Ferry Beaubien LLC v. Centurion Place on Ferry Street Condo
335571
| Mich. Ct. App. | Dec 14, 2017Background
- Centurion Place on Ferry Street Condominium was created by a recorded Master Deed in July 2006, showing 10 units; Units 9 and 10 were labeled "NEED NOT BE BUILT" and remained vacant.
- Master Deed included developer rights to contract/withdraw undeveloped units and a Section 7.6 stating undeveloped portions become general common elements if not withdrawn within 10 years after construction commencement.
- Centurion stopped paying taxes on Units 9–10; the units were tax-forfeited and sold to Kostakos, then conveyed to Ferry Beaubien LLC (plaintiff).
- Association president filed affidavit asserting purchasers at tax sale are not "successor developers" and that Units 9–10 reverted to general common elements under MCL 559.167 if not built within the statutory period.
- Plaintiff obtained a Detroit building permit; Association contested ownership, permit was revoked, and plaintiff sued for declaratory relief claiming the tax sale extinguished deed restrictions under MCL 211.78k(5)(e).
- Trial court granted summary disposition to the Association; Court of Appeals affirmed, holding the Master Deed restrictions survived the tax sale and Units 9–10 had reverted to general common elements before plaintiff’s attempted amendment.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Do Master Deed restrictions survive a tax sale under MCL 211.78k(5)(e)? | Master Deed restrictions are not "private deed restrictions" and were extinguished by the tax sale. | Master Deed provisions are restrictive covenants—"private deed restrictions"—and survive tax sale. | Held: Survive; Master Deed restrictions are "private deed restrictions." |
| Did Units 9–10 revert to general common elements under MCL 559.167(3)? | Plaintiff argued it amended the Master Deed (July 25, 2016) to withdraw the units before they reverted. | Association argued developer did not timely withdraw and statutory period had expired, so units reverted. | Held: Reverted — developer did not withdraw within the 10‑year period measured from construction commencement. |
| Could plaintiff effectuate the amendment/withdrawal of units? | Plaintiff claimed it was (or was acting as) a developer/successor developer entitled to amend the Master Deed. | Association said plaintiff was not the developer or a successor developer and thus lacked authority; amendment was not recorded. | Held: Plaintiff was not a successor developer under MCL 559.235 and did not properly record a valid amendment; so amendment ineffective. |
| Are Association costs/fees or appellate sanctions warranted? | (Plaintiff sought declaratory relief; no argument here.) | Association asked for damages as vexatious appeal and fees under MCL 559.206(b). | Held: Denied now — request for vexatious‑appeal damages untimely; attorney‑fee statute inapplicable on these facts. |
Key Cases Cited
- Lakes of the North Ass’n v TWIGA Ltd Partnership, 241 Mich. App. 91 (concluding restrictive covenants and covenants to pay assessments are "private deed restrictions" that survive tax sale)
- Oosterhouse v Brummel, 343 Mich. 283 (recognizing public policy favoring clearly established deed restrictions)
- Petersen v Magna Corp, 484 Mich. 300 (standards for de novo review of statutory interpretation)
- Rossow v Brentwood Farms Dev, Inc, 251 Mich. App. 652 (summary disposition standard regarding MCR 2.116(I)(2))