Aristotle said, “[k]nowing yourself is the beginning of all wisdom.” Before you buy a condominium or a home in a subdivision with a homeowners association (HOA) you had better know yourself. Living in communities governed by condominium associations or HOAs can come with what some people see as benefits and others see as downsides. It all depends on who you are and what type of community you are buying into.
In regard to condominiums, there are generally two types. The first type is what people think of as the traditional condominium. Owners of the units share common walls, floors, and/or ceilings with the neighbors in adjacent units. The second type is what is known as a “site condominium.” Site condominiums look like traditional subdivisions, but instead of “lots,” there are “units” and you own what is inside your “unit,” which includes the home. Both a site condominium and traditional condominium are governed by the Michigan Condominium Act, MCL 559.101, et seq., and the condominium documents (Master Deed, Condominium Bylaws, etc.). When you buy a condominium, you are automatically agreeing to abide by the provisions and restrictions set forth in Condominium Act and the condominium documents. There is no opting out.*
Traditional subdivisions are many times (but not always) governed by a HOA. HOAs are similar to condominium associations, but they are not governed by the Condominium Act and instead of a Master Deed and Condominium Bylaws, the lot owners property rights are subject to a Declaration of Covenants & Restrictions (“Declaration”), the HOA’s Articles of Incorporation, and possibly the HOA’s Bylaws (if any exist). If you buy a home in a subdivision and your deed references the Declaration or “restrictions of record,” then you are automatically agreeing to abide by the provisions and restrictions set forth in the HOAs governing documents. There is no opting out.
Many people buy the traditional type of condominium because they want to live somewhere that they are not responsible for doing things like mowing the lawn, shoveling snow, keeping up landscaping, fixing the roof, etc. Many people buy both traditional and site condominiums because they come with amenities like pools, clubhouses, tennis courts, playgrounds, and fitness centers. Many people buy into subdivisions for those same amenities.
What many people do not consider is that all of those things come with a price. Both a literal price in the form of having to pay condominium or HOA assessments/dues and a figurative price in the form of giving up some freedoms such as to what you can and cannot due with the property you own. If you are not a rule follower, are a “control freak,” or you have been told you march to the beat of your own drum, living in a condominium or a subdivision with an HOA may not be right for you. If it is not right for you, there is nothing wrong with that. But, you need to determine that before you buy a property, because once you buy, you’re stuck until you sell.
Condominiums tend to have a large list of rules that you must abide by. This can include little things like what color your front door can be, what window coverings you can have, what pets you own and how many, and even what type of flowers you can have in a flower pot on the front porch (if you are even allowed to have a flower pot). In a traditional condominium, you also cannot make changes to certain things that are “inside” your unit, like walls, without getting approval from the condominium association. Site condominiums also have restrictions about what the outside of your home can look like. For instance, the condominium association can control the color of brick, siding, or roofing on your home, the type of landscaping, the number of trees, fencing, and decking, etc. HOAs can have similar restrictions to condominiums, but are generally slightly less stringent.
If you do not follow the rules, you may be issued fines, your property might end up with a lien recorded against it if you do not pay the fines, and/or you could end up getting sued to make you come into compliance.
Another thing to consider is that condominium associations and HOAs have a Board of Directors tasked with enforcing the restrictions. The Board is elected by the owners at the annual meeting. That means that who is on the Board will change over time. When you move into a community, the Board in place may be lackadaisical in enforcing restrictions. However, all it takes is a shakeup in leadership for that to change. Another Board may be stringent in enforcing the restrictions.
There are many things to consider before purchasing a condominium unit or a home in a subdivision governed by an HOA. An attorney experience in this area of law can help you understand the possible pitfalls in purchasing and owning these types of properties. You should have an experienced attorney review all of the documents governing your property prior to making your purchase.
All of the attorneys at Tilchin & Hall, P.C. are knowledgeable and experienced in the laws associated with condominiums and subdivisions in Michigan and we are available to advise you. Please reach out to us at (248) 349-6203 or email us using the form below.
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* To learn more about condominium basics, please head over to our previous blogs Condo Living 101: Basic Things You Should Know, Condo Living 201: Beyond the Basics, and Condo Living 301: Meetings and the Board of Directors