Legislature Amends Withdrawal Rights for Unbuilt Condominium Units

In an Act which takes effect September 21, 2016, the Michigan Legislature has added some procedural hoops for a developer or an association to jump through regarding the withdrawal of unbuilt units.

If there are unbuilt units which are labeled “need not be built” in the condominium documents, within the time frames (which have not changed) provided by MCLA Sec 559.167, the developer may either convert the units to “must be built” units or may withdraw the land from the condominium project. 

If the developer does not do so, then the association may prepare and serve on the developer, or any successor developer(s) a notice that the association intends for them to revert to general common elements.  If the developer or successor developer(s) do not withdraw the land or convert the units to “must be built” units, the association may record the declaration with the register of deeds.  The declaration takes effect upon recording.  If the filing results in the need to adjust percentages of value, the association still has to file suit seeking a court order adjusting the percentages of value.

The Act clarifies that undeveloped land includes land on which units were depicted on the drawings, but for which construction has not commenced.  Installation of infrastructure (e.g., utility leads) and common elements does not qualify as construction of the units.

The Act still does not address what happens if there are unpaid taxes assessed against these units which become general common elements by the recording of a declaration.  It remains to be seen whether the register of deeds will insist that a declaration be tax-certified before recording, which will require that the unpaid taxes be paid.

© Steve Sowell 2017