CONDOMINIUM ACT
Act 59 of 1978
559.235 Successor developer.
Sec. 135.
(1) As used in this section, "successor developer" means a person who acquires title to the lesser of 10 units or 75% of the units in a condominium project, other than a business condominium project, by foreclosure, deed in lieu of foreclosure, purchase, or similar transaction.
(2) A successor developer shall do both of the following:
(a) Comply with this act in the same manner as a developer before selling any units.
(b) Except as provided in subsection (3), assume all express written contractual warranty obligations for defects in workmanship and materials undertaken by its predecessor in title. A successor developer shall not be required to assume, and shall not otherwise be liable for, any other contractual obligations of its predecessor in title.
(3) A successor developer shall not be required to comply with subsection (2)(b) with respect to any express written contractual warranty obligations for defects in workmanship and materials, if either of the following is maintained with respect to units for which such a warranty was undertaken by the predecessor in title:
(a) An insurance policy, in a form approved by the insurance bureau, that is underwritten by an insurer authorized to do business in this state. The insurance policy shall provide coverage for express written contractual warranty obligations for liability for defects in workmanship and materials.
(b) An aggregate escrow account with an escrow agent which contains not less than 0.5% of the sales price of each unit. If the escrow account described in this subdivision is initiated by a developer before a successor developer acquires title, 0.5% of the sales price of each unit in the project shall be deposited by the developer in the aggregate escrow account periodically upon the sale of each unit. If the escrow account described in this subdivision is initiated by a successor developer after acquisition of title, a total amount equal to 0.5% of the sales price of all units for which the warranty period plus 6 months has not expired shall be deposited by the successor developer in the aggregate escrow account, and 0.5% of the sales price of each unit shall be deposited by the successor developer in the aggregate escrow account periodically upon the sale of each remaining unit. Funds in an escrow account described in this subdivision shall not be released for a unit until 6 months after the expiration of the warranty period for that unit.
(4) A successor developer that acquires title to the lesser of 10 business condominium units or 75% of the business condominium units in the condominium project shall not be required to assume, and shall not otherwise be liable for, any contractual obligations of its predecessor in title.
(5) A residential builder who neither constructs nor refurbishes common elements in a condominium project and who is not an affiliate of the developer shall not be required to assume and be liable for any contractual obligations of the developer under this section, and shall not be considered a successor developer or acquire any additional developer obligations or rights in the absence of a specific assignment of those obligations or rights from the developer. However, a residential builder that sells a condominium unit shall deliver to the purchaser of that condominium unit the condominium documents that the developer is required to deliver to the purchasers under section 84a(1). This subsection applies only to condominium projects established on or after the effective date of the amendatory act that added this subsection.
History: 1978, Act 59, Eff. July 1, 1978 ;-- Am. 1982, Act 538, Imd. Eff. Jan. 17, 1983 ;-- Am. 2000, Act 379, Imd. Eff. Jan. 2, 2001 ;-- Am. 2002, Act 283, Imd. Eff. May 9, 2002
Notes of Decisions
Reserve at Heritage Vill. Ass'n v. Warren Fin. Acquisition, LLC, 850 N.W.2d 649 (Mich. Ct. App. 2014).
· cites it 2× “The term “successive developer” is not defined in the definitions sections of the Condominium Act, but is *115 defined at MCL 559.235(1). As the trial court ruled, because a successive developer must comply with the act in the same manner as a developer before selling any units,…”
Ferry Beaubien LLC v. Centurion Place on Ferry Street Condo (Mich. Ct. App. 2017).
· cites it 4× “She announced in her affidavit that the Association had taken the position that any purchaser of the units at auction could not be considered a “successor developer” for purposes of MCL 559.235,1 and that, under MCL 559.167, any purchaser would be required to complete…”
Ferry Beaubien LLC v. Centurion Place on Ferry Street Condo (Mich. Ct. App. 2017).
· cites it 4× “She announced in her affidavit that the Association had taken the position that any purchaser of the units at auction could not be considered a “successor developer” for purposes of MCL 559.235,1 and that, under MCL 559.167, any purchaser would be required to complete…”
Elizabeth Trace Condo. Assoc v. Am. Global Enter. (Mich. Ct. App. 2022).
· cites it 3× “235(1). Relatedly, defendant argues that the trial court erred by not considering certain terms of the Master Deed, which defines a “successor” to exclude a “successor developer.”
Highfield Beach at Lake Michigan v. Scott E Sanderson (Mich. Ct. App. 2020).
· cites it 2× “Sanderson argues that Board Member Barczyk fit the statutory definition of “successor developer,” MCL 559.235(1), because of the large number of lots that he owned; therefore, pursuant to Article VII, § 14, of the bylaws, his properties were not subject to the prohibition on…”
Wellesley Gardens Condo. Ass'n v. Ashish P Manek (Mich. Ct. App. 2020).
“Manek references §135(1) of the Condominium Act, MCL 559.235(1), which defines a successor developer as “a person who acquires title to the lesser of 10 units or 75% of the units in a condominium project, other than a business condominium project, by foreclosure, deed in lieu of…”
Kenneth Rudisel v. Torchport Airpark LLC (Mich. Ct. App. 2024).
“On July 7, 2020, VNI conveyed by warranty deed all its units to TAL and TAL became the successor developer by operation of § 135 of the Condominium Act, MCL 559.235. TAL then advised plaintiffs of its intent to pave both runways at an approximate cost of $1.”
— Mich. Comp. Laws § 559.235(1) — 7 cases
Reserve at Heritage Vill. Ass'n v. Warren Fin. Acquisition, LLC, 850 N.W.2d 649 (Mich. Ct. App. 2014).
“The term “successive developer” is not defined in the definitions sections of the Condominium Act, but is *115 defined at MCL 559.235(1). As the trial court ruled, because a successive developer must comply with the act in the same manner as a developer before selling any units,…”
Elizabeth Trace Condo. Assoc v. Am. Global Enter. (Mich. Ct. App. 2022).
“235(1). Relatedly, defendant argues that the trial court erred by not considering certain terms of the Master Deed, which defines a “successor” to exclude a “successor developer.”
Highfield Beach at Lake Michigan v. Scott E Sanderson (Mich. Ct. App. 2020).
“Sanderson argues that Board Member Barczyk fit the statutory definition of “successor developer,” MCL 559.235(1), because of the large number of lots that he owned; therefore, pursuant to Article VII, § 14, of the bylaws, his properties were not subject to the prohibition on…”
Ferry Beaubien LLC v. Centurion Place on Ferry Street Condo (Mich. Ct. App. 2017).
“She announced in her affidavit that the Association had taken the position that any purchaser of the units at auction could not be considered a “successor developer” for purposes of MCL 559.235,1 and that, under MCL 559.167, any purchaser would be required to complete…”
Ferry Beaubien LLC v. Centurion Place on Ferry Street Condo (Mich. Ct. App. 2017).
“She announced in her affidavit that the Association had taken the position that any purchaser of the units at auction could not be considered a “successor developer” for purposes of MCL 559.235,1 and that, under MCL 559.167, any purchaser would be required to complete…”
— Mich. Comp. Laws § 559.235(2)(a) — 1 case
Reserve at Heritage Vill. Ass'n v. Warren Fin. Acquisition, LLC, 850 N.W.2d 649 (Mich. Ct. App. 2014).
“The term “successive developer” is not defined in the definitions sections of the Condominium Act, but is *115 defined at MCL 559.235(1). As the trial court ruled, because a successive developer must comply with the act in the same manner as a developer before selling any units,…”
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