Real Property Notes Blog

Association prevails, but recoups only 1/5 of requested attorney fees

In Bishop v Westchester Place Association, the co-owner complained of repairs needed in the attic of his condominium to stop a water leak.  When the association failed to repair the issue as quickly as the co-owner would have liked, he hired the repairs done himself and then sued the association for the cost of repairs.  The association filed a counterclaim because of the co-owners violation of the documents, which granted the association the right to make the repairs.

The court of appeals held that the association was “successful” in the litigation within the meaning of the Michigan Condominium Act and the condominium bylaws when it obtained a ruling that the co-owner had violated the documents.  However, the court of appeals affirmed the trial court’s award of only $10,000 of the requested $55,000 in attorney fees, finding that the balance was unreasonable.

Pump House violates covenants; ordered removed

In Oakwood Meadows Homeowners Association v Urban, the declaration of restrictions for this residential subdivision contained a provision that "No building or structure shall be erected, altered, placed, or permitted to remain upon any lot other than one detached one family dwelling not exceeding two stories in height. . . . No outbuildings, sheds, detached garages or the like shall be erected, placed or permitted to remain upon any lot.  The lot owners erected a pump house to shelter their pool pump.  The association filed suit seeking removal of the shed.  The trial court ruled in favor of the lot owners.

On appeal, the court of appeals reversed, finding that the pump house was a clear violation of the restrictions, and remanded the matter to the trial court for entry of an order requiring the property to be brought into compliance with the restriction.

If there is a clear violation of restrictive covenants, the courts will enforce them, without a balancing of the equities.

Condominium lien has priority over second recorded mortgage

In New Center Commons Condo. Assn v. Espino, et. al., the Court of Appeals held that a condominium lien had priority over a mortgage executed earlier in time but recorded later than a second-executed mortgage.

Mr. Espino purchased a unit and granted a mortgage to Quicken Loans, which was assigned to Green Tree.  He also later granted a second mortgage to PNC Bank.  The PNC bank was recorded first, then the Green Tree mortgage.

Mr. Espino subsequently defaulted in payment of assessments and the condominium association filed a lien and a judicial foreclosure.  Six years after the two mortgages were recorded and after the condominium association had filed a motion for summary disposition. PNC and Green Tree entered into a subordination agreement.  The trial court ruled that the Green Tree mortgage had priority over the condominium lien.

The court of appeals reversed, holding that under the plain language of MCLA §559.208, the PNC Mortgage was the first mortgage of record and the Green Tree mortgage was not entitled to priority.  The court of appeals reversed and remanded for entry of a judgment of priority in favor of the Condominium Association.

Pre-approval Litigation Clause Upheld in Published Opinion

In Tuscany Grove Assn. v Gasperoni, an published Michigan Court of Appeals decision, a lawsuit filed by a condominium association against a co-owner for an alleged violation of the condominium documents was dismissed because the association did not obtain approval of the co-owners prior to filing suit.

The co-owner sought approval for a backyard renovation project, which was approved by the association.  However, the project as completed exceeded the scope of the submitted plans and expressly violated the condominium restrictions.  The association filed suit seeking injunctive relief.

The condominium documents contained a provision requiring co-owner approval of all litigation except an action for unpaid assessments.  The association did not obtain the requisite approval from the co-owners, and the court dismissed the lawsuit. 

The court of appeals affirmed.  Failure to obtain approval of the co-owners in the manner provided by the condominium bylaws deprived the association of authority to file the lawsuit.

© Steve Sowell 2018