Court rules Site Condominium Unit was rebuilt in accordance with Master Deed

In DeCaminada v Hammond, unpublished opinion of the Court of Appeals, issued February 18, 2020 (Docket No. 345847), the Michigan Court of Appeals ruled that the co-owners of a site condominium unit who constructed a larger home, after losing their home in a fire, had constructed the home “substantially” in accordance with the master deed.  The Court determined that the reconstruction of the home and landscaping only had to be substantially in accordance with the specifications contained in the master deed and that the condominium bylaws did not require permission to build a larger home or require permission from any of the other co-owners to rebuild.

Facts

Bruce and Joyce Hammond purchased a site condominium unit in 2002.  Their home was destroyed in a fire in 2015.  The condominium association approved the Hammonds’ plans to rebuild a new home. However, the new home was larger than the original home and about 30 feet closer to the neighboring site condominium unit, which was owned by Joseph and Carol DeCaminada. The DeCaminadas claimed that the Hammonds new landscaping had large rocks and a staircase that were located too close to the property line, in addition to the home being located too close to the property line. The Hammonds did not obtain written approval from the condominium association before installing their landscaping. However, the condominium association later approved the landscaping. The DeCaminadas sued the Hammonds and claimed that they had violated the condominium bylaws.  Specifically, the condominium bylaws contained the following pertinent provisions:

Article V of the community’s Bylaws addresses the reconstruction or repair of units and provides: “If any part of the Condominium Premises shall be damaged, the determination of whether or not it shall be reconstructed or repaired” will be made by the owner, who shall “restore his unit and the improvements thereon to a clean and sightly condition satisfactory to the Association and in accordance with the provisions of Article VI.” Section 5.2 further provides: “Any such reconstruction or repair shall be substantially in accordance with the Master Deed and the original plans and specifications for any damaged improvements located within the Unit unless the Co-owners shall unanimously decide otherwise.” Article VI sets forth various restrictions and states in relevant part: “No co-owner shall make alterations, modifications or changes in any of the units or common elements, limited or general, without the express written approval of the [Association’s] board of directors.” Article VI requires similar approval for landscaping.

Analysis

In affirming the trial court, the court of appeals first looked to the Michigan Condominium Act. Specifically, the court relied on MCL 559.103(9), MCL 559.108, MCL 559.153 in determining that that the condominium bylaws and condominium subdivision plan, which are both part of the master deed, govern the administration of the project and must be interpreted in the same manner as a contract. In reviewing the contract, the court noted that, “when interpreting a contract, a term or phrase cannot be construed in isolation, but must instead be construed in context and in light of the contract as a whole.”  In applying this principle to the condominium bylaws at issue, the court determined that the restrictions on construction were clearly outlined in the master deed. Specifically, the court stated:

These can be found in various places, including Section 7.2(c) of the Master Deed, which requires that, for example, homes have square-footage restrictions and have a maximum of four bedrooms. Additional plans and specifications can be found in the community’s subdivision plan, which sets out the property lines of the various private plots and common areas, as well as the building envelopes within each private plot (i.e., areas within a particular plot’s property lines where a structure can be built). It is undisputed that the Hammonds’ second home satisfies the community’s original plans and specifications.

The court determined that the Hammonds had complied with the “specifications” that were contained in the condominium bylaws as they had built within an area permitted by the master deed. Accordingly, the court determined that the Hammonds were not required to obtain unanimous co-owner approval, or approval from any other co-owner, in order to rebuild their home.

With respect to the altered landscaping, the court determined that the condominium bylaws did not require “prior” written approval for landscaping. Rather, the court determined that the condominium association’s subsequent ratification of the landscaping plan sufficed, and that the association could issue written approval after the landscaping was installed. The Court determined that since the Hammonds’ landscaping did not encroach on the DeCaminadas’ unit, then the DeCaminadas did not suffer damages and that the condominium bylaws had not been breached.

Conclusion

In short, this case stands for the proposition that a court will not create an ambiguity in the condominium bylaws or find a conflict when there is a reasonable construction of the condominium bylaws when read as a whole. Similarly, a court will not impose additional restrictions on construction, beyond what is required by the condominium documents. In this case, the condominium association properly enforced its restrictions, even though the co-owners disagreed. However, condominium associations should carefully review their architectural control provisions to determine if they adequately preserve the aesthetic character of the neighborhood.

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 2013-2019, an award given to only 2.5% of the attorneys in Michigan each year. Mr. Hirzel has been named a Leading Lawyer in Condominium & HOA law by Leading Lawyers Magazine in 2018 and 2019, an award given to less than 5% of the 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) 478-1800 or kevin@hirzellaw.com.