Attention: Michigan Residents in Owners Associations

2006 April 30
Last update:  2009 Aug 10.  See History for brief descriptions of changes and updates. 

Dear Michigan Residents in Owners Associations:

    This post is an attempt to locate Michigan residents whose homes/property are in a common interest development (CID) governed by a property owners association (POA), who are interested in Michigan legislation that may address some of the problems you are having with the developer of the CID and/or the property owners association (POA) that manages the affairs of the CID.   

    If you are from Michigan and have found this weblog because of your concerns about governance of property owners association, and are interested in possible legislation to improve that governance and guarantee rights of individual members, please contact me.  An active group of individual property owners to contact their individual representatives and senators for enactment of a comprehensive law concerning Common Interest Developments (CIDs) and Property Owners Associations (POAs).  Click on the email link near the top of the left column. Your reply will be treated with strictest confidence.

    Visitors from Michigan to this weblog for the period, 2009 Jul 18 — 2009 Aug 08, are shown in the map below.  Click on the image for a full-size and clearer view in a new window.  Then close the new window or return to the window for this post.  

 

Click continuation to access maps covering three-week periods in reverse chronological order. 

    At the end of the continuation is a comment section which may also be used for communicating your problems in Michigan POAs to others. 

    Please read the Welcome Page for more information on this weblog.  Thanks for your interest. 

Don Nordeen
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Scroll down past the Key Words for continuation for access to maps and to add comments. 

• Key Words:  The list of words and terms are those used typically used in internet searches concerning property owners associations.  Specifically, any search containing "Michigan" and other terms which are included in the list should result in a "hit" to this post.  This is a way to try to locate residents in Michigan who may be interested in joining forces to improve CID and POA legislation.
         List of Key Words and Terms: ABA, ABA Model Nonprofit Corporation Act, abuse, access, access to records, accountable, accounting, accounting standards, ACLU, advocacy, ADR, agency, AICPA, AICPA Audit & Accounting Guide, AICPA Audit & Accounting Guide for Common Interest Reality Associations, alternate dispute resolution, amendment, annual meeting, arbitrary, arbitrary and capricious, architectural control committee, architectural committee, Armand Arabian, Articles of Incorporation, association of owners, association of co-owners, association manager, attorney, attorney client privilege, attorney general, attorney obligations, audit, backlash, bill of rights, board of directors, board of trustees, breach, breach of fiduciary duty, business judgment rule, bylaws, CAI, capricious, Carl Lisman, Carol Silverman, case law, CC&R, CC&Rs, Charles Egan Goff, Charles Goff, CHORE, CID, CIDs/POAs, client, client attorney privilege, client lawyer privilege, client attorney privilege, closed session, collection, common interest community, common interest homeowners coalition, Common Interest Realty Association, CIRA, community association, Community Associations Institute, complaint, compliance, condo, condominium, Condominium Act, condominium association, conflict, consolidated financial statements, constitution, corrective action, Covenant, Covenants Conditions and Restrictions, CPA, declarant, definition, democracy, democratic, depreciation, developer, developer control, development, director, directors obligations, disclosure, dispute, dispute resolution, due process, dues, duties, duty, duty of care, duty of loyalty, duty of obedience, duty to act, easement, election, Elizabeth A. Pitrof, enforcement, enforcing, engagement, engagement letter, Evan McKenzie, excessive, executive, executive session, expert, FASB, fiduciary, fiduciary duty, fiduciary duties, fiduciaries, fine, condo ombudsman, condominium ombudsman, HOA abuse, HOA ombudsman, flsenate, foreclosure, Frank Askin, freedom of information, GAAP, generic CC&Rs, glossary, Goff, governance, Governance of Not-for-Profit Organizations, governing, governing documents, grievance, harass, harassment, handbook, HOA, homeowners associations, home owners associations, HOA, Homeowner Bill of Rights, improvement, Joe West, land development, law, laws, lawsuit, lawyer, lawyer client privilege, legislation, legislative, legislature, limitations, Maryland, members' rights, Michigan, model bylaws, model CC&Rs, model homeowners covenants conditions and restrictions, negligence, Nevada, New Jersey, nonprofit, Nonprofit Corporation Act, nonprofit GAAP, obligations, ombudsman, open meetings, organization as client, owners' rights, Pat Haruff, planned communities, planned unit development, POA Act, private government, Privatopia, privatopia papers, problem solving, problems, property owners association, POA, property rights, proxy vote, proxy voting, public policy, PUD, quorum, Radburn, regulation, rental, reserve, reserve fund, restriction, restrictive covenants, Robert Nelson, roles and responsibilities, rule, rules and regulations, special meeting, Stephen Barton, subdivision, transparency, trustee, UCIOA, Uniform Law Commissioners, Uniform Planned Community Act, unreasonable, vacation rental, Vail and Mintz.

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Attention: Michigan Residents in Owners Associations (continued)

Visitors from Michigan to this Weblog

    Maps showing Michigan visitors to this weblog in successive two-to-three-week periods (newest first) can be accessed below.  Use your browser's back button/arrow to return to this post. 

• Download MI-2009-Jul-19--Aug-08.jpg
  

• Download MI-2009-Jun-27--Jul-18.jpg

• Download MI-2009-Jun-10--Jun-26.jpg

• Download MI-2009-May-18--Jun-09.jpg

USA Visitors to this Weblog

    A typical map of USA visitors to this weblog is shown below.  Click on the image for a full-size and clearer view in a new window.  Then close the new window or return to the window for this post.  

 

Basically, the pattern tracks the numbers of owners associations in the various states.  The high concentration from the State of Washington is because Google places a particular post concern Washington HOA law near the top of search results.  The "flag" in the middle of Kansas is for all visitors that are identified as USA only.  Most also provide city and state. 

    The locations suggest that problems with POAs are generic and universal, suggesting that the concept if fundamentally flawed with the limited state laws. 

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• History:  Changes are usually identified in the text with the date which facilitates searching by date.  Edits are usually noted by add and delete changes. 
  • 2009 Aug 10 — edit of maps and related text
  • 2009 Jul 18 — Maps showing visitors from Michigan to this weblog added.
  • 2006 Aug 24 — added text to post problems in Michigan POAs as comments
  • 2006 Apr 30 — Initial Post
• Links:  Attention:  Michigan Residents in Owners Associations at [http://swagman.typepad.com/poa_governance/2006/04/attention_michi.html]

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____________________________________________________________________________
Copyright 2009 © Donald L. Nordeen.  All Rights Reserved.  See Copying Posts on This Weblog.
••• End of Post •••

Comments

[don mcdonald]

2006 July 13

Re Problems with Contractor

We are having a very, very difficult issue with the condo association and management company. we are being wrongly accused of interferring with third party contractors work at the condo common areas. These contractors have damaged the condo, prevented access to our automobiles and the management company will not respond even when activities are presenting a potential liability exposure. We live in livonia michigan and need advice on how to proceed to protect ourselves from the association and management company. Thanks so much for you comments.

don mcdonald

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Reply
2006 Jul 25

This appears to be a problem with the management of the association. Your complaint should be directed to the management company and the board of directors.

Your first step is to request for a copy of the contract with the contractor. If the contractor is not required to perform to your expectations, then the contract has to be renegotiated. If the contract provides the protections you want, then the management company and the board should demand the contractor perform accordingly, and payment should be withheld. Just normal business.

If the board stonewalls, circulate a petition requesting that copies of all contracts be available and that the management company ensure conformance. A Gang of 20 is usually enough.

Don Nordeen

[s chwaled]

2006 Jul 20

Re Waterfall Not Operated

we live on a lot that has an easement which is commons area with a waterfall. The waterfall used to be run about 12 hours per day from may-october. Now they only run it about four hours per day, and when it's off its not nice to look at. It holds a bit of water that sits and stagnates all day and is a breeding ground for mosquitos. They dont want to run it because it's costly. What can we do.

s chwaled

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Reply
2006 Jul 25

This sounds like an issue for the members to decide. It is clearly a subject to discuss at the annual meeting if not before. Circulate a petition requesting longer or full-time operation. I presume that you have already made your request directly to the board.

It may boil down to money. Are you willing to pay more for full operation/

You should probably review your governing documents to determine whether or not an operational fountain is part of the common property. If such, the board is probably required to provide full operation.

Review the post, Thoughts on Problem Solving for CIDs/POAs.

Don Nordeen

[Desiree Brown]

2006 August 22

Re Improper Billing from DTE through Condo

Breach of Fiduciary Duty on the part of my Condo Association when they failed to act in good faith regarding my electricity being shared with the developers of Raintree Condo from the day I moved in and lasting over a year without my knowledge.

I have been fighting a DTE bill of $3,500.00 (approx.) which has accumulated since the day I moved here in Feb. of 2001. I have been trying to resolve this for 5 years not knowing who was actually responsible for these bills which did not match the meter on my house. I wrote letters to the Property Management Company in 2002, I spoke repeatedly with the president of the association regarding this and ask if my issues with the wrong meter would be rolled into the main lawsuit that had been on going since day one between the developers and the association and he answered in the affirmative.

Over the last 5 years my DTE service has been disconnected 4 times due to this issue. The last time was this past Feb. and I was without lights and heat for 8.5 days at which time I combed persistently through all the minutes of the association meetings, and correspondences between the developer’s attorneys and that of the associations and finally finding out who was actually responsible for this mess.

Additionally everyone was aware of my electricity being shared with the developers but me and they all knew that I had been fighting DTE for 5 years. No one came forward until I brought my findings to their attention at which time they agreed to pay for the amount owing, however, I had to sign a “Memorandum of Understanding” in order to get the association to pay DTE and restore my electricity.

Being that I did not have the information they requested in the time they wanted (no time frame was included in this agreement) the association has now put a lien on my condo for $3,500.00. Can some one tell be the correct cause of action I can file against them?

Desiree Brown

=============================================
Reply

2006 August 30

Dear Ms. Brown:

What a mess. I suggest that you talk to a customer service at DTE and verify that they have a record of what has happened. Detail is important, so have names, dates, actions, etc. ready. With the power turned off several times, DTE should have the record in their file. If not, send a supervisor or manager at DTE a letter describing what has happened including names, dates, etc. I presume that DTE was called regarding the power being turned off, and that the DTE technician has verified the incorrect wiring. Prior to your occupancy, DTE had the name of the party responsible for the meter in question. Somehow, the account name appears to have been improperly changed. Not matching the meter on your house seems important.

Likely, the customer service person won't be able to solve your problem, so be prepared to ask to speak to his/her supervisor. If you call can't be transferred, get the name and phone number and keep calling until you reach the supervisor. Make sure the supervisor has accessed and is reading your file. Repeat the story if necessary. If no action, ask for the manager's name and phone number and repeat the process. Sooner or later, you will get high enough in the DTE organization to find someone who can address your problem and complaint. Put the pressure on DTE that their account names and billing are improper. If they agree that the meters were hooked up incorrectly, then the lien is clearly invalid.

The Association does not seem to have a basis for filing the lien since they likely have a record of what happened in the association file. I would try one more time to get an answer from your association. Be insistent that the lien is invalid, and that they are improperly clouding the title to your property.

I am not an attorney and cannot provide legal advice. But if you can't get any satisfaction, interview an attorney or two and select one who will vigorously pursue the screw-ups with threatening language concerning both DTE and the association acting improperly.

Good luck.

Don Nordeen

[Cheryl Kubat]

2006 August 23

Re Reserves for Preservation Fund Inadequate

I am Vice President of Villa Nova Condominiums. I purchased my condo in October of 2002. At my first condo association meeting I was surprised to hear that the association was running on no reserves. In the mean time. I became part of the board and started working on getting the association dues raised to what they should be (they were still paying the original amount from approx.20 years ago).

I have finally gotten the dues raised and all the other owners could not believe that the dues needed to double in order to pay our bills. The management co has been the same for the last 20 years and I have heard first hand his comments to the owners. "We can raise the dues or just do a special assessment". The special assessments have been done to pay bills. The management co never told the owners (prior to me purchasing my condo) that this is a law. The Association must maintain a reserve and the dues are based on the yearly budget. These people have been under the impression that it is ok to operate this way. Now when a condo has a new owner, we are the ones paying for the repairs and the reserves that are needed to be maintained.

I would like to know if the association has any legal right to pursue a suit against the management co?

Cheryl Kubat

====Reply====
2006 August 24

Other new people to associations and the board have encountered similar problems. Too often the seriousness of the obligation to the other owners is not recognized by boards. Problems beget problems. Poor work begets more poor work. I am not an attorney, so I can't give you legal advice. But I may be able to help in your fact finding.

My post, References on CID/POA Issues, contains most of the Michigan law that may relate to property owners associations, which includes condo associations. This link should take your directly to the Michigan information. If not, scroll down to the Table of Contents and click on Michigan. Use the search engine on my weblog to locate other applicable information.

I presume your association has a contract with the management company. You will need to read it carefully to determine whether or not the co. lived up to its obligations. The board minutes are another source. The minutes should include the reports made by the management co. You may find that the management co. didn't make the required reports or the board didn't act on the recommendations, or both. In any event, it is probably the responsibility of the board to communicate to the members.

Another source of facts is the audits or reviews by an independent CPA firm. If conducted according to the applicable audit and accounting guide, those reports should have flagged the deficiency in the reserve fund and any legal requirement to do so.

Advice from a competent attorney on the obligations of the association and its board should also have been received, and/or provided by the condo developer at the time of turnover to the owners association.

Your board should consider updated the contract with the management co. If you are dissatisfied with the current management company, then a change is in order. My advice is to make sure that the co. recognizes the importance of respecting the rights of the individual owners who pay the bills. Sometimes, management cos. consider members to be a nuisance. Unfortunately, the training from CAI doesn't appear to emphasize members' rights.

Don Nordeen

[Concerned Resident]

2006 August 27

Re Poorly Managed Condo

Keatington New Town Condos - Office: 2957 Rockford Court, Lake Orion, Michigan 48360 (Phone: 248 391-4665), is poorly managed by Kay, she will threaten you with "violations" if you complain and insist on minor repairs to common elements, and she sends her "maint" person to intimidate residents. Garbage is horrible; the garage doors need replacing; vents in garbage "dumpsters" (which are under stairwells) need repair/replacing; sidewalks are hell in the winter as there's never any salt; electrical problems, plumbing problems. Kay resolves complaints by threatening to cite residents for "violations" - and rather than look into a complaint to try to resolve the issue, she will begin looking around for "violations" - this is her way of not having to deal with a complaint. Board meetings are a huge secret. She puts out a newsletter that insults residents (personal attacks). The entire community is suffering.

Concerned Resident

[D Russ]

2006 Sep 24

Re Existing Fence Possibly in Violation of CC&Rs

Belong to an association in Belleville. Received a letter from developer allowing 6 ft fence, approx 8 years. Association now going after saying letter and permission was no good according to case law. Some people moved in with property violations totally unaware... What to do ?? Please any help

D Russ

=====Reply======
2006 Oct 11

Mr. Russ:

The first step in solving problems in a CID is to read the governing documents. Does your fence comply with the CC&Rs. If not, then your position may depend upon what is in the letter you received from the developer, and whether or not the developer had the authority to issue such a letter.

Please consult Thoughts on Problem Solving for CIDs/POAs.

Use the search engine and the instructions on searching on my weblog to locate posts of interest. There is an extensive post on restrictive covenants that may be helpful.

Ask the Association to provide the case law they are referencing. Go to the Michigan Courts website and search for cases with the key words relating to your situation. The case law should be studied in the context of the case and the issues decided.

Don Nordeen

[jean long]

2006 Dec 04

Re Snow Plowing Contract

hello, having problems with hoa. husband is disabled (bad heart and spinal cord damage)and trying to feel useful. he was awarded snowplow contract past 2 years. he had a friend do it when he was unable. friend did damage ($250.00) to road one plow, husband repaired damage and gave association several free plows and fired friend. executive board members announced at annual meeting they were bidding out contract this season. husband submitted bid. board chose to give contract to some one with higher bid. when asked why they told me they could choose whom ever they wanted, period. new guy comes when he feels like it and i can't get out till the road is plowed. friday it wasn't till 3 p.m., it still wasn't plowed sunday at 7p.m. my home is 1 mile off the main road. if emergency vehicles need to get in??? what should i do? i am requesting a signed copy of the new contract and am again asking this time in writing why they chose the new plow person. anything else you can suggest? any suggestions greatly appreciated! j.l.

[co-owner]

2006 Dec 30

Re Ongoing Increases in Association Fees

I am a co-owner in a condo development, where 3 of our 5 board members are also employed (or retired) from/by our management company. Association fees go up, and don't go back down. Work isn't done in a timely manner. Isn't this an ethical/legal violation? Certainly it's a conflict of interest.

co-owner

=====reply=====
2007 May 06

I am not an attorney so cannot provide any legal advice. My expectation is that conflicts or potential conflicts of interest should be disclosed, and then the governing body decides if the relationship should be continued and under what terms.

From what you describe, it appears that the board is not adhering to another good practice which is to require multiple bids before awarding any contract or work. That could be a requirement in the governing documents.

Don Nordeen

[Irina Elizar]

2007 Jan 02

Re Large Special Assessment

The board of directors in our self-managed condominium complex imposed a one-time assessment of $10,000 to improve the condition of our roads (for aesthetic, not safety, reasons). Our monthly association dues average $400, or $4,800 per year. The special assessment of $10,000 is on top of the regular association dues!!!

Only 4 out of 7 board members voted for the assessment. When questioned, the board responded that they can levy assessments without co-owner approval (?).

The individual co-owners (68 units), mostly senior citizens on limited budgets, had no say in it. An informal vote of co-owners, taken by co-owner after the decision was announced, revealed that at least 36 out of 68 co-owners cannot afford and don't want the roads replaced at this time. Can the majority of co-owners overrule the board of directors decision? Short of expensive litigation, what is the recourse against a dictatorial board that threatens liens and foreclosures, and tells individual co-owners who lived here for 20 to 30 years to move out if they can't afford it?

We need a law in Michigan, as exists in Civil Code of California, that limits the amount of special assessment that can be levied in any one fiscal year.

PLEASE HELP!
Thanks,
I.Elizar

=====Reply=====
2007 Jan 17

Dear Ms. Elizar:

Sorry, you are having problems with your board of directors not consulting with members before taking a major action. You are not alone. First, read the governing documents for your condominium to understand the authorities granted to the board.

Many of the answers to your questions are posted on my weblog.

Read the search instructions on how to use the search features with the weblog, which appear near the top of the left column which explains why "Post a Comment" should be added to the search string. Use the FreeFind search with the search string exactly as shown in [ ]: [michigan condominium nonprofit corporation act "Post a Comment"]. The use your browser's search/find command to find the words or phrases of interest in the posts with relevant titles. The Michigan condo law may have restrictions on what the board can assess. I have not studied the condo act, but my general understanding is that it provides very little on the operation of the condo association.

Rather, your association is likely governed by the Michigan Nonprofit Corporation Act (MNCA). Even if your governing documents do not call for a special members' meeting, MNCA requires that a special members' meeting must be called upon petition of 10% of the members, but you may have to get a court order if the board doesn't respond to the petition. Likely, your governing documents also provide a method for members to petition for a special members' meeting. The petition should clearly state the motion to be decided at the special meeting such as "move to reverse the board's special assessment of $10,000 as defined in ________, and to refund any payments already made to the owners". If you have someone who can put the motion in resolution form (Whereas and Resolve ? consult Robert's Rules of Order Newly Revised), that would be even better. Make the motion/resolution in the petition exactly what a number of members want (it sounds like you can get a gang or 10 to meet and decide on the language) so that the association's attorney cannot claim a "bait and switch" between petition and motion. Don't stop with just 10%; get as many signatures as you can on the petition. Overwhelm the board with your point of view.

Finally search on ["problem resolution" "Post a Comment"] to find general information on resolving problems within an owners association.

Don Nordeen

[Charlotte Schiller]

2007 Oct 16

Re Alleged Defective Notice of Members' Meeting

I live in a Property Association that surrounds a lake in Michigan. A property owner's association biannual meeting was held in early October. The notice for the meeting was sent out in a timely matter. The notice indicated that there would be a discussion about possible dredging of the lake. Last Friday, I received a notice of assessment on my property for $60 payable immediately to conduct a feasibility study concerning dredging. The cost of the study is $30,000. The final cost of the dredging could be as high as 5.75 million dollars. I could not attend the meeting. I got this information from the POA web site after receiving the notice of assessment. According to the assessment notice, a presentation was done and a vote was taken for the special assessment. The vote was 31 to 4 in favor of the assessment. Our POA has 534 properties. The by-laws state that a quorum is 20 members. I think that whenever a project of this magnitude is considered that the general membership should be given the information in advance of a vote and a much fairer opportunity to cast their vote before an assessment is enforced. In this case, I think that a special interest group stacked the deck and pushed this to a vote without a fair notification to the majority of the members. Is there any case law or any recourse to at least ask for fair notification and another vote?

Charlotte Schiller

=====My Reply=====

2007 Oct 17

Sorry to hear about the lake problem that could be costly for the owners. From your description, my view is that the manner in which the board is approaching the problem indicates poor management and is probably illegal. That is just my observation and is not legal advice since I am not an attorney.

The beginning of problem solving in POAs typically begins with studying your governing documents. Use the FreeFind search engine on my (this) weblog to find that post. Please read the search instructions just below the FreeFind box.

It sounds like your bylaws are way out of date if the quorum is only 20 members. I recommend a quorum requirement of about 20% of the number of valid ballots for election of directors in the last three elections. Given the magnitude of the financial problem ($10,000 per property), the bylaws should be amended to ensure good democratic processes as a first step.

The rights of the owners are defined in the CC&Rs (restrictive covenants) for the lands in your development. The bylaws should define the notice requirements for the annual meetings. From what you describe, the notice stated discussion, not vote. That may explain the low turnout for the meeting. The CC&Rs also should define the authorities for assessments. Unless the authority is specifically given to the members, the board likely has the authority for assessments.

You will also need to become familiar with the Michigan Nonprofit Corporation Act (MNCA). Go to the website for the Michigan Legislature and search for nonprofit. You should be able to download the complete act in PDF format from the title page for the act (Act 162 of 1982). Chapter 4 deals with members' meetings. The notice requirements are defined in Sec. 404, which states that the written notice is required to include the purpose of the meeting. When the notice states "discussion", it does not include "vote", in my view.

Much will depend upon how open your board is to correction. Given the poor handling of the notice, they may become very defensive. Get a "Gang of 20" members to approach the board with a request that they call a special meeting of the members for a proper vote on the assessment. That should be an easy way out for everyone. If you are stonewalled, legal action is likely the next step. There is no ombudsman or other resource in Michigan government to reign in a board that doesn't follow the law and the governing documents.

Don Nordeen

[randy]

2008 Apr 15

hi I live in a single family condo site that is still under 50% finished and the developer is the holder of the association,
we have live there two years and in that time our dues have gone up more each year.
they are not giving up a full report for year spendings only a part of it and they say that we have to repair the roads that they use we don't know where to go to for info this is only part of it need some help and where to start with them ?

[randy]

2005 Apr 15

hi I live in a single family condo site that is still under 50% finished. and the developer is the holder of the association ,
we have lived there two years, and in that time our dues have gone up more each year.
they are not giving us a full report for year spendings only a part of it and they say that we have to repair the roads that they use. this is a state law for michigan they said but they are still developing the sub using heavy equipment on the roads. we don't know where to go to for info this is only part of it need some help and where to start with them?