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Steiner v. Wisconsin American Mutual Insurance Co.6/9/2005
land sale contract.
A land contract vendor holds legal title as security for the unpaid balance of the contract, while the land contract vendee holds equitable title. Holding equitable title in effect gives the land contract vendee "full rights" of ownership, including the ability to "sell, lease or encumber the real estate subject to the rights of the Vendor unless the contract provides to the contrary." The land contract vendee has liabilities generally attributed to ownership, such as payment of taxes, and is also generally liable as the owner to third parties injured on the property.
In addition to providing parties the flexibility to set the terms of the conveyance, the land contract offers a vendor several alternative remedies should the vendee default. Each remedy has advantages or disadvantages depending on the particulars of the situation. The relevant remedy in this case is strict foreclosure.
Strict foreclosure is a long-standing equitable remedy in Wisconsin. It is generally a faster remedy for the land contract vendor than the remedies provided a mortgagee.
In strict foreclosure, the land contract vendor forgoes his or her right to collect the amount remaining on the debt and instead recovers the property. In the event of a vendee's default on a land contract, under strict foreclosure the circuit court's judgment sets a period, called the redemption period, in which the vendee must pay up or lose all his or her interest in the land.
At common law, the circuit court had the discretion to set the duration of the redemption period. The only limit on the operation of the circuit court's discretion was that the period had to be "reasonable" when viewed under the totality of the circumstances of the case.
As part of Wis. Stat. § 846.30, the legislature mandated that a redemption period for a land contract must be at least seven working days from the date of the judgment hearing or, if there is no hearing, from the date of the entry of the judgment order.
We turn now to an examination of Wis. Stat. § 846.30.
IV.
To understand Wis. Stat. § 846.30, we look first to the text of the statute. Wisconsin Stat. § 846.30 reads as follows:
Redemption period for land contracts. If a court finds that the purchaser under a land contract is obligated to make certain payments under that land contract, that the purchaser has failed to make the required payments and that the vendor is entitled to a judgment of strict foreclosure, the court shall set a redemption period of at least 7 working days from the date of the judgment hearing or, if there is no hearing, from the date of the entry of the judgment order. No judgment of strict foreclosure is final until the court enters an order after the expiration of the redemption period confirming that no redemption has occurred and making the judgment of strict foreclosure absolute.
The first sentence of the statute requires, as we stated previously, that a court set a redemption period in a strict foreclosure judgment and further requires that, at a minimum, the redemption period be at least seven working days from the date of the judgment hearing or the date of the entry of the judgment order. This provision appears to be a direct reaction to an unpublished court of appeals decision, Walker v. Dorney, No. 1993AP2389-FT, unpublished slip op. (WiS.Ct. App. Feb. 8, 1994).
In Walker, the court of appeals affirmed a circuit court's strict foreclosure judgment that granted no redemption period to the land contract vendees in default. A letter in the drafting file suggested the text of the first sentence of
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