MCL 599.211: Who Is on the Hook for Those Unpaid Assessments?
Imagine this. After weeks, months, or maybe even years of searching, you finally found the condo unit of your dreams and have decided to make it your own. There’s only one issue—unpaid condo association assessments on the unit. Fear not, the Michigan Condo Act provides clarity on matters of this sort.
MCL 559.211 states, the following:
Sale or conveyance of condominium unit; payment and statement of unpaid assessments; liability for unpaid assessments.
Sec. 111.
(1) Upon the sale or conveyance of a condominium unit, all unpaid assessments, interest, late charges, fines, costs, and attorney fees against a condominium unit shall be paid out of the sale price or by the purchaser in preference over any other assessments or charges of whatever nature except the following:
a. Amounts due the state, or any subdivision thereof, or any municipality for taxes and special assessments due and unpaid on the condominium unit.
b. Payments due under a first mortgage having priority thereto.
(2) A purchaser or grantee is entitled to a written statement from the association of co-owners setting forth the amount of unpaid assessments, interest, late charges, fines, costs, and attorney fees against the seller or grantor and the purchaser or grantee is not liable for, nor is the condominium unit conveyed or granted subject to a lien for any unpaid assessments, interest, late charges, fines, costs, and attorney fees against the seller or grantor in excess of the amount set forth in the written statement. Unless the purchaser or grantee requests a written statement from the association of co-owners as provided in this act, at least 5 days before sale, the purchaser or grantee shall be liable for any unpaid assessments against the condominium unit together with interest, costs, fines, late charges, and attorney fees incurred in the collection thereof.
MCL 559.211 dictates that when a condo unit is purchased in Michigan, the unpaid assessments (including interest, late charges, fines, costs, and attorney fees) against the unit are to be paid out of the sale price or by the purchaser. Purchasers are also entitled to a written accounting of the unpaid fees from the association, which must be requested a minimum of five days before the sale. If the purchaser does not request this statement from the association five or more days before the sale, the purchaser is liable for all unpaid assessments.
Holcomb v. Harbour Pointe Condo. Ass’n, No. 266023, 2006 WL 891025 (Mich. Ct. App. Apr. 6, 2006) put MCL 599.211 to the test. Mary and Paul Holcomb (plaintiffs) purchased a condo unit on which outstanding assessments were due to the condominium association. The plaintiffs argued that the printout of outstanding assessments and charges received from the association, which included a handwritten note referring to an additional two remaining installments, was not indicative of intent to represent all back, current, and future unpaid fees.
The Michigan Court of Appeals affirmed the trial court’s order granting defendant’s motion for summary disposition, finding that the printout was simply a ledger, which showed unpaid amounts, and that the handwriting did not preclude assessments that would become due in the future. The Court further stated that “[t]he plain language of MCL 559.211 clearly indicates that a purchaser is entitled to a written statement of charges against the seller. It is axiomatic that a seller cannot be held responsible for charges incurred and assessed against a condominium unit after the seller no longer owns it. Hence, the statute can only refer to past or current charges assessed against the seller.” Id. Additionally, the Court noted that evidence was not provided to show that the plaintiffs requested the ledger pursuant to MCL 559.211.
The attorneys of Hirzel Law, PLC focus their practice on condominium and homeowners association law. Our attorneys have extensive litigation and trial experience in state and federal courts involving commercial litigation issues and community association matters. We stand by our clients, offering quality legal representation and promptly responding to our clients’ needs. Contact Hirzel Law online or call 248-986-2290 to learn how our Michigan attorneys can help.
