Michigan House Bill 4015 (2017): Bad News for Michigan Condominium Associations
On January 12, 2017, House Bill 4015 (2017) was introduced in the Michigan House of Representatives. The bill is a re-incarnation of former House Bill 5655 that had previously failed last year. Similar to House Bill 5655, House Bill 4015 is extremely problematic for Michigan Condominium Associations. House Bill 4015 would make the following significant changes to the Michigan Condominium Act:
1. Requiring Co-Owner Budget Approval. HB 4015 would require co-owners to approve a condominium association’s budget at a meeting with quorum by a majority vote in order to pay for essential services. No proxies could be utilized. No increase in the budget would be …show more content…
If a condominium association budget is never approved, the association cannot levy assessments to provide essential services. If essential services are not provided, HB 4015 would allow for co-owners to withhold assessments. This creates a vicious cycle that would ultimately bankrupt a condominium association. The current system allows for a co-owner to pay the assessments and later file a lawsuit if there is a dispute so that the condominium association may continue to function and all co-owners do not suffer merely because there is one or two disgruntled co-owners.
3. HB 4015 requires a majority approval of all co-owners, not just those eligible to vote. Why would a delinquent co-owner ever vote to raise assessments? Moreover, the board of directors and property management company are in the best position to determine the actual projected costs of operating the condominium association. Most co-owners will now take the time to educate themselves on the cost of running the condominium association before voting.
4. Administrative enforcement will create a huge burden on taxpayers to pay for new administrative costs. Condominium disputes are best handled as civil matters in front of a judge. Providing a free governmentally paid for administrator to every disgruntled co-owner will greatly increase the legal expenses of every condominium
On January 12, 2017, House Bill 4015 (2017) was introduced in the Michigan House of Representatives. The bill is a re-incarnation of former House Bill 5655 that had previously failed last year. Similar to House Bill 5655, House Bill 4015 is extremely problematic for Michigan Condominium Associations. House Bill 4015 would make the following significant changes to the Michigan Condominium Act:
1. Requiring Co-Owner Budget Approval. HB 4015 would require co-owners to approve a condominium association’s budget at a meeting with quorum by a majority vote in order to pay for essential services. No proxies could be utilized. No increase in the budget would be …show more content…
If a condominium association budget is never approved, the association cannot levy assessments to provide essential services. If essential services are not provided, HB 4015 would allow for co-owners to withhold assessments. This creates a vicious cycle that would ultimately bankrupt a condominium association. The current system allows for a co-owner to pay the assessments and later file a lawsuit if there is a dispute so that the condominium association may continue to function and all co-owners do not suffer merely because there is one or two disgruntled co-owners.
3. HB 4015 requires a majority approval of all co-owners, not just those eligible to vote. Why would a delinquent co-owner ever vote to raise assessments? Moreover, the board of directors and property management company are in the best position to determine the actual projected costs of operating the condominium association. Most co-owners will now take the time to educate themselves on the cost of running the condominium association before voting.
4. Administrative enforcement will create a huge burden on taxpayers to pay for new administrative costs. Condominium disputes are best handled as civil matters in front of a judge. Providing a free governmentally paid for administrator to every disgruntled co-owner will greatly increase the legal expenses of every condominium