HOUSE BILL No. 5486 December 11, 2001, Introduced by Reps. Bishop, DeRossett and Shulman and referred to the Committee on Commerce. A bill to amend 1978 PA 59, entitled "Condominium act," by amending sections 58, 67, 69, 90, 90a, 108, 112, 135, 173, and 176 (MCL 559.158, 559.167, 559.169, 559.190, 559.190a, 559.208, 559.212, 559.235, 559.273, and 559.276), sections 58, 67, 69, 90, 108, 112, and 135 as amended and sections 90a and 176 as added by 2000 PA 379 and section 173 as amended by 1983 PA 113. THE PEOPLE OF THE STATE OF MICHIGAN ENACT: 1 Sec. 58. If the mortgagee of a first mortgage of record or 2 other purchaser of a condominium unit obtains title to the condo- 3 minium unit as a result of foreclosure of the first mortgage, 4such person, its successors,THAT MORTGAGEE OR PURCHASER AND 5 HIS OR HER SUCCESSORS and assigns are not liable for the 6 assessments by the administering body chargeable to the unit that 7 became due prior to the acquisition of title to the unit bysuch04982'01 TLG 2 1person except for assessments that have priority over the first2mortgage under section 108THAT MORTGAGEE OR PURCHASER AND HIS 3 OR HER SUCCESSORS AND ASSIGNS. 4 Sec. 67. (1) A change in a condominium project shall be 5 reflected in an amendment to the appropriate condominium 6 document. An amendment to the condominium document is subject to 7 sections 90, 90A, and 91. 8 (2) If a change involves a change in the boundaries of a 9 condominium unit or the addition or elimination of condominium 10 units, a replat of the condominium subdivision plan shall be pre- 11 pared and recorded assigning a condominium unit number to each 12 condominium unit in the amended project. The replat of the con- 13 dominium subdivision plan shall be designated replat number 14 __________ of __________ county condominium subdivision plan 15 number __________, using the same plan number assigned to the 16 original condominium subdivision plan. 17 (3) Notwithstanding section 33, if the developer has not 18 completed development and construction of UNITS OR IMPROVEMENTS 19 IN theentirecondominium project,including proposed improve-20ments whether identified as "must be built" orTHAT ARE IDENTI- 21 FIED AS "need not be built", during a period ending 10 years 22fromAFTER the date of commencement of construction by the 23 developer of the project, the developer, its successors, or 24 assigns have the right to withdraw from the project all undevel- 25 oped portions of the project NOT IDENTIFIED AS "MUST BE BUILT" 26 without the prior consent of any co-owners, mortgagees of units 27 in the project, or any other party having an interest in the 04982'01 3 1 project. If the master deed contains provisions permitting the 2 expansion, contraction, or rights of convertibility of units or 3 common elements in the condominium project, then the time period 4 is 6 yearsfromAFTER the date the developer exercised its 5 rights with respect to either expansion, contraction, or rights 6 of convertibility, whichever right was exercised last. The unde- 7 veloped portions of the project withdrawn shall also automati- 8 cally be granted easements for utility and access purposes 9 through the condominium project for the benefit of the undevel- 10 oped portions of the project. If the developer does not withdraw 11 the undeveloped portions of the project from the project before 12 expiration of the time periods,suchTHOSE UNDEVELOPED lands 13 shall remain part of the project as general common elements and 14 all rights to construct units upon that land shall cease. In 15 such an event, if it becomes necessary to adjust percentages of 16 value as a result of fewer units existing, a co-owner or the 17 association of co-owners may bring an action to require revisions 18 to the percentages of valuepursuant to section 96UNDER SEC- 19 TION 95. 20 Sec. 69. (1) Except to the extent that the condominium doc- 21 uments provide otherwise, common expenses associated with the 22 maintenance, repair, renovation, restoration, or replacement of a 23 limited common element shall be specially assessed against the 24 condominium unit to which that limited common element was 25 assigned at the time the expenses were incurred. If the limited 26 common element involved was assigned to more than 1 condominium 27 unit, the expenses shall be specially assessed against each of 04982'01 4 1 the condominium units equally so that the total of the special 2 assessments equals the total of the expenses, except to the 3 extent that the condominium documents provide otherwise. 4 (2) To the extent that the condominium documents expressly 5 so provide, any other unusual common expenses benefiting less 6 than all of the condominium units, or any expenses incurred as a 7 result of the conduct of less than all those entitled to occupy 8 the condominium project or by their licensees or invitees, shall 9 be specially assessed against the condominium unit or condominium 10 units involved, in accordance with reasonable provisions as the 11 condominium documents may provide. 12 (3) The amount of all common expenses not specially assessed 13pursuant toUNDER subsections (1) and (2) shall be assessed 14 against the condominium units in proportion to the percentages of 15 value or otherformula statedPROVISIONS AS MAY BE CONTAINED in 16 the master deed for apportionment of expenses of administration. 17 (4) A co-owner shall not be exempt from contributing as pro- 18 vided in this act by nonuse or waiver of the use of any of the 19 common elements or by abandonment of his or her condominium 20 unit. 21 Sec. 90. (1) The condominium documents may be amended with- 22 out the consent of co-owners or mortgagees if the amendment does 23 not materially alter or change the rights of a co-owner or mort- 24 gagee and if the condominium documents contain a reservation of 25 the right to amend for that purpose to the developer or the asso- 26 ciation of co-owners. An amendment that does not materially 27 change the rights of a co-owner or mortgagee includes, but is not 04982'01 5 1 limited to, a modification of the types and sizes of unsold 2 condominium units and their appurtenant limited common elements. 3An amendment that does not materially change the rights of a4mortgagee further includes, but is not limited to, any change in5the condominium documents that, in the written opinion of an6appropriately licensed real estate appraiser, does not detrimen-7tally change the value of any unit affected by the change.8 (2) Except as provided in this section, the master deed, 9 bylaws, and condominium subdivision plan may be amended, even if 10 the amendment will materially alter or change the rights of the 11 co-owners or mortgagees, with the consent of not less than 2/3 of 12 the votes of the co-owners and mortgagees. A mortgagee shall 13 have 1 vote for each mortgage held. The 2/3 majority required in 14 this section may not be increased by the terms of the condominium 15 documents, and a provision in any condominium documents that 16 requires the consent of a greater proportion of co-owners or 17 mortgagees for the purposes described in this subsection is void 18 and is superseded by this subsection. Mortgagees are not 19 required to appear at any meeting of co-owners except that their 20 approval shall be solicited through written ballots. Any mortga- 21 gee ballots not returned within 90 days of mailing shall be 22 counted as approval for the change. 23 (3) The developer may reserve, in the condominium documents, 24 the right to amend materially the condominium documents to 25 achieve specified purposes, except a purpose provided for in sub- 26 section (4). Reserved rightsmaySHALL not be amended except 27 by or with the consent of the developer. If a proper reservation 04982'01 6 1 is made, the condominium documents may be amended to achieve the 2 specified purposes,without the consent of co-owners or 3 mortgagees. 4 (4) The method or formula used to determine the percentage 5 of value of units in the project for other than voting purposes 6, and any provisions relating to the ability or terms under7which a co-owner may rent a unit, maySHALL not be modified 8 without the consent of each affected co-owner and mortgagee. A 9 co-owner's condominium unit dimensions or appurtenant limited 10 common elements may not be modified without the co-owner's 11 consent. 12 (5) Co-owners shall be notified of proposed amendments,13 under this section,not less than 10 days before the amendment 14 is recorded. 15 (6) A person causing or requesting an amendment to the con- 16 dominium documents shall be responsible for costs and expenses of 17 the amendment, except for amendments based upon a vote of a pre- 18 scribed majority of co-owners and mortgagees or based upon the 19 advisory committee's decision, the costs of which are expenses of 20 administration. 21 (7) A master deed amendment, including the consolidating 22 master deed, dealing with the addition, withdrawal, or modifica- 23 tion of units or other physical characteristics of the project 24 shall comply with the standards prescribed in section 66 for 25 preparation of an original condominium subdivision plan for the 26 project. 04982'01 7 1 (8) For purposes of this section, the affirmative vote of a 2 2/3 of co-owners is considered 2/3 of all co-owners entitled to 3 vote as of the record date for such votes. 4 Sec. 90a. (1) To the extent this act or the condominium 5 documents require a vote of mortgagees of units on amendment of 6 the condominium documents, the procedure described in this sec- 7 tion applies. 8 (2) The date on which the proposed amendment is approved by 9 the requisite majority of co-owners is considered the "control 10 date". 11 (3) Only those mortgagees who hold adulyrecorded FIRST 12 mortgage or adulyrecorded assignment of a FIRST mortgage 13 against 1 or more condominium units in the condominium project on 14 the control dateisARE entitled to vote on the amendment. 15 Each mortgagee entitled to vote shall have 1 vote for each condo- 16 minium unit in the project that is subject to its mortgage or 17 mortgages, without regard to how many mortgages the mortgagee may 18 hold on a particular condominium unit. 19 (4) The association of co-owners shall give a notice to each 20 mortgagee entitled to vote containing all of the following: 21 (a) A copy of the amendment or amendments as passed by the 22 co-owners. 23 (b) A statement of the date that the amendment was approved 24 by the requisite majority of co-owners. 25 (c) An envelope addressed to the entity authorized by the 26 board of directors for tabulating mortgagee votes. 04982'01 8 1 (d) A statement containing language in substantially the 2 form described in subsection (5). 3 (e) A ballot providing spaces for approving or rejecting the 4 amendment and a space for the signature of the mortgagee or an 5 officer of the mortgagee. 6 (f) A statement of the number of condominium units subject 7 to the mortgage or mortgages of the mortgagee. 8 (g) The date by which the mortgagee must return its ballot. 9 (5) The notice provided by subsection (4) shall contain a 10 statement in substantially the following form: 11 "A review of the association records reveals that you are 12 the holder of 1 or more mortgages recorded against title to 1 or 13 more units in the (name of project) condominium. The co-owners 14 of the condominium adopted the attached amendment to the condo- 15 minium documents on (control date). Pursuant to the terms of the 16 condominium documents and/or the Michigan condominium act, you 17 are entitled to vote on the amendment. You have 1 vote for each 18 unit that is subject to your mortgage or mortgages. 19 The amendment will be considered approved by FIRST mortga- 20 gees if it is approved by 66-2/3% oftheTHOSE mortgagees. In 21 order to vote, you must indicate your approval or rejection on 22 the enclosed ballot, sign it, and return it not later than 90 23 daysfrom (the control date)AFTER THIS NOTICE (WHICH DATE 24 COINCIDES WITH THE DATE OF MAILING). Failure to timely return a 25 ballot will constitute a vote for approval. If you oppose the 26 amendment, you must vote against it.". 04982'01 9 1(6) The association of co-owners shall mail the notice2required by subsection (4) to the mortgagee at the address3provided in the mortgage or assignment for notices by certified4mail, return receipt requested, postmarked within 30 days after5the control date.6 (6)(7)The amendment is considered to be approved by the 7 FIRST mortgagees if it is approved by 66-2/3% of the FIRST mort- 8 gagees whose ballots are received, or are considered to be 9 received, in accordance with section 90(2), by the entity autho- 10 rized by the board of directors to tabulate mortgagee votes.not11later than 100 days after the control date. In determining the12100 days, the control date itself shall not be counted but the13one-hundredth day shall be included unless the one-hundredth day14is a Saturday, Sunday, legal holiday, or holiday on which the15United States postal service does not regularly deliver mail, in16which case the last day of the 100 days shall be the next day17that is not a Saturday, Sunday, legal holiday, or holiday on18which the United States postal service does not regularly deliver19mail.20 (7) THE ASSOCIATION OF CO-OWNERS SHALL MAIL THE NOTICE 21 REQUIRED UNDER SUBSECTION (4) TO THE FIRST MORTGAGEE AT THE 22 ADDRESS PROVIDED IN THE MORTGAGE OR ASSIGNMENT FOR NOTICES. 23 (8) The association of co-owners shall maintain a copy of 24 the notice, proofs of mailing of the notice, and the ballots 25 returned by mortgagees for a period of 2 years after the control 26 date. 04982'01 10 1 (9) Notwithstanding any provision of the condominium 2 documents to the contrary, FIRST mortgagees are entitled to vote 3 on amendments to the condominium documents only under the follow- 4 ing circumstances: 5 (a) Termination of the condominium project. 6 (b) A change in the method or formula used to determine the 7 percentage of value assigned to a unit subject to the mortgagee's 8 mortgage. 9 (c) A reallocation of responsibility for maintenance, 10 repair, replacement, or decoration for a condominium unit, its 11 appurtenant limited common elements, or the general common ele- 12 ments from the association of co-owners to the condominium unit 13 subject to the mortgagee's mortgage. 14 (d) Elimination of a requirement for the association of 15 co-owners to maintain insurance on the project as a whole or a 16 condominium unit subject to the mortgagee's mortgage or realloca- 17 tion of responsibility for obtaining or maintaining, or both, 18 insurance from the association of co-owners to the condominium 19 unit subject to the mortgagee's mortgage. 20 (e) The modification or elimination of an easement benefit- 21 ing the condominium unit subject to the mortgagee's mortgage. 22 (f) The partial or complete modification, imposition, or 23 removal of leasing restrictions for condominium units in the con- 24 dominium project. 25 (G) AMENDMENTS REQUIRING MORTGAGEE OR CO-OWNER CONSENT UNDER 26 SECTION 90(4). 04982'01 11 1 Sec. 108. (1) Sums assessed to a co-owner by the 2 association of co-owners that are unpaid together with interest 3 on such sums, collection and late charges, advances made by the 4 association of co-owners for taxes or other liens to protect its 5 lien, attorney fees, and fines in accordance with the condominium 6 documents, constitute a lien upon the unit or units in the 7 project owned by the co-owner at the time of the assessment 8 before other liens except tax liens on the condominium unit in 9 favor of any state or federal taxing authority and sums unpaid on 10 a first mortgage of record, except that past due assessments that 11 are evidenced by a notice of lien,recorded as set forth in 12 subsection (3),have priority over a first mortgage recorded 13 subsequent to the recording of the notice of lien. The lien upon 14 each condominium unit owned by the co-owner shall be in the 15 amount assessed against the condominium unit, plus a proportion- 16 ate share of the total of all other unpaid assessments attribut- 17 able to condominium units no longer owned by the co-owner but 18 which became due while the co-owner had title to the condominium 19 units. The lien may be foreclosed by an action or by advertise- 20 ment by the association of co-owners in the name of the condomin- 21 ium project on behalf of the other co-owners. 22 (2) A foreclosure shall be in the same manner as a foreclo- 23 sure under the laws relating to foreclosure of real estate mort- 24 gages by advertisement or judicial action except that to the 25 extent the condominium documents provide, the association of 26 co-owners is entitled to reasonable interest, expenses, costs, 27 and attorney fees for foreclosure by advertisement or judicial 04982'01 12 1 action. The redemption period for a foreclosure is 6 months from 2 the date of sale unless the property is abandoned, in which event 3 the redemption period is 1 month from the date of sale. 4 (3) A foreclosure proceeding may not be commenced without 5 recordation and service of notice of lien in accordance with the 6 following: 7 (a) Notice of lien shall set forth all of the following: 8 (i) The legal description of the condominium unit or condo- 9 minium units to which the lien attaches. 10 (ii) The name of the co-owner of record. 11 (iii) The amounts due the association of co-owners at the 12 date of the notice, exclusive of interest, costs, attorney fees, 13 and future assessments. 14 (b) The notice of lien shall be in recordable form, executed 15 by an authorized representative of the association of co-owners 16 and may contain other information that the association of 17 co-owners considers appropriate. 18 (c) The notice of lien shall be recorded in the office of 19 register of deeds in the county in which the condominium project 20 is located and shall be served upon the delinquent co-owner by 21 first-class mail, postage prepaid, addressed to the last known 22 address of the co-owner at least 10 days in advance of commence- 23 ment of the foreclosure proceeding. 24 (4) The association of co-owners, acting on behalf of all 25 co-owners, unless prohibited by the master deed or bylaws, may 26 bid in at the foreclosure sale, and acquire, hold, lease, 27 mortgage, or convey the condominium unit. 04982'01 13 1 (5) An action to recover money judgments for unpaid 2 assessments may be maintained without foreclosing or waiving the 3 lien. 4 (6) An action for money damages and foreclosure may be com- 5 bined in 1 action. 6 (7) A receiver may be appointed in an action for foreclosure 7 of the assessment lien and may be empowered to take possession of 8 the condominium unit, if not occupied by the co-owner, and to 9 lease the condominium unit and collect and apply the rental 10therefromFROM THE CONDOMINIUM UNIT. 11 (8) The co-owner of a condominium unit subject to foreclo- 12 surepursuant toUNDER this section, and any purchaser, grant- 13 ee, successor, or assignee of the co-owner's interest in the con- 14 dominium unit, is liable for assessments by the association of 15 co-owners chargeable to the condominium unit that become due 16 before expiration of the period of redemption together with 17 interest, advances made by the association of co-owners for taxes 18 or other liens to protect its lien, costs, and attorney fees 19 incurred in their collection. 20 (9) The mortgagee of a first mortgage of record of a condo- 21 minium unit shall give notice to the association of co-owners of 22 the commencement of foreclosure of the first mortgage by adver- 23 tisement by serving a copy of the published notice of foreclosure 24 required by statute upon the association of co-owners by certi- 25 fied mail, return receipt requested, addressed to the resident 26 agent of the association of co-owners at the agent's address as 27 shown on the records of the Michigan corporation and securities 04982'01 14 1 bureau, or to the address the association provides to the 2 mortgagee, if any, in those cases where the address is not regis- 3 tered, within 10 days after the first publication of the notice. 4 The mortgagee of a first mortgage of record of a condominium unit 5 shall give notice to the association of co-owners of intent to 6 commence foreclosure of the first mortgage by judicial action by 7 serving a notice setting forth the names of the mortgagors, the 8 mortgagee, and the foreclosing assignee of a recorded assignment 9 of the mortgage, IF ANY; the date of the mortgage and the date 10 the mortgage was recorded; the amount claimed to be due on the 11 mortgage on the date of the notice; and a description of the 12 mortgaged premises that substantially conforms with the descrip- 13 tion contained in the mortgage upon the association of co-owners 14 by certified mail, return receipt requested, addressed to the 15 resident agent of the association of co-owners at the agent's 16 address as shown on the records of the Michigan corporation and 17 securities bureau, or to the address the association provides to 18 the mortgagee, if any, in those cases where the address is not 19 registered, not less than 10 days before commencement of the 20 judicial action. Failure of the mortgagee to provide notice as 21 required by this section shall only provide the association with 22 legal recourse and will not, in any event, invalidate any fore- 23 closure proceeding between a mortgagee and mortgagor. 24 Sec. 112. (1) Before the transitional control date, during 25 the development and sales period the rights of a co-owner, 26 including the developer, to rent any number of condominium units 27 shall be controlled by the provisions of the condominium 04982'01 15 1 documents as recorded by the developer and shall not be changed 2 without developer approval. After the transitional control date, 3 the association of co-owners may amend the condominium documents 4 as to the rental of condominium units or terms of occupancy.as5provided in section 90(4).The amendment shall not affect the 6 rights of any lessors or lessees under a written lease otherwise 7 in compliance with this section and executed before the effective 8 date of the amendment, or condominium unitsas long as they9 THAT are owned or leased by the developer. 10 (2) A co-owner, including the developer, desiring to rent or 11 lease a condominium unit shall disclose that fact in writing to 12 the association of co-owners at least 10 days before presenting a 13 leaseformor otherwise agreeing to grant possession of a con- 14 dominium unit toapotentiallesseeLESSEES OR OCCUPANTS and, 15 at the same time, shall supply the association of co-owners with 16 a copy of the exact leaseformfor its review for its compli- 17 ance with the condominium documents. THE CO-OWNER OR DEVELOPER 18 SHALL ALSO PROVIDE THE ASSOCIATION OF CO-OWNERS WITH A COPY OF 19 THE EXECUTED LEASE. If no leaseformis to be used, then the 20 co-owner or developer shall supply the association of co-owners 21 with the name and address of thepotential lesseeLESSEES OR 22 OCCUPANTS, along with the rental amount and due datesunder the23proposed agreementOF ANY RENTAL OR COMPENSATION PAYABLE TO A 24 CO-OWNER OR DEVELOPER, THE DUE DATES OF THAT RENTAL AND COMPENSA- 25 TION, AND THE TERM OF THE PROPOSED ARRANGEMENT. 04982'01 16 1 (3) Tenants or nonco-owner occupants shall comply with all 2 of the conditions of the condominium documents of the condominium 3 project, and all leases and rental agreements shall so state. 4 (4) If the association of co-owners determines that the 5 tenant or nonco-owner occupant failed to comply with the condi- 6 tions of the condominium documents, the association of co-owners 7 shall take the following action: 8 (a) The association of co-owners shall notify the co-owner 9 by certified mail, advising of the alleged violation by the 10 tenant. The co-owner shall have 15 days after receipt of the 11 notice to investigate and correct the alleged breach by the 12 tenant or advise the association of co-owners that a violation 13 has not occurred. 14 (b) If after 15 days the association of co-owners believes 15 that the alleged breach is not cured or may be repeated, it may 16 institute on its behalf or derivatively by the co-owners on 17 behalf of the association of co-owners, if it is under the con- 18 trol of the developer, an action for both eviction against the 19 tenant or nonco-owner occupant and, simultaneously, for money 20 damages against the co-owner and tenant or nonco-owner occupant 21 for breach of the conditions of the condominium documents. The 22 relief provided for in this section may be by summary 23 proceeding. The association of co-owners may hold both the 24 tenant and the co-owner liable for any damages to the general 25 common elements caused by the co-owner or tenant in connection 26 with the condominium unit or condominium project. 04982'01 17 1 (5) When a co-owner is in arrearage to the association of 2 co-owners for assessments, the association of co-owners may give 3 written notice of the arrearage to a tenant occupying a 4 co-owner's condominium unit under a lease or rental agreement, 5 and the tenant, after receiving the notice, shall deduct from 6 rental payments due the co-owner the arrearage and future assess- 7 ments as they fall due and pay them to the association of 8 co-owners. The deduction does not constitute a breach of the 9 rental agreement or lease by the tenant. If the tenant, after 10 being notified, fails or refuses to remit rent otherwise due the 11 co-owner to the association of co-owners, then the association of 12 co-owners may do the following: 13 (a) Issue a statutory notice to quit for non-payment of rent 14 to the tenant and shall have the right to enforce that notice by 15 summary proceeding. 16 (b) Initiate proceedings pursuant to subsection (4)(b). 17 Sec. 135. (1) As used in this section, "successor 18 developer" means a person who acquires title to the lesser of 10 19 units or 75% of the units in a condominium project, other than a 20 business condominium project, by foreclosure, deed in lieu of 21 foreclosure, purchase, or similar transaction.Successor devel-22oper does not include a person that is not obligated to, or in23fact does not, construct common elements.24 (2) A successor developer shall do both of the following: 25 (a) Comply with this act in the same manner as a developer 26 before selling any units. 04982'01 18 1 (b) Except as provided in subsection (3), assume all express 2 written contractual warranty obligations for defects in 3 workmanship and materials undertaken by its predecessor in 4 title. A successor developer shall not be required to assume, 5 and shall not otherwise be liable for, any other contractual 6 obligations of its predecessor in title. 7 (3) A successor developer shall not be required to comply 8 with subsection (2)(b) with respect to any express written con- 9 tractual warranty obligations for defects in workmanship and 10 materials, if either of the following is maintained with respect 11 to units for which such a warranty was undertaken by the prede- 12 cessor in title: 13 (a) An insurance policy, in a form approved by the insurance 14 bureau, that is underwritten by an insurer authorized to do busi- 15 ness in this state. The insurance policy shall provide coverage 16 for express written contractual warranty obligations for liabil- 17 ity for defects in workmanship and materials. 18 (b) An aggregate escrow account with an escrow agent which 19 contains not less than 0.5% of the sales price of each unit. If 20 the escrow account described in this subdivision is initiated by 21 a developer before a successor developer acquires title, 0.5% of 22 the sales price of each unit in the project shall be deposited by 23 the developer in the aggregate escrow account periodically upon 24 the sale of each unit. If the escrow account described in this 25 subdivision is initiated by a successor developer after acquisi- 26 tion of title, a total amount equal to 0.5% of the sales price of 27 all units for which the warranty period plus 6 months has not 04982'01 19 1 expired shall be deposited by the successor developer in the 2 aggregate escrow account, and 0.5% of the sales price of each 3 unit shall be deposited by the successor developer in the aggre- 4 gate escrow account periodically upon the sale of each remaining 5 unit. Funds in an escrow account described in this subdivision 6 shall not be released for a unit until 6 months after the expira- 7 tion of the warranty period for that unit. 8 (4) A successor developer that acquires title to the lesser 9 of 10 business condominium units or 75% of the business condomin- 10 ium units in the condominium project shall not be required to 11 assume, and shall not otherwise be liable for, any contractual 12 obligations of its predecessor in title. 13 (5) A RESIDENTIAL BUILDER WHO NEITHER CONSTRUCTS NOR REFUR- 14 BISHES COMMON ELEMENTS IN A CONDOMINIUM PROJECT AND WHO IS NOT AN 15 AFFILIATE OF THE DEVELOPER SHALL NOT BE REQUIRED TO ASSUME AND BE 16 LIABLE FOR ANY CONTRACTUAL OBLIGATIONS OF THE DEVELOPER UNDER 17 THIS SECTION, AND SHALL NOT BE CONSIDERED A SUCCESSOR DEVELOPER 18 OR ACQUIRE ANY ADDITIONAL DEVELOPER OBLIGATIONS OR RIGHTS IN THE 19 ABSENCE OF A SPECIFIC ASSIGNMENT OF THOSE OBLIGATIONS OR RIGHTS 20 FROM THE DEVELOPER. HOWEVER, A RESIDENTIAL BUILDER THAT SELLS A 21 CONDOMINIUM UNIT SHALL DELIVER TO THE PURCHASER OF THAT CONDOMIN- 22 IUM UNIT THE CONDOMINIUM DOCUMENTS THAT THE DEVELOPER IS REQUIRED 23 TO DELIVER TO THE PURCHASERS UNDER SECTION 84A(1). 24 Sec. 173. (1)Except as provided by subsection (2) and by25the following subdivisions, this act shall apply to anyTHIS ACT 26 APPLIES TO A condominium project or condominium unit AS FOLLOWS: 04982'01 20 1 (a) For a condominium project for which a permit to sell has 2 been issued on or before March 18, 1983, the developer may elect 3 to comply with 1 or more of the following requirements in lieu of 4 the specified provisions: 5 (i) In lieu of section 31, 32, 33, 52, or 66, or any combi- 6 nation of these sections, the developer may elect to comply with 7 the terms of the master deed in effect as of March 18, 1983. 8 (ii) In lieu of sections 66(2)(j), 66(4), 84(3), 84(4)(a), 9 (c), and (e), and 103b, the developer may elect to deposit all 10 funds paid by a purchaser on or after January 17, 1983 into an 11 escrow account pursuant to an escrow agreement the terms of which 12 were approved by the administrator on or before March 18, 1983. 13 The funds escrowed under this subdivision in excess of any amount 14 or percentage of the escrowed funds that had been required to be 15 escrowed by the administrator or a condominium document pursuant 16 to former section 103 to cover the cost of construction of recre- 17 ational facilities and other common elements, shall be released 18 only upon conveyance of the condominium unit to that purchaser 19 and issuance of a certificate of occupancy if required by local 20 ordinance. Appropriate funds retained in escrow to cover the 21 cost of construction of recreational facilities and other common 22 elements shall be released to the developer upon completion of 23 each recreational facility or other common element. The escrow 24 agent shall be a bank, savings and loan association, or title 25 insurance company, or person designated to act as the agent of a 26 title insurance company, licensed or authorized to do business in 27 this state. 04982'01 21 1 (b) For a condominium project for which a permit to sell has 2 been issued on or before March 18, 1983, the developer may elect 3 to exempt the project from the application of sections 84(4)(d), 4 144, and 145(b). 5 (c) For promotional material filed with the administrator on 6 or before March 18, 1983, the developer may elect to exempt the 7 promotional material from the application of section 81a. For 8 promotional material that has not been filed with the administra- 9 tor on or before March 18, 1983 and that relates to a condominium 10 project to which section 66 does not apply, the developer shall 11 comply with section 81a as if section 66 was applicable to the 12 condominium project. 13 (2) Sections 104a, 104b,104c,and 104d, as amended by14Act No. 538 of the Public Acts of 1982, shallAND FORMER SECTION 15 104C apply to all condominium projectswhichTHAT on 16 October 10, 1980,complied with the definition of qualified 17 conversion condominium projectas added by Act No. 538 of the18Public Acts of 1982PROVIDED IN SECTION 104B. 19 (3) Subsection (1)(a)(ii) and (b)shallDOES not apply to 20 any phase or convertible area of a condominium project, which21 IF THE phase is established,orwhichTHE convertibility 22 option is exercised,after March 18, 1983,andtheTHAT 23 establishment or exerciseof whichresults in the addition of 24 units to the condominium project or the creation of a facility 25 intended for common use. 26 (4) BEGINNING ON THE EFFECTIVE DATE OF THE AMENDATORY ACT 27 THAT ADDED THIS SUBSECTION, SECTIONS 54(8), (9), AND (10), 67(3), 04982'01 22 1 135(5), AND 176 APPLY ONLY TO CONDOMINIUM PROJECTS ESTABLISHED ON 2 OR AFTER JANUARY 1, 2001. 3 Sec. 176. A person shall not maintainanyAN action 4 againstanyA developer, residential builder, licensed archi- 5 tect, contractor, sales agent, or manager of a condominium 6 project arising out of the development or construction of the 7 common elements, or the management, operation, or control of a 8 condominium project BEFORE THE TRANSITIONAL CONTROL DATE, more 9 than 3 yearsfromAFTER the transitional control date or 2 10 years from the date the cause of action accrues, whichever occurs 11 later. 04982'01 Final page. TLG