Quick Answer
MCL 559.155 (Section 55 of the Michigan Condominium Act) lets an owner-controlled board cancel certain contracts the developer set up for the association. A service contract or management contract with the developer or an affiliate of the developer "is voidable by the board of directors of the association of co-owners on the transitional control date or within 90 days thereafter." After that window, the board can still void on 30 days' notice, but only for cause. Any management contract that runs past 1 year after the transitional control date can be cut back to that year by notice at least 30 days before the year ends.
At a Glance
| Item | Detail |
|---|---|
| Law/citation | MCL 559.155, Condominium Act (1978 PA 59), Sec. 55 |
| Effective date | July 1, 1978 (no later amendments appear in the section's history note) |
| Applies to | Service contracts and management contracts between the association and the developer or its affiliates |
| Key sections | 559.155(1) voidable window and for-cause termination; (2) management contracts over 1 year; related definitions in 559.103(2) and 559.110(7) |
| Remedy or penalty | None stated; the section gives the board a right to void |
What the Law Says
Subsection (1): the 90-day window and for-cause termination
"A service contract which exists between the association of co-owners and the developer or affiliates of the developer and a management contract with the developer or affiliates of the developer is voidable by the board of directors of the association of co-owners on the transitional control date or within 90 days thereafter, and on 30 days' notice at any time thereafter for cause."
The sentence has two clocks:
- On the transitional control date or within 90 days after: voidable, with no cause stated as a requirement.
- At any time after that: on 30 days' notice, "for cause."
Subsection (2): long management contracts
"To the extent that any management contract extends beyond 1 year after the transitional control date, the excess period under the contract may be voided by the board of directors of the association of co-owners by notice to the management agent at least 30 days before the expiration of the 1 year."
The right in subsection (2) is limited to the "excess period." The first year after the transitional control date is not touched by subsection (2).
Key defined terms
The Act defines the two terms the section relies on:
- "Transitional control date" means "the date on which a board of directors for an association of co-owners takes office pursuant to an election in which the votes that may be cast by eligible co-owners unaffiliated with the developer exceed the votes which may be cast by the developer" (MCL 559.110(7)).
- "Affiliate of developer" means "any person who controls, is controlled by, or is under common control with a developer," with control tests that include holding or voting more than 20% of a person, controlling election of a majority of directors, or contributing more than 20% of the capital (MCL 559.103(2)).
What This Means in Practice
For newly owner-controlled boards
The 90-day window is the main event. The window opens on the day the first owner-controlled board takes office, which is a different date from the day the developer last conveys a unit or the day a particular milestone under MCL 559.152 is reached. See our turnover timeline page. Our reading is that the practical first task of a new board is to identify the transitional control date and calendar day 90.
Next, collect every contract the developer or an affiliate arranged for the association: management, maintenance, landscaping, snow removal, or any other service. The statute covers "a service contract" and "a management contract," so it is not limited to management. Check each counterparty against the "affiliate" definition, which is based on control and the 20% tests, not on name.
Notice math
- Window to void without cause: transitional control date through day 90 after it.
- After day 90: 30 days' notice, with cause.
- Management contract over 1 year: notice to the management agent at least 30 days before the 1-year anniversary of the transitional control date, to cut off the excess.
If the transitional control date is, for example, June 1, the 90-day window runs through about August 30 (our arithmetic, not from the statute), and the 30-day notice to trim a long management contract would need to be delivered by about May 2 of the next year. Confirm counting with counsel.
What the statute does not say
- It does not define "for cause."
- It does not say what form the notice takes or how it must be delivered.
- It does not address what the association owes the counterparty for services already rendered, or any termination fee or damages. Contract terms and other law may.
- It does not cover contracts with unaffiliated vendors that the developer chose.
- It does not say whether a contract voided in part (the excess period) leaves the earlier period intact. Subsection (2) says only that "the excess period" may be voided.
Transition planning
Voiding a management contract leaves the association needing a manager or a self-managed plan, so it makes sense to line up a replacement before the window closes. APM is a management company and has an interest in this topic; this page describes the statute only and gives no view on which contracts to cancel.
Timeline
| Event | Date or trigger |
|---|---|
| Section 55 effective | July 1, 1978 |
| Transitional control date | Date the first board elected by a majority of unaffiliated votes takes office |
| End of no-cause window | 90 days after the transitional control date |
| Deadline to void excess of long management contract | Notice at least 30 days before 1 year after the transitional control date |
Related Michigan Law
- MCL 559.152: developer turnover timeline.
- MCL 559.190: amending the master deed and bylaws.
- MCL 559.157: books, records and audit, helpful for reviewing developer-era finances.
- Michigan Condominium Act 2026: A Guide for Boards
- How Michigan HOA Boards Can Switch Managers Smoothly
Board Checklist
- Identify the transitional control date and calendar day 90.
- List every service and management contract signed before turnover.
- Check each counterparty against the "affiliate of developer" definition.
- Note each contract's term, notice, and termination provisions.
- Decide, with counsel, which contracts to void and give written notice within the window.
- For management contracts running past 1 year, calendar the 30-day notice deadline before the first anniversary.
- Line up replacement services before voiding critical contracts.
- Document any "cause" if terminating after the 90 days.
Frequently Asked Questions
Can a new Michigan condo board cancel the developer's management contract?
Under MCL 559.155(1), a management contract with the developer or an affiliate is voidable by the board on the transitional control date or within 90 days after it.
Does it only apply to management contracts?
No. It covers a "service contract" between the association and the developer or affiliates as well as a management contract.
What if the 90 days have passed?
The board may void on 30 days' notice "at any time thereafter for cause."
What if the management contract is longer than a year?
The "excess period" beyond 1 year after the transitional control date may be voided by notice to the management agent at least 30 days before the 1 year expires.
What is the transitional control date?
The date a board takes office after an election in which the votes of owners unaffiliated with the developer exceed the developer's votes (MCL 559.110(7)).
Is a company owned by the developer's relative an affiliate?
The statute defines "affiliate of developer" by control, including ownership or voting of more than 20%, control of a majority of directors, or more than 20% of capital. Whether a particular company qualifies is a fact question for counsel.
Where This Comes From
This page is based on the text of MCL 559.155, MCL 559.103 and MCL 559.110 as published by the Michigan Legislature (compiled laws complete through PA 114 of 2026): MCL 559.155. We did not review court decisions applying this section.
How APM Helps
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.
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