Noncompliant Assessment Calculations

"Assessments shall be calculated per pro-rata ownership percentages", that's what our state Statute law and Declaration mandate, what many/most statutes and Declarations require.

Am looking for other condo associations where board intentionally failed to comply with pro-rata ownership percentage allocations for assessment allocation calculations, and used noncompliant allocation-formulas instead, to benefit one or more board members, at detriment to other unit-owners. "Self-dealing", "bad faith", and "failure to abide by fiduciary duty", these are not uncommon lapses in board-member conduct, but haven't found similar specific cases in internet searches to our situation: board-treasurer implemented his self-determined, and obviously non-compliant, "divide equally" assessment-allocation formula, instead of pro-rata percentages, upon acquiring 50% pro-rata percentage ownership (largest unit) and gaining ad hoc board control too.

Our association has one large commercial storefront unit (50% pro-rata share, two self-appointed board seats, treasurer and his wife) and 20 small upstairs residential units (other 50% pro-rata share total, 2.5% each, two elected board seats, recruited by treasurer). Board-treasurer (and wife) bought commercial unit directly from Developer, triggering board turnover, while board treasurer/president of Developer-controlled board, already owning one residential unit during transition-phase. Per Declaration, commercial unit owns 50% pro-rata percentage ownership share, 50% board seats, parking lot, extra privileges.

Declaration plainly states assessments shall be allocated in accordance with pro-rata ownership percentage shares. No candid board disclosure to unit-owners, or to new purchasers, obscured by super-brief annual "$/month" dollar-amount assessment notice sent to residential unit-owners without background calculations. Each year, Treasurer quietly re-allocated 45% of his 50% pro-rata ownership share to residential units, divided his discarded 45%-increment upon 20 unsuspecting unit-owners. (Residential units have equal pro-rata percentages, were charged double their lawful assessment allocation.) The "commercial unit" board members, treasurer and his wife, as a consequence, received substantial "windfall" assessment subsidies from other unit-owners for a decade, year-after-year, paying a 5% pro-rata share rather than mandated 50%.

(All new board attempted to rectify situation, to no avail.)

Forget about vague complaints of self-dealinig, bad faith and fiduciary duty. From what you posted this is by far about violations of the covenants pertaining to assessments. If you truly have your facts straight, you can write a letter asking that assessments (past and future) be paid as directed in the covenants and asking the condo association lawyer to review this situation. If you get no cooperation from the board and the condo association lawyer, then the law, despite sounding simple, is too complex to handle without professional assistance. You will have to hire a lawyer to review your claims, your Declaration and the Wisc condo act and then give you direction. If there is any chance a group of you could win a majority of seats on the board, then this is the best (cheapest and least hassle) route to go.

Postscript: this former board resigned; new board formed, composed of four residential unit-owners. Association file cabinet found purged of documents; "curated" association PDF files provided by former-treasurer, but without retrievable financial statement records. No audit performed in ten years. New board immediately retained a qualified HOA attorney, had HOA review docs and association records. New board filed lien and foreclosure suits for unpaid accrued legit assessments; commercial unit owner countersued. All done "by the book", per statute law, per Declaration, etc.

Our county has few condominium associations, probably no prior HOA-related litigation at county courthouse. County circuit court judge, normally presiding over criminal cases, ruled in favor of commercial unit owner, contrary to state statute law. Judge believes original Developer-declarant made "error" in Declaration, when Declarant assigned 50% pro-rata ownership share to commercial unit, and 50% collectively to all residential units divided equally, even though it's plainly stated so in both Declaration paragraph-clause, and also plainly so stated same year in 1st Amendment to Declaration, which re-confirmed 50%/50% split and corrected one typo in same paragraph (typo being reason for 1st amendment, "scrivener" error, no change in intent of Declaration terms).

Association attorneys advised board that litigation must go to trial to challenge initial rulings on motions, note NO case-law here, or in other states, support judge's opinion. Nonetheless, two board-members insist upon settling now, settling in favor of commercial unit owner. (Side agreement by one board-member with commercial unit-owner plausible; they are "friends".)

So two board members who supported litigation resigned, likely disgusted. Two remaining board members appointed two new board members, both utterly inexperienced, and new-new board immediately decided to just settle, to allow "divide equally" policy to become "official". No unit-owner vote on pro-rata changes has occurred. At least six unit-owners opposed to changes, so no indication that 100% owner-approval of pro-rata percentage changes is possible. Rancor against objectors: yelling, name-calling, shunning, et al.

Settlement Agreement now executed, even though statute law requires formal "100% owner-approval" to modify pro-rata ownership percentages. Current board believes so long as it executes Agreement, abiding by court's ruling on preliminary motions (not trial) that new pro-rata percentages become "legal". Association's D&O insurer has already advised board it won't renew policy in 2023.

"Fairness" is subjective; reasonableness and law didn't prevail here. Matter has been resolved; I'm asking if anyone here has experienced a similar situation.

Circuit Court judge, unfamiliar with HOA statute law, already decided its "fairer" for court to enforce noncompliant "divide equally" policy, allow to continue, now enforced by court decree, regardless of statute law and Declaration terms, to sole financial benefit of commercial unit-owner.

How was it resolved? What is the formula?