Condo Association Sanctioned for Recording Lien for Developer Litigation Assessment not Approved by Membership

After the Court of Appeals held that an assessment levied without co-owner approval to fund developer litigation was invalid and remanded the matter for the grant of summary disposition in favor of the co-owner, the trial court granted sanctions against the association for filing a frivolous action.  The association again appealed.

On second appeal, the Court of Appeals held that the grant of sanctions against the association was warranted.  Because the association knew that the assessment had not been approved by the co-owners, the association had no reasonable basis to believe that its allegation in the complaint that the assessment was for the “expenses of administration, maintenance, and repair of the common elements” was true.

It seems clear, after two (here and here) opinions in addition to this follow up, that Michigan courts will uphold limitations on litigation contained on a condominium association’s documents.  There is pending legislation that would give at least partial relief from such provisions.

© Steve Sowell 2018