Solowicz v. Forward Geneva National, LLC

2010 WI 20, 780 N.W.2d 111, 323 Wis. 2d 556, 2010 Wisc. LEXIS 20

• Court: Wisconsin Supreme Court
• Decided: March 24, 2010
• Docket: 2008AP10
• Status: Published

Opinions

PATIENCE DRAKE ROGGENSACK, J.

¶ 1. We review a decision of the court of appeals¹ affirming the circuit court's decision² granting summary judgment in favor of Forward Geneva National, LLC, and other defendants (collectively, the Developer) and denying plaintiffs' motion for summary judgment. Both the circuit court and the court of appeals agreed that the "Declaration of Covenants, Conditions, Restrictions and Easements for the Geneva National Community" (the Community Declaration), which controls the overall development of Geneva National, does not violate Wis. Stat. ch. 703 (2007-08),³ the Condominium Ownership Act. The court of appeals concluded that the Community Declaration established a master-planned community⁴ that is not subject to ch. 703 and that the terms of the Community Declaration are unambiguous, which "the complainants full-well knew existed" before they purchased in Geneva National.⁵

¶ 2. Two issues are presented for our review: (1) whether the Community Declaration, which affects the condominiums, is either subject to or contravenes Wis. Stat. ch. 703, the Condominium Ownership Act; and (2) whether the Community Declaration's terms, if unambiguous, must also be reasonable to be enforceable. We conclude that ch. 703 does not apply to the Community Declaration because the Community Declaration is not a document that creates condominiums. Rather, the Community Declaration provides the overarching development scheme for Geneva National, a 1,600 acre planned community. Moreover, the Community Declaration does not contravene the protections of ch. 703 because the Developer does not exercise particularized day-to-day control over individual condominiums; rather, particularized day-to-day control of the terms of individual condominiums is vested in the unit owners. Furthermore, because the terms of the Community Declaration are unambiguous, those terms are not required to be reasonable, as well as unambiguous, in order to be enforceable. Accordingly, we affirm the decision of the court of appeals that affirmed the circuit court's decision granting the Developer's motion for summary judgment and denying plaintiffs' motion for summary judgment.

I. BACKGROUND

¶ 3. The relevant facts are undisputed. Plaintiffs Mark J. Solowicz, Jesse E. Soltis and Stephen J. Havey (collectively, Solowicz) each purchased a condominium unit in Geneva National, a planned community near Lake Geneva, Wisconsin. Geneva National was designed by "environmental specialists and engineers to protect the beauty of the environment" while offering year round amenities and services to its residents and to those who visit Geneva National.⁶ The community spans approximately 1,600 acres and consists of three golf courses, racquet and swim clubs, numerous wooded hiking trails, hotels, restaurants, private roadways and utilities, single- and multi-family residences and commercial space. Geneva National was first developed by GN Partners, an Illinois General Partnership. Forward Geneva National, LLC is GN Partners' successor in interest as the Developer.

¶ 4. The multi-family residential buildings include 32 parcels of condominiums.⁷ Each condominium parcel, including the three condominium units purchased by plaintiffs, has two recorded declarations that apply to it: the "Declaration of Condominium Ownership and of Easements, Restrictions, Conditions and Covenants for Geneva National Condominium No._" (with the particular condominium unit number indicated) (the Condominium Declaration) and the Community Declaration. The Community Declaration was recorded in the Walworth County Register of Deeds Office on May 21, 1990, and each of the Condominium Declarations, all dated May 22, 1990, were recorded sometime thereafter.

A. Condominium Declaration

¶ 5. The Condominium Declaration for each parcel subjects that condominium parcel and the condominium units within that parcel to the provisions of the Condominium Ownership Act. Each Condominium Declaration required the Declarant to form the Geneva National Condominium Master Association, Inc. (Condominium Master Association), pursuant to Wis. Stat. § 703.155, not later than the date of the first conveyance of a condominium unit to a purchaser. The Declarant properly formed the Condominium Master Association. This association serves all residential and select commercial condominiums at Geneva National. The Developer has no control over the Condominium Master Association; complete control is vested in its members — the condominium unit owners. The Condominium Master Association conducts the affairs of the condominium parcels. Its services are limited to maintenance and administration.

B. Community Declaration

¶ 6. The Community Declaration is not simply a restrictive covenant as the document has been referred to by petitioners and in both previous court decisions. Rather, it is a master governance scheme for the entire Geneva National development. The document was enacted by the Declarant, whom we also refer to as the Developer, Forward Geneva National, LLC.⁸ The circuit court determined the Community Declaration's purpose is to promote the orderly development of Geneva National; to control the effect of the development to preserve the natural setting; to maintain wooded areas, open spaces, recreational areas, roadways and other facilities and to subject the development to the terms of the Community Declaration for its overall benefit. This is accomplished through two governing bodies: the Geneva National Trust (Trust) and the Geneva National Community Association (Community Association).

¶ 7. The purpose of the Trust is to preserve and maintain the natural environment within Geneva National. The Trust's powers and duties include adopting and enforcing architectural standards, adopting and amending rules and regulations governing the use of property and granting variances from restrictions set forth in the Community Declaration. The Trust is governed by majority vote of three trustees. If the Trust is unable, fails or refuses to act according to its duties, only then can the Declarant exercise the Trust's powers. The Trust is independent of, and not accountable to, the Community Association.

¶ 8. The Community Association has various powers, duties and responsibilities. It maintains Geneva National's private roadways, medians, entrances and property; provides utilities and security services; may levy assessments on property owners; may buy or sell property on behalf of the members; may obtain loans and may take any other lawful action necessary in the sole and absolute discretion of the Board of Directors to exercise all powers and discharge all duties and responsibilities of the Community Association and to carry out the purpose and intent of the Community Declaration. Its powers are limited to the extent that it cannot exercise the powers granted to the Trust. The Community Association is governed by the majority vote of the Board of Directors. The Board of Directors is made up of five (originally six) classes of voting members: the club owners, commercial property owners, multiple-family unit owners, single-family unit owners and the Developer. Each class of voting members elects a representative to sit on the Board of Directors, and each representative may cast four votes, except the commercial property owners who may cast only three votes.

¶ 9. Article IX of the Community Declaration reserves certain rights for the Declarant, two of which are at issue here. The Declarant may amend the Community Declaration without approval of any condominium unit owner if the Declarant determines that the amendment does not materially alter or change any unit owner's right to the use and enjoyment of his or her property. Additionally, the Declarant may exercise the powers listed in Article IX until:

conveyance by Declarant of eighty-five percent (85%) of the maximum number of Units which may be located on Single-Family Residence Grounds and Multiple-Family Residence Grounds within the Property, as determined from time to time pursuant to the provisions of the applicable zoning laws and ordinances, including any variations, use permits, amendments and other modifications thereto enacted by Walworth County, Wisconsin or any other governmental unit or agency having jurisdiction thereof....

The maximum number of residential units is 1,960. As of April 2007, the Declarant conveyed 1,015 units, approximately 52 percent of the maximum number. No other term exists for the transition of Declarant control to the property owners.

¶ 10. Solowicz sued for declaratory judgment. Solowicz's major complaint is that the Developer, referred to as the "Declarant" in the Community Declaration, retains too much control over the development of Geneva National.⁹ In an effort to limit the Developer's control, Solowicz sought a declaration that Wis. Stat. ch. 703 applies to the Community Declaration, that the Community Declaration be deemed invalid for violating ch. 703 and that the Developer relinquish control of Geneva National to the property owners. Solowicz further argued that even if the Community Declaration is not subject to ch. 703, it is invalid because its terms are unreasonable, ambiguous and vague. The parties filed cross-motions for summary judgment.

¶ 11. The circuit court granted defendants' motion for summary judgment and denied plaintiffs' motion for summary judgment. Finding no genuine issue of material fact, the circuit court held that the Community Declaration is not a condominium instrument and thus is not subject to ch. 703 and that it does not contravene ch. 703 because each individual Condominium Declaration is subject to ch. 703 and thus provides plaintiffs the protections of the law with regard to the particular parcel in which their individual units are located. The circuit court further held that the Community Declaration's terms were not ambiguous or vague. Finally, the court held that it was precluded from assessing reasonableness because the Community Declaration's language is unambiguous. The court of appeals affirmed the circuit court's decision and, in addition to the reasons set forth by the circuit court, explained that the Community Declaration established a 1,600 acre planned community that is not subject to ch. 703.

¶ 12. We granted review and now affirm.

II. DISCUSSION

A. Standard of Review

¶ 13. This case requires us to review the circuit court's decision granting the Developer's motion for summary judgment. We review a decision on a motion for summary judgment independently, employing the same methodology as the circuit court. Estate of Genrich v. OHIC Ins. Co., 2009 WI 67, ¶ 10, 318 Wis. 2d , 769 N.W.2d 481. Resolution of the first question presented requires us to interpret and apply Wis. Stat. ch. 703." 'The interpretation and application of a statute to an undisputed set of facts are questions of law that we review independently.'" Id. (quoting McNeil v. Hansen, 2007 WI 56, ¶ 7, 300 Wis. 2d 358, 731 N.W.2d 273). Resolution of the second question presented requires us to interpret a written document affecting land and is a question of law that we review independently of the circuit court. Zinda v. Krause, 191 Wis. 2d 154, 165, 528 N.W.2d 55 (Ct. App. 1995) (citing Bubolz v. Dane County, 159 Wis. 2d 284, 291-92, 464 N.W.2d 67 (Ct. App. 1990)).

B. Application of the Condominium Ownership Act

¶ 14. The first question is whether the Community Declaration, which established the terms and conditions for the development of a 1,600 acre planned community that includes condominium parcels, must comply with the Condominium Ownership Act (the Act). See Wis. Stat. ch. 703. Solowicz argues that the Community Declaration is a condominium instrument subject to the Condominium Ownership Act.

¶ 15. The condominium declaration is the operative instrument that creates a condominium. See Wis. Stat. § 703.09. Chapter 703 applies to all property with a duly executed condominium instrument. Solowicz argues that the Community Declaration is a condominium instrument as contemplated by the Act because the Developer attached the Community Declaration to the individual Condominium Declarations.¹⁰ Therefore, Solowicz contends that ch. 703 overrides any contradictory provisions in the Community Declaration. Specifically, Solowicz argues that because Article IX of the Community Declaration left the Declarant in control of Geneva National for 19 years, it violates Wis. Stat. § 703.l5(2)(c).¹¹ Excising Article IX would result in control of Geneva National being transferred to the unit owners. Similarly, Solowicz argues that the Declarant violated § 703.09(2)¹² each of the four times it unilaterally amended the Community Declaration and that the provisions of the Community Declaration allowing such unilateral amendments should be excised. We disagree with Solowicz and decline to excise any provisions of the Community Declaration.

¶ 16. We conclude that the Community Declaration is not a condominium instrument subject to ch. 703; rather, it establishes an overall development scheme for the 1,600 acre planned community. Condominium instruments include the condominium declaration, plat and plan. See Wis. Stat. § 703.02(5). First, to qualify as a condominium declaration, the document "shall contain" "a statement of the owner's intent to subject the property to the condominium declaration" under the Act, a name including the word "condominium" and a description of the condominium's common elements.¹³ Wis. Stat. § 703.09(1)(a), (b), (d). No part of the Community Declaration evinces the Declarant's intent to subject all 1,600 acres to ch. 703; rather, it is the Condominium Declaration for each condominium parcel that demonstrates the intent to be subject to the Act. Further, the Community Declaration's full name, "Declaration of Covenants, Conditions, Restrictions and Easements for the Geneva NationalCommunity," very clearly does not include the word condominium. The Community Declaration refers to condominiums only when it references the Condominium Declarations, which clearly include the word condominium in their title. Finally, each Condominium Declaration, not the Community Declaration, includes a description of the condominium's common elements. The Community Declaration is not, nor does it purport to be, a condominium plat. A condominium plat must include a survey of the condominium property. See Wis. Stat. § 703.11(2)(b). Such plat was properly included in each Condominium Declaration, not the Community Declaration. Lastly, the Community Declaration is not a condominium plan, which is required to be submitted as part of the plat. See § 703.11(2)(c). Again, each Condominium Declaration, not the Community Declaration, properly shows the location of the condominium units.

¶ 17. These shortcomings cannot be salvaged by the Act's saving provision in Wis. Stat. § 703.30(2) because the Community Declaration cannot be said to "substantially conform with the requirements" of the Act. Thus, the plain language of ch. 703 makes clear that the Community Declaration is not a condominium instrument subject to the Act.

¶ 18. Solowicz further argues that Geneva National is required to comply with the Act because it is a community of condominiums and the Community Association is an umbrella organization authorized by Wis. Stat. § 703.155(7).¹⁴ The Developer counters by arguing that Geneva National is not simply a community of condominiums, but a 1,600 acre planned community, portions of which contain condominiums.

¶ 19. We agree with the court of appeals' statement that planned communities, such as Geneva National, "are an entirely different type and level of development than condominiums." Solowicz v. Forward Geneva Nat'l, 2009 WI App 9, ¶ 23, 316 Wis. 2d 211, 763 N.W.2d 828. A condominium is a form of ownership of real property that combines two separate forms of ownership interest: the individual ownership of the dwelling unit and the undivided common ownership, with other unit owners, of the common elements of the condominium parcel. Joseph W Boucher et al., Wisconsin Condominium Law Handbook § 1.17 (3d ed. 2006). While we found varying characteristics of similarly planned communities, there are several key components that appear to be common to most such communities. First, these communities generally are large¹⁵ developments that usually include a mix of commercial, recreational and residential property, including condominiums. Second, a keystone to such communities is an overall development scheme that not only permits individual units to operate under their own individual governing documents, but also subjects the entire development to a master governing body, which ensures the entire community is developed according to its stated purpose.¹⁶ The communities function as semi-autonomous, private quasi-towns.

¶ 20. Geneva National is not merely a community of condominiums; rather, it is a 1,600 acre planned community that includes condominium parcels and other types of ownership. The Community Declaration, Geneva National's overarching development plan, guides the development of 1,600 acres according to the Developer's vision — "a distinct golf and leisure community." Solowicz, 316 Wis. 2d 211, ¶ 24. It also serves to protect those who purchase within Geneva National by assuring that their common interest in developing such a community according to the overarching development plan will be honored as development continues. And finally, the recorded Community Declaration gives notice to all purchasers of Geneva National's underlying terms and conditions.

¶ 21. As did the court of appeals, we too conclude that Wis. Stat. "ch. 703 [] unambiguously provides no reference whatsoever to master-planned communities. So, the plain meaning of the chapter is that it simply does not contemplate such communities." Id., ¶ 35. Accordingly, because the Community Declaration establishes the overall development scheme for the 1,600 acre planned community, it need not comply with ch. 703.

¶ 22. Furthermore, the portion of Geneva National that Solowicz seeks to control is not the 32 residential condominiums. The unit owners already have achieved this.¹⁷ Instead, Solowicz seeks control of the remainder of the 1,600 acre development. Accepting Solowicz's argument would mean that simply because a developer chooses to include one condominium parcel in a 1,600 acre development, the time limitations of ch. 703 — three or ten years — control the entire 1,600 acres. Thereafter, development decisions would cede to the then existing condominium unit owners. This surely cannot be the case. Due to the complexity of the development of the large planned community, extended developer control is necessary to properly market and uniformly develop such property. See Uniform Common Interest Ownership Act § 2-123(g) (2008).

¶ 23. Likely anticipating the weakness of the arguments addressed above, Solowicz attempts to reinvent his argument by asserting that even if the Community Declaration is not a condominium instrument and ch. 703 does not directly apply to planned communities, the overarching development scheme of Geneva National intentionally contravenes the protections of ch. 703, to which plaintiffs are entitled. Solowicz cites three cases from other jurisdictions that he contends use condominium law to limit a developer's control over planned communities. All three of the cases cited are distinguishable on their facts, and one actually supports the Developer's position.

¶ 24. In Fox v. Kings Grant Maintenance Ass'n, 770 A.2d 707 (N.J. 2001), cited by Solowicz, plaintiffs were 46 condominium unit owners in a planned community¹⁸ that spanned 1,800 acres with a total of 1,447 individually owned units. The condominium association was required to turn over control of the condominium's common elements to the community's umbrella association, which consisted of non-unit owners. The umbrella association then exercised complete control of "all common property," including common elements of the individual condominiums. Id. at 711 (emphasis in original). The court held that New Jersey's condominium act prohibited requiring unit owners to delegate their governance rights over the common elements of their condominium to the umbrella association. Id. at 709.

¶ 25. The Fox court went on to explain that an umbrella association is permitted to control "property intended for the common and beneficial use of unit owners of several separate condominium associations, such as common roadways, common open space, and common recreational facilities"; and, that, as long as the umbrella association does not infringe on the unit owner's control of the common elements of individual condominiums, the condominium act is not circumvented. Id. The court demonstrated support for other governance schemes by explaining that because of the enormity of such communities, control by an umbrella association is "necessary for the viability and maintenance of uniform standards." Id. at 719.

¶ 26. Here, the Community Association, which was established in the Community Declaration, functions appropriately under Fox's description of a lawful umbrella association. It retains no control whatsoever over the Condominium Master Association,¹⁹ which is the governing body that retains sole and complete control over the management and governance of the residential condominium parcels, including their common elements.²⁰ Stated otherwise, the Community Association's powers are limited to those Fox approved. Accordingly, Fox does not support Solowicz's argument that Geneva National's governance scheme contravenes ch. 703.

¶ 27. Solowicz next relies on Brandon Farms Property Owners Ass'n v. Brandon Farms Condominium Ass'n, 852 A.2d 132 (N.J. 2004), which held that under New Jersey's condominium act, a declaration may not make a condominium association responsible for an association member's failure to pay assessments owed to an umbrella association. Id. at 133-34. Geneva National's Community Declaration does not contain such a provision. To the contrary, the Community Declaration provides for the assessment of unit owners directly; it does not pass assessments through the Condominium Master Association as occurred in Brandon Farms.

¶ 28. Finally, Solowicz cites Ainslie at Century Village Condominium Ass'n v. Levy, 626 So. 2d 229 (Fla. Dist. Ct. App. 1993). In Ainslie, included in the condominium declaration was a long term lease and a service contract between the developer and a management firm that gave the developer control of the condominium's recreational facilities. Id. at 230. The court held the lease and contract void because it vitiated the statutory protections in place for condominium owners. Id. at 232. We agree with the court of appeals' analysis of Ainslie and conclude that it is distinguishable for two reasons. First, in the case now before us, there is no lease or contract giving the Developer control of any condominium parcel's common elements. Second, based on the Ainslie court's description, the development in Ainslie was a community of condominiums, not a planned community with an overarching development plan similar to Geneva National.

¶ 29. Significantly, all of Solowicz's complaints relate to how the community as a whole, through its overarching plan, is being developed. He has not complained that the Developer is meddling in individual condominium affairs. Indeed, this is because the Developer does not have, any power over individual condominium affairs and therefore, its power cannot be said to thwart rights accorded to individual condominium unit owners under ch. 703.

¶ 30. In support of this point, we note that the Declarant timely ceded control of each residential condominium parcel to its unit owners as required under Wis. Stat. § 703.15.²¹ Solowicz, Soltis and Havey, through the Condominium Master Association of which they are members, are in complete and absolute control of their condominium units and the common elements of their condominium parcels. Further, the Declarant has not amended the Condominium Declaration without proper approval of the unit owners, see Wis. Stat. § 703.09(2), and the Declarant is restrained from unilaterally amending the Community Declaration if such amendment would materially alter a unit owner's rights to the use and enjoyment of the unit and its common elements.²²

¶ 31. Because Geneva National is a planned community with an overarching development scheme established to create a high end golf and leisure community, containing restaurants, golf clubs, tennis clubs, swimming clubs, single family homes, multiple family homes, wooded hiking trails, private streets with gated access to the community, and not simply a community of condominiums, it is not subject to ch. 703. Furthermore, because the Community Declaration does not retain particularized day-to-day control over the condominium parcels or the individual condominiums, it does not contravene ch. 703.

C. Solowicz's Reasonableness Requirement

¶ 32. Solowicz next contends that Wisconsin has a longstanding reasonableness requirement such that agreements with unreasonable terms, even if unambiguous, are unenforceable. The Developer contends that because the Community Declaration's terms are unambiguous, the court need not, and should not, determine the reasonableness of such terms. Accordingly, the second question we must address is whether the terms of the Community Declaration, if unambiguous, must also be reasonable. But, before we answer this question we must first determine whether the Community Declaration's terms are unambiguous. We consider each question in turn.

1. Unambiguous terms

¶ 33. We note that neither Solowicz nor the Developer dispute that the terms of the Community Declaration must be unambiguous; however, they do dispute whether the terms are unambiguous.

¶ 34. Ordinary contract rules apply to interpreting the terms of contracts such as the Community Declaration. See Siler v. Read Inv. Co., 273 Wis. 255, 261, 77 N.W.2d 504 (1956). Wisconsin public policy favors freedom of contract. AKG Real Estate, LLC v. Kosterman, 2006 WI 106, ¶ 34, 296 Wis. 2d 1, 717 N.W.2d 835. Freedom of contract is based on the idea that individuals should have the power to govern their own affairs without interference. Id. Our goal in interpreting contracts that were freely entered into "is to determine and give effect to the parties' intention." Wis. Label Corp. v. Northbrook Prop. & Cas. Ins. Co., 2000 WI 26, ¶ 23, 233 Wis. 2d 314, 607 N.W.2d 276 (citing Gorton v. Hostak, Henzl & Bichler, S.C., 217 Wis. 2d 493, 506, 577 N.W.2d 617 (1998)). Wisconsin public policy also "favors the free and unrestricted use of property." Dodge v. Carauna, 127 Wis. 2d 62, 65, 377 N.W.2d 208 (Ct. App. 1985) (citing Crowley v. Knapp, 94 Wis. 2d 421, 434, 288 N.W.2d 815 (1980)).

¶ 35. In order to accommodate the principle favoring free and unrestricted use of property and the principle favoring individuals' right to freely contract in ordering their own affairs, we generally have said that documents such as the Community Declaration must be expressed in unambiguous language to be enforceable contracts. Pertzsch v. Upper Oconomowoc Lake Ass'n, 2001 WI App 232, ¶ 8, 248 Wis. 2d 219, 635 N.W.2d 829 (citing Dodge, 127 Wis. 2d at 65); see also Crowley, 94 Wis. 2d at 435 (to be enforced, restrictions must be "expressed in clear, unambiguous, and peremptory terms"). We apply the standard set forth in Zinda, which includes ascertainment of the purpose of the contract, to determine whether the Community Declaration is expressed in unambiguous terms. See Zinda, 191 Wis. 2d at 167.

¶ 36. Language "is ambiguous if it is susceptible to more than one reasonable interpretation." Id. at 165-66. However, if the intent of the contract can be certainly ascertained from the document itself, it will be enforced. Id. at 166. "By intent we do not mean the subjective intent of the drafter, but the scope and purpose of the [document] as manifest by the language used." Id. Furthermore, a document need not expressly prohibit the specific activity in question; when the purpose is ascertainable, the document should be construed to give effect to that purpose. Bubolz, 159 Wis. 2d at 294. Applying these principles of law to the Community Declaration, we determine that its terms are unambiguous in light of its purpose.

¶ 37. As previously stated, Article IX of the Community Declaration reserved to the Declarant control over Geneva National until "conveyance by Declarant of eighty-five percent (85%)" of the maximum number of residential units. Solowicz contends that the term conveyance is ambiguous because it was redefined two times,²³ which demonstrates that the term is subject to more than one reasonable interpretation. Solowicz further contends that because GN Partners, the original developer, conveyed certain undeveloped land in Geneva National to its lenders, who in turn transferred most of that land to the current Developer, the Declarant's control is terminated because it conveyed more than 85 percent of the units. We are unpersuaded.

¶ 38. We give effect to the purpose of the Community Declaration as manifest by the language used. See Zinda, 191 Wis. 2d at 166. We agree with the circuit court's characterization of the Community Declaration's purpose. It is unambiguously an attempt to position control of Geneva National with the Declarant until a significant number of the residential units are sold to allow the Declarant to promote the orderly development of the property according to the master plan. Accepting Solowicz's contention would contravene this purpose by eliminating Declarant control when only 52 percent of the residential units have been conveyed to individual unit owners; conveying land to a third-party lender does not eliminate the need for Declarant control over the properly. The Declarant's two explanations of what constitutes a conveyance did not redefine the term, but instead served to reinforce the Community Declaration's purpose by concluding that a conveyance occurs when the Developer conveys a parcel to an owner or to a third-party developer who has platted the parcel.²⁴ Accordingly, the terms of the Community Declaration unambiguously maintain the Declarant's control until 85 percent of the residential units are conveyed to individual unit owners or to a third-party developer who has platted the parcels. Conveyance of 85 percent of the residential units to individual unit owners or third-party developers who have platted the parcels has not yet occurred.

2. Reasonable enforcement

¶ 39. Solowicz argues that even if the terms of the Community Declaration are unambiguous, the court must determine whether its terms are reasonable, and the Community Declaration unreasonably provides for unlimited and unending Developer control over the condominiums in Geneva National and is thereby unenforceable.

¶ 40. The Community Declaration is a contract or agreement between the Developer and those who choose to purchase property within Geneva National, as we have discussed above. However, the Community Declaration is also a type of servitude upon the land underlying Solowicz's condominiums because it places certain burdens on the ownership estates. Black's Law Dictionary 1492 (9th ed. 2009).

¶ 41. Wisconsin courts have consistently held that a servitude that is unambiguous at the time of its creation will be strictly enforced. Gojmerac v. Mahn, 2001 WI App 22, ¶ 31, 250 Wis. 2d 1, 640 N.W.2d 178 (citing Hunter v. McDonald, 78 Wis. 2d 338, 342-43, 254 N.W.2d 282 (1977)). Courts do not determine the reasonableness of such unambiguous servitudes. See Pertzsch, 248 Wis. 2d 219, ¶ 10 n.3; Zinda, 191 Wis. 2d at 171. The reasons for this conclusion are many. For example, we apply ordinary contract rules when interpreting the terms of a servitude. See Siler, 273 Wis. at . Parties also have the freedom to contract as they see fit, which is a well-established principle of law that Wisconsin courts have long recognized. Watts v. Watts, 137 Wis. 2d 506, 521, 405 N.W.2d 305 (1987).

¶ 42. Here, the contract (the Community Declaration) was recorded, affording plaintiffs' notice of all its terms. While we acknowledge that the freedom to contract may be tempered by basic common law principles, courts will not intervene and void an unambiguous contract absent the violation of a common law principle, which under the circumstances, requires that result. See, e.g., unconscionability, Wis. Auto Title Loans, Inc. v. Jones, 2006 WI 53, ¶ 29, 290 Wis. 2d 514, 714 N.W.2d 155; bad faith, M&I Marshall & Ilsley Bank v. Schlueter, 2002 WI App 313, ¶ 15, 258 Wis. 2d 865, 655 N.W.2d 521; performance becomes impossible due to facts existing when the contract was made, which the non-performing party did not know and had no reason to know, Estate of Zellmer v. Sharlein, 1 Wis. 2d 46, 49, 82 N.W.2d 891 (1957); terms that contravene public policy, Watts, 137 Wis. 2d at 521; or terms that contravene a statute, Baierl v. McTaggart, 2001 WI 107, ¶ 12, 245 Wis. 2d 632, 629 N.W.2d 277. No such common law principle has been contravened by the Community Declaration.

¶ 43. As noted, Solowicz contends that there is a long line of cases holding that restrictive covenants with unreasonable terms are unenforceable. Solowicz misconstrues these cases. The Community Declaration is not simply a covenant that contains restrictions, but rather the overarching plan for the development of a 1,600 acre parcel. However, we nevertheless review the principles established by the restrictive covenant cases that Solowicz cites.

¶ 44. First, Solowicz cites to restraint of trade cases and wrongly attempts to import the reasonableness requirement in such cases to the contract at issue here. Contracts that contain restraints of trade are distinguishable because they are disfavored at law and "must withstand close scrutiny as to their reasonableness." Star Direct, Inc. v. Dal Pra, 2009 WI 76, ¶ 19, 319 Wis. 2d 274, 767 N.W.2d 898. In Huntley v. Stanchfield, 174 Wis. 565, 183 N.W. 984 (1921), cited by Solowicz, Patnaude sold a hotel property with a restrictive covenant in the deed that prohibited the property from being used as a hotel for 15 years. In a previous action, the court enjoined the defendants from using the property as a hotel. Id. at 566. Huntley claimed the defendants violated the injunction and requested the court hold them in contempt. Id. The defendants argued that the covenant was void because it was an illegal restraint of trade. Id. at 569. On this point, the court noted that the proper inquiry is whether:

the restriction [is] a reasonable one under all the facts and circumstances of the transaction in the light of "the situation, business, and objects of the parties," and was the restriction "for a just and honest purpose, for the protection of the legitimate interests of the party in whose favor it is imposed, reasonable as between them and not specially injurious to the publicf]"

Id. at 570 (quoting Cottington v. Swan, 128 Wis. 321, 323, 107 N.W. 336 (1906) and cases there cited). Solowicz is correct in pointing out that the Huntley court determined whether the restrictive covenant was reasonable; however, Huntley is distinguishable because the covenant contained a restraint of trade. Id. at 568-69. The Community Declaration does not restrain trade. Accordingly, Huntley's reasonableness inquiry is inapplicable here. Doherty v. Rice, which reiterates the inquiry in Huntley, is also a restraint of trade case. Doherty, 240 Wis. 389, 3 N.W.2d 734 (1942). The deed in that case prohibited sale to and occupation by non-Caucasians, construction of residences that cost less than $600 and the use of outside toilets. Id. at 392.

¶ 45. Next, Solowicz argues that McKinnon v. Benedict, 38 Wis. 2d 607, 157 N.W.2d 665 (1968), Le Febvre v. Osterndorf, 87 Wis. 2d 525, 275 N.W.2d 154 (Ct. App. 1979), Dodge, 127 Wis. 2d 62 and Weiland v. Paulin, 2002 WI App 311, 259 Wis. 2d 139, 655 N.W.2d 204,²⁵ hold that the terms of a contract must be reasonable to be enforceable. We disagree. None of these cases declines to enforce a contract on the grounds that its terms are unreasonable; rather, the cases demonstrate the court applying equitable principles. Such equitable principles require the enforcement of a contract's terms be reasonable, not that the terms themselves be reasonable.

¶ 46. In McKinnon, the defendants purchased land that was being used as a resort. In need of financial assistance, defendants obtained a loan from plaintiff, the terms of which imposed a restraint on trade such that defendants could use the land for no purpose other than as a summer resort for a period of 25 years. McKinnon, 38 Wis. 2d at 615. Because of financial pressures, defendants added a trailer park and campsite. Plaintiff sought to enjoin defendant from operating the trailer park and campsite. Id. at 614r-15. The court declined to use its equitable injunctive powers because the terms of the agreement were so unreasonably enforced that the contract was unconscionable. See id. at 622.

¶ 47. In Le Febvre, the condominium declaration stated that "no unit may be rented without the prior written consent of the Board of Directors." Le Febvre, 87 Wis. 2d at 528. Plaintiffs, members of the board of directors, sought an injunction against the continued rental of certain units by the developer, which the circuit court granted. Id. The court affirmed, holding that based upon all the facts and circumstances, "it [was] reasonable to enforce this restriction by injunction." Id. at 535.

¶ 48. In Dodge, a deed restriction reserved the right for the subdivision developers to approve all buildings. Dodge, 127 Wis. 2d at 64. The court held that the restriction's approval standard was arbitrary and concluded "that where, as here, a common grantor reserves the right to approve building on a deeded property by arbitrary standards, the exercise of that right — and not the restriction itself — " must be reasonable. Id. at 66 (emphasis added).

¶ 49. Weiland, citing McKinnon, reaffirmed that "the reasonableness requirement for a deed restriction is grounded in principles of equity." Weiland, 259 Wis. 2d at 152. Weiland unequivocally states that "if the intent of a restrictive covenant can be clearly ascertained from the covenant itself, the restrictions will be enforced." Id. at 149 (citing Zinda, 191 Wis. 2d at 166). In Weiland, the subdivision developers sought injunctive relief against the lot owners, alleging that the owners erected a manufactured structure on their lot without preapproval in violation of the declarations governing the subdivision. Id. at 143. The court held that it was reasonable to enforce the deed restriction and affirmed the grant of injunctive relief. Id. at 151.

¶ 50. In the case now before us, both the court of appeals and the circuit court cited Pertzsch in support of the proposition that unambiguous contract terms need not be assessed for their reasonableness. Specifically, they relied on this passage:

Because we reject the argument that the covenants contain no specific standard of approval for boathouses, we also reject the Association's reliance on Dodge v. Carauna .... [Bjecause the standards of approval in this case are not arbitrary, but are clear and specific, we are precluded from inquiring into the developer's intent or into any other evidentiary matters outside the four corners of the agreement.

Pertzsch, 248 Wis. 2d 219, ¶ 10 n.3.

¶ 51. Solowicz contends that Pertzsch should be overruled because it attempts to eliminate what Solowicz contends is Wisconsin's longstanding reasonableness requirement. We disagree. Rather, Pertzsch is the latest in a long line of cases recognizing that the reasonableness analysis of unambiguous contracts is limited to determining whether the terms of the contract were reasonably enforced.²⁶

¶ 52. Here, we have concluded that the terms of the Community Declaration are unambiguous and therefore, its terms need not pass a test as to their reasonableness in order to be enforceable.

III. CONCLUSION

¶ 53. Two issues are presented for our review: (1) whether the Community Declaration, which affects the condominiums, is either subject to or contravenes Wis. Stat. ch. 703, the Condominium Ownership Act; and (2) whether the Community Declaration's terms, if unambiguous, must also be reasonable to be enforceable. We conclude that ch. 703 does not apply to the Community Declaration because the Community Declaration is not a document that creates condominiums. Rather, the Community Declaration provides the development scheme for a 1,600 acre planned community. Moreover, the Community Declaration does not contravene the protections of ch. 703 because the Developer does not exercise particularized day-to-day control over individual condominiums; rather, particularized day-to-day control of the terms of individual condominiums is vested in the unit owners. Furthermore, because the terms of the Community Declaration are unambiguous, those terms are not required to be reasonable, as well as unambiguous, in order to be enforceable. Accordingly, we affirm the decision of the court of appeals that affirmed the circuit court's decision granting the Developer's motion for summary judgment and denying plaintiffs' motion for summary judgment.

By the Court. — The decision of the court of appeals is affirmed.

1 Solowicz v. Forward Geneva Nat'l, 2009 WI App 9, 316 Wis. 2d 211, 763 N.W.2d 828.

2 The Honorable Michael S. Gibbs of Walworth County presided.

3 All references to the Wisconsin Statutes are to the 2007-08 version unless otherwise noted.

4 The court of appeals referred to Geneva National as a "master-planned community." Solowicz, 316 Wis. 2d 211, ¶ 23. We have not employed this term, but rather, refer to Geneva National simply as a 1,600 acre planned community. We have done so because, to some extent, the term "master planned community" máy have become a term of art in those writings that remark upon the Uniform Common Interest Ownership Act (UCIOA). In the UCIOA, "master planned community" is the term employed for developments of more than 500 acres, with at least 500 units, all of which the developer has subjected to an overarching development plan. UCIOA § 2-123 (2008). Although Geneva National has similarities to a master-planned community as defined in the UCIOA, Wisconsin has not enacted a statute adopting the UCIOA. In addition, we have not analyzed the UCIOA to determine whether Geneva National complies with all its provisions.

5 Solowicz, 316 Wis. 2d 211, ¶ 1.

6 www.genevanationalhoa.com, visited March 12, 2010.

8 GN Partners was the original Declarant, as well as the original developer. Forward Geneva National, LLC is its successor in interest in both capacities.

9 For example, Solowicz complains that the Developer purchased an expensive gate for the entrance to the community and then assessed all the owners for that purchase.

10 We, like the circuit court and court of appeals, recognize that Solowicz bases his argument in part on an advisory memorandum issued by the Wisconsin Attorney General on July 21, 2006. The Memorandum concluded that the Community Declaration was in fact subject to Wis. Stat. ch. 703 and thus was probably not valid. Such opinions can be persuasive, but they are not binding on this court.

11 Wisconsin Stat. § 703.15(2)(c) requires a declarant to relinquish control of a condominium association "[tjhirty days after the conveyance of 75% of the common element interest to purchasers," but not later than three years after the declaration is recorded or ten years in the case of an expandable condominium.

12 Wisconsin Stat. § 703.09(2) provides: "[A] condominium declaration may he amended with the written consent of at least two-thirds" of the unit owners.

13 These are only three of the ten requirements necessary to create a condominium declaration, none of which is found in the Community Declaration. See Wis. Stat. § 703.09(l)(a)-(j).

14 Section 703.155(7) provides: "A master association may represent condominium or noncondominium property on behalf of one or more condominiums and property under a different form of ownership or for the benefit of the unit owners of one or more condominiums and the owners of other property."

15 Section 2-123(a) of the UCIOA states that a community qualifies as a "master planned community if the declarant has reserved the development right to create at least [500] units ... and at the time of the reservation that declarant owns or controls more than [500] acres on which the units may be built." (Brackets in original.)

16 The circuit court relied on the Wisconsin Realtors Association's (WRA), appearing as amicus curiae, definition of a master-planned community, which encompassed the two key components described above. WRA described a master-planned community as one which:

contemplates many parcels, each operating under a separate ownership regime such as a condominium declaration, but all subject to a master set of restrictions to give notice to buyers of the intended uses and use restrictions, amenities, and governance structure. Most often, the overall community has mixed uses, such as single-family residential, multi-family residential, commercial, and recreational. Each separate area requires different ownership, with a master association to govern the entire development.

17 See infra ¶¶ 26, 29-30.

18 The court in this case referred to the community as a planned-unit development, the description of which has similarities to a planned community with an overarching development scheme. See Fox v. Kings Grant Maint. Ass'n, 770 A.2d 707, 710 (N.J. 2001).

19 The Condominium Master Association is controlled by its Executive Board, which is comprised of "one individual elected from each condominium." The Executive Board in turn elects five Executive Board members to the Executive Committee. It is this Executive Committee that has complete control over administering the affairs of the condominium property pursuant to the Condominium Declaration, the common elements of the condominituns and the annual budget and assessments imposed on unit owners.

20 The common elements include internal roads, common area utilities, swimming pools, landscaping, etc.

21 While the Declarant has the power to "approve" all amendments to condominium parcel documents under section 9.04 of the Community Declaration, the Declarant does not have the power to unilaterally amend condominium parcel documents, unless such amendment "is necessary" to cause the document to comply with "statute, ordinance, rule or regulation of any governmental or other regulatory authority, or with any judicial determination," as provided in section 11.01(b)(1) of the Community Declaration.

22 See Community Declaration, section 11.01(a).

23 In its brief, Solowicz contends that conveyance has been redefined three times. However, the court finds no support for a third redefinition in Solowicz's citation to the record.

24 In 2006, the Developer explained that a "conveyance" requires a certificate of occupancy. Then, in 2007, responding to an interrogatory from Solowicz, the Developer further explained that a conveyance requires the Developer to sell a parcel to an individual third-party purchaser or to a third-party developer who has platted the parcel. This is because the Developer will not know how many units it conveyed until the third-party developer plats the parcel.

25 Weiland v. Paulin, 2002 WI App 311, 259 Wis. 2d 139, 655 N.W.2d 204, overruled in part, Weiland v. Paulin, 2003 WI 27, 260 Wis. 2d 277, 659 N.W.2d 875.

26 Williston on Contracts supports this view. It states:

"[Parties] should be permitted to enter into contracts that actually may be unreasonable or which may lead to hardship on one side. It is only where it turns out that one side or the other is to be penalized by the enforcement of the terms of a contract so unconscionable that no decent, fair-minded person would view the ensuing result without' being possessed of a profound sense of injustice, that equity will deny the use of its good offices in the enforcement of such unconscionability."

Richard A. Lord, 8 Williston on Contracts § 18:1 (4th ed. 2009) (quoting Carlson v. Hamilton, 332 P.2d 989, 990-91 (Utah 1958)) (emphasis added).

We decline to decide whether the Community Declaration was reasonably enforced. The issue was not developed in the briefs to this court or at oral argument. Further, like the circuit court, we conclude that no support has been shown for Solowicz's "vague claims" that the Developer acted inappropriately, illegally or in bad faith.