The attorneys in the Community Association Practice Group at CMDA provide a wide range of transaction and litigation legal services. The Community Association Attorneys at CMDA provide a wide range of general counsel services to condominium associations, cooperatives, homeowners associations, summer resort associations and individual co-owners.
Community associations are non-profit corporations, which are funded solely by dues/assessments that are paid by its members. When one member does not pay his or her fair share, the rest of the members must make up the difference. It would simply be unjust for the other joint property owners, who have not done anything wrong and have no involvement whatsoever in the defaulting co-owner’s failure to pay, to make up the difference.
CMDA attorneys will evaluate the delinquent member, determine if there are assets and examine all of the various options for pursuing the delinquent member and then advise the board members and the association’s manager the best course of action.
Whether it is a payment plan, foreclosure or garnishing wages, CMDA attorneys are well experienced to efficiently and successfully guide our clients through the entire litigation process and are dedicated to helping Associations recover losses in a timely and cost-efficient manner, while providing strategic, innovative, and aggressive representation for our clients.
Amendments to the Governing Documents
CMDA prides itself on being on the cutting edge of amendments to governing documents. Each of our Community Association attorneys is well-versed in the language of Association documents and we endeavor to provide updated, legal and easily readable language for our clients. CMDA is uniquely capable in Michigan of handling all aspects of the amendment process: from an initial review of the documents and determining the need for amendments to the recording of the final amendments. An example of updated provisions includes:
- Electronic Vehicles
- Electronic Voting and Remote Meeting Participation
- Internet Use and Security
- Smart Phones / Social Media
- Solar Panels
A hallmark of shared ownership living is that a co-owner gives up some individual rights for the good of the community as a whole. Consequently, whether an individual lives in a condominium, a homeowner’s association, a co-operative or a summer resort association, in exchange for having the lawn mowed, the streets, driveways and sidewalks plowed and the outside of the units painted; each co-owner has some restrictions on what can and cannot be done. Community Associations function best when reasonable bylaw provisions are implemented and uniformly enforced. CMDA attorneys provide legal analysis to Community Associations on how to avoid ‘selective enforcement’ claims and routinely draft Bylaw Infraction Letters to co-owners acting outside the confines of the Bylaws or Rules and Regulations of the Community Association.
Bylaw Interpretation/Opinion Letters
CMDA attorneys will help board members and the association’s manager to review and interpret the association’s governing documents regarding, for example,
- Evaluating Association and owner maintenance responsibilities
- Evaluating insurance responsibilities and liabilities from water leaks, common property repairs, and other causes of damage
- Determination of board power and authority and requirements for owner votes
- Installation of satellite dish/antennas
- Installation/placement of garden statues and/or figures
- Review of rules and regulations to verify compliance with the Association’s governing documents and state and Federal laws
Contract Preparation and Review
Community Associations hire a plethora of service vendors including contractors, accountants, consultants, attorneys and property managers. CMDA attorneys prepare standard and customized contracts for Community Associations to utilize when hiring potential service vendors. In addition, CMDA reviews and analyzes potential contracts on behalf of Community Associations for inappropriate or illegal provisions.
Our goal at CMDA is to protect Community Associations on the ‘front-end’ before litigation to save our Community Associations time, money and the headache of poorly drafted or one-sided contracts. However, disputes inevitably arise and CMDA attorneys litigate contractual provisions whether drafted by our office or others.
Michigan Condominium Associations are responsible for the maintenance and repair of the general common elements in a Condominium. While many Condominium Association Boards budget for repairs and maintenance of the common elements over an extended period of time, many Associations are unprepared to deal with the discovery of construction defects. Construction defects can be financially devastating to a Condominium Association and the failure of a Board of Directors to appropriately investigate and respond to construction defects can often cost a Condominium Association hundreds of thousands of dollars.
Examples of 10 common element construction defects that condominium associations often encounter are as follows:
- Collapsing retaining walls resulting from improper installation
- Cracking in the foundation or drywall caused by concealed foundation issues
- Electrical wiring that is not properly installed within common element walls
- Flooding caused by improper installation of the underground storm water drainage system
- Heaving or cracking of concrete porches, driveways or sidewalks due to poor drainage
- Leaks, mold and other water issues caused by improperly installed roofing, siding, flashing and/or windows
- Noise related to insufficient insulation and poor sound protection
- Pipe bursts that result from a failure to insulate common element pipes
- Premature road failure resulting from failing to test and/or account for soil conditions, improper use of base course materials or drainage issues
- Missing or improperly installed trusses, which compromise the structural integrity of the roofing and/or building. The Condominium Attorneys at CMDA are experienced in pursuing construction defect claims against architects, builders, contractors, developers (as defined by MCL 559.106) and engineers.
Corporate Governance/Operational Issues
The Condominium Law practice group is prepared to assist your Michigan Community Association with implementing the appropriate corporate governance procedures. The attorneys at CMDA are well versed in interpreting the Articles of Incorporation and Bylaws for Michigan Condominium Associations, Co-operatives and Homeowner Associations, as well as the Michigan Nonprofit Corporation Act.
We counsel our community association clients with respect to counting votes appropriately, drafting proxies, drafting designated voter representative forms, drafting meeting notices, issues concerning Robert’s Rules of Order, properly running meetings of the Association, properly running meetings of the Board of Directors, along with any other procedural aspects of operating a community association. The Condominium Lawyers at CMDA are also well versed in attending and/or running community association meetings. Ensuring that your Association is properly run is essential to avoiding costly litigation.
Developer/Successor Developer Liability
One of the most important times in the life cycles of a condominium is immediately after the developer transitions control of the condominium to the co-owners. After the developer transitions control to the co-owners, many condominium associations require legal counsel to resolve issues relating to the following:
- Breach of Fiduciary Claims against the Developer and/or its board appointees for violating their common law fiduciary duties and statutory duties pursuant to MCL 2541.
- Breach of Express and Implied Warranties against the Developer.
- Claims against the Developer arising from a failure to contribute its proportionate share of expenses as required by the Condominium Documents.
- Claims against the Developer resulting from a failure to create and/or maintain a reserve fund as required by MCL 559.205
- Claims arising under MCL 559.167 relating to undeveloped portions of a condominium that should have converted to common elements, but the developer continues to attempt to develop.
- Failures to properly identify and/or complete “must be built” structures as required by MCL 559.166
- Failures to maintain an escrow account or other sufficient security to complete the “must be built” common elements as required by MCL 559.184, MCL 559.184a and MCL 559.203b
- Improper expansion of the Condominium in violation of MCL 559.132
- Improper contraction of the Condominium in violation of MCL 559.133
- Preparation of a misleading disclosure statement that does not meet the requirements of MCL 559.184a
Condominium Associations also frequently need legal counsels to deal with issues relating to successor developers as well. MCL 559.235 defines a successor developer as a person or entity who acquires title to the lesser of 10 units or 75% of the units in a condominium. While there are some exceptions, generally speaking, a successor developer has an obligation to fulfill all of the express written contractual warranties of a developer and they must comply with the Michigan Condominium Act in the same manner as a developer prior to selling units. Accordingly, the Condominium Lawyers at CMDA are prepared to assists associations with successor developer liability issues as well.
Fair Housing Act Compliance Issues
CMDA attorneys will examine the Association’s documents to determine proper compliance with fair housing and or civil rights to avoid alleged claims of discrimination, including those based on familial status, race, gender, creed, national origin, and service or emotional support animal requests.
CMDA specializes in obtaining FHA and VA approval by working cooperatively with the Board of Directors, individual co-owners, lenders, insurance providers and property managers to meet the needs of each Community Association. FHA guidelines are frequently being updated and CMDA attorneys help Community Associations stay up-to-date with the newest iterations and requirements. Initially, CMDA provides a checklist of required documentation and a preliminary ‘Community FHA/VA Report’ to determine if your Community Association is eligible for FHA and VA certification and, if not, steps to increase the likelihood of approval.