UPDATE TO EXECUTIVE ORDER 2020-54

“GOVERNOR SUSPENDS RENTAL EVICTIONS”

By: Shane F. Diehl, Esq.

We had previously written and informed you that Governor Whitmer had issued several Executive Orders, including Executive Order 2020-19, which suspended rental evictions through April 17, 2020.

On Friday, April 17, 2020, Governor Whitmer rescinded that Executive Order and replaced it with Executive Order 2020-54, which extends all of the dates in the original Executive Order from April 17, 2020 to May 15, 2020.  As such, landlords cannot take action to remove a tenant from their property until the Order expires.  Further, until 30 days after the restrictions on eviction provided by sections I through 6 of the order, any statutory limits on the court to adjourn any proceedings, toll any redemption periods or limitations periods, or extend any deadlines are suspended.

We suspect that this may not be the final extension on this moratorium.  We recommend that you check back with this blog on a periodic basis for any further updates.

If you have any questions with regard to how the governor’s Executive Order 2020-54 affects your landlord-tenant relationship, please do not hesitate to contact us at your earliest convenience.  Our experienced attorneys are available to assist you through this process during these unique times.

 

Shane F. Diehl is a senior associate attorney with the Firm and has been with the Firm since 2008.  He has over 26 years of experience in representing condominium, subdivision and co-operative associations in Southeast Michigan and has represented hundreds of such associations in addressing all aspects of community association representation.  In addition, Mr. Diehl has 10 years of experience in the banking industry and is a former instructor for the American Institute of Banking.  He also has extensive experience in estate planning, and has served as an officer, trustee and member of numerous non-profit and civic organizations, including the Four County Community Foundation and the Armada Village Planning Commission. Mr. Diehl resides in Armada, Michigan and works from our Macomb County office in Mt. Clemens.

Mr. Diehl holds an Associate in Arts Degree from Ferris State University and a Bachelor of Business Administration from the University of Toledo, Ohio.  He earned his Juris Doctor Degree from the University of Toledo College of Law in 1989.  He is licensed to practice in the State of Michigan since 1990, and is admitted to practice in the United States District Court for the Eastern District of Michigan.

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Special COVID-19 Support Center Seminar

Creating solutions and accessing resources to COVID-19 issues
in your community
A seminar to support Board Members and Managers

Wednesday, April 22, 2020 | 2:00 p.m.
Presenters: Edward J. Zelmanski  and Gregory J. Fioritto, Esq.

Right now, we know many communities like yours are facing challenges as a result of the COVID-19 pandemic and are having to make many decisions about whether to inform your communities about an infected person, weighing safety and privacy concerns, how to keep residents safe, landscaping and maintenance, dealing with increased costs for emergency issues or obtaining financial relief through government programs.

Join us on Wednesday, April 22 at 2:00 p.m. for a special Zoom meeting about these significant issues featuring Zelmanski, Danner & Fioritto attorneys who will explain and address some of the most common questions we are hearing from communities and associations during this unprecedented time.

This meeting is interactive and your questions will be answered by a panel in real-time. Share ideas with other Board Members and other attendees.

For the Zoom meeting details and to submit any questions or concerns you would like addressed, please contact Marsha Williams via email mwilliams@zdfattorneys.com, or call us at 734-459-0062 x224.  If you are new to Zoom and need assistance, please contact Melissa Francis via email mfrancis@zdfattorneys.com or 734-459-0062 x233.  This Zoom presentation will be fed through our Facebook Event page. 

Be sure to bookmark our online COVID-19 Support Center page for regular
updates relating to COVID-19 implications and how your community can respond appropriately as the situation evolves.

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BUILDING COMMUNITY IN THE TIME OF COVID-19

By: Melissa D. Francis, Esq.

Sidewalk Chalk Art in Canton, MI
Photo Credit:  Laura Kitzman

As Community Association attorneys, one of the things I hear most often from Community Association Boards and Homeowners is that they do not feel connected to their neighbors.  Residents of the community come home, do their own things, and (with the exception of perhaps a few close neighbors) only see each other occasionally.  Many Community Association residents do not attend meetings, volunteer for committees, or participate in any other community events.  Now is the time to work on changing these patterns by making connections we may not have been able to make before COVID-19 interrupted our daily lives.

With Governor Whitmer’s stay-at-home order and the Federal social distancing guidelines remaining in place until at least April 30, 2020, many community residents are spending more time than ever before at home.  Many individuals and families are looking for activities to keep their time occupied, within the social distancing and stay-at-home guidelines, as many activities and events have been cancelled.   Why not use this time to plan some simple community events to build a sense of belonging?

Messages of Encouragement and Happiness– Across the United States, many people are leaving messages of encouragement on their driveways for neighbors to see as they walk or drive by, or look out their windows-Happy faces, hearts, children’s pictures, encouraging words. A Florida friend recently reported that her daughters’ pre-school teachers came to the house early in the morning and left the girls chalk messages for their birthdays.  The girls were so excited when they looked outside and saw what their teachers left!  Invite community residents to decorate their driveways and email a picture to the Association’s email, or post on the Association’s Facebook page, or challenge community members to find as many chalk messages as they can on their daily walks.  Associations with restrictions on sidewalk chalk use may consider making a temporary change in policy to allow residents to participate in this activity.  If sidewalk chalk is not an option, have people participate by leaving pieces of paper with these messages in their front windows.

Nightly Neighbor Check In– A group in Plymouth, Michigan started the “Plymouth Pause”.  Each night at 7 p.m. these residents and their families turn on their porch lights and go out on their front porches to wave to each other, say “hello”, and make sure everyone is alright. With a little communication, this would be easy to implement in any Community Association.  This gives people an opportunity to see people they do not see often, and introduce themselves to their neighbors.

Organize a Bear Hunt–  Based on the children’s book classic, “We’re Going on a Bear Hunt” by Michael Rosen and Helen Oxenbury, even your oldest residents will enjoy participating in this activity.  Invite community members to place teddy bears in their windows during the week of the event.  As families and individuals are taking their daily walks, bike rides and runs, they can search the neighborhood for bears.  How many bears can you find?  Are they all similar?  What are the bears doing?  Create a Facebook event and have residents post their finds or their favorites in the event discussion.  Have residents vote for their favorite bear and award small prizes to the winners later in the spring or summer.

A Commerce, Michigan home ready for a Bear Hunt
Photo Credit:  Julia Kondoff

Neighborhood “Graduation” Ceremony–  With the 2019-2020 school year ending abruptly in early March and the Governor and universities ending face-to-face instruction for the year, many 5th graders, 8th graders, high school and college seniors will not be able to experience their milestone end-of-year traditions and ceremonies.  However, that doesn’t mean they cannot get recognition of their accomplishments from their community.  Choose a day to celebrate these milestones in your community.  Have the “graduates” stand on their porches or driveways while other community members walk or bike at a safe distance or safely drive through the neighborhood pausing briefly at each graduates home to clap for them and congratulate them for their accomplishments.  List the names of your Community’s graduates, by category, in your Community Newsletter.

Now is also an excellent time to start planning your Spring and Summer, 2020 committees.  Get an invitation out to members to join committees and start planning committee meetings using conference calling and other technology.  Engaging in building a sense of community now, will strengthen your community as we come out of the Covid-19 crisis.

Sidewalk Chalk Art in Canton, MI
Photo Credit:  Laura Kitzman

The activities listed above are only a small sampling of things you can do as a Community Association to strengthen your bond as a community and get to know your neighbors.  Be creative while working within the confines of the stay-at-home order, social distancing, and general community safety.

Melissa D. Francis joined the Firm in 2013 as an associate attorney. She is a graduate of Plymouth-Canton High School and earned her Bachelor of Arts Degree in International Relations from Michigan State University’s James Madison College in 1998. She earned her Juris Doctorate from Wayne State University Law School in 2001.  Ms. Francis is admitted to practice law in the State of Michigan, Federal District and Bankruptcy Courts for the Eastern and Western District of Michigan, and the United States Supreme Court. Ms. Francis has extensive experience representing both Creditors and Debtors in Chapter 7, 11, and 13 Bankruptcy proceedings.  Since association collections matters routinely involve bankruptcy issues, her vast experience in that field provides the Firm with a unique resource that provides tremendous value to the Firm’s Clients.  Ms. Francis is a member of the American Bankruptcy Institute.  She was a speaker at the 2019 Community Association Institute Law Conference in New Orleans discussing Consumer Bankruptcy and its impact on Community Associations.  She is also a speaker at the 2019 American Bankruptcy Institute Detroit Conference on Veteran’s Day.

Ms. Francis is a Past Dean of the Metro Detroit Alumni Senate of Delta Theta Phi Law Fraternity International.  She is active in the Plymouth-Canton Community as a member of the St. Thomas A’Becket Church choir, Beckridge Productions, Spotlight Players Theater Company, and the Plymouth-Canton Marching Band Alumni Community.

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HOW TO HANDLE DISCLOSURE OF COVID-19 CASES IN YOUR COMMUNITY – WEIGHING PRIVACY AGAINST SAFETY

By: Gregory J. Fioritto, Esq.

The ongoing pandemic has raised many new and difficult questions for community association boards.  One of the most frequently-asked questions is whether a board should disclose the presence of a known case of COVID-19 in the community to the other residents.

The issue is complex because it raises two equally compelling interests and seemingly pits them against each other.  On the one hand, you have the privacy concerns of the individual resident with the virus, who may not want their identity disclosed to the community in any way, shape or form.  On the other hand, you have the very substantial interest of the board in protecting the health and safety of the community from a highly contagious and (in some cases deadly) virus.

We have, in our country’s laws, a well-established and highly-prized “right to privacy.”  A member of a community association can and should reasonably expect, all things being equal, that their present health and medical status is their own private concern and not something that can or will ever be disclosed to the membership by the Board of Directors or the association’s management in any manner.

However, as we all know in this unprecedented time, all things are not equal.  Never before have association boards been forced to weigh, in such stark terms, the disclosure of private, sensitive information about an individual member against the potential deadly harm that could result to other members of the community if the board does not disclose the information.

It is well-accepted that a board should not disclose to the community any specific identifying information (e.g., name or address) about a resident who is COVID-19 positive without their express written permission.  This is true regardless of whether the resident in question is also a member of the association (i.e., both tenants and owners are equally entitled to protection of their privacy).

That boundary being established, a board does have a duty to disclose potential dangers to its community members once they become known.  Indeed, a board that knows about the presence of a COVID-19 positive resident in the community and that fails to advise the members in any manner about this fact may well be subjecting the board and the association to potential liability.

As a lawyer, one can easily conceive of a possible “nightmare” scenario where the board has knowledge of a COVID-19 case but does not apprise the community of the increased danger presented, and another member in the community (perhaps living in the same building as the COVID-19 infected person) becomes seriously ill or dies.  The owner who becomes ill (or their estate, if they pass) may assert that the Board was negligent in failing to warn the community in some fashion of the increased threat level presented by the infected resident.

Regardless of whether a COVID-19-infected resident has given any permission to the board to disclose their illness or identity, a board may inform other residents in a more generalized way about the presence of the infected person in the community without unduly compromising the infected person’s privacy.  A board could adequately apprise its community’s residents about the presence of the COVID-19 infected individual without disclosing any specific, identifying information about the person.  For example, if the infected resident lives in a 4-unit building, the Board could reasonably decide, in balancing the privacy rights of the infected individual against the safety of the community, to advise only the residents within that particular building that a person with COVID-19 is living in the building.  Disclosure of the COVID-19 case beyond that particular building to the rest of the community may be unnecessary if the community does not have any other shared amenities (e.g., no clubhouse, pool or grouped mailbox stacks).

As with anything, the “right” advice for each community board in acting on COVID-19 issues cannot be decided within a vacuum.  There is no “one size fits all” – such advice and judgment must always be tailored to the nature of each unique community in light of the particular facts and circumstances in play.  Board members should examine these issues with care as they arise, act in reliance on the advice of the appropriate professionals, and make the most well-informed and balanced decisions that they can in these challenging times.

Gregory J. Fioritto is a partner with the Firm.  He graduated from the University of Michigan in Ann Arbor with High Distinction in 1997, where he obtained his Bachelor of Arts in Psychology and received numerous honors, including Phi Beta Kappa and recognition as an Angell Scholar.  Mr. Fioritto earned his Juris Doctorate from the University of Michigan Law School in 2000.  He joined the Firm in 2003 and has spent nearly his entire legal career practicing in the field of condominium, HOA and community association law.

Mr. Fioritto has extensive experience in virtually every facet of condominium and HOA law, including, but not limited to: drafting master deed and bylaw amendments and guiding associations through the amendment process, drafting rental restriction amendments (including rental caps and bans), managing condominium conversions, handling Fair Housing disputes and claims, counseling boards and managers on insurance and casualty loss matters, collecting  assessments, conducting lien foreclosures, assisting associations with bylaw enforcement, and the handling of FHA certification issues.

He is also well-versed in the many developer-related matters that can and do affect associations, including the application of the Condominium Act and other laws to “unfinished” condominium and HOA projects, “transition of control” issues, defect litigation, and the enforcement of association rights in developer disputes.  He has significant expertise in assisting new associations with maximizing and protecting their legal rights and leverage in transition negotiations with new project developers and builders.

Mr. Fioritto has attended literally hundreds of board and association meetings over the course of his career.  His experience has given him a particular interest in educating co-owners and board members on the many benefits of the proper application and use of parliamentary procedure at meetings.

He has lectured on a frequent basis for many years on condominium and HOA-related topics at seminars sponsored by the Community Associations Institute (CAI) and the United Condominium Owners of Michigan (UCOM).

As a partner with the firm, Mr. Fioritto helped pioneer the firm’s exclusive “Condo & HOA B.E.A.T. (Board Education and Training)” program, an ongoing monthly series of free educational sessions held in Canton and Mt. Clemens and which are open to all (not just firm clients).

In further service of the firm’s dedication to the ongoing education of condominium and HOA boards and their association members, Mr. Fioritto recently helped create the firm’s “Neighborhood Know How” educational program.  As part of this program, the firm provides valuable free educational sessions in conjunction with local municipalities.

In addition to community association law, Mr. Fioritto has experience with commercial and residential real estate transactions and small business formation (including corporations and limited liability companies).

Mr. Fioritto currently serves as President of his own condominium association in Canton, Michigan.  His years of service on his own Michigan condominium board give him a unique and more complete perspective among attorneys of the many practical problems and legal issues that are encountered by community association boards on a daily basis.

He enjoys spending his free time with his two sons, attending Michigan football games (Go Blue!) as well as vacationing up north in the state’s “thumb area.”

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CONDO AND HOA

Board Education and Training (B.E.A.T.)
brought to you by
Zelmanski, Danner and Fioritto, PLLC
Experienced Condominium & HOA Attorneys

Join us tonight, Wednesday, April 15 at 6:30 p.m. for the presentation

Effective Enforcement for Your Community by attorney Lee Schofield.

For the Zoom meeting details, please contact Marsha Williams via email mwilliams@zdfattorneys.com , or call us at 734-459-0062 x224.

This Zoom presentation will be fed through our Facebook Live page!

Visit ZDF’s Event page to attend virtually, give feedback in real-time, and have your questions answered by an attorney for free!

Wednesday, April 15, 2020 | 6:30 p.m. – Lee S. Schofield
Effective Enforcement for Your Community
Now that you have great documents and rules and regulations that go along with them, how do you enforce all of it? This session will explore options to enforce your documents including equal enforcement, the use of fines, the property manager’s role in enforcement, and when to get your attorney involved.

Be sure to bookmark our online COVID-19 Support Center page for regular updates relating to COVID-19 implications and how your community can respond appropriately as the situation evolves.

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COVID-19 Reflections

Everyone Matters, Reaching Out to Elderly and Vulnerable Members of Our Communities

By Lee S. Schofield, Esq.

Beginning on March 10, 2020 with Executive Order 2020-4, which declared a state of emergency in Michigan and throughout the month of March 2020, Governor Whitmer has issued a series of Executive Orders which have, with gradual swiftness, imposed severe closures and restrictions upon Michigan residents and business. At this point, with the issuance of Order 2020-21 on March 23rd, Michiganders are, subject to limited exceptions, ordered to stay at home and are not allowed to meet with anyone outside of their households. While these restrictions are part of the national and global effort to stem the rate of COVID-19 infections to avoid overwhelming healthcare capacity and to create a breathing space for augmentation of such capacity, aside from enormous economic disruption, the restrictions have resulted, temporarily, in significantly increased personal social isolation for most people. COVID-19 restrictions affect everyone to some degree regardless of age or circumstance and probably uniquely affect those who live alone, in single person households, which is an ever-growing demographic. While most can and almost universally do rely on the myriad modes of digital interconnectedness at our disposal, the temporary enforced isolation caused by COVID-19 should give everyone, including younger folks, a window into the issues surrounding social isolation, which particularly affect the elderly and more vulnerable members of our communities.

It’s worth noting that, according to federal statistics, a much higher percentage of condominium and coop households are single person households, compared to the national average, and condominium residents are much more likely to be either under 35 or over 65. So, from a statistical perspective, thinking about ways to reach out and break down social and generational gaps is of extra importance and relevance in the condo/coop setting. Given the extensive contractual obligations that already exist (Master Deed, Bylaws, etc.) among and between owners and Associations, it behooves condo and coop homeowner to work together. And as we know from annual meeting experience, by their nature, condos and coops work best when people come together.

Compounding the enforced isolation of COVID-19 restrictions is the fact that older and more vulnerable members of the community may feel additionally constrained not to venture out at all at this time due to increased risk of severe illness or death in older age groups. Michigan data alone shows that the average overall age of those deceased is 70. Further older Michiganders may (though hardly universally) be less likely to have as much facility with or desire to engage in online social media or other online modes of remote social interaction, thus further increasing isolation.

Since COVID-19 has, in a sense, made everyone at least temporarily “lonelier”, let’s take this moment of empathy to reflect on how we can strengthen bonds where they are weakening and reach out to our neighbors and community members, especially those who may be more vulnerable. Governor Whitmer’s Executive Order 2020-21 (Section 7.a.8) does specifically provide that Michiganders may leave their homes to care for the elderly, persons with disabilities, or other vulnerable persons.

While COVID-19 presents extra challenges to these efforts, we should do things such as:

  • Use community email lists, websites, and social media to get out the message that support is available for those who want or need it.
  • Seek out those in the community who are willing to volunteer to provide such support, for instance obtaining groceries or medications.
  • Take advantage of online resources, non-profits, and religious institutions that may provide ideas, tips, or training on reaching out to vulnerable members of our communities.
  • Be aware of those around us that may need assistance.
  • Break your own routine to make a friendly telephone call to a neighbor.
  • We do not need an excuse to knock on a door.
  • Gestures to show community solidarity and support while observing the restrictions of Executive Orders, including social distancing.
  • Offer a smile and “how are you” to neighbors you may see when engaging in allowed activities outside your home.

I invite readers to take this time of increased difficulty to reach out to those around them, but particularly to those who may be suffering greater hardship as a result of COVID-19 restrictions. Making people understand that they matter and contribute to the community is critical to their self-worth and to their health and well-being. I would like to think that the positive social habits and lessons we can develop at this time of difficulty will be carried forward in our communities and will result in some lasting positive change.

Lee S. Schofield is an associate attorney with the Firm.  He earned his Bachelor of Arts in Comparative Literature at Brigham Young University in 1996, where he was a Trustee Scholar.  He obtained his Juris Doctorate at Michigan State College of Law in 2000, where he was an officer of the MSU chapter of Amnesty International.  Prior to joining the Firm in 2005, Mr. Schofield practiced commercial law with a firm in Dearborn, Michigan that had an affiliate relationship with an Anglo-Kuwaiti law firm.  Mr. Schofield has handled a diverse range of commercial litigation and transactional matters, including litigation and arbitration in state, federal, and international courts, defense contract negotiation and management, small and medium-sized business and real estate transactions, Islamic finance issues, corporate issues, and trademark registrations and disputes.

Mr. Schofield has extensive experience in condominium law, and enjoys advising condominium boards and membership on the diverse array of legal questions that face condominium associations, housing cooperatives, and HOAs.  Mr. Schofield’s practice and experience with the Firm has also included a myriad of commercial litigation, real estate and transactional matters.

Mr. Schofield has numerous outside interests, including literature and literary theory, violin, and cooking.  He is also a fitness enthusiast and enjoys keeping in shape through running and other physical activities.

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WHAT’S A BOARD TO DO?

The Board of Directors as local government in the COVID-19 pandemic crisis.

By Edward J. Zelmanski, Esq.

We received the first round of questions arising in the face of the current COVID-19 Virus pandemic. Those questions tended to be of the form “Must the Board of Directors do what we cannot do?”  These questions typically pertain to the holding of annual meetings required to be scheduled at a given time according to the governing documents of the Association or the holding of regular board meetings with Board Members in attendance. The answers tended to be that you may postpone those meetings or in some fashion conduct business electronically, being guided by the provisions of your governing documents and the Michigan Non-Profit Corporations Act.

It is important to recognize that as members of your Board of Directors you continue to be the local government for your community and you need to continue governing your community during these times with the shutdown or sheltering in place that has been ordered. There is no one else ready to step in and perform these activities. You should continue working with your professional community managers during this time.  Managers may be unable to provide the guidance necessary to continue the proper governance of your community.    Fortunately, we are part of the great American tradition, part of the culture that highly values invention and innovation.  This time of crisis is one that calls upon you to lean on that tradition and recognize that this country’s ability to be innovative provides us with an invaluable strength during these times. Common sense and practicality are premium attributes during the changing face of the crisis.

Whatever form of dialogue the Board Members might use now, this is the time for a review of the responsibilities that your Association regularly discharges in its governance. After doing that, identify those activities that are essential to the continued operation of your Association and plan to continue those and defer the performance of nonessential activities. These will vary on a case-by-case basis for each community.  A common sense approach to this would readily provide you with answers exercised in the reasonable business judgment of your Board under this declared emergency.

The powers vested in the Board of Directors are contained within the Bylaws for your Association.  These powers have not been abolished nor have they been particularly expanded by the addition of new powers due to this pandemic.  It is commonplace that the powers and duties of the Board of Directors in your Community are set forth in a separate article within your Bylaws.  Now is a good time to review those so that you are fully familiar with the stated requirements of your governance duties which will typically conclude with a statement similar to the following:  “The Board may, in general, enter into any kind of activity to make and perform any contract, or to exercise all powers necessary, incidental or convenient to the administration, management, maintenance, repair, replacement and operation of the Condominium and to the accomplishment of any of the purposes thereof not forbidden and with all powers conferred upon non-profit corporations by the laws of the State of Michigan.”

As Board Members, you are the backbone of the governance of your Community and your diligence, common sense and inventiveness are at particularly high premium now. You are encouraged to go forward with the knowledge and confidence that we have all been through tough times before and your continuing to function as the governing backbone of the Community is an important part of seeing you and all you care for through!

 

Edward J. Zelmanski is a partner with the firm Zelmanski, Danner & Fioritto, PLLC. After graduating from the University of Michigan in 1976, he earned his Juris Doctorate from the University of Detroit School of Law and has been a member of the Michigan Bar since 1979. He is a Michigan Master Lawyer and a member of the Real Estate Section of the Michigan Bar Association. He has a broad range of experience in real estate and community association matters, including the review, interpretation, enforcement and amendment of community association governing documents, as well as providing counseling and problem solving for community association boards and members. Mr. Zelmanski has experience with state and federal real estate litigation, foreclosure proceedings, real estate title and boundary disputes, as well as disputes with real estate developers and contractors. He has defended community associations in civil rights disputes and has assisted community associations and individual clients with bankruptcies, probate matters and class actions. He has contributed to the amendment of the Michigan Condominium Act, has published materials on real estate subjects and has lectured on real estate topics at Wayne State University and the University of Detroit Mercy School of Law. He has trained dozens of attorneys in law school clinics. Mr. Zelmanski has also presented lectures on community association topics for the Real Property Section of the Michigan State Bar, Community Association Institute, United Condominium Owners of Michigan, Lorman Education Services and for private community management classes.

Mr. Zelmanski joined the Firm in 1997. He has also provided pro bono services to the elderly, church groups, and the Veterans of Foreign Wars. He enjoys spending time with his family and has a myriad of other outside interests, including music, literature, cross-cultural studies, hiking, and swimming, in addition to being an avid baseball and football fan.

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The Role of Management Companies During Michigan’s COVID-19 Shutdown

Written by Stacia A. Miller, Esq.

As everyone is likely aware, Governor Gretchen Whitmer has signed EO2020-21. EO2020-21 which prohibits in person work that is not necessary to sustain or protect life or conduct minimum basic operations of your business. The violation of this Order constitutes a misdemeanor. That’s great, but what does that actually mean?

In the property management industry those minimum operations could include things like the processing of accounts payable and receivable, responding to incoming telephone calls (especially maintenance calls) and other functions deemed necessary to assist individual managers working from home. The key to minimum operations according to EO2020-21 is “minimum”. The fewest number of people required to maintain the necessary tasks and those people observing the tenets of social distancing.

Property Managers should be working from home. No site visits, no in-person Board meetings, and no annual meetings should be taking place. No projects (i.e. roads, roofs, etc.) should be underway, nor should any contractors be visiting sites to produce bids (if they are, Property Managers should not be supervising or accompanying the contractors and/or workers).

With that said, for every rule there are exceptions. The Governor has deemed certain service providers, such as plumbers, and, of course, emergency personnel, exempt from the “shutdown” aspect of this Order. In other words, if you encounter an emergent situation such as a flood or fire, you should be taking normal measures to handle the emergency and mitigate possible damages.

If you have urgent matters requiring discussion with your Boards, consider using conference call or virtual meeting technology. If there are exigent circumstances leading you to not want to delay a co-owner vote, consider electronic voting measures (as long as they are permitted within the documents). If you need help interpreting the EO2020-21 relating to your concerns or needs, contact us. We will be happy to provide additional guidance.

This is unchartered territory for all of us but we will get through it together. Please stay safe and know that all of us at Zelmanski, Danner and Fioritto, PLLC are here to help you in any way we can.

 

Stacia A. Miller is an associate attorney and joined the Firm in 2017. Prior to her legal career, Ms. Miller served in the United States Navy on active duty from 1994 to 1997 and achieved the rank of Petty Officer Third Class.  From 1997 to 1999, she served in the Naval Reserve as an Aviation Warfare specialized Yeoman.  During her active duty service, Ms. Miller earned a Bachelor Degree from Troy State University in Criminology.  After leaving the Navy, she earned a Master’s Degree in Paralegal Studies/Business Law from Kaplan University (Purdue), followed by a Juris Doctorate degree from Wayne State University in 2015.

Ms. Miller brings a unique perspective to her role as a community association attorney, having previously worked in the field of property management for associations.  She worked in on-site property management for a small company, as well as in an accounting and customer service capacity for one of the largest management companies in Michigan. In her later experience working as a paralegal/law

clerk, Ms. Miller gained significant experience with collections matters, bylaws enforcement, FHA and VA certification, and document amendments.

Ms. Miller is also the director of a veteran-centric non-profit organization, and a published author.  She spends her free time on Lake St. Clair with her husband, five children (including two adoptees), three step-children, and their many friends.  She is an avid Cowboys fan, originally hailing from Dallas, but has joyfully adopted the Lions and Red Wings as her home teams.

Please visit www.zdfattorneys.com for additional information about all of our Firm’s attorneys.

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COVID-19 AND COLLECTIONS – HOW TO PREPARE YOUR ASSOCIATION FOR A POSSIBLE SPIKE IN DELINQUENCIES

By Gregory J. Fioritto, Esq.

Prior to the beginning of the COVID-19 pandemic, many Associations were experiencing record-low levels of owner delinquencies.  This is the expected result of a national (and local) economy that improved by leaps and bounds from the dark days of The Great Recession of 2007-2009.  Indeed, prior to the recent unprecedented turn of events, it was not uncommon for many Associations to have no delinquencies at all.

If the expected unemployment forecasts for the next six months hold, the COVID-19 crisis may present a sudden and significant increase in the level of delinquencies for condominium and homeowners Associations across the State of Michigan.

Fortunately, Boards should have at least a few months “lag time” before a potential recession takes firm hold of our State’s economy and starts significantly increasing Owner delinquencies.

We would recommend that Boards take the following steps in preparation for a possible increase in delinquencies:

  1. EXAMINE (AND ADJUST) YOUR 2020 BUDGET AND EXPENDITURES: A COVID-19 recession could hurt an Association in two primary ways – a decrease in the amount of assessments collected (income), and an increase in administrative costs incurred in pursuing delinquencies (expenses).

These sudden (and perhaps drastic) changes in an Association’s income and expenses could put a real damper on its financial health.

In light of this new reality, Boards should consider reducing, deferring or eliminating any unnecessary capital expenditures or costly projects that may have been planned for the year.  The Board will have to exercise its best business judgment in deciding how to re-prioritize such expenditures and projects in view of the changed financial landscape.

Given the dearth of delinquencies in recent years, many Association may have allocated very little funds to collections matters (relatively speaking) in their 2020 budgets.  Boards should review the current allocation of funds to collections matters in their 2020 budgets and consider adjusting the budget to allocate a larger share of funds to collections efforts than was originally planned.   Such re-allocations could perhaps come from excess funds that the Board had planned to put in reserves, or from contingency line items in the existing budget.

The Board, with the support and input of qualified financial professionals, should continue to monitor the COVID-19 crisis and make further adjustments to income projections and expenditures as needed through the remainder of 2020.

 

  1. REVIEW YOUR COLLECTIONS POLICY (OR ADOPT ONE):

We recommend that all Associations have a collections policy in place at all times so that the procedures and standards that the Board will apply in pursuing collections matters are clearly understood by all and fairly administered.

If an Association has not had a policy in place to date, then it should consider adopting one.  If it already has a policy, then it should consider whether or not the policy needs to be amended to best suit the needs of the Board and the Association in the current crisis.

For example, a policy that currently provides for delinquencies to be turned over to the Association’s attorney after 90 days may need to be shortened to require such turnover after 60 days if the Board decides that a more aggressive approach is warranted.

If the Board plans on granting concessions to those Owners who are hardest hit by this crisis, then the standards that the Board will apply in granting such concessions should be laid out in their policy.  For example, the policy could provide that a delinquent Owner whose financial hardship is directly related to the Owner (or one of their family members) contracting COVID-19 is eligible for a payment plan of a longer term, or automatic forgiveness of all late charges on their account.

 

  1. PLAN AND REVISE YOUR 2021 BUDGET:

Again, given the very low overall level of Association delinquencies in recent years, an Association’s 2020 budget may well have been rendered obsolete in many ways, especially in regard to expenditures related to delinquencies.

Boards should plan their 2021 budgets to account for expected decreases in income and increased delinquency-related expenditures.  As we move through 2020, Board should gain a better understanding of just how large these budget adjustments will need to be.

For further guidance on how to plan their 2021 budgets, Boards may be well-served to examine old budgets from years past (say, from 2007-2015) to gauge how their 2021 budgets may need to be adjusted to properly manage the financial fallout of the COVID-19 pandemic.

 

  1. REVIEW YOUR RELATIONHIPS AND CONTRACTS WITH YOUR ASSOCIATION’S COLLECTIONS PROFESSIONALS:

It almost goes without saying that (ideally) every Association should already have experienced and qualified professionals in place to handle their collections matters.

If an Association has sustained good financial health through the recent economic recovery, the Association’s Board may not even know which firm or collections agent their Association has used in the past to handle their delinquencies.

Each Board should review the existing relationships (and contracts) with their collections professionals/attorneys and make sure that such professionals are well-versed in handling Association collections issues and that the Board is comfortable with the existing contractual arrangement with such professionals (e.g., how much they charge, which methods of collections they employ, etc.)

 

  1. REACH OUT TO THE MEMBERSHIP AHEAD OF TIME:

As with almost all Association issues, good communication (i.e., open, honest and transparent) between the membership and the Board can go a very long way.

In the collections context, this may mean that the Board mails (or re-mails) a copy of the Association’s collections policy to the membership so that all Owners are aware of how such matters will be handled by the Board and its agents.

It may also mean that the Board keeps the Association apprised on a regular basis as to the total amount of current Association delinquencies, so that all Owners are aware of the impact that the pandemic may be having on the Association’s financial status.

Of course, it bears mentioning that the Board should never disclose specific information about individual Owner delinquencies to the membership at large, as such disclosures could result in violations of the Owner’s right to privacy, generate ill will, and create possible legal liability for the Association and the Board.

In sum:  the bad news is that Michigan Associations are likely to face an increase in Owner delinquencies through the remainder of 2020, and perhaps beyond.  The good news is that there is still time for Boards to take action now to minimize the adverse impact that COVID-19 may have on their Association’s financial health.

 

Gregory J. Fioritto is a partner with the Firm.  He graduated from the University of Michigan in Ann Arbor with High Distinction in 1997, where he obtained his Bachelor of Arts in Psychology and received numerous honors, including Phi Beta Kappa and recognition as an Angell Scholar.  Mr. Fioritto earned his Juris Doctorate from the University of Michigan Law School in 2000.  He joined the Firm in 2003 and has spent nearly his entire legal career practicing in the field of condominium, HOA and community association law.

Mr. Fioritto has extensive experience in virtually every facet of condominium and HOA law, including, but not limited to: drafting master deed and bylaw amendments and guiding associations through the amendment process, drafting rental restriction amendments (including rental caps and bans), managing condominium conversions, handling Fair Housing disputes and claims, counseling boards and managers on insurance and casualty loss matters, collecting  assessments, conducting lien foreclosures, assisting associations with bylaw enforcement, and the handling of FHA certification issues.

He is also well-versed in the many developer-related matters that can and do affect associations, including the application of the Condominium Act and other laws to “unfinished” condominium and HOA projects, “transition of control” issues, defect litigation, and the enforcement of association rights in developer disputes.  He has significant expertise in assisting new associations with maximizing and protecting their legal rights and leverage in transition negotiations with new project developers and builders.

Mr. Fioritto has attended literally hundreds of board and association meetings over the course of his career.  His experience has given him a particular interest in educating co-owners and board members on the many benefits of the proper application and use of parliamentary procedure at meetings.

He has lectured on a frequent basis for many years on condominium and HOA-related topics at seminars sponsored by the Community Associations Institute (CAI) and the United Condominium Owners of Michigan (UCOM).

As a partner with the firm, Mr. Fioritto helped pioneer the firm’s exclusive “Condo & HOA B.E.A.T. (Board Education and Training)” program, an ongoing monthly series of free educational sessions held in Canton and Mt. Clemens and which are open to all (not just firm clients).

In further service of the firm’s dedication to the ongoing education of condominium and HOA boards and their association members, Mr. Fioritto recently helped create the firm’s “Neighborhood Know How” educational program.  As part of this program, the firm provides valuable free educational sessions in conjunction with local municipalities.

In addition to community association law, Mr. Fioritto has experience with commercial and residential real estate transactions and small business formation (including corporations and limited liability companies).

Mr. Fioritto currently serves as President of his own condominium association in Canton, Michigan.  His years of service on his own Michigan condominium board give him a unique and more complete perspective among attorneys of the many practical problems and legal issues that are encountered by community association boards on a daily basis.

He enjoys spending his free time with his two sons, attending Michigan football games (Go Blue!) as well as vacationing up north in the state’s “thumb area.”

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Governor Suspends Rental Evictions

Written by Shane F. Diehl, Esq.

With the advent of the coronavirus crisis and the subsequent “Stay Home, Stay Safe” Executive Order, and all other Executive Orders issued by Governor Whitmer, many folks are finding themselves without a paycheck to pay for necessary expenses, including rent.

The City of Detroit recognized early that the shutdown of business was going to be a problem and the District Court Chief Judge issued a moratorium on all evictions in the 36th District Court in early March, 2020. President Trump took similar action a few days later by suspending all evictions and foreclosures involving the U.S. Department of Housing and Urban Development properties.

Governor Whitmer announced a State of Emergency in Michigan on March 10, 2020, extended the tax foreclosure deadline in Michigan until after May 29, 2020, and then, on March 20, 2020, issued her Executive Order 2020-19 which temporarily prohibits the eviction of a tenant from their house or mobile home.

Under the terms of the Executive Order, a landlord is prohibited from evicting a tenant from the rental property except in the case where the tenant poses a substantial risk to others or imminent and severe risk to the property. The Order is effective until the end of the day on April 17, 2020. The Order may be extended by the governor at any time.

This Order does not mean that the tenant is no longer obligated to pay rent or comply with all statutes or terms of the lease. It just means that they cannot be removed from the property until the Order expires. It should also be noted that the Order prohibits any attempt to personally serve or deliver a demand for payment to the tenant during the moratorium period. The governor does not want parties meeting face to face at this time or at least until after April 17.

If a landlord has already obtained a writ to take back possession of the property pursuant to a previously obtained judgment, the landlord is prohibited from executing on that order in attempting to remove the tenant from the property. Again, unless the tenant poses an imminent risk to others or the premises. All court officers are prohibited from serving those writs and orders until after April 17. Further, the landlord may not prohibit the tenant from accessing the leased premises during this moratorium.

If a landlord has already filed an eviction action or has served a notice or taken some other action which requires the eviction to move forward, all statutory requirements or limits on the Courts to move forward are adjourned and tolled for 30 days and the deadlines are suspended. This means that if a landlord has already filed an action, the date for the hearing on that action will not occur until after the moratorium has expired and the statutory requirement that the hearing be held within a certain period of time is suspended.

Everyone should understand that a willful violation of any of the terms of the governor’s Order is considered a misdemeanor and will be prosecuted.

This moratorium period is not to be considered a tenant’s rent-free holiday. Once the Order has expired, all proceedings may and are expected to move forward. As such, tenants should, if they can, take this time to try and raise the past due rent or correct the violations which led to the impending eviction. Landlords should take this time to make sure that they have taken all appropriate steps in the eviction process and be prepared to proceed, if necessary, once the moratorium has been lifted.

If you have questions with regard to how the Governor’s Executive Order affects your landlord-tenant relationship, please contact us at your earliest convenience.  Our experienced attorneys are available to assist you through this process during these unique times.

Shane F. Diehl is a senior associate attorney with the Firm and has been with the Firm since 2008.  He has over 26 years of experience in representing condominium, subdivision and co-operative associations in Southeast Michigan and has represented hundreds of such associations in addressing all aspects of community association representation.  In addition, Mr. Diehl has 10 years of experience in the banking industry and is a former instructor for the American Institute of Banking.  He also has extensive experience in estate planning, and has served as an officer, trustee and member of numerous non-profit and civic organizations, including the Four County Community Foundation and the Armada Village Planning Commission. Mr. Diehl resides in Armada, Michigan and works from our Macomb County office in Mt. Clemens.

Mr. Diehl holds an Associate in Arts Degree from Ferris State University and a Bachelor of Business Administration from the University of Toledo, Ohio.  He earned his Juris Doctor Degree from the University of Toledo College of Law in 1989.  He is licensed to practice in the State of Michigan since 1990, and is admitted to practice in the United States District Court for the Eastern District of Michigan.

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