Agreement to Allow One Co-owner Exclusive Use of General Common Elements Enforceable

In Dorfman v Pierce Martin LLC, an unpublished Michigan Court of Appeals case, a six-unit condominium project was established, with four units characterized as residential and two units characterized as commercial.  The owner of the two commercial units requested approval of the use of approximately 365 square feet of general common elements for outdoor seating in connection with a restaurant, whose final character had not yet been finalized.  After informal discussions among the owners of the four residential units, the vice-president of the association issued a letter stating that the association approved the project and had obtained all necessary approvals from co-owners.  Once it was determined that the restaurant would serve alcohol, two of the owners of residential units challenged, claiming either that the letter was not properly issued because there was no formal meeting of co-owners, or that the grant was a violation of the bylaws because it was an improper conveyance of the general common elements. The trial court ruled in favor of the owner of the commercial units.

On appeal, the court held that there was no conveyance of the unit; only a change in use.  Under a provision common in many condominium documents, the association had the power to approve alterations to the common elements.

The court also rejected the argument that the approval was void because there was no formal meeting to vote on the matter.  The court noted that the evidence in the trial court showed that the four residential owners had agreed among themselves to act informally on association matters and had done so for other matters besides this one.  The court held that to require formal approval under the circumstance would be to elevate form over substance.

© Steve Sowell 2018