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Michigan Court of Appeals Rules that Modular Home Violates Restrictive Covenants

UPDATE:  This opinion was subsequently reversed by the Michigan Supreme Court on July 24, 2019 in a 5-2 decision.  A copy of the Supreme Court’s opinion can be found here.
In Thiel v Goyings, unpublished opinion of the Court of Appeals, issued August 8, 2017 (Docket No. 333000), the Michigan Court of Appeals held that the construction of a partially prefabricated home violated the restrictive covenants in the Timber Ridge Bay Subdivision.  Specifically at issue were restrictive covenants that provided as follows:

COVENANTS, RESTRICTIONS AND CONDITIONS
Section 1. Establishment of Restrictions. In order to provide for congenial occupancy of the Premises, and for the protection of the value of the Parcels therein, the Parcels shall be subject to the limitations set forth below:
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  1. Building and Use Restrictions

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  1. Relocated Residences No residences, including modular, manufactured, mobile or prefabricated homes, may be moved from a location outside the Premises and placed or located within a Parcel within the Premises.
  2. Manufactured Housing Units No manufactured homes whether classified as a mobile home, modular home, or otherwise, and no prefabricated homes shall be permitted on any Parcel in the Premises; regardless of which building codes are applicable to said homes.
  3. Residential Dwelling Restrictions

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4. The height of any building will not be more than four (4) stories. If any portion of a level or floor within a residence is below grade all of the level or floor shall be considered a basement level. All residences shall be stick built on site and no geodesic dome; berm house, pre-fabricated or modular home, mobile home, shack or barn will be erected on any of the Parcels unless provided for herein.

Analysis

The Michigan Court of Appeals held that the above restrictive covenants were to be enforced according to their plain language.  The defendants attempted to argue that the covenants were ambiguous, as the term “modular” was not defined, and that they could keep their modular home.  Specifically, the defendants argued that the home was “a mix, or hybrid” in that they designed the home with Heritage Custom Builders using computer assisted design (CAD). Defendants argued that a majority of the home was to be stick built on site with only a minority of the home built at the Ritz Craft facility.  However, the court rejected this argument by relying on the dictionary definition of the term “modular.”  Specifically, the Court of Appeals held that the term “modular” meant  “1. of or pertaining to a module or a modulus. 2. composed of standardized units or sections for easy construction or flexible arrangement: a modular home; a modular sofa. ….” The court held that since part of the home was constructed offsite, that the above restrictions were violated
The Court of Appeals also noted that these types of cases are “difficult” and that while the trial court strived to find an equitable solution, it did not have the authority to do so. The court held that where defendants’ home was in clear violation of the unambiguous restrictive covenant, the only solution was to grant injunctive relief and order that the non-conforming home be removed.  Thiel v Goyings, unpublished opinion of the Court of Appeals, issued August 8, 2017 (Docket No. 333000), stands for the proposition that Michigan Courts will enforce deed restrictions as written and that courts will rarely allow equitable considerations to override the plain language of the documents.  Accordingly, condominium and homeowner associations should enforce restrictions as written and be aware that courts will grant injunctive relief to remove construction that does not comply with the restrictive covenants.

 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.

Written by

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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