707.39 Initiative, referendum and recall.

(1) Definitions. In this section:

(a) “Owner" means a person who, other than as security for an obligation, is an owner or co-owner of a time share or is an owner or co-owner of a unit that is not a time-share unit.

(b) “Time share" does not include a time-share easement in a campground.

(c) “Unit" does not include real property in which a time-share easement in a campground exists.

(2) Applicability. This section applies only to a project in which at least 50 percent of the votes are allocated to time shares.

(3) Address list. For purposes of this section, the managing entity shall keep reasonably available for inspection and copying by any owner all addresses, known to it or to the developer, of all of the owners, with the principal permanent residence address of each indicated, if known. The managing entity shall revise continually the list of addresses based on any new information it obtains, and the developer shall keep the managing entity advised of any information which the developer has or obtains.

(4) General provisions.

(a) Each ballot prepared under subs. (5) to (7) shall contain all of the following:

1. A statement that the ballot will not be counted unless signed by an owner.

2. The date, not less than 30 days nor more than 180 days after the date the ballot is mailed, by which the ballot must be received by the person to whom it is to be returned, and a statement that the ballot will not be counted unless received by that date.

3. The name and address of the person to whom the ballot is to be returned.

4. No material other than what is required by this section.

(b) Each ballot mailed under subs. (5) to (7) shall be mailed to the principal permanent residence of the owner to whom it is addressed, if known to the person responsible for mailing it, and that person shall procure and keep reasonably available for inspection for at least one year after the vote is calculated a certificate of mailing for each ballot mailed and the original or a photocopy of each ballot returned by the date specified in par. (a) 2.

(c) If the developer or a person on behalf of the developer communicates with an owner, other than as expressly authorized by sub. (5), (6) or (7), on the subject matter of any petition or ballot prepared under any of those subsections, the expense of that communication may not be assessed directly or indirectly in whole or in part to any owner other than the developer.

(d) The vote allocated to any time share and to any unit other than a time-share unit shall be counted as having been cast in accordance with the ballot of any owner of that time share or unit. If the ballots of different owners of the same time share, or of the same unit other than a time-share unit, are not in accord with one another, the vote allocated to that time share or unit shall be divided in proportion to the number of owners of the time share or unit voting each way and shall be counted accordingly. Any ballot that is not signed by an owner or is not received by the date specified under par. (a) 2. is void.

(e) The managing entity shall take action reasonably calculated to notify all owners of the resolution of any matter considered under sub. (5), (6) or (7).

(f) No right or power of an owner under this section may be waived, limited or delegated by contract, power of attorney, proxy or otherwise, in favor of the developer, an affiliate of a developer, a managing entity or a designee of any of them.

(4m) Amendment to project instrument. The project instrument may be amended by the owners by direct initiative under sub. (5) or by referendum under sub. (6). An amendment adopted under sub. (5) or (6) shall be promptly recorded by the managing entity with a statement of the vote and becomes effective upon recordation.

(5) Direct initiative by owners.

(a) The owners may amend the project instrument or any unrecorded document governing the project, or approve or reject any proposed expenditure, in accordance with this subsection or in any manner permitted by the project instrument or document.

(b) An owner may deliver to the managing entity a petition containing the language of a proposed amendment and signed by the owners of at least one time share or other estate or interest in each of a number of units to which at least 33 1/3 percent of the votes are allocated or any smaller percentage specified by the document to be amended. A writing of not more than 750 words in support of the proposal may be attached to the petition and mailed with the ballots under par. (c).

(c) Within 20 days after receiving the petition under par. (b), the managing entity shall mail to each owner a ballot setting forth the language of the petition and affording an opportunity to approve or reject the proposal, together with a copy of the writing, if any, attached to the petition. A writing of not more than 750 words from the managing entity recommending approval or rejection of the proposal may be mailed with the ballots.

(d)

1. Within 10 days after the date specified under sub. (4) (a) 2., the managing entity shall examine the ballots that have been returned and determine the vote. A signature on the petition shall be treated for the purpose of sub. (4) (d) as a ballot from the signer indicating approval of the proposed amendment.

2. Except as provided in s. 707.20 (2), a simple majority of the votes counted shall be sufficient for the adoption of the proposal unless the document to be amended specifies a larger majority or, in the case of a proposed expenditure, the project instrument specifies a larger majority not exceeding 66 2/3 percent, except that no document may specify more than a simple majority for a proposal which the managing entity could effect unilaterally.

3. No proposal may be adopted by an initiative in which the ballots favoring the proposal represent less than 10 percent of the votes allocated to all owners.

(e) A proposal adopted under this subsection may not be repealed or modified within 3 years after adoption except by another initiative under this subsection. After the 3-year period, the managing entity may not repeal or modify the result without the approval of the owners in a referendum under sub. (6). If the project instrument permits the managing entity to initiate a referendum for that purpose, no referendum may be initiated for that purpose more often than once every 3 years.

(6) Referendum of owners.

(a) The owners may amend the project instrument by referendum, and the project instrument may specify other matters which the owners may determine by referendum and may permit the managing entity to select matters which the owners may determine by referendum.

(b) If an amendment to a project instrument proposed by the managing entity, or other matter, is to be determined by referendum, the managing entity shall prepare and, not less than 30 days nor more than 180 days before the votes are to be counted, mail to each owner a ballot stating each matter to be determined and affording the opportunity to approve or reject each matter. The ballot may be accompanied by a writing of not more than 750 words from the managing entity recommending a particular decision.

(c) Within 10 days after the date specified under sub. (4) (a) 2., the managing entity shall examine the ballots and determine the vote. Except as provided in s. 707.20 (2), a simple majority of the votes counted shall determine each matter in question unless the project instrument specifies a larger majority, but no matter may be determined by referendum unless the ballots favoring the majority decision represent at least 10 percent of the votes allocated to all owners.

(7) Recall of manager by owners.

(a) In addition to any manner permitted by the project instrument, the owners may discharge the manager with or without cause in the manner provided by this subsection.

(b)

1. An owner may prepare a ballot affording the opportunity to indicate a preference between retaining the present manager and discharging the present manager in favor of a new manager. A writing of not more than 750 words supporting discharge of the manager may be attached to the ballot.

2. A copy of the ballot and of any writing that is to be mailed with the ballots shall be delivered to the manager. Not less than 10 days nor more than 30 days after the ballot and writing are delivered to the manager, the owner who prepared the ballot shall mail to each owner the ballot and writing, if any, supporting discharge, and a copy of any written reply from the manager of not more than 750 words.

(c)

1. Within 10 days after the date specified under sub. (4) (a) 2., the person who receives the ballots shall examine those that have been returned, determine the vote and promptly notify the manager of the result. If at least 66 2/3 percent of the vote, representing at least 33 1/3 percent of the votes allocated to all owners, favors discharging the manager, then all of the following shall occur:

a. The developer shall be notified of the result and the ballots or photocopies of the ballots shall be given promptly to the manager.

b. The developer shall diligently attempt to procure offers for management contracts from prospective managers. Any owner other than the developer also may attempt to procure such offers.

2. If the developer or any owner obtains an offer within 60 days after the date on which the vote was tabulated, the developer or owner shall promptly notify the developer and the owner who was responsible for tabulating the vote. If no offer is obtained from a prospective manager other than the current manager within the 60-day period, that period shall be extended for successive intervals of 30 days each until an offer is obtained.

3. At the end of any period under subd. 2. during which an offer from a prospective manager other than the current manager is obtained, the owner who prepared the ballot, or the developer if that owner so directs in a writing delivered to the developer, shall promptly prepare and mail to each owner a 2nd ballot stating the term and compensation provided by each offer that has been received and affording an opportunity to indicate a preference for any one of the offers or for retaining the current manager. A letter recommending that a particular offer be accepted or that the current manager be retained may accompany the ballot, and if the developer prepared the ballot, the developer shall enclose a copy of any letter submitted by the owner who was responsible for tabulating the vote.

4. The developer has no obligation under this paragraph and nothing need be delivered to the developer if the developer owned no estate or interest in any unit on the date that the first ballot was delivered to the manager and neither the developer nor the affiliates of the developer or the developer's appointees caused the current manager to be hired.

(d) Within 10 days after the date specified under sub. (4) (a) 2., the person who receives the ballots prepared under par. (c) 3. shall examine the ballots that have been returned, determine the vote, notify the manager of the result, and hold the ballots available for inspection by the manager and any proposed manager for at least 30 days. If more votes favor accepting a particular offer rather than retaining the manager, the manager shall be discharged 90 days after being notified of the result, except that if the ballot prepared under par. (b) was delivered to the manager before the current term of the manager began, the manager is discharged immediately upon being notified of the result. The person who received the ballots prepared under par. (c) 3. shall accept on behalf of the owners the offer that received the largest number of votes. The expenses under a contract accepted under this paragraph are time-share expenses.

(e) A manager discharged under this subsection is not entitled because of the discharge to any penalty or other charge payable directly or indirectly in whole or in part by any owner other than the developer.

(f) If the manager is discharged under par. (d), the reasonable expenses incurred by the developer or any owner in obtaining offers and preparing and mailing ballots under this subsection, including reasonable attorney fees, shall be promptly collected by the managing entity from all owners as a time-share expense and paid to the developer or the owner.

History: 1987 a. 399.