Michigan HOA Foreclosure

Section 1: Overview — How HOA foreclosure works in Michigan

Michigan runs foreclosures on two tracks. A community association can enforce an unpaid-assessment lien either non-judicially, through "foreclosure by advertisement," or through a judicial action in circuit court. Advertisement is the dominant residential method, and most residential property carries a six-month redemption period after the sale.¹ Condominiums operate under the Michigan Condominium Act, MCL 559.101 et seq. (1978 PA 59), which creates a statutory assessment lien and lets the association foreclose it.² Planned communities — non-condominium subdivisions — have no comprehensive Michigan statute. They draw their lien and foreclosure authority from recorded covenants, conditions, and restrictions, which Michigan practitioners usually call deed restrictions or subdivision restrictions, backed by the Michigan Nonprofit Corporation Act and common-law contract and property principles.³ The sequence moves in steps: the association records and serves a notice of lien, then either publishes and posts notice (for foreclosure by advertisement) or files a circuit-court complaint (for judicial foreclosure), and the process ends with a sheriff's sale and a post-sale redemption window.⁴ Federal law overlays every step. The Fair Debt Collection Practices Act governs pre-sale dunning by third-party collectors, narrowed by Obduskey v. McCarthy & Holthus LLP for conduct limited to non-judicial enforcement of a security interest, while the Servicemembers Civil Relief Act and the bankruptcy automatic stay can halt or undo a sale.⁵ The framework rewards precision, because a defect in notice, publication, or redemption handling can void a sale or expose the association to liability.

Section 2: The statutory framework

2A. The Michigan Condominium Act and lien provisions

The Michigan Condominium Act, MCL 559.101 et seq., enacted as 1978 PA 59 and titled the "condominium act," is a bespoke Michigan statute that governs how condominium projects are established, operated, and managed; it does not derive from the Uniform Common Interest Ownership Act or the 1980 Uniform Condominium Act.² The Act reaches condominiums only and does not extend to non-condominium homeowners associations. Section 108, codified at MCL 559.208, is the operative lien and foreclosure provision. Under MCL 559.208(1), sums assessed to a co-owner that go unpaid — together with interest, collection and late charges, advances the association makes for taxes or other liens to protect its lien, attorney fees, and fines authorized by the condominium documents — "constitute a lien upon the unit" at the time of assessment.⁶ That lien takes priority over other liens "except tax liens on the condominium unit in favor of any state or federal taxing authority and sums unpaid on a first mortgage of record."⁶ Michigan therefore grants no UCIOA-style super-priority: the association lien generally sits junior to the first mortgage of record, and a bank that forecloses a senior first mortgage can wipe out the association's pre-existing delinquency claim against the unit. One statutory exception cuts the other way on timing. Under MCL 559.208(1), "past due assessments that are evidenced by a notice of lien recorded as set forth in subsection (3) have priority over a first mortgage recorded subsequent to the recording of the notice of lien," so a notice of lien recorded before a mortgage primes that later-recorded mortgage, while a first mortgage recorded first keeps its priority.⁷ MCL 559.208(1) authorizes the association to foreclose the lien "by an action or by advertisement by the association of co-owners in the name of the condominium project," and MCL 559.208(2) directs that the foreclosure proceed "in the same manner as a foreclosure under the laws relating to foreclosure of real estate mortgages by advertisement or judicial action," allowing reasonable interest, expenses, costs, and attorney fees to the extent the condominium documents provide.⁶ MCL 559.208(3) sets the pre-foreclosure prerequisites: the association must record a notice of lien stating the legal description, the co-owner of record, and the amounts due, sign it in recordable form, and serve it on the delinquent co-owner by first-class mail at least 10 days before it commences the foreclosure.⁸ The Court of Appeals has held that the Act requires only mailing to the last known address, not proof of actual receipt.⁸

2B. The CC&R-primary framework for planned communities

Michigan has not enacted a comprehensive planned-community or general homeowners-association statute.³ Non-condominium associations, often called subdivision associations, operate under recorded covenants, conditions, and restrictions — in Michigan, usually deed restrictions or subdivision restrictions — that bind the lots within a development. Unlike the Condominium Act, which supplies a statutory lien by operation of law, a planned-community association holds no statutory assessment lien; its right to record a lien and to foreclose that lien must come expressly from the recorded declaration of restrictions.⁹ Where the declaration says nothing, the association's collection options narrow sharply and may shrink to a personal money action against the owner rather than foreclosure against the lot.⁹ Corporate governance of these associations runs through the Michigan Nonprofit Corporation Act, MCL 450.2101 et seq., which sets out the organization, powers, board authority, and member rights of the nonprofit corporation that typically operates the association, while the substantive duty to pay assessments and the remedy of lien foreclosure remain matters of recorded contract and common-law property principles.³ Whether older recorded restrictions stay enforceable is itself governed by the Marketable Record Title Act, which the Legislature has amended repeatedly and which Section 4 addresses. This CC&R-primary structure means two delinquent owners in the same metropolitan market can face materially different enforcement paths depending on whether their community is a condominium or a platted subdivision.

2C. Foreclosure by advertisement, judicial foreclosure, and federal overlays

Foreclosure by advertisement runs under MCL 600.3201 et seq. The association publishes a notice of foreclosure once each week for four successive weeks in a newspaper published in the county where the property sits, and within 15 days after the first publication posts a true copy in a conspicuous place on the premises, under MCL 600.3208.¹⁰ The sale is a public auction that the sheriff or a deputy conducts under MCL 600.3216.¹⁰ Judicial foreclosure runs under MCL 600.3101 et seq.; the association files a complaint in the circuit court for the county where the property sits, may seek a money judgment alongside a judgment of foreclosure, and cannot have the property sold until at least six months after it files the complaint, under MCL 600.3115.¹¹ Redemption after a condominium lien foreclosure runs six months from the date of sale, shortened to one month if the property is abandoned, under MCL 559.208(2).⁶ For mortgage foreclosures generally, MCL 600.3240 sets a default redemption period that varies by property type and equity: six months for residential property of not more than four units where more than two-thirds of the original indebtedness remains, one year for most other property, and 30 days or one month where the property is abandoned.¹² Federal law constrains the process. Under Obduskey v. McCarthy & Holthus LLP, 139 S. Ct. 1029 (2019), "[a] business engaged in no more than nonjudicial foreclosure proceedings is not a 'debt collector' under the FDCPA, except for the limited purpose of §1692f(6)," so pre-sale dunning and any conduct beyond the state-required foreclosure steps remain subject to the full FDCPA.¹³ The Michigan Regulation of Collection Practices Act, MCL 445.251 et seq., reaches collection conduct by regulated persons, though it exempts attorneys handling a claim in their own name.¹⁴ The Servicemembers Civil Relief Act, 50 U.S.C. § 3953, requires a court order before a covered servicemember's property may be sold and can invalidate a sale conducted during or within one year after military service.¹⁵ The bankruptcy automatic stay, 11 U.S.C. § 362, halts foreclosure activity the moment the owner files for bankruptcy.¹⁶

Section 3: The Michigan HOA foreclosure procedural sequence

A. Lien establishment and recording

For condominiums, the assessment lien arises automatically under MCL 559.208(1) when the association assesses sums against the unit; the lien attaches without any recording.⁶ To perfect notice against third parties and to satisfy the statutory prerequisite to foreclosure, the association records a notice of lien with the register of deeds in the county where the unit sits. MCL 559.208(3)(a) requires the notice to state the legal description of the unit, the name of the co-owner of record, and the amounts due; specifically, MCL 559.208(3)(a)(iii) requires the notice to state "[t]he amounts due the association of co-owners at the date of the notice, exclusive of interest, costs, attorney fees, and future assessments," so those separately treated charges should not inflate the recorded figure.⁸ An authorized representative must sign the notice in recordable form under MCL 559.208(3)(b).⁸ Planned communities have no statutory lien; the association creates and records a lien only if and as the recorded declaration of restrictions authorizes, and the declaration typically dictates the form, content, and timing of the recording.⁹ CC&Rs frequently go beyond the statutory minimum, spelling out late charges, interest rates, and notice steps that exceed the Condominium Act floor.

B. Pre-foreclosure notice and demand

For condominiums, MCL 559.208(3)(c) requires the association to serve the recorded notice of lien on the delinquent co-owner by first-class mail, postage prepaid, to the co-owner's last known address at least 10 days before the foreclosure proceeding commences.⁸ The Court of Appeals has confirmed that the Act requires mailing rather than proof of actual receipt.⁸ Many condominium bylaws add a step: the association must separately notify the co-owner that it will pursue foreclosure by advertisement and advise the co-owner of the right to demand a judicial hearing by suing the association. Where the documents impose that step, it becomes a contractual prerequisite enforceable on top of the statute.⁴ For planned communities, the demand and notice obligations are whatever the declaration specifies, supplemented by any applicable provisions of the Michigan Regulation of Collection Practices Act and the federal FDCPA when a third-party collector is involved.¹⁴ Both condominium and planned-community associations should align their pre-foreclosure dunning with the FDCPA's pre-sale coverage, because Obduskey shields only conduct strictly limited to state-required non-judicial enforcement.¹³

C. Foreclosure by advertisement or judicial foreclosure

Once the 10-day notice period has run for a condominium, the association elects between the two tracks that MCL 559.208(1) authorizes.⁶ Foreclosure by advertisement under MCL 600.3201 et seq. is non-judicial: the association publishes a notice of foreclosure once each week for four successive weeks in a county newspaper and, within 15 days of first publication, posts a copy on the premises, all under MCL 600.3208.¹⁰ The published notice must carry the contents that MCL 600.3212 specifies — the names of the parties, the recording data, the amount claimed due, and a statutory statement — and the sheriff then conducts the sale under MCL 600.3216.¹⁷ Judicial foreclosure under MCL 600.3101 et seq. requires the association to file a complaint in circuit court, serve the co-owner (who has 21 days to respond if personally served or 28 days if served by alternative means under the Michigan Court Rules), and obtain a judgment of foreclosure and sale; the court cannot order a sale sooner than six months after the complaint is filed under MCL 600.3115, and the association may also win a money judgment.¹¹ Associations generally favor the faster, lower-cost advertisement track where the documents authorize it and the matter is uncontested, and they choose judicial foreclosure where junior interests require a court order of priority, where the co-owner is likely to contest, or where they want a money judgment.⁴ For planned communities, the availability of either track depends on the recorded declaration; the association cannot invoke the Condominium Act and must establish its foreclosure right by contract, then follow the same mortgage-foreclosure machinery in MCL 600.3201 et seq. or MCL 600.3101 et seq.⁹

D. Sheriff's sale and post-sale redemption

The sale is a public auction. The association ordinarily enters a credit bid equal to the judgment or lien amount plus permitted costs, and any surplus over the opening bid belongs to the former owner.⁴ The purchaser receives a sheriff's deed subject to the statutory right of redemption. For a condominium lien foreclosure, MCL 559.208(2) fixes the redemption period at six months from the date of sale, shortened to one month if the property is abandoned.⁶ In Great Lakes Property Management Consultants, Inc v HP Foreclosure Solution, LLC, the Court of Appeals confirmed that this period runs from the date of sale, not the date the deed is recorded, and cannot be equitably extended absent fraud, accident, or mistake; the trial court found the purchaser "was entitled to payment of per diem interest of 5% of the redemption amount," and a redeeming party who tendered a check that omitted that per diem interest failed to redeem before the period elapsed.¹⁸ During redemption, a purchaser who pays taxes, senior-lien redemption amounts, condominium or association assessments, or insurance premiums may add those sums to the redemption amount under MCL 600.3240(4).¹² If the owner does not redeem, all right, title, and interest vest in the purchaser. These rules apply to both condominium and planned-community foreclosures, because both proceed in the manner of mortgage foreclosures; CC&Rs cannot lengthen or shorten the statutory redemption period.

Section 4: Recent legislative and judicial activity

A. Recent bills

Michigan's most consequential recent legislation for association lien and foreclosure practice concerns the Marketable Record Title Act (MRTA), 1945 PA 200, MCL 565.101 et seq., which governs whether the recorded restrictions that underpin a planned-community association's lien and foreclosure rights stay enforceable. Because a non-condominium association's authority to lien and foreclose flows entirely from its recorded restrictions, extinguishing those restrictions under the MRTA can eliminate the contractual basis for foreclosure.

B. Recent appellate rulings

Michigan's appellate courts aren't rewriting HOA law from the bench. They're doing something more practical: holding associations and owners to the statute's exact terms. Two recent Court of Appeals decisions show how — one on when the redemption clock runs and what a redeeming owner must pay, and one on whether complaints about board spending can stop a foreclosure for unpaid assessments.

C. Active legislative debates

Practitioner commentary anticipates a possible 2026 bill that would require certain condominium associations to commission periodic reserve studies by a qualified professional, though no such bill has been introduced as of this writing.²² Continued refinement of the Marketable Record Title Act also looks likely, given how often the Legislature has amended it through Public Act 13 of 2025.

Section 5: National positioning and related coverage

Michigan sits in the middle of the national spectrum. It is a dual-track foreclosure state whose dominant residential mechanism — foreclosure by advertisement — is a statutory publication-and-posting procedure under MCL 600.3208, not the trustee's-sale model that states like Arizona, Georgia, or Idaho use, and it pairs that procedure with a moderate six-month redemption period for most residential property. Michigan grants no UCIOA-style super-priority lien, so its associations stay junior to the first mortgage of record and cannot prime institutional lenders, unlike associations in super-lien states. The state runs more creditor-efficient than judicial-only states, because the advertisement track skips a full lawsuit, yet it protects owners more than pure trustee-sale states, because of its statutory redemption window. Michigan has not enacted UCIOA, keeps no dedicated HOA regulator, and requires no state-level community association manager licensing, leaving condominiums to the bespoke Condominium Act and planned communities to recorded restrictions and the Michigan Nonprofit Corporation Act.²³

For property managers, board members, and association counsel, the operational takeaway is direct: Michigan rewards procedural discipline. A properly recorded and served lien, accurate publication and posting, and precise redemption handling decide whether a foreclosure stands or falls.

1. Mich. Comp. Laws § 600.3201 (foreclosure by advertisement of mortgage containing power of sale); Mich. Comp. Laws § 559.208(2) (six-month redemption from date of sale, one month if abandoned) ↩
2. Mich. Comp. Laws § 559.101 (short title, "condominium act"), Michigan Condominium Act, 1978 PA 59, eff. July 1, 1978 ↩
3. Michigan Nonprofit Corporation Act, Mich. Comp. Laws § 450.2101 et seq.; Michigan has no comprehensive HOA statute, so non-condominium associations rely on recorded CC&Rs and the Nonprofit Corporation Act ↩
4. Which Type of Foreclosure, Judicial or Advertisement, is Best for Your Community Association?, Michigan Community Association Law Blog (election between tracks; sheriff's sale; credit bid; surplus; bylaw notice provisions) ↩
5. Obduskey v. McCarthy & Holthus LLP, 586 U.S. 466, 139 S. Ct. 1029 (2019); Servicemembers Civil Relief Act, 50 U.S.C. § 3953; 11 U.S.C. § 362 (bankruptcy automatic stay) ↩
6. Mich. Comp. Laws § 559.208 (Sec. 108: assessment lien; priority; foreclosure by action or advertisement; six-month/one-month redemption; notice-of-lien prerequisites) ↩
7. Mich. Comp. Laws § 559.208(1) (a notice of lien recorded before a mortgage primes that later-recorded mortgage; a first mortgage recorded first retains priority) ↩
8. Mich. Comp. Laws § 559.208(3) (notice-of-lien contents, including subsection (3)(a)(iii), "[t]he amounts due ... exclusive of interest, costs, attorney fees, and future assessments"; recordable form; first-class-mail service to last known address at least 10 days before foreclosure); see Trademark Properties of Mich., LLC v. Federal National Mortgage Ass'n, 308 Mich. App. 132 (2014) (mailing, not actual receipt, required) ↩
9. Which Type of Foreclosure, Judicial or Advertisement, is Best for Your Community Association?, Michigan Community Association Law Blog (no Michigan statute addresses HOA lien rights; the right to record and foreclose a lien must be granted by the recorded declaration of restrictions) ↩
10. Mich. Comp. Laws § 600.3208 (publication once each week for four successive weeks; posting within 15 days of first publication); Mich. Comp. Laws § 600.3216 (public sale by sheriff) ↩
11. Mich. Comp. Laws § 600.3101 (circuit-court jurisdiction to foreclose mortgages); Mich. Comp. Laws § 600.3115 (court may not order sale within six months of filing) ↩
12. Mich. Comp. Laws § 600.3240 (redemption periods by property type and equity; subsection (4) additions for taxes, senior liens, association assessments, and insurance; abandonment provisions) ↩
13. Obduskey v. McCarthy & Holthus LLP, 586 U.S. 466, 139 S. Ct. 1029 (2019) (a business engaged in no more than nonjudicial foreclosure proceedings is not a "debt collector" under the FDCPA, except for the limited purpose of 15 U.S.C. § 1692f(6)) ↩
14. Michigan Regulation of Collection Practices Act, 1981 PA 70, Mich. Comp. Laws § 445.251 et seq. (definitions; regulated persons; attorney exemption) ↩
15. Servicemembers Civil Relief Act, 50 U.S.C. § 3953 (court order required before sale; sale invalid if conducted during or within one year after military service) ↩
16. 11 U.S.C. § 362 (automatic stay upon bankruptcy filing) ↩
17. Mich. Comp. Laws § 600.3212 (contents of notice of foreclosure by advertisement); Mich. Comp. Laws § 600.3216 (sale by sheriff) ↩
18. Great Lakes Property Management Consultants, Inc v HP Foreclosure Solution, LLC, ___ Mich. App. ___ (2023) (published, issued Aug. 10, 2023, Docket No. 363746) (redemption runs from date of sale; per diem interest of 5% of the redemption amount required; no equitable extension absent fraud, accident, or mistake); leave to appeal denied (Mich. May 29, 2024) (No. 166147), Viviano, J., concurring ↩
19. Senate Bill 721 of 2023-2024, Public Act 20 of 2024, amending §§ 1 & 3 of 1945 PA 200 (Mich. Comp. Laws §§ 565.101, 565.103); approved Mar. 28, 2024, with immediate effect; extended the preservation deadline to September 29, 2025 ↩
20. House Bill 4524 of 2025, Public Act 13 of 2025, amending the title and §§ 1, 1a, 2, 3, 4, 5, 6 & 8 of 1945 PA 200 and adding § 5a; approved with immediate effect Sept. 29, 2025; Senate Fiscal Agency analysis (preservation deadline extended to two years after the effective date) ↩
21. Main Street Lofts Condominium Ass'n v Parodi, Docket Nos. 362990, 362991, 363727 (Mich. Ct. App. Nov. 21, 2023) (unpublished per curiam) (mismanagement allegations do not excuse unpaid assessments; foreclosure affirmed), discussed at Michigan Community Association Law Blog ↩
22. 2025 Michigan Condo and HOA Legislative Update, Michigan Community Association Law Blog (anticipating a 2026 reserve-study bill not yet introduced) ↩
23. Michigan Department of Licensing and Regulatory Affairs (no dedicated HOA regulator; no state community association manager licensing); condominium framework, Mich. Comp. Laws § 559.101 et seq.; planned-community framework, recorded CC&Rs and Michigan Nonprofit Corporation Act, Mich. Comp. Laws § 450.2101 et seq. ↩