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Does a co-owner of a condominium unit have the right to see the Association's financial records showing which co-owners are delinquent in their association assessments, the amounts of the delinquencies, and other such financial information?

Under Section 57 of the Michigan Condominium Act, the books, records, and contracts 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.  MCL § 559.157.

However, obvious privacy considerations weigh against a Board of Directors disclosing to the co-owners the names of delinquent co-owners and specific amounts they owe.  The delinquent co-owner no doubt desires to keep such information private, and if the Board chooses to disclose the information, such disclosure could expose the Association to potential legal action by the delinquent co-owner for violation of the co-owner's right to privacy, defamation, etc.  Further, disclosing this information really does not serve any useful purpose for the Association or for any of the non-delinquent co-owners, since the Association's Board of Directors alone is responsible for pursuing collection action against delinquent co-owners.  While the non-delinquent co-owners (or the Board) may wish to disclose the information as a means of shaming the delinquent co-owners into paying what is owed, such tactics are not advisable given the risks of a counter-suit by the delinquent co-owner.  The Board is more likely to recover the unpaid assessments through the legal remedies providing by the Condominium Act and Michigan law, without unnecessarily creating additional animosity between the Association and the delinquent co-owner (a relationship that is tenuous enough once the Association pursues collection action against the delinquent co-owner).

It is usually permissible for a Board of Directors to disclose the total dollar amount of the Association's current delinquencies.  The co-owners, as members of the Association and owners-in-common of the condominium, are entitled to such general information about the Association's financial status.  However, a Board should never disclose the names of delinquent co-owners to other co-owners unless compelled to do so by a court order.  Also, if and when a Board first learns that a non-delinquent co-owner (or co-owners) is seeking disclosure of the names of delinquent co-owners via a court proceeding, the Board should, if possible, provide written notification to the delinquent co-owners of the pending court proceedings so that they may have the opportunity to attend any court hearings on the issue before an order is granted by the court.


 
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