Sowell-Law PLLC

In Miller v Griffin, an unpublished Michigan Court of Appeals opinion, a sheriff’s sale in foreclosure of property was held on March 12, 2020. There was a third party purchaser. The sheriff’s deed was not recorded until May 11, 2020. An individual on behalf of the mortgagor met with the third party purchaser on November 11, 202, and tried to tender redemption, but was advised the amount tendered was insufficient. The correct amount was tendered on November 16, 2020. A suit to quiet title followed. The trial court held that the parties who tendered the funds had no standing to do so because they had no recorded interest in the property. An appeal followed.

The appeals court held that, as agents of the mortgagor, the parties tendering the funds had standing to do so, but because the correct amount was not tendered until after the redemption period expired, the trial court reached the right result for the wrong reason and would not be overturned.

Curiously, the parties and the court all assumed the redemption period ran from the date of recording, not the date of sale, contrary to the published opinion discussed here issued just 7 days previously.

In Aldrich v Sugar Springs Property Owners Association, a published opinion of the Michigan Court of Appeals held that short term rental of a residence on a lot was a violation of the “residential purposed only” restriction contained in a Declaration of Covenants, Conditions, and Restrictions.

As a published opinion, it should put to rest any thought that short term rentals are somehow compatible with residential use restrictions in Michigan. Prior opinions have been discussed here.

In Apache Hills Property Owners Association, Inc. v Sears Nichols Cottages, LLC, an unpublished Michigan Court of Appeals opinion, the court held yet again that renting a residence on a short term basis violates covenants that lots will be used as a single family private residence and that no business of any sort would be conducted.

The opinion gives a good overview and analysis of the prior case law regarding short term rentals and restrictive covenants.

Analyses of other opinions can be found here and here.

In Estate of Romig v Boulder Bluffs Condominiums, a published Michigan Court of Appeals opinion, the court held that Plaintiff’s claim of a violation of the Persons with Disabilities Civil Rights Act was barred by collateral estoppel.

A request was made to install a handrail along the front porch of a condominium unit. The intial request did not contain any information that the request was made on behalf of a handicapped person and was denied. When additional information including a doctor’s note was provided, the handrail was approved. The time period between the initial, unsupported request, and the approval, was two months. In the interim, the handicapped person fell twice.

The Plaintiff initially filed in federal court, which declined to take supplemental jurisdiction over the state law claim. Ultimately, the federal court held that the condominium association did not violate the Fair Housing Act, 42 USC 3601, because the delay between the first request and the eventual approval was not unreasonable. 

Plaintiff then filed suit in state court. After summary disposition in favor of defendants in the trial court, affirmance by the Court of Appeals, and consideration by the Michigan Supreme Court, the case was remanded to the trial court to consider whether the federal decision barred Plaintiff’s claims under the doctrine of collateral estoppel. After additional findings of fact in the trial court, the court of appeals held the claim under the PWDCRA was barred by the federal court’s finding that the delay was not unreasonable. It also held that Plaintiff did not establish that the initial denial of the request was the result of discrimination.

While condominium associations should move promptly on a request for modification related to a handicap, the law does not require an instant decision. Consideration of a request is an interactive process and there is room in the process for deliberation.

In In re Wright, an opinion issued from the United States Bankruptcy Court for the Eastern District of Michigan, the Debtor filed a Chapter 13 bankruptcy case the day before a condominium lien foreclosure sale. No notice of the bankruptcy filing was given to the Association until the day after the sale was held. The condominium unit was titled solely in the debtor’s husband.

The Association filed a motion to confirm the absence of any automatic stay as to the Association and the condominium unit. The debtor opposed the motion on the ground the debtor had an equitable interest in the unit and a possessory interest, both of which are property of the estate. The court granted the Association’s motion, on two independent grounds.

First, the debtor had no interest in the property. Although the debtor claimed an equitable interest under a theory that it was part of her “marital estate” or because she had a constructive trust against the property, the court rejected both of those arguments. The court held her possessory interest derived from permission of her owner-husband and the foreclosure sale did not interfere with that right.

Second, the court held, based upon Easley v Pettibone Michigan Corp, 990 F2d 905 (6th Cir 1993), the debtor unreasonably withheld notice of the bankruptcy filing and the Association would be prejudiced if the debtor could use the filing to avoid the sale after the fact.