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Condominium Bylaws Amendment Restricting Short Term Rentals Decision

In Highfield Beach at Lake Michigan v. Scott E. Sanderson, et. al, ___ Mich App ___ (2020), decided on March 24, 2020 (Case Nos. 343968, 345177; 2020 WL 1445415) as a published decision, the Michigan Court of Appeals upheld the enforceability of an amended condominium bylaw prohibiting short-term rentals under 90 days, denying relief to an owner who argued his 15-year contract with a property management company that involved short-term leases of his condominium unit on his behalf could not be interrupted by the amendment.

The owner, Scott Sanderson, cited the Michigan Condominium Act (the “Act”), specifically MCL 559.212(1) which provides in part: “After the transitional control date, the association of co-owners may amend the condominium documents as to the rental of condominium units or terms of occupancy. The amendment shall not affect the rights of any lessors or lessees under a written lease otherwise in compliance with this section and executed before the effective date of the amendment. . . “ (Emphasis added). Sanderson maintained that pursuant to this provision of the Act, the bylaws amendment could not infringe on his rights or his property management company’s rights to continue short-term rentals under the pre-amendment bylaws provision. The Court disagreed, holding that the property management company is not a lessee under a written lease pursuant to MCL 559.212(1) merely because it has a contractual right to find tenants to lease the owner’s unit. Without any right to possess, occupy, or use the condominium units, the property management company fell outside the protection of the Act, which is reserved to tenants in possession of units at the time of such an amendment to the bylaws restricting lease rights.
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