Who Pays for Maintaining Shared Easements Between Multiple Condominium Associations?

Introduction 

            Residential community developments in Michigan often use the rights of use afforded by recorded easements in order to permit the development of communities with multiple underlying individual residential projects.  In some cases, a developer may create an overarching project and then record a series of subdivision plats or condominium master deeds over years to finalize its development.  In other cases, a developer may create a series of condominium projects immediately adjacent to one another but which each use the same means of access to a public road for ingress and egress.  Or a developer may seek to grant or obtain an easement between different projects to assist in permitting the common use of land owned by another.  In each instance the legal concept used to allow one party to use the land of another for a specified purpose is known as an “easement.”   

            Common types of easements used in residential developments include storm water drainage easements, utility easements, recreational areas, beach access easements, and as mentioned above, the most common type, access easements otherwise known as easements for ingress and egress over roads.  In most instances an access easement or easement for ingress and egress permits the owner of one land to use another’s land to access a public road from the owner’s land.  These types of easements are common  in Michigan when multiple residential developments are built in close proximity and share the same private access to a public road.  However, the rights and obligations of a development as between the multiple residential developments who share use of an easement is not always well-defined, and conflicts often arise as to who is responsible for the cost of maintenance of the road that is the subject of the easement. 

Background 

            The Michigan Court of Appeals recently addressed the above issues in the published decision Bayberry Group, Inc v Crystal Beach Condominium Ass’n, et al, ___ Mich ___; ___ NW2d ___ (2020) (Docket No 349378), issued on October 22, 2020.  In Bayberry, several condominium projects shared the use of certain roadway areas in order to access M-22.  These easements had each been contained in each project’s respective original development documents going back to the 1970s, but there does not appear to have been a specified means under which each project was to contribute to the costs of maintaining the roads over which they held an easement.  In 2013, some, but not all, of these projects entered into a Common Area Maintenance Agreement or “CAM Agreement” under which they agreed to share in the costs of maintaining the roadways over which they each enjoyed an easement for ingress and egress and to share in other related costs as well, such as lawn maintenance and landscaping.   

            In 2017 Bayberry filed a lawsuit against the condominium associations which had not executed the CAM Agreement and who had not contributed towards the costs of maintaining certain road easements.  In short, Bayberry claimed that the easements under which the condominium associations enjoyed the right of ingress and egress from their respective condominiums to the public highway M-22 were general common elements of each of the individual condominiums and, therefore, each of the condominiums was responsible for the easements’ maintenance, repair, and replacement as a general common element.  Bayberry requested that it be awarded damages for unpaid maintenance costs between 2011 and 2017, less the usage costs already paid by associations that had already paid their share under the CAM Agreement.  In response, the defendant condominium associations argued that there was no contractual relationship between Bayberry and the defendants regarding the easements, and denied that the easements constituted general common elements.  Further, defendants argued that even if they were found to be obligated to contribute to the cost of easement maintenance, Bayberry and its predecessor’s failure to enforce such an obligation over the past thirty (30) years amounted to a waiver of the right to now seek such damages and such a suit would be barred by the equitable doctrine of laches. 

            In addressing these arguments, the Court of Appeals made several rulings of potential significance to condominium associations in Michigan. 

  1. Easements are Not General Common Elements Unless Defined as General Common Elements Under the Master Deed 

            First, the Court of Appeals rejected the plaintiff’s argument that the easements constituted general common elements under either a contract theory or by operation of law.  From a contractual standpoint, the Court of Appeals first noted that the master deeds of the associations in question did not define an easement as a general common element stating that because the South Homestead Road easement is not described in Article 3 of any of defendants’ master deeds, the easement does not fall within the category of general common elements outlined in Article 7(a)(1).”  (Bayberry, Slip Op p 6).  The Court of Appeals further determined that the “catch-all” provision contained in Article 7(a)(7) of each of the associations’ master deeds was insufficient to define an easement as a general common element because the items listed as examples for Article 7(a)(7) were fundamentally different than an easement: 

[W]e conclude that the examples provided in Article 7(a)(7) are not in the same category as that of a road. The South Homestead Road easement undoubtedly exists so that an individual can travel (often by a motor vehicle) on a paved surface within and outside of the condominium project. In contrast, “stairways, laundry rooms and storage areas” are located within the four walls of a building and are located within the condominium project. Therefore, we conclude that the plain language establishes that the South Homestead Road easement is not included in Article 7(a)(7)’s definition of common element. (Bayberry, Slip Op pp 5-6). 

            The Court of Appeals likewise rejected the plaintiff’s argument that the easements constituted general common elements by operation of law, stating simply that in making its argument “[plaintiff] ignores the fact that the South Homestead Road easement is not listed as a common element in the master deeds and the other relevant condominium documents. 

            Accordingly, based on the Court of Appeals’ analysis in Bayberry, unless an easement is specifically defined as a general common element within a condominium master deed, it is unlikely that the easement itself will be considered a general common element.   

  1. The Common Law Obligation to Contribute to Costs of Maintaining Easements

            Second, even though there was no contractual obligation on the part of the defendant associations to contribute to the maintenance of the easement, the Court of Appeals applied the principles of Mumrow v Riddle, 67 Mich App 693, 700; 242 NW2d 489 (1976), and Bowen v Buck and Fur Hunting Club, 217 Mich App 191, 194; 550 NW2d 850 (1996), to require that under common law principles the defendant associations contribute their proportionate share of the costs to maintain the easements.  The legal principles on which these conclusions were based state as follows: 

“[I]t is the owner of an easement, rather than the owner of the servient estate, who has the duty to maintain the easement in a safe condition so as to prevent injuries to third parties.” Morrow v Boldt, 203 Mich App at 329-330. However, “[t]he maintenance costs of an easement used jointly by both the dominant and servient owners are to be paid in proportion to each party’s use.” Bowen v Buck and Fur Hunting Club, 217 Mich App 191, 194; 550 NW2d 850 (1996).  (Bayberry, Slip Op p 8) (emphasis added). 

With respect to the repairs and improvements that defendants were required to make, it is well settled that “[t]he making of repairs and improvements necessary to the effective enjoyment of an easement . . . is incidental to and part of the easement.” Mumrow v Riddle, 67 Mich App 693, 700; 242 NW2d 489 (1976). Thus, defendants are only required to make repairs and improvements to the easement that are incidental to and part of their ability to safely enter and leave their respective properties. See id.  (Bayberry, Slip Op p 7). 

             Applying these principles, the Court of Appeals affirmed the trial court decision requiring the defendant associations to contribute towards the cost of maintaining the road over which they enjoyed an easement.  Notably, the Court of Appeals rejected the plaintiff’s argument that the defendants were also obligated to pay a proportionate share of all expenses under the CAM Agreement (such as lawn maintenance and landscaping), and, instead, limited the defendants’ responsibility to the costs “incidental to and part” of the easement itself, namely, the use of the road necessary for ingress and egress and no other costs.  Accordingly, it is best to have an easement specifically define the cost sharing mechanism that will be used between multiple condominium associations.  However, in the absence of an agreement, the Court will apportion costs on an equitable basis based on use. 

  1. Application of the Doctrine of Laches 

            Third, and potentially most interestingly, the Court of Appeals refused to affirm the trial court’s decision to use the doctrine of laches to limit recovery to future expenses only.  Specifically, the trial court’s decision obligated the defendant associations to contribute to the costs of maintenance, but only for future costs and not for costs that had been incurred already.  The trial court reasoned that such past costs were barred under the doctrine of laches since the easements had been in place for over thirty (30) years but no party had ever previously sought payment from the associations.  In rejecting the trial court’s decision, the Court of Appeals stated that since there had been no finding of prejudice to the defendant associations, the trial court’s application of laches was in error.  The Court of Appeals remanded to the trial court for a determination on the issue of prejudice under the doctrine of laches.  Accordingly, depending on the trial court’s factual findings on remand, it is possible that the defendant associations will be required to pay a portion of the past road maintenance costs in addition to such future costs.

Summary 

            Bayberry helps clarify the obligations of residential community developments to contribute to the cost of maintaining the easements that benefit their communities.  Even in the absence of an express contractual commitment to do so, the common law principles of  Mumrowsupra, and Bowensupra, will not generally allow an association to benefit from an easement without contributing to its maintenance costs.  One of the important lessons learned from Bayberry is that an express agreement between multiple condominium associations is the best method used to allocate costs.  In the absence of an agreement, a court will allocate costs, but this requires the expenditure of legal fees and fact specific determination as to the proportionate use of the easement. 

Matthew W. Heron is a Member at Hirzel Law, PLC where he concentrates his practice in real estate, community association law, condominium law, real estate litigation, and zoning and land use.  Mr. Heron also has extensive experience in a variety of litigation matters, including insurance coverage, non-compete agreements, automotive supplier disputes, and breach of contract.  He routinely appears in both federal and state courts throughout Michigan and has argued before the Michigan Court of Appeals and the Court of Appeals for the Sixth Circuit.  He can be reached at (248) 480-8758.