The 2018 lame duck session of the Michigan Legislature passed Public Act 572 of 2018, which was signed by the governor on December 28, 2018. The Act amends the Michigan Marketable Title Act and may be problematic for homeowner associations.
The Marketable Title Act was first enacted in 1945 in an effort to improve the marketability of real property in Michigan by eliminating interests in land more than 40 years old (20 years for mineral interests) unless the interest is kept alive by the filing of a notice of the claim of interest. Prior to the passage of Public Act 572, a general statement in a deed or other conveyance that the transfer was “subject to restrictions of record” was deemed sufficient to keep a declaration of restrictions in force against the property. However, the new Act now requires that a conveyance "specifically refer[s] by liber and page or other county-assigned unique identifying number to a previously recorded conveyance or other title transaction.
While a conveyance of a lot in a platted subdivision will refer to the liber and page where the plat was recorded (and thus, keep alive any restrictions stated in the plat), other restrictions on the use of a lot in a subdivision (or restrictions on the use of unplatted land) may be contained in a “Declaration of Restrictions” or similar document recorded separately from the plat. If a conveyance of property does not specifically mention, by liber and page or other number, the Declaration, arguably the property is no longer subject to those restrictions after 40 years. For subdivisions established prior to March 29, 1979, that can be problematic.
There is a provision in the Act allowing an affidavit of claim to be recorded to keep the restrictions in effect; however, it is unclear under the Act who is entitled to record such an affidavit, and whether the affidavit will affect only the affiant’s property, or will affect all property subject to the restrictions. Can a member of the board of directors of a homeowner’s association record such an affidavit and keep alive the restrictions as to all lots in a subdivision?
The Act requires the affidavit to be recorded within 2 years after adoption of the Act. Lot owners and homeowner associations should seek counsel to determine whether they should file an affidavit.
Condominiums will not be affected by the Act; title to, and deeds conveying, a unit in a condominium project always references the recording information for the original Master Deed for the condominium project, thus satisfying the Act’s requirements.