As used in this article, the term:

(1) "Contiguous area" means any area which, at the time annexation procedures are initiated, either abuts directly on the municipal boundary or is separated from the municipal boundary by a street or street right of way, a creek or river, the right of way of a railroad or other public service corporation, lands owned by the municipal corporation or some other political subdivision, or lands owned by this state.

(2) "Used for residential purposes" refers to any lot or tract five acres or less in size on which is constructed a habitable dwelling unit.