## Facts

- Apple Valley Gardens is a condominium complex formed in 1979 with a recorded declaration and an owners’ association.
- Steven MacHutta developed the condominium and served as declarant and incorporator; Steven and Gloria MacHutta (husband and wife) each owned a unit.
- The declaration limited units to single-family residential use and stated that any lease or rental agreement would not relieve an owner of obligations to pay common expenses and comply with the declaration.
- The declaration did not expressly grant or protect an owner’s right to rent a unit.
- In 1988, after disputes about the number of leased units and voting control, the parties entered a settlement agreement that addressed Steven’s ability to rent, but did not confer a perpetual rental right for Gloria’s separate unit.
- In 2002, the association amended its bylaws to require owner-occupancy and prohibit most rentals, with limited exceptions; the association did not amend the declaration.
- Gloria leased her unit after the bylaw amendment, and the association sued for declaratory relief to enforce the owner-occupancy bylaw.

## Issues

1. Whether Wisconsin’s Condominium Ownership Act permits a condominium association to prohibit rentals through a bylaw amendment, or instead requires such a restriction to be placed in the recorded declaration.
2. Whether the declaration’s reference to leases and rental agreements created an affirmative right to rent that precluded enforcement of a later bylaw amendment prohibiting rentals.
3. Whether a bylaw prohibition on rentals renders unit title unmarketable in violation of Wis. Stat. § 703.10(6).

## Decision

- The Wisconsin Supreme Court affirmed summary judgment for the association.
- The court held that Wis. Stat. § 703.10(3) authorizes use restrictions in bylaws, including a rental prohibition, so long as the bylaw does not conflict with the declaration or the statute.
- The court held that the declaration did not create a right to rent; it merely contemplated leasing while preserving owners’ obligations to the association.
- The court held that a rental prohibition is a use restriction, not a defect in title, and therefore does not render title unmarketable under Wis. Stat. § 703.10(6).
- The court accepted that the 1988 settlement agreement did not bar enforcement of the bylaw against Gloria’s unit.

## Legal Principles

- Under Wis. Stat. § 703.10(3), condominium bylaws may include restrictions or requirements concerning unit use and maintenance, including restrictions on renting, if consistent with the declaration and governing law.
- A declaration’s acknowledgment that units may be leased, coupled with a clause preserving owners’ obligations during a lease, does not itself establish a vested or affirmative right to rent immune from later, otherwise valid use restrictions.
- Marketability of title is distinct from the economic desirability of property; a use restriction limiting rentals affects permissible use, not the owner’s ability to convey title, and does not by itself make title unmarketable under Wis. Stat. § 703.10(6).

## Conclusion

The court upheld enforcement of an owner-occupancy bylaw amendment prohibiting most rentals, concluding that Wisconsin law permits rental restrictions in bylaws, the declaration did not create an enforceable right to rent, and the restriction did not impair marketable title.


Apple Valley Gardens Ass’n, Inc. v. MacHutta, 2009 WI 28, 316 Wis. 2d 85, 763 N.W.2d 126