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Michigan Court of Appeals Rules that Unincorporated HOA May Govern Under Declaration

In Suttons Bay Yacht Village Condominium Association, et. al. v Board of Representatives of Port Sutton Community, et. al., Docket No. 325327 (May 19, 2016) (Unpublished Opinion), the Michigan Court of Appeals held that an unincorporated voluntary association had legal authority to administer a declaration as a master homeowners association.  In 1982, a declarant recorded a declaration of covenant, conditions, and restrictions that established the Port Sutton Community.  The Port Sutton Community was composed of four separate condominium associations.  The declaration allowed for the declarant to assign and delegate its rights and responsibilities under the declaration to the “condominium associations collectively.”  On December 26, 1996, the declarant executed a written assignment to an informal board of representatives of the Port Sutton Community.  Each condominium association was allowed to appoint one voting representative to the informal board of representatives.  An informal board of representatives was created in 1997 and assumed responsibility for governing the Port Sutton Community.  Each of the condominium associations adopted resolutions appointing board members to the board of representatives.

In 2012, one of the condominium associations disputed whether the board of representatives had legal authority to administer the declaration after it had participated on the board of representations since 1997. In affirming the decision of the trial court, the Court of Appeals held that an unincorporated voluntary association is a legal entity that was capable of receiving a written assignment from the original declarant.  The Court held that an unincorporated voluntary association was not required to have a constitution, articles of agreement, bylaws or rules in order to operate as a legal entity since it was not subject to the Michigan Nonprofit Corporation Act.  Accordingly, the court affirmed the dismissal of the Plaintiff’s case and ruled that the board of representatives could continue to govern pursuant to the written assignment.
This case represents the importance of having an attorney carefully review the language of a declaration to ensure that a homeowners association obtains a written assignment from a declarant as a basis to govern. While it is an unpublished case, and not precedentially binding, it also indicates that if the language of the declaration permits, courts may allow an unincorporated voluntary association to act as a homeowners association, as well as an incorporated entity, if a proper written assignment is obtained.

 Kevin Hirzel is the Managing Member of Hirzel Law, PLC and concentrates his practice on commercial litigation, community association law, condominium law, Fair Housing Act compliance, homeowners association and real estate law. Mr. Hirzel is a fellow in the College of Community Association Lawyers, a prestigious designation given to less than 175 attorneys in the country.  He has been a Michigan Super Lawyer’s Rising Star in Real Estate Law from 2013-2018, an award given to only 2.5% of the attorneys in Michigan each year. Mr. Hirzel was named an Up & Coming Lawyer by Michigan Lawyer’s Weekly in 2015, an award given to only 30 attorneys in Michigan each year. He represents community associations, condominium associations, cooperatives, homeowners associations, property owners and property managers throughout Michigan. He may be reached at (248) 480-8758 or kevin@hirzellaw.com.

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kevin@hirzellaw.com

Kevin Hirzel is the Managing Member of Hirzel Law, PLC. Hirzel Law has offices in Farmington, Grand Rapids, and Traverse City and services clients throughout the State of Michigan. Mr. Hirzel focuses his practice on condominium law, homeowners association law, and real estate law. He is a fellow in the College of Community Association Lawyers (“CCAL”), a prestigious designation given to less than 175 attorneys in the country. Mr. Hirzel formerly served on the CCAL National Board of Governors and is a former member of the Community Associations Institute’s (“CAI”) Board of Trustees, an international organization with over 40,000 members worldwide that is dedicated to improving community associations. Mr. Hirzel has been recognized as a Leading Lawyer in Michigan by Leading Lawyers, a distinction earned by fewer than 5% of all lawyers licensed in Michigan. He has been named a Michigan “Rising Star” in real estate law by Super Lawyers Magazine, a designation is given to no more than 2.5% of the attorneys in Michigan each year. Mr. Hirzel was also named as a “Go-To-Lawyer” in condominium and real estate law by Michigan Lawyer’s Weekly. Hirzel Law was also voted the best law firm in Metro Detroit in the Detroit Free Press Best of the Best awards. He is the Co-Chairman of the State Bar of Michigan’s Real Property Law Section Committee for Condominiums, PUDs & Cooperatives. Mr. Hirzel has authored numerous articles on community association law for publications such as the Michigan Community Association News, Michigan Real Property Review, Macomb County Bar Briefs and the Washington Post. He is also the author of “Hirzel’s Handbook: How to operate a Michigan Condo or HOA”, which is available for purchase on amazon.com. Mr. Hirzel has been interviewed on community association legal issues by various media outlets throughout the country, such as CBS, CNBC, Common Ground Magazine, Community Association Management Insider, the Dan Abrams Show on SiriusXM Radio, the Detroit News, Dr. Drew Midday Live on KABC Radio, Fox Business News, Fox News, HOALeader.com, the Law & Crime Network, Michigan Lawyer’s Weekly, NPR, WWJ News Radio and WXYZ. Mr. Hirzel is a dynamic speaker and frequently lectures on community association law throughout Michigan, as well as nationally at the CAI National Law Seminar, and is a two-time winner of the best manuscript award at the CAI National Law Seminar.

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