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HOA Talk -Michigan: Condo Association Fees Upon Acquisition of Title

Posted By USFN, Wednesday, April 30, 2014
Updated: Monday, October 12, 2015

April 30, 2014

 

by Matthew B. Theunick
Trott & Trott, P.C.
USFN Member (Michigan)

In a “for publication” opinion, the appellate court affirmed a decision of the Oakland County Circuit Court regarding the entry of a judgment ordering the plaintiff to pay defendant $15,597.90 in condominium assessments and late fees for a condominium unit assessed between March 8, 2011, and April 30, 2013. [Wells Fargo Bank v. Country Place Condominium Association, No. 312733, __ Mich. App. __ (Mar. 18, 2014)].

For the legal practitioner, this opinion offers guidance as to an issue of first impression concerning when condominium assessments are attributable to a party after a foreclosure sale by advertisement. In reviewing this matter, the court ruled that MCL § 559.158 controls over MCL § 559.211 and, further, noted that a party is not liable for association fees incurred “prior to the acquisition of title.”

In elaborating upon what constitutes “acquisition of title” within the meaning of § 559.158, the court observed that the statute does not require that the purchaser have “absolute title,” just a “title,” and an equitable title is a form of title. As such, the court held that the plaintiff-purchaser at the March 8, 2011 sheriff’s sale acquired a “title” interest in the real property and was therefore responsible for condominium assessments from the date of the sheriff’s sale going forward, as opposed to the date of the expiration of the statutory redemption period when legal title would vest.

The consequences of this judicial decision are that foreclosure sale purchasers will now be responsible for condominium assessments during the statutory redemption period, wherein they do not yet have legal title to the real property or full, absolute title, but only an equitable title interest.

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Spring 2014 USFN Report

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