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Michigan Supreme Court Holds That HOA Can Revoke Dock Approvals

This case has been overruled by the Michigan Supreme Court, click here to read the update

As previously discussed in Michigan Court of Appeals Holds that HOA Cannot Revoke Approvals for Docks, the Michigan Court of Appeals held that an oral approval from an Allegan county homeowners association related to the installation of docks could ripen into a permanent easement to install docks.  In Haan v Lake Doster Lake Association, unpublished opinion of the Court of Appeals, issued January 16, 2020 (Docket No. 345282), the majority opinion from the Michigan Court of Appeals held that the homeowners association did not have authority to revoke approvals previously granted to owners to install docks.  The dissenting opinion argued that the restrictive covenants provided a procedure for owners to obtain permission to construct a dock, which could later be revoked, and that the covenants could not be amended by representations made in the membership application or by oral approvals from the homeowners association.  On June 11, 2021, the Michigan Supreme Court reversed the majority opinion of the Michigan Court of Appeals and adopted the analysis of the dissenting opinion. The Supreme Court held that the homeowners association could revoke the dock approvals as they were not permanent easements and that the HOA only granted a revokable license.

Understanding the Michigan Supreme Court Decision to Allow HOA to Revoke Dock Approvals

The Lake Doster Lake Association (the “LDLA”) was responsible for administering a residential subdivision located around Lake Doster in Allegan County, Michigan. The LDLA possessed riparian rights as it owned Lake Doster, the lake bottom and the land to the high watermark of the lake. As a result of acquiring riparian rights from the developer, the LDLA could regulate the use of the lake, including the installation of docks and the ability to moor boats to the docks.

Owners that purchased lots in the subdivision and wanted access to Lake Doster were required to complete a membership application that was approved by the HOA.  The application stated as follows:

The Applicant desires the Property’s present and future owners to have access and use of certain lands owned by the Association, including but not limited to, Lake Doster, …To that end, the Applicant hereby agrees and acknowledges that upon admission and receipt of membership, this instrument shall be recorded with the Allegan County Register of Deeds and all previous rights and interests of all kinds and nature enjoyed by the Applicant in the Association Property shall be relinquished and quitclaimed to the Association. Upon acceptance of this Application for Membership …, the Association agrees to allow the Applicant and all future owners of the Property to continue all past permitted rights of the Association Property, provided that the Applicant and all future owners of the property abide by the Bylaws, Plat Restrictions and all rules and regulations adopted by the Association from time to time. Title to the Association Property shall at all times remain vested in the Association subject to the rights of use and enjoyment provided above and granted elsewhere to other Members of the Association.

In 2015, the homeowners association contacted a group of backlot owners that had executed applications and requested that certain docks be removed, added, adjusted, and realigned.  The owners refused and filed a lawsuit arguing that they had a permanent easement and could continue to install the docks as they had historically done.  The homeowners association argued that the owners only had a license to install the docks, as opposed to a permanent easement, and that the deed restrictions and riparian rights permitted the LDLA to revoke prior dock approvals.

Looking at Whether HOA Have Riparian Right and If They Could Revoke a License to Install Docks

In overruling the majority opinion of the Michigan Court of Appeals, the Michigan Supreme Court adopted the analysis of the dissenting opinion and held that the homeowners association’s architectural control approvals amounted to a revokable license instead of a permanent easement.  Specifically, the Michigan Supreme Court stated as follows:

“An easement is an interest in land that is subject to the statute of frauds.” Forge v Smith, 458 Mich 198, 205 (1998). Plaintiffs can point to no written conveyance manifesting a clear intent to create an easement granting dock rights. See id. Rather, plaintiffs argue that a property interest was created when (1) the Lake Doster Development Corporation (the LDDC) orally approved plaintiffs’ request or a predecessor’s request to install a dock and (2) the LDLA agreed, as a benefit of membership, that it would agree to allow the continuance of “all past permitted rights.” Neither of these bases, whether considered separately or in tandem, satisfies the requirements for establishing a permanent interest in realty. Assuming the LDDC intended to convey an interest in real estate when it orally approved plaintiffs’ or their predecessors’ requests for dock installation, and absent any indication of fraud, an attempted conveyance of an interest in real estate is void if it is not in writing. See Kitchen v Kitchen, 465 Mich 654, 660 (2002). When there was no observance of the formalities required for creating an express easement, only a mere license was created. See Morrill v Mackman, 24 Mich 279, 283 (1872); 1 Cameron, Michigan Real Property Law (3d ed), Easements, § 6.2, p 212 (“A license may be created when the kind of interest that would normally be the subject of an easement is granted but the formal requirements for the creation of an easement are not met.”). Although a license may grant permission to be on the land of the licensor, unlike easements, they are not interests in real estate and are generally revocable at will by the licensor. Forge, 458 Mich at 210. It makes no difference that plaintiffs or their predecessors might have relied on the oral approvals over the course of many years. Michigan does not recognize “irrevocable licenses” or “easements by estoppel” stemming from a licensee’s expenditures made in reliance on representations about the duration of a license. See Kitchen, 465 Mich at 660.

Contact an Experienced Michigan Community Association Attorney to Help Document Your Architectural Control Approvals

This case reaffirmed the general principle that an easement cannot be established without a writing that clearly establishes the intent to convey a permanent property interest.  However, in order to avoid litigation, condominium and homeowners associations should reduce architectural control approvals to writing, irrespective of whether an easement or license is being created.  Homeowners associations that use written modification agreements to document architectural control committee approvals are less likely to have disputes with homeowners.  It is inevitable that the composition of the board of directors will change, and owners will move over time. If a written modification agreement does not exist, disputes arise as to whether architectural approvals were previously provided, the scope of approval, or whether the approval is revocable.  Accordingly, homeowners associations should consider consulting with a community association attorney to ensure that it has a process for appropriately documenting architectural control approvals.

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 was named a “Go To Lawyer” in Condominium and Real Estate Law by Michigan Lawyer’s Weekly. Mr. Hirzel has been a Michigan Super Lawyer’s Rising Star in Real Estate Law from 2013-2021, 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 from 2018-2021, 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.

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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, Michigan with a fourth office location in Chicago, Illinois. 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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