SB550: Bill Text

2019 - 2020 LEGISLATURE

2019 Senate BILL 550

November 8, 2019 - Introduced by Senators Olsen, Cowles and Petrowski, cosponsored by Representatives Ballweg, Milroy, Murphy, Novak, Spiros, VanderMeer, Vruwink and Edming. Referred to Committee on Utilities and Housing.

SB550,2,2 An Act to repeal 703.275 (5) and 703.28 (1m) (a); to renumber 703.13 (7) (a) and 703.275 (1) (title); to renumber and amend 703.095, 703.11 (2) (b), 703.13 (6) (c), 703.26 (2) (b), 703.275 (1) and 703.28 (1m) (b); to consolidate, renumber and amend 703.08 (2) (intro.), (a) and (b); to amend 703.02 (1b), 703.02 (1h), 703.02 (3), 703.02 (6m), 703.02 (14g), 703.07 (2), 703.09 (2), 703.09 (4), 703.093 (1), 703.093 (7), 703.10 (5), 703.11 (2) (d), 703.11 (5), 703.115 (1) (a), 703.115 (1) (b), 703.12, 703.13 (4), 703.13 (6) (d), 703.13 (6) (e), 703.13 (6) (f), 703.13 (7) (b), 703.13 (7) (c), 703.13 (7) (d), 703.13 (8) (b), 703.13 (8) (c), 703.163 (11), 703.165 (3), 703.19 (5), 703.26 (2) (intro.), 703.26 (2) (a), 703.26 (2) (c), 703.26 (2) (d), 703.26 (3), 703.265 (3), 703.30 (2), 703.365 (3m) and 706.01 (7r) (b); and to create 703.02 (3m), 703.02 (8m), 703.065, 703.09 (1) (title), 703.09 (1b), 703.09 (1c) (title), 703.09 (2m) (title), 703.09 (3) (title), 703.095 (2) (d), 703.095 (3), 703.11 (2) (b) 3., 703.13 (7) (ac), 703.26 (3) (d), 703.275 (1c) and 703.275 (1m) (b) of the statutes; relating to: requirements related to condominium documents and technical changes to condominium law.

Analysis by the Legislative Reference Bureau

This bill makes various changes to condominium law and clarifies requirements related to various types of condominium documents.

General recording requirements; condominium instruments

This bill specifies that every instrument related to a condominium other than a plat or an addendum (a modification to a plat) that is offered to a register of deeds for recording must meet the following criteria:

1. The instrument must include the name of the condominium as it appears in the declaration.

2. The instrument must meet the standard formatting requirements for recorded documents.

3. The instrument must include any signatures required by law and must be notarized or authenticated.

4. If the county in which the instrument is to be recorded has an ordinance that requires local review of condominium instruments before recording, the instrument must be accompanied by the certified written approval of the person who performed the local review.

In addition, the bill specifies that a register of deeds may record an amendment, addendum, or correction instrument only if the document satisfies the above criteria, if applicable, and satisfies the following:

1. It refers to the instrument being modified or corrected.

2. It is numbered consecutively or states that it is an amendment and restatement of the instrument being modified or corrected.

3. It identifies all units in the condominium.

4. It clearly states the changes being made to the document being modified or corrected.

Expanding condominiums

Under current law, a declarant may reserve the right to expand a condominium by subjecting additional property to the condominium declaration. Current law provides various conditions that must be met in order for a reservation of a right to expand a condominium to be valid. For example, the condominium declaration must describe each parcel of property that may be added to the condominium under the reservation of the right to expand and the condominium plat must include, in general terms, the outline of the land, buildings, and common elements of the property that may be added as part of the expansion.

The bill clarifies that the condominium plat must include the outline of the expansion property and, in general terms, the buildings and common elements on the expansion property. The bill also clarifies that property included in a reservation of the right to expand is not subject to the condominium declaration (i.e., is not part of the condominium) until an amendment and addendum that add the property to the condominium are recorded.

Merger or consolidation of condominiums

Under current law, any two or more condominiums may be merged or consolidated into a single condominium by agreement of the unit owners of the existing condominiums. Current law requires that the condominium that results from the merger or consolidation must have the same name as one of the preexisting condominiums. The merger or consolidation agreement must reallocate the allocated interests among the units of the resultant condominium.

The bill specifies that a condominium may be created by merger or consolidation only by recording a restatement of the declaration for the resultant condominium that includes the merger or consolidation agreement and a resultant condominium plat. Under the bill, the register of deeds must reference the document number of the resultant condominium plat on the plat of each preexisting condominium plat that is merged or consolidated. The bill also specifies that it is not necessary to remove the preexisting condominiums prior to a merger or consolidation.

Local review of condominium instruments

Current law allows a county to adopt an ordinance that requires condominium instruments to be reviewed by employees of the county of recording or of a city, village or town located in the county of recording before the condominium instruments are recorded if the ordinance meets certain criteria. One of the criteria is that the ordinance must require that the local review be completed within ten working days after the condominium instrument is submitted and provide that, if the review is not completed within those ten working days, the condominium instrument is considered to be approved. The bill extends the deadline for local review in this requirement to 15 working days.

Declaration; declarant rights

Under the bill, after the period of declarant control, a condominium declaration may not provide a declarant with a right that is not provided to other unit owners.

Condominium plat

Under current law, a condominium plat must include a survey of the property that shows the location of any unit or building on the property and comply with the minimum standards adopted by the examining board of architects, landscape architects, professional engineers, designers, and professional land surveyors. Under the bill, the survey of the property must also include a clear and concise description of the surveyed property that meets the requirements for a professional land surveyor certificate included on a recorded certified survey map.

Bylaws

Under the bill, whenever condominium bylaws are amended by a condominium association, the condominium association must promptly deliver a copy of the approved amendment to each unit owner.

Correction instruments

Under current law, a correction instrument is an instrument drafted by a professional land surveyor that, upon recording, corrects an error in a condominium plat. The bill specifies that a correction instrument may be used only to correct scrivener errors on a condominium plat, such as incorrect distances, angles, directions, building or unit numbers, or street names.

Small condominiums

Current law provides alternative procedures for small condominiums. A small condominium is a condominium with no more than 12 units. Under current law, an agreement may be substituted for bylaws if approved by all of the unit votes in a small condominium. Current law further provides that the affirmative vote or written consent of all the unit votes of the small condominium is required to amend such an agreement. Under the bill, 75 percent of the unit votes of the small condominium are required to amend such an agreement.

The people of the state of Wisconsin, represented in senate and assembly, do enact as follows:

SB550,1 Section 1. 703.02 (1b) of the statutes is amended to read:

SB550,4,3 703.02 (1b) “Addendum" means a condominium an instrument that modifies a recorded condominium plat.

SB550,2 Section 2. 703.02 (1h) of the statutes is amended to read:

SB550,4,9 703.02 (1h) “Amendment" means a condominium an instrument that modifies a recorded condominium declaration. “Amendment” includes a modification to a declaration to relocate unit boundaries under s. 703.13 (6), to separate or merge units under s. 703.13 (7) or (8), and to merge or consolidate a condominium under s. 703.275.

SB550,3 Section 3. 703.02 (3) of the statutes is amended to read:

SB550,4,12 703.02 (3) “Common expenses and common surpluses" mean the expenses and surpluses of an association.

SB550,4 Section 4. 703.02 (3m) of the statutes is created to read:

SB550,4,14 703.02 (3m) “Common surpluses” mean the surpluses of an association.

SB550,5 Section 5. 703.02 (6m) of the statutes is amended to read:

SB550,5,5 703.02 (6m) “Correction instrument" means an instrument drafted by a professional land surveyor that complies with the requirements of s. 59.43 (2m) and that, upon recording, corrects an error in a condominium plat. “Correction instrument" does not include an instrument of conveyance.

SB550,6 Section 6 . 703.02 (8m) of the statutes is created to read:

SB550,5,8 703.02 (8m) “Deliver” includes to deliver by hand, U.S. mail, commercial delivery, facsimile transmission, or electronic mail.

SB550,7 Section 7. 703.02 (14g) of the statutes is amended to read:

SB550,5,13 703.02 (14g) “Removal instrument" means an instrument that complies with the requirements of s. 59.43 (2m) and that removes property from the provisions of this chapter upon recording. “Removal instrument" does not include an instrument of conveyance.

SB550,8 Section 8. 703.065 of the statutes is created to read:

SB550,5,17 703.065 Recording requirements; general. Every instrument offered for record related to a condominium other than a plat or addendum shall satisfy all of the following criteria:

SB550,5,19 (1) The instrument shall include the name of the condominium as it appears in the declaration.

SB550,5,21 (2) The instrument shall be prepared in the standard format for recorded documents under s. 59.43 (2m) and (5) (a).

SB550,5,22 (3) The instrument shall comply with s. 706.05 (2) (a) and (b).

SB550,6,2 (4) If the instrument is a condominium instrument or an instrument that modifies a condominium instrument and the county in which the instrument is to be recorded has adopted an ordinance under s. 703.115, the instrument is accompanied by the certified written approval of the person who performed the review under the ordinance.

SB550,9 Section 9 . 703.07 (2) of the statutes is amended to read:

SB550,6,13 703.07 (2) A condominium instrument, and all amendments, addenda and certifications of a condominium instrument, shall be recorded in every county in which any portion of the condominium is located, and shall be indexed in each county in the name of the declarant and the name of the condominium grantor and grantee and the description of the condominium property that is located in that county. Subsequent instruments affecting the title to a unit which is physically located entirely within a single county shall be recorded only in that county, notwithstanding the fact that the common elements are not physically located entirely within that county. Subsequent amendments and addenda shall be indexed under the name of the condominium.

SB550,10 Section 10. 703.08 (2) (intro.), (a) and (b) of the statutes are consolidated, renumbered 703.08 (2) and amended to read:

SB550,6,19 703.08 (2) A tenant may not be required to vacate the property during the 120-day period immediately following the date of delivery of the notice required under sub. (1) except for: (a) Violation of unless the tenant violates a covenant in the lease; or (b) Nonpayment of fails to pay rent.

SB550,11 Section 11. 703.09 (1) (title) of the statutes is created to read:

SB550,6,21 703.09 (1) (title) Requirements.

SB550,12 Section 12 . 703.09 (1b) of the statutes is created to read:

SB550,7,2 703.09 (1b) Declarant rights after period of declarant control; prohibition. A condominium declaration may not provide a declarant with a right in the association of unit owners after the period of declarant control ends under s. 703.15 (2) (c) if the right is not granted to unit owners who are not the declarant.

SB550,13 Section 13. 703.09 (1c) (title) of the statutes is created to read:

SB550,7,4 703.09 (1c) (title) Consent of property owners and mortgagees; declaration.

SB550,14 Section 14. 703.09 (2) of the statutes is amended to read:

SB550,7,18 703.09 (2) Amendment. Except as provided in sub. (4) and ss. 703.093, 703.13 (6) (c), (cm), and (d), (7) (b) and (bm), and (8) (b), (bm), and (bp), and 703.26, a condominium declaration may be amended with the written consent of at least two-thirds of the aggregate of the votes established under sub. (1) (f) or a greater percentage if provided in the declaration. An amendment becomes effective when it is recorded in the same manner as the declaration. The document submitting the amendment for recording shall state that the required consents and approvals for the amendment were received. Except as provided in sub. (2m), a unit owner's written consent is not effective unless it is approved in writing by the first mortgagee of the unit, or the holder of an equivalent security interest, if any. Approval from the first mortgage lender or equivalent security interest holder, or the person servicing the first mortgage loan or its equivalent on a unit, constitutes approval of the first mortgagee or equivalent security interest holder under this subsection.

SB550,15 Section 15. 703.09 (2m) (title) of the statutes is created to read:

SB550,7,20 703.09 (2m) (title) Consent of unit owners and mortgagees; amendments.

SB550,16 Section 16. 703.09 (3) (title) of the statutes is created to read:

SB550,7,22 703.09 (3) (title) Compensation for reduction in value; amendments.

SB550,17 Section 17. 703.09 (4) of the statutes is amended to read:

SB550,8,4 703.09 (4) Assignment of declarant's interest. A declarant may assign his or her rights and obligations as a declarant under this chapter by recording an amendment to the declaration that includes the assignment and an acceptance of the assignment that is signed by the assignee and acknowledged. A declarant may not assign under this subsection less than all of his or her rights and obligations as a declarant under this chapter.

SB550,18 Section 18 . 703.093 (1) of the statutes is amended to read:

SB550,8,12 703.093 (1) As an alternative to s. 703.09 (2), a condominium declaration may be amended under this section if at least two-thirds of the aggregate of the votes established under s. 703.09 (1) (f), or a greater percentage if provided in the declaration, consent to the amendment in writing and those consents are approved by the mortgagees or holders of equivalent security interests in the units. An amendment becomes effective when it is recorded in the same manner as the declaration.

SB550,19 Section 19. 703.093 (7) of the statutes is amended to read:

SB550,8,18 703.093 (7) Any person acquiring a mortgage or equivalent security interest on a unit after the affidavit is recorded under sub. (2) may notify the association in writing of the mortgage or equivalent security interest lien, identifying the unit on which it holds a lien, and signify its approval of or objection to the proposed amendment to the declaration.

SB550,20 Section 20. 703.095 of the statutes is renumbered 703.095 (1) and amended to read:

SB550,8,24 703.095 (1) Modifications. A recorded condominium instrument, amendment, or addendum may only be modified only by recording an amendment, addendum, or correction instrument, or by removal from the provisions of this chapter under s. 703.28 (1).

SB550,9,3 (2) Requirements. The register of deeds may not record an amendment, addendum, or correction instrument only if it does not refer the document complies with s. 703.065, if applicable, and satisfies all of the following criteria: