Background
The dispute concerned 14 proposed units in the Richard Rowhouses condominium project. The master deed designated the units as “need not be built,” and construction commenced in March 2004. Triple Properties Detroit, LLC later acquired the developer’s rights and purported to sell the units to PCJ Investments, LLC in 2019, although construction had not been completed and the units had not been withdrawn from the project within 10 years.
PCJ sued to quiet title, and Triple filed a cross-claim against the Richard Rowhouses Association. The circuit court ruled that the units had reverted by operation of law to the project’s general common elements in 2014 and granted summary disposition to the Association. PCJ and Triple subsequently placed a settlement on the record under which Triple would pay PCJ $1 million in two installments. Triple later disputed whether payment depended on the Association recording its ownership interest, but the circuit court enforced the settlement and dismissed the case with prejudice.
The Court’s Holding
The Court of Appeals affirmed. It first held that it had jurisdiction because the June 10, 2024 dismissal resolved all claims and was a final order, despite the circuit court’s retention of limited jurisdiction to enforce the settlement and manage the second payment held in escrow. A later order releasing that payment did not further adjudicate the parties’ claims.
Applying the former version of MCL 559.167(3), the court held that the unfinished units automatically became general common elements in 2014 because they were neither completed nor withdrawn within 10 years after construction began. Partial construction did not prevent reversion, the unrecorded proposed amendment to the master deed never became effective, and the Association’s failure to record a replat did not prevent the statutory reversion. The Association also was not equitably estopped from asserting ownership.
The court rejected Triple’s constitutional challenge because binding Michigan precedent held that the statute afforded adequate notice and imposed reasonable conditions for retaining the property rights; Triple’s failure to act, rather than state action, caused those rights to lapse. It also upheld enforcement of the $1 million settlement, finding that the parties objectively assented in open court to all essential terms. Recording the Association’s ownership was not a condition precedent to payment, and Triple’s later change of position did not invalidate the agreement.
Key Takeaways
- Under the applicable former version of MCL 559.167(3), “need not be built” condominium units had to be completed or withdrawn within the statutory 10-year period to avoid reversion to the general common elements.
- An amendment to a condominium master deed is ineffective until recorded, and failure to record a replat does not prevent an otherwise automatic statutory reversion.
- A settlement stated and accepted in open court is binding when the parties agree on its essential terms; a later change of heart does not create a lack of mutual assent.
Why It Matters
The decision underscores the title risks associated with unfinished condominium units governed by the former version of Michigan’s Condominium Act. Developers, purchasers, and title professionals cannot rely on partial construction, informal approvals, or unrecorded amendments to preserve or restore development rights that have lapsed by operation of law.
It also confirms that retaining jurisdiction to enforce a settlement does not necessarily undermine the finality of a dismissal order, and that Michigan courts will enforce settlement terms placed on the record without adding conditions that the parties did not expressly adopt.