By: Todd Farris and Michael Van Someren
Sometimes a municipality’s certified survey map approval authority, minimum lot size requirements, or building setback requirements can present an obstacle to an owner’s desire to sell part but not all of his or her property. Whether it is vacant land, a retail shopping center, or a mixed-use project, a condominium can facilitate the sale of portions of real property without having to comply with minimum lot sizes or certified survey map requirements of various municipalities. Wisconsin’s small condominium law is a potential tool to divide vacant land, retail buildings, individual tenant spaces or a development pad into more saleable “units” with at most a limited technical review of the condominium documents by the Register of Deeds before recording. Further, the small condominium law allows all of these benefits with minimal organizational and administrative burdens than a traditional condominium.
Under Wisconsin law, subjecting land to the condominium form of ownership is not a division of land. As such, setback lines and minimum lot sizes apply to the entirety of the condominium and not the individual units. Each unit plus its limited common elements and the common elements should meet the governing minimum lot size requirements. This is especially true if a development pad is involved.
Condominiums are often disfavored due to the seemingly complex nature of the documentation and the organizational and administrative burdens of running the condominium association. A small condominium avoids many of these issues. A “small condominium” is defined in Wis. Stat. § 703.02(14m) as a condominium of not more than 12 units. The small condominium law itself is set forth in Wis. Stat. § 703.365. The advantages of a statutory small condominium include:
- A more streamlined Declaration.
- Relatively low-cost exhibits including an as-built survey, an exhibit showing the units, limited common elements and common elements (this can be can be shown on a separate copy of the as-built survey) and floor plans if more than one unit is being established in a building.
- Opt-in provisions in Stat. § 703.365(2)-(8) which allow the owner to avoid the general requirements for condominiums in Chapter 703.
- The option to use an agreement between unit owners instead of bylaws to govern the affairs of the association. As the initial owner of all of the units, the owner can use the agreement to create a streamlined, flexible structure for the condominium.
- Management by a board of directors with a representative from each unit owner. A manager can be retained.
- A statutory procedure leading to arbitration to resolve disputes about proposed expenditures on the common elements.
The real estate attorneys at Davis|Kuelthau, s.c. represent clients in all aspects of real estate law. If you would like to discuss the possibility of converting the ownership structure of your property to a statutory small condominium, please contact your Davis|Kuelthau attorney, the authors noted above our our Real Estate practice team co-chairs linked here.
 The local lot size ordinance should of course be consulted to confirm that common elements are included in determining lot size.