ARTICLE | PA 572 Amends Marketable Title Act
On December 28, 2018, the Michigan Legislature passed Senate Bill No. 671 amending the Marketable Record Title Act, Act 200 of 1945 (MTA). Once a lame duck long shot, PA 572 becomes effective March 29, 2019.
While brief, PA 572 is rife with implications and uncertainties for real estate owners, buyers, and sellers.
MTA generally states that in order to claim an unbroken chain of title (i.e., presumptive marketable title), there must be a conveyance or other title transaction at least forty years prior (twenty years for mineral interests) which purports to create an int erest in a person with no subsequent recorded document purporting to divest that person of the interest.
PA 572 attempts to ameliorate the actual legal effect of the typical phrase "subject to easements and restrictions of record." Under PA 572, that rote recitation will not preserve a deed restriction more than forty years old without a direct reference to a recorded document (by liber and page or other county assigned identifying number) within the forty years intended to bringthe restriction forward and preserve it. Older interests can be preserved by filing an affidavit under the MTA before expiration of the forty years.
While a needed step toward in streamlining chains of title, PA 572 may have unintended consequences for property owners and homeowner's associations. PA 572 could, for instance, terminate subdivision restriction s recorded prior to March 29, 1979. While filing an affidavit could preserve old restrictions, who can file? And what property is affected? Who should receive notice? Can one lot owner file the affidavit and "re-encumber" the entire subdivision? Should one lot owner be able to do that? Many questions remain. (For the record, the RPLS opposed this bill.) For a deeper dive, the legislative analysis can be found here and here.