Opinion ID: 1703027
Heading Depth: 2
Heading Rank: 2

Heading: Application of the Condominium Ownership Act

Text: ¶ 14 The first question is whether the Community Declaration, which established the terms and conditions for the development of a 1,600 acre planned community that includes condominium parcels, must comply with the Condominium Ownership Act (the Act). See Wis. Stat. ch. 703. Solowicz argues that the Community Declaration is a condominium instrument subject to the Condominium Ownership Act. ¶ 15 The condominium declaration is the operative instrument that creates a condominium. See Wis. Stat. § 703.09. Chapter 703 applies to all property with a duly executed condominium instrument. Solowicz argues that the Community Declaration is a condominium instrument as contemplated by the Act because the Developer attached the Community Declaration to the individual Condominium Declarations. [10] Therefore, Solowicz contends that ch. 703 overrides any contradictory provisions in the Community Declaration. Specifically, Solowicz argues that because Article IX of the Community Declaration left the Declarant in control of Geneva National for 19 years, it violates Wis. Stat. § 703.15(2)(c). [11] Excising Article IX would result in control of Geneva National being transferred to the unit owners. Similarly, Solowicz argues that the Declarant violated § 703.09(2) [12] each of the four times it unilaterally amended the Community Declaration and that the provisions of the Community Declaration allowing such unilateral amendments should be excised. We disagree with Solowicz and decline to excise any provisions of the Community Declaration. ¶ 16 We conclude that the Community Declaration is not a condominium instrument subject to ch. 703; rather, it establishes an overall development scheme for the 1,600 acre planned community. Condominium instruments include the condominium declaration, plat and plan. See Wis. Stat. § 703.02(5). First, to qualify as a condominium declaration, the document shall contain a statement of the owner's intent to subject the property to the condominium declaration under the Act, a name including the word condominium and a description of the condominium's common elements. [13] Wis. Stat. § 703.09(1)(a), (b), (d). No part of the Community Declaration evinces the Declarant's intent to subject all 1,600 acres to ch. 703; rather, it is the Condominium Declaration for each condominium parcel that demonstrates the intent to be subject to the Act. Further, the Community Declaration's full name, Declaration of Covenants, Conditions, Restrictions and Easements for the Geneva National Community, very clearly does not include the word condominium. The Community Declaration refers to condominiums only when it references the Condominium Declarations, which clearly include the word condominium in their title. Finally, each Condominium Declaration, not the Community Declaration, includes a description of the condominium's common elements. The Community Declaration is not, nor does it purport to be, a condominium plat. A condominium plat must include a survey of the condominium property. See Wis. Stat. § 703.11(2)(b). Such plat was properly included in each Condominium Declaration, not the Community Declaration. Lastly, the Community Declaration is not a condominium plan, which is required to be submitted as part of the plat. See § 703.11(2)(c). Again, each Condominium Declaration, not the Community Declaration, properly shows the location of the condominium units. ¶ 17 These shortcomings cannot be salvaged by the Act's saving provision in Wis. Stat. § 703.30(2) because the Community Declaration cannot be said to substantially conform with the requirements of the Act. Thus, the plain language of ch. 703 makes clear that the Community Declaration is not a condominium instrument subject to the Act. ¶ 18 Solowicz further argues that Geneva National is required to comply with the Act because it is a community of condominiums and the Community Association is an umbrella organization authorized by Wis. Stat. § 703.155(7). [14] The Developer counters by arguing that Geneva National is not simply a community of condominiums, but a 1,600 acre planned community, portions of which contain condominiums. ¶ 19 We agree with the court of appeals' statement that planned communities, such as Geneva National, are an entirely different type and level of development than condominiums. Solowicz v. Forward Geneva Nat'l, 2009 WI App 9, ¶ 23, 316 Wis.2d 211, 763 N.W.2d 828. A condominium is a form of ownership of real property that combines two separate forms of ownership interest: the individual ownership of the dwelling unit and the undivided common ownership, with other unit owners, of the common elements of the condominium parcel. Joseph W. Boucher et al., Wisconsin Condominium Law Handbook § 1.17 (3d ed. 2006). While we found varying characteristics of similarly planned communities, there are several key components that appear to be common to most such communities. First, these communities generally are large [15] developments that usually include a mix of commercial, recreational and residential property, including condominiums. Second, a keystone to such communities is an overall development scheme that not only permits individual units to operate under their own individual governing documents, but also subjects the entire development to a master governing body, which ensures the entire community is developed according to its stated purpose. [16] The communities function as semi-autonomous, private quasi-towns. ¶ 20 Geneva National is not merely a community of condominiums; rather, it is a 1,600 acre planned community that includes condominium parcels and other types of ownership. The Community Declaration, Geneva National's overarching development plan, guides the development of 1,600 acres according to the Developer's visiona distinct golf and leisure community. Solowicz, 316 Wis.2d 211, ¶ 24, 763 N.W.2d 828. It also serves to protect those who purchase within Geneva National by assuring that their common interest in developing such a community according to the overarching development plan will be honored as development continues. And finally, the recorded Community Declaration gives notice to all purchasers of Geneva National's underlying terms and conditions. ¶ 21 As did the court of appeals, we too conclude that Wis. Stat. ch. 703 [ ] unambiguously provides no reference whatsoever to master-planned communities. So, the plain meaning of the chapter is that it simply does not contemplate such communities. Id., ¶ 35. Accordingly, because the Community Declaration establishes the overall development scheme for the 1,600 acre planned community, it need not comply with ch. 703. ¶ 22 Furthermore, the portion of Geneva National that Solowicz seeks to control is not the 32 residential condominiums. The unit owners already have achieved this. [17] Instead, Solowicz seeks control of the remainder of the 1,600 acre development. Accepting Solowicz's argument would mean that simply because a developer chooses to include one condominium parcel in a 1,600 acre development, the time limitations of ch. 703three or ten years control the entire 1,600 acres. Thereafter, development decisions would cede to the then existing condominium unit owners. This surely cannot be the case. Due to the complexity of the development of the large planned community, extended developer control is necessary to properly market and uniformly develop such property. See Uniform Common Interest Ownership Act § 2-123(g) (2008). ¶ 23 Likely anticipating the weakness of the arguments addressed above, Solowicz attempts to reinvent his argument by asserting that even if the Community Declaration is not a condominium instrument and ch. 703 does not directly apply to planned communities, the overarching development scheme of Geneva National intentionally contravenes the protections of ch. 703, to which plaintiffs are entitled. Solowicz cites three cases from other jurisdictions that he contends use condominium law to limit a developer's control over planned communities. All three of the cases cited are distinguishable on their facts, and one actually supports the Developer's position. ¶ 24 In Fox v. Kings Grant Maintenance Ass'n, 167 N.J. 208, 770 A.2d 707 (2001), cited by Solowicz, plaintiffs were 46 condominium unit owners in a planned community [18] that spanned 1,800 acres with a total of 1,447 individually owned units. The condominium association was required to turn over control of the condominium's common elements to the community's umbrella association, which consisted of non-unit owners. The umbrella association then exercised complete control of all common property, including common elements of the individual condominiums. Id. at 711 (emphasis in original). The court held that New Jersey's condominium act prohibited requiring unit owners to delegate their governance rights over the common elements of their condominium to the umbrella association. Id. at 709. ¶ 25 The Fox court went on to explain that an umbrella association is permitted to control property intended for the common and beneficial use of unit owners of several separate condominium associations, such as common roadways, common open space, and common recreational facilities; and, that, as long as the umbrella association does not infringe on the unit owner's control of the common elements of individual condominiums, the condominium act is not circumvented. Id. The court demonstrated support for other governance schemes by explaining that because of the enormity of such communities, control by an umbrella association is necessary for the viability and maintenance of uniform standards. Id. at 719. ¶ 26 Here, the Community Association, which was established in the Community Declaration, functions appropriately under Fox 's description of a lawful umbrella association. It retains no control whatsoever over the Condominium Master Association, [19] which is the governing body that retains sole and complete control over the management and governance of the residential condominium parcels, including their common elements. [20] Stated otherwise, the Community Association's powers are limited to those Fox approved. Accordingly, Fox does not support Solowicz's argument that Geneva National's governance scheme contravenes ch. 703. ¶ 27 Solowicz next relies on Brandon Farms Property Owners Ass'n v. Brandon Farms Condominium Ass'n, 180 N.J. 361, 852 A.2d 132 (2004), which held that under New Jersey's condominium act, a declaration may not make a condominium association responsible for an association member's failure to pay assessments owed to an umbrella association. Id. at 133-34. Geneva National's Community Declaration does not contain such a provision. To the contrary, the Community Declaration provides for the assessment of unit owners directly; it does not pass assessments through the Condominium Master Association as occurred in Brandon Farms. ¶ 28 Finally, Solowicz cites Ainslie at Century Village Condominium Ass'n v. Levy, 626 So.2d 229 (Fla.Dist.Ct.App. 1993). In Ainslie, included in the condominium declaration was a long term lease and a service contract between the developer and a management firm that gave the developer control of the condominium's recreational facilities. Id. at 230. The court held the lease and contract void because it vitiated the statutory protections in place for condominium owners. Id. at 232. We agree with the court of appeals' analysis of Ainslie and conclude that it is distinguishable for two reasons. First, in the case now before us, there is no lease or contract giving the Developer control of any condominium parcel's common elements. Second, based on the Ainslie court's description, the development in Ainslie was a community of condominiums, not a planned community with an overarching development plan similar to Geneva National. ¶ 29 Significantly, all of Solowicz's complaints relate to how the community as a whole, through its overarching plan, is being developed. He has not complained that the Developer is meddling in individual condominium affairs. Indeed, this is because the Developer does not have any power over individual condominium affairs and therefore, its power cannot be said to thwart rights accorded to individual condominium unit owners under ch. 703. ¶ 30 In support of this point, we note that the Declarant timely ceded control of each residential condominium parcel to its unit owners as required under Wis. Stat. § 703.15. [21] Solowicz, Soltis and Havey, through the Condominium Master Association of which they are members, are in complete and absolute control of their condominium units and the common elements of their condominium parcels. Further, the Declarant has not amended the Condominium Declaration without proper approval of the unit owners, see Wis. Stat. § 703.09(2), and the Declarant is restrained from unilaterally amending the Community Declaration if such amendment would materially alter a unit owner's rights to the use and enjoyment of the unit and its common elements. [22] ¶ 31 Because Geneva National is a planned community with an overarching development scheme established to create a high end golf and leisure community, containing restaurants, golf clubs, tennis clubs, swimming clubs, single family homes, multiple family homes, wooded hiking trails, private streets with gated access to the community, and not simply a community of condominiums, it is not subject to ch. 703. Furthermore, because the Community Declaration does not retain particularized day-to-day control over the condominium parcels or the individual condominiums, it does not contravene ch. 703.