On July 8, 2024, Michigan’s governor signed House Bill 5028 into law. Section 5(1) of HB 5028 invalidates provisions in a “homeowners’ association agreement” that do any of the following:
(a) A provision that prohibits, or requires the approval of a homeowners’ association for, a member to replace, maintain, install, or operate an energy-saving improvement or modification.
(b) A provision that compels, or requires association approval for, a member to make auxiliary changes needed for the installation of an energy-saving improvement or modification.
The bill also requires homeowners’ associations to enact a solar energy policy before July 8, 2025.
In the realm of property law, legislative nuances can have profound implications. As it stands, this bill specifically mentions “homeowners’ association.” HB 5028 does not define the term “homeowners’ association.” Furthermore, HB 5028 makes no reference to “condominium association.” This omission raises a critical question: Does HB 5028 apply to condo associations?
To unpack this, we first need to understand the legislative context and definitions—or lack thereof—provided in HB 5028. As stated previously, the bill does not define “homeowners’ association,” a term that carries distinct legal connotations. Importantly, the Michigan legislature has demonstrated in other statutes that it understands and acknowledges the difference between a “homeowners’ association” and a “condominium association.”
Legislative Precedent and Statutory Construction
The Michigan legislature’s awareness of the distinction between these two types of associations is evident in several statutes. For instance:
- MCL 450.2304 explicitly references both homeowners’ and condominium associations.
- MCL 565.865 explicitly references both homeowners’ and condominium associations.
- MCL 565.866 explicitly references homeowners’ association boards of directors and condominium association boards of directors and differentiates the two.
- MCL 565.868 explicitly references homeowners’ association boards of directors and condominium association boards of directors and differentiates the two.
- MCL 565.881 explicitly references both homeowners’ and condominium associations.
- MCL 565.891 explicitly references both homeowners’ and condominium associations.
- MCL 600.2807 also makes a clear distinction between the two.
The consistent separation of these terms in various statutes underscores the legislature’s intentionality. When the legislature enacts laws, it is presumed to understand the rules of statutory construction. This presumption includes the awareness that the use or omission of specific language is intentional and significant. The omission of “condominium association” in HB 5028 is thus not a trivial oversight but a deliberate legislative choice.
Legal Interpretation and Case Law
Legal interpretation principles further support this view. As established in Bronson Methodist Hosp v Allstate Ins Co, 286 Mich App 219, 228; 779 NW2d 304 (2009), “[w]hen the Legislature enacts laws, it is presumed to know the rules of statutory construction and therefore its use or omission of language is generally presumed to be intentional.” This principle indicates that the absence of “condominium association” in HB 5028 suggests that the bill is not intended to apply to such entities.
Furthermore, the ruling in Bronson underscores that undefined words with peculiar and appropriate meanings in the law should be construed according to those meanings. In legal contexts, “homeowners’ association” and “condominium association” have distinct definitions and roles. A homeowners’ association typically manages common areas and enforces rules for a traditional subdivision of single-family homes, while a condominium association governs, well, a condominium, which may consist of units with shared floors/walls/roofs, etc. or units with individual homes.[1]
Practical Implications and Potential Litigation
The practical implications of this legislative distinction are significant. If HB 5028 were to apply only to homeowners’ associations, condominium associations would not be subject to its provisions. This could impact everything from governance practices to financial regulations and dispute resolutions within condo communities.
Given the potential for varied interpretations, it is almost certain that litigation will arise to clarify the bill’s scope. Courts will likely be asked to interpret the legislative intent behind HB 5028 and determine whether its provisions extend to condominium associations despite the omission of explicit language.
Conclusion
In conclusion, the omission of “condominium association” in HB 5028 is a clear indicator of the bill’s limited scope. The Michigan legislature’s demonstrated understanding of the distinction between homeowners’ and condominium associations, coupled with established principles of statutory construction, strongly suggests that HB 5028 applies exclusively to homeowners’ associations an does not apply to condominium associations. This interpretation is poised to be a contentious issue, likely leading to significant legal challenges as stakeholders seek judicial clarification.
However, it is never a bad idea for a condominium association to be proactive. There is no doubt that your condominium community will face issues involving solar energy system installations or energy improvement modifications.
If your homeowners’ association needs assistance developing its policies to comply with HB 5018 or if your condominium association wants to take a proactive approach with solar energy system installations or energy improvement modifications, Tilchin & Hall, P.C. can help. Please call us at (248) 349-6203 or email us using the form below.
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[1] For a more in-depth explanation between condominiums and traditional subdivisions, please check out our blog from November 28, 2022.
