Start with which law covers you
This guide follows two Michigan records paths that often matter to self-managed boards. They are not the only legal forms a community can take. Quoting a section that does not apply can leave the association relying on a right it does not have.
A condominium. If your community was created by a recorded master deed and your neighbors are co-owners of units, the Michigan Condominium Act, 1978 PA 59, covers you. That act uses the terms "association of co-owners" and "condominium project". Its records sections are quoted below.
A subdivision association that is not a condominium. Its records rights may come from the recorded declaration and bylaws and, if the association is incorporated under it, the Michigan Nonprofit Corporation Act, 1982 PA 162.
A site condominium is still a condominium. Its units may be areas of land for individual houses rather than apartments, so it can look like a subdivision. Check the recorded documents instead of relying on the appearance of the neighborhood.
Start with the recorded document that created the community and the association's state business filing. A recorded master deed points toward the Condominium Act. A declaration of covenants and a nonprofit filing may point toward the corporate path. Those records tell you which question you are asking. If it is still unclear, ask a Michigan attorney which law applies.
MCL 559.157(1) says condominium records must be available at convenient times and does not state a written-demand or proper-purpose requirement. MCL 450.2487(2) requires a qualifying corporate member to make a particular written demand for a proper purpose. Neither section names a deadline, and neither says a request costs nothing.
What a condominium co-owner can ask for
The Condominium Act splits the records into two sections that reach two different audiences. Check which section covers the records you need and who can ask to see them.
"The books, records, contracts, and financial statements concerning the administration and operation of the condominium project shall be available for examination by any of the co-owners and their mortgagees at convenient times."
"An association of co-owners shall keep current copies of the master deed, all amendments to the master deed, and other condominium documents for the condominium project available at reasonable hours to co-owners, prospective purchasers, and prospective mortgagees of condominium units in the condominium projects."
Reading those two together
- Books, contracts and financial statements rest on Section 157. Any co-owner may examine them, and so may their mortgage holder.
- The master deed, its amendments and the other condominium documents rest on Section 168, and that section reaches further: a prospective buyer and their lender can ask, not only an existing co-owner.
- Neither sentence sets a deadline. Section 157 says "at convenient times" and Section 168 says "at reasonable hours". Neither puts a number on it, so name your own date in the letter and say what you will do if it passes.
- Subsection 157(1) is one sentence, and it names no written demand, no purpose to satisfy and no fee. Other parts of the act may bear on how a request is handled. This guide has read the sections listed at the foot of the page and no others.
Check the audit rule before the handover
Check the association’s audit or review records while the manager is still under contract and available to answer questions.
"Except as provided in subsection (3), an association of co-owners with annual revenues greater than $20,000.00 shall on an annual basis have its books, records, and financial statements independently audited or reviewed by a certified public accountant, as defined in section 720 of the occupational code, 1980 PA 299, MCL 339.720."
"An association of co-owners may opt out of the requirements of subsection (2) on an annual basis by an affirmative vote of a majority of its members by any means permitted under the association's bylaws."
Three questions for your manager, in writing
- Did the association's annual revenue exceed $20,000.00 in each of the last several years?
- For each of those years, was there an audit or a review, and where is the report?
- For any year without one, where is the association's documentation of the member vote to opt out?
The vote belongs to the members
Read subsections (2) and (3) together and the shape is clear. An audit or a review is what the statute requires above $20,000.00 in annual revenue. Opting out is allowed, and it is not a board decision and not a permanent one: the statute puts the vote with the members, requires a majority of them, and requires it again every year.
Ask for the audit or review report for each year, or the record of the member vote to opt out. Resolve any missing records while the manager is still under contract.
What a subdivision member can ask for
For a corporation organized on a stock or membership basis, Section 487(2) gives a shareholder or member of record a qualified inspection right. It works differently from the condominium sections and does not apply merely because someone lives in the community.
"Any shareholder or member of record of a corporation that is organized on a stock or membership basis, in person or by attorney or other agent, may during regular business hours inspect for any proper purpose the corporation's stock ledger, a list of its shareholders or members, and its other books and records, if the shareholder or member gives the corporation written demand describing with reasonable particularity the purpose of the inspection and the records the shareholder or member desires to inspect, and the records sought are directly connected with the purpose."
What that means in practice
- Proper purpose has a definition, in the same subsection. It means "a purpose that is reasonably related to a person's interest as a shareholder or member".
- Use one of the two locations the subsection names. Deliver the demand to the corporation's registered office in Michigan or its principal place of business. Do not assume a manager's office qualifies; verify the corporation's filing and business address.
- Date it. Under Section 487(3), if the corporation does not permit the inspection within 5 business days of receiving the demand, or imposes unreasonable conditions on it, the member may apply to the circuit court for the county holding the principal place of business or registered office for an order compelling it.
- What you asked for changes who has to prove what. For the membership list, the corporation carries the burden of showing the purpose was improper. For the other books and records, the member carries the burden of showing the demand was in the right form, the purpose was proper, and the records asked for connect to it.
- A current director has a separate path. Section 487(4) says a director may examine corporate books and records for a purpose reasonably related to the director's position. A board taking control should identify whether it is acting through the corporation, a director, or an individual member before choosing its request.
- Member access can be limited. Under Section 487(7), corporate articles, bylaws or a board resolution may limit inspection after the required good-faith determination, including for privacy or free-association concerns. Section 487(8) then requires a reasonable way for members to communicate about director elections and other corporate affairs when the membership list is limited.
- Copies may carry a reasonable charge. Section 487(9)(b) allows the corporation to recover reasonable labor and material costs for copies. An inspection right is not a promise that every format is free.
- For the member path, write one careful letter naming a real purpose, rather than a broad request for everything. The demand is easier to evaluate when the records connect directly to the stated purpose.
The handover list
Build the handover list before giving notice, then request the records and account controls through the authority the board, a director, or a qualifying member actually has. The management agreement may add turnover duties beyond the statutes discussed here.
What to ask for
- Recorded and governing. The master deed or declaration and every recorded amendment, the bylaws, the articles of incorporation, current rules, and every board resolution still in force. Pull the recorded documents from the register of deeds as an independent check on what the manager identifies as current.
- Financial. The general ledger for this year and last, bank statements for every account the association holds, the reconciliation for each of those months, the budget as adopted and the meeting that adopted it, reserve account statements, filed tax returns, and every audit or review report.
- Per unit or per lot. For an authorized board handover, identify the owner roster and mailing addresses the association is entitled to hold, the balance owed and its as-of date, payment plans in force, and open violations with their notice dates. Do not treat an ordinary member's inspection right as permission to publish private owner data.
- Contracts. Every vendor agreement with its renewal date and its cancellation notice window, certificates of insurance for each vendor, and the association's own policies with declarations pages.
- The meeting record. Minutes and resolutions as far back as they exist, election results, and retained ballots or proxies.
- Open matters and deadlines. Recorded liens and their dates, pending legal matters, open insurance claims, and any notice period already running against an owner.
- Account access and authority. Bank signatories, the registered agent on file with the state, the association's domain and email, the payment processor account, and the physical mailbox.
Do it in this order
Read the management agreement first for its termination, notice and turnover terms. Then check the governing documents and applicable law for any separate approval or notice requirement.
Request the records while the agreement is still live. State whether the request comes from the association, a director, or a qualifying member; cite only a section that applies; list what you want; and name a date.
Check what arrived against the list before the handover date. This is the step boards skip, and it is the one the old systems and the people who know them are still around for.
Then give notice, in the form the agreement requires. Certified mail, if that is what it says.
Use the final handover period to move control: bank signatories, registered agent, processor, mailbox, and the vendors who need a new address for an invoice.
The handover that turns into a reconstruction is the one where notice went out before anyone inventoried the records. Know what the association has, what is missing, and who controls each account before the final transfer date.
Records worth checking twice
These five gaps can make a handover harder, and each is easier to close with a question than with a reconstruction.
- Balances with no as-of date. A list of amounts owed is worth little if nobody can say which day it was true. Ask for the date on the face of the report.
- Vendor renewal dates. Contracts arrive as scans and the renewal and cancellation dates sit in a paragraph in the middle. Check these dates before deciding whether to renew or end the agreement.
- The monthly reconciliations. Bank statements arrive and the reconciliation does not, because it lived in the manager's accounting system rather than in a file. Without it, the ledger and the bank are two numbers with nothing joining them.
- Audit and review reports, and the opt-out votes. Ask for each report and documentation of any member vote to opt out.
- Owner mailing addresses of record. The address an owner asked the association to use is not always the property address. Confirm the authorized address source before the next required notice.
What this guide cannot tell you
This is a records checklist and a reading of three sections. It is not legal advice, and there are four things it cannot answer for your association.
Common Parcel is software for boards that have already decided to self-manage. It does not answer any of the four questions above, and a board that has not answered them is not ready to leave yet.
- Your notice and approval requirements. Start with the management agreement, then check the governing documents and applicable law. A Michigan attorney can resolve a conflict among them.
- Whether your declaration or bylaws require a member vote to change managers. Some do. Read yours.
- Which act covers you. The recorded documents and corporate filing usually show the path. If they leave you unsure, put that focused question to a Michigan attorney.
- Whether this text still reads the same way. Michigan amends both acts. The retrieval dates below are the dates these sections were read.