Apple Valley Gardens Association, Inc. v. MacHutta

Wisconsin Court of Appeals · 2007 · Property

306 Wis. 2d 780 (2007)

Updated July 23, 2026

PropertyCondominiumsUse restrictionsBylawscondominium declarationbylaw amendmentowner occupancyrental restriction

Facts

Apple Valley Gardens' recorded declaration stated that units were for single-family residential use only and also stated that any lease or rental agreement would not relieve an owner of obligations under the declaration. In 2002, the Association amended its bylaws by a more than two-thirds vote to require owner occupancy effective January 1, 2003, while grandfathering existing tenants until they vacated. Gloria MacHutta owned Unit 2-206, and after her existing tenant left in 2004, the board rejected a proposed new lease under the amendment, but Gloria rented the unit anyway. The MacHuttas argued the amendment was invalid because the restriction was not placed in the declaration, affected marketability, and violated a 1988 settlement agreement.

Issue

Whether a condominium association may enforce an owner-occupancy rental restriction adopted by bylaw amendment when the declaration mentions leases, whether that bylaw violates Wis. Stat. § 703.10(6) by affecting marketable title, and whether a 1988 settlement agreement bars enforcement of the amendment against Gloria MacHutta.

Rule

Under Wis. Stat. § 703.10(3), condominium bylaws may include restrictions or requirements respecting unit use, and under § 703.10(1) unit owners must comply strictly with bylaws and amendments. A bylaw use restriction is not invalid merely because the declaration also contains a statement of purpose and use restrictions under § 703.09(1)(g). Section 703.10(6) prevents bylaws from being used to block transfer of title or otherwise render title unmarketable, but a restriction that limits leasing while leaving the owner's right to alienate intact affects use, not marketable title.

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A condominium in Madison has a recorded declaration stating that units are for residential use only and that if an owner leases a unit, the owner remains liable for common expenses. Years later, Prairie Court Condominium Association amends its bylaws by the required supermajority vote to prohibit new rentals, while allowing current tenants to remain until they move out. After her tenant leaves, Dana Ortiz signs a new lease and argues the amendment is invalid because rental restrictions must appear in the declaration.

How should a court most likely rule?

Explanation. The majority held that related condominium provisions must be harmonized: the declaration states purposes and restrictions, but the bylaws may also contain restrictions respecting unit use, and owners must strictly comply with amended bylaws. A declaration’s statement that leasing does not relieve an owner of obligations is not an affirmative grant of an unchangeable rental right. Therefore, a later bylaw restricting rentals is enforceable if the declaration does not forbid such a bylaw. (Derived from Apple Valley Gardens Association, Inc. v. MacHutta (2007).)