HOA and condo association foreclosure in Michigan

HOA and condo collection rules in Michigan, step by step

• Which law covers your community

  Check your deed and master deed

  Condominiums follow the Condominium Act, 1978 PA 59, MCL 559.101 and following. For a subdivision or other homeowners association that is not a condo, we did not find a general Michigan statute on liens or foreclosure, so the recorded restrictions, bylaws and collection policy set what it can do.

  MCL 559.208

• What the lien covers

  From each assessment you do not pay

  Unpaid assessments, interest, collection and late charges, lawyer fees, money the association advanced for taxes, and fines under the condominium documents are a lien on your unit. Fines can be charged only if the condo documents allow them, and only after notice and a hearing.

  MCL 559.208(1); MCL 559.206(c)

• Notice of lien before any foreclosure

  Mailed at least 10 days before foreclosure starts

  The association cannot start a foreclosure until it records a notice of lien with the county register of deeds and mails it to you by first class mail at your last known address. The notice must describe the unit, name you, and state the amount due, not counting interest, costs, lawyer fees and future assessments.

  MCL 559.208(3)

• Foreclosure in court or by advertisement

  After the 10-day notice

  The association can foreclose the same way a mortgage is foreclosed, either by a court case or by advertisement with a sheriff's sale. If the condo documents allow it, it can add reasonable interest, costs and lawyer fees. It can also sue you for a money judgment without foreclosing.

  MCL 559.208(1), (2), (5), (6)

• Where the lien stands against your mortgage

  Depends on recording dates

  The association's lien comes after state and federal tax liens and after amounts unpaid on a first mortgage of record. It comes ahead of a first mortgage only if that mortgage was recorded after the association's notice of lien. Michigan does not give a fixed number of months of dues priority over an existing first mortgage.

  MCL 559.208(1)

• Six months to redeem after the sale

  6 months from the sale, or 1 month if abandoned

  After an association's foreclosure sale, you have 6 months from the sale to redeem, or 1 month if the property is abandoned. Assessments that come due before the redemption period ends, plus interest, costs and lawyer fees, are still owed by you or anyone who takes your interest.

  MCL 559.208(2), (8)

• What happens to your mortgage

  If your lender forecloses

  Your mortgage lender must send the condo association a copy of its foreclosure notice. If the buyer at a mortgage sale pays condominium or homeowner association assessments during your redemption period and files proof with the register of deeds, those amounts plus interest are added to what you must pay to redeem.

  MCL 559.208(9); MCL 600.3240(4)

Common questions in Michigan