Section A. The Association shall be assessed as the person or entity in possession of any tangible personal property of the Condominium Project owned or possessed in common by thc co-owncrs, and personal property taxes based thereon shall be treated as expenses of administration.
Section B. All costs incurred by the Association in satisfaction of any liability arising within, caused by or in connection with the common elements or the administration of the Condominium Projecr shall constitute expenditures affecting theadministration of the Condominium Project; and all sums received as proceeds of, or pursuant to, any policy of insurance carried by the Association securing the interests of the co-owners against liabilities or losses arising from, caused by or in connection with the common elements or the administration of the Condominium Project shall constitute receipts affecting the administration of the Condominium Project; all within the meaning of Section 54(4) of the Act.
Section C. Assessments shall be determined in accordance with the following provisions:
(1) The Board of Directors of the Association shall establish an annual budget in advance for each fiscal year and such budget shall project all expenses for the forthcoming year which may be required for the proper operation, management and maintenance of the Condominium Project, including a reasonable allowance for contingencies and reserves. An adequate reserve fund for maintenance, repairs and replacement of those common elements which must be replaced on a periodic basis must be established in the budget and must be funded by regular monthly payments as set forth in Section D of this Article II, rather than by special assessments. At a minimum, the reserve fund shall be equal to ten (10%) percent of the Association's current annual budget, on a noncumulative basis. Such ten (10%) percent minimum standard may prove to be inadequate. The Board of Directors and co-owners should carefully analyze their Condominium Project to determine whether a greater amount should be set aside, or whether additional reserve funds should be established for other purposes. Upon adoption of an annual budget by the Board of Directors, copies of said budget shall be delivered to each co-owner and the assessment for said year shall be established based upon said budget. The delivery of a copy of the budget to each co-owner and the assessment for said year shall be established based upon said budget. The delivery of a copy of the budget to each co-owner shall, however, not affect the liability of any co-owner for any existing or future assessments. Should the Board of Directors at any time determine, in its sole discretion, that the assessments levied are or may prove to be insufficient: (a) to pay the costs of operation and management of the Condominium Project, (b) to provide replacements of existing common elements, (c) to provide additions to the common elements not exceeding $2,000.00 annually, or (d) in the event of emergencies, the Board of Directors shall have the authority to increase the general assessment or the levy such additional assessment or assessments as it shall deem to be necessary
(2) Special assessments, in addition to those assessments required in subparagraph (1) of this Section C, may be made by the Board of Directors from time to time and approved by the co-owners as hereinafter provided to meet other needs or requirements of the Association, including, by way of example and not as limitation, (a) assessments for capital improvements or additions at a cost of exceeding $2,000.00 per year, (b) assessments for the purchase or lease of a unit pursuant to Article Vl, Section M hereof, (c) assessments to purchase a unit upon foreclosure of the lien for assessments described in Section F of this Article II, (d) assessments to purchase a unit for use as a resident manager's unit, or (e) assessments for any other appropriate purpose not elsewhere herein described. Special assessments referred to in this subparagraph (2) (but not including those assessments referred to in subparagraph (1) of this Section C which shall be levied in the sole discretion of the Board of Directors) shall not be levied without the prior approval of more than sixty (60%) percent of all co-owners in number and in value.
Section D. All assessments levied against the co-owners to cover expenses of administration shall he apportioned among and paid by the co-owners in accordance with the percentage of value allocated to each unit in Article V of the Master Deed without increase or decrease for the existence of any rights to the use of limited common elements appurtenant to a unit. Annual assessments as determined in accordance with subparagraph (1) of this Section C shall be payable by co-owners in twelve (12) equal monthly installments, commencing with acceptance of a deed to a unit or with acquisition of fee simple title to a unit by any other means. Special assessments shall be due and payable at such times as the Association shall determine. The payment of an assessment shall be in default if such assessment, or any part thereof, is not paid to the association in full on or before the due date for such payment. Assessments in default shall bear interest at the rate of seven (7%) percent per annum until paid in full. Each co-owner (whether one or more persons) shall be, and remain, personally liable for the payment of all assessments pertinent to his unit which may be levied while such co-owner is the owner thereof. Any co-owner in default in his/her monthly assessment shall not be entitled to vote at any regular or special meeting of the association.
Section E. No co-owner may exempt himself from liability for his contribution toward the expenses of administration by waiver of the use or enjoyment of any of the common elements or by the abandonment of his unit.
Section F. The Association may enforce collection of delinquent assessments by a suit at law for a money judgment or by foreclosure of the statutory lien which secures the payment of assessments. Each co-owner, and every other person who from time to time has any interest in the Condominium Project, shall be deemed to have granted to the Association the unqualified right to elect to foreclose such lien either by judicial action or by advertisement. The provisions of Michigan law pertaining to foreclosure of mortgages by judicial action and by advertisement, as the same may from time to time be amended, are incorporated herein by this reference for the purpose of establishing the alternative procedures to be followed in lien foreclosure actions and the rights and obligations of the parties to such actions. Furthermore, each co-owner, and every other person who from time to time has any interest in the Condominium Project, shall be deemed to have authorized and empowered the Association to sell or to cause to be sold the unit with respect to which the assessment (or assessments, as the case may be) is delinquent and to receive, hold and distribute the proceeds of such sale in accordance with the priorities established by applicable law. Each co-owner of a unit in the Condominium Project acknowledges that at the time of acquiring title to such unit, he was notified of the provisions of this Section and that he voluntarily, intelligently and knowingly waived notice of any proceedings brought by the Association to foreclose by advertisement the lien for nonpayment of assessments and a hearing on the same prior to the sale of the subject unit. Notwithstanding the foregoing, neither a judicial foreclosure action nor a suit at law for a money judgment shall be commenced, nor shall any notice of foreclosure by advertisement be published, until the expiration of ten (10) days after mailing, by first class mail, postage prepaid, addressed to the co-owner in default at his last known address, a written notice that one or more assessments (or one or more installments of the annual assessment, as the case may be) are delinquent and that the Association may invoke any of its remedies hereunder if the default is not cured within ten (10) days after the date of mailing. Such written notice shall be accompanied by a written affidavit of an authorized representative of the Association which sets forth (1) the affiant's capacity to make the affidavit, (2) the statutory and other authority for the lien, (3) the amount outstanding (inclusive of interest, costs, attorney fees and future assessments), (4) the legal description of the subject unit, and (5) the name (or names, as the case may be) of the co-owner of record. Such affidavit shall be recorded in the Office of the Register of Deeds for Iosco County prior to the commencement of any foreclosure proceeding, but it need not have been recorded as of the date of mailing as aforesaid. In the event that the default is not cured within the ten (10) day period, the Association may take such remedial action as may be available to it hereunder or under Michigan law. In the event that the Association elects to foreclose the lien by advertisement, the Association shall so notify the co-owner in default and shall inform advertisement, the Association shall so notify the co-owner in default and shall inform such co-owner that he may request a judicial hearing by bringing suit against the Association. All expenses incurred in collecting unpaid assessments, including, by way of example and not as limitation, interest, costs, actual attorney's fees (not limited to statutory fees) and advances for taxes or other liens paid by the Association to protect its lien, shall be chargeable to the co-owner in default and shall be secured by the lien on his unit. In the event of default by any co-owner in the payment of any installment of the annual asscssment levied against his unit, the Associalion shall have the right to declare all unpaid installments of the annual assessment for the pertinent fiscal year to be immediately due and payable. In addition, the Association may discontinue the furnishing of any utilities or other services to a co-owner in default upon seven (7) days' written notice to such co-owner of its intention to do so. A co-owner in default shall not be entitled to utilize any of the general common elements of the Condominium Project, and shall not be entitled to vote at any meeting of the Association so long as such default continues. In a judicial foreclosure action, a receiver may be appointed to collect a reasonable rental for the unit from the co-owner thereof or from any person claiming under him.
Section G. Notwithstanding any other provisions of the Condominium Documents, the holder of any first mortgage covering any unit in the Condominium Project which comes into possession of the unit pursuant to the remedies provided in the mortgage or by deed (or assignment) in lieu of foreclosure, or any purchaser at a foreclosure sale, shall take the property free of any claims for unpaid assessments or charges against the mortgaged unit which accrue prior to the time such holder comes into possession of the unit (except for claims for a pro rata share of such unpaid assessments or charges resulting from a pro rata reallocation of such unpaid assessments or charges to all units including the mortgaged unit).
Section H. During the period up to the time of the First Annual Meeting of members held in accordance with the provision of Section F(6) of Article I hereof, the Developer of the Condominium Project, even though a member of the Association, shall not be responsible for payment of the monthly Association assessment. During the period up to the time of the First Annual Meeting, Developer shall pay a proportionate share of the Association's current maintenance expenses actually incurred from time to time based upon the ratio of completed units owned by the Developer at the time the expense is incurred to the total number of completed units in the Condominium Project. In no event shall the Developer be responsible for payment, until after said First Annual Meeting of any assessments for referred maintenance, reserves for replacement, capita! improvements or other special assessments, except with respect to occupied units owned by it. After the First Annual Meeting, Developer shall be responsible for payment of the 50% monthly Association maintenance assessment for all completed units owned by it and shall also maintain, at its own expense, any incomplete units owned by it. Developer shall not be responsible at any time for payment of said monthly assessment or payment of any expenses whatsoever with respect to unbuilt units notwithstanding the fact that such unbuilt units may have been included in the Master Deed. "Occupied Unit" shall mean a unit used for residenlial purposes. "Completed Unit" shall mean a unit with respect to which a certificate of occupancy has been issued by the local public authority.
Section I. All property taxes and special assessments levied by any public taxing authority shall be assessed in accordance with Section 231 of the Act.
Section J. A mechanic's lien or construction lien otherwise arising under Act No. 179 of the Public Acts of Michigan of 1891 or Act No. 497 of the Public Acts of Michigan of 1980, respectively, as amended, shall be subject to Section 232 of the Act.
Section K. Pursuant to Section 211 of the Act, the purchaser of a unit may request a statement from the association of the outstanding amount of anv unpaid Association assessments thereon, whether regular or special. Upon written request to the Association accompanied by a copy of the executed purchase agreement pursuant to which the purchaser has the right to acquire title to a unit, the Association shall provide a written statement of any unpaid assessments which may exist or a statement that none exist with respect to such unit, which statement shall be binding upon the Association for the period stated therein. Upon the payment of such amount within the period stated, the Association's lien for assessments against such unit shall be deemed to have been satisfied; provided, however, that the failure of a purchaser to request such statement at least five (5) days prior to the closing of the purchase of such unit, shall render any unpaid assessments and the lien securing same, fully enforceable against such purchaser as well as the unit itself, to the extent provided for in the Act. Under the Act unpaid assessments constitute a lien upon the unit prior to all claims against the proceeds of sale thereof except for real property taxes and first mortgages of record.
