LRB-3651/1
PJK:jld&nwn:rs
2011 - 2012 LEGISLATURE
December 20, 2011 - Introduced by Senator Taylor, cosponsored by
Representatives Mason, Grigsby, Turner and
Berceau. Referred to
Committee on Insurance and Housing.
SB344,1,9
1An Act to repeal 703.15 (2) (c) 1. a.;
to consolidate, renumber and amend
2703.115 (1) (intro.), (a), (b) and (c);
to amend 703.07 (1), 703.115 (title), 703.115
3(2), 703.15 (2) (c) 1. b., 703.20 (3) and 703.26 (2) (d); and
to create 703.115 (3),
4703.117, 703.145 and 703.15 (3m) of the statutes;
relating to: length of
5declarant control; period for expanding condominiums; community manager
6requirements; requiring a written agreement between the declarant and the
7municipality, declarant warranties, and posting securities; requiring approval
8by the municipality of condominium instruments; and requiring certification
9of condominium financial statements.
Analysis by the Legislative Reference Bureau
Current law contains provisions that regulate the establishment and operation
of condominiums. A condominium is a form of property that includes separate units
that are owned and occupied by separate owners and common elements that,
generally, may be used by all unit owners and in which each unit owner has a
specified ownership interest. A condominium is governed by an association of the
unit owners with a board of directors elected by the unit owners. This bill makes a
number of changes to the condominium laws, including the following:
1. Under current law, a county may adopt an ordinance that requires review
by the county, or by a city, village, or town in the county, of condominium instruments
before they are recorded. The bill eliminates the ordinance requirement and
provides that condominium instruments may not be recorded unless they are
reviewed and approved by each city, village, or town (municipality) in which the
condominium is to be located.
2. The bill adds requirements for condominium declarants (the person who
establishes the condominium). A declarant must enter into an agreement with each
municipality in which the condominium is to be located that specifies the rights and
responsibilities of the declarant and the municipality. The agreement must address
zoning approvals, permit issuance, the completion schedule, and remedies in the
event of default. The agreement must include fair market value guarantees, utility
and water and sewer specifications, and a development plan with such details as
buildings and other structures, roadways, open space, and parking facilities. The
agreement must authorize the municipality to inspect the condominium
development during construction and must authorize the condominium association
to enforce the agreement. The bill also explicitly gives an association standing to
enforce the agreement between the declarant and the municipality.
3. In addition to the agreement requirement, a declarant must provide a
three-year warranty to each unit owner against defects in materials and
workmanship in the unit, and a three-year warranty to the association against
defects in materials and workmanship in the condominium outside of the units.
Before conveying the first unit to a purchaser, the declarant must post a bond or
letter of credit with each municipality with which the declarant has entered into an
agreement. The amount of bond or letter of credit must equal 10 percent of the
estimated construction or conversion costs and be in favor of the municipality for the
benefit of the association and any unit owner damaged by a defect in materials or
workmanship.
4. Under current law, a condominium declaration may authorize the
association to hire a manager to handle the day-to-day affairs of the condominium.
The bill provides that any person hired by an association as a manager must be
certified by the Certified Manager of Community Associations certification program
and must post a bond in an amount specified by the association board.
5. Under current law, before the declarant turns over control of the
condominium to the owner's association and for one year after that, the association
must arrange for an independent audit of the condominium's financial records, at the
association's expense, upon the request of three unit owners or the owners of 10
percent of the units, whichever is less. Any request for an audit within three years
after a previous audit must be paid for by the requesting unit owners. The bill
requires the association to arrange for an independent audit by a certified public
accountant annually, at the association's expenses, both during and after the
declarant turns over control. Any additional audit must be paid for by the requesting
owner or owners.
6. Under current law, the declarant may not have control over the association
for more than three years, or for more than ten years if the condominium is
expandable, meaning that the declaration allows more units to be added to the
original plans by amendment to the declaration. Also, the declaration of a
condominium may not allow the condominium to be expanded for a period exceeding
ten years. The bill limits the period during which a condominium may expand to no
more than three years and limits the maximum period of declarant control over the
association of an expandable condominium to three years.
The people of the state of Wisconsin, represented in senate and assembly, do
enact as follows:
SB344, s. 1
1Section
1. 703.07 (1) of the statutes is amended to read:
SB344,3,52
703.07
(1) A condominium may only be created by recording condominium
3instruments
that have been approved under s. 703.115 (1) with the register of deeds
4of the county where the property is located. A condominium declaration and plat
5shall be presented together to the register of deeds for recording.
SB344, s. 2
6Section
2. 703.115 (title) of the statutes is amended to read:
SB344,3,7
7703.115 (title)
Local review and approval of condominium instruments.
SB344, s. 3
8Section
3. 703.115 (1) (intro.), (a), (b) and (c) of the statutes are consolidated,
9renumbered 703.115 (1) and amended to read:
SB344,4,410
703.115
(1) A county may adopt an ordinance to require the review of No 11condominium
instruments before recording instrument may be recorded unless it
12has been reviewed and approved by persons employed by
the county of recording or
13by a each city, village
, or town
that is in which the condominium is to be located in
14whole or in part
in the county of recording if the ordinance does all of the following:
15(a) Requires the. The review
to
must be completed within 10 working days after
16submission of the condominium instrument
and provides that, if. If the review is not
17completed within this period, the condominium instrument is approved for
18recording.
(b) Provides that a A condominium instrument may be rejected only if
19it fails to comply with the applicable requirements of ss. 703.095, 703.11 (2) (a), (c)
,
1and (d) and (3), 703.275 (5)
, and 703.28 (1m) or if the surveyor's certificate under s.
2703.11 (4) is not attached to or included in the condominium plat.
(c) If the person
3performing the review approves the condominium instrument,
requires the person
4to shall certify approval in writing, accompanied by his or her signature and title.
SB344, s. 4
5Section
4. 703.115 (2) of the statutes is amended to read:
SB344,4,86
703.115
(2) An ordinance adopted under this section A city, village, or town
7performing a review under sub. (1) may
authorize the county to charge a fee that
8reflects the actual cost of performing the review.
SB344, s. 5
9Section
5. 703.115 (3) of the statutes is created to read:
SB344,4,1210
703.115
(3) If a county has in effect on the effective date of this subsection ....
11[LRB inserts date], an ordinance, rule, or resolution that is inconsistent with sub. (1),
12the ordinance, rule, or resolution does not apply and may not be enforced.
SB344, s. 6
13Section
6. 703.117 of the statutes is created to read:
SB344,4,15
14703.117 Agreement between declarant and municipality. (1) In this
15section, "municipality" means any city, village, or town.
SB344,4,20
16(2) (a) Notwithstanding s. 703.27, the declarant shall enter into a written
17agreement with each municipality in which the condominium is to be located in
18whole or in part. The agreement shall specify the rights, responsibilities,
19undertakings, and promises of each party with respect to the condominium
20development, including all of the following, as applicable:
SB344,4,2121
1. Permit issuance.
SB344,4,2222
2. Zoning approvals.
SB344,4,2323
3. Fee payment.
SB344,4,2524
4. Development plan, including all buildings and other structures, roadways,
25elevation contours, open space, parking facilities, and landscaping.
SB344,5,1
15. Utility and water and sewer specifications.
SB344,5,22
6. Completion schedule.
SB344,5,33
7. Fair market value guarantees.
SB344,5,44
8. Subject to s. 703.145 (2), form and amount of any security required.
SB344,5,55
9. Remedies in the event of default.
SB344,5,66
(b) The agreement shall include provisions that do all of the following:
SB344,5,87
1. Authorize the municipality to inspect the condominium property during the
8construction process.
SB344,5,109
2. Authorize the condominium association that is established under s. 703.15
10to enforce the agreement.
SB344,5,1211
(c) The declarant shall provide a copy of the signed agreement under this
12section to the condominium association when it is established under s. 703.15.
SB344,5,15
13(3) Notwithstanding any other remedies provided for in the agreement, the
14condominium association established under s. 703.15 has standing to enforce the
15agreement.
SB344, s. 7
16Section
7. 703.145 of the statutes is created to read:
SB344,5,18
17703.145 Declarant warranties; security. (1) (a) Except as provided in par.
18(d), the declarant shall furnish both of the following:
SB344,5,2319
1. A minimum of a 3-year warranty covering the full cost of labor and materials
20for the repair or replacement of roof and structural components, and mechanical,
21electrical, plumbing, and common service elements serving the condominium
22property or additional property as a whole, that is occasioned or necessitated by a
23defect in materials or workmanship.
SB344,6,3
12. A 3-year warranty covering the full cost of labor and materials for the repair
2or replacement of structural, mechanical, and other elements pertaining to each unit
3that is occasioned or necessitated by a defect in materials or workmanship.
SB344,6,44
(b) The warranty under par. (a) 1. shall commence as follows:
SB344,6,85
1. For a condominium development other than an expandable condominium
6development, on the date on which the deed or other evidence of ownership is filed
7for record following the sale of the first condominium ownership interest in the
8development to a purchaser in good faith for value.
SB344,6,129
2. a. For an expandable condominium development, for property included in
10the original declaration, on the date on which the deed or other evidence of ownership
11is filed for record following the sale of the first condominium ownership interest in
12the property to a purchaser in good faith for value.
SB344,6,1613
b. For an expandable condominium development, for any additional property
14added by amendment to the declaration, on the date on which the deed or other
15evidence of ownership is filed for record following the sale of the first condominium
16ownership interest in the additional property to a purchaser in good faith for value.
SB344,6,2017
(c) The warranty under par. (a) 2. for each unit shall commence on the date on
18which the deed or other evidence of ownership is filed for record following the
19declarant's sale and conveyance of the condominium ownership interest in the unit
20to a purchaser in good faith for value.
SB344,7,221
(d) The valid assignment by the declarant of the express and implied warranty
22of the manufacturer satisfies the declarant's obligation under this section with
23respect to ranges, refrigerators, washing machines, clothes dryers, hot water
24heaters, and other similar appliances installed and furnished as part of the unit by
1the declarant. The declarant's warranty under par. (a) is limited to the installation
2of the appliances.
SB344,7,63
(e) All warranties made to the declarant that exceed time periods specified in
4par. (a) with respect to any part of a unit shall be assigned to the purchaser of that
5unit, and warranties with respect to any part of the common elements shall be
6assigned to the association.
SB344,7,13
7(2) Before the declarant's first conveyance of a residential unit to a purchaser,
8the declarant shall post a bond or letter of credit with each municipality with which
9the declarant has entered into an agreement under s. 703.117 in the amount of 10
10percent of the estimated construction or conversion costs of the condominium
11development. The bond or letter of credit shall be in favor of the municipality for the
12benefit of the association and any unit owner damaged by a defect in materials or
13workmanship.
SB344, s. 8
14Section
8. 703.15 (2) (c) 1. a. of the statutes is repealed.
SB344, s. 9
15Section
9. 703.15 (2) (c) 1. b. of the statutes is amended to read: