The petitioner in this case asks the Supreme Court to review whether a restriction on the use of a condominium unit, such as a prohibition on renting the unit to others, must be stated in the condominium declaration, or whether such a restriction may be contained in the owners' association's bylaws. Condominium declarations are usually drafted by a condominium developer and filed with the register of deeds; bylaws are adopted and amended from time to time by the unit owners.
Some background: Steven MacHutta developed the Apple Valley Gardens condominium complex in the late 1970s, but apparently had trouble selling some of the units. A declaration of condominium contained, as required by statute, a declaration of purpose and of restrictions on use. The declaration provided, in part, that any rental or lease agreement shall not relieve an owner from his or her obligation to pay common expenses.
The MacHuttas assert that this part of the declaration gives them the affirmative right to rent any of the units they own. Eventually, Steven MacHutta ended up owning 15 units, most of which they leased to tenants. The association (Apple Valley Gardens) contends the sentence grants no such right but merely states, in a negative manner, that if a lease is allowed, an owner is not relieved from all owner obligations.
Steven MacHutta and the association reached an agreement and most of MacHutta's units were sold. Under the agreement, MacHutta ultimately retained one of the units and sold one to his wife, Gloria. She rented it out, leading to another dispute.
In 2002, the association enacted an amendment to a bylaw that required owner occupancy, thereby prohibiting rentals. The bylaw required that when the tenant moved out, the unit had to become owner occupied, like the other units.
When Gloria rented to another tenant despite the association's objection, the association filed a declaratory judgment, requesting enforcement of the owner-occupancy bylaw. The MacHuttas filed counterclaims for breach of contract.
The circuit court granted summary judgment in favor of the association. The Court of Appeals affirmed, concluding that although the Apple Valley declaration did not prohibit units from being rented, it also did not forbid the association from subsequently enacting bylaws to require owner occupancy. [2007 WI App 270] From Waukesha County.
Monday, April 21, 2008
The Wisconsin Supreme Court has granted review in this case. (2007AP191)