Michigan community associations and their attorneys are concerned about potential unintended consequences from Public Act 572, which amended Michigan’s Record Marketable Title Act. While it is not entirely clear, many community association attorneys are of the opinion that the language might be interpreted to cause some community associations’ recorded restrictions to expire if they were recorded over 40 years ago as of March 29, 2021 and no additional claim of interest is recorded to essentially “renew” the restrictions.
Another bill, HB 5611, is likely to be signed into law. It will extend the deadline before which associations over 40 years old can record a claim of interest from March 29, 2021 to March 29, 2024. It was approved unanimously by the state House of Representatives on 9/10/20 and approved by a Senate committee on 11/10/20. It will now move on to a vote in the Senate. The legislative record shows support from the Michigan Realtors and Real Estate Developers Association. Those two organizations are a couple of the largest lobbies in Lansing, so we believe this legislation will likely move forward and be signed into law with them behind it.
So it looks like the can is being kicked down the road here, basically. We previously posted about a bill that would actually provide a fix for condos, HB 5260, which probably won’t move forward in the legislature for now. And of course it lacks a fix for HOAs/subdivisions.
Given the above, associations are taking a wait-and-see approach for now because it seems as if HB 5611 has a good chance of being signed into law and will likely provide an extended time period in which a legislative fix may be enacted before older associations will have to worry about recording a claim of interest.
All of the above said, if you were to have entirely new amended and restated documents recorded, you would not have to worry about the above issue at all. So, if you’ve been on the fence, this is another good reason to consider restatement. Contact us if you would like an estimate.