Co-owners desire to rent units for a variety of reasons. By way of example, many co-owners desire to rent condominium units as they are underwater on the mortgage and cannot sell the unit, they inherited the unit, their job was relocated, the co-owner was required to move for health reasons, or the unit was purchased with the intent that it would be a rental property. No matter the reason for the rental of a unit, condominium associations frequently have to deal with renters failing to comply with the condominium bylaws. Fortunately, the Michigan Condominium Act, MCL 559.101 et seq., provides remedies to a Michigan condominium association that is forced to deal with unruly renters, whether they are short term renters found via AirBnB or long term renters that occupy the unit for an extended period of time.
MCL 559.212(2) provides as follows:
A co-owner, including the developer, desiring to rent or lease a condominium unit shall disclose that fact in writing to the association of co-owners at least 10 days before presenting a lease or otherwise agreeing to grant possession of a condominium unit to potential lessees or occupants and, at the same time, shall supply the association of co-owners with a copy of the exact lease for its review for its compliance with the condominium documents. The co-owner or developer shall also provide the association of co-owners with a copy of the executed lease. If no lease is to be used, then the co-owner or developer shall supply the association of co-owners with the name and address of the lessees or occupants, along with the rental amount and due dates of any rental or compensation payable to a co-owner or developer, the due dates of that rental and compensation, and the term of the proposed arrangement.
Accordingly, any rental of a unit shall be disclosed to the condominium association and any lease of the unit must be provided to the condominium association. However, if there is no written lease, the co-owner is required to notify the condominium association of the name and address of the occupants, rental amount and due dates that rent will be paid. Failure to comply with MCL 559.212 by a co-owner is a violation of the Michigan Condominium Act, and almost always a violation of the condominium bylaws, which typically contain provisions that mirror MCL 559.212(2). As such, if the association discovers that a unit is being rented, and it has not been notified of the rental, it should send a bylaw violation letter to the co-owner, advising them of the violation. If the co-owner still does not provide comply with MCL 559.212, the association can potentially fine the co-owner or initiate court proceedings to obtain compliance. Accordingly, in the event that the condominium association has an issue with a renter, the first step is to determine whether they are properly in the unit in the first place. In some instances, condominium bylaws impose rental caps and renting without notifying the association may also run afoul of a rental cap contained in the condominium bylaws.
Assuming that the tenant is properly in the unit, MCL 559.212(3) requires that all “tenants or nonco-owner occupants shall comply with all of the conditions of the condominium documents of the condominium project….” To the extent that a written lease or rental agreement exists, the or rental agreement must also state that a tenant is required to comply with the condominium documents.
If a tenant or nonco-owner occupant violates the condominium documents, MCL 559.212(4) allows for the condominium association to take the following action:
(a) The association of co-owners shall notify the co-owner by certified mail, advising of the alleged violation by the tenant. The co-owner shall have 15 days after receipt of the notice to investigate and correct the alleged breach by the tenant or advise the association of co-owners that a violation has not occurred.
(b) If after 15 days the association of co-owners believes that the alleged breach is not cured or may be repeated, it may institute on its behalf or derivatively by the co-owners on behalf of the association of co-owners, if it is under the control of the developer, an action for both eviction against the tenant or nonco-owner occupant and, simultaneously, for money damages against the co-owner and tenant or nonco-owner occupant for breach of the conditions of the condominium documents. The relief provided for in this section may be by summary proceeding. The association of co-owners may hold both the tenant and the co-owner liable for any damages to the general common elements caused by the co-owner or tenant in connection with the condominium unit or condominium project.
Accordingly, MCL 559.212(4) allows for the condominium association to pursue eviction proceedings as well as a claim for monetary damages against a tenant that violates the condominium documents. Additionally, the condominium association would have its traditional remedies available for fines, injunctive relief or monetary damages against a co-owner for allowing a violation of the condominium documents as provided in MCL 559.206. As such, while many condominium associations feel powerless to stop co-owners from renting without notifying the association, or enforcing the condominium documents against renters, the Michigan Condominium Act provides condominium associations with effective remedies to deal with difficult tenants.
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 has been a Michigan Super Lawyer’s Rising Star in Real Estate Law from 2013-2018, an award given to only 2.5% of the attorneys in Michigan each year. Mr. Hirzel was named an Up & Coming Lawyer by Michigan Lawyer’s Weekly in 2015, an award given to only 30 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 firstname.lastname@example.org.