Can Michigan Condominium Associations Restrict Sex Offenders Within Their Projects?

Condominium Association Boards are often faced with making difficult decisions while governing their condominium projects.  For example, some typical difficult decisions Boards face are whether to raise assessments, whether to pursue a fellow co-owner who fails to comply with the condominium documents, whether to evict a co-owner’s tenants who are being unruly, and whether to pursue a developer for construction defects, just to name a few.  One of the toughest issues that a Board has to deal with is determining what restrictions should be placed on the condominium project and how to implement them.  In most instances, these restrictions deal with issues such as garage or estate sales, when, where and how they can be conducted, if at all; whether pets are allowed within a unit and, if so, how many, the type and/or size of the pet; the types of vehicles that can be parked within the project; and, the use of gas grills on the premises, etc.

With the growth of social media and the ubiquitous use of the internet, people are becoming more aware of what happens in their neighborhood.  This has led to some efforts to prevent individuals labeled as ‘sex offenders’ from living within their condominium projects.  More and more TV shows are dealing with the issue and shining a spotlight on an area that can be very emotional. As a result, more individuals are aware of the issue, are more concerned about it and, thus, are searching for ways to “protect” themselves from these “undesirables”.   Co-owners want to feel comfortable within their Unit and their condominium project and want to know that it is safe for their children, grandchildren and/or great grandchildren to play in the general common areas, such as parks, pools or playgrounds.  They do not want to fear what may happen if there is a sex offender living in the project or even, next door to them.  Moreover, co-owners are also concerned with the negative impact that sex offenders living within the condominium project would have on the unit property values.

History and Statistics

Although the desire to restrict or ban certain individuals is not new[1], the desire to ban individuals that have been classified as sex offenders from condominium projects has been on the rise.   As a result of the enactment of Megan’s Laws[2] across the country, each state now has a digital registry of sex offenders that can be searched via the internet making it a relatively simple process to check whether there are any sex offenders living in one’s neighborhood.  There are approximately 800,000 individuals listed on sex offender registries throughout the United States.[3] Michigan ranks fourth in the country behind Oregon, Delaware and Arkansas for the highest number of registrants per capita.[4]

Texas, New Jersey, Ohio and Florida have condominium projects that have implemented restrictions barring certain individuals who have been classified as a certain degree of sex offender from living within their community.

In the only case that has reached a decision on sex offender restrictions, Mulligan v. Panther Valley Property Owners Association, 766 A2d 1186 (2001), the New Jersey Court upheld an association’s sex offender restriction. In Mulligan, the association had passed an amendment to their bylaws, which banned Tier 3 offenders from occupying (but not the right to owning) a condominium unit. In upholding the ban, the New Jersey Supreme Court found: (1) that the restriction was applied equally to all residents in Panther Valley (Mulligan was not treated differently or relegated to a smaller potential home market than any other Panther Valley resident), (2) sex offenders were not a protected group for discrimination purposes, (3) sex offenders were not proven to be handicapped for discrimination purposes, and (4) sex offenders were not viewed as a large enough segment of the public (only 80 Tier 3 registrants out of 8.4 Million New Jersey residents) for purposes of infringing on Mulligan’s right to sell or lease her home. However, the Mulligan court took notice regarding the public policy aspects of such a restriction. The court recognized that allowing such a restriction could lead to a segment of the State closing its doors to these offenders. Thus, confining them to a narrower corridor of housing that would expose those within that corridor to a greater risk of harm than they might have otherwise had to confront simply because they are unable or unwilling to live in a protected neighborhood. Nevertheless, the court recognized that sex offenders have very few sympathizers, and even those who believe laws and covenants restrictions may go too far in addressing such offenders are hesitant to publicly express their concerns for fear of their own ostracism.

The reality is that sex offenders are generally not wealthy enough to pursue Court challenges of the type that occurred in Mulligan, which may be why there has only been one opinion reached so far.[5]  Furthermore, sex offenders do not normally like to call attention to themselves by filing lawsuits. Also non-profit legal programs usually spend their limited resources on other matters.

What Types of Restrictions can be Imposed? 

Ownership Restrictions 

What if the Board wants to prevent a sex offender from purchasing and owning a unit within their project? An outright ban restriction could prevent any individual who was designated a sex offender from owning a unit within a condominium project.  The restriction could also place the burden on co-owners’ selling their units to affirmatively check federal and state registries to confirm that the purchaser was not a sex offender.

Michigan Courts have generally held that restrictions/restrictive covenants within condominium documents are contractual and should be upheld so long as they are reasonable, have been properly adopted and do not infringe one’s constitutional rights. Rossow v. Brentwood Farms Dev, Inc, 251 Mich App 652, 658, 651 NW2d 458 (2002).

On the other hand, Michigan Courts have also consistently found restrictions / restrictive covenants that place unreasonable restraints on alienation of property[6] unenforceable. Albro v Allen, 434 Mich 271, 281, 454 NW2d 85(1990) (“Michigan recognizes a strong public policy against restraints on alienation”).  Courts might find that an outright ownership ban would be an unreasonable restraint on a co-owner’s right to sell his or her unit to someone who happened to be a sex offender.  Moreover, how does one prevent situations where the unit is bought in someone else’s name in behalf of the sex offender?

Residency/Occupancy Restrictions

If the Board does not want to restrict ownership, but rather wants to prevent sex offenders from living within the community, what options are available?  In most instances, when a sex offender restriction is in place, the provision restricts the ability of a sex offender to live in a unit within the condominium project. Unlike an outright ban on ownership, a residency restriction would allow the sex offender to own the unit but simply not allow him or her to live in the unit. It would also allow a co-owner to sell a unit to a sex offender who also would not be permitted to live in the unit.

In addition to residency restrictions, occupancy restriction provisions have been implemented across the country.   Similar to the residency provisions that limit the ability of a sex offender co-owner from residing in his or her unit, these restrictions prevent a co-owner from renting/leasing his or her unit to sex offenders. Once more, the focus of the restriction is placing a limitation on a sex offender’s ability to live within the condominium project but not preventing a co-owner from renting his or her unit to a non-sex offender, so long as, the Co-owner complies with any other rental/lease restrictions imposed by the Association.

The residency and occupancy restrictions also make distinctions on the “level” of the sex offender. There are typically three tiers of sex offenders[7]: tier 1 is the low-level offender who must update their location in the local registry once per year for 15 years and includes possession of child porn and/or inappropriate touching of adult victims; tier 2 is the moderate level offender who must update their location every six months for 25 years, and generally involves victims ages 13 to 17, including inappropriate touching and gross indecency, but does not include sexual penetration, also includes producing child pornography and soliciting prostitutes under 18 years old; and, tier 3 is the high level offender who muse update their location every three months for life and generally involves inappropriate touching of victims under age 13, as well as any sexual penetration or attempts (first- and third-degree sexual assault) with victims of any age.   Most of the restrictions focus on the tier 3 sex offenders and limit the ability of these registrants from residing in condominium projects.  Thus, an individual who was caught urinating in public, who may appear on the sex offender registry, in the typical residency/occupancy restriction provision, would not be affected and could live in a unit in the project.[8]

How to implement restrictions?

Restrictions can be implemented by rules and regulations and/or amendments to the condominium bylaws.   Although some restrictions that have been implemented across the country have been done via Boards through rules and regulations, it is this author’s opinion that such restrictions would not be upheld if contested as the rule or regulation would not implement or manage existing structural law and would probably be inconsistent with the existing provisions of the Master Deed and Bylaws. Therefore, if a Board desired to place restrictions on the ability of certain sex offenders from residing within their condominium project, the restrictions should be implemented by an amendment to the Association’s condominium bylaws.  In Michigan, since a residency restriction would be considered a material alteration of a co-owner’s rights, and the restriction would require a 2/3 vote by the eligible members and mortgagees.

Issues Dealing With Sexual Offenders

Even if a residency restriction is likely to pass, there are still issues that Boards will face in enforcing such a provision.  First, there is the issue of what happens to any sexual offenders who are currently living within the project.  Does the restriction grandfather them in? Does the Board make no exceptions and seek to enforce the residency restriction?  A condominium community may have to go to court to enforce its restrictions and this could be quite expensive, particularly if the sexual offender is already a co-owner. The members of the association must be willing to enforce the restriction; otherwise, it should not be approved.

Boards and their managers will potentially face additional problems in enforcing any such restrictions.  For example, the Board and/or its manager would have to keep track of sales, leases and any other type of transfer of ownership and/or change in occupancy.   Such a process is not complicated in smaller, close knit communities but is more complicated and intensive when you have 100, 200, 300 or more units within the condominium project. Furthermore, even when condominium documents require that co-owners advise and provide the Association with notice of a sale or lease of a unit, in many instances, the co-owner does not disclose the sale or lease.  Therefore, what leads one to believe that co-owners will be more inclined to provide that information if a sex offender restriction is put in place?

As stated above, the costs to defend the restriction can be high.  In a 2012 case filed in federal district court in Texas (Whipple et al v Valley View Village Condominium Homeowners Association, W.D.Tex., 12-cv-01073), a convicted sex offender and his wife argued that the bylaw prohibiting him from living in the community violated his rights, interfered with his ability to buy and sell property and was contrary to public policy.  After two and a half years of litigating the matter and after the Association spent a good deal of money defending its sex offender restrictions, the parties settled the matter before the federal court could render a decision.   Although the restriction is still in place, only the Board and the other co-owners know whether the restriction was worth passing and defending.

Even if a Board does not implement residency restrictions, should it notify its members that there is a sexual offender living within the community?  Boards should be extremely careful and cautious if they choose to disclose such information.  The association needs to minimize potential liability if it fails to disclose information or inadvertently misinforms residents.  A South Carolina condominium board did not conduct adequate due diligence prior to disclosing the name of a sex offender and did not retract its disclosure after they were informed by the co-owner that he was not the same individual on the registry.  A jury found for the co-owner and awarded him $550,000 in actual damages and $340,000 in punitive damages. (King v Santee Resort Condominium Association Inc., Court of Common Pleas of South Carolina, Third Judicial Circuit, Dec. 5, 2013, 2011-CP-14-00541, JVR 1406300069[9]).

Moreover, Associations should not provide an offender’s name or address. The only time disclosure is allowed is to protect persons at risk. The disclosure must not be for the purpose of discriminating against or harassing the registered offender. Impermissible disclosures could lead to criminal prosecution and civil liability for directors.[10]

There is no standard protocol for what to do if there are sexual offenders within your condominium project. However, to avoid issues such as what happened with the Santee Resort Board, the Board can organize neighborhood block watch groups.  In addition, if your community uses a newsletter or has a website, the Association can publish a list of safety resources and include in that list the web site for sex offender registries – www.mipsor.state.mi.us, and/or check the National Registry of Sex Offenders website, www.nsopw.gov. A couple of other good resources to provide are www.criminalcheck.com  and www.familywatchdog.us.

Finally, if anything appears or seems wrong, the best thing that a Board can do is contact the local law enforcement rather than involving the Association.

 Conclusion

Placing restrictions on sex offenders within your community is not a simple matter and requires extensive evaluation by the Board.  Accordingly, if you are interested in imposing restrictions on sexual offenders or are interested in creating a protocol on how to deal with sexual offenders within your community, you should contact experienced community association lawyer regarding both the legal and practical consequences of such an action.

 

 William Z. Kolobaric is an attorney with the law firm of Cummings, McClorey, Davis & Acho, P.L.C. where he focuses his practice on community association law, construction law, real estate law, creditor’s rights in bankruptcy and probate and estate planning. He has extensive experience in state and federal courts involving a wide scope of real estate, commercial litigation and creditor’s rights matters. He can be reached at (734) 261-2400 or wkolobaric@cmda-law.com. Please view The Michigan Community Association Law Blog at http://www.micondolaw.com for additional resources on Michigan Community Association Law.

 

[1] There are many unconstitutional restrictions that are still in place that limit the rights of certain races and/or unmarried individuals from living and/or owning units within condominium projects. For example, limiting ownership or occupancy of the premises to members of the Caucasian race.

[2] Megan’s Law is the name for a federal law, and informal name for the state laws that were subsequently enacted, requiring law enforcement authorities to make information available to the public regarding registered sex offenders. Federal Megan’s law was enacted as a subsection of the Jacob Wetterling Act in 1996: A designated state or local law enforcement agency “… shall release relevant information that is necessary to protect the public concerning a specific person required to register…” Pub. L. No. 104-145, 110 State. 1345. The national standards for the registration of sex offenders were previously set by the Jacob Wetterling Crimes Against Children and Sexually Violent Offender Registration Act of 1994 and are now found in the Adam Walsh Child Protection and Safety Act of 2006 (AWA).  AWA supplements Megan’s Law with new registration requirements and a three-tier system for classifying sex offenders according to certain listed offenses requiring registration. Michigan’s statute is the Sex Offenders Registration Act, MCL 28.721 et seq.

[3] National Center for Missing & Exploited Children. http://www.missingkids.com.

[4] Id. https://www.missingkids.com/en_US/documents/Sex_Offenders_Map.pdf#page=1History

[5] It is interesting to note that the plaintiff in Mulligan was not a sex offender but a litigious lawyer resident.

[6] A restraint on alienation of property is a restriction that seeks to prohibit the owner of land from selling or otherwise transferring his or her interest in the property.

[7] Not to be confused with the criminal sexual conduct degrees set forth in the Michigan Penal Code, MCL 750. 520 et al.

[8] As of 2011, those convicted of a single count of public urination (“indecent exposure”) no longer are required to register as a sex offender. However, a person who is repeatedly convicted for indecent exposure for urinating in public will be required to register as a sex offender, if the prosecution makes an allegation that the individual is a sexual delinquent, . Michigan Sex Offender Registration Act (“SORA”), MCL 28.721 et seq.

[9] The board of this resort community circulated a flyer obtained from the state sex offender registry identifying William James King as a convicted sex offender. Board members told owners that the individual pictured on the flyer was James E. King, who owned two units in the community. They continued to make this representation, even though the condominium-owning King did not resemble the photo and several owners insisted that the man pictured in the flyer was not the James King they knew as their neighbor.

[10] See Section 10 of the Sex Offenders Registration Act, Act 295 of 1994,  subsections (4) and (5):

(4) Except as provided in this act, an individual other than the registrant who knows of a registration or report under this act and who divulges, uses, or publishes nonpublic information concerning the registration or report in violation of this act is guilty of a misdemeanor punishable by imprisonment for not more than 93 days or a fine of not more than $1,000.00, or both.

(5) An individual whose registration or report is revealed in violation of this act has a civil cause of action against the responsible party for treble damages.