Michigan MCL 559.158: Mortgage Foreclosure and Condo Dues

Quick Answer

Under MCL 559.158, a first mortgagee of record, or another purchaser, who gets title to a Michigan condominium unit through foreclosure of the first mortgage is "not liable for the assessments" that came due before it took title. That rule sits alongside MCL 559.208, which gives an association's recorded notice of lien priority over a first mortgage recorded after the notice, and requires the mortgagee to notify the association when it starts foreclosure. The two sections need to be read together.

At a Glance

What the Law Says

MCL 559.158: no liability for earlier assessments

The whole section is one sentence. If a first mortgagee of record "or other purchaser" obtains title "as a result of foreclosure of the first mortgage," that mortgagee or purchaser "and his or her successors and assigns are not liable for the assessments by the administering body chargeable to the unit that became due prior to the acquisition of title."

The wording protects the mortgagee, any other purchaser at the foreclosure, and their successors and assigns. It speaks to assessments that "became due prior to" acquiring title, so assessments coming due after the acquisition are not addressed by this section.

MCL 559.208(1): the priority exception

The association's lien ranks behind "sums unpaid on a first mortgage of record," but "past due assessments that are evidenced by a notice of lien recorded as set forth in subsection (3) have priority over a first mortgage recorded subsequent to the recording of the notice of lien." For the notice of lien requirements, see assessment lien and foreclosure.

MCL 559.208(9): notice to the association

The first mortgagee of record must notify the association when it starts foreclosure:

• Foreclosure by advertisement: serve a copy of the published notice of foreclosure on the association by certified mail, return receipt requested, addressed to the association's resident agent as shown in state corporate records (or to an address the association gave the mortgagee), "within 10 days after the first publication of the notice."
• Foreclosure by judicial action: serve a notice naming the mortgagors, the mortgagee and any foreclosing assignee, the mortgage date and recording date, the amount claimed due, and a description of the premises, by certified mail on the same addressee, "not less than 10 days before commencement of the judicial action."

The consequence for missing the notice is limited: "Failure of the mortgagee to provide notice as required by this section shall only provide the association with legal recourse and will not, in any event, invalidate any foreclosure proceeding between a mortgagee and mortgagor."

What This Means in Practice

For boards

Our reading is that section 559.158 means unpaid assessments that accrued before a lender or other purchaser took title through foreclosure of the first mortgage generally cannot be collected from that purchaser. The association's practical options are to collect before the foreclosure sale completes, or to rely on the recorded-notice-of-lien priority in 559.208(1) where the first mortgage was recorded after the notice. The interaction between the two sections for a given file is a question for counsel.

The priority rule turns on recording order. It benefits an association whose notice of lien is recorded before a later first mortgage. It does not, by its words, reorder a first mortgage that was already of record before the notice.

Keep the association's resident agent address and any mailing address given to lenders current, since 559.208(9) sends the notice to the resident agent "as shown on the records of the Michigan corporation and securities bureau," or to an address the association provides.

For owners and buyers

A buyer who purchases at a first-mortgage foreclosure sale is covered by the same section ("other purchaser"). A buyer who purchases in an ordinary sale is not. See our page on MCL 559.211 for the resale statement rule.

What the statute does not say

• Section 559.158 does not say what happens to the former owner's personal liability. Other parts of the Act (including 559.208(5), which allows money-judgment actions) address owner liability, so confirm with counsel.
• It does not cover assessments that come due after title passes.
• The remedy for a mortgagee that skips the 559.208(9) notice is "legal recourse" for the association, but the section does not define that recourse. Open question: what a court would award.

Timeline

Related Michigan Law

• MCL 559.208: lien, notice of lien, foreclosure. See assessment lien and foreclosure.
• MCL 559.211: resale. See resale statement and unpaid assessments.
• Michigan Condominium Act 2026: A Guide for Boards

Board Checklist

• Record a notice of lien promptly on seriously delinquent accounts, because recording order affects priority against later first mortgages.
• Keep the resident agent and mailing address on file with the state current.
• Log the date any mortgagee notice arrives and which method it used.
• Ask counsel to calendar the redemption period once a first-mortgage foreclosure sale occurs.
• Track which units have first mortgages recorded before or after your notices of lien.
• Budget for the possibility that pre-foreclosure assessments will not be recovered from the lender or purchaser.
• Give counsel a ledger of what was owed at the foreclosure sale date.

Frequently Asked Questions

Does a bank that forecloses owe the condo association past assessments?

Under MCL 559.158, a first mortgagee or other purchaser that gets title through foreclosure of the first mortgage "and his or her successors and assigns are not liable" for assessments that became due before title was acquired.

Does this protect only the bank?

No. The text covers "the mortgagee of a first mortgage of record or other purchaser," plus successors and assigns.

Can an association's lien ever come before a first mortgage?

Yes, in one case: past due assessments evidenced by a recorded notice of lien have priority over a first mortgage recorded after the notice of lien (MCL 559.208(1)).

Must the lender tell the association it is foreclosing?

Yes. MCL 559.208(9) requires notice by certified mail, return receipt requested: within 10 days after first publication for foreclosure by advertisement, or at least 10 days before a judicial action begins.

What if the lender does not send the notice?

The statute says that failure "shall only provide the association with legal recourse" and will not invalidate the foreclosure between mortgagee and mortgagor.

Does the statute address assessments after the lender takes title?

Section 559.158 speaks only to assessments that came due before the acquisition of title.

Where This Comes From

This page is based on the text of MCL 559.158 and MCL 559.208 as published by the Michigan Legislature (compiled laws complete through PA 114 of 2026): MCL 559.158. We did not review court decisions applying either 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.