Homeowners’ associations in Wisconsin are governed by no specific government act. Instead, most common interest communities are registered as nonprofit corporations and are therefore subject to Chapter 181 of state law regarding Nonstock Corporations. The Condominium Ownership Act also applies to condo associations.
Because there are no standard regulations regarding the management of HOAs, rules can vary drastically between communities. Associations have the power to create and enforce as many, or as few, regulations as they desire so long as they do not contradict any state or federal laws. Homeowners are typically required to sign a contract to join the HOA upon the purchase of a property in a common interest community. Once signed, the homeowner is obligated to abide by any rules set forth by the association.
Homeowners Association’s Rights and Responsibilities
To create an HOA, the declarant or initial board of directors must file the articles of incorporation with the department of financial institutions. These articles outline the general rules and management of the homeowners’ association.
Maintenance And Management
The primary purpose of a community association is to manage the maintenance of common elements within the community and protect property values. To maintain a budget for the cost of maintenance, the HOA has the power to impose regular assessments upon homeowners. If an account becomes delinquent, the association may impose liens on the property and, in extreme cases, even foreclose despite on-time mortgage payments.
The board of directors is responsible for keeping detailed records. All records may be inspected by members at a reasonable time and place as determined by the association. These records should include:
Minutes of official meetings
Record of names, addresses, and number of votes for each member
Articles of incorporation, bylaws, and any amendments adopted
Financial statements for the past three years
Most recent annual report delivered to the department of financial institutions
The board is also responsible for preparing annual reports containing a description of the HOA and its members in the past year. The report must be filed with the department of financial institutions on the anniversary of the association’s incorporation each year.
Homeowners have the right to participate in elections for the board of directors and to vote on any proposed amendments to the articles of incorporation. Voting is to take place during member meetings which are to be held annually, if not more frequently. Special meetings may also be called at any time by the board of directors or with a petition signed by at least 5% of the total allocated votes. The board of directors must provide fair and reasonable notice for all meetings.
Voting rights should be described by the articles of incorporation. Unless stated otherwise, all members have the right to vote. If no mention of voting rights exists, each member is to have one vote.
Members serving on the board of directors may be removed during member meetings with the same vote that is required to elect them; generally, a simple majority. Members may be removed for any reason with or without cause.
To adopt proposed amendments to the articles, at least 67% of the allocated votes must be in favor of the proposition. Once an amendment is adopted, it must be drafted as an article of the amendment and filed with the department of financial institutions to become valid.
Community Association Law in WI
HOA rules in Wisconsin vary widely. It is important to read and understand all community regulations before purchasing property in an HOA-managed community. Most homeowners’ associations require the signing of a contract upon purchase.
To ensure that your community association is being run following all state and local laws, it helps to have a professional on your side. CSM has a team of experienced professionals that have worked with communities in almost every state in the US. Specializing in HOA financial management, we can help your board of directors manage association finances, write and submit documents, and prepare for audits. If you have any questions regarding state HOA laws and regulations, give us a call at (865) 315-7505, contact us online or email us at email@example.com.