This case (2008AP10) is scheduled for argument [
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pdf] September 18, 2009 9:45 a.m. before the Wisconsin Supreme Court to review the
Court of Appeals decision, 2009 WI App 9, on the issues [
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pdf]:
Has Wisconsin law changed so that a clear and specific restrictive covenant need not be reasonable?
May a restrictive covenant governing condominiums create developer control exceeding that allowed by Wisconsin’s Condominium Act?
Are the restrictive covenant’s terms, which have been redefined outside the restrictive covenant, ambiguous?
Is a provision granting a developer unlimited control over condominiums reasonable under Wisconsin law?
The
Synopsis says,
This dispute involves three condominium owners in Geneva National, a master-planned community near Lake Geneva and various entities associated with its development. The Supreme Court has been asked to review several issues related to restrictive covenants and possible conflicts among covenants, case law and the state’s Condominium Ownership Act, Wis. Stat. ch. 703.
...
Some background: Geneva National is a 1,600 acre private development of golf courses, clubs, private roadways and utilities, single- and multi-family residences, including 32 condominiums, and commercial uses. The petitioners point out it is, in effect, "a community of condominiums." The three condominium owners sought a declaratory judgment to invalidate the restrictive covenant forming Geneva National’s governing structure.
The condominium owners contend the restrictive covenant is unenforceable because it grants the developer too much control, contrary to the act. They also claim the restrictive covenant is ambiguous, unreasonable, against public policy and void. The condominium owners argue the developer could unilaterally exercise its powers and perpetually control the majority of the association’s board through its own four votes and its power to remove or appoint any other officer on the board. The condominium owners also contend that the association and the trust were mere figureheads, and that the developer controls the community and assesses unit owners without recourse.
The circuit court dismissed their complaint, finding that the covenant was clear and specific, and therefore not subject to a separate reasonableness evaluation. The circuit court also determined that because the Restrictive Covenant is not a condominium instrument, it is not subject to ch. 703.
The Court of Appeals affirmed, observing that Geneva National was not a condominium, but a “private quasi-town.” Key to its decision was that the petitioners' complaints related to the community as whole, that is, how the master plan, rather than the individual condominiums, was being developed. The Court of Appeals concluded the covenant lacks the statutory requisites necessary to comprise a condominium instrument within the meaning of ch. 703.
The condominium owners contend the covenant conflicts with ch. 703, which would require a developer to develop the property within three years, or ten years, if it is expandable, and that both time limits long passed. The developers contended before the Court of Appeals that Geneva National is a master-planned community, not a condominium venture and that it sees vast differences between condominiums and master-planned communities.
The developers explained that master-planned communities present a complex development method, distinct from condominiums, requiring the developer to retain control so that it may react to varying market and government conditions in seeing its vision through and its investment secured.
A decision by the Supreme Court could clarify law in this area.
From Walworth County.
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