily available to those living in or purchasing a property within an HOA, the law makes the information more accessible.
The law:
- Scope— Applies to all existing associations and new associations created to manage, regulate, or to enforce covenants/restrictions that apply to at least one residential lot.
- Recording/registration requirements—Requires the association to record covenants/restrictions with the county register of deed and register with the Department of Financial Institutions (DFI)
- DFI searchable database— requires the DFI to create a searchable database of all associations registered, see https://wdfi.org/apps/HomeOwnersAssociation/Search.
- Cap on document fees— Create a fee cap that can be charged by the DFI to file registration forms (no more than $25 by DFI) and by association to deliver documents to property owners (covenants and restrictions, if not posted on a website.
- Public notice for meetings— Instituted a 48-hour notice that must be provided to association members as to upcoming meetings as well as decisions of the board.
- Enforcement— Provides if the association fails to comply with the law, one-time fees resulting from the transfer of the property and any late fees that could be charged are unenforceable.
- Does not limit HOA fees or regulation – Wisconsin state law does not restrict how HOAs can regulate property or limit the ability or amount of any special assessment or periodic association fees an HOA may charge.
