Tilchin & Hall PC

The Re-Birth of the Michigan Consumer Protection Act Claims Against Residential Builders

2026-09-17T14:46:27Z

For Michigan homeowners dealing with defective construction, delays, unfinished work, or misleading statements from a residential builder, a recent Michigan Supreme Court decision may open an important additional avenue for relief. In Attorney General v Eli Lilly & Co., the Michigan Supreme Court overturned two longstanding decisions that had significantly limited the reach of the Michigan Consumer Protection Act (“MCPA”) against licensed and regulated businesses. One of those decisions, Liss v Lewiston-Richards, Inc, 478 Mich 203; 732 NW2d 514 (2007), involved a residential home builder. The overruling of Liss could have a direct impact on homeowners' potential claims against residential builders in Michigan. The problem with the old rule The MCPA prohibits unfair, unconscionable, and deceptive methods, acts, or practices in trade or commerce. The statute also contains an exemption for “[a] transaction or conduct specifically authorized” under laws administered by a state or federal regulatory authority. MCL 445.904(1)(a). For years, however, Michigan courts interpreted that exemption broadly. In Smith v Globe Life Ins Co, 460 Mich 446; 597 NW2d 28 (1999), the Michigan Supreme Court held that the relevant question was not whether the specific misconduct alleged by the consumer was authorized by law. Instead, the court asked whether the general transaction was authorized by law. That interpretation became particularly important in Liss, a case involving the construction of a residential home. The homeowners alleged that the builder failed to complete construction on time and that the construction was not performed in a workmanlike manner. The homeowners sought relief under the MCPA. The Michigan Supreme Court nevertheless held that the MCPA exemption applied to licensed residential builders because the activities defining residential home building were activities that Michigan law permitted licensed residential builders to perform. Under Liss, claims relating to the general transaction of residential home building were therefore exempt from the MCPA. In practical terms, the builder's license could become a significant barrier to a homeowner pursuing a consumer-protection claim. How the Michigan Supreme Court changed that rule In AG v Eli Lilly, the Supreme Court expressly overruled Smith and Liss. The Court held that when determining whether the MCPA exemption applies, courts must examine whether the specific transaction or conduct at issue is specifically authorized by law. It is not enough that the defendant operates in a regulated industry or is licensed to conduct its business generally. That distinction is critical for residential construction disputes. A residential builder may be licensed to construct homes. But that does not necessarily mean Michigan law specifically authorizes the builder to:

make false representations to a homeowner;
misrepresent the quality or characteristics of construction materials;
misrepresent what work will be performed;
engage in deceptive sales practices;
conceal known construction problems;
misrepresent the status or completion of construction;
charge consumers for work that was not performed; or
otherwise engage in conduct prohibited by the MCPA.

The question after AG v Eli Lilly is whether the particular conduct alleged by the homeowner is specifically authorized by law. It is not simply whether the builder is licensed or the general activity of home construction is regulated. The Supreme Court explained that the prior decisions had effectively transformed a narrow statutory exemption into broad immunity for regulated businesses. The Court specifically identified residential home builders among the industries that had benefited from this broader interpretation. What does this mean for homeowners? The decision does not mean that every homeowner with a construction dispute automatically has an MCPA claim. Homeowners still must establish the elements of whatever statutory or common law claims they assert, and the applicability of the MCPA will depend on the particular facts. But the decision changes an important threshold question. Before AG v Eli Lilly, a licensed residential builder could argue that the homeowner's claim was barred because residential construction was a regulated activity and therefore fell within the MCPA exemption under Liss. That argument is no longer sufficient merely because the builder is licensed. Instead, the analysis must focus on the specific transaction or conduct challenged by the homeowner. The Supreme Court emphasized that MCL 445.904(1)(a) is a narrow exemption and that the statutory language requires the transaction or conduct itself to be specifically authorized. Why the distinction matters in a construction lawsuit Consider a homeowner who purchases a newly constructed home and later discovers significant defects. The homeowner may have traditional claims for breach of contract, breach of warranty, negligence, or other construction-related causes of action, depending on the circumstances. But suppose the evidence also shows that the builder made specific representations about the home's construction, materials, workmanship, energy efficiency, completion status, or compliance with contractual specifications that were false or misleading. Before AG v Eli Lilly, the builder might have relied on Liss to argue that the entire transaction was exempt from the MCPA because the builder was licensed to construct residential homes. That categorical argument has now been rejected. The homeowner's attorney can instead focus on the precise conduct at issue and ask whether Michigan law specifically authorized that conduct. That could make the MCPA an important additional component of a homeowner's case when the facts support a claim under the statute. The MCPA provides for private consumer actions, in addition to enforcement mechanisms available to the Attorney General. What homeowners should do if they have a construction dispute Because AG v Eli Lilly is so recent, Michigan courts will have to apply its new interpretation to particular factual circumstances. Homeowners should therefore have their claims evaluated based on the specific conduct of the builder rather than simply labeling a dispute as a “construction defect” case. If you believe your builder breached the construction contract, performed defective work, failed to complete the project as promised, or made misleading representations, make sure to preserve your contract, change orders, photographs, inspection reports, emails, text messages, invoices, warranties, advertisements, and communications with the builder. Those documents may help establish not only what the builder promised to do, but also what the builder actually did. The bottom line AG v Eli Lilly does not guarantee an MCPA claim for every homeowner. But by overruling Liss, the Michigan Supreme Court has removed a significant legal obstacle that previously prevented homeowners from pursuing MCPA claims against licensed residential builders. For homeowners facing serious construction problems, that change makes it especially important to have the builder's specific representations and conduct examined before deciding which legal claims may be available. We can help If you are homeowner that has issues with your construction project, we can help. Please call us at (248) 349-6203 or email us using the form below. Disclaimer: This Blog/Web Site is made available by the lawyer or law firm publisher for educational purposes only as well as to give you general information and a general understanding of the law, not to provide specific legal advice. By using this Blog, you understand that there is no attorney client relationship between you and lawyer, law firm, and the Blog/Web Site publisher. The Blog/Web Site should not be used as a substitute for competent legal advice from a licensed professional attorney in your state.

The Importance of Written Agreements for Co-Owned Property

2026-08-21T19:29:46Z

Owning property with others, whether family members, friends, or business partners, can be a practical way to acquire real estate. But without a clear agreement in place, co-ownership can quickly become complicated, contentious, and costly. In Michigan, where the law recognizes several forms of shared ownership, putting your expectations in writing is one of the smartest steps you can take to protect your investment and preserve your relationships. Understanding Co-Ownership in Michigan Michigan law recognizes three main forms of property co-ownership: tenancy in common, joint tenancy, and tenancy by the entirety.[1] Each carries different rights and obligations.

Tenants in common each own a separate fractional share of the property and can sell, mortgage, or pass their share to heirs independently.
Joint tenants hold property with rights of survivorship, meaning that when one owner dies, their interest automatically passes to the surviving owner(s)—not to their heirs.
Tenancy by the entirety is available only to married couples and also includes survivorship rights.

While these default legal structures provide a framework, they don't answer the practical questions that arise in day-to-day co-ownership: Who pays for repairs? Who can live in the property? What happens if one owner wants to sell and the other doesn't? The Risks of Operating Without an Agreement Without a written agreement, co-owners are left to navigate disputes using only the default rules of Michigan law. Those default rules may not align with anyone's expectations.

Partition actions are a common trouble spot. Under Michigan law, any co-owner generally has the right to force a partition of the property. If the property cannot be physically divided without prejudice to the owners, the court may order it sold and the proceeds divided. This means one co-owner can compel a sale even if the others want to keep the property, which is a harsh outcome if you've invested time and money into a shared home or rental property.

There is an exception: co-owners can contract away their right to partition. Courts have found that when parties take property as joint tenants "with right of survivorship," that language may constitute an implied contract not to partition.[2] But relying on implied agreements is risky. A clear, written co-ownership agreement eliminates ambiguity.

Financial disputes are another major risk. Who pays the mortgage, property taxes, insurance, and utilities? What happens if one owner covers more than their share? Michigan law allows co-owners to seek contribution from each other for common expenses, but litigating these issues is expensive and time-consuming. An agreement can spell out each owner's financial responsibilities from the start.
Use and occupancy conflicts can also fracture co-ownership relationships. Does one owner have the right to live in the property while others do not? Can one owner rent out their portion? Without an agreement, disputes over exclusive use can lead to claims for rent or an accounting.

What a Co-Ownership Agreement Should Include A well-drafted co-ownership agreement functions as a roadmap, addressing potential issues before they become disputes. Here are the essential components:

Ownership Shares and Contributions. Clearly state each owner's percentage interest in the property and their initial financial contributions. Specify how ongoing costs—mortgage payments, taxes, insurance, maintenance, and repairs—will be divided. Address what happens if one owner fails to pay their share.
Use and Occupancy Rights. Define who has the right to occupy the property and under what circumstances. If one owner will live in the property while others will not, consider requiring that owner to pay fair rental value or increased share of expenses. Address whether owners can rent out the property or their individual interests.
Decision-Making Authority. Establish how decisions will be made. What requires unanimous consent (e.g., selling the property, major renovations) versus majority vote (e.g., routine repairs, tenant selection)? Clarify who will manage day-to-day operations if the property is rented.
Restrictions on Transfer. Decide whether owners can freely sell or mortgage their interests, or whether other co-owners have a right of first refusal. Include any required notice periods and procedures for buyouts.
Dispute Resolution. Include a mechanism for resolving disagreements, such as mediation, arbitration, or other alternatives to litigation. Specify whether partition rights are waived and under what conditions a forced sale might be permitted.
Exit Strategy. Plan for the future. What happens if one owner wants out? Include buyout procedures, valuation methods, and timelines. Address what happens upon death, divorce, or bankruptcy of an owner.
Improvements and Repairs. Clarify who can authorize improvements, how costs will be shared, and whether improving owners are entitled to reimbursement or increased equity. Distinguish between necessary repairs and elective upgrades.
Accounting and Records. Require transparent record-keeping for all income and expenses related to the property. Michigan courts have the authority to order accountings for rents, profits, and proceeds in partition proceeding, but a proactive approach is far less costly.

Conclusion Co-ownership can be rewarding, but it requires clear communication and careful planning. A written co-ownership agreement tailored to Michigan law protects everyone's interests, reduces the risk of costly litigation, and preserves relationships. Whether you're buying a vacation home with siblings, investing in rental property with a friend, or co-purchasing a primary residence, take the time to put your agreement in writing. Your future self, and your co-owners, will thank you. We Can Help If you are purchasing a property with someone else and would like a co-ownership agreement, we can help. We can also help if you are in a situation where lack of a co-ownership agreement finds you in a situation where filing a partition action is necessary. Please call us at (248) 349-6203 or email us using the form below. Disclaimer: This Blog/Web Site is made available by the lawyer or law firm publisher for educational purposes only as well as to give you general information and a general understanding of the law, not to provide specific legal advice. By using this Blog, you understand that there is no attorney client relationship between you and lawyer, law firm, and the Blog/Web Site publisher. The Blog/Web Site should not be used as a substitute for competent legal advice from a licensed professional attorney in your state. [1] There is also “joint tenancy with full rights of survivorship,” but that is an entirely different beast and please do not title your co-owned property using those words of conveyance! [2] See footnote 1. Please do not use those words!

Action Without Meeting in Community Associations

2026-09-17T13:16:39Z

Most actions by community associations require a vote, either by the Board of Directors, or by the full membership. The basic forum for casting votes is at a meeting: an annual meeting of the association, a special meeting of the association called for a limited purpose, or a regular or special meeting of the Board. Special meetings may pose logistical or expense challenges, and some items cannot wait for the next regular meeting, particularly if it is an annual meeting several months off. Therefore, the Nonprofit Corporation Act authorizes Action Without Meeting. Corporate Action Without Meeting – Usually Amendments and Loans The Nonprofit Corporation Act allows members to take any action they would be required or permitted to take at an annual or special meeting, without a meeting, by written consent or electronic transmission (such as email) under MCL 450.2407, by ballot under MCL 450.2408, or at polling places under MCL 450.2409. Associations most frequently seek consent under MCL 450.2407 when an action requires approval by a set percentage of the full membership – not just a majority of quorum present at a meeting. The first example is amendments to Condominium Documents or Homeowners Association Restrictions. For Condominiums, the Condominium Act, MCL 559.190, requires approval by the affirmative vote of 2/3 of co-owners, defined as 2/3 of all co-owners entitled to vote. For Homeowners Associations, the percentage to amend will be fixed in its Declaration of Covenants, Conditions, and Restrictions. Again, the requirement will often be 60%, 2/3, or 80% of all homeowners. The second example is loans. Most association documents allow the Board to borrow money an “issue evidence of indebtedness” (promissory note, mortgage, lien), but only if at least 60% of the membership approves the loan – and the resulting assessment (dues) increase to fund the repayment. Because loans are often for urgent replacement needs, they often cannot wait for the next annual meeting, and therefore action without meeting is an expeditious option. Action by ballot under MCL 450.2408 is less common for community associations. Most governing documents, when addressing action without meeting, specify that it is for any action that could be taken at a meeting, except election or removal of Directors. The rationale is that candidates for office should speak in favor of their election and be available for questioning by the members. Conversely, sitting Directors proposed for removal must have the option to speak in their own defense. Action at polling places under MCL 450.2409 can provide welcome flexibility. Many Associations with clubhouses or offices have existing drop boxes for payments or maintenance forms that can easily accept consents or ballots. Associations without these facilities have the option to accept consents or ballots at other centralized locations, such as adjacent to CBU mailbox stations. Board Action Without Meeting – Frequently Used, and Often Incorrectly Because community association Boards are volunteers, many Directors will be busy with their day jobs. For this reason, most Boards conduct a lot of business by email, but often without observing the necessary formalities. The Nonprofit Corporation Act, MCL 450.2525, states: Unless prohibited by the articles of incorporation or bylaws, action required or permitted to be taken under authorization voted at a meeting of the board or a committee of the board may be taken without a meeting if, before or after the action, all members of the board then in office or of the committee consent to the action in writing or by electronic transmission. The written consents shall be filed with the minutes of the proceedings of the board or committee. The consent has the same effect as a vote of the board or committee for all purposes. The two critical factors: unanimity and inclusion in minutes. First, when the Board votes by email, all Directors must respond, and the vote must be unanimous. A five-member Board with four approvals does not satisfy the statute. A 3-2 vote does not satisfy the statute. Incomplete or contested votes must be taken at a meeting. Failure to follow this procedure means that any member has standing to challenge the validity of the Board action. Second, the written consents for any action without meeting (often a group email chain) must be included in the minutes of the next meeting. Any approvals existing only in the individual Directors’ emails may be lost when the Board turns over at the next election. Therefore, it is important to memorialize action without meeting approvals in the formal records of the Board. We Can Help If your condominium association or homeowners association has questions about action without meeting, or other topics in community association administration, then Tilchin & Hall, P.C., can help. Please call us at (248) 349-6203 or email us using the form below. Disclaimer: This Blog/Web Site is made available by the lawyer or law firm publisher for educational purposes only as well as to give you general information and a general understanding of the law, not to provide specific legal advice. By using this Blog, you understand that there is no attorney client relationship between you and lawyer, law firm, and the Blog/Web Site publisher. The Blog/Web Site should not be used as a substitute for competent legal advice from a licensed professional attorney in your state.

How to Protect Yourself from Wire Fraud in Michigan Real Estate Closings

2026-05-22T12:28:49Z

Real estate transactions have become increasingly digital over the last several years. Purchase agreements are signed electronically, documents are exchanged through email and cloud-based systems, and closing funds are often wired between financial institutions within hours. While these technological changes have made closings faster and more convenient, they have also created new opportunities for cybercriminals. Wire fraud in real estate transactions is becoming a serious problem across Michigan and throughout the country. Buyers, sellers, title companies, attorneys, lenders, and real estate agents are all potential targets. In many cases, a single fraudulent email sent at the right moment can result in the loss of tens or even hundreds of thousands of dollars. Unfortunately, these scams are often sophisticated enough to fool even careful people. How Wire Fraud in Real Estate Transactions Usually Happen Most real estate wire fraud schemes begin with a compromised email account. A cybercriminal may gain access to the email account of a buyer, seller, real estate agent, attorney, or title company employee through phishing emails, weak passwords, malware, or data breaches. Once inside the account, the fraudster often quietly monitors communications for days or weeks. They study the transaction, identify who is involved, and wait until the closing date approaches. Then, shortly before closing, the criminal sends an email containing “updated” or “corrected” wire instructions. The message may appear completely legitimate. Sometimes it comes directly from the real email account of a trusted party. Other times, the scammer creates a nearly identical email address that differs by only one letter or symbol. The buyer receives the instructions, assumes they are legitimate, and wires the closing funds to the fraudulent account. By the time anyone realizes what happened, the money may already have been transferred through multiple accounts or moved overseas, making recovery extremely difficult. Why Do These Scams Work So Well for the Scammers? Real estate transactions create the perfect environment for wire fraud. Closings are fast-paced, stressful, and involve large sums of money. Buyers are often wiring significant funds for the first time and may already feel overwhelmed by the process. Anyone who has ever purchased a home knows that you may never sign your name more times within 30 minutes as you do during a real estate closing! In addition, real estate deals involve many different parties communicating through email, including:

Buyers and sellers
Real estate agents and brokers
Mortgage lenders
Title companies
Attorneys
Escrow agents
Condominium associations/Homeowners associations
Representatives of other lien holders

Because so many people are involved, buyers become accustomed to receiving emails, attachments, revised documents, and last-minute updates. That makes it easier for fraudulent communications to blend in. Cybercriminals also understand psychology and many scam emails create a sense of urgency by using the “red exclamation point” and saying things like:

“These are the updated wire instructions.”
“Please send the funds immediately to avoid closing delays.”
“The account information has changed.”

Because of the pressure to complete all the transactions timely, some buyers act quickly without independently verifying the information. Michigan Buyers Should Be on the Lookout There have been numerous cases of multi-million dollar wire-fraud schemes in Michigan.

For the average person, the best protection against wire fraud is simple: verify wire instructions verbally before sending any money. NEVER rely solely on emailed instructions, even if the email appears authentic. Instead, call the title company, attorney, or closing agent using a trusted phone number obtained independently. DO NOT USE THE ONE LISTED IN THE SUSPICIOUS EMAIL! Then confirm the instructions directly. That one phone call can prevent catastrophic financial loss. Parties to real estate transactions should also watch for warning signs such as:

Last-minute changes to wire instructions
Requests for secrecy or urgency
Poor grammar or unusual wording
Slightly altered email addresses
Unexpected or odd-looking attachments or links

Even sophisticated professionals can fall victim to these scams. These scammers know what they are doing and how to do it! Anyone that is a party to a real estate transaction should assume that every wire instruction email deserves close scrutiny. Title Companies and Law Firms Are Major Targets As I stated above, even sophisticated professionals can fall victim to these scams. Title companies and law firms are very attractive targets for cybercriminals because they routinely handle large wire transfers and sensitive financial information. A compromised title company email account can expose closing schedules, escrow information, and banking instructions for multiple transactions at once. Similarly, law firms involved in real estate matters often possess confidential client communications and access to escrow accounts. Smaller firms can be especially vulnerable if they lack dedicated cybersecurity staff or advanced security systems. Cybersecurity has become an increasingly important part of real estate practice. Many Michigan title companies and law firms are implementing stronger safeguards, including:

Multi-factor authentication
Secure client portals
Encrypted communications
Employee phishing training
Password management systems
Internal approval procedures for wire transfers

Some leery companies now avoid transmitting wire instructions through standard email altogether. If You Have Been Scammed, It Can Get Complicated When funds disappear in a wire fraud scam, the immediate question the person that has been scammed asks is: who is responsible? I wish there was a simple answer to that question and in all but a very few cases, there is not. Victims may attempt to pursue claims against various parties involved in the transaction, including title companies, attorneys, brokers, lenders, or financial institutions. Legal claims may involve allegations of negligence, breach of fiduciary duty, professional malpractice, or failure to implement reasonable cybersecurity measures. A buyer may argue that a title company failed to use secure communication systems or ignored obvious signs of email compromise. Similarly, law firms and brokerages may face scrutiny regarding their internal cybersecurity practices and employee training procedures. At the same time, businesses that handle financial transactions increasingly face expectations that they maintain reasonable data security protections. Courts and insurers alike are beginning to treat cybersecurity as part of ordinary professional responsibility. If You Routinely Deal in Real Estate, Cyber Insurance Is a Must Because of the growing threat of wire fraud and data breaches, many Michigan real estate professionals are obtaining cyber liability insurance coverage. In my opinion, this coverage should be mandatory for any real estate professional. These policies may help cover:

Fraudulent wire transfer losses
Data breach response costs
Business interruption losses
Forensic investigations
Client notification expenses
Regulatory investigations

However, not all policies provide the same protection. Coverage disputes frequently arise over policy exclusions, employee conduct, or whether a fraudulent transfer qualifies as covered “social engineering” fraud. Businesses involved in real estate transactions should carefully review their insurance coverage and understand exactly what protections exist before a problem occurs. They should make sure that they have a trusted insurance agent that can advise them appropriately and correctly concerning the coverage. A knowledgeable insurance agent is invaluable to any real estate professional. Cybersecurity Is Part of Every Real Estate Transaction, No Exception A decade ago, people viewed cybersecurity as primarily an IT issue. Today, cybersecurity is a central risk-management issue affecting nearly every Michigan real estate transaction. As transactions become more digital, cybercriminals continue to develop more sophisticated tactics. Artificial intelligence, realistic phishing emails, and advanced impersonation techniques are making scams harder to detect. It is truly scary how good these scammers are at implementing the latest technologies to take your money. The good news is that many wire fraud losses can be prevented. Careful verification procedures, secure communication systems, employee training, and consumer awareness can dramatically reduce the risk. For buyers, the takeaway is straightforward: never send wiring funds without verbally confirming the instructions through a trusted source. For real estate professionals, cybersecurity can no longer be treated as optional. Clients increasingly expect brokers, attorneys, lenders, and title companies to safeguard sensitive information and implement modern security practices. A single fraudulent email can derail an entire transaction and create enormous financial and legal consequences. In today’s market, vigilance and verification are just as important as the closing documents themselves. If you have questions about how to remain secure in a real estate transaction or if you have been scammed in a real estate transaction, then Tilchin & Hall, P.C. can help. Please call us at (248) 349-6203 or email us using the form below. Disclaimer: This Blog/Web Site is made available by the lawyer or law firm publisher for educational purposes only as well as to give you general information and a general understanding of the law, not to provide specific legal advice. By using this Blog, you understand that there is no attorney client relationship between you and lawyer, law firm, and the Blog/Web Site publisher. The Blog/Web Site should not be used as a substitute for competent legal advice from a licensed professional attorney in your state.

2026 Changes in Condominium Reserve Funding

2026-05-21T16:30:21Z

Reserve Fund Statutory Basis The Michigan Condominium act, MCL - Section 559.205, requires all condominiums to maintain a reserve fund: 559.205 Reserve fund. A reserve fund for major repairs and replacement of common elements shall be maintained by the associations of co-owners. The administrator may by rule establish minimum standards for reserve funds. The statute itself does not set a minimum level, but defers to the Administrator, originally the Department of Consumer and Industry Services, and currently the Office of Policy and Legislative Affairs (OPLA). The Office maintains the Condominium Administrative Rules. Rule 559.511(1) sets the minimum at 10%: R 559.511 Reserve fund for major repairs and replacement of common elements. Rule 511. (1) The bylaws shall provide that the association of co-owners shall maintain a reserve fund for major repairs and replacement of common elements in accordance with section 105 of the act. The co-owners' association shall maintain a reserve fund which, at a minimum, shall be equal to 10% of the association's current annual budget on a noncumulative basis. The “noncumulative” language means that theoretically an association need not contribute every year if it has 10% of the current budget on hand from contributions in previous years. The Rules recognize that 10% is the absolute minimum, and noncumulative contribution is likely appropriate only for single-family, detached “site” condominiums with few common elements and minimal maintenance responsibilities. Therefore Rule 559.511 requires Condominium Bylaws to insert additional statutory language: (4) The following statement shall be contained in the bylaws: "The minimum standard required by this section may prove to be inadequate for a particular project. The association of co-owners should carefully analyze their condominium project to determine if a greater amount should be set aside, or if additional reserve funds should be established for other purposes." Fannie Mae and Freddie Mac Increasing to 15% Minimum Reserve Funding Federal National Mortgage Association (FNMA) (“Fannie Mae”) and Federal Home Loan Mortgage Corporation (FHLMC) (“Freddie Mac”) guarantee most mortgages in the United States. Therefore, their own rules hold considerable sway over mortgage and real property industry practices, over and above statutory and administrative requirements. For decades, Fannie Mae and Freddie Mac have required condominium associations to dedicate a minimum of 10% of their annual budget to the reserve fund each year. This effectively eliminates the “noncumulative” option allowed under Michigan Condominium Administrative Rules. The requirements are about to increase again. On March 18, 2026, Fannie Mae released Lender Letter (LL-2026-03) and Freddie Mac released Bulletin 2026-C. Effective January 4, 2027, Fannie Mae and Freddie Mac are increasing the minimum reserve funding requirement from 10% to 15% of the annual budget. The requirements provide an exception to the 15% contribution if an association has a reserve study conducted or updated within the last three years, and the association is following the highest level of funding recommended in the study, not merely the baseline. Only site condominiums with minimal maintenance responsibilities are likely to have reserve studies with the most aggressive savings track under 15%. This means that for many site condominiums, and all attached condominiums, the minimum reserve contribution will be 15% of the budget, every year. Michigan Contemplating Mandatory Reserve Studies Proposed Michigan law would define a reserve study as: A study of reserve funds required to pay for future major repairs and replacement of the common elements in a condominium that meets all of the following criteria:

(a) Identifies each structural, mechanical, electrical, and plumbing component of the common elements and any other components that are the responsibility of the association of co-owners to repair or replace in accordance with the condominium documents. (b) States the normal useful life and the estimated remaining useful life of each identified component. (c) States the estimated current cost of repair or replacement of each identified component. (d) States the estimated annual reserve amount necessary to accomplish any identified future repair or replacement of the components.

Reserve studies are typically prepared by independent professional companies who utilize engineers and accountants to conduct the inspections and prepare the reports and plans. On April 14, 2026, the Michigan House of Representatives introduced House Bill 5784 of 2026. If passed by both houses of the state legislature and signed by the governor, the bill would introduce new regulations:

1. Condominiums that do not have a current reserve study would have three years to conduct one, or contract for one to be done in the fourth year.
2. Existing reserve studies would have to be updated every five years.
3. Impacted condominiums (virtually all):
  1. Maintains, repairs, or replaces common elements,
  2. Has an annual budget of over $20,000,
  3. Has more than twenty units.
4. Reserve study providers would have to meet licensing or industry certification requirements.
5. Condominium Boards of Directors would have to adopt a reserve funding plan to comply with the reserve study.
6. Boards would have to set the annual budget to comply with the reserve funding plan.
7. Boards would have to send notices and disclosures to the Co-owners regarding the reserve study, the reserve funding plan, and potential assessment increases or borrowing to comply with them.

Note that the legislature introduced a substantially similar bill in the 2023-2024 session that failed to advance, so the current bill is not guaranteed to become law. What To Do Now Any association that does not currently contribute at least 15% of its annual budget to its reserve fund should plan to do so for 2027. Associations with fiscal years in advance of the calendar year should do so earlier, to cover January 4, 2027. All associations should consider conducting a reserve study or updating their existing studies if they are more than five years old. Conclusion If your condominium association or homeowners association has questions about reserve funding, reserve studies, or other topics in community association administration, then Tilchin & Hall, P.C., can help. Please call us at [nap_phone id="LOCAL-REGULAR-NUMBER-1"] or email us using the form below. Disclaimer: This Blog/Web Site is made available by the lawyer or law firm publisher for educational purposes only as well as to give you general information and a general understanding of the law, not to provide specific legal advice. By using this Blog, you understand that there is no attorney client relationship between you and lawyer, law firm, and the Blog/Web Site publisher. The Blog/Web Site should not be used as a substitute for competent legal advice from a licensed professional attorney in your state.

Why Condominium and Homeowners Association Boards Must Closely Monitor Their Financials to Prevent Theft and Embezzlement

2026-05-08T10:07:30Z

Condominium associations and homeowners associations manage substantial collective assets. Monthly assessments, reserve contributions, special assessments, and insurance proceeds often total hundreds of thousands, if not millions, of dollars annually. These funds are held in trust for the benefit of all association members. When oversight is lacking, the opportunity for theft or embezzlement drastically increases. For people serving as directors and officers of condominium associations or homeowners associations, careful financial governance is not simply good practice; it is an important fiduciary obligation. Real-World Examples of Embezzlement Financial misconduct within condominium and homeowners associations is more common than many boards realize. In 2024, in Aventura, Florida, the president of the Turnberry on the Green condominium faced criminal allegations after he was accused of diverting approximately $1.5 million in association funds over several years. The case, reported by CBS News, illustrates how unchecked authority and limited financial segregation can allow misconduct to continue undetected for an extended period. Similarly, in 2025, Miami-Dade County, a former manager of The Club at Brickell Bay Condominium was accused of operating a “ghost employee” scheme, allegedly siphoning more than $140,000 from association accounts. According to reporting, fabricated payroll entries and fraudulent payments went unnoticed until significant losses had accumulated. You can read more on The Office of State Attorney of Florida’s website. In Georgia in 2026, a property manager was indicted by a grand jury in connection with alleged thefts from clients whose money was supposed to be held and distributed through the company. In Michigan in 2022, after she pleaded no contest to a charge of embezzlement, the former treasurer of the Fayette Arms Condominiums was given a suspended jail sentence of 365 days and 36 months of probation. She was also ordered to pay $77,934 to the condominium association in restitution. These cases are not anomalies. Across the country, association treasurers have written unauthorized checks to themselves, managers have inflated vendor invoices, and board members have used reserve funds for personal expenses. Many incidents come to light only after a change in leadership, a forensic audit, or a whistleblower complaint. Why Condominium Associations and Homeowners Associations Are Vulnerable The structure of Condominium and Homeowners association governance creates inherent risk factors:

Concentration of authority.

In smaller associations especially, one individual may serve simultaneously as board president, treasurer, and de facto financial overseer. When that person also works closely with the property manager, internal controls can erode quickly. The absence of segregation of duties is one of the most significant red flags in fraud prevention.

Volunteer leadership.

Board members are typically volunteers. While dedicated, they often lack formal training in accounting, internal controls, or fraud detection. Without financial literacy, irregularities may go unnoticed.

Limited owner engagement.

Owners frequently rely on the board to “handle the finances.” When financial statements are distributed but not reviewed critically, transparency becomes performative rather than protective.

Overreliance on management companies.

Professional property managers provide essential services, but boards sometimes delegate too much authority. Blind trust without verification undermines fiduciary oversight.

The Financial and Legal Consequences The financial impact of embezzlement extends beyond the stolen funds themselves. Associations often face:

Emergency special assessments to replenish reserves
Increased insurance premiums or difficulty securing fidelity coverage
Costly litigation and forensic accounting expenses
Delayed capital projects and maintenance
Reputational harm that affects property values

Board members also face potential exposure. While directors are generally protected under the business judgment rule when acting in good faith, a consistent failure to implement basic oversight mechanisms may raise questions regarding breach of fiduciary duty. Best Practices to Mitigate Risk Effective financial governance requires layered controls. No single safeguard is sufficient. Boards should implement the following measures as standard operating procedure:

Segregation of duties.

No individual should control invoice approval, check preparation, and bank reconciliation simultaneously. If staffing is limited, require dual signatures on checks above a defined threshold and board approval for electronic transfers.

Independent annual audits or reviews.

Engage a certified public accountant experienced in community association accounting. Even smaller associations should consider at minimum an annual financial review. Annual audits or reviews are required by the Michigan Condominium Act if the condominium association has annual revenues over $20,000.00, unless a majority of the association’s members vote to opt out of the requirement.

Monthly financial reporting.

Boards should review income statements, balance sheets, aged receivables reports, and bank reconciliations at every meeting. These reviews should be done carefully, not hastily.

Direct access to bank statements.

At least one board member independent of day-to-day bookkeeping should receive bank statements directly from the financial institution.

Vendor verification protocols.

New vendors should undergo due diligence, including confirmation of corporate registration, tax identification numbers, and proof of insurance. Regular vendor audits help detect inflated or duplicate payments.

Fidelity insurance coverage.

Adequate fidelity bond or crime coverage is essential. Boards should confirm that coverage extends to officers, directors, employees, and management companies.

Transparent owner communication.

Providing accessible financial summaries and permitting reasonable record inspection reinforces accountability and builds trust. However, this transparency does not mean that a board should allow association members to dictate how each dollar is spent.

Governance Is a Fiduciary Duty Financial vigilance is not a matter of suspicion; it is a matter of stewardship. Association boards act as fiduciaries, meaning they must exercise due care, loyalty, and good faith in managing association assets. Courts consistently recognize that while volunteer directors are not expected to be financial experts, they are expected to implement reasonable oversight procedures. Fraud prevention operates on a simple principle: trust, but verify. When boards institutionalize transparency and internal controls, they reduce both opportunity and temptation. Conversely, when oversight is casual or deferred, the association becomes vulnerable to significant loss. Condominium communities function on collective investment. Every owner contributes to the shared enterprise. Protecting those contributions through disciplined financial governance preserves not only assets but also confidence in the integrity of community leadership. The Attorneys at Tilchin & Hall, P.C. have successfully litigated cases on behalf of association who were victims of financial misconduct. If you are an association member and there are financial misconduct concerns, please contact us by giving us a call at [nap_phone id="LOCAL-REGULAR-NUMBER-1"], or by emailing us using the form below. Disclaimer: This Blog/Web Site is made available by the lawyer or law firm publisher for educational purposes only as well as to give you general information and a general understanding of the law, not to provide specific legal advice. By using this Blog, you understand that there is no attorney client relationship between you and lawyer, law firm, and the Blog/Web Site publisher. The Blog/Web Site should not be used as a substitute for competent legal advice from a licensed professional attorney in your state.

Does your Association need to adopt a Solar Energy Policy Statement?

2026-02-23T17:33:01Z

The Homeowners’ Energy Policy Act On July 8, 2024, Michigan’s governor signed House Bill 5028 into law as the Homeowners’ Energy Policy Act, MCL - Act 68 of 2024, MCL – Section 559.301 et seq. MCL - Section 559.305 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.

MCL - Section 559.303 defines various covered improvements and modifications: clotheslines, air source heat pumps, ground source heat pumps, insulation, rain barrels, reflective roofing, energy efficient appliances, solar water heaters, electric vehicle supply equipment, energy-efficient windows, and energy-efficient insulations materials, and solar energy systems. However, the Homeowners’ Energy Policy Act imposes affirmative duties only regarding solar energy systems. MCL - Section 559.309 requires homeowners’ associations to enact a solar energy policy before April 2, 2026. Homeowners Associations Traditional Homeowners Associations (“HOA”) are organized as a platted subdivision, and governed by a recorded Declaration of Covenants, Conditions and Restrictions (“Declaration”) (“CCR”). [1] These associations are subject to the Homeowners’ Energy Policy Act and should adopt a Solar Energy Policy Statement. Failure to do so allows homeowners to install solar energy systems without application, approval, fines, or penalties, pursuant to MCL - Section 559.311. Condominium Associations in General Despite the legislature placing the Homeowners’ Energy Policy Act in MCL - Chapter 559 “Condominiums,” its application to associations organized under MCL - Act 59 of 1978, the Condominium Act, is doubtful. The definitions section of the Homeowners’ Energy Policy Act, MCL - Section 559.303, does not does not define the term "homeowners’ association." Furthermore, the Homeowners’ Energy Policy Act makes no reference to "condominium association." Given these omissions, we take the interpretation that the Homeowners' Energy Policy Act does not apply to associations organized under the Condominium Act.[2] Detached/Site Condominiums Detached/site condominiums are projects where the homes have no shared roofs, and the Co-owner’s Unit typically includes both the home and some or all the yard (together, the “site”). Visually, they may be indistinguishable from traditional subdivisions. We take the interpretation that these associations are not subject to the Homeowners’ Energy Policy Act and are not required to adopt solar energy policy statements. However, the areas where Co-owners would be installing solar energy systems are part of the Unit or Limited Common Elements, areas where the Co-owner has exclusive uses, as well as the responsibility for decoration, maintenance, repair, replacement, and insurance. Therefore, if the associations do not have aesthetic or architectural objections to solar energy systems, they may voluntarily adopt solar energy policy statements, for uniformity with homeowners associations. Attached Condominiums In this context, attached condominiums are associations organized under the Condominium Act that have shared roofs. MCL - Section 559.303 defines shared roof as “a roof that serves more than 1 home or unit, including, but not limited to, a contiguous roof that serves adjacent homes or units.” Independent of our interpretation that condominium associations are not subject to the Homeowners’ Energy Policy Act, attached condominiums benefit from a specific statutory exemption. MCL - Section 559.313 states that the Homeowners’ Energy Policy Act does not apply to solar energy systems or other energy-saving improvements or modifications in common areas or on shared roofs. Therefore, these associations are not required to adopt solar energy policy statements. Conclusion If your homeowners’ association needs assistance developing a solar energy policy statement to comply with the Homeowners’ Energy Policy Act, or if your condominium association wants to take a proactive approach with solar energy system installations or energy improvement modifications, then Tilchin & Hall, P.C., can help. Please call us at (248) 349-6203 or email us using the form below. Disclaimer: This Blog/Web Site is made available by the lawyer or law firm publisher for educational purposes only as well as to give you general information and a general understanding of the law, not to provide specific legal advice. By using this Blog, you understand that there is no attorney client relationship between you and lawyer, law firm, and the Blog/Web Site publisher. The Blog/Web Site should not be used as a substitute for competent legal advice from a licensed professional attorney in your state. [1] For a more in-depth explanation between condominiums and traditional subdivisions, please check out our blog from November 28, 2022. [2] For examination of the legislative precedent, statutory constructions, legal interpretation, and case law, please check out our blog from July 22, 2024.

Thinking About Buying a Lakefront or Waterfront Property in Michigan? Legal Issues to Consider Before You Do!

2025-12-29T13:51:01Z

Buying a lakefront home in Michigan is on a lot of people’s wish lists, and it’s easy to understand why. With thousands of inland lakes and endless stretches of shoreline, our state offers some of the most beautiful water access in the country. But as dreamy as the idea may be, purchasing on the water is not quite the same as buying a traditional residential home. There are extra layers of law, regulation, and local custom that many buyers don’t realize until they are already knee-deep in the process. If you’re thinking about making the leap into waterfront living, here are the key legal issues you should understand before signing a purchase agreement. Riparian Rights: What They Are and Why They Matter In Michigan, owning land that actually touches the water comes with a unique bundle of legal rights known as riparian rights. These rights include things like the ability to swim, boat, and install a reasonable dock in front of your property. They also typically include ownership of the bottomlands (the land beneath the water extending out to the lake’s center or the thread of a stream). But the tricky part is that riparian rights are not automatic just because a listing says, “lake access.” It’s common for homes to be “near” the water without actually touching it. In subdivisions, condos, and older platted communities, certain owners may have exclusive riparian rights while others only have shared or deeded access. Before moving forward, it’s worth having an attorney review the title and a survey to confirm that the property is truly riparian. Buyers are often surprised to learn that a neighbor, or an entire association, controls the rights they thought came with the house. Not All “Access” Is the Same One of the biggest sources of confusion for buyers comes from phrases like “private access,” “lake privileges,” or “deeded access.” These can mean very different things. Private Riparian Access This is the gold standard. Your property touches the water, and the rights belong solely to you (subject to reasonableness and local rules). Shared or Deeded Access You may have the right to use a community beach, park, or dock. These rights are spelled out in the recorded documents, and the fine print matters:

Can you keep a boat there year-round?
Are slips assigned, rotated, or first-come, first-served?
Can guests use the access?
Can tenants use the access?
Are there waitlists for docks or hoists?

Without reading the actual deed or association rules, it’s impossible to know. Public Access Nearby This doesn’t give you any rights, but it can affect your enjoyment of the property. Public launches often mean more traffic, noise, and parking concerns. Whenever “access” is involved, it’s smart to look closely at what is and isn’t included. Dock and Mooring Restrictions Many people assume, “If I live on the lake, I can put in whatever dock I want.” Unfortunately, that’s usually not the case. Between state law, local ordinances, and HOA or lake-association rules, docks and hoists are often heavily regulated. Some lakes limit:

The size or shape of your dock
The number of boats you can moor
Permanent structures or covered boat lifts
Placement to avoid interfering with neighbors

Even if a dock is already in place, you shouldn’t assume it was installed legally or that you’ll be able to keep it as-is. Permits may be required, and older, non-conforming structures sometimes become a point of contention. Bottomland Boundaries and Underwater Encroachments It sounds odd, but a lot of lakefront disputes happen “under the water.” Because riparian owners typically own the bottomlands adjacent to their property, disagreements often arise over:

The angle of a neighbor’s dock
A swim raft floating over the boundary line
Mooring buoys placed too close to your frontage
Overly long docks that cut off access

A traditional land survey won’t show you what’s happening beneath the surface. In some cases, a specialized riparian survey may be necessary, especially if there is already tension between neighbors. Zoning and Building Restrictions Waterfront properties come with more zoning rules than most homes. You may face restrictions on:

How close you can build to the shoreline
Removing trees or natural vegetation
Adding patios, seawalls, or shore paths
Septic system placement
The height of new construction or additions
Erosion control structures

If you’re dreaming of remodeling, expanding, or building new, it’s essential to confirm what’s actually allowed. EGLE (Michigan’s Department of Environment, Great Lakes, and Energy) also has a say in many shoreline projects, and ignoring those regulations can be an expensive mistake. Environmental Issues and Water Quality The health of the lake itself affects your day-to-day enjoyment as well as long-term property value. Before committing, look into:

Whether the lake struggles with algae blooms
The presence of invasive species
Known erosion problems
Stormwater runoff issues
Whether it’s a no-wake or limited-speed lake
Any history of flooding or shoreline damage

Sometimes the lake looks pristine, but the issues emerge in midsummer. By then it’s too late. Association Rules and Future Assessments Many waterfront homes fall within homeowners’ associations, lake associations, or condo boards. These organizations often control:

Dock assignments
Beach hours
Boat size or horsepower limits
Short-term rental rules
Landscaping restrictions
Annual or special assessments

Always review the bylaws, rules and regulations, meeting minutes, and budget. These documents often reveal what life on the lake is really like, especially when it comes to neighbor disputes or upcoming expenses. Insurance and Flood Risk Waterfront homes may require different insurance coverage than inland properties. Consider:

Whether the home sits in a FEMA flood zone
The cost of flood insurance (if required)
Past water damage or drainage problems
How docks, hoists, or boathouses are covered
Whether the area is prone to shoreline erosion

Insurance limitations can influence both your monthly costs and your risk tolerance. Always Do Your Homework Before You Fall in Love With the View Buying a lakefront property in Michigan can be incredibly rewarding, but it’s also more complex than most first-time waterfront buyers realize. The best approach is to treat the due-diligence period seriously: verify riparian rights, understand the type of access you’re actually getting, review surveys and association documents, and look into zoning and environmental concerns. Working with a real estate attorney who understands waterfront property can save you from unexpected headaches and sometimes from buying the wrong house entirely. When you go in prepared, you’ll be in a much better position to enjoy everything that lakefront living in Michigan has to offer. Are you considering buying lake front property? We at Tilchin & Hall, P.C. are available to advise you regarding the process. Please reach out to us at (248) 349-6203 or email us using the form below. Disclaimer: This Blog/Web Site is made available by the lawyer or law firm publisher for educational purposes only as well as to give you general information and a general understanding of the law, not to provide specific legal advice. By using this Blog, you understand that there is no attorney client relationship between you and lawyer, law firm, and the Blog/Web Site publisher. The Blog/Web Site should not be used as a substitute for competent legal advice from a licensed professional attorney in your state.

Holiday Decorations in Community Associations

2025-12-04T16:38:25Z

The winter holidays are upon us, and community association boards receive questions about holiday decorations. Can community associations restrict holiday decorations, and what are some of the considerations? Enforceability of Restrictions Generally, restrictions will be enforceable if they are contained in the recorded Master Deed and Condominium Bylaws for condominiums or in the recorded Declaration of Covenants, Conditions and Restrictions for homeowners associations. Restrictions in unrecorded documents, such as Rules & Regulations, may not be enforceable unless the recorded documents specifically authorize them. Selective Enforcement When a community association enforces its restrictions, then it must enforce them equally against all co-owners or homeowners. If the association sends notices or levies fines for decoration violations, then it must send notice and levy fines against all co-owners and homeowners similarly in violation. If an association targets only particular displays, then it is selectively enforcing its restrictions, which can create a defense to the enforcement action. Locations for Display Even if permitted, co-owners or homeowners and homeowners may display decorations only in their exclusive use areas. For a homeowners association, this will normally be the homeowner’s lot, excepting easements or sidewalk strips. For a detached site condominium, this may be the entire lot, or only an envelope around the home. For an attached condominium, this may be only the porch, patio, or balcony. Co-owners and homeowners may not display decorations in common areas or common elements, such as entrances, clubhouses, parks, medians, or cul-de-sacs. Display Time and Removal Governing documents traditionally limited holiday decorations and displays to October through January 15, considering the holidays of Halloween, Thanksgiving, Hanukkah, Christmas, and Epiphany. Depending on the demographics of the community, we recommend flexibility on dates if it is appropriate for the holiday to be celebrated. Examples include when Diwali falls in September and when Lunar New Year falls in February. In such cases it is reasonable to require removal within two weeks following the holiday. However, associations should consider additional flexibility for decorations that have frozen into the ground or onto trees. Safety and Disposal Attached condominium projects and any other associations that provide insurance on buildings should strictly observe any fire safety requirements imposed by the insurance underwriters. Candles and incense should be confined to purpose-made, fireproof displays and extinguished when the residents are sleeping or away. Live Christmas trees are also an issue, particularly if decorated with older-style incandescent lights. If permitted, residents must take care to avoid damaging common areas with pine sap and gouged walls. Additionally, some waste removal companies do not allow live trees to be placed in dumpsters or require that they be cut in two before bulk disposal. Common Area Decorations Associations that maintain a community display at entrances, parks, or common areas must comply with all municipal restrictions. Displays should be religiously neutral in character. Furthermore, associations should install displays only if they are budgeted items, or social committee funds exist for such expenses. We Can Help Are you a director, officer, or manger of a community association, and have questions about holiday decorations or other restrictions? We at Tilchin & Hall, P.C. have many years of experience in these matters, and we are available to advise you regarding administration and enforcement. Please reach out to us at (248) 349-6203 or email us using the form below. Disclaimer: This Blog/Web Site is made available by the lawyer or law firm publisher for educational purposes only as well as to give you general information and a general understanding of the law, not to provide specific legal advice. By using this Blog, you understand that there is no attorney client relationship between you and lawyer, law firm, and the Blog/Web Site publisher. The Blog/Web Site should not be used as a substitute for competent legal advice from a licensed professional attorney in your state.

Why Every College Student Should Have a Durable Power of Attorney and Healthcare Power of Attorney

2025-12-04T16:35:44Z

When parents drop their children off at college, they often think about textbooks, dorm room essentials, and meal plans. But what many families overlook is one of the most important safeguards a young adult can have: a Durable Power of Attorney (POA) and a Healthcare Power of Attorney (HCPOA).

Turning 18 is a legal milestone. At that moment, parents lose automatic authority to make financial, educational, or medical decisions for their child. That’s why these documents are critical—even for healthy, independent young adults who don’t yet own homes or have large bank accounts.

In this post, we’ll explore why these legal tools matter, what they do, and how they can protect college students and their families in times of need.

Why Powers of Attorney Matter Once a Student Turns 18

When a child is under 18, parents are legal guardians and can access medical records, talk with doctors, manage school paperwork, and handle emergencies without issue. But once a student becomes an adult in the eyes of the law, HIPAA privacy rules and other regulations shut parents out.

Here’s what that means:

If a student is hospitalized after an accident, parents may not be able to get updates or make decisions.
If financial issues arise—like tuition, rent, or banking problems—parents cannot step in unless the student has given them legal authority.
Even in emergencies, without proper documents, families might need to go to court to be appointed as guardians—an expensive, time-consuming, and stressful process.

That’s why proactive planning is so important.

What Is a Durable Power of Attorney?

A Durable Power of Attorney is a document that lets someone (the “agent”) handle financial and legal matters for another person (the “principal”). For college students, this usually means giving a parent or trusted adult the authority to help with things like:

Managing bank accounts or paying bills
Dealing with landlords or signing housing agreements
Handling tuition payments or financial aid matters
Filing taxes on the student’s behalf

The word “durable” is key. It means the document remains valid even if the student becomes incapacitated. For example, if a student is in a car accident and cannot act for themselves, the parent could still manage their financial affairs without delay.

What Is a Healthcare Power of Attorney?

A Healthcare Power of Attorney (sometimes called a medical power of attorney or healthcare proxy) gives someone the legal right to make medical decisions if the student cannot.

This document often goes hand in hand with a HIPAA authorization, which allows doctors to share medical information with the chosen agent. Without it, parents could be left in the dark in a crisis.

With a Healthcare POA in place, parents (or whomever the student chooses) can:

Access medical updates from doctors
Make treatment decisions if the student is unconscious or unable to communicate
Advocate for the student’s wishes regarding care
Work with healthcare providers to ensure timely treatment

Why These Documents Are Essential for College Students Some parents assume these tools are only for older adults or people with significant assets. But here are several reasons why they’re just as important for young adults:

Medical Emergencies Happen - Car accidents, sports injuries, sudden illnesses, and mental health crises can all strike without warning. If a student can’t speak for themselves, the family needs a legal way to step in immediately.
Independence Doesn’t Eliminate Responsibility - College students are learning to manage money, but they may still need help. With a Durable POA, parents can step in to pay bills, handle lease agreements, or resolve banking issues, even from miles away.
Avoiding Court Involvement - If no powers of attorney are in place, the only option during a crisis may be going to court to seek guardianship. This process can take weeks or months, cost thousands of dollars, and add emotional stress at an already difficult time.
Protecting Privacy - Students may want parents involved in emergencies but may not want to give them blanket access to every record. These documents can be customized to strike the right balance.

Addressing Common Concerns

“Won’t this give parents too much control?”
Not necessarily. Students choose who their agents are. Some name both parents, others choose one parent and a sibling, or even a trusted friend. The documents can also limit powers so that parents only step in if necessary.

“What if my student is studying out of state?”
Powers of attorney are generally recognized across state lines, but it’s best to work with an attorney familiar with both the home state and the school’s state to ensure compliance.

“Isn’t this just for wealthy families?”
No. Even students with modest resources need help in emergencies. A POA can be as simple or detailed as needed—it’s not about wealth, it’s about readiness.

How to Get Started

Setting up these documents doesn’t have to be complicated. Here are the basic steps:

Consult an attorney – While forms can be found online, state laws vary. An attorney ensures the documents are valid and customized to your student’s needs.
Discuss wishes openly – Students should talk with parents about who they trust and what decisions they want made on their behalf
Sign and notarize – Many states require notarization or witnesses for POAs to be effective.
Distribute copies – Keep copies in a safe but accessible place. Provide one to the named agent and, for healthcare documents, to the student’s doctor or school health center if possible.

Real-World Example

Imagine this: A 19-year-old sophomore is in a serious car accident and rushed to the hospital. She is unconscious and needs immediate surgery. Without a Healthcare Power of Attorney, doctors may hesitate to share details with her parents or ask them to authorize procedures. Hours could be lost while legal hurdles are sorted out.

With a POA and HIPAA release in place, the parents could step in instantly, get information, and make life-saving decisions without delay.

We Can Help Sending a child to college is both exciting and nerve-wracking. While no one wants to imagine worst-case scenarios, part of being prepared is having the right legal documents in place. A Durable Power of Attorney and a Healthcare Power of Attorney are simple, affordable tools that can prevent headaches, delays, and costly court battles. More importantly, they ensure that if the unthinkable happens, parents or trusted loved ones can act quickly and confidently on behalf of their student. Before move-in day or the start of the semester, take time to meet with an attorney and put these safeguards in place. It’s one of the best gifts of protection and peace of mind you can give your college student. If you need assistance in this regard, please reach out to us at (248) 349-6203 or email us using the form below. Disclaimer: This Blog/Web Site is made available by the lawyer or law firm publisher for educational purposes only as well as to give you general information and a general understanding of the law, not to provide specific legal advice. By using this Blog, you understand that there is no attorney client relationship between you and lawyer, law firm, and the Blog/Web Site publisher. The Blog/Web Site should not be used as a substitute for competent legal advice from a licensed professional attorney in your state.