Amending articles of incorporation, master deeds and condominium bylaws.
Michigan Condo Lawyers | Condo Association Attorneys
Reviewing and Updating Articles of Incorporation, Master Deeds, and Bylaws
Michigan condominium associations must regularly review and update their articles of incorporation, master deed, and bylaws to ensure they are compliant with changes in federal and state laws. These governing documents should adequately address co-owners’ needs. Let us help with this complicated task.
When Should You Update Condo Association Governing Documents?
As time passes, laws change and so does technology. And for newly formed condo associations, sometimes you don’t know what you don’t know. Here are common signs that your condominium association’s articles of incorporation, master deed, and bylaws need to be updated.
1. The articles of incorporation are dated prior to January 15, 2015.
In 2015 and 2018, major revisions were made to the Michigan Nonprofit Corporation Act, MCL 450.2101, et. seq., Act 162 of 1982.
A few examples of the changes include:
- participation in meetings by electronic means
- voting by electronic means
- additional limitations on director and officer liability
- new requirements for the inspection of association records
- the ability to create nonexecutive committees.
The articles of incorporation should also permit a Michigan condominium association to act by voting outside to accommodate the busy lifestyles of co-owners in today’s society.
We recommend reviewing your condominium association’s articles of incorporation to determine if they need updating. You can search for a copy of your Michigan condominium association’s articles of incorporation here.
2. The master deed and bylaws have not been updated to account for changes in the Michigan Condominium Act.
The Michigan Condominium Act, MCL 559.101, et. seq. was originally enacted in 1978. Any master deed or bylaws drafted prior to 1978 should be immediately reviewed and amended to reflect numerous changes in Michigan and federal law.
Moreover, in 2001 and 2002, significant amendments were made to the Michigan Condominium Act. It was updated in 2014 as well. If a condominium association’s master deed and bylaws were not amended to reflect the changes to the Michigan Condominium Act, then there is a strong likelihood that the master deed and bylaws need to be updated.
3. The master deed and bylaws were written by the developer’s attorney.
Condominium developers often draft a master deed and condominium bylaws to protect the interests of the developer. A condominium developer’s goals are primarily to sell units and complete the project. The developer often is not concerned about long-range planning and operations of a condominium association.
After control of a condominium association’s board of directors is transferred from the developer to the co-owners, it is wise for a condominium association to amend their governing documents. The amendments not only make the documents more user friendly by removing obsolete provisions, but they also ensure that a successor developer will not attempt to take advantage of certain developer rights later in the lifecycle of a project.
Developers also commonly include “anti-lawsuit” provisions in condominium bylaws to prevent themselves from being sued. In some cases, these provisions are so broad that they later prevent condominium associations from enforcing the condominium bylaws or collecting assessments without co-owner approval, which is often difficult to obtain for practical reasons.
Additionally, at the completion of the condominium project, many developers fail to record a consolidating master deed and leave the condominium project with numerous amendments. Co-owners and condominium association board members often become frustrated searching through the various amendments for answers to simple questions.
Many condominium associations will file a restated master deed and condominium bylaws that combines numerous amendments into a single document for ease of use.
4. The master deed and bylaws do not address current issues.
Master deeds and condominium bylaws can become outdated based on changes in technology or the law. Times are changing and so should your condominium documents.
Given that the law evolves much slower than technology and various other trends, condominium associations should take a proactive approach to anticipate potential issues. A reactive approach will often result in litigation if potential problems are not addressed in the condominium bylaws before they arise.
Here are examples of common issues not addressed in many condominium bylaws:
- Electric Vehicle Charging Stations
- Electronic Voting
- HAM Radio
- Insurance Coverage
- Medical Marijuana
- Rental Caps
- Remote Meeting Participation
- Short-Term Rentals (Airbnb)
- Social Media
- Smart Phone Use
- Smoking Bans
- Solar Panels
- Website Use
- Wi-Fi Use
5. The master deed/bylaws/condominium subdivision plan contain conflicting provisions.
Human error in drafting condominium documents can result in the documents containing conflicting provisions. Ambiguous drafting often leads to expensive litigation. Condominium documents that contain conflicts in the master deed, condominium bylaws, or condominium subdivision plan should be amended immediately to avoid potential litigation.
6. The condominium bylaws do not contain adequate enforcement mechanisms.
All condominium bylaws should allow for the condominium association to recover attorney’s fees and costs as allowed by MCL 559.206 of the Michigan Condominium Act. In addition, condominium bylaws should allow for the assessments of damages—including attorney’s fees and costs—back to a co-owner who has violated the condominium documents.
Additionally, not all condominium bylaws permit the condominium association to impose fines for violations of the condominium documents. Condominium associations should amend their documents to ensure that they have adequate enforcement provisions.
7. The master deed/bylaws/condominium subdivision plan are unclear.
At Hirzel Law, PLC, we believe that condominium documents should be drafted in plain English to the extent possible. Many condominium documents are drafted by attorneys and for attorneys, which make them incomprehensible to condominium association boards and co-owners.
If a condominium association is constantly having battles over the interpretation of language contained in condominium documents, it may be time to amend the documents to clarify specific issues.
Common Element Modification Agreements
Sometimes co-owners request permission to make modifications to common elements or units. For instance, they may want to install an electric vehicle charging station in a commons area. If condominium association boards approve such modifications, it is best practice to enter into a written modification agreement that sets forth the terms and conditions of the approval that can be recorded in the register of deeds.
From the perspective of a co-owner, this is important in order to avoid a new board coming along many years later and attempting to pursue a co-owner for a bylaw violation.
From the perspective of the condominium association’s board of directors, this is important as the condominium association does not want to take on any additional responsibility or risk that results from the modification.
The condominium association will want to make clear that the co-owner is responsible for the cost of construction, hiring a licensed contractor, maintaining the modification, repairing the modification, insuring the modification, and indemnifying the condominium association if it causes damage.
Do Your Documents Pass or Fail?
We offer a Condominium Report Card that outlines the strengths and weaknesses of your condominium association’s governing documents. Our written review also offers suggestions for improvement. The Condominium Report Card is included in our Premium Service Plan.
Improving Documents Can Help Prevent Lawsuits
With our vast experience in condominium association governing documents, we are well equipped to amend and modify these documents. Our goal is to make the language as clear as possible to avoid ambiguities that lead to unnecessary litigation. We also seek to update documents so they comply with the most current laws, such as the Condominium Act.
One thing that sets Hirzel Law PLC apart is that we have bi-annual meetings will all our attorneys to review documents. We are constantly updating governing documents based on new cases, changes in the law, and new issues we spot in our practice.
The Right Michigan Condo Lawyers for Your Needs
Clients come to us with huge, messy problems because they know we have a great track record of resolving complex issues. We are known for our ingenuity, responsiveness, and peer-recognized legal prowess. We pride ourselves on educating clients and providing the highest quality legal representation.
Contact Our Michigan Condo Lawyers for Help with Condo Association Governing Documents
When you want top-notch service, quick response times, and cutting-edge thinking, contact Hirzel Law PLC online or call 248-478-1880. Our team of award-winning condo lawyers is ready and willing to help with your condominium law issues.
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