Attorney Brian Harris of The Meisner Law Group recently appeared at trial on behalf of one of our long-standing community association clients, and he successfully argued for application of a $500 limit on “incidental damage” set forth in the condominium’s Bylaws. The judge correctly applied the limit to the plaintiff’s damages.

Incidental damage is usually defined, as in this case, as damage from a common element source which is incurred to the drywall and/or floor of a unit, but excluding any damage to the contents of a unit, for example, wallpaper, carpeting, paneling, furniture, and personal property. When we draft governing documents, Boards usually prefer to set limits on incidental damage somewhere between $500 and $1000, and in some cases, provision will be made to completely exculpate the association from liability for incidental damage.

The main idea behind these kinds of provisions is basically to shift responsibility for who pays for a bit of bad luck. When we work with Board members restating their associations’ Bylaws, we find most of them agree that it’s not fair for the entire association to be shouldered with the cost to replace personal items within a unit, even if the damage is sourced from a common element. Personal items can vary greatly in value, and even if the association is reasonably diligent in maintaining the common elements, water leaks can and do occur.

While there is no controlling case law at the appellate level or higher in Michigan, we can look to California as an example of what may happen if incidental damage provisions were appealed to a higher court in Michigan. As a populous state, California’s appellate decisions would likely carry weight if a similar case were ever to be tried at the appellate level in our state. In Franklin v. Marie Antoinette Condominium Owners Association, a similar exculpatory provision in the governing documents stated that the California association would not be responsible for interior unit damage except in the case of gross negligence, and the court of appeals ruled in favor of the association, finding the provision to be reasonable.

Interested in amending your association’s governing documents? Contact us today at 248.644.4433 and let us know how we can help.

By Mark Petrie, Legal Assistant, The Meisner Law Group