AB254: Bill Text

AB254,40,12 3. `Governance.' The name and address of the condominium association; whether the association is self-managed or has hired or retained management; and the name, address, and telephone number of the individual or individuals who may be contacted regarding the condominium in general.

AB254,40,15 4. `Special amenities.' A description of any special amenities, such as an athletic club or golf course, and a statement of the obligation of a unit owner to join or support the amenity.

AB254,40,17 5. `Maintenance and repair of units.' A description of an owner's responsibilities for the repair and maintenance of the unit.

AB254,41,4 6. `Maintenance, repair, and replacement of common elements.' The identity of the person responsible for the maintenance, repair, and replacement of common elements and limited common elements and whether repairs or replacements will be funded from unit owner assessments, reserve funds, or both.

AB254,41,6 7. `Rental of units.' Whether unit owners may rent their units and any restrictions on rentals.

AB254,41,9 8. `Unit alterations.' A description of any rules, restrictions, or procedures governing a unit owner's authority to alter the unit or use or enclose limited common elements.

AB254,41,10 9. `Parking.' A description of the availability, restrictions, and costs of parking.

AB254,41,11 10. `Pets.' A description of rules relating to unit owners' pets.

AB254,41,14 11. `Reserves.' Whether the association maintains reserves for repairs and replacement of common elements beyond routine maintenance and, if so, whether a statutory reserve account under s. 703.163 is maintained.

AB254,41,16 12. `Other restrictions or features.' At the option of the declarant or association a description of other restrictions or features of the condominium.

Note: Sections 47 to 49 require an executive summary highlighting important disclosure items to be included as the first document, following the index, in the disclosure materials that must be furnished by a seller of a condominium unit to a buyer. The executive summary is prepared and revised by the declarant or association, whichever is in control of the condominium. The executive summary must contain the following information, or indicate where the information may be found in the disclosure materials:

1. The name of the condominium.

2. A description of the declarant's expansion plans for the condominium, if any, and deadline for implementation.

3. Information identifying the condominium association and management authority and the individual who may be contacted regarding the condominium.

4. A description of special amenities such as an athletic club or golf course and the obligation of an owner to join or support the amenity.

5. A description of an owner's responsibilities relating to the repair and maintenance of the unit.

6. The identity of the person responsible for the maintenance, repair, and replacement of common elements and limited common elements and whether the repair or replacement will be funded from unit owner assessments or reserve funds.

7. Whether unit owners may rent their units and any restrictions on rentals.

8. A description of any rules, restrictions, or procedures governing a unit owner's authority to alter the unit or use or enclose limited common elements.

9. A description of the availability, restrictions, and costs of parking.

10. A description of rules relating to unit owners' pets.

11. Whether reserves are maintained by the association and, if so, whether a statutory reserve account is maintained.

12. At the option of the declarant or association of unit owners, a description of other restrictions or features of the condominium.

See Sec. 69 (11) for the delayed applicability of the executive summary requirement.

AB254, s. 50 Section 50. 703.33 (1m) of the statutes is created to read:

AB254,42,7 703.33 (1m) Preparation of executive summary. The executive summary under sub. (1) (h) shall be prepared, and subsequently revised whenever a change is made in the disclosure materials described in sub. (1) (a) to (g) that requires a revision of a statement in the summary, by the declarant or the association, whichever is in control of the condominium when the executive summary is prepared or revised.

Note: Imposes an obligation on the declarant or association to prepare the executive summary and to revise it consistent with changes in the required disclosure materials.

AB254, s. 51 Section 51 . 703.33 (2) (intro.) of the statutes is amended to read:

AB254,42,14 703.33 (2) Disclosure form. (intro.) The materials required in sub. (1) shall be delivered to a prospective purchaser with cover sheet, index, and tables of contents as prescribed in this section. A cover sheet and index shall precede all other materials required in sub. (1). The executive summary required under sub. (1) (h) shall appear immediately following the index. A table of contents shall precede the section to which it applies.

Note: Specifies the location of the executive summary: immediately following the index at the beginning of the disclosure materials.

AB254, s. 52 Section 52. 703.33 (2) (a) (form) 2. of the statutes is amended to read:

AB254,43,5 703.33 (2) (a) (form) 2. THESE DISCLOSURE MATERIALS GIVEN TO YOU AS REQUIRED BY LAW MAY, WITH THE EXCEPTION OF THE EXECUTIVE SUMMARY, BE RELIED UPON AS CORRECT AND BINDING. FOR A COMPLETE UNDERSTANDING OF THE EXECUTIVE SUMMARY, CONSULT THE DISCLOSURE DOCUMENTS TO WHICH A PARTICULAR EXECUTIVE SUMMARY STATEMENT PERTAINS. ORAL STATEMENTS MAY NOT BE LEGALLY BINDING.

AB254, s. 53 Section 53. 703.33 (2) (a) (form) 3. of the statutes is amended to read:

AB254,43,19 703.33 (2) (a) (form) 3. YOU MAY AT ANY TIME WITHIN 5 BUSINESS DAYS FOLLOWING RECEIPT OF THESE DOCUMENTS, OR FOLLOWING NOTICE OF ANY MATERIAL CHANGES IN THESE DOCUMENTS, CANCEL IN WRITING THE CONTRACT OF SALE AND RECEIVE A FULL REFUND OF ANY DEPOSITS MADE. IF THE SELLER DELIVERS LESS THAN ALL OF THE DOCUMENTS REQUIRED, YOU MAY, WITHIN 5 BUSINESS DAYS FOLLOWING RECEIPT OF THE DOCUMENTS, DELIVER A REQUEST FOR ANY MISSING DOCUMENTS. IF YOU TIMELY DELIVER A REQUEST FOR MISSING DOCUMENTS, YOU MAY, AT ANY TIME WITHIN 5 BUSINESS DAYS FOLLOWING THE EARLIER OF EITHER THE RECEIPT OF THE REQUESTED DOCUMENTS OR THE SELLER'S DEADLINE TO DELIVER THE REQUESTED DOCUMENTS, CANCEL IN WRITING THE CONTRACT OF SALE AND RECEIVE A FULL REFUND OF ANY DEPOSITS MADE.

Note: Sections 50 and 51 revise 2 of the disclosure statements that must appear in bold face type and capital letters on the cover sheet of the disclosure form given to a prospective purchaser of a condominium unit to indicate: (1) that the executive summary (when required; see Sec. 69 (11) of the bill) may not be relied upon as correct and binding and that the purchaser should consult the disclosure documents to which a particular executive summary statement pertains; and (2) that a buyer may request missing disclosure documents within 5 business days following receipt of the other documents and that, if a request is made, the 5-day cancellation period does not start to run until the earlier of the receipt of any missing documents that have been requested by the purchaser or the seller's deadline for delivery of the missing documents. (See Secs. 56 and 58 of the bill.)

AB254, s. 54 Section 54. 703.33 (2) (b) (form) 1. of the statutes is renumbered 703.33 (2) (b) (form) 1m.

AB254, s. 55 Section 55. 703.33 (2) (b) (form) 1c. of the statutes is created to read:

AB254,44,6 703.33 (2) (b) (form) 1c. Executive summary. The executive summary highlights for a buyer of a condominium unit essential information regarding the condominium. The executive summary begins on page . . . .

Note: Places the executive summary required under this bill first in the list of items included in the index of disclosure materials that follows the cover sheet to the disclosure materials.

AB254, s. 56 Section 56. 703.33 (2) (c) of the statutes is amended to read:

AB254,44,22 703.33 (2) (c) Tables of contents and page numbers. In addition to an index required by par. (b), there shall be provided tables of contents for the declaration, and bylaws and articles of incorporation which shall identify shall be provided, identifying each section of these documents and provide providing a page number for each section. Each section of disclosure material required in sub. (1) shall, on the first page of that material, identify contents of that section but, with an the exception of the declaration, and bylaws and articles of incorporation, shall, is not be required to have a table of contents. Each page of disclosure materials shall contain a page number sufficient to identify it within the body of disclosure materials. Page numbers for the declaration, bylaws and articles of incorporation required in par. (b) shall be the first page of the table of contents for that section. All other page numbers required in the index shall refer to the first page of that section on which the title appears Each section of disclosure material shall be separately identified by a letter, tab, or number. Pages within each section shall be consecutively numbered with an indication of the section as part of the pagination.

Note: Clarifies that the entire body of disclosure materials furnished to purchasers of residential units need not be consecutively paginated by providing that the consecutive pagination requirement only applies to each section within the body of disclosure materials. Removes the requirement of a table of contents for the articles of incorporation. Also makes editorial changes.

AB254, s. 57 Section 57. 703.33 (3) of the statutes is renumbered 703.33 (3m).

AB254, s. 58 Section 58 . 703.33 (3c) of the statutes is created to read:

AB254,45,11 703.33 (3c) Delivery of incomplete set of disclosure materials. If the seller delivers disclosure materials that include the cover sheet required in sub. (2) (a), but that do not include all of the documents required under sub. (1), the purchaser may, within 5 business days from receipt of the disclosure materials, request any documents that were required to be delivered under sub. (1), but that were not timely delivered. If no executive summary required under subs. (1) (h) and (1m) has been prepared, the seller may so inform the purchaser when the seller delivers the disclosure materials to the seller. The seller has 5 business days following receipt of the purchaser's request to deliver the requested documents to the purchaser.

Note: Authorizes the purchaser to request any documents that are not included in the disclosure materials within 5 business days of receipt of the materials. The seller has 5 business days following receipt of the request to deliver the requested documents. See, also, Sec. 58 of the bill.

AB254, s. 59 Section 59. 703.33 (4) of the statutes is renumbered 703.33 (4) (a) and amended to read:

AB254,45,19 703.33 (4) (a) Any purchaser may at any time within 5 business days following receipt of all information of the documents required under sub. (1) and within 5 business days following receipt of all information of the amendments required under sub. (3) (3m), rescind in writing a contract of sale without stating any reason and without any liability on his or her part, and the purchaser is entitled to the return of any deposits made in account of the contract.

AB254, s. 60 Section 60 . 703.33 (4) (b) and (c) of the statutes are created to read:

AB254,46,4 703.33 (4) (b) If the disclosure materials delivered by the seller do not include all the documents required under sub. (1), the purchaser may rescind in writing a contract of sale without stating any reason and without any liability on his or her part as follows:

AB254,46,7 1. If the purchaser does not give notice requesting missing documents under sub. (3c), the purchaser may rescind within 5 business days following receipt of the incomplete disclosure materials.

AB254,46,11 2. If the purchaser gives notice requesting missing documents under sub. (3c), the purchaser may rescind within 5 business days following the earlier of receipt of the requested documents or the deadline, under sub. (3c), for the seller's delivery of the requested missing documents.

AB254,46,13 (c) A purchaser who timely rescinds under par. (a) or (b) is entitled to the return of any deposits made under the contract.

Note: Provides that the purchaser's 5-day cancellation period does not start to run until the earlier of the receipt of any missing disclosure documents that have been requested by the purchaser or 5 business days following the receipt by the seller of a request for the missing documents.

AB254, s. 61 Section 61 . 703.365 (title), (1), (2) and (3) of the statutes are amended to read:

AB254,46,15 703.365 (title) Small residential condominiums.

AB254,46,18 (1) Applicability. (a) The declaration for a small residential condominium may provide that any or all of subs. (2) to (8) or any parts of those subsections apply to the small residential condominium.

Note: Revises a defined term to reflect the revision of that term by Sec. 3 of the bill. See the Note to that Section. This change is made throughout provisions of s. 703.365, relating to small condominiums.

AB254,47,2 (b) If a declaration under par. (a) provides that any or all of subs. (2) to (8) or any parts of those subsections apply, then, except as provided in those subsections or parts of those subsections, this chapter applies to the small residential condominium in the same manner and to the same extent as to other condominiums.

AB254,47,4 (2) Declaration. (a) The declaration for a small residential condominium need not contain those provisions otherwise required under s. 703.09 (1) (e) to (g) and (i).

AB254,47,6 (b) The undivided percentage interest in a small residential condominium shall be is allocated equally among the units.

AB254,47,8 (c) Each unit in a small residential condominium shall have has one vote at meetings of the association.

AB254,47,12 (d) Commercial activity is permitted in a small residential condominium that consists solely of units restricted to residential uses only to the extent that commercial activity is permitted in residences in a zoning ordinance adopted under s. 59.69, 60.61, 61.35, or 62.23.

Note: Revised to reflect the revised defined term and the change in substance of that term.

AB254,47,16 (e) All actions taken under this chapter which that require a vote of units or unit owners must be approved by an affirmative vote or written consent of at least 75% of the unit votes of a small residential condominium, or a greater percentage if required by the declaration or this chapter.

AB254,47,21 (3) Bylaws. (a) Notwithstanding s. 703.10 (2) (a), all aspects of the management, operation, and duties of the association of a small residential condominium shall be delegated to the board of directors, which may retain a manager, including a master association under s. 703.155, for the small residential condominium, and the bylaws shall so specify.

Note: Expressly allows a small condominium to utilize a master association.

AB254,48,3 (b) Under s. 703.10 (2) (c), notice of meetings shall be given in a manner best calculated to assure that actual notice is received by the owners of all units of a small residential condominium, and the bylaws shall so specify.

AB254,48,6 (c) Section 703.10 (2) (d) does not apply to a small residential condominium. The board of directors shall be composed of one representative from each unit, chosen by and from among the unit owners of that unit.

AB254,48,9 (d) All actions taken by the board of directors of a small residential condominium under this chapter must be approved by an affirmative vote or written consent of at least 75% of the board.

AB254,48,10 (e) Section 703.10 (4) does not apply to a small residential condominium.

AB254, s. 62 Section 62. 703.365 (3m) of the statutes is created to read:

AB254,48,17 703.365 (3m) Agreement in lieu of bylaws. If approved by written consent of all of the unit votes of a small condominium, an agreement may be substituted for the bylaws under sub. (3). The terms of the agreement shall include the requirements of sub. (3) (a) to (d) and shall be consistent with this section. An amendment to an agreement may be made with the affirmative vote or written consent of all the unit votes of the small condominium.

Note: Authorizes a small condominium, if approved by written consent of all of the unit votes, to substitute an agreement for the bylaws. The terms of the agreement must include the requirements of current s. 703.365 (3) and must otherwise be consistent with s. 703.365. An amendment to an agreement may be made with affirmative vote or written consent of all of the unit votes of the small condominium. Compare ss. 180.1823 and 180.1825, stats., relating to agreements in place of bylaws for statutory close corporations.

AB254, s. 63 Section 63 . 703.365 (4), (5), (6) (a) (intro.) and (c), (7) and (8) of the statutes are amended to read:

AB254,49,3 703.365 (4) Condominium plat. (a) The survey under s. 703.11 (2) (b) shall be an as-built survey of the property described in the declaration, building, and other improvements on the land which that are part of the small residential condominium.

AB254,49,9 (b) The floor plans under s. 703.11 (2) (c) need only show the location and designation of each unit in the building and the limited common elements appurtenant to each unit of a small residential condominium. These plans may be supplemented by an agreement among all unit owners and mortgagees regarding the allocation of use and enjoyment of common elements, which agreement, in both its original and any amended form, shall be recorded.

AB254,49,12 (5) Association. (a) Under s. 703.15 (2), an association shall exist immediately upon establishment of a small residential condominium and the declarant shall have rights in the association only as an owner of a unit or units.

AB254,49,14 (b) Directors of a small residential condominium shall be chosen in accordance with sub. (3) (c). The board of directors shall meet at least quarterly.

AB254,49,16 (c) Unless included in the bylaws, s. 703.15 (4) (b) to (d) does not apply to a small residential condominium.

AB254,49,18 (6) (a) (intro.) Paragraphs (b) to (e) apply to a small residential condominium if any of the following criteria is met:

AB254,49,23 (c) The unit owner or owners may challenge the decision after reconsideration by the board of directors under par. (b) only in an arbitration proceeding under ch. 788. Acceptance of a conveyance of a small residential condominium which that is subject to pars. (b) to (e) is deemed to constitute an agreement by the unit owner to submit challenges to decisions of the board of directors to arbitration.

AB254,49,25 (7) Expanding condominiums. Section 703.26 does not apply to a small residential condominium.

AB254,50,3 (8) Disclosure requirements. The disclosure required for a small residential condominium under s. 703.33 shall be is limited to the disclosure required under s. 703.33 (1) (a) to (e), if applicable, and a copy of the condominium plat.

AB254, s. 64 Section 64. 703.37 of the statutes is amended to read:

AB254,50,7 703.37 Interpretation. For purposes of interpretation of this chapter, a condominium is a form of ownership, not a form of land use, and is not a subdivision as defined in ch. 236.

Note: Clarifies the current interpretation directive which provides that, for purposes of interpreting ch. 703, a condominium is not a subdivision under ch. 236, stats., by adding the statement that a condominium is "a form of ownership, not a form of land use".

AB254, s. 65 Section 65. 703.38 (10) of the statutes is renumbered 703.38 (10) (a) and amended to read:

AB254,50,14 703.38 (10) (a) Section Except as provided in par. (b), s. 703.02 (14m), 2001 stats., and s. 703.365 applies, 2001 stats., apply to condominiums created on or after April 22, 1986, and before the effective date of this paragraph .... [revisor inserts date], and to condominiums created before April 22, 1986, that elect to be subject to s. 703.02 (14m), 2001 stats., and s. 703.365, 2001 stats.