Elimination of Municipal Code Compliance Requirements as a Condition of Transfer

As part of the 2015 budget bill, 2015 Wis. Act 55, the Wisconsin legislature created a new law, Section 706.22, that eliminates any code compliance requirements of municipalities as a condition to the transfer or refinancing of real property.  A municipality cannot require that an owner obtain an inspection, make certain improvements or repairs or take any other actions relating to the property complying with building codes or other property condition standards in connection with the sale, refinance or other transfer of title to the property.  Municipalities may still require any of the foregoing if they are not in connection with the sale, refinance or other transfer of title to the property.

While we believe this statute clearly applies to code compliance requirements in a number of municipalities, the notice requirements of other municipalities do not appear to be affected.  A municipal ordinance should continue to be valid under the new law so long as the ordinance only requires notice of a transfer of certain properties and does not relate to code compliance, require an inspection of the property or restrict an owner’s ability to sell or otherwise transfer title or refinance real estate.

We do foresee some future litigation over this statute to determine how far the new law reaches.  We will provide an update if any future litigation clarifies this statute.

If you have questions about this post, please contact its author, Michael Marx, at mmarx@mzmilw.com.