In Detroit Club Holdings, LLC v Edward, a published Michigan Court of Appeals opinion, a condominium unit was sold at public auction under Michigan’s foreclosure by advertisement statute in foreclosure of a condominium lien for unpaid assessments. A third party purchased at the sheriff’s sale, then posted a Notice to Inspect on the property and sent a copy of the notice to the owner at the condominium unit address by certified mail. The owner never lived at the condominium unit; his home address was stated in the deed by which he obtained title to the unit.
The third party subsequently filed an eviction proceeding under MCL §600.3238 seeking to shorten the redemption period. Again, the owner was only listed and served at the unit address. Obtaining a default judgment shortening the redemption period, the purchaser then sold the unit to plaintiff. Upon finding out about the judgment a month later, the owner filed a motion to set aside the judgment. The trial court denied the motion, finding that adequate notice had been given. The owner appealed to the circuit court, which also denied relief to the owner, who subsequently appealed by leave granted to the Michigan Court of Appeals.
Among other issues decided by the court, the court concluded that the reference in the Michigan Condominium Act (PDF) to foreclosing condominium liens in “the same manner as a foreclosure relating to foreclosure of real estate mortgages by advertisement" unambiguously incorporated all of the provisions of the foreclosure by advertisement statutes. The fact that some of the terminology is not literally applicable to condominium liens is a matter of form over substance, which the court looks past.
The court went on to hold that, based upon the record before it, it could not determine the basis for the trial court’s holding that the owner received adequate notice and remanded for development of that record. Because the trial court held that the owner received adequate notice, it did not reach the issue whether the purchasers were innocent third parties whose rights might be jeopardized by setting aside the judgment and remanded for consideration of this issue as well.
UPDATE: The Court of Appeals has issued a new opinion in this case, reversing in part, affirming in part, and remanding to the circuit court, with the admonition that the circuit court can remand to the district court if necessary. This opinion, issued on reconsideration, is unpublished. The previous opinion has been vacated, meaning it is no longer of precedential value.
The only real take-away for readers of this blog is that the MI Condominium Act incorporates all provisions of the Foreclsoure by Advertisement statute, including those provisions allowing for shortening of the redemption period.