Simon PLC Attorneys & Counselors – January 2021 Memorandum
An Update on the compliance with the amended Marketable Record Title Act for Homeowners’ and Condominium Associations
Bloomfield Hills, Michigan – As noted in an earlier memorandum, Michigan’s Marketable Record Title Act was amended at the end of 2018 in a lame-duck session of the state legislature. Almost immediately, deficiencies in the amendment as drafted and enacted raised questions, especially for condominium and homeowners’ associations. For example:
- Whether an association is a “claimant”? An association is generally charged with enforcement of use restrictions in association communities, but do they have an interest under the Amendment to file a Notice of Claim and extend the restrictions if the interests or restrictions aren’t necessarily for the association’s benefit?
- Whether an association (i) may legally describe the real property collectively as is typically done in a plat or site condominium map, or (ii) must legally describe every parcel of real estate impacted by the use restrictions separately? The administrative burden of the latter on both associations and registers of deeds could be catastrophic.
Fortunately, bills have been introduced in an attempt to clarify these issues. Unfortunately, the legislation remains in the pipeline.
An initial bill, as introduced, would have exempted condominium associations from the amendment, but not necessarily homeowners’ associations. This bill was replaced by HB 6332, which has been on-hold since November 12, 2020. If enacted, this curative legislation would:
- Confirm that an “association” qualifies as a person authorized to be a “claimant” under the Act (Sec. 565.101a).
- Confirm that a claim filed on behalf of an association, citing a Master Deed or recorded subdivision covenants, binds all of the units. Added Sec. 565.103 (5) states: The recording of a notice of claim under this section by a claimant that meets all the requirements of this act to preserve the claimant’s rights in the land is an effective notice under this section for any other person whose rights originate from the same document as the claimant’s.
- Preserve recorded restrictions regardless of any actions taken or omitted. Amended Sec. 565.104(1) states in pertinent part: This act must not be applied to do any of the following: . . . (g) Bar or extinguish any subdivision restrictions; (h) Bar or extinguish any recorded master deed for a condominium or any recorded amendment to that condominium master deed.
Further, the curative legislation would eliminate the need to have the liber and page of the originating document so long as the legal description of the affected real property is present in the notice of claim. This is a relief to landowners and associations who for various reasons are unable to ascertain the exact recording information.
The good news is that the deadline for recording the notice to preserve covenants has been extended until March 29, 2024. HB 5611 was signed by Governor Whitmer on December 30, 2020 and was enacted into law via 2020 PA 294.
We will continue to update the progress of the pending legislation. In the meantime, the elimination of the looming March 2021 deadline for claims is excellent news for the homeowners’ and condominium associations of Michigan. We at Simon PLC Attorneys & Counselors are always ready to answer your questions and work with your association.
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