MCL 559.139: Transferring limited common element parking spaces in Michigan Condominiums

In densely populated urban areas in Michigan, it is not uncommon for a co-owner to sell another co-owner a parking space at a premium when parking space is limited.  However, condominium associations and co-owners often confuse the process of selling units with the process of selling a limited common element parking space.  In determining the proper procedure for selling a parking space in a condominium, a co-owner must first determine whether the parking space is a unit or a common element.  If the parking space is a unit, and some condominiums are solely composed of units that are intended to park vehicles, a co-owner can transfer the parking space by merely executing a deed and conveying their interest in the unit to the purchaser.  However if the parking space is a limited common element, the Michigan Condominium Act, MCL 559.101 et seq., provides a different process for transferring a park space, which will be outlined below.

If the parking space is part of the general common elements, a co-owner does not have the right to unilaterally transfer the parking space.  A general common element is not assigned to a particular unit as it is owned by all of the co-owners in common, pursuant to MCL 559.137.  Accordingly, an individual co-owner cannot transfer title to a general common element parking space.  Rather, the general common element would first need to be assigned as a limited common element via a proper amendment to the master deed. MCL 559.139(3) provides as follows:

(3) A common element not previously assigned as a limited common element shall be so assigned only in pursuance of the provisions of the condominium documents and of this act. The amendment to the master deed making the assignment shall be prepared and executed by the principal officer of the association of co-owners or by other persons as the condominium documents specify.

In contrast, a limited common element parking space is assigned to a specific unit in the master deed.  The Michigan Condominium Act allows for a co-owner to sell a limited common element parking space.  Specifically, MCL 559.139 provides in pertinent part:

(1) Assignments and reassignments of limited common elements shall be reflected by the original master deed or an amendment to the master deed. A limited common element shall not be assigned or reassigned except in accordance with this act and the condominium documents.

(2) Unless expressly prohibited by the condominium documents, a limited common element may be reassigned upon written application of the co-owners concerned to the principal officer of the association of co-owners or to other persons as the condominium documents may specify. The officer or persons to whom the application is duly made shall promptly prepare and execute an amendment to the master deed reassigning all rights and obligations with respect to the limited common element involved. The amendment shall be delivered to the co-owners of the condominium units concerned upon payment by them of all reasonable costs for the preparation and recording of the amendment to the master deed.

Unlike MCL 559.190, which permits amendments by a developer that do not materially alter or change the rights of the co-owners, and material amendments via a co-owner vote, MCL 559.139 allows for the association’s principal officer to execute an amendment to the master deed to reassign a limited common element parking space to another co-owner so long as there is nothing in the master deed that prohibits such a transfer.  The co-owners requesting the reassignment of the limited common element parking space would also be responsible for all reasonable costs associated with the preparation and recording of the amendment.  However, it is important to note that a co-owner cannot transfer a limited common element parking space without amending the master deed and MCL 559.139.

In Burke v Ramblewood Manor Homes Ass’n, Docket No. 277808 (Mich Ct App May 29, 2008), the Michigan Court of Appeals held that a purported conveyance of a limited common element carport via a warranty deed was invalid.  Specifically, the Court held:

Plaintiffs’ claims on appeal hinge upon whether the warranty deed conveying Unit 48 to them, through reference to the consolidating master deed governing Ramblewood Manor Homes, served to convey ownership of the carport at issue to them. There is no dispute that the carport at issue was originally assigned to Unit 48 and that such assignment appears in an architectural drawing attached to the original master deed. The assignment of carports and other elements described as “limited common elements” is not necessarily, however, static.

Article XII of the original master deed for the Ramblewood Manor Homes addresses changes to limited common elements and provides, at section 1:

No Unit dimension may be modified in any material way without the consent of the Co-Owner or mortgagee of such Unit nor may the nature or extent of Limited Common Elements or the responsibility for maintenance, repair or replacement thereof be modified in any material way without the written consent of the Co-owner and mortgagee of any Unit to which the same are appurtenant.

The Michigan Condominium Act, at MCL 559.139(2), similarly provides:

(2) Unless expressly prohibited by the condominium documents, a limited common element may be reassigned upon written application of the co-owners concerned to the principal officer of the association of co-owners or to other persons as the condominium documents may specify. The officer or persons to whom the application is duly made shall promptly prepare and execute an amendment to the master deed reassigning all rights and obligations with respect to the limited common element involved. The amendment shall be delivered to the co-owners of the condominium units concerned upon payment by them of all reasonable costs for the preparation and recording of the amendment to the master deed.

MCL 559.139(1) further provides:

Assignments and reassignments of limited common elements shall be reflected by the original master deed or an amendment to the master deed. A limited common element shall not be assigned or reassigned except in accordance with this act and the condominium documents.

MCL 559.173 requires that a master deed and amendments to the master deed be recorded, and MCL 559.191 provides that an amendment to the master deed shall not be effective until the amendment is recorded.

An “Amendment and Reassignment of Limited Common Element Carport” concerning the carport at issue was recorded with the Oakland County Register of Deeds on November 3, 1988. The amendment states that the developer of the condominium project is the owner of Units 46 and 48. The amendment further states that the developer/owner and the Ramblewood Manor Homes Association “reassign Carport No. C-48, formerly assigned to Unit No. 48 to Unit No. 46.” The reassignment of the carport having been agreed to between the co-owners of the concerned units and the amendment and reassignment of the carport having been duly recorded with the Oakland County Register of Deeds, the reassignment complied with the condominium documents and the Michigan Condominium Act.

According to plaintiffs, however, because their warranty deed transfers ownership of Unit 48 “according to the superceding consolidated master deed” and such deed supersedes the previously recorded master deed and all amendments, the amendment and reassignment of the carport to Unit 46 is no longer valid. Plaintiffs thus claim that the warranty deed vested title in the carport to them, as owners of Unit 48. We disagree.

In conclusion, if the parking space is a unit, a co-owner can execute a deed to transfer the parking space and an amendment to the master deed is not required.  If the parking space is a general common element, a co-owner cannot transfer the parking space.  Finally, if the parking space is a limited common element, which is typically the case, the co-owners must submit an application to the condominium association to amend the master deed in order to effectuate the transfer.  An amendment to a master deed that merely re-assigns a limited common element parking space does not require 2/3 co-owner and mortgagee approval under MCL 559.190 and MCL 559.190a, and can simply be executed by the principal officer of the condominium association.  However, as recognized by the Michigan Court of Appeals, a limited common element parking space cannot be transferred via a warranty deed.

Kevin Hirzel is a Partner and Chair of the Community Association and Real Estate Practice Group at CMDA. He concentrates his practice on commercial litigation, community association law, condominium law, construction law and real estate law. Mr. Hirzel has been a Super Lawyer’s Rising Star in Real Estate Law from 2013-2017, an award given to only 2.5% of the attorneys in Michigan each year. He was named an Up & Coming Lawyer by Michigan Lawyer’s Weekly in 2015, an award given to only 30 attorneys in Michigan each year. Mr. Hirzel represents builders, community associations, condominium associations, cooperatives, co-owners, developers, homeowner’s associations, investors, property owners and property managers throughout Michigan. He is available to represent clients out of CMDA’s Michigan offices in Clinton Township, Livonia, Grand Rapids or Traverse City. He may be reached at (734) 261-2400 or khirzel@cmda-law.com.