In Infinity-Brownstown LLC v Dove’s Pointe Homeowners Association, an unpublished Michigan Court of Appeals opinion, the developer established a condominium project and sold a few units, then defaulted on its mortgage. The property was sold at sheriff’s sale and ultimately purchased by Plaintiff. The condominium association subsequently amended the condominium bylaws to prohibit leasing more than 10% of the units; the original bylaws provided there was no restriction on the number of units the developer could rent. Plaintiff sued to overturn the amendment and for damages. The trial court held that the amendment was void, but also held that the Plaintiff’s damages were too speculative or remote to be recovered. Plaintiff appealed, and the association cross-appealed.
The Michigan Court of Appeals, after examining the chain of title and the provisions of the Master Deed, held that the Plaintiff was a successor and assign of the original developer, relying upon the FNMA v Lagoons Forest C.A. opinion discussed in this post. Because the Plaintiff was a successor and did not consent to the amendment as required by the documents, the amendment was void.
The court also held that the Plaintiff’s damages were not speculative simply because it had not yet built or leased the units, relying on other cases holding that it was not necessary to build out a leashold or to construct a building in order to determine lost profits.