Background
The dispute concerned proposed condominium units 13 through 26 in the Richard Rowhouses project. The master deed designated those units as “need not be built,” and construction commenced in March 2004. After foreclosure and subsequent transfers, Triple Properties Detroit, LLC acquired the developer’s rights in 2011 and purported to sell the units to PCJ Investments, LLC in 2019. The units, however, had not been completed or withdrawn from the project within the 10-year period prescribed by the former version of MCL 559.167(3).
PCJ sued to quiet title, and Triple filed a cross-claim against the condominium association. The circuit court held that the units reverted by operation of law to the project’s general common elements in 2014 and granted summary disposition to the association. PCJ and Triple later placed a settlement on the record under which Triple would pay PCJ $1 million in two installments. Triple subsequently disputed whether payment depended on the association recording title documents, but the circuit court enforced the settlement, entered a written agreement despite Triple’s refusal to sign, and dismissed the case with prejudice.
The Court’s Holding
The Court of Appeals affirmed. Applying the former version of MCL 559.167(3), it held that “need not be built” units had to be completed or withdrawn within 10 years after construction began to avoid reversion. Partial construction did not suffice. Because the units were neither completed nor withdrawn by March 2014, they became general common elements and all rights to construct them ceased. The unrecorded proposed amendment to the master deed did not reinstate the units, and the association’s failure to record a replat did not prevent the statutory reversion.
The court also rejected Triple’s equitable-estoppel and constitutional arguments. The record did not show inequitable conduct by the association, and binding Michigan precedent established that the statute provided adequate notice and did not effect an unconstitutional taking. Finally, the parties formed an enforceable settlement in open court. Recording a deed in the association’s name was not a condition precedent to Triple’s payment obligations, and Triple’s later change of position did not permit it to avoid the agreement.
The June 10, 2024 dismissal order was a final, appealable order even though the circuit court retained jurisdiction to enforce the settlement and manage the escrowed payment. The Court of Appeals therefore had jurisdiction over the appeal, but Triple could not challenge the December 18, 2024 disbursement order because that order was entered after Triple filed its claim of appeal.
Key Takeaways
- Under the applicable pre-2016 version of MCL 559.167(3), partially constructed “need not be built” condominium units reverted to the general common elements unless construction was completed or the units were withdrawn within the statutory 10-year period.
- An amendment to a recorded condominium document does not take effect until it is recorded, and failure to record a replat does not prevent an otherwise automatic statutory reversion.
- A settlement stated and accepted on the record in open court is binding; a party’s later change of heart cannot create a new condition precedent or defeat enforcement.
Why It Matters
The decision reinforces the consequences of missing the former Condominium Act’s development deadline: incomplete units could revert automatically, without a separately recorded deed or replat, and later purchasers could receive no valid development rights. It also confirms that Michigan courts will enforce the objective terms of an on-the-record settlement despite a party’s subsequent attempt to condition performance on an unstated title-recording requirement.