Can a Michigan condominium board levy a special assessment without a co-owner vote? The answer depends on what the master deed and bylaws authorize and on whether the board follows the required procedure. Understanding how Michigan condominium special assessments work helps boards fund major repairs and improvements without exposing the association to a legal challenge.
Regular, Additional, and Special Assessments in a Michigan Condominium
Most condominium bylaws draw a distinction between regular, additional, and special assessments based on purpose and approval requirements. Regular assessments are recurring, budgeted charges imposed to fund the association’s ordinary operating expenses and maintenance obligations. They are typically adopted through the annual budget process and paid monthly, quarterly, or annually. These assessments cover routine costs such as maintenance and repair of common elements, landscaping and snow removal, utilities, management fees, and reserve contributions. Because they are planned and predictable, regular assessments serve as the baseline for a condominium association’s financial structure.
Additional assessments generally address financial needs that arise outside the ordinary budget, such as operating shortfalls or the repair and replacement of existing common elements. Unlike special assessments, they are still tied to maintaining the existing condition and function of the condominium rather than funding new or extraordinary projects. As a result, governing documents often permit boards to levy additional assessments without requiring a co-owner vote, depending on the bylaws’ specific authority.
Special assessments, by contrast, are typically reserved for more extraordinary expenditures, such as adding or improving common elements and constructing new amenities. Because these expenditures go beyond ordinary maintenance and preservation of existing property, they often fall outside the board’s authority under the additional assessment provisions. Accordingly, special assessments usually require the co-owners’ approval before they may be imposed, as specified in the condominium’s governing documents.
When Is a Special Assessment Enforceable?
Even when an assessment is necessary, failure to comply with notice, voting, or other procedural requirements in the governing documents may render it unenforceable or subject to legal challenge. Courts generally focus on whether the association followed the procedures set out in the master deed and bylaws when adopting the assessment, rather than the underlying necessity of the expense.
Michigan condominium law and governing documents control this framework. MCL 559.209 requires associations to maintain reserve funds for major repairs and replacement of common elements, but the master deed and bylaws govern the approval process for special assessments, including any voting or procedural requirements.
Additional vs. Special Assessment: Mayes v Colony Farms Condominium Association
In Mayes v Colony Farms Condominium Ass’n, unpublished per curiam of the Michigan Court of Appeals, issued October 15, 2002 (Docket No. 232916), co-owners challenged a $432,000 assessment for repairs and replacement of roofs, gutters, asphalt, garage siding, and other common elements, arguing it was a “special assessment” requiring a two-thirds co-owner vote under the bylaws. The Court of Appeals held the assessment was an “additional assessment” rather than a special assessment because it concerned maintenance and replacement of existing common elements, which the board was authorized to fund without a co-owner vote under the governing documents. The court emphasized that the bylaws control the scope of the association’s authority and distinguished special assessments as those intended for extraordinary expenses beyond ordinary maintenance, such as new amenities, including, but not limited to, the addition of new common elements, such as a pool, clubhouse, workout facility, or walking paths.
This allocation framework is further supported by MCL 559.169, which permits special assessments for costs tied to limited common elements or expenses benefiting fewer than all co-owners, as well as costs attributable to specific co-owners or occupants. All other common expenses are generally allocated according to the percentage of value or another method established in the master deed.
When Is a Co-Owner Vote Required? Sunnyside Resort Condominium Ass’n
Special assessments are typically used when expenses exceed the annual budget or available reserves. In the case discussed below, the association could have appropriately charged the special assessment had it obtained the required membership vote.
In Sunnyside Resort Condominium Ass’n, unpublished per curiam of the Michigan Court of Appeals, issued April 23, 2019 (Docket No. 341116), the Michigan Court of Appeals addressed a “supplemental assessment” imposed by the condominium association for tree removal and stump grinding. The court examined the condominium bylaws, which required that “special assessments” be approved by more than two-thirds of the co-owners. Although the association labeled the charge as “supplemental,” the court found that the record, including meeting minutes referring to it as a “special assessment,” showed it was intended to function as a special assessment. Because the association did not obtain the required membership vote, the court held the assessment was not properly levied under the bylaws and affirmed its removal from the amounts owed.
Although the court ultimately held that the tree removal and stump grinding assessment constituted a special assessment that required membership approval under the bylaws, the assessment’s underlying purpose was maintenance and preservation of the condominium property. The court noted that the association sought to impose an assessment to schedule the removal of trees and stumps before May 1, 2012, demonstrating that the board was attempting to address a property-related issue it believed required timely action. Nevertheless, even when acting in what the board perceives to be the condominium’s best interests, the board must comply with the procedural requirements set forth in the governing documents, including obtaining the required membership vote for special assessments.
Overall, board members owe a fiduciary duty to the condominium association and its co-owners, requiring them to act with good faith in administering the association’s affairs, including that all decisions and assessments comply with the governing documents and are not made for improper or self-interested purposes.
Does the Board Have Authority to Levy the Assessment?
Determining whether a board has authority requires careful review of the master deed and bylaws. Key sections include assessment provisions and any limitations on board authority.
A practical analysis asks:
- Does the expense involve maintenance or repair of existing common elements?
- Do the bylaws authorize the board to levy this type of assessment?
- Do the documents require co-owner approval regardless of necessity?
Procedural Requirements for Michigan Condominium Special Assessments
Even when a board has authority, procedural compliance is required. Most bylaws require advance notice of any meeting considering a special assessment, including the purpose, allocation method, and payment terms. Inadequate notice is a common source of legal challenges.
If approved, assessments must be allocated as required by the governing documents. Boards should also maintain clear documentation, including minutes and financial records. This is important because properly adopted assessments are enforceable and can become liens, while procedural defects may undermine or prevent collection.
Co-owner challenges are generally limited to issues of authority and failure to follow governing documents. Courts may apply the business judgment rule and defer to board decisions made in good faith, within authority, and reasonably related to the association’s interest.
Key Takeaways for Michigan Condominium Boards
Most disputes involving special assessments arise not because the underlying expense was unnecessary, but because the association failed to strictly follow its governing documents. The key to enforceable special assessments is clear authority under the master deed and bylaws, strict procedural compliance (including proper notice and approval requirements), and thorough documentation. When these requirements are met, special assessments are far more likely to be upheld, enforceable as liens, and successfully collected, significantly reducing litigation and financial exposure for the association.
If you need assistance determining when a special assessment may be levied or how your association’s bylaws and master deed govern the authority, notice requirements, and approval process, our experienced collection and condominium law attorneys can help your association ensure compliance, reduce risk, and enforce assessments properly. Contact Hirzel Law today to discuss your association’s needs.
