Adopt a written collection policy
Apply it the same way to every owner. Consistent enforcement is the board’s best protection against defenses and disputes.
A Board Member’s Checklist, Michigan Condominiums
Collecting Delinquent Assessments in Michigan: What Every Board Member Needs to Know
Schedule a Collections ConsultationWhy is Assessment Collection Important?
Assessments are how a community pays its bills. When an owner stops paying, the shortfall lands on every other owner, and the longer an account ages, the harder it is to collect. Michigan law gives associations strong tools to recover what is owed, but only if the board uses them promptly and consistently.
“Community associations rely on assessments to fund essential operations, maintain common elements, pay vendors, and preserve property values, making it critical to address delinquencies promptly and consistently. Involving an experienced community association attorney early allows the association to use the appropriate collection tools before the delinquency becomes a more serious and costly issue.”
The Collections Checklist
Confirm your governing documents authorize recovery of attorney’s fees and costs
The Michigan Condominium Act and most master deeds and bylaws allow the association to charge collection costs back to the delinquent owner (MCL 559.206), but the language in your documents matters. Amend if unclear or outdated.
Keep ledgers accurate and current
The balance owed should be easy to verify. Disputed or messy ledgers slow collection and weaken the association’s position.
Do not waive valid charges
Late fees, interest, fines, attorney’s fees, and costs are part of what keeps the burden on the delinquent owner rather than the paying owners.
Send a demand letter early
The attorney confirms the owner of record, mailing address, bankruptcy status, and balance, then sends a demand giving the owner a deadline to pay or dispute. Most accounts resolve at this stage.
Record a notice of lien
The association’s lien secures the debt against the unit under the Michigan Condominium Act (MCL 559.208), with notice required before foreclosure.
Foreclose or sue if the account does not resolve
Options include foreclosure by advertisement, judicial foreclosure, or a lawsuit for a money judgment. Your attorney will recommend the path that fits the owner’s situation and the association’s goals.
Retain an experienced community association attorney
Collections is deadline-driven and procedural. An attorney keeps the process compliant, consistent, and positioned to recover fees.
Key Deadlines, Do Not Miss
Michigan collection deadlines depend on the association’s governing documents, the notices already sent, the owner’s status, and the remedy the board chooses.
Do not rely on a general checklist to calculate a legal deadline. Have the association’s specific dates and documents reviewed by counsel.
Important deadlines may involve:
- Demand periods before the next collection step
- Notice requirements before foreclosing a recorded lien
- Redemption periods after a foreclosure sale
- Statutes of limitations on collection claims
- Proof-of-claim deadlines when an owner files bankruptcy
- Responses to owner disputes or payment proposals
Warning Signs in Your Receivables
- A delinquency list that grows quarter over quarter
- Accounts aging past 60–90 days with no demand sent, the debt is hardest to collect after the owner leaves
- Late fees or interest waived inconsistently, or side deals with individual owners
- Governing documents without clear fee-recovery language
- Ledgers the owner disputes or the manager cannot reconcile
- An owner in bankruptcy without counsel involved, the automatic stay can pause collection, and proof-of-claim deadlines run
- A first mortgage in foreclosure, a foreclosing lender usually eliminates most pre-existing assessment debt, and former owners rarely satisfy a judgment
- Paralegal time that does not meet the MCR 2.626 standards, it will not be recoverable (Farmington Square v Mitan)
A payment plan can be a good outcome. It should be documented, consistent with your policy, and approved by the board, not improvised account by account.
In Practice
30+ to 2
delinquent accounts referred per year, after the board began enforcing consistently
A condominium association came to us with a major delinquency problem. We initially received 6 accounts, but that quickly grew to over 30. After the association began addressing the delinquencies, timely referring them to our office, and handling them all consistently, assessment defaults significantly decreased and only a couple of accounts are referred to our office each year now.
Example based on an actual matter; details changed for privacy. Past results do not guarantee a similar outcome. Every matter depends on its particular facts, documents, claims, and applicable law.
What This Costs
Collections are primarily handled in flat-fee stages. These fees are in addition to costs such as postage, copies of documents from the county register of deeds, etc. Time spent outside of these flat fees is billed at the firm’s hourly rates.
| Collection step | Typical flat fee |
|---|---|
| Demand letter (Stage 1) | $400 |
| Notice of lien (Stage 2) | $350 |
| Final demand (optional, Stage 3) | $200 |
| Complaint / judicial foreclosure (Stage 4a) | $1,000 |
| Foreclosure by advertisement (Stage 4b) | $1,150 |
| Discharge of lien | $150 |
Who Ultimately Pays
Costs of collecting a delinquent account are generally chargeable back to the delinquent co-owner under your governing documents and the Michigan Condominium Act (MCL 559.206), so the association often recovers its legal fees rather than absorbing them.
Frequently Asked Questions
Do we need an attorney if the owner says they’ll pay?
A promise to pay is not a payment plan. Counsel documents the arrangement, keeps it consistent with your collection policy, and preserves the association’s lien rights if the owner stops paying again.
Can we recover our attorney’s fees and costs?
Often yes, if your master deed and bylaws authorize it (MCL 559.206(b)). Recovery isn’t automatic, so the language in your documents matters.
What if the owner files bankruptcy or the lender forecloses?
The automatic stay can pause collection, and a first-mortgage foreclosure usually eliminates most prior assessment debt. Both situations have deadlines, and counsel can protect what remains recoverable.
What should the board do if an account keeps aging?
Do not wait. Accounts are most collectible early, while the owner still has the unit and equity. Gather the ledger and governing documents and contact experienced community association counsel.
What will Hirzel Law need from our association?
- Your governing documents (declaration / master deed and bylaws)
- The delinquent owner’s ledger or account history
- Your written collection policy, if you have one
- The owner’s name and current mailing address
- Copies of any notices already sent
Do You Need an Attorney?
Board members are volunteers, but every month a delinquency goes unaddressed, the paying owners carry the cost. A prompt, consistent collection process can help the board:
- Recover the assessments, fees, and costs the documents allow
- Keep enforcement uniform and defensible
- Preserve lien rights and act inside the statutory windows
- Navigate bankruptcies and lender foreclosures without losing what’s recoverable
- Keep the burden off the owners who do pay
Before writing off a delinquent account or letting another month go by, schedule a Michigan collections review with Hirzel Law.
This material is provided for general informational purposes and is not legal advice. Legal rights and deadlines depend on the particular facts, governing documents, contracts, claims, and applicable law.