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Michigan Court of Appeals Agrees with CAI Arguments in Tax Sale Case

6/20/2000  -  Alexandria, VA

On May 12, the Court of Appeals of Michigan, concurring with CAI's arguments in an amicus curiae, or "friend of the court," brief filed in April 1999, released a favorable decision in the case of Lakes of the North Association v. Twiga Limited Partnership. The court concluded that properties in question fell under the private deed restriction exception of the General Property Tax Act. Therefore, the association has a right to collect prospective assessment fees.

This case originated when the association sued the owner for non-payment of assessments. The four parcels of land were bid to the State of Michigan because the 1988 taxes were unpaid. The owner, who purchased the lots from the state, argued that he owned the four lots—free and clear of any covenant to pay assessments to the association—because of the tax sale to the state. Therefore, title became absolute under the state statute. The trial court did not agree with this reasoning and found in favor of the association by order granting summary disposition, which the Court of Appeals affirmed.

The Court of Appeals held that legislative intent of the General Property Tax Act did not include such covenants to be canceled by a tax sale. Attorney Mark Makower filed the amicus brief on behalf of CAI. Ron Perl, Esq., chair of the Government and Public Affairs Council, said, "The holding in this case is invaluable because it reiterates the importance of upholding a community associations ability to collect assessments, which is the life blood of these communities. The Court's reasoning paralleled that of the amicus brief and this holding will further community associations interests in the future."

CAI amicus curiae briefs, one aspect of CAI's overall government and public affairs program, are filed in federal or state cases that pose questions of significant importance in community association law. The Community Associations Institute is a nonprofit association created in 1973 to educate and represent the nation's 205,000 community associations—condominium associations, homeowner associations and cooperatives. CAI members include homeowners, associations and related professionals and service providers.

Phone: 703-970-9235