Why the manager-authority holding is the one to plan around

It cuts both ways, and which way it cuts is a Michigan board's own choice.

In favour: collection is time-sensitive. An association whose management agreement lets the manager commence an action does not lose a month waiting for a quorum, and a co-owner cannot defeat a well-founded claim by pointing at the minutes.

Against: the same clause lets a management company put the association into litigation, at the association's expense, without a board decision. Where the manager's affiliated law firm is doing the collecting, the incentive structure deserves a hard look.

The holding turns entirely on what the management agreement and bylaws say. Boards that have never read Article X of their own bylaws against their current management contract are relying on an alignment nobody has checked.

Set against the association that lost

Six months before Farmington Square, a different association lost a foreclosure outright when a judge found its ledgers untrustworthy and its practices deceptive — Woodside Meadows Condominium Association v Parker. And a year later a homeowners association lost an enforcement case entirely on authority, because its bylaws required a two-thirds member vote for the litigation expense that it never took.

Three cases, three different outcomes, and none of them turned on whether the money was owed:

• Authority to sue — Farmington Square had it in the management agreement; Northville Colony did not have it because it skipped a required vote.
• Provable records — Farmington Square had them; Woodside Meadows did not.
• A fee provision that says “attorney fees” — Farmington Square had the statutory route at MCL 559.206(b); Carnegie Woods had a bylaw that said only “damages” and recovered nothing.

The statutory advantage condominiums have

Worth stating plainly because it is frequently missed. A Michigan condominium association collecting assessments has a statutory fee-shift at MCL 559.206(b). A Michigan non-condominium property owners' association does not; it has whatever its recorded documents give it, and those documents were often drafted by a developer with no interest in the association's later enforcement costs.

That is a structural difference in Michigan law that no bill this session would change.

One record note

At least one practitioner alert cites this case as Docket No. 366035. The opinion is No. 366946. A companion appeal by the co-owner, Keith J. Mitan v Farmington Square Condominium Association, No. 364595 (25 July 2024, unpublished), was also resolved against him.

What to watch next

Whether Michigan panels start scrutinising manager-initiated litigation where the manager and the collecting firm are affiliated. Nothing in Farmington Square forecloses that argument; the co-owner simply did not make it.