Michigan Proposes Changes to Real Property Law

Michigan House Bill 5611 proposes to modify the Marketable Title Act by altering the number of years an interest or claim can be preserved.  “An interest, claim, or charge may be preserved and kept effective by filing for record within 5 years March 29, 2019[.]” This is an increase from the prior 2 year time limitation. This proposed bill passed the House on September 10, 2020, and would reset the effective date of the Marketable Record Title Act to March 29, 2024.  
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Senate Bill 1056 proposes to allow foreclosing governmental entities to cancel a foreclosure by recording in the county where the property is located a certificate of post-judgment redemption for specified reasons and for a limited amount of time. The interests extinguished by the judgment would be replaced with a right to make an equivalent claim to the proceeds from a subsequent sale. In order to qualify for such a cancellation, as basic requirements, the real property must have:

1. been a principal residence exempted from the tax levied by a local school district;
2. less than $3,000.00 due of unpaid taxes, interest, penalties, and fees;
3. no extinguished liens under the foreclosure judgment;
4. not been transferred to anyone other than the foreclosing governmental entity.

Senate Bill 1056 goes hand-in-hand with Senate Bill 676, which requires proceeds from a tax foreclosure sale above and beyond the minimum bid be returned to the owner of the property if they occupied it as their principal residence. Senate Bill 1056 is expected to have a positive fiscal impact on taxing entities by allowing the entity to forego the expense of a traditional foreclosure sale.