Master Deed is “Private Deed Restriction” that Survives Tax Sale; Purchaser of Two out of 10 Units is Not a Successor Developer

In Ferry Beaubien, LLC v Centurion Place on Ferry Street Condo. Assn., an unpublished Michigan Court of Appeals decision, the developer built 8 of 10 condominium units in a condominium project before going under.  The two units, labeled in the master deed as “need not be built,” were subsequently sold at tax sale and purchased by Ferry Beaubien, LLC, who attempted to use the two units as an urban garden.  The association’s president recorded an affidavit against the property pointing out that the units were soon to become general common elements if not constructed within the deadlines provided in a predecessor version of MCL §559.167(3).  Ferry Beaubien claimed it recorded, as a developer, an amendment to the Master Deed removing the two units from the property prior to the passing of the deadline.

Ferry Beaubien filed suit seeking a declaration that the restrictions on use in the condominium documents no longer applied to the two units.  The court held otherwise, relying on Lakes of the North Association v TWIGA Ltd. P’ship, 241 Mich App 91, 614 NW2d 682 (2000), which held that a covenant to pay homeowner association assessments was a “private deed restriction” within the meaning of MCL 211.78k(5)(e) and survived the tax sale.

The court also ruled that Ferry Beaubien was not a successor developer within the meaning of the MI Condominium Act and therefore had no authority to file an amendment to the Master Deed withdrawing the two condominium units, even if an amendment had been timely filed.  The court also declined to award the association costs and attorney fees in defending under MCL 559.206(b), finding that this was not a proceeding arising out of a default by a co-owner, but a proceeding filed by Ferry Beaubien to determine interests in land.

© Steve Sowell 2017