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Property Lien – Condominium Law

By: Derek Hawkins//May 4, 2016//

Property Lien – Condominium Law

By: Derek Hawkins//May 4, 2016//

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WI Supreme Court

Case Name: Walworth State Bank v. Abbey Springs Condominium Association, Inc. et al

Case No.: 2015AP940

Focus: Property Lien – Condominium Law

The membership and guest policy revived a lien against the property that former unit owners had extinguished.

“Although Abbey Springs concedes that Walworth State Bank had no legal obligation to pay the former owners’ unpaid assessments following foreclosure, the policy dictates that any unpaid assessments stay with the unit and transfer to the new owners rather than travel with the former unit’s owner who actually incurred the debt. The policy does so by preventing a new purchaser of any unit, whose only connection to the unpaid assessments is through the unit itself, from accessing the recreational facilities if the prior owner failed to pay his or her assessments. As a result, the policy effectively allows Abbey Springs to assert a right against the property for the prior owner’s unpaid assessments in violation of well-established foreclosure law. Furthermore, the policy violates the Foreclosure Judgment that eliminated “all right, title, interest, lien or equity of redemption” of Abbey Springs in and to the foreclosed units. Because we conclude that the condominium policy violates well-established foreclosure law and the Foreclosure Judgment entered in the underlying foreclosure action, we do not address Walworth State Bank’s argument that the policy renders the unit’s title unmarketable.

Affirmed

ABRAHAMSON, J. dissents, joined by BRADLEY, A. W., J.

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Attorney Derek A. Hawkins is the managing partner at Hawkins Law Offices LLC, where he heads up the firm’s startup law practice. He specializes in business formation, corporate governance, intellectual property protection, private equity and venture capital funding and mergers & acquisitions. Check out the website at www.hawkins-lawoffices.com or contact them at 262-737-8825.

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