Michigan Legislative Action Committee
The CAI Michigan Legislative Action Committee (CAI MILAC), a committee of CAI is the official voice with legislators and regulators in Michigan. CAI MILAC exists to speak with one voice on legislative and regulatory matters that affect community associations, community association managers and CAI business partners. CAI MILAC is made up of a balance of CAI members and appointees from the chapter within the state. CAI MILAC is a committee of CAI’s national office and is a partner with the CAI chapter within its state.
Legislative Action Committees work to monitor state legislation, educate lawmakers, and protect the interests of those living and working in community associations. Each committee is comprised of homeowner leaders, community managers, and representatives from community association business partners who graciously volunteer their time. (click here to link)
For more information, please contact the CAI MILAC Co-Chairs
Please contact CAI's National Headquarters Office at email@example.com
Michigan LAC (Clink here to link)
JULY 2021 – MICHIGAN CAI LEGISLATIVE ACTION COMMITTEE UPDATE
2021 has turned out to be a very busy year so far for the Michigan Chapter of the Community Association Institute’s Legislative Action Committee (“LAC”). The LAC has been monitoring, discussing and reviewing several pieces of pending and soon-to-be-proposed legislation that could greatly affect Michigan community associations:
- House Bills No. 4416 and 4417, known as the “Prohibited Restrictive Covenants Act,” (PRCA) were introduced in March by Representative Sarah Anthony (District 68 – Lansing).
This new law would provide a way for association boards to easily remove discriminatory provisions from their governing documents without having to conduct a full membership vote.Antiquated discriminatory provisions are sometimes found in the documents of older associations and can be greatly offense to members.
The new bills are a re-introduction of proposals made by Rep. Anthony in 2020 on the same issue.Members of the LAC met with Rep. Anthony in 2020 to help improve the text of the proposed bill for community associations. Unfortunately, the bill as revised did not pass before the end of the 2019-2020 legislative session.
LAC Co-Chairpersons Greg Fioritto and Matt Heron met with Rep. Anthony in March of this year to relay the LAC’s general support for the bills, as well as to propose some changes for the benefit of community associations.Specifically, the LAC requested clarification about provisions in the bill that would allow an individual property owner to remove a discriminatory covenant from their title.The LAC seeks to clarify that this provision would not apply to the situation where the discriminatory covenant is found in the governing documents of that owner’s community association (where the association’s board and not the individual property owner would have the right/duty to remove the discriminatory covenant).The LAC also requested removal of certain liability provisions from the bill that could adversely affect unwitting boards, who may unknowingly “record” a covenant that a court later holds to be discriminatory under Fair Housing laws.
These bills remain pending with the Committee on Local Government and Municipal Finance.The LAC plans to continue to work with Rep. Anthony towards passage of a thoroughly-vetted PRCA that helps community association boards effectively remove discriminatory covenants from their governing documents without undue liability concerns.
- House Bill No. 4668, a bill which would amend the Construction Lien Act, introduced by Rep. Brann (District 77 – Kent County) and referred to the Committee on Regulatory Reform on April 20, 2021.
This bill would require a contractor to provide verification of their contractor’s license when recording a claim of lien under Section 111 of the Act. A contractor who violates the new law would be guilty of a misdemeanor.
Community associations often run into problems with unlicensed contractors, which can result in defective work and sometimes legal disputes. When a contractor records a claim of lien against the units in a condominium, this can cause significant problems for the individual owners whose units may be subject to the lien, as well as for the association. Requiring contractors to provide verification of their contractor’s license before they may record a claim of lien should help foster the proper licensing of contractors, and help associations avoid lien disputes with unscrupulous/unlicensed contractors.
The LAC voted to support this bill and conveyed this support to the bill’s sponsor in June. This bill remains pending with the Committee on Regulatory Reform.
- House Bill No. 4825, a bill to amend the Condominium Act, introduced by Rep. Wendzel (District 79 – Berrien County) and referred to the Committee on Regulatory Reform on May 11, 2021.
This bill would amend Section 57 of the Act to require a condominium association to have its books, records and financial statements independently audited or reviewed by a CPA at least once every 5 years.It also would impose significant new reporting requirements on condominium associations regarding delinquencies, conflicts of interest, collections practices and amounts spent by the association if they are 50% over budgeted amounts.
Lastly (and perhaps most significantly), it would mandate that any association which proposes an assessment that is more than $2,500.00 per co-owner or more than a 50% increase in the annual assessment would require the approval of the members by a 2/3 vote.If such an assessment is not approved by the co-owners via a vote, then the Association would be required to arbitrate the issue of whether the additional/increased assessment should be approved.
The LAC has decided to oppose this bill, for several reasons.Although the LAC generally supports the notion that associations boards should obtain CPA-produced audits and reviews if the members of the association wish to do so, the LAC believes the decision on how to proceed with such matters should be left to the Association (i.e., they should not be forced to obtain an audit or review every 5 years if the membership has voted to “opt out” of doing so in a given year, as current law allows).The bill which also impose a myriad of new reporting duties, which the LAC believes would impose significant additional costs on associations.Lastly, the requirement that additional assessments over $2,500.00 or any increase in the annual assessment of more than 50% must be approved by 2/3 of the members could significantly hinder the ability of boards to maintain and repair their existing common elements. The LAC takes the position that any such limitations on the assessment powers of a board should be decided by the members of the association itself under its governing documents, rather than dictated by state law.The LAC also believes the arbitration requirement to be unworkable.
LAC Co-Chairs Greg Fioritto and Matt Heron met with the Rep. Wendzel’s Chief of Staff to convey the LAC’s objections to the bill in May.The bill remains pending with the Committee on Regulatory Reform.
- Amendments to the Marketable Record Title Act. The Real Property Law Section (RPLS) of the Michigan Bar intends to propose amendments to the Marketable Record Title Act (MRTA) this year to resolve certain issues and problems which were created by the 2018 amendments to the Act.
The LAC’s focus in regard to the forthcoming 2021 MRTA amendments is on ensuring that community associations will not be in jeopardy of having their recorded governing documents (e.g., Master Deeds, Bylaws and Declarations) legally eliminated by operation of the 2018 amendments to the Act.
The LAC Co-Chairs met with the RPLS sponsors of the proposed amendments in June 2021 to discuss their concerns with the bill as it was proposed last year (which failed to pass). The LAC is now in the process of reviewing the newest draft of the amendments, which has not yet been formally introduced in the legislature. The LAC will continue to provide input to the RPLS and other sponsors and stakeholders to ensure that the governing documents of both homeowners’ associations and condominium associations are protected to the extent possible from any adverse consequences of the 2018 MRTA amendments or any future amendments to the Act.
Community associations represent the interests of an ever-increasing membership in the State of Michigan and throughout the U.S. The CAI LAC is continually looking for ways to make our voices heard in the legislature and is committed to educating legislators about the needs of our communities.
But we can’t do it without your help.
The CAI LAC greatly needs your support to make our state’s laws better for all of our Michigan community associations, their members and families. Contributing to the CAI LAC with a monetary donation is one way that you can directly support these efforts to help make our laws better.
If you are interested in supporting legislative change for community associations, please consider making a financial contribution to the LAC at www.cai-michigan.org/advocacy.html. Contributions from both individuals and community associations are welcome.
Gregory J. Fioritto and Matthew Heron
Co-Chairs of the Michigan CAI LAC
Community Association Market & Facts
Community Associations Institute (CAI) estimates that in 1970 there were 10,000 community associations nationwide. Today, there are 260,000 community associations housing 50 million Americans. A community association functions as a business, a governance structure, and a community. Traditionally, these functions were applied as follows: business meant austerity; governance meant compliance; and community meant conformity. According to the U.S. Census Bureau, the American Housing Survey, and IRS Statistics of Income Reports, associations today are seeking prudence in business, justice in governance, and harmony in community to provide an enjoyable, vibrant lifestyle for homeowners and residents.
- Nearly one out of every six Americans (50 million) lives in a community association.
- There are an estimated 260,000 community associations in the United States providing 19.9 million housing units.
- Between 9,000 and 11,000 new community associations are formed every year.
- In the largest metropolitan areas, more than 50 percent of new home sales are in community associations.
- Community associations can range in size from as small as a two-unit associations to large-scale, master planned communities with more than 30,000 units.
- 1.25 million Americans serve on a community association Board.
Community associations have become increasingly popular because they help protect home values, provide affordable ownership opportunities, help meet the increased privatization of services as local governments cut back, and are efficient land planning, land use, and land conservation techniques.
The real estate value of all community associations and their units exceeds $2.25 trillion, approximately 17-19% of the value of all U.S. residential real estate. The estimated annual operating revenues for all community associations in the U.S. is more than $35 billion. Most of this is spent in the associations’ local economies.
Add the Michigan CAI LAC to your Community Association’s Budget
CAI’s Michigan Legislative Action Committee (MI LAC) has been very active in Lansing by fighting legislation that would harm community associations and going head-to-head with powerful and well-funded special interest groups. With your help, the MI LAC can continue to advance issues in the legislature that are important to community associations. As community associations begin working on budgets for the coming year, we hope you can include the MI LAC in your planning and designate an annual investment in support of our legislative advocacy efforts. For as little as $1 a door in your community, your association can make a big difference. The MI LAC has been working on the following issues this year:
The MI-LAC needs money to battle other well-funded interest groups to ensure that community association interests are adequately represented. The MI-LAC uses the funds raised from community association to pay for its lobbyist, legislative receptions, “Meet your Legislator” Day and to prepare educational materials for community associations and legislators. Please consider an investment from your community association as you plan your next budget. We have strength in numbers and a small investment from each community goes a long way. Please support this worthy and necessary advocacy effort. Donations can be made at www.caionline.org/LACDonate. The suggested donation is $1 or $2 per door in your community, but the MI LAC would greatly accept donations of any amount. For continuing updates on legislative issues impacting Michigan’s community associations, please visit https://www.caionline.org/Advocacy/LAC/MI/Pages/default.aspx.
CAI Michigan Legislative Update