Archive for August, 2010

“The Board of Review for the Town of Pacific got it right.”

Thursday, August 26th, 2010

With those words, in a unanimous decision, the Wisconsin Supreme Court overruled both the appeals court and the circuit court and held that the developers of declared but unbuilt condominium “units” should be assessed the property taxes on the unbuuilt units.  In Saddle Ridge Corporation v. the Board of Review of the Town of Pacific, Saddle Ridge argued that unbuilt condominium “units” had “zero value” and didn’t really exist until something was built.  The only thing of value was the land, which was, Saddle Ridge argued, a common element.  The importance of this theory is that the property tax on the common elements is apportioned to the condo units which are built.  Thus in a condominium development, if only a few condos are built, those few condo owners would be responsible for the entire property tax burden for all the unbuilt condo “units.”  And, as the court pointed out, under Saddle Ridge’s argument, if no condo units were built, a declared but unbuilt condominium development would not pay any taxes at all.

 This case hinged on the definition of a “unit.”  The court noted that in order for a condominium to be declared, it must define the “units.”  Thus the “units” exist upon the declaration, no matter when they are built.  Once a unit is declared, it is given a parcel number.  Saddle Ridge argued that a unit does not come into existence until it is built, thus there is nothing to tax..  The court noted that according to Saddle Ridge, through a “clever use of definitions in a condominium declaration a developer could avoid paying taxes on a share of the common elements, or that the developer could avoid taxes altogether by never constructing a unit…”

 The Supreme Court said that Saddle Ridge could not have it both ways – a condominium cannot be declared without creating “units,” and those “units” are taxable to the developer.  The Town got it right.

Wanting to do something and actually doing it are two different things!

Tuesday, August 24th, 2010

Uebelacker v. Begler, decided August 18, 2010.  Although not involving a municipality, this unpublished land use case demonstrates the need for careful attention to detail when amending covenants controlling land use.  Uebelacher and Begler are neighboring property owners in the Upper Oconomowoc Lake Association, and as such are subject to a 1961 agreement concerning the building of boathouses.  In 2003, a majority of the property owners voted to amend the agreement and require all boathouses be attached to the residence.  Uebelacker built a detached boathouse, and Begler sued. 

This case hinged on the proper procedure required for amending the 1961 agreement, which stated that amendments could only be made if “an instrument signed by a majority of the then owners of the lots has been recorded, agreeing to change said covenants in whole or in part.”  Although a majority of the owners apparently approved of the amendment, only three members of the Architectural Control Committee signed the recorded document.  Based on the undisputed fact that a majority of the members had not signed the recorded amendment, the circuit court held the amendment invalid and thus unenforceable.  The appeals court upheld the circuit court decision, noting: “The simple answer is that wanting to amend the 1961 agreement and actually doing so are two different things.”

 The important note here is that it is important to follow your own rules – this is an area where municipalities are often challenged – a failure to follow the procedures they have enacted.

Platting Law Changes

Monday, August 16th, 2010

2009 Wisconsin Acts 376 and 399 went into effect on June 2, 2010, and made some important changes to Wisconsin Statute 236 (subdivision and platting law) with respect to municipalities.  One significant change is that, although municipalities can still have ordinances that are more restrictive than Wis. Stat. 236, this power has been considerably reined in.  Municipalities may not be more restrictive time limits, deadlines, notice requirements, and may not limit any other protections the statute provides for a subdivider.  I suspect this last limit could be interpreted very broadly by a subdivider.

As I mentioned in this blog back in May, Act 399 made one important change, essentially overruling Wood v. City of Madison, 2003 WI 24 which had permitted Madison to deny a subdivision based in part on the proposed use of the land.  Land use may still be regulated via normal zoning laws, but cannot be considered in plat approval.

One other important aspect of Act 376 is a nonstatutory provision that an ordinance that is not “consistent” with Act 376 is “does not apply and cannot be enforced.”  It would be wise for municipalities to review their subdivision ordinances against the new provisions in Act 376.

A good summary of the changes in the law can be found in “Platting Letter #55 – 2010” from the Wisconsin Department of Administration.

Special Assessment Statute of Limitations is 90 Days, Period.

Thursday, August 5th, 2010

In a recent unpublished opinion, Emjay Investment Company v. Village of Germantown, the Wisconsin Court of Appeals made it clear that the 90 day period to appeal a special assessment is a final deadline.  In 2004, the Village had special assessed a number of properties.  It was clear that the Village had followed the correct procedures and given all of the required notices under the statute.  It was undisputed that Emjay had received the notice.  However, the special assessment was deferred as to certain properties, including parcels owned by Emjay “…until the property was commercially developed…”  Emjay argued that the statute of limitations should begin when the deferred period ends and the money is actually due.  The court rejected this argument, stating “…the law does not recognize this excuse.”

 The bottom line is that appeal deadlines are firm and final and persons and entities who want to appeal a government decision should not sit on their rights, but take immediate action.