Why this is a live risk rather than a theoretical one

Because Michigan case law has just confirmed how much authority a manager can hold. In Farmington Square Condominium Association v Mitan, No. 366946 (11 August 2025), the Court of Appeals held that a community association manager could authorise the filing of a lawsuit under the management agreement and the bylaws, with no separate board vote required.

So in Michigan a person who needs no licence, sits no exam and carries no bond may — depending on the contract — commit an association to litigation at the association's expense.

That is not an argument against professional management. Good Michigan managers are the reason many volunteer boards function at all. It is an argument for reading the contract, because the contract is the only control that exists.

The controls a board actually has

All of them are private, and all of them go in the management agreement or the board's own procedures:

• A fidelity bond or crime policy covering the manager's access to association funds, in an amount that reflects the balances actually held. Verify it annually against a certificate, not a promise.
• Association funds in accounts in the association's name, with at least one board member holding view access. Commingled or manager-held operating accounts are the structural precondition for every association embezzlement.
• A limit on the manager's authority to commit the association — to litigation, to contracts above a stated value, to legal counsel. Farmington Square makes this concrete rather than academic.
• The section 57 audit or review. MCL 559.257(2)–(3) requires an association with annual revenues over $20,000 to have its books independently audited or reviewed by a CPA each year — but the co-owners may opt out annually by affirmative vote. An association that routinely opts out has waived the only statutory financial check Michigan gives it.
• A credential the state does not require. CAI's manager designations are voluntary, and asking for one is the closest thing to a licensing check available in Michigan.

Where a complaint would go, and it is nowhere

LARA states in its published FAQ that it “has no authority to take complaints or enforce any requirements of the Condominium Act regarding the actions of condominium associations.” It has no authority over unlicensed managers either, because there is no licence.

The Attorney General's Consumer Protection Team takes written complaints, and folds condominium associations into a “Landlord/Tenant” category that ranked sixth of its top ten in 2025 out of more than 12,000 complaints. Taking a complaint is not enforcement. The AG has issued no formal opinion touching associations since 2019.

For an association that has lost money, the route is a civil action, funded by the association, against a counterparty whose assets are unknown.

What to watch next

Nothing pending. There is no bill in the 2025–2026 session proposing licensure or registration of Michigan community association managers, no ombudsman bill, and no general homeowners association statute. The only association bill with any floor movement this session is Senate Bill 272, which is a developer measure.