Michigan Nonprofit Corporation Act FAQ

Why does the Michigan Nonprofit Corporation Act matter to my HOA?

Most homeowners associations in Michigan are formed as domestic nonprofit corporations, meaning the association files articles of incorporation with the state and operates under the corporate governance framework the Michigan Nonprofit Corporation Act sets out for all Michigan nonprofits — not a framework written specifically for HOAs. That's an important distinction: your association's day-to-day operating rules for assessments, architectural review, and use restrictions come from your own declaration and bylaws, while the Act supplies the underlying corporate skeleton — how the board is elected, what a director's duties are, how meetings and votes must generally be conducted, and how the corporation can be amended or dissolved.

What does the Act say about board members?

Directors are held to real fiduciary standards

As covered in more depth in our board education guide, directors of a Michigan nonprofit corporation are generally expected to act in good faith, with the care an ordinarily prudent person would exercise, and in a manner the director reasonably believes is in the best interests of the corporation. That standard applies to HOA board members exactly the way it applies to directors of any other Michigan nonprofit.

Directors can generally rely on qualified professionals

The Act generally allows directors to reasonably rely on information, opinions, and reports prepared by officers, employees, or outside professionals such as accountants, attorneys, or the association's management company — provided the director doesn't have reason to know that reliance is unwarranted. This is one reason associations that use a professional management company often have an easier time demonstrating a defensible decision-making process.

What rights does the Act give to owner-members?

As members of a Michigan nonprofit corporation, owners generally have rights around receiving notice of membership meetings, inspecting certain corporate records, and voting on matters reserved to the membership under the bylaws (such as amending governing documents or removing directors, depending on what your specific bylaws provide). Because the Act sets a floor and your bylaws fill in the specifics, an owner asking "can I see the board's minutes?" or "how do I call a special membership meeting?" needs to check both the Act's general framework and the association's own bylaws for the exact mechanics.

Does the Act cover assessments and collections?

Not directly — assessment authority and collection remedies for HOAs typically come from the association's own declaration and bylaws rather than the Nonprofit Corporation Act itself, which is focused on corporate governance rather than real property or lien mechanics. That's a key difference from Michigan condominiums, where the Michigan Condominium Act (covered in our companion FAQ) does directly address assessment liens and co-ownership obligations.

Do I need a lawyer to understand how this applies to my association?

For routine governance questions, a well-informed board and an experienced management company can usually work through the practical implications together. For anything with real legal exposure — amending governing documents, a contested board removal, or a dispute over an owner's records request — Michigan associations should involve legal counsel, since this guide describes the Act's general framework rather than legal advice for your specific situation.

Putting it into practice