“Unincorporated” Boards are Legal Entities in Michigan

On May 19th, the Court of Appeals issued its decision in Suttons Bay Yacht Village Condo Ass’n v Board of Representatives of Port Sutton Community (COA No. 325327) involving whether a Board, which has not been incorporated in the state, is an entity to be involved in a legal action.

The Court of Appeals held it is a recognized entity, concluding that “Michigan caselaw and statutory law support the conclusion that an unincorporated association is a legal entity.”

Whether any group constitutes an unincorporated association requires not simply agreement in the description as such, but “associated, mutual, action of individuals.”

This is good news for Michigan property law which allows informal associations, while not formally incorporating under the Summer Cottage Act, the Non-Profit Corporation Act, or the Corporation statute, to have their day in court. It also means that property owners can take action against “associated” individuals who sometime overstep their legal authority in lake communities and subdivisions throughout Michigan.

Author: Philip Ellison

Philip L. Ellison, MBA, JD, Esq is an attorney, business counselor, and civil litigator with Outside Legal Counsel PLC. He represents riparians, backlotters, and others protecting water access on Michigan's recreational lakes. Visit his online profile at www.olcplc.com.

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