Condo Bylaws Association With Low Reserves In Michigan
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Section 559.205. The state administrative code requires the co-owners' association to maintain a reserve fund which, at a minimum, shall be equal to 10% of the association's current annual budget on a noncumulative basis. The funds shall only be used for major repairs and replacement of common elements.
Sec. 67. (1) A change in a inium project shall be reflected in an amendment to the appropriate inium document. An amendment to the inium document is subject to sections 90, 90a, and 91.
The dissolution of a homeowners association in Michigan necessitates a formal resolution, approval from a majority of members, and adherence to specific procedures set forth in the Michigan Nonprofit Corporation Act.
Maintenance, repair, and replacement of a limited common element is usually the responsibility of the association except to the extent the declaration shifts that duty to the unit owner.
The Federal Housing Administration (FHA) has weighed in by requiring approved inium projects to have at least 10% of the annual operating budget set aside for reserves. However, that percentage is arbitrary and is usually never enough for an association that has to paint and replace roofs.
Sec. 47. (1) Subject to the prohibitions and restrictions in the inium documents, a co-owner may make improvements or alterations within a inium unit that do not impair the structural integrity of a structure or otherwise lessen the support of a portion of the inium project.
Section 57 of the Act provides that all books, records, contracts, and financial statements concerning the administration and operation of the inium project shall be available for examination by any of the co-owners at convenient times.
The inium documents include the master deed, inium subdivision plan, bylaws for the inium project, and any other documents referred to in the master deed or bylaws. In addition, the developer is required to provide a disclosure statement.
