Real Property Notes Blog
Who is “qualified to vote?"
The Michigan Condominium Act and some condominium documents require that a certain percentage of co-owners necessary to pass a measure (such as amending the condominium documents) be of those qualified to vote. This begs the question, who is qualified?
The Michigan Condominium Act itself contains on express qualifications for voting, so an association must look to its condominium documents to determine if there is a provision disqualifying a co-owner from voting. Common provisions include:
- A requirement that a co-owner provide “evidence of ownership” (e.g., a copy of his deed or land contract).
- A requirement that a co-owner fill out a designation of voter representative form.
- A requirement that a co-owner not be in default of payment of assessments.
If a co-owner is not qualified to vote, this reduces the total number of votes needed to pass a measure. For instance, if the condominium project consists of 100 units, all are qualified to vote, and the measure being considered needs to be approved by a 2/3rds majority, then 67 units must vote in favor of the measure. 100 * 2/3 = 66.67 or 67. However, if the project consists of 100 units, 10 are not qualified to vote, and the measure needs to be approved by a 2/3rds majority, then only 60 units need to vote in favor of the measure. (100-10=90) * 2/3 = 60.
Second Opinion on Mortgagee Liability for Assessments
In a second, unpublished, opinion, the court of appeals has ruled that a foreclosing lender is liable for assessments from the date of its foreclosure sale, not the date of end of the redemption period. This blog had earlier noted the publication of a court of appeals opinion deciding the issue in favor of associations.
In this most recent case, the trial court had awarded the association a judgment for post-redemption assessments, but refused to award attorney fees and costs as provided in the Michigan Condominium Act and the condominium documents. The court of appeals reversed the trial court and remanded the case for entry of a judgment both for the post-sale, pre-redemption assessments and for an award of the association’s costs and attorney fees.
Seminar on opting out of the new audit or review requirements
I was privileged to speak at a seminar last night hosted by Cummings Property Management, Inc. on the recent amendment to the Michigan Condominium Act requiring a condominium association to audit or review its records annually unless the membership votes to opt out. My portion of the seminar was on the procedures to opt out. My handout from the event can be found here in Word and PDF formats. Cummings will post the Powerpoint presentation on its web site on its Seminars Page.
A co-owner wants copies of meeting minutes; do we have to provide them?
I frequently get asked whether an association is required to provide copies of books, records, contracts, etc. from a condominium association’s files. There are two laws that apply:
The Michigan Condominium Act provides, in MCLA §559.157(1), that "The books, records, contracts, and financial statements concerning the administration and operation of the condominium project shall be available for examination by any of the co-owners and their mortgagees at convenient times.”
The Nonprofit Corporation Act provides, in MCLA §450.2485, that "A corporation shall keep books and records of account and minutes of the proceedings of its shareholders or members, board, and executive committee, if any…. The corporation shall keep … records containing the names and addresses of all ... members, the number ... of shares held by ... each member and the dates when they respectively became ...members. Any of such books, records, or minutes may be in written form or in any other form capable of being converted into written form within a reasonable time. A corporation shall convert into written form without charge any such record not in such form, upon written request of a person entitled to inspect them."
The Nonprofit Corporation Act goes on to provide, in MCLA §450.2487, that "A person who is a shareholder or member of record of a corporation, upon at least 10 days’ written demand, may examine for any proper purpose in person or by agent or attorney, during usual business hours, its minutes of shareholders' or members' meetings and record of ... members and make extracts therefrom, at the places where they are kept ….”
The Michigan Condominium Act does not require that a condominium association give copies to a co-owner. The Nonprofit Corporation Act does specifically provide that a member may “make extracts” from minutes or member lists.
Common sense should prevail. In this day and age of cell phone cameras and portable computers with scanners, if a co-owner can look at the records nothing prohibits him from snapping a photo or scanning the record. If that is the case, then an association should consider whether simply providing a copy of the requested document is faster and easier than requiring the co-owner to make an appointment and come into the office, taking up administrative time in pulling the file and monitoring the co-owner’s review. If the co-owner makes a targeted request (e.g., I’d like a copy of the August, 2013, board meeting minutes.”), then simply mailing copies will usually be easier.