Wisconsin Condo Rental Bans Take a 67 Percent Bylaw Vote

The Condominium Ownership Act does not limit rental restrictions; it authorizes them. Wis. Stat. § 703.10(3) provides that the bylaws may contain any other provision regarding the management and operation of the condominium, including any restriction on or requirement respecting the use and maintenance of the units and the common elements. Section 703.10(1) then makes compliance mandatory: every unit owner shall comply strictly with the bylaws and with the rules adopted under the bylaws, as the bylaws or rules are amended from time to time, and with the covenants, conditions and restrictions set forth in the declaration or in the deed to the unit. The phrase "as the bylaws or rules are amended from time to time" is why a Wisconsin owner who bought into a rental-friendly building can still be bound by a later ban.

The threshold is fixed by Wis. Stat. § 703.10(5): the bylaws may be amended by the affirmative vote of unit owners having 67 percent or more of the votes, and following an amendment the association shall promptly deliver to each unit owner a copy of the approved amendment. Votes are counted by the percentage interests assigned in the declaration under § 703.13, not by head count, so in a Wisconsin condominium with unequal unit sizes a minority of owners holding large units can carry a rental amendment. Restrictions may also sit in the declaration itself, which is amended under the procedure in § 703.09(2) rather than under § 703.10(5).

The controlling Wisconsin decision is Apple Valley Gardens Association v. MacHutta, 2009 WI 28, 316 Wis. 2d 85, 763 N.W.2d 126, printed as an annotation to § 703.10 on the Legislature's own statute page. The court held that a condominium complex may prohibit the rental of condominium units through an amendment to the bylaws, that nothing in § 703.09(1)(g) or any other section of ch. 703 requires all use restrictions to be identified in the declaration, and that sub. (3) expressly authorizes the placement of additional use restrictions in condominium bylaws without limiting the types of restrictions that may be adopted that way. Use restrictions are valid and enforceable in Wisconsin as long as they do not conflict with the declaration or with state or federal law.

Two limits do exist. First, Wis. Stat. § 703.10(2m) provides that no bylaw, no rule adopted under a bylaw, and no covenant, condition or restriction in a declaration or deed may be applied to discriminate against an individual in a manner described in Wis. Stat. § 106.50, the state open housing law, so a leasing rule cannot be enforced selectively along a protected characteristic. Second, § 703.10(6) provides that title to a condominium unit is not rendered unmarketable or otherwise affected by any provision of the bylaws. In Bankers Trust Co. of California, N.A. v. Bregant, 2003 WI App 86, 261 Wis. 2d 855, 661 N.W.2d 498, a bylaw prohibiting sale of a unit to a buyer who would not live there could not be used to block confirmation of a foreclosure sale to a high bidder who admitted he would not occupy the premises. A Wisconsin rental restriction therefore controls occupancy and leasing, not the transfer of title.

Where leasing is allowed, Wis. Stat. § 703.315 sets the paperwork. A condominium rental agreement means an agreement, oral or written, to rent or lease a residential unit to the same tenant for more than one month. Entering into one is itself an agreement by the tenant to comply with ch. 703, the association rules and bylaws, and the declaration. Within 5 business days after entering into or renewing a written agreement the unit owner must give the association a copy, and the association must keep it on file while it is in effect. Before the tenant occupies the unit the owner must hand over, or leave in the unit, a copy of the declaration and the association bylaws and rules. Section 703.315(6) exempts time-share units governed by ch. 707.

Owners of lots in a covenanted subdivision have even less protection. Wisconsin's homeowners' association statute, Wis. Stat. § 710.18, regulates recording, public notice, meeting notice and document fees but says nothing about leasing, so a subdivision covenant capping or banning rentals is limited only by its own terms. Section 710.18(2)(a) does require the covenants and restrictions to be recorded with the register of deeds in every county in which the planned community sits, and § 710.18(2)(b) has required associations that run a public website to post the covenants there since January 1, 2023, which is the practical way to confirm what your leasing rule actually says. The statute that restrains rental bans in Wisconsin, § 66.1014, is aimed at cities, villages, towns and counties rather than at associations, and does not help an owner facing a covenant.

A unit owner who leases in breach of a validly adopted bylaw is exposed under Wis. 24(2), which makes the owner liable for any charges, fines, or assessments imposed by the association pursuant to the bylaws or association rules and subject to a temporary or permanent injunction. 24(4). 165(1) folds fines and penalties for violations of the declaration, bylaws or association rules into the definition of assessments, which become a lien on the unit if a statement of lien is filed within 2 years and are foreclosed in the same manner as a mortgage. 24(4).