Condominium Basics (Michigan)

Condominium homes are a great, low-maintenance choice for a primary residence, second home, or income property. According to the National Association of Relators condominium sales were up 23 percent in 2013. As the popularity of condominiums rises, it is important for perspective buyers to be aware of the unique aspects of condominium ownership.

In Michigan the Condominium Act (P.A. 59 of 1978, as amended, MCL 559.101 et seq.) regulates nearly all aspects of condominium development, ownership, and administration. The following is a brief overview of condominium ownership.

Condominium Ownership
Condominium co-owners have exclusive ownership of their unit and the right to use the common elements of the condominium development with the other co-owners. A condominium subdivision plan shows which portions of the development are common elements and which are private units. The condominium subdivision plan is part of the master deed; the master deed also provides the percentage ownership of each condominium unit (this is used as a basis for determine the payment of maintenance fees, assessments, and your voting percentage).

Condominium bylaws for the association and condominium development contain important provisions illustrating your rights and obligations as a co-owner. These provisions often include:

  • Monthly maintenance fees, assessments, and other monetary obligations;
  • Right to modify or make repairs to your unit;
  • Pet Policies; and,
  • Renting and Subletting Polices.

It is also important to note that bylaws may be amended by the association, and only changes the materially effect the co-owners require a vote of all co-owners. It is important for perspective purchasers to read and fully understand the bylaws

Purchase Agreement
A purchaser may withdraw from a signed purchase agreement without cause or penalty within nine-business day as long as the property has not been conveyed to the purchaser. The nine-business day window starts the day the purchaser receives all the documents that the developer is required to provide. These documents include:

  • The recorded master deed;
  • Copy of purchase agreement and escrow agreement;
  • The condominium buyer’s handbook; and,
  • A disclosure statement that includes: the developers previous experience with condominium projects, any warranties taken by the developer, financing arrangements to complete construction (for new developments), and an itemized list of the association’s budget.

The developer must deposit payments under a purchase agreement in an escrow account with an escrow agent. Before signing a purchase agreement it is always prudent to seek professional assistance.

Association of Co-Owners
The association is responsible for governing the development and maintaining the common elements. General common elements usually include hallways, lobbies, lawns, gyms, and utility systems. Many associations hire property management companies to provide services to the development. The elected association members often called the condominium board usually hold regular meetings to administrate the operation of the development. Because a condominium association is a private, not a public entity, the meetings are not subject to the Open Meetings Act. But associations are required to keep books and records detailing the operations and the expenditures of the development.

Remedies Available
Developers who offer or sell a condominium unit in violation of Condominium Act are liable to the purchaser for damages.

In most cases condo developers must also be a licensed residential builder under the Occupational Code (PA 299 of 1980, as amended, MCL 339.101 et seq.), a complaint for violation of the Michigan Occupational Code must be made within 18 months after completion, occupancy, or purchase of a residential structure.

The Michigan Consumer Protection Act (P.A. 331 of 1976, as amended, MCL 445.901 et seq.) prohibits certain methods, acts, practices, and provides for investigations and penalties for developers and sellers of condominiums.

Buying a condominium is a large decision and it is important to seek advice to ensure you understand exactly what you are purchasing.