The executive summary
The disclosure materials include an executive summary, a short document arranged under set headings. One heading covers maintenance, repair and replacement of common elements, including whether that work is paid for from owner assessments, reserve funds or both. Another, headed "Reserves," says whether the association keeps reserves for repair and replacement of common elements beyond routine maintenance, and whether it keeps a statutory reserve account under s. 703.163.
For a board, that second heading is the one that matters. An opted-out association has to say so in a document every buyer gets. An opted-in association with a thin balance has nothing to hide behind either, because the budget sits in the same pile.
The budget
The materials also include the condominium's annual operating budget. Under s. 703.161 the budget of a condominium with any residential unit must show the amounts allocated to a statutory reserve account and the amount held in it. A buyer, or a buyer's lender, can set those figures against the age of the roof and draw conclusions.
Five business days
Section 703.33 (4) lets a purchaser rescind in writing, without giving a reason and without liability, within five business days after receiving all of the required documents. If documents are missing, the clock depends on whether the buyer asked for them in writing; going ahead to closing ends the right. Rescinding gets the buyer's deposit back.
Put plainly: a buyer who spots a large special assessment on the horizon and very little set aside for it has a clean, no-fault way out, or a strong hand to renegotiate.
Getting documents from the association
The seller usually needs the association's help to put the package together. Section 703.33 (2m) gives the association 10 days after a written request to provide the executive summary and the other required documents. Associations may charge for this, within the notice and resolution procedure in s. 703.205.
How a study helps on a sale
- It turns the "Reserves" heading from a bare yes or no into a figure with a plan behind it.
- It answers lender questionnaires that ask when reserves were last reviewed and by whom.
- It gives sellers and agents something concrete when a buyer asks whether a special assessment is coming.
The exact headings and wording of the executive summary have been amended over the years. Before relying on a specific item, read the current text of s. 703.33 or check with the association's attorney.
Sources: Wis. Stat. 703.33, 703.161 and 703.163, Wisconsin State Legislature.