In Wellesley Gardens Condo. Assn v Manek, an unpublished Michigan Court of Appeals decision, several units in the condominium unit reverted under the 2002 version of Section 167 of the Michigan Condominium Act and the condominium association obtained a judgment declaring that the units had become general common elements. The “owner” of the “units" failed to pay taxes on them, the county foreclosed, and the county sold the “units.”
Wellesley again filed suit seeking to quiet title against the purchasers. The county treasurer intervened. The trial court ruled in favor of the purchasers. Wellesley appealed.
The Michigan Court of Appeals reversed and remanded to the trial court to enter a judgment in Welles’ey’s favor. Relying on the Cove Creek opinion, discussed elsewhere in this blog, the appeals court held that the tax sales did not revive these units, which had become general common elements prior to the tax sale. Also, the decision in the prior lawsuit was res judicata as to the units involved in the prior lawsuit.
There were three units, not subject to the prior lawsuit, which were foreclosed and purchased by a separate entity. This entity argued that the 2002 version of Section 167 applied only to developers and because the entity was not a developer or successor developer, its units did not revert to general common elements. The appeals court held that the automatic reversion mandated by the 2002 version of Section 167 was not limited to developer-owned units; these units also became general common elements prior to the tax sale.