Can a condominium or homeowners association enforce a parking easement that was terminated years earlier by a recorded agreement? In Michigan, the answer is no. Parking easement disputes in Michigan condos and HOAs often turn on what the recorded documents actually say—and an association that continues to assert an extinguished easement can end up owing damages for slander of title.
Condominium and homeowners associations frequently rely on recorded easements to access parking areas, roads, utilities, beaches, marinas, and other common amenities. Because many of these easements were created decades ago and have been amended through multiple transactions, disputes often arise over whether an easement still exists or whether it has been modified or terminated.
The Michigan Court of Appeals’ decision in Lighthouse Place Development, LLC v. Moorings Association, unpublished per curiam opinion of the Court of Appeals, issued April 28, 2009 (Docket No. 280863), 2009 WL 1160042, demonstrates the importance of carefully reviewing recorded property documents before asserting easement rights. In that case, a condominium association continued to claim rights under a parking easement that had been expressly terminated years earlier through a recorded agreement. The trial court quieted title in favor of the developer and awarded damages, attorney fees, and costs for slander of title.
On appeal, the Michigan Court of Appeals affirmed, holding that the easement had been intentionally terminated, could not be revived through a later amendment, and that the association’s continued assertion of the extinguished easement supported a slander of title claim. As discussed below, the decision serves as an important reminder that condominium and homeowners associations should confirm the continued existence of recorded easements before attempting to enforce them.
Factual Background of the Parking Easement Dispute
Lighthouse Place Development, LLC (“Lighthouse”) acquired property in New Buffalo, Michigan, for the development of the Light Harbor condominium project. Before Lighthouse acquired the property, a 1985 seasonal parking easement was recorded benefiting the Moorings Association, a condominium association whose members owned boat slips at a neighboring marina.
Several years later, the Moorings Association became involved in separate litigation with neighboring property owners. The dispute was ultimately settled in 1997. As part of that settlement, the parties executed and recorded an “Agreement Terminating Easements,” which expressly terminated numerous easements affecting the surrounding properties, including the 1985 seasonal parking easement.
For several years, there was no dispute regarding the termination. However, after Lighthouse began developing the property, the Moorings Association asserted that the parking easement remained valid and objected to Lighthouse’s development plans. Lighthouse maintained that the easement had been permanently extinguished by the recorded termination agreement and filed suit seeking to quiet title, recover damages for slander of title, and obtain related relief.
Following a bench trial, the trial court found that the easement had been intentionally terminated in 1997, rejected the association’s request to reform the termination agreement based upon mutual mistake, quieted title in favor of Lighthouse, and awarded damages, attorney fees, and taxable costs for slander of title. The Moorings Association appealed.
The Court of Appeals Rejects the Moorings Association’s Mutual Mistake Argument
One of the Moorings Association’s primary arguments on appeal was that the 1997 termination agreement should be reformed because the parties allegedly made a mutual mistake in including the parking easement among the easements to be terminated.
Under Michigan law, courts may reform a written agreement when the document fails to reflect the parties’ actual agreement because of a mutual mistake. However, reformation is considered an extraordinary equitable remedy. A party seeking to reform a recorded instrument must present clear and convincing evidence demonstrating that both parties shared the same mistaken understanding at the time the agreement was executed.
The Court of Appeals concluded that the Moorings Association failed to meet that standard. Rather than demonstrating a mutual mistake, the evidence presented during the bench trial showed that the parties intentionally negotiated a comprehensive settlement that broadly terminated all easements affecting the subject properties. The termination agreement itself contained expansive language extinguishing “any and all easements,” and testimony presented during trial supported the trial court’s finding that the parties intended exactly that result.
The Court emphasized that a party cannot obtain reformation simply because it later realizes that the consequences of an agreement are more significant than originally anticipated. Regret over the effect of a settlement agreement is not the same as proving that both parties were mistaken when the agreement was signed. Because competent evidence supported the trial court’s factual findings, the Court of Appeals held that the trial court properly refused to reform the recorded termination agreement. As a result, the parking easement remained extinguished.
A Terminated Parking Easement Cannot Simply Be Revived
The Moorings Association also argued that a later amendment to the 1997 settlement agreement effectively restored the parking easement. The Court of Appeals rejected that argument as well. The Court explained that once the easement was intentionally terminated and the termination was recorded, the easement ceased to exist. Because there was no longer an easement burdening the property, the parties could not simply “undo” the termination years later by recording another document among themselves. Instead, creating a new easement would have required the participation and consent of the property’s current owner.
This portion of the decision highlights an important principle of Michigan property law: once a recorded property interest has been intentionally extinguished, later attempts to revive that interest are generally ineffective unless a new property interest is properly created.
The Court of Appeals Affirms Quiet Title and Slander of Title
The Court of Appeals also affirmed the trial court’s decision quieting title in favor of Lighthouse and awarding damages for slander of title. Michigan law recognizes a claim for slander of title when a person maliciously publishes false statements that disparage another’s ownership interest in real property and cause special damages. Here, the Court concluded that competent evidence supported the trial court’s finding that the Moorings Association knowingly continued asserting rights under an easement that had already been terminated by a recorded instrument.
Those continued assertions clouded Lighthouse’s title, interfered with its condominium development, and forced Lighthouse to incur substantial litigation expenses to remove the invalid claim from the property’s title. Accordingly, the Court affirmed the trial court’s award of damages, attorney fees, and taxable costs.
The Court also rejected the association’s argument that Lighthouse lacked standing. The Mooring Association asserted that, under the Michigan Condominium Act, after Lighthouse recorded the condominium’s master deed, it lost its property rights in the condominium’s common elements. The Court clarified that although the Michigan Condominium Act authorizes condominium associations to pursue litigation involving common elements under section MCL 559.160, this section does not provide a condominium association with the exclusive right to assert claims on behalf of all co-owners in connection with common elements of a condominium project and the Court concluded that Lighthouse still had its own direct ownership and economic interests in the property and therefore had standing to pursue a quiet title action and related claims.
Key Takeaways for Michigan Condominium and Homeowners Associations
The Court of Appeals’ decision in Lighthouse Place Development, LLC v. Moorings Association illustrates several important lessons for condominium and homeowners associations throughout Michigan.
- Do Not Assume Older Easements Still Exist. Easements that have existed for decades may have been modified or terminated through settlement agreements, releases, or recorded amendments. Condominium associations should carefully review the property’s chain of title before asserting easement rights.
- Recorded Termination Agreements Carry Significant Legal Weight. When parties intentionally execute and record an agreement terminating an easement, Michigan courts are likely to enforce the termination according to its plain language. Associations should not rely solely on historical use or long-held assumptions about access rights.
- An Extinguished Easement Cannot Be Revived Informally. Once an easement has been terminated, it generally cannot be restored through a later amendment executed by former parties. In many situations, creating new easement rights will require the participation of the current property owner.
- Improper Easement Claims Can Become Expensive. Continuing to assert easement rights that no longer exist may expose an association to quiet title litigation, slander of title claims, attorney fees, court costs, and damages if those assertions interfere with another party’s ownership or development rights.
- Consult Legal Counsel Before Enforcing Historical Property Rights. Condominium and homeowners associations should have experienced community association counsel review easement agreements, settlement documents, title commitments, and recorded instruments before pursuing litigation or objecting to neighboring development projects. A careful title review may avoid costly litigation and help preserve association resources.
Need Assistance Resolving Easement Disputes?
Questions regarding easements, access rights, and recorded property interests frequently arise in the context of condominium and homeowners association governance. Whether your association is attempting to enforce an easement, respond to a neighboring development, or determine whether historical property rights remain valid, obtaining legal guidance early can prevent expensive litigation.
The attorneys at Hirzel Law regularly represent condominium and homeowners associations in easement disputes, quiet title actions, slander of title claims, and other complex litigation throughout Michigan. Our experienced community association attorneys can review your governing documents, title records, and recorded easement agreements to help protect your association’s property rights and minimize legal risk.
