Michigan owners are paying full dues on condos that no longer exist
Michigan owners are paying full dues on condos that no longer exist
2026-09-12 · Michigan · Compliance · Reported — unconfirmed
Reported. Two Oakland County condominium communities produced the same problem sixteen months apart, and Michigan law has no answer to it: an owner whose unit has been destroyed keeps paying assessments in full.
Le Chateau, Southfield
A fire on 4 November 2024 killed a 73-year-old woman, hospitalised three people and displaced dozens. Sixteen months later, WDIV's Local 4 Investigators reported on 11 March 2026 that the building had still not been rebuilt — while the association continued charging pre-fire budgets on a structure drawing no utilities and receiving no services.1
Owner David Henry told the station he pays $849 a month and was threatened with foreclosure if he stopped. Owner Lance Slater did stop; the association foreclosed on his two units after more than fifteen years of ownership. His attorney, Richard Shulman, said the board had refused settlement offers before foreclosing. The community is managed by Encompass Management Group; the board president did not respond to the station.
Keatington New Town, Orion Township
A suspected gas explosion in November 2024 destroyed a unit. WDIV reported on 26 February 2026 that an 85-year-old resident was paying $770 a month in association dues plus special assessments on a unit that no longer physically exists, while also paying $2,000 a month in rent elsewhere. Nothing remained on the site; reconstruction was scheduled to begin in summer 2026. Her son was drafting a demand for full abatement of fees until an occupancy permit issues.2
Why the association is probably entitled to the money
This is the uncomfortable part, and boards and owners both need it stated clearly.
A condominium assessment is not a service charge. It is a co-owner's share of the association's common expenses, allocated by percentage of value in the master deed. The association's expenses do not fall because one building burned — in most cases they rise, because the association is now managing a reconstruction, an insurance claim and a site.
Michigan has no statute abating assessments on an uninhabitable or destroyed unit. Nothing in the Condominium Act reduces a percentage of value because the improvement on it is gone. Unless the master deed contains an abatement provision — and most Michigan master deeds do not — the obligation continues.
So an owner paying $849 a month on a burned-out unit is, in all likelihood, being billed correctly. That is the problem, not a departure from it.
What the master deed might actually give
An owner in this position should have three documents read by counsel, in this order:
- The reconstruction provisions of the master deed. Michigan master deeds commonly set a threshold — frequently a supermajority of co-owners — for a decision not to rebuild, and a mechanism for what happens then, including withdrawal of the damaged units and reallocation of percentages of value. That is the route to an actual reduction, and it is a vote, not a request.
- The insurance provisions. Loss of use, additional living expense and who is entitled to claim it. An owner paying rent elsewhere while paying assessments may have a claim under the master policy, the HO-6, or both.
- Any deadline the association is under. Where the documents require reconstruction to commence within a period, an association that has let sixteen months pass may be in breach of its own instrument — which is a different and stronger argument than fairness.
What a board can do differently
Foreclosing on an owner whose home burned down is legally available and reputationally catastrophic, and Michigan courts are not indifferent to how associations conduct collections. In one 2025 case a judge found an association's records “not trustworthy” and its practices “deceptive,” and its foreclosure failed at trial.
The available middle paths do not require abatement: a payment plan with interest, deferral secured by a lien that sits until the reconstruction completes or the unit sells, or a documented board resolution explaining why abatement is not within the board's power. All three are better records than a foreclosure, and the last one costs nothing.
The gap nobody in Lansing is filling
No bill in the 2025–2026 session addresses assessments on destroyed or uninhabitable units. The Condominium Act has not been amended once in 2024, 2025 or 2026. This is a real and recurring Michigan problem with no legislative attention at all.
What to watch next
Whether the Le Chateau foreclosure is challenged. Slater's units were foreclosed and his counsel is on the record; a Michigan appellate decision on assessments during reconstruction would be the first authority anyone has.
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