Declaration | CMDA Law

The overwhelming majority of condominium and homeowners associations in Michigan are formed to govern residential developments. Accordingly, many community associations have concerns about residents or guests traveling at excessive speeds throughout the neighborhood. With the growing utilization of common interest communities, more and more associations are seeking to create and enforce their own speed limits within their respective developments. For example, some community associations may desire to lower the speed limit within their communities from the typical 25 mph limit in residential areas to 15 mph. Speed limit restrictions in residential areas provides increased safety for the residents of the community, particularly in heavily populated developments with a large number of children who frequently play outside.

Speed Limits in Michigan

In Michigan, speed limits are established and enforced by the State and the local municipality within which the roads are located. MCL 257.627(1), of the Michigan Vehicle Code, commonly referred to as the basic speed law, states in pertinent part as follows:

(1) A person operating a vehicle on a highway shall operate that vehicle at a careful and prudent speed not greater than nor less than is reasonable and proper, having due regard to the traffic, surface, and width of the highway and of any other condition existing at the time. A person shall not operate a vehicle upon a highway at a speed greater than that which will permit a stop within the assured, clear distance ahead. A violation of this subsection shall be known and may be referred to as a violation of the basic speed law or “VBSL”.

Accordingly, regardless of any posted speed limit, all drivers in Michigan are subject to the above statutory provision and violators are subject to citation. Depending on the circumstances, a driver could still be issued a citation for driving within the posted speed limit if the driver’s actual speed is unreasonable in light of the existing conditions. See, Mich. M Crim JI 16.19 Unreasonable Rate of Speed. For example, while driving through a heavy snowstorm, a driver could be ticketed for driving 50 mph on a highway with a posted speed limit of 55 mph if the circumstances make traveling at 50 mph unreasonable.

In 2002, House Bill 6274 of 2002 was introduced in the Michigan House of Representatives by Rep. Glenn S. Anderson. The proposed bill sought to amend MCL 257.627 to make it unlawful for any driver to drive at a speed exceeding 15 mph in the common area of a residential condominium development. The bill faced opposition from a number of groups and ultimately did not pass. A particular concern was raised regarding the bill’s impact on site condominiums in rural and sparsely populated townships where some or all of the borders of the condominium project consist of county roads—sometimes paved, but sometimes gravel or dirt—on which the speed limit is 55 mph.

Association Enforcement of Speed Restrictions

There is currently no case law in Michigan addressing the enforceability of a community association’s implementation or enforcement of a speed limit contained in a deed restriction. Without any case law on point to provide further clarity on this question, it is impossible to say for certain what types of restrictions an association could implement with respect to speed limits. In light of this, the extent to which an association has the ability to implement and enforce speed limit restrictions may depend on whether the association owns its own private roads or whether the roads are publicly maintained by a local municipality. While it is not uncommon for a community association to have public roads that are maintained by the local municipality, most associations own the roads within the development as common elements or common areas.

If a community association has private roads, the association should be able to erect speed limit signs within the community. Careful review of any easement agreements and local ordinances must be done prior to erecting any signs within a community. In doing so, these signs should be distinct from speed limit signs used by the local municipality so as not to cause confusion.

Governing Documents

Condominium or homeowners associations with a set speed limit in their Master Deed, Declaration, or Bylaws are scarce. This is understandable as an association with such a provision would lose flexibility, be unable to adapt to changing times, and could face difficulties obtaining the required approval from members to amend. As a result, associations that wish to enforce speed restrictions typically rely on broad provisions in their governing documents, such as provisions stating “No Co-owner shall use his Unit or the Common Elements in any manner inconsistent with the purposes of the Project or in any manner that interferes with or impairs the rights of any other Co-owner in the use and enjoyment of his Unit or the Common Elements” or provisions that prohibit any activity that could be considered a “nuisance or annoyance” to the other members of the community. While these provisions can certainly be relied upon in an enforcement action against someone who is speeding within the community, and would at the very least give the association a strong case, the broad nature of these provisions leaves associations susceptible to various defenses.

Rules and Regulations

In order to provide an association with the flexibility it needs to adapt, and the enforcement powers it needs to govern the community safely, the ideal method of implementing and enforcing speed limits is through reasonable rules and regulations. Condominium associations are empowered to implement rules and regulations in accordance with the Michigan Condominium Act, specifically MCL 559.165 and Michigan Administrative Rule R 559.510. As a result, nearly every condominium in Michigan has a provision in its Bylaws empowering the association to implement and enforce reasonable rules and regulations.

There is no explicit authorization for a homeowners association to implement rules and regulations as they are not governed by the Michigan Condominium Act. However, as long as the HOA’s Declaration and Bylaws permit reasonable rules and regulations to be implemented relating to the common areas of the subdivision, it is likewise possible for a homeowners association to implement and enforce speed limits. Although there is similarly no case law directly on point, there is a strong argument to be made that case law discussing analogous situations involving condominium associations should be applied to homeowners associations.

Before adopting a rule or regulation, all associations must be aware of the limitations on the authority of a board of directors to adopt rules, as well as the distinction between adopting a rule and amending the Bylaws. A rule may not amend the Bylaws as “…a rule or regulation is ‘a tool to implement or manage existing structural law,” while an amendment ‘presumptively changes existing structural law.’ See Black’s Law Dictionary (5th ed).” Meadow Bridge Condo Ass’n v Bosca, 167 Mich App 280, 282; 466 NW2d 303 (1990). The Michigan Court of Appeals has held that a homeowners association could not use its rule making authority to create rules that impose additional burdens that are not expressly stated in the Bylaws. Specifically, the Court held:

For instance, Paragraph 20 of the covenants and restrictions provides that the lot owners may keep “common household pets” unless “they become an annoyance or nuisance to the neighborhood.” The restriction does not define “common household pet” and does not define the conditions under which a common household pet will be deemed to be a nuisance. The Association could for that reason promulgate rules expressing its understanding of those terms and governing its procedure for enforcing that particular restriction. The Association could not, however, expand that restriction or impose a new burden on the lot owners with less than unanimous consent under the guise of interpreting the restriction. (emphasis added).

Conlin v Upton, 313 Mich App 243, 265–66; 881 NW2d 511, 524–25 (2015). Therefore, as long as your condominium or homeowners association has private roads and has a provision in its documents empowering the association to implement and enforce reasonable rules and regulations, your association should be able to set and enforce a speed limit within the community. For developments with public roads, the association could petition the local municipality for an ordinance implementing a lower speed limit within that particular project.

If a condominium association does not have an express provision in its governing documents authorizing the association to adopt rules or regulations, there is case law supporting the position that condominium associations have this right inherently. In this respect, the Michigan Court of Appeals has held:

MCL 559.153 provides, in pertinent part, that the “administration of a condominium project shall be governed by bylaws recorded as part of the master deed, or as provided in the master deed.” A condominium association has an implied power to adopt reasonable rules to govern the use of common property except as limited by statute or the condominium documents. See 2 Restatement Property (Servitudes), 3d, § 6.7(1), p 140.

Hunters Woods Site Condo Ass’n, Inc v Homes of Hunters Woods Condo Ass’n, Inc, unpublished opinion per curiam of the Court of Appeals, issued May 24, 2011 (Docket No. 296001), p 1. “The trial court correctly recognized the general principle that a condominium board ‘has a duty and the authority to manage the common elements of the traditional condominium project, including the recreational facilities …’” Id. Although subdivision or homeowners associations are not governed by MCL 559.153, the analysis provided by the Hunters Woods Court could provide persuasive authority for the position that a homeowners association has the same implied power to adopt rules and regulations as a condominium association.

The implementation of a rule or regulations is of course contingent upon the existence of an underlying provision in the Bylaws or Declaration that the rule or regulation is implementing. In many cases, the underlying provision would be the aforementioned broad restriction against any activity that could be considered a “nuisance or annoyance” to the other members of the community. The rule or regulation must also be reasonable as all deed restrictions must not violate public policy in order to be enforceable in Michigan. See Bloomfield Estates Improvement Ass’n, Inc v City of Birmingham, 479 Mich 206, 212; 737 NW2d 670, 674 (2007). Ideally, an association attempting to implement or enforce a speed limit should have a provision in its recorded governing documents providing the association with the right to adopt a speed limit by rule or regulation in an amount as determined by the board of directors from time to time.

Arguably, if there is a speed limit already in place by the local municipality, the association may still be able to implement a speed limit that is more restrictive, i.e. a lower maximum speed, as long as the restriction is reasonable. An association however could not attempt to avoid the local municipality speed limit by adopting a rule purporting to increase the posted speed limit. See MCL 559.241(1) which states in relevant part “A condominium project shall comply with applicable local law, ordinances, and regulations.”

Enforcement Mechanisms

If an association does implement such a rule, enforcement of the restriction against repeat offenders becomes the next priority. Associations with speed limits should ensure that they have the ability to issue fines for violations. Alternative potential enforcement mechanisms include erecting stop signs or speed bumps to slow down drivers within the community, but the effectiveness of these options are limited and also come with many drawbacks.

If someone is continually driving at excessive speeds throughout the community, the association should document the violations carefully. In particular, the date and time of the offense, the location of the offense, the license plate, and the make and model of the car should all be documented to the extent possible. The association should then send violation letters and should consider fining for repeated violations after appropriate notice and an opportunity to defend have been provided. It is important to note that an association will likely not be able to enforce any type of speed limit restriction on a non-resident of the community.

If an association is forced to take enforcement action against a violator, it may have a difficult time proving the speed that a violator was traveling at. Observation by a lay witness will likely be the most common documentation of the violation and could at least provide the association with enough evidence to issue a violation letter. It would of course be more beneficial if an association had security cameras and a radar system to unequivocally establish the speed someone was traveling at, but the installation of these devices to enforce a speed limit restriction presents practical and legal complications. Even if an association has concerns about enforcing a speed limit restriction, the erection of speed limit signs may alone provide the necessary deterrence for many violators. If none of the above enforcement mechanisms are working, the association may be left with no other option than to pursue a court ordered injunction against the offender.

A more extreme option may exist for associations that wish to involve the local government to issue citations for speeders. An Attorney General Opinion from 2002 issued by former Michigan Attorney General Mike Cox discusses the ability of an owner of a private road to contract with the local police department to issue citations and enforce speed limits.

Section 951(2) provides that a person in charge of a private road may request that the local police enforce such an ordinance on that private road:

A city, township, or village, with the consent of, or at the request of, a person who is in charge of a private road or parking lot, whether or not that road or parking lot is open to the general public, may contract with that person for the city, township, or village to enforce provisions of the uniform traffic code or ordinance adopted under this section on that private road or parking lot. As used in this subsection, “person” means an individual, corporation, association, partnership, or other legal entity. [MCL 257.951(2).]

It is my opinion, therefore, that the provisions of the MVC applicable to private roads authorize a police agency to issue citations to motorists for certain civil infractions and criminal traffic violations that occur on private subdivision roads accessible to the public. Even if the road is not open to the general public, section 951 of the MVC, MCL 257.951, allows a person in charge of the road to contract with a city, township, or village to enforce provisions of the uniform traffic code or ordinance adopted under that section.

OAG, 2003, No. 7138, WL, 2003, No. 7138 (September 23, 2003). Importantly, the statute being discussed above, MCL 257.951(2), was amended in 2006 to state as follows:

A city, township, or village, with the consent of, or at the request of, a person who is in charge of a parking lot, whether or not that parking lot is open to the general public, may contract with that person for the city, township, or village to enforce provisions of the uniform traffic code or ordinance adopted under this section in that parking lot. A peace officer may enter upon a private road that is accessible to the general public to enforce provisions of an ordinance adopted under this section if signs meeting the requirements of the Michigan manual of uniform traffic control devices are posted on the private road. The owner or person in charge of the private road is responsible for the posting of signs under this subsection. Nothing in this subsection shall be considered to affect a contract entered into between a city, township, or village and the person in charge of a private road before the effective date of the amendatory act that added this sentence. As used in this subsection, “person” means an individual, corporation, association, partnership, or other legal entity.

The language “a person who is in charge of a private road or parking lot” was amended to state simply “a person who is in charge of a parking lot”. Therefore, it remains unclear whether the above Attorney General Opinion remains persuasive authority in light of the fact that the new statute removes private roads from its purview.

Conclusion

In short, although there are strong arguments to support a community association’s ability to implement and enforce speed limit restrictions, the extent to which associations can do so remains unsettled. Careful consideration should be taken with legal counsel prior to an association putting up signs or attempting to enforce restrictions that are inconsistent with local ordinances or state law. Although there are questions and limitations on what can be done, in many instances it may be possible for associations to implement and enforce speed limit restrictions within their communities.

Brandan A. Hallaq is an attorney in our Livonia, MI office where he focuses his practice in the areas of business and real estate law. He practices in state and federal courts handling a wide scope of real estate and business/commercial litigation matters. He also has experience preparing the necessary documents for business formation, purchases/sales of businesses, as well as negotiating and drafting contracts. Mr. Hallaq obtained his Juris Doctor degree cum laude from Wayne State University Law School and his B.A. degree cum laude in Political Science from Wayne State University. He can be reached at (734) 261-2400 or at bhallaq@cmda-law.com.

With Christmas just around the corner, many community associations are currently planning parties to celebrate the holiday season. Holiday parties are a great way to bring the community together and converse with your neighbors. These parties frequently involve the catering of food and alcohol as well as live entertainment which helps foster community participation.

While holiday parties are generally encouraged by all, there are a few concerns that community associations should be aware of beforehand. Among these concerns include the concern that the expenses of the party might be an improper use of association funds, potential liability to the association or individual board members, and properly addressing the concerns of members in the community who disapprove of having holiday parties.

Using Association Funds for Holiday Parties

Boards of directors must be cautious in using association funds for holiday parties as the determination of whether association funds can be used for a holiday party will depend on the specific language used in the association’s governing documents. For large associations, the costs of these parties can easily reach thousands of dollars and are often paid for with association funds. If the Master Deed and Condominium Bylaws for a particular condominium only permit the association to use funds for costs that are necessary for the operation of the condominium, it may be helpful to review the Articles of Incorporation. Often times, an association will have a provision in its Articles of Incorporation authorizing the association to “levy and collect assessments against and from the Members of the Association and to use the proceeds thereof for the purposes of the Association”. This broad authority could be used to justify an association’s use of funds for holiday parties.

For subdivision or homeowners associations, governing documents, and the provisions authorizing assessments, vary drastically from one development to the next. Accordingly, the documents will need to be reviewed on a case by case basis to determine whether association funds can be used to pay for these types of events. A sample provision authorizing assessments for a platted subdivision is as follows:

The assessments levied by the Association shall be used exclusively to promote the health and safety of the residents in the Subdivision and maintain the property values thereof.

An association with the above provision might have a difficult time demonstrating that a holiday party promotes the health or safety of the residents or maintains the property values within the subdivision. Contrast the above provision with the following alternative provision which could reasonably be used to support an association’s use of funds towards a holiday party:

The Assessments levied by the Association shall be used exclusively to promote the recreation, health, safety, welfare, common benefit and enjoyment of the Owners in the Subdivision.

In the latter case, the association could justify the holiday party expenses as promoting recreation or the enjoyment of the members. Similarly, a homeowners association could look to its Articles of Incorporation for additional authority to use assessments towards holiday party expenses. In short, as long as the governing documents authorize the use of association funds for such purposes, your community associations may have holiday parties.

How to Proceed if your Governing Documents do not Authorize the use of Association Funds for Parties?

If your governing documents do not permit the use of association funds for these purposes, you should not be discouraged from having the party. In these instances, invitations could still be sent out to all members and indicate that attendance is optional but in order to cover the expenses of the party, all attending guests will be asked to contribute a portion of the total cost. This way, your association can still have the party, but instead of using funds from the association’s bank account, the attendees of the party each make a small contribution to cover the expenses.

Dram-Shop Liability and Liquor Licensing Requirements

Finally, individual board members must be particularly cautious regarding the serving and consumption of alcohol at any association sponsored event. If alcohol is being served, proper precautions must be taken to ensure that all individuals consuming alcohol are required to present identification and that limits are set to avoid over-consumption of alcohol. Many of these concerns are diminished if the party is held at an outside venue since the venue will be responsible for checking IDs and monitoring alcohol consumption.

If your association plans on having a party in a clubhouse or other common area under association control, a temporary liquor license or other regulatory approval may be necessary. A review of the association’s insurance policies, including Director and Officer Insurance, should be conducted to determine coverage for potential liability if the association plans to have an on-site party with alcohol. It may also be prudent to obtain dram-shop insurance or associations and board members alike could face potential liability if minors are served alcohol or if individuals consume excessive amounts of alcohol and cause injury to themselves or others.

While many community associations in Michigan have authority to use association funds for holiday parties, a review of the governing documents must be conducted prior to doing so. Even if hamstrung with constrictive governing documents, associations can still have these parties by asking attendees to contribute to the expenses. A simple and effective method to avoid, or limit, much of the potential liability associated with alcohol consumption is to hold the party at an outside venue. If a party with alcohol is held on-site, it is critical for an association to obtain the required licensing and insurance. Finally, associations should also be sensitive of different religious beliefs and should avoid gearing holiday parties toward any particular religion.

Brandan A. Hallaq is an attorney with the law firm of Cummings, McClorey, Davis & Acho, P.L.C., in the firm’s Livonia, MI office where he focuses his practice in the areas of business and real estate law. He practices in state and federal courts handling a wide scope of real estate and business/commercial litigation matters. He also has experience preparing the necessary documents for business formation, purchases/sales of businesses, as well as negotiating and drafting contracts. Mr. Hallaq obtained his Juris Doctor degree cum laude from Wayne State University Law School and his B.A. degree cum laude in Political Science from Wayne State University. He may be reached at (734) 261-2400 or at bhallaq@cmda-law.com.

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