Changes to Condominium Laws as of November 1, 2004
There were a number of changes to Chapter 703 that went into effect November 1, 2004. Some of these that directly affect the Office of the Register of Deeds are listed below.
703.01(12m). The definition of a small condominium was changed from four to no more than 12 units and is not limited to residential.
703.163 Establishes a Statutory Reserve Account (SRA).
The declarant/association of a new and existing condominium (except for the case of a small condominium) must consider whether or not to establish an SRA to fully or partially fund major repairs and replacement of the common elements such as roofs, siding, driveways, parking areas, etc.Starting Nov. 1, 2004, all new condominiums, typically acting though the declarant, must choose whether or not to establish an SRA. Existing condominiums have until May 1, 2006 (or 18 months after the expiration of the declarant control, whichever is later) to either set up an SRA or opt out. Either way, a statutory reserve account statement must be recorded with the local Register of Deeds. Associations may later change the decision and in that case, a new statutory reserve account statement would be prepared and recorded.
Small condominiums may elect to establish an SRA and record a statutory reserve account statement but this is optional.
The statutory reserve account statement need not go into detail. If the declarant or association elects not to establish an SRA, they must include language in the statutory reserve account statement to indicate how future repairs and replacements of the common elements will be funded. If the declarant or association decides to establish an SRA, they must so state but they do not need to present the specific financial plans in the statutory reserve account statement.
Here is sample language for the first part of the statutory reserve account statement:
Sunny Acres Condominium, being a condominium created under the Condominium Ownership Act of the State of Wisconsin by a Declaration of Condominium for Sunny Acres Condominium dated November 1, 2004 and recorded __________________ in the Office of the register of Deeds for Dane County, Wisconsin as document # __________________ and by a Condominium Plat in Vol. ______, page ________ of Condominium Plats.
The Condominium (shall) (shall not) have a Statutory Reserve Account, as described in Wis. State. 703.163 effective ____________________. This determination is made by the (Declarant) (Association with the written consent of a majority of the Unit votes).
Cross out part that does not apply
If the Condominium will not have a Statutory Reserve Account, it is anticipated that future expenditures for the repair and replacement of the common elements will be funded by:
(give explanation only if SRA is not established)
Smith & Smith Attorneys
123 Main St
McFarland WI 53558
PIN: NA (new condo)
Note: All the recording requirements of 59.43(2m) must be met. For more information, see Wisconsin Realtors Association's Legal Update, June 2004.