By Ryan J. Foley • Associated Press writer MADISON — Developers are responsible for paying property taxes on land where they intend to build condominiums, the state Supreme Court ruled Friday in a victory for condo owners and municipalities. The case had been closely watched by the real estate industry and revolves around a nationwide phenomenon linked to the recession: the crush of partially completed condominium projects. At issue was who should cover the property tax bill for the unfinished parts of such projects, or whether there should even be one at all. The court's 7-0 ruling that developers are responsible for taxes on condos that are legally approved but not built means the tax burden won't be shifted to other residents who live in those developments. It also means municipalities can assess taxes on land that could be held for years before condos are constructed. "It's a significant victory for both municipalities and the owners of the built units," said attorney Amie Trupke, who represented the Town of Pacific. "This eliminates a lot of confusion for assessors and condo purchasers." A group representing condo associations and management companies said the decision also means developers should have to pay their fair share of expenses for things like snow removal and landscaping that are covered by owners. Whether unbuilt units should have to pay those monthly fees has long been a controversy, said Jack Levine, who represents the Wisconsin chapter of the Community Associations Institute. "What the decision effectively says is that every unit declared, whether built or not, has a share of responsibility," he said. "I think it's good news and it will have an impact." The dispute started when Town of Pacific in Columbia County assessed the Saddle Ridge Corp. property taxes for 41 unbuilt condo units. The town assessed each unit's value at $32,000 for tax purposes in 2006. Portage-based Saddle Ridge filed a lawsuit arguing the "units" were nothing more than bare land, were not yet built and could not be sold. The company said it should not have to pay any taxes on the land, which it argued was owned by the condo associations. A judge ruled such land should be considered "a common area" belonging to condo associations and existing owners, who should split up responsibility for taxes among themselves. An appeals court upheld that ruling, but the 2-1 opinion was criticized by industry officials for causing confusion in the marketplace. The state Supreme Court overturned those decisions Friday, saying the town "got it right." "We conclude that Saddle Ridge was lawfully assessed for the property tax due on the tax parcels at issue here," Chief Justice Shirley Abrahamson wrote. "These parcels represent the declared but unbuilt units within the condominiums, and Saddle Ridge is the owner of those units." Abrahamson said adopting Saddle Ridge's position would either allow developers to avoid real estate taxes while they sit on valuable land, or "shift the tax burden onto the purchasers of the earliest condominium units." Either outcome would be unacceptable, she said.
