Attorney John Gwyn Provides Michigan Legislative Update

John Gwyn, an attorney in the Firm’s Livonia office, provides a brief summary of some of the key legislative changes that have taken effect or will be taking effect in Michigan in 2025. These updates are particularly relevant to property owners, employers, and those involved in real estate.

​Real Estate & Property Law Changes: ​Recent legislative action has introduced new requirements for homeowners’ associations (HOAs) and addressed issues of housing affordability.

​Homeowners’ Energy Policy Act: A new law effective April 1, 2025, limits an HOA’s ability to restrict homeowners from installing energy-saving devices, such as solar panels and rain barrels. All HOAs are now required to adopt a solar energy policy that complies with the new statute. The Act mandates HOAs create a solar energy policy within a year to outline installation standards and processes, but prohibits them from denying applications based on arbitrary reasons. HOA’s can only deny requests if they violate law or significantly impact safety, but cannot impose fines for violations of their own prior rules, nor can they charge excessive fees. The law excludes common areas and shared roofs, applying only to installations on individual lots.

Real Estate Commissions: New rules for real estate commissions took effect in August 2024. Under these changes, buyers must now sign a written agreement with their agent that outlines the agent’s commission before they begin touring homes. This change aims to provide greater transparency in the home-buying process. The National Association of Realtors settlement, requires buyers to pay their own agent’s commission through a written agreement signed before a home search begins, rather than the seller typically covering both agent commissions. Key impacts include the elimination of buyer agent commissions being listed on the MLS and the increased focus on negotiation and the potential for buyers to ask the seller for concessions.

​Affordable Housing: New laws have been signed to support the expansion of affordable housing by providing the Michigan State Housing Development Authority (MSHDA) with more flexibility to offer mortgage assistance and respond to market conditions. Michigan is addressing its affordable housing crisis by expanding MSHDA programs and enacting new legislation to support both homebuyers and renters. Key changes include a significant increase in the maximum sales price limit for MSHDA-financed homes and the introduction of the Housing Tax Increment Financing (TIF) tool to incentivize affordable housing development for various income levels. These efforts aim to increase housing supply, provide more flexible financing, and help Michigan residents, particularly first-time and middle-income households, overcome the growing challenges of housing cost burdens.

Employment Law Updates: ​Effective early in 2025, Michigan has seen significant changes to its employment laws, primarily affecting minimum wage and sick time benefits. These changes stemmed from a Michigan Supreme Court ruling that reinstated prior voter-approved laws.

Minimum Wage Increase: The state’s minimum wage has increased. As of February 21, 2025, the minimum wage is now $12.48 per hour. This also includes changes to the minimum wage for minors and a path to phasing out the tip credit for tipped employees.  After 2028, the minimum wage will be adjusted annually based upon inflation.

Earned Sick Time Act:  The Earned Sick Time Act (ESTA) replaced the previous Paid Medical Leave Act. The new law requires most employers to provide employees with more generous paid sick leave. Employees must accrue at least one hour of earned sick time for every 30 hours worked, with annual usage caps of up to 72 hours for larger employers.  All unused sick time must be carried over to the next year with no cap. Employers can now require new hires to wait up to 120 days before using their accrued sick time.

John D. Gwyn is an attorney in our Livonia office where he focuses his practice on real estate law, community association law, commercial litigation, and municipal law. He represents developers and condominium and homeowners’ associations with matters involving real estate, contract, and construction issues. He currently serves as a committee member on the Oakland County Bar Association’s Real Estate Committee. Mr. Gwyn is a Contributor to the Institute of Continuing Legal Education and recently presented an on-demand seminar on short-term rentals. He may be reached at (734) 261-2400 or jgwyn@cmda-law.com.