Michigan HOA Budgets and Assessments Guide

Key Points

• Michigan assessment authority should be traced to the recorded documents, condominium documents, bylaws, budget, or board resolution.
• Condominium budgets and assessments should be reviewed under the Condominium Act and condominium documents.
• Special assessments, dues caps, owner votes, and reserve requirements are document-sensitive.
• Boards should keep a clean audit trail from budget draft to approval to owner ledger charges.

Official Statutes & References

• Michigan Condominium Act, Act 59 of 1978
• Michigan Nonprofit Corporation Act, Act 162 of 1982

Requirements

Budget package

• Prior-year actuals, current-year forecast, proposed budget, reserve needs, contracts, insurance, taxes, and utilities.
• Board agenda item, motion, vote, and approved budget record.
• Owner notice or ratification process if required by the documents.
• Assessment schedule and allocation method by lot, unit, class, or percentage interest.

Assessment records

• Regular assessment amount, due dates, late fees, interest, and payment method.
• Special assessment purpose, authority, allocation, approval, and owner notice.
• Any cap, threshold, vote requirement, or reserve rule from the documents.
• Ledger entries tied to the approved budget or assessment resolution.

Budget Approval Should Be Traceable

Michigan boards should treat every assessment as something that needs a source. That source may be the master deed, bylaws, declaration, restrictions, articles, statute, an approved budget, or a board/member resolution.

Regular Assessments

For regular dues or assessments, keep:

• The approved budget.
• The allocation formula.
• The board or member approval record.
• The annual assessment schedule.
• Any owner notice required by the documents.

Special Assessments

Special assessments deserve extra care because documents often require a specific purpose, threshold, vote, notice, or allocation rule. If the documents distinguish common expenses, limited common expenses, lots, units, classes, or percentages, the ledger should match that structure.

Controls Worth Adding

• Require board approval before assessment invoices are generated.
• Attach the budget or resolution to the assessment batch.
• Keep reserve transfers separate from operating expenses.
• Track dues caps, special assessment thresholds, and member approval requirements in settings.

Frequently Asked Questions

Can a Michigan HOA raise dues without an owner vote?

It depends on the governing documents and association type. Some documents give the board budget authority; others require member approval, ratification, caps, or special procedures.

Do Michigan condominiums have different budget rules?

Condominium associations should review the Michigan Condominium Act together with the master deed and condominium bylaws. Non-condominium associations may rely more heavily on recorded covenants, bylaws, and corporate rules.

What should be saved when a special assessment is approved?

Save the authority, purpose, calculation, allocation method, notice, meeting minutes, motion, vote result, and owner ledger postings.