At the end of 2018, our Michigan government experienced a “lame duck” session when many of the representatives and senators, as well as the governor, would not be returning to office the following year. During these times, there tends to be a flurry of legislative activity, as certain individuals may no longer be concerned about being held accountable for their votes.
Unfortunately, the 2018 lame duck session included Public Act 572, which represents a threat to Michigan community associations. While not entirely clear, the legislation could be interpreted in such a way as to allow sellers of property in community associations with governing documents recorded over 40 years ago to remove their property from the association. However, the association could guard against that by recording a claim of interest before the 40 years expire, thereby preserving the applicability of the governing documents to all units/homes. And the bill allowed for an initial extra period of time until March 29, 2021 for claims of interest to be recorded for properties over 40 years old. However, there will be many associations unaware of this situation, and they are in for a rude awakening if no further action is taken.
HB 5260 was recently introduced, which is a good start toward fixing this problem. It would clarify that “This act must not be applied to… bar the enforcement of any provision contained in or referred to in a recorded master deed for a condominium and its recorded amendments.” Obviously, this should be expanded to address homeowners associations and their recorded declarations of restrictions.
Open Letter to Michigan House Committee on Local Government and Municipal Finance Re: HB 5260
As an attorney who has represented condominium and homeowners associations for over 40 years, I am writing in support of HB 5260 and advising that it should be expanded to include a reference to homeowners associations and their recorded declarations of restrictions. Homeowners associations are legally distinct from condominium associations in Michigan, even though they share many similarities. But they are no less deserving of the relief provided by HB 5260.
Just like condominium associations, homeowners associations depend on everyone paying their annual assessments in order for the association to function. Also, the character of the neighborhood is supported by the architectural restrictions and other restrictions in the recorded documents. If individuals are allowed to withdraw their property from the association by selling it without a reference to the condominium’s master deed or homeowners association’s declaration, it would be greatly unfair to the rest of the people in the association that depend on the enforceability of the documents and who made their purchase with the understanding that no one person would be able to unilaterally withdraw their property.
Homeowners associations face the same problem as condominiums with respect to the approaching deadline of March 29, 2021, the last day to record a claim of interest for associations that are more than 40 years old (pursuant to 2018 PA 572). Not every association will be aware of this deadline, and as it stands, many will be surprised by new owners claiming their residence is no longer part of the association. If not fixed, this problem is also certain to cause litigation. That’s why we support HB 5260 on behalf of our community association clients and would like to see it expanded to include homeowners associations as well.
Please contact me if you have any questions about this issue.
Very truly yours, Robert Meisner