Assessments Board Condominium Financial Governance Legal

Condo Contemplates Adjoining Land Purchase

S.T. from Michigan writes:

Dear Mister Condo,

Our Board wants to purchase adjoining land (12.7 acres) of field/trees which will be a berm/buffer zone for the Association as protection from purchase by another party which might construct an apartment complex, for example. We do not intend to build on it but leave it as it is. There would be somewhat of a tax increase for co-owners with this purchase ($50,000), which is being done primarily through co-owner donations, all except $8,000 which will be in a loan or borrowing from reserves with payback through co-owner additional assessment in the budget until paid back.
The concern is if we need a co-owner vote for this purchase. Our bylaws state that the board has the right to purchase land “on behalf of the Association in furtherance of the purposes of the Association.” The property line is very close to the backyard of one building and we only have a 35ft buffer zone from there. The SEV on the property is $13,900 as are the taxable and assessed values. The bylaws don’t really list that we need co-owner approval/vote (we have support in donations from 1/3 so far), but we are concerned about the possible ramifications from the tax increase to co-owners, though it shouldn’t be that significant. Would that aspect possibly mean we would need a vote? We would need to have an amendment to the Master Deed here to include this land as part of the common elements. If you have insights on this situation, please give feedback. Thank you.


Mister Condo replies:

S.T., always happy to hear from Michigan folks like yourself.12.7 acres is a lot of land and this sounds like a great opportunity for the association to add a buffer zone to protect and enhance the value of the common grounds. That being said, it would seem to me that some legal advice is in order here. As you know, I am not an attorney nor am I verse in the laws of your state. But I do have friends that are both! I turned to them and posed your question. Here is what they had to say:

The condominium documents really need to be reviewed by an attorney to determine whether the addition of the property is allowed and what the requirements would be to add it.  The other challenge is that reserve funds are being used towards the purchase.  Under MCL 559.205, reserve funds can only be used for repair and replacement purposes.

That’s some great advice. Looks like you should consult an attorney to make sure you are not in violation of your own condominium governing documents or any state laws. Once you have determined that is legally proper to proceed, I think what you are trying to do is a great idea. All the best!

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