Unincorporated Association is a Legal Entity

The Michigan Court of Appeals has recently held that an unincorporated association comprised of the presidents of four condominium associations, formed to to make decisions regarding the community areas shared by the four condominiums, is a legal entity separate and distinct from the condominium associations themselves or their presidents.  The plaintiff, president of one of the associations, filed suit seeking various forms of relief, all of which hinged upon the actions of the unincorporated association being invalid because the unincorporated association was not a legal entity.  The trial court held otherwise and the court of appeals affirmed.

Several statutes as well as various common law decisions stretching back over 100 years have recognized unincorporated societies or associations as separate legal entities.  The Court of Appeals was not plowing new ground in so holding.  

Unincorporated associations consisting of the board members of condominiums which are part of a larger planned unit development are not uncommon.  However, there are good strategic reasons for incorporating, not the least of which are the provisions which can be incorporated in the Articles of Incorporation requiring the corporation to indemnify and defend board members from claims brought against them as a result of actions taken on behalf of the entity.

© Steve Sowell 2018