Wisconsin Condo Lien Foreclosure: 2-Year Filing, 3-Year Suit Limit

The lien does not exist until the association creates it on paper. Under Wis. Stat. § 703.165(3) all assessments, together with interest and actual costs of collection, become a lien on the unit only if a statement of lien is filed within 2 years after the date the assessment became due. Wisconsin files that statement with the clerk of circuit court of the county where the unit sits, not with the register of deeds, and the clerk indexes it under the record owner in the judgment and lien docket. The statement has to describe the unit, name the record owner, and state the amount due and the period the assessment covered, and it must be signed and verified by an officer or agent of the association designated in the bylaws. Section 703.165(8) prints the exact form. Once the assessment is paid in full the owner is entitled to a satisfaction that can be filed with the same clerk. Miss the 2-year window and the debt survives as a personal obligation but stops being secured by the unit.

Priority is where Wisconsin owners and lenders learn the real limit. Section 703.165(5) puts the association lien ahead of everything except general and special taxes, all sums unpaid on a first mortgage recorded before the assessment was made, construction liens filed before the assessment was made, unpaid balances on a veterans housing loan made under s. 45.80, 1989 stats., and environmental cleanup liens under s. 292.31(8)(i) or s. 292.81. Wisconsin has no priority slice for a few months of assessments, which is why a condominium association here usually recovers far less out of a bank foreclosure than an association in a super-lien state. The Court of Appeals read par. (b) literally in U.S. Bank, N.A. v. Landa, 2011 WI App 135: the statute says "a" first mortgage recorded before the assessment, not "the" first mortgage, so more than one earlier mortgage can outrank the association lien.

Foreclosure itself runs on the mortgage track. Section 703.165(7) says the lien is enforced and foreclosed in the same manner, and subject to the same requirements, as a foreclosure of mortgages on real property in this state, which pulls in Wis. Stat. ch. 846. Two hard limits sit inside that subsection. The association may not start a foreclosure unless it gives the unit owner 10 days of prior written notice by registered mail, return receipt requested, sent to the address shown on the association books, and it may not foreclose at all unless suit is brought within 3 years after the statement of condominium lien was recorded. Inside those limits the association is strong: it may recover costs and actual attorney fees, it may bid on the unit at the sale and then hold, lease, mortgage or convey it unless the declaration says otherwise, it may sue for a money judgment without foreclosing or waiving the lien, and it may take a deficiency judgment in the same proceeding.

The sale timetable comes from ch. 846 rather than from ch. 703. In Geneva National Community Association v. Friedman, 228 Wis. 2d 572 (Ct. App. 1999), the court held that the 12-month redemption period in Wis. Stat. § 846.10(2) applies to a foreclosure brought for unpaid condominium fees, and that § 846.10(1) could not sensibly be applied to require a statement of installments to become due because monthly assessments were in varying amounts. A delinquent Wisconsin unit owner therefore normally has a redemption window measured in months after judgment, during which paying the assessments, interest, costs and actual attorney fees stops the sale.

Buyers and sellers get their own protection in § 703.165(4). Any grantee of a unit may demand a statement of unpaid assessments against the seller, and if the association or its board does not deliver that statement within 10 business days after the request, the association is barred from claiming under any lien not already filed before the request. The grantee is also never liable on an unfiled lien for more than the figure the statement gives. Separately, § 703.245(9)(a)1. exempts assessment collection from the notice-of-claim and direct negotiation conference that Wisconsin otherwise forces on association and unit owner disputes, so an owner facing a lien or a foreclosure gets no statutory pre-suit meeting.

None of this reaches a platted subdivision association. Wis. Stat. § 710.18, created by 2021 Wis. Act 199, is Wisconsin’s only general homeowners association statute, and it regulates recording of covenants, annual notice filings with the Department of Financial Institutions, 48-hour meeting notice, a $50 ceiling on charges for copies of the covenants, and payoff statements due within 10 business days with damages capped at $350. It creates no lien and no foreclosure remedy. A Wisconsin homeowners association that wants to foreclose has to point to lien language in its own recorded declaration and proceed under ch. 846 like any other lienholder.

An owner who falls behind first sees interest running from the due date under Wis. 165(3). The association then files a statement of condominium lien with the clerk of circuit court, which is indexed against the owner by name in the judgment and lien docket and is picked up by any title search. If the debt is still unpaid the association mails the 10-day registered-mail notice and files a foreclosure action in circuit court, where actual attorney fees are recoverable and a deficiency judgment can be entered in the same case.

Owners have real defenses when the association is late: a statement filed more than 2 years after the assessment came due secures nothing, a foreclosure started more than 3 years after the statement was recorded is barred, and a foreclosure begun without the registered-mail notice is defective. The Wisconsin Supreme Court also held in Walworth State Bank v. Abbey Springs Condominium Association, 2016 WI 30, that a bank foreclosure judgment forever barred the association’s interest, so an association may not restrict a new owner’s use of condominium facilities to collect the prior owner’s debts.