(By authority conferred on the corporation and securities bureau by section 142 of Act No. 59 of the Public Acts of 1978, as amended, being S559.242 of the Michigan Compiled Laws)

PART 1. GENERAL PROVISIONS

R 559.101 Definitions.
Rule 101.

(1) As used in the act and these rules:
(a) “A 100-year flood” means a flood which has a 1% chance of occurring or being exceeded in any given year.

(b) “Act” means Act No. 59 of the Public Acts of 1978, as amended, being S559.101 et seq. of the Michigan Compiled Laws.

(c) “Advertising material” means a prospectus, pamphlet, circular, form letter, fact sheet, sign, newspaper or magazine ad, or any other sales literature or advertising communication addressed to, or intended for distribution to, prospective purchasers.

(d) “Floodplain” means that area of land adjoining a lake, watercourse, or similar body of water which will be inundated by a 100-year flood.

(e) “Imposition,” with respect to purchasers or the public under section 154(c) of the act, means the existence of any of the following factors, among others:

(i) Failure to comply with the act or these rules where such failure would endanger the viability of the project.

(ii) Failure to comply with local, state, or federal statutes, ordinances, regulations, or rules where such failure would endanger the viability of the project.

(iii) Financial or contractual arrangements which permit the developer to directly or indirectly convey, assign, or otherwise transfer the developer’s responsibility to fulfill contractual obligations to the project or to the co-owners in derogation of section 137 of the act.

(iv) Publishing written or oral false or misleading statements concerning a condominium project.
(f) “Land surveyor” means either a surveyor who is registered in this state as a land surveyor or a civil engineer who is registered in this state as a professional engineer.

(g) “Major boundary corners” means those property corners which comprise the total proposed condominium development of a particular project.

(h) “Minor boundary corners” means those property corners which are created by an individual phase of the project as it is developed in stages and does not mean a major boundary corner.
(i) “Unreasonable risk,” with respect to prospective co-owners under section 154(c) of the act, means the existence of any of the following factors:

(i) A prospective co-owner is likely to lose the money deposited towards the purchase of a condominium unit.

(ii) A prospective co-owner would not receive marketable title to the condominium unit.

(iii) The common elements of a condominium project are not completed as advertised or stated in the master deed or disclosure statement.

(iv) The developer does not pay the developer’s share of the monthly assessments as required by the master deed or other legal documents.

(v) The developer enters into loans with, or borrows money from, the association prior to the transitional control date.

(vi) The developer fails to keep adequate financial records of income and expenditures of the association of co-owners prior to the transitional control date.

(vii) The developer commingles funds of the co-owners’ association.

(viii) Other actions which materially endanger the public interest or the interest of condominium co-owners.
(2) Terms defined in the act have the same meanings when used in these rules.

R 559.102 Name of proposed condominium project; reservation.
Rule 102. The name of a proposed condominium project shall not be such as to confuse or mislead the public.

R 559.103–R 559.105 Rescinded.

R 559.106 Disclosure booklet.

Rule 106.

(1) The disclosure booklet required by section 84a(1)(C) of the act to be distributed to prospective purchasers shall be “The Condominium Buyers Handbook,” as published by the administrator.

(2) “The Condominium Buyers Handbook” shall be distributed to purchasers who sign a purchase agreement 9 business days before a purchase agreement becomes a binding agreement, pursuant to section 84 of the act.

R 559.107 Advertising, sales material, and other representations.

Rule 107.

(1) Advertising, sales material, and oral representations shall be truthful and accurate and designed to fully inform the public about the project. Such materials shall not be presented in such a way as to create a false impression about the nature, status, quality, or cost of a proposed condominium project or its location.

(2) A developer or any agent shall not represent to any person that the administrator has inspected or approved the quality, value, or price of any unit.

R 559.108 Independent hearing officers.

Rule 108.

(1) Pursuant to section 157(4)(b) of the act, independent hearing officers shall possess, at a minimum, all of the following qualifications:

(a) A juris doctor degree, a bachelor of law degree, or the equivalent.

(b) An expertise or working knowledge of Act No. 306 of the Public Acts of 1969, as amended, being S24.201 et seq. of the Michigan Compiled Laws.

(c) An expertise or working knowledge of the condominium act and rules promulgated thereunder.

(2) The procedures to be utilized in the compilation of a list of independent hearing officers shall be as follows:

(a) The American arbitration association shall distribute public notice of the availability of the position as an independent hearing officer. The notice shall set forth the qualifications necessary to obtain the position.

(b) The American arbitration association shall select qualified persons and compile a list of these individuals to be submitted to the administrator; such list to be updated by the American arbitration association each fiscal year.

R 559.109 Termination of condominium project; notice to interested parties.

Rule 109.

(1) Pursuant to sections 50 and 51 of the act, notification of termination shall be given to all parties interested in the project, including the following:

(a) Escrow agents.

(b) Land contract vendors.

(c) Project creditors.

(d) Project lienors.

(e) Prospective purchasers who have deposited funds.

(f) Any other person who holds an outstanding interest in the condominium property. (2) Such notice shall be made by first-class mail to the person’s last known address.

R 559.110 Developers; compliance with mobile home commission act; conversion of existing mobile home parks; waiver.

Rule 110.

(1) The developer of a mobile home condominium shall comply with the provisions of Act No. 419 of the Public Acts of 1976, as amended, being S125.1101 et seq. of the Michigan Compiled Laws, and the rules promulgated thereunder.

(2) Existing mobile home parks which propose to convert to condominiums shall do both of the following:

(a) Meet the standards set for new mobile home parks, as set forth in Act No. 419 of the Public Acts of 1976, as amended, being S125.1101 et seq. of the Michigan Compiled Laws, and the rules promulgated thereunder.

(b) Comply with the requirements imposed on conversion projects under the act and these rules.

(3) If the developer demonstrates to the administrator of Act No. 419 of the Public Acts of 1976, as amended, being S125.1101 et seq. of the Michigan Compiled Laws, that a specific standard or requirement should be waived and that a waiver is in the public interest, the administrator may waive the requirements of subrule (2) of this rule.

R 559.111 Shared recreational facilities.

Rule 111.

Pursuant to section 134 of the act, a recreational facility which is to be enjoyed by condominium co-owners and third parties shall, at a minimum, comply with the following provisions:

(a) When the recreational facilities are owned by the condominium co-owners and are to be used by a third party, all of the following conditions shall be met:

(i) Disclosure shall be made to all prospective purchasers that the recreational facilities will be shared with a third party.

(ii) The master deed shall define who is entitled to use recreational facilities.

(iii) The master deed shall set forth the appropriate financial obligations of all the parties involved.

(b) When recreational facilities are owned by a third party and condominium co-owners are obligated to help financially support the recreational facilities, all of the following conditions shall be met:

(i) Disclosure shall be made to prospective purchasers of their financial obligations and responsibilities as co-owners to support the recreational facilities. Such disclosure shall include information regarding all fees charged and compensation paid.

(ii) The condominium co-owners shall have an equitable vote, as set forth in the disclosure statement, as to the operation and management of the recreational facilities.

(iii) An arbitration clause to settle disputes upon consent of the parties shall be included in the condominium legal documents.

(iv) The necessary easements shall be established.

(v) The books and records of the recreational facilities shall be kept separate from other operations and shall be made available for inspection by the co-owners.

R 559.112 Condominium project warranties.

Rule 112.

Condominium project warranties shall comply with state and federal law. The terms of any warranty offered in connection with the sale of a condominium unit shall be clearly disclosed. The name, address, and telephone number of the individual responsible for fulfilling warranty claims shall be stated in the warranty.

 

PART 2. PERMIT TO TAKE RESERVATIONS

R 559.201 Rescinded.

 

PART 3. CONTENTS OF A MASTER DEED

R 559.301 Minimum requirements.

Rule 301.

(1) A master deed shall contain a statement referring to the condominium subdivision plan and the condominium bylaws and shall incorporate them by reference.

(2) A master deed shall contain the mandatory provisions required by sections 8, 9, 37(3), and 69 of the act.

(3) Where applicable, a master deed shall contain the provisions in sections 31, 32, 33, 34(2), 35, 36, 37(1) and (2), 41, 45, 46, 47, 49, and 121 of the act.

(4) A master deed shall describe in detail all general and limited common elements. Pursuant to section 39 of the act, limited common elements shall be assigned in the master deed, unless the power to amend the master deed to make such assignments is reserved to the developer. The master deed shall designate the manner in which the common elements will be assessed.

(5) Pursuant to sections 35, 40, and 44 of the act, a master deed shall provide for the following easements:

(a) Reciprocal easements for a change of boundaries of units due to shifting, settling, or moving of a building in the condominium project.

(b) Easements for the installation, maintenance, and service for all utilities, including light, heat, power, sewer, water, and communications.

(c) If the project is not served by an existing municipal water and sewage system, and any component of the system is not located on property to be owned by the condominium, an easement shall be obtained, or other suitable arrangement made, for the repair and maintenance of such components, so long as the system continues to be used by the project.

(d) Such other easements as may be necessary for continued use and enjoyment of the project.

PART 4. CONDOMINIUM SUBDIVISION PLAN

R 559.401 General requirements.

Rule 401.

(1) The condominium subdivision plan shall be an exhibit to the master deed. The drawings which constitute the plan shall be prepared by an architect, land surveyor, or civil engineer licensed to practice in this state. More than 1 such individual may prepare different segments of the same condominium subdivision plan.

(2) Each sheet shall contain the name of the condominium and the name and address of the firm responsible for the preparation of that sheet and shall bear a legible seal and signature of the individual responsible for the preparation of that sheet. A complete condominium subdivision plan shall be comprised of all of the following:

(a) Cover sheet.

(b) Survey plan.

(c) Site plan.

(d) Utility plan.

(e) Building floor plan.

(f) Section plans, where applicable.

(g) Floodplain plan, where applicable.

(h) Where appropriate, individual plans may be combined, if this does not impair legibility.

(3) Pursuant to section 66(2)(j) of the act, all proposed structures and improvements shown on the drawings shall be labeled either “must be built” or “need not be built.” This shall be done on the site plan for all proposed structures and improvements, other than utilities, and on the utility plan for all utilities. When labeling a portion of structure “need not be built” and the remainder “must be built,” or vice versa, the labeling shall be done on the applicable floor plans and sections.

(4) When a condominium subdivision plan is drawn, it shall, at a minimum, comply with all of the following provisions:

(a) Be drawn to scale.

(b) All lettering and numbering shall be mechanical lettering not less than 0.14 inches high. Freehand lettering is not acceptable.

(c) Be drawn on sheets measuring 24 inches by 36 inches.

(d) The top shall be either the 24- or 36-inch length with the binding margin on the top or left side, respectively.

(e) All margins from the edge of the sheet to the drawings shall be 1/2 inch, except the binding margin, which shall be 2 inches.

(f) The general direction “north” shall be placed toward the top or left-hand side of the sheet.

(g) Each sheet shall be numbered consecutively, beginning with the number 1. The use of suffixes, such as a, b, c, shall only be acceptable when adding supplemental sheets after the initial recording.

(h) Lots of platted subdivisions which fall within the project boundary shall be shown by dashed lines and dotted numbers. Platted subdivisions which fall contiguous to the project boundary shall be shown by solid lines and numbers.

(i) Indicate the scale of each drawing by means of a graphic bar scale.

(j) Show the name of the condominium on each sheet, agreeing exactly with the name used in the master deed.

(k) Use match lines when the survey plan, site plan, or floor plans are shown on more than 1 sheet. The symbol for match lines shall be different from those used for property lines or utility lines.

(l) All signatures shall be in black ink.

(m) Include a composite plan, to show the relationship of the various sheets to each other, when more than 3 sheets are required to do a survey, site, floodplain, or utility plan.

(n) Each sheet shall be identified as “proposed, dated __________” or “as-built dated __________.”

R 559.402 Contents.

Rule 402.

A complete condominium subdivision plan shall be comprised of the following:

(a) A cover sheet, showing all of the following:

(i) The name and location of the condominium project.

(ii) Prescribed wording as indicated in section 66(3) of the act for assignment of a condominium subdivision plan number by the county register of deeds.

(iii) Prescribed wording stating the exhibit letter or number as used in the master deed.

(iv) The name and address of the developer.

(v) A complete and accurate written property description.

(vi) A comprehensive sheet index.

(b) A survey plan, showing all of the following:

(i) A surveyor’s certificate prescribed as follows: SURVEYOR’S CERTIFICATE I, ____________________ (Name of Individual), registered land surveyor or registered civil engineer of the state of Michigan, hereby certify: That the subdivision plan known as _______________ (name) county condominium subdivision plan no. __________, as shown on the accompanying drawings, represents a survey on the ground made under my direction (that there are no existing encroachments upon the lands and property herein described) or (that there are existing encroachments upon the lands and property described as shown). That the required monuments and iron markers have been located in the ground as required by rules promulgated under section 142 of Act No. 59 of the Public Acts of 1978. That the accuracy of this survey is within the limits required by the rules promulgated under section 142 of Act No. 59 of the Public Acts of 1978. That the bearings, as shown, are noted on survey plan as required by the rules promulgated under section 142 of Act No. 59 of the Public Acts of 1978. _______________________________ _________________________________ (Date) (Signature) Individual Name–Printed Registered land surveyor or Registered civil engineer Registration No. _______________ (fill in) (Firm name–if any) (Seal) (Firm address)

(ii) All easements and encroachments, whether of benefit or burden, dimensioned and identified.

(iii) All property boundaries complete with bearings, distances, and curve data necessary to completely traverse the parcel or parcels.

(iv) All property corners monumented as prescribed in R 559.407(1)(a).

(v) A survey bench mark shown by symbol and described with its elevation referenced to an official bench mark of the national geodetic survey of the United States geological survey, which are based on the national geodetic vertical datum of 1929. If the bench mark is more than 200 feet from the total site, a permanent bench mark shall be established within that distance in accordance with the generally accepted standards for establishment of such a bench mark.

(vi) Identification of all contiguous properties or waterways.

(vii) In the case of expandable condominium projects, all land on which the balance of the project may be located shall be shown, complete with distances, bearings, and curve data, identified as proposed future development. This land shall be shown in relationship to the phase being currently submitted.

(viii) A location map of the project with its relationship to the surrounding area.

(c) A floodplain plan when the condominium lies within or abuts a floodplain area, showing all the following:

(i) The location of all condominium buildings and improvements.

(ii) The floodplain shall be shown within a contour line as established by the department of natural resources.

(iii) The floodplain contour line shall be shown to the point where it intersects with the boundaries of the condominium project or to its limits, whichever is greater, and be dimensioned to the nearest whole foot from the street or traverse line.

(iv) The contours over the entire project shown at 2-foot intervals.

(v) The floodplain area shall be clearly labeled with words “floodplain area.” A common element or a condominium unit, other than a campsite or a marina unit, shall not be constructed where it may be reasonably anticipated that the structures will be damaged by flooding. Where the proposed condominium project is within a floodplain, the administrator may require a statement from a registered engineer that the subject property is not in apparent present or future danger of flooding, including herewith an explanation of the factors leading to that conclusion.

(d) A site plan showing all of the following:

(i) Specific locations of all property corners, condominium buildings or units, and improvements by a coordinate system established in the form of latitudes and departures in north-south and east-west directions from an established point, preferably a property corner.

(ii) All coordinate values referenced to either the Michigan coordinate system, prescribed by Act No. 9 of the Public Acts of 1964, being SS 54.231 to 54.239 of the Michigan Compiled Laws, or to a city coordinate system, if one exists, or to a monument set during the survey, if such coordinate systems have not been established.

(iii) The relationship of the condominium units to the condominium property boundaries by either showing 2 coordinates on the same line, as prescribed in (ii) above, on 2 corners of the building or unit, or by 1 coordinate on the building or unit corner, and by a bearing related to the true meridian or a previously established meridian.

(iv) All general and limited common elements and approximate size.

(e) A utility plan showing all of the following:

(i) All utility lines for gas, electricity, water, steam, telephones, storm sewer, sanitary sewer, or services of a similar nature.

(ii) A legend stating the source from which the location information was obtained.

(iii) The location and identity of all utility meters.

(iv) The size of the various utility lines.

(f) Floor plans, when the use is intended for residential, office, industrial or business, or any other type, with the ownership contained within a building or buildings, showing all of the following:

(i) All structures and the specific location of each condominium unit in the project, which shall be by a system of dimensional descriptions and angle measurements.

(ii) Each floor of each building, including all general and limited common elements and approximate size.

(iii) Each unit’s boundaries clearly distinguishable by a heavy black line.

(iv) The area of each condominium unit.

(v) A number assigned to each unit.

(g) Sections, when the use is intended for residential, office, industrial or business, or another type with the ownership contained within a building, or buildings, showing all of the following:

(i) The required number of views necessary to accurately identify the vertical boundaries of the condominium units.

(ii) Dimensioned all vertical boundaries as referenced to an elevation established at any floor, based on the national geodetic vertical datum of 1929.

(iii) All general and limited common elements.

(iv) All unit boundaries identified by a heavy black line.

R 559.403 Mobile home condominium subdivision plan; contents.

Rule 403.

(1) A mobile home condominium subdivision plan shall be composed of all of the following in compliance with R 559.402(1)(a) to (e):

(a) A cover sheet.

(b) Survey plan.

(c) Floodplain plan, where applicable.

(d) Utility plan.

(e) Site plan.

(2) In addition to the requirements of subrule (1)(a) to (e) of this rule, show all of the following:

(a) Sufficient dimensions and angle measurements to accurately identify the area of fee simple ownership contained within a given description on top of the ground or foundation, either on or within the mobile home lot.

(b) If basements are provided as part of a mobile home condominium unit, a section shall be provided which complies with R 559.402(1)(g) and a floor plan of that basement area shown which complies with R 559.402(1)