Limitations on Municipal Regulation of Condominiums

07.21.2021

Author: Attorney Eric S. Johnson

Condominiums are governed by Chapter 703 of the Wisconsin Statutes, also known as the “Condominium Ownership Act.” The Act creates and describes the condominium form of ownership. Essentially, a condominium development consists of Units, Common Elements and Limited Common Elements.

Individuals or entities own the Units and have the exclusive right to occupy their Units. The owner of each Unit owns an undivided interest in the Common Elements. Common Elements are those portions of the development other than the Units and Limited Common Elements. They usually including the systems serving the building (i.e. central heating and air conditioning systems, common plumbing, most of the structure of the building, and common areas, such as green space, parking lots and clubhouses). Limited Common Elements are those parts of the development that are reserved for the use of less than all of the owners of the Units. Typical Limited Common Elements include decks, patios, garages, or parking spaces.

Wisconsin Statute Section 703.27 imposes important limitations on the ability of counties, cities, villages, townships to regulate condominiums. In general, the law prevents municipalities from singling condominiums out for different treatment than other forms of ownership. The statute expressly prohibits the following actions:

• Using zoning, land use ordinances or other regulations to prohibit the condominium form of ownership.
• Imposing requirements upon a condominium that would not be imposed if the condominium development were under a different form of ownership.
• Applying the state or local building code to a building in a condominium differently than the code would be applied to other buildings, unless the different application is expressly permitted in the code, and the different application is reasonably related to the nature of condominium ownership.
• Applying a subdivision ordinance to a condominium, unless the ordinance expressly states that it is applicable to condominiums, and the application of the ordinance to a condominium is reasonably related to the nature of condominium ownership.
• Enacting laws, ordinances or regulations that would impose a greater burden or restriction on a condominium, or provide a lower level of services to a condominium, that would be imposed or provided if the condominium were under a different form of ownership.

It is important for real estate developers, those serving as officers or directors of condominiums and the owners of the Units to be aware of these limitations on municipal authority.

Likewise, municipal officials should carefully craft their ordinances and regulations to comply with the Act by treating condominiums the same as other developments or, where the law allows, by ensuring that different treatment of condominiums is reasonably related to the nature of condominium ownership.