Apple Valley Gardens Ass'n v. MacHutta - 2009 WI 28, 316 Wis. 2d 85, 763 N.W.2d 126

Rule:

Wis. Stat. § 703.10(3) (2007-08) expressly authorizes the placement of additional use restrictions in condominium bylaws. This provision does not contain limitations on the types of restrictions that can be implemented through bylaw amendments. Therefore, as long as use restrictions do not conflict with the declaration or with state or federal law, they are valid and enforceable. It is recognized that this empowers condominium associations to take actions that limit the rights of individual owners. There is an inherent tension between the competing interests of supermajority owners and individual owners. A unit owner might be frustrated, financially or otherwise, by the loss of her ability to rent out her unit. But the statutes are clear that associations have this power. Condominium ownership is a statutory creation that obligates individual owners to relinquish rights they might otherwise enjoy in other types of real property ownership. When purchasing a condominium unit, individual owners agree to be bound by the declaration and bylaws as they may be amended from time to time. The bylaws may provide for restraints on the use of condominium units for the benefit of all unit owners.

Facts:

The declaration of condominium, recorded in July 1979 to establish the condominium, contained no restriction regarding rental of the units. However, on December 18, 2002, the association amended the condominium bylaws to prohibit rental of the condominium units. One of the owners leased her condominium unit to a new tenant over the association's objection, claiming that the rental prohibition was ineffective because it had not been added to the condominium declaration. The association then filed an action seeking an order for declaratory judgment that the bylaws amendment was enforceable. The circuit court entered summary judgment in favor of the association, the appellate court affirmed. The condominium owner sought review of the decision. 

Issue:

May a condominium complex prohibit the rental of condominium units through an amendment to the bylaws? 

Answer:

Yes.

Conclusion:

The court affirmed the judgment of the lower courts, holding that the amendment was permissible under Wis. Stat. § 703.10(3) (2007-08). The declaration did not conflict with the bylaws amendment prohibiting unit rental. Having been duly adopted by the association, the bylaws amendment was therefore enforceable under § 703.10(1). And, in accord with § 703.10(6), the bylaws amendment constituted a mere restriction on the use of the condominium units, and did not affect the quality of the units' title or marketability.