Short answer
Yes. A site condominium is a condominium under Michigan's Condominium Act, so its bylaws must provide for a reserve fund of at least 10 percent of the annual budget. The list of shared property is shorter than in an attached complex, but it usually includes the most expensive single item in the community, the private road.
Drive through the newer suburbs around Grand Rapids, Ann Arbor or Traverse City and many of the subdivisions you see are not subdivisions at all. They are site condominiums: each owner holds a detached house on a “unit” that is really a building site, and the association owns everything in between. Owners often assume a reserve fund is something for townhouse complexes with shared roofs. In Michigan, it is not.
Why the rule still applies
The reserve requirement sits in the state’s rules for what condominium bylaws must contain, and a site condominium has a master deed and bylaws like any other condominium. R 559.511 asks for a reserve fund for major repairs and replacement of common elements, funded from regular assessments, of at least 10 percent of the current annual budget. Nothing in it carves out detached homes.
What changes is the size of the job. In an attached complex the reserve covers roofs, siding, decks and paving for every building. In a site condo the owners usually look after their own houses, and the reserve covers the shared land.
What a site condo reserve usually covers
The master deed decides what is a general common element, so start there. In most Michigan site condos the list looks something like this:
| Item | Why it matters |
|---|---|
| Private road and curbs | Often the largest single liability, and resurfacing is usually the biggest bill the association ever faces |
| Storm drains and detention pond | Sediment builds up; outlets and banks need work every few decades |
| Entrance, signs and landscaping walls | Small items, but visible, and masonry suffers in freeze-thaw |
| Street lights and mailbox clusters | Short lives and often forgotten |
| Clubhouse, pool or trail | Only where the community has them; they add most of the cost |
If the road is public, dedicated to the county road commission, the reserve picture is very different. Check before you budget.
Is 10 percent of a small budget enough?
This is where site condos get caught. Their annual budgets are often small, because there is little to maintain from year to year: snow plowing, mowing, insurance and a management fee. Ten percent of a small budget is a small number. But the road does not care how small the budget is. A community that puts aside the minimum for twenty years can arrive at its first resurfacing with a fraction of the cost in the bank.
The rule itself anticipates this. It says the 10 percent minimum may prove inadequate and asks the association to analyze the project. For a site condo, that analysis is short: what does the road cost to resurface, when will it need it, and what does the association have to put aside each year to get there?
When to get a study
Three moments are worth the fee:
- At turnover from the developer. The co-owners take control, and a study shows them what they are inheriting and whether the developer funded reserves.
- Before the first big road project. Ten years out is the right time. The study sets a contribution that avoids a special assessment.
- After a change in what the association owns. A new trail, a pond retrofit or a decision to take over a public road all change the inventory.
A site condo study is usually toward the small end of the fee range, because there are fewer components to inspect. See our Michigan reserve study cost guide for ranges, or go back to Michigan Reserve Studies to check your own 10 percent figure against this year’s budget.