Deed restrictions, subdivision rules and condo associations in Michigan

It can. In Eager v Peasley (2017), the Court of Appeals held that transient short-term rentals of a lake house violated restrictions requiring "private occupancy only" and a "private dwelling," and also violated a separate prohibition on commercial use. The Court wrote that "the act of renting property to another for short-term use is a commercial use, even if the activity is residential in nature." Aldrich v Sugar Springs (2023) applied Eager to a covenant limiting lots to residential purposes. The result still depends on the wording of the recorded restrictions.

Eager v Peasley involved a lake house rented to transient guests on stipulated facts. The Court of Appeals found that the owner lived in another county, rented the house to a variety of groups, including tourists, hunters and business groups, advertised on a worldwide rental website, and gave renters no right to leave belongings at the house. It held that this use "is not limited to one single family for 'private occupancy only' and a 'private dwelling,'" and so violated the restrictions. It held separately that the rentals violated the prohibition on commercial use, relying on the Supreme Court's definitions of commercial use in Terrien: "We conclude that, under the definitions set forth in Terrien, the act of renting property to another for short-term use is a commercial use, even if the activity is residential in nature." The Court reversed and remanded for entry of an injunction. It did not decide long-term residential rentals, and a separate opinion in the case noted that the majority was not commenting on them.

Aldrich v Sugar Springs Property Owners Association applied Eager to a covenant that limited lots to "residential purposes only," described the building as a "single family residence unless otherwise designated for multi-family or commercial use on the plat," and reserved certain areas for commercial development. The Court of Appeals held that short-term rentals were a commercial use that the covenant did not allow. It faulted the trial court for relying on the absence of an express ban on short-term rentals, because that approach did not examine the covenant as a whole and the intent the developer expressed in it. The association, as defendant, was entitled to summary disposition.

Two limits follow. First, both cases turned on the language of the recorded restrictions, so a subdivision with different wording, or restrictions that expressly allow rentals, must be read on its own terms. Second, who may enforce is a separate question that those decisions did not settle. In Aldrich, the plaintiffs were owners who sued the association, and the association had not challenged their standing, so the Court did not resolve that point. An owner who rents, or a neighbor who objects, should start with the recorded declaration, any amendments, and the plat, and with how rentals have been treated in the neighborhood in the past.

Authority: Eager v Peasley, 322 Mich App 174, 190 (2017); Eager v Peasley, 322 Mich App 174, 189-191 (2017); Aldrich v Sugar Springs Prop Owners Ass'n, 345 Mich App 181 (2023). Reviewed Oct. 2026.

Not for assessments that came due before the new owner acquired title. MCL 559.158 provides that a first mortgagee, or other purchaser, that obtains title through foreclosure of the first mortgage, and its successors and assigns, is not liable for assessments that became due before it acquired title. The Court of Appeals held in Wells Fargo v Country Place that title is acquired for this purpose on the date of the sheriff's sale, so assessments that accrue from that date, including during the redemption period, are owed.

MCL 559.158 reads: "If the mortgagee of a first mortgage of record or other purchaser of a condominium unit obtains title to the condominium unit as a result of foreclosure of the first mortgage, that mortgagee or purchaser and his or her successors and assigns are not liable for the assessments by the administering body chargeable to the unit that became due prior to the acquisition of title to the unit by that mortgagee or purchaser and his or her successors and assigns."

The Act does not define "acquisition of title." In Wells Fargo Bank v Country Place Condominium Association, the Court of Appeals held that the bank acquired equitable title on the date of the sheriff's sale, even though its legal title became absolute only when the redemption period ended without redemption. The Court observed that "that ownership interest takes the form of an equitable title that is capable of being sold or assigned." The bank was therefore liable for assessments that came due on and after the sheriff's sale date, including those that came due during the redemption period, and not for assessments that became due before that date.

Federal National Mortgage Association v Lagoons Forest Condominium Association reached the same line on a sale followed by a quitclaim deed to Fannie Mae. The association argued that Fannie Mae never requested the written statement of unpaid assessments that MCL 559.211(2) provides for, so it should be liable for the pre-sale assessments. The Court of Appeals rejected that argument. It found that MCL 559.158 and MCL 559.211 "create a patent ambiguity and irreconcilably conflict with each other," and held that "specific statutory provisions prevail over more general ones," so the specific protection of MCL 559.158 controlled. Fannie Mae and its predecessor were not liable for assessments due before the March 1, 2011 sale, but were liable from that date forward.

Lagoons describes the effect of the statute this way: "It is abundantly clear that MCL 559.158 acts to eliminate all preexisting association assessments and corresponding fees and costs once a condominium is foreclosed upon, unless the original owner reclaims the property during the redemption period."

Two points limit the rule. It protects the holder of a first mortgage of record, or another purchaser who takes title as a result of foreclosure of that mortgage, and by its terms it does not cover a buyer from an ordinary sale. And the dates matter: assessments that came due before the sheriff's sale and those that come due on and after it are treated differently, so the association's ledger should be read against the sale date.

Authority: MCL 559.158; Wells Fargo Bank v Country Place Condo Ass'n, 304 Mich App 582, 592 (2014); Fed Nat'l Mortg Ass'n v Lagoons Forest Condo Ass'n, 305 Mich App 258, 267 (2014). Reviewed Oct. 2026.

MCL 559.211(2) entitles a purchaser or grantee to a written statement from the association of co-owners setting out the unpaid assessments, interest, late charges, fines, costs and attorney fees against the seller. The purchaser is not liable for more than the amount in the statement. If the purchaser does not request the statement at least 5 days before the sale, the purchaser is liable for the unpaid assessments against the unit, together with interest, costs, fines, late charges and collection attorney fees.

Under MCL 559.211(1), on the sale or conveyance of a condominium unit, all unpaid assessments, interest, late charges, fines, costs and attorney fees against the unit "shall be paid out of the sale price or by the purchaser in preference over any other assessments or charges of whatever nature," with two exceptions: amounts due the state or a local government for taxes and special assessments due and unpaid on the unit, and payments due under a first mortgage having priority.

Subsection (2) adds the written statement procedure. A purchaser or grantee "is entitled to a written statement from the association of co-owners setting forth the amount of unpaid assessments, interest, late charges, fines, costs, and attorney fees against the seller or grantor," and the purchaser "is not liable for, nor is the condominium unit conveyed or granted subject to a lien for any unpaid assessments, interest, late charges, fines, costs, and attorney fees against the seller or grantor in excess of the amount set forth in the written statement." The consequence of not asking is stated in the next sentence: unless the purchaser requests the statement "at least 5 days before sale," the purchaser "shall be liable for any unpaid assessments against the condominium unit together with interest, costs, fines, late charges, and attorney fees incurred in the collection thereof."

The section applies to a sale or conveyance of the unit. In Coventry Parkhomes Condominium Association v Federal National Mortgage Association, the Court of Appeals held that MCL 559.211 "does not apply in this case," because the bank obtained only a mortgage security interest by assignment, and the statute concerns the conveyance of a co-owner's interest, not a mortgagee's interest. In the foreclosure setting, MCL 559.158 is the more specific provision and controls over the written statement rule, as the Court of Appeals held in Federal National Mortgage Association v Lagoons Forest Condominium Association.

For an ordinary buyer, the practical step is to request the statement in writing well before the closing date, and to keep the request and the response with the closing file. A seller should expect the association to include fines and collection costs, not only the monthly assessment.

Authority: MCL 559.211(1), (2); Coventry Parkhomes Condo Ass'n v Fed Nat'l Mortg Ass'n, 298 Mich App 252, 262 (2012); Fed Nat'l Mortg Ass'n v Lagoons Forest Condo Ass'n, 305 Mich App 258, 267 (2014). Reviewed Oct. 2026.

Under MCL 559.206(b), in a proceeding arising from an alleged default by a co-owner, the association or the co-owner, if successful, recovers the costs and reasonable attorney fees as determined by the court, to the extent the condominium documents expressly so provide. In Windemere Commons, the Court of Appeals held that the party claiming fees has the burden of proving the amount is reasonable and listed factors the trial court should consider.

MCL 559.206(b) allows recovery of costs and fees only on a defined basis: "In a proceeding arising because of an alleged default by a co-owner, the association of co-owners or the co-owner, if successful, shall recover the costs of the proceeding and reasonable attorney fees, as determined by the court, to the extent the condominium documents expressly so provide." Two points are visible from the text. The right exists for whichever side succeeds, so a co-owner who wins can claim fees if the documents provide for it. And the documents must expressly provide for fees, so the bylaws or master deed are the first place to look.

The Court of Appeals applied the section in Windemere Commons. The bylaws there provided for costs and reasonable attorney fees to the association when it was successful in an action arising from the default of a co-owner. The trial court denied the request and gave no explanation. The Court of Appeals reversed, writing that "plaintiff prevailed in its action against defendants, and therefore, pursuant to MCL 559.206(b) and the association bylaws, it was entitled to costs and reasonable attorney fees." It remanded for the trial court to decide the amount.

On the amount, the Court wrote: "The party claiming entitlement to costs and fees has the burden of proving that the amount requested is reasonable." It listed a nonexclusive set of factors for the trial court: the time and effort required, the novelty and difficulty of the issues and the skill needed; the likelihood that taking the case precludes other employment; the fee customarily charged in the locality for similar services; the amount of money involved and the result obtained; time limits imposed by the case or the client; the nature and length of the professional relationship; the experience, reputation and ability of the attorney; and whether the fee is fixed or contingent.

For an owner facing a fee claim, the questions are whether the documents expressly provide for fees, whether the association actually succeeded, and whether the billing is documented and proportionate to the dispute. For an association, the invoices and a clear record of the time spent are the proof that the burden requires.

Authority: MCL 559.206(b); Windemere Commons I Ass'n v O'Brien, 269 Mich App 681, 684 (2006); Windemere Commons I Ass'n v O'Brien, 269 Mich App 681, 683 (2006). Reviewed Oct. 2026.

Yes, in the Court of Appeals' reading of the Act. Tuscany Grove Association v Peraino held that MCL 559.206(a), which makes noncompliance with the condominium documents grounds for relief, does not prohibit co-owners from limiting the association's authority to sue to cases in which a supermajority of owners approve. The case was dismissed because the association did not have the approval its bylaws required.

MCL 559.206(a) provides that a failure to comply with the condominium documents "shall be grounds for relief, which may include without limitations, an action to recover sums due for damages, injunctive relief, foreclosure of lien if default in payment of assessment, or any combination thereof." An association that wanted to sue without a vote of the owners argued in Tuscany Grove Association v Peraino that this language overrides a bylaw requiring a supermajority vote first.

The Court of Appeals disagreed: "Contrary to plaintiffs arguments, while this provision recognizes that an association might pursue an action for damages or injunctive relief against a co-owner, it does not prohibit co-owners from choosing to limit this authority to instances in which a supermajority of owners deem the litigation worth pursuing." The Court reasoned that the statute makes noncompliance grounds for relief but does not dictate when an association must pursue it, who decides, or whether a supermajority requirement is allowed. It pointed to MCL 559.153, which provides that the administration of a condominium project "shall be governed by bylaws," and MCL 559.156(a), which allows bylaw provisions "deemed appropriate for the administration of the condominium project not inconsistent with this act or any other applicable laws." A rule on who may authorize litigation is a matter of administration, so the bylaws regulate it. The Court affirmed summary disposition because the association lacked the required prior approval, and its later petitions did not meet the bylaw's voting formalities.

A board that is thinking about suing an owner should read the bylaws for a litigation vote, how many owners must approve and in what form, and whether approval must come before filing. An owner who is sued should ask for the approval record, because a missing approval is a defense the Court of Appeals accepted in that case. The rule depends on what the documents say, and a later unpublished decision distinguished Tuscany Grove where the governing documents did not require a membership vote.

Authority: MCL 559.206(a); MCL 559.153; MCL 559.156(a); Tuscany Grove Ass'n v Peraino, 311 Mich App 389, 398 (2015). Reviewed Oct. 2026.

MCL 559.276 sets short limits. For a cause of action that accrues on or before the transitional control date, an action against a developer, residential builder, licensed architect, contractor, sales agent or manager may not be brought later than 3 years after the transitional control date or 2 years after the cause of action accrued, whichever is later. For a cause of action that accrues after that date, the limit is 2 years after accrual. Subsection (2) limits the section to projects established on or after the effective date of the amendatory act that added it.

MCL 559.276(1) applies to a cause of action "arising out of the development or construction of the common elements of a condominium project, or the management, operation, or control of a condominium project." Under subdivision (a), if the cause of action accrues on or before the transitional control date, a person "shall not maintain an action against a developer, residential builder, licensed architect, contractor, sales agent, or manager of a condominium project later than 3 years after the transitional control date or 2 years after the date on which the cause of action accrued, whichever occurs later." Under subdivision (b), if it accrues after the transitional control date, the action must be brought no later than 2 years after the date on which the cause of action accrued.

The "transitional control date" is defined in MCL 559.110(7) as the date on which a board of directors for the association takes office "pursuant to an election in which the votes that may be cast by eligible co-owners unaffiliated with the developer exceed the votes which may be cast by the developer." Because every deadline in the statute is measured from that date, it is usually the first fact to nail down.

Reserve at Heritage Village Association v Warren Financial Acquisition shows how the statute operates. The trial court found that the transitional control date was January 27, 2009, based on the association's own interrogatory answer and on control having clearly passed to the board, which was prosecuting the case. The association filed the amended complaint with the claims at issue more than three years later. The Court of Appeals held: "We conclude that the trial court properly dismissed Counts IV through XXVII on the basis of the statute of limitations." The Michigan Supreme Court denied leave to appeal and then denied reconsideration.

Under MCL 559.276(2), subsection (1) "applies only to condominium projects established on or after the effective date of the amendatory act that added this subsection," so the project's establishment date should be checked in the master deed. An association that is recently out of developer control, or a buyer who suspects a construction defect in the common elements, should find the transitional control date and the dates of the problems before doing anything else.

Authority: MCL 559.276; MCL 559.110(7); Reserve at Heritage Village Ass'n v Warren Fin Acquisition, LLC, 305 Mich App 92, 110 (2014). Reviewed Oct. 2026.

Often, yes, within the time the Condominium Act allows. Under MCL 559.155, a service contract between the association and the developer or its affiliates, and a management contract with the developer or its affiliates, is voidable by the board of directors on the transitional control date or within 90 days after it, and afterward on 30 days' notice for cause. A management contract that runs more than 1 year past that date may be voided for the excess period by notice at least 30 days before the 1 year ends.

MCL 559.155(1) provides that "A service contract which exists between the association of co-owners and the developer or affiliates of the developer and a management contract with the developer or affiliates of the developer is voidable by the board of directors of the association of co-owners on the transitional control date or within 90 days thereafter, and on 30 days' notice at any time thereafter for cause."

Subsection (2) deals with long management contracts: "To the extent that any management contract extends beyond 1 year after the transitional control date, the excess period under the contract may be voided by the board of directors of the association of co-owners by notice to the management agent at least 30 days before the expiration of the 1 year."

The transitional control date is the date the board of directors takes office in an election in which the votes of eligible co-owners unaffiliated with the developer exceed the developer's votes (MCL 559.110(7)). The 90 day window and the 1 year point both run from it, so the first step for a newly elected board is to fix that date and calendar both deadlines. The section applies to contracts with the developer or the developer's affiliates, and by its text says nothing about contracts with unrelated vendors.

Voiding a management contract can leave the association without a manager, so a board should have a replacement or an interim plan before it sends notice. The statute calls for notice to the management agent for the excess period of a long contract, and written notice that identifies the contract and the section relied on is the safer course. An owner who thinks a developer-era contract is costing the association money can raise the question with the board, since the right belongs to the board of directors.

Authority: MCL 559.155; MCL 559.110(7). Reviewed Oct. 2026.

Only if they prove a scheme of restrictions that started with a common owner. In Denhardt v De Roo, the Michigan Supreme Court held that where there is no express restriction in the chain of title of the lot, there must be proof of a "scheme of restrictions" originating from a common owner, and the burden is on the owners seeking to enforce. A restriction in the title to a single lot does not establish such a plan, and a scheme cannot arise on one lot because other owners conform to a general plan.

Denhardt v De Roo was a bill in equity by owners of lots in a 74 lot subdivision against the owner of two lots who planned to build a grocery and meat business. The plat, filed in 1921, had no restrictions of any kind, and the original owners later partitioned the lots among themselves so that their holdings were spread through the subdivision. A few deeds from one of them carried residence-only restrictions, but there was no express restriction in the chain of title to the defendant's lots. The trial court granted relief. The Michigan Supreme Court reversed and wrote: "Where there is no express restriction in the chain of title of the particular lot the use of which is sought to be restricted, there must be proof of a 'scheme of restrictions' originating from a common owner." Such a scheme is called a reciprocal negative easement. The Court said it "must start with a common owner; it cannot arise and fasten upon one lot by reason of other lot owners conforming to a general plan," and that "The burden of establishing the restrictions by way of reciprocal negative easement is on plaintiffs."

The Court added requirements for the plan itself. A restriction placed in the title to a single lot "does not establish such a plan." The general plan must have been "maintained from its inception" and "understood, accepted, relied on, and acted upon by all in interest." The plaintiffs in Denhardt lost because they produced no evidence of a plan founded by the common grantor. Lots next to the defendant's had never been restricted, and the scattered holdings of the original owners meant that a neighborhood plan would have been impossible without express restrictions from the other owners. The plaintiffs also could not rely on the inference that restrictions had been observed, because the stipulated facts showed several lots already used for business. The Court ordered the bill dismissed.

The rule gives a title examiner a place to start. A buyer or an owner who is told that an unrecorded subdivision plan applies should look at the deeds into the lot, the original plat, and the deeds of the other lots from the same original owner, because the question is whether the developer used the same restrictions across the lots. The neighbors who sue need that proof. The owner who is sued should not assume that the lack of a restriction in the deed ends the case, because a plan that did start with the common owner and was carried through the lots can bind a lot whose own deed is silent. Denhardt is a 1940 decision that the Supreme Court later distinguished on its facts, so it should be read together with the decisions that apply it.

Authority: Denhardt v De Roo, 295 Mich 223, 228 (1940); Denhardt v De Roo, 295 Mich 223, 228-229 (1940). Reviewed Oct. 2026.

Under MCL 559.160, actions on behalf of and against the co-owners are brought in the name of the association of co-owners, and the association may assert, defend or settle claims on behalf of all co-owners in connection with the common elements of the condominium project. MCL 559.215 separately allows a person or association adversely affected by a violation of the Act, its rules, or an agreement or master deed to bring an action, and lets the court award costs to the prevailing party.

MCL 559.160 provides: "Actions on behalf of and against the co-owners shall be brought in the name of the association of co-owners. The association of co-owners may assert, defend, or settle claims on behalf of all co-owners in connection with the common elements of the condominium project." A suit about a roof, a foundation, a retaining wall or other common element is therefore the association's suit, and a settlement of the common element claims is the association's decision.

MCL 559.215(1) adds a general right of action: "A person or association of co-owners adversely affected by a violation of or failure to comply with this act, rules promulgated under this act, or any provision of an agreement or a master deed may bring an action for relief in a court of competent jurisdiction. The court may award costs to the prevailing party." That section covers claims by an association and by a person, and it covers claims based on the Act, the rules, the master deed or an agreement.

Two limits are worth noting. First, the text of MCL 559.160 speaks to the common elements, and it does not say who sues for damage inside a single unit. Second, claims against the developer, builder, architect, contractor, sales agent or manager arising from the development or construction of the common elements are subject to the limitation periods of MCL 559.276, measured from the transitional control date or accrual.

An association that is considering a defect claim should confirm that its bylaws do not require an owner vote before filing, because the Court of Appeals has upheld such a requirement. Individual owners who want the common element problem fixed should put the request in writing to the board, since the board controls the claim.

Authority: MCL 559.160; MCL 559.215(1); MCL 559.276(1). Reviewed Oct. 2026.