Michigan MCL 559.157: Condo Records Access and Annual Audit

Quick Answer

MCL 559.157 (Section 57 of the Michigan Condominium Act) says an association's "books, records, contracts, and financial statements" must be available for examination by co-owners and their mortgagees "at convenient times." It also requires an annual independent audit or review by a certified public accountant if annual revenues exceed $20,000, unless a majority of members votes to opt out for that year. The audit and opt-out language was added by 2013 PA 134, effective January 14, 2014.

At a Glance

What the Law Says

Subsection (1): examination

"The books, records, contracts, and financial statements concerning the administration and operation of the condominium project shall be available for examination by any of the co-owners and their mortgagees at convenient times."

Two points stand out. The right belongs to co-owners and to their mortgagees. And the access standard is "convenient times," not a fixed number of days or hours.

Subsection (2): the annual audit or review

"Except as provided in subsection (3), an association of co-owners with annual revenues greater than $20,000.00 shall on an annual basis have its books, records, and financial statements independently audited or reviewed by a certified public accountant," as defined in section 720 of the occupational code (MCL 339.720). The work must follow "the statements on auditing standards or the statements on standards for accounting and review services, respectively, of the American institute of certified public accountants."

The statute therefore allows either an audit or a review. It does not say which one, and the standards named match each type (auditing standards for an audit, accounting and review services standards for a review).

Subsection (3): opting out

"An association of co-owners may opt out of the requirements of subsection (2) on an annual basis by an affirmative vote of a majority of its members by any means permitted under the association's bylaws."

• The opt-out is annual, so the vote has to be repeated each year the association wants to skip the audit or review.
• The threshold is "a majority of its members," not a majority of those voting.
• The vote may be taken "by any means permitted under the association's bylaws," so the bylaws control the method (for example, meeting, ballot or written consent, if the bylaws allow).

What This Means in Practice

For boards

Treat $20,000 as the trigger and measure it against annual revenues. The statute says "annual revenues," not assessments only. Our reading is that revenue from all sources counts, but the text does not define the term, so confirm with your accountant or counsel how to measure it.

The opt-out wording, "a majority of its members," is the part to read carefully. Our reading is that it means a majority of all members, not of a quorum, which is a higher bar than a typical meeting vote. Confirm with counsel before relying on a smaller count. Keep the record of the vote with the minutes.

The opt-out does not remove the examination right in subsection (1). Even an association that opts out of the audit still must keep its books and records open to co-owners and mortgagees.

For owners

Subsection (1) is a short, general right. The statute does not say how to make a request, whether it must be in writing, whether copies must be provided, or whether a fee may be charged. For corporate-law inspection procedures that may also apply to an association organized as a nonprofit corporation, see our page on MCL 450.2487. Whether and how that statute applies to a particular association is a question for counsel.

What the statute does not say

• It does not list which records are covered beyond "books, records, contracts, and financial statements concerning the administration and operation of the condominium project." It does not mention meeting minutes or rules.
• It does not set a response deadline, a request format or a copying fee.
• It does not state a penalty or remedy if an association fails to examine, audit or allow access.
• It does not require that the audit or review be delivered to co-owners. Open question: whether delivery is required by the bylaws or other law.
• It does not say when in the year the audit must be completed.

Timeline

Related Michigan Law

• MCL 450.2485 and 450.2487: Nonprofit Corporation Act records and inspection. See member records inspection.
• MCL 559.208: assessment lien and foreclosure.
• Michigan Condominium Act 2026: A Guide for Boards
• How Michigan HOA Boards Prepare for Budget Season
• Michigan HOA Reserve Fund Requirements Explained

Board Checklist

• Determine whether annual revenues exceed $20,000.
• If so, engage a certified public accountant for an audit or a review each year, or hold the annual opt-out vote.
• Check your bylaws for the permitted voting methods before an opt-out vote, and count a majority of all members.
• Record the opt-out result in the minutes each year it is used.
• Adopt a written procedure for co-owner and mortgagee requests to examine records, and define "convenient times."
• Keep contracts and financial statements organized so they can be produced.
• Ask counsel whether your documents add records rights beyond the statute.

Frequently Asked Questions

Who can examine a Michigan condo association's records?

Under MCL 559.157(1), co-owners and their mortgagees may examine the books, records, contracts and financial statements concerning administration and operation of the project "at convenient times."

Does a Michigan condo association need an annual audit?

If annual revenues exceed $20,000, the association must have its books, records and financial statements independently audited or reviewed by a CPA each year, unless it opts out.

Is a review enough, or does it need to be a full audit?

The statute says "audited or reviewed," so either is permitted. It does not say which to choose.

How does an association opt out of the audit?

By "an affirmative vote of a majority of its members by any means permitted under the association's bylaws," on an annual basis.

Is the opt-out permanent?

No. The statute says the opt-out is "on an annual basis," so it applies year by year.

When did the audit requirement start?

The current wording comes from 2013 PA 134, effective January 14, 2014.

Can an owner demand copies of records?

Section 559.157 speaks of "examination" and does not mention copies or fees. Confirm with counsel what your documents and other law provide.

Where This Comes From

This page is based on the text of MCL 559.157 as published by the Michigan Legislature (compiled laws complete through PA 114 of 2026), including its history note: MCL 559.157. We did not review court decisions applying this section or the text of 2013 PA 134 itself.

<h2>Where We Stand</h2><p><strong>Our position: we support the audit trigger, with a caveat.</strong> Independent review of financials improves transparency and board accountability. We would also support a lower-cost review option for small associations, where the audit expense falls hard on each owner. This is Association Property Managers' operating view as a management company, separate from the legal summary above, and it is not legal advice.</p>

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Association Property Managers manages condominium and HOA communities across Michigan from our East Lansing office, with flat, published pricing. See our Michigan service area, browse every Michigan state-law guide, or request a free proposal. Laws and documents differ by community, and we review your master deed and bylaws when we build your proposal.

Legal disclaimer: This article is general information, not legal advice. Laws change and associations differ. Confirm the current statute text and how it applies to your governing documents with a licensed Michigan attorney before acting.