Governance Concern
Land Use Restriction Authority
Introduction
This page explains the process required to adopt and amend property use restrictions within Rifle River Valley Estates.
These restrictions are established through recorded covenants that run with the land and directly affect property rights. Because of this, any change to those restrictions must be made strictly in accordance with the amendment provisions contained in the governing documents.
Understanding this process is essential when evaluating whether a proposed or recorded change to the restrictions properly applies to property within the subdivision.
In Maatta v. Dead River Campers, Inc., the Michigan Court of Appeals addressed whether restrictions governing property use could be modified outside the procedures set forth in the recorded covenants. The court held that where the covenants provide a specific method for amendment, that method must be followed. An attempted change that is not adopted in accordance with the required procedure is not effective.
Subdivision and Association Naming
The properties commonly associated with Pinnacle Estates Association are located within the subdivision legally known as Rifle River Valley Estates, situated in Deep River Township.
- Rifle River Valley Estates is the name used in recorded plats, deeds, and governing covenants.
- Pinnacle Estates refers to the property owners association that operates within the subdivision.
Because property restrictions, land use requirements, and amendment provisions are tied to the recorded subdivision documents, all references to governing covenants on this page relate to the Rifle River Valley Estates subdivision.
Changes to subdivision restrictions must be adopted in accordance with the amendment provisions contained in the recorded covenants. These provisions typically require approval by a specified percentage of all lot owners and must be formally documented and recorded.
Because these restrictions affect property rights, they are not modified through routine association actions such as board decisions or simple majority votes at meetings.
Overview
Restrictions governing the use of property within Rifle River Valley Estates are established through recorded covenants and run with the land.
These restrictions may only be modified in accordance with the amendment provisions contained in those recorded documents. Actions taken outside of those provisions do not, by themselves, change or replace the recorded restrictions.
Early Declarations (1966–1969)
The original restrictions for Rifle River Valley Estates were established through a series of recorded declarations between 1966 and 1969.
- 1966 Declaration of Restriction
- 1967 Declaration of Restrictions – Estates No. 2
- 1969 Declaration of Restrictions – Estates No. 3
These early declarations:
- Were created by the original developer
- Applied to the initial plats within the subdivision
- Established basic land use restrictions, including residential use
The restrictions were designed to run with the land; however, they did not include provisions for amendment by property owners or an association.
As a result, the original declarations did not provide a defined process for modifying or replacing the recorded restrictions.
1989 Amended Declaration
In 1989, a consolidated Amended Declaration of Restrictions was recorded, combining multiple phases of Rifle River Valley Estates under a single set of governing restrictions.
This document:
- Replaced the earlier developer-controlled structure
- Established the Pinnacle Estates Property Owners Association
- Created a formal governance framework for the subdivision
Most importantly, the 1989 declaration introduced a defined amendment process, providing that:
- Restrictions may be amended by a two-thirds (2/3) vote of members in attendance at an annual meeting
This was the first recorded document to establish a method by which property owners could modify the subdivision restrictions.
1990 Amendment to the Restrictions
In 1990, the association recorded its first known amendment to the 1989 Amended Declaration of Restrictions.
Unlike later amendments involving land use issues, the 1990 amendment addressed assessment collection procedures.
Specifically, the amendment modified Section 14(e) to address:
- Delinquent assessments
- Late payment penalties
- Collection costs
- Liens against property
- Foreclosure remedies available to the association
Effect of the Michigan Nonprofit Corporation Act of 1982
The Pinnacle Estates Property Owners Association operates as a Michigan nonprofit corporation and is therefore subject to the Michigan Nonprofit Corporation Act of 1982.
The Act does not replace the recorded covenants governing Rifle River Valley Estates. Instead, it governs how the corporation operates, including:
- Member meetings
- Voting procedures
- Corporate records
- Meeting minutes
- Notice requirements
- Member inspection rights
Because the association operates as a nonprofit corporation, actions taken through the association’s governance structure must comply with both the recorded covenants and applicable nonprofit corporate law.
This includes activity involving proposed amendments to subdivision restrictions.
The Act is significant because it establishes operational and recordkeeping requirements relating to member voting and corporate actions affecting the association.
As a result, restriction amendment activity generates records documenting:
- Notice of the meeting
- The purpose of the meeting
- Attendance information
- Voting results
- Meeting minutes documenting the action taken
The Act also provides members with statutory rights to inspect certain corporate records maintained by the association.
What This Means for Restriction Amendments
After 1989, subdivision restrictions affecting Rifle River Valley Estates could no longer be modified through informal practices or undocumented association actions.
Because the 1989 declaration required amendments to be approved through member voting at an annual meeting, the amendment process became dependent upon:
- Proper notice to the membership
- A valid annual meeting
- Member participation and voting
- Compliance with the required two-thirds (2/3) approval threshold
- Preservation of records documenting the approval process
At the same time, because the association operated as a Michigan nonprofit corporation, the amendment process also became subject to the operational and recordkeeping requirements imposed by the Michigan Nonprofit Corporation Act of 1982.
As a result, restriction amendments affecting property rights generate records demonstrating:
- Notice of the meeting
- The proposed amendment activity
- Attendance and voting information
- Meeting minutes documenting the action taken
- The final recorded amendment instrument
These records are important because they provide the documentary basis supporting the association’s authority to record amendments affecting subdivision restrictions.
Proper Notice of the Meeting
Because the 1989 Amended Declaration requires restriction amendments to be approved during an annual meeting, proper notice to the membership becomes part of the amendment process itself.
Members are entitled to know:
- That an annual meeting will occur
- When and where the meeting will occur
- That amendments to subdivision restrictions will be considered
- That a vote affecting recorded property restrictions may occur
Notice relating to proposed restriction amendments must identify the proposed amendment activity before the meeting takes place.
This is important because subdivision restrictions affect property rights running with the land. Members cannot meaningfully evaluate or respond to proposed restriction changes if they are not informed that amendment activity will occur before the vote is taken.
Because amendment authority under the 1989 declaration depends upon member approval obtained at an annual meeting, the adequacy of notice becomes part of determining whether a restriction modification was properly authorized.
Valid Annual Meeting
The 1989 Amended Declaration provides that subdivision restrictions may be amended by a two-thirds (2/3) vote of the members in attendance at an annual meeting.
As a result, the annual meeting itself becomes a critical component of the amendment process.
Before a restriction amendment can be approved, there must first be a valid annual meeting at which members are given the opportunity to attend and vote.
The annual meeting serves as the forum through which amendment authority is exercised under the declaration.
Because amendment authority depends upon action taken at an annual meeting, records relating to the meeting become important in determining whether the amendment process was properly completed.
Records documenting the meeting include:
- Notice of the meeting
- Meeting minutes
- Attendance records or sign-in sheets
- Voting records
- Documentation of the action taken by the membership
These records establish whether the annual meeting occurred and whether the required member approval was obtained before the amendment was recorded.
Member Participation and Voting
The 1989 Amended Declaration provides that subdivision restrictions may be amended by a two-thirds (2/3) vote of the members in attendance at an annual meeting.
As a result, the authority to amend subdivision restrictions rests with the membership rather than the Board of Directors.
The amendment process established by the declaration requires member participation through attendance and voting at the annual meeting.
The role of the membership is significant because recorded restrictions affect the property rights of all owners within Rifle River Valley Estates.
Through the voting process, members determine whether a proposed restriction amendment receives the approval required by the declaration.
Because amendment authority depends upon member approval, records relating to member participation and voting become important in determining whether the amendment process was properly completed.
These records establish:
Which members participated in the meeting
Which members were eligible to vote
The number of members voting
The outcome of the vote
Whether the required two-thirds (2/3) approval threshold was achieved
The amendment process therefore depends upon both member participation and member approval before a restriction amendment may be recorded.
Member Verification
The amendment process established by the 1989 Amended Declaration depends upon approval by the members of the association.
As a result, determining who is entitled to participate and vote becomes an important part of the amendment process.
Before votes can be counted, the association must be able to identify:
Who qualifies as a member
Which lots are entitled to vote
Whether the individual casting a vote is authorized to do so
The total number of members participating in the vote
Member verification serves an important purpose because the authority to amend subdivision restrictions rests with the membership rather than the Board of Directors.
Records relating to member verification help establish that votes were cast by individuals entitled to participate in the amendment process and that the required approval threshold was calculated using eligible members participating in the meeting.
Because amendment authority depends upon member approval, records supporting member eligibility become an important part of documenting the amendment process.
Records Supporting Restriction Amendments
The amendment process established by the 1989 Amended Declaration depends upon more than the later recording of an amendment document.
Before a restriction amendment can be recorded, the amendment process must first be completed.
Because amendment authority depends upon member participation and approval at an annual meeting, records become the primary means of demonstrating that the required process occurred.
These records document:
Notice of the meeting
The annual meeting itself
Member attendance and participation
Member voting
Approval of the proposed amendment
Recording of the amendment
Together, these records establish the factual basis supporting the association’s authority to amend and record subdivision restrictions.
Because recorded restrictions affect property rights running with the land, the preservation of these records is an important part of the amendment process.
The existence, completeness, and availability of these records may become significant when questions arise regarding whether a recorded restriction amendment was adopted in accordance with the governing documents.
Applying the Amendment Process to Pinnacle Estates
The preceding sections explain the amendment process established by the governing documents and applicable law.
Under that process, a restriction amendment depends upon:
Proper notice to the membership
A valid annual meeting
Member participation
Verification of voting eligibility
Approval by a two-thirds (2/3) vote of members in attendance
Preservation of records documenting the amendment process
The existence of a recorded amendment document, standing alone, does not explain how the amendment was approved.
Instead, the authority supporting a recorded restriction amendment is found in the records documenting the process that occurred before the amendment was recorded.
The following sections examine the records located to date and compare those records to the amendment process required by the governing documents.
The purpose of this review is not to determine whether a particular restriction is desirable or undesirable. Rather, the purpose is to determine whether the available records demonstrate that the amendment process required by the governing documents and applicable law was completed before the restriction was recorded.
Did the Association Have the Authority to File the Replacement Restrictions in 2024?
On May 6, 2024, Sharon Williams, acting as President of Pinnacle Estates Association, signed and filed a Declaration of Building and Use Restrictions with the Arenac County Register of Deeds.
The document states that it replaces restrictions adopted in 1989, 2007, and 2019.
This raises an important question.
Did the Association possess the authority required to replace the existing restrictions before the replacement restrictions were filed in 2024?
Authority Comes From the Membership
Under the recorded restrictions, the authority to amend or replace subdivision restrictions rests with the membership.
The restrictions provide that amendments are approved by a two-thirds (2/3) vote of the property owners attending an annual meeting.
As a result, the Board of Directors cannot create amendment authority on its own.
The authority required to replace subdivision restrictions must first be obtained from the membership through the amendment process established by the governing documents and applicable law.
Only after that authority exists can replacement restrictions be filed with the Register of Deeds.
The Required Process
As discussed throughout this page, the amendment process depends upon:
Proper notice to the membership
A valid annual meeting
Member participation
Member verification
Member voting
Records documenting the approval process
These requirements are not independent events. Each step forms part of the authority required to amend or replace subdivision restrictions.
The filing of a restriction document is the final step in the process.
Recording a document does not create authority. The authority to record the document must already exist before the document is filed.
The 2019 Restriction Replacement
The restrictions filed in 2024 state that they were adopted on August 3, 2019.
The document further states that it replaces restrictions adopted in 1989 and 2007.
Unlike the 1990 amendment, which modified a specific section of the restrictions, the 2019 document appears to be a complete rewrite and replacement of the subdivision’s Building and Use Restrictions.
Because the document replaces the restriction framework affecting all property owners within Rifle River Valley Estates, the authority supporting its adoption becomes a significant issue.
Questions Raised by the Available Records
The records reviewed to date raise several questions.
The 1989 Declaration requires restriction amendments to be approved by the membership at an annual meeting.
The bylaws in effect during 2019 scheduled annual membership meetings on Memorial Day Weekend and Labor Day Weekend.
August 3, 2019 was neither of those annual meeting dates.
This raises an important question:
What meeting occurred on August 3, 2019 and what records document the authority to replace the subdivision restrictions on that date?
Additional questions arise from the restriction timeline.
The replacement document states that it replaces restrictions adopted in 1989, 2007, and 2019.
However:
The recorded 1990 amendment is not referenced.
The 2007 restriction document has not been provided in response to records requests.
The 2007 restriction document has not been located within the Arenac County Register of Deeds records reviewed to date.
The 2019 replacement restrictions were not filed with the Register of Deeds until May 6, 2024, nearly five years after the stated adoption date.
The 2024 filing states that it replaces restrictions adopted in 1989, 2007, and 2019, even though the document being filed appears to be the same 2019 replacement restrictions that were allegedly adopted on August 3, 2019.
The replacement document raises an additional question regarding member authority.
A complete replacement of the subdivision restrictions is not a routine board action. Under the governing documents, the authority to replace the restrictions belongs to the membership.
For the membership to exercise that authority, members must first receive proper notice of the proposed action and be provided sufficient information to understand what they are being asked to approve.
The records reviewed to date do not establish what documents were provided to the membership regarding the restrictions being replaced, what information was provided regarding the proposed replacement restrictions, or how members were informed of the changes contained within the replacement document.
Why This Matters
The issue is not whether a particular restriction is desirable or undesirable.
The issue is whether the Association possessed the authority required to replace the existing restrictions before the replacement restrictions were filed in 2024.
If proper notice was not provided, the membership could not lawfully exercise the authority required to replace the restrictions.
If the required notice, meeting, member participation, verification, and voting process did not occur, then the amendment process established by the governing documents and applicable law was not completed.
Without that authority, the replacement restrictions would not have been adopted with the authority required by the governing documents and applicable law before being filed with the Register of Deeds in 2024.
If the replacement restrictions were not validly adopted before being filed in 2024, it becomes necessary to determine what restrictions were legally in effect immediately prior to the filing and whether the replacement restrictions can serve as the governing restrictions for the subdivision.
2023 Annual Meeting
The June 3, 2023 membership meeting is the most recent meeting prior to the recording of the Declaration of Building and Use Restrictions on May 6, 2024.
A review of the 2023 membership meeting minutes reflects routine association business, including approval of prior minutes, financial reporting, and other general matters.
The minutes do not reflect:
- A record of attendance, identification of members present, or verification of member eligibility to vote.
- Any motion to amend or restate the Declaration of Building and Use Restrictions
- Any proposed revision to subdivision use restrictions
- Any vote related to adoption of a new or amended declaration
Based on the meeting records provided, no action is identified at the June 3, 2023 membership meeting authorizing the adoption of the Declaration recorded on May 6, 2024.
The minutes were prepared by the association secretary, Irene Jarvis.
May 2024 Declaration of Restrictions
A Declaration of Building and Use Restrictions was recorded on May 6, 2024 for Rifle River Valley Estates.
This document:
- Applies to multiple phases of the subdivision
- Replaces prior recorded declarations
- Establishes the current set of restrictions governing property use
The declaration states that it is adopted pursuant to the amendment provisions contained in the governing covenants.
Because the declaration was recorded on May 6, 2024, any authorizing vote would need to have occurred at a membership meeting held prior to that date.
The next annual membership meeting occurred on June 1, 2024. As a result, that meeting could not have been the meeting at which the declaration was approved.
The declaration does not reference a specific membership meeting or vote authorizing its adoption.
The document was executed by the association president, Sharon Williams.
2024 Membership Meeting
The annual membership meeting of the association was held on June 1, 2024.
The minutes reflect routine association business, including approval of prior minutes, financial reporting, and other general matters.
The minutes also reflect that a motion was made and carried to amend the Declaration of Building and Use Restrictions to address short-term rentals.
The minutes do not reflect:
- Any discussion or vote related to camping or camping restrictions.
- A record of attendance or identification of members present
- Verification of member eligibility to vote
- A vote count or confirmation that a two-thirds (2/3) approval threshold was met
The minutes reflect a motion to amend the use restriction related to short-term rentals. They do not reflect any motion to adopt or approve a complete replacement of the Declaration of Building and Use Restrictions.
The minutes were prepared by the association secretary, Irene Jarvis.
July 2024 Recorded Addition
A document recorded on July 25, 2024 states that a “clerical error” omitted a provision from the previously recorded Declaration of Building and Use Restrictions.
July 25, 2024 Recorded Addition
The document adds the following language:
“No camping or tenting on any lot unless approved in writing by the Building Committee.”
The document was executed by the association president, Sharon Williams.
The June 1, 2024 membership meeting minutes do not reflect any discussion or vote related to camping or camping restrictions.
Short-Term Rental Restriction
A document recorded on July 25, 2024 amends the use restriction within the Declaration of Building and Use Restrictions to address short-term rentals.
The document states that the amendment was approved by members at the June 1, 2024 membership meeting.
The amendment provides:
“Any structure erected upon any lot in this subdivision shall be for residential purposes only and may not be used for any commercial purpose, including short-term rental less than twenty-eight (28) days.”
The document also includes a violation provision:
A fine of $500 per violation, with unpaid fines resulting in a lien on the property.
The June 1, 2024 membership meeting minutes reflect that a motion was made and carried to amend the use restriction to address short-term rentals.
The minutes do not include:
- A record of attendance or identification of members present
- Verification of member eligibility to vote
- A vote count or confirmation that a two-thirds (2/3) approval threshold was met
The document was executed by the association president, Sharon Williams.
Summary of Documented Actions
The recorded documents and meeting minutes establish the following sequence of events:
- The original declarations recorded between 1966 and 1969 established subdivision restrictions but did not include a process for amendment.
- The 1989 Amended Declaration established a process allowing amendments by a two-thirds (2/3) vote of members in attendance at a membership meeting.
- The June 3, 2023 membership meeting minutes do not reflect any motion, discussion, or vote to amend or replace the Declaration of Building and Use Restrictions.
- The June 3, 2023 and June 1, 2024 membership meeting minutes do not include a record of attendance, identification of members present, or verification of member eligibility to vote.
- The June 1, 2024 membership meeting minutes do not include a vote count or confirmation that a two-thirds (2/3) approval threshold was met.
- Yet, a Declaration of Building and Use Restrictions was recorded on May 6, 2024, prior to the June 1, 2024 membership meeting.
- The June 1, 2024 membership meeting minutes reflect a motion to amend the use restriction related to short-term rentals.
- A document recorded on July 25, 2024 states that the short-term rental restriction was approved at the June 1, 2024 membership meeting.
- A separate document recorded on July 25, 2024 adds a provision related to camping, described as a correction of a clerical omission.
Application of Governing Documents and Law
The adoption and amendment of subdivision restrictions are governed by the procedures set forth in the recorded covenants. These procedures establish the requirements for member approval, including any applicable voting thresholds and eligibility requirements.
Michigan courts have consistently held that amendments to deed restrictions must be carried out in strict accordance with those governing provisions. Where the required procedures are not followed, or where the record does not demonstrate that the required approval was obtained, the amendment may not be enforceable. Additionally, restrictions affecting property rights must be supported by proper authority under the governing documents.
Courts will enforce properly adopted restrictions as written. However, they will decline to enforce changes where the available record does not establish that the required amendment process was satisfied or where proper authorization is not demonstrated.
This principle is reflected in Michigan case law, including Maatta v. Dead River Campers, Inc., Conlin v. Upton, and Highfield Beach at Lake Michigan v. Sanderson, where courts required compliance with governing amendment provisions, proper authority for imposing restrictions, and have enforced restrictions that were adopted in accordance with those requirements.
Maatta v. Dead River Campers, Inc.
Summary:
In Maatta v. Dead River Campers, Inc., the Michigan Court of Appeals addressed whether restrictive covenants could be modified by a supermajority vote of property owners. Although the governing documents permitted amendment by “the affirmative written action of two-thirds (2/3) of the Lot Owners,” the court held that this authority is limited and that non-uniform covenant amendments require the unanimous consent of affected property owners. The court explained that permitting non-uniform amendments by majority or supermajority vote “would destroy this crucial aspect of covenants and thus undermine the entire system of private regulation of real property in Michigan.”
Conlin v. Upton
Summary:
In Conlin v. Upton, the Michigan Court of Appeals addressed whether a property owners association could impose additional restrictions through its governing documents. The court held that the covenants “did not give the Association the authority to burden the lots with additional restrictions” and did not permit the addition of restrictions “with less than unanimous approval.” The court further concluded that bylaws imposing new burdens were invalid where adopted “without the proper consent or authority.” The case reflects that restrictions affecting property rights must be supported by clear authority in the governing documents and cannot be expanded without the required level of approval.
Highfield Beach at Lake Michigan v. Sanderson
Summary:
In Highfield Beach at Lake Michigan v. Sanderson, the Michigan Court of Appeals considered whether a restriction affecting property use was enforceable under the governing documents. The court held that “the amended bylaw is enforceable” and noted that the association amended the restriction “upon obtaining the consent of two-thirds of the co-owners and mortgagees.” The court further determined that “there was no evidence that the Board Members violated the master deed or the bylaws in approving the 2016 amendment” and that there was no statutory provision mandating a “meaningful opportunity” for debate or to be heard. The case reflects that courts will enforce restrictions where they are properly authorized and adopted under the governing documents.