Enforceability of an agreement (& amendment to it) between condo associations; Whether the condo association’s board of directors (on behalf of the association) had authority to enter into the agreement & amendment without the co-owners’ approval; The Michigan Condominium Act; MCL 559.190(1) & (2); Arbitration as a matter of contract; Altobelli v Hartmann; Dismissal of the counter claims

Concluding that the agreement at issue in this dispute between two condo associations “did not materially alter the rights of the co-owners,” the court held that it was valid and thus, the trial court did not err in compelling arbitration pursuant to it. Plaintiff-Walden Hills II Condominium Association (Summit View) and defendant-Walden Hills arose from two developments built in the 1960s as one apartment complex. The property included recreational areas collectively known as the community building, the source of this dispute. It is located within defendant’s boundaries. Defendant entered into the agreement (Agreement for Use of Community Facilities) in 1983. “Summit View and Walden Hills shared the community building with no issue for over 30 years.” After a dispute arose, defendant began to operate the building on its own in 2021, “claiming the 1983 agreement and the later amendment were invalid because they were not approved by a two-thirds vote of the condominium owners.” Plaintiff sued, seeking “to compel arbitration pursuant to the agreement.” The court concluded “the trial court did not err in finding the Walden Hills board of directors, on behalf of the Walden Hills Condominium Association, had authority to enter into the agreement and subsequent amendment without approval of the co-owners” in light of MCL 559.190(1). The court held that the “plain language of the 1983 agreement shows that it did not materially alter the rights of the co-owners.” Nothing in the master deed, articles of incorporation, or bylaws prohibited the board from “entering into an agreement with its adjoining condominium association—which enjoys an easement over the recreational areas—to share the administration, regulation, maintenance, and associated costs related to the recreational area though the creation of a governing committee.” The court noted that “the agreement established a method by which the co-owners of Walden Hills and the subsequent co-owners of Summit View, would continue to owe their share of the community building’s expenses. This change in the cost-sharing formula was necessary to carry out the master deed’s intent of having Walden Hills and Summit View share the rights and obligations of the community building, and thus did not materially alter the co-owners’ rights.” Affirmed.