Michigan Real Estate Law Changes

Hello world! My name is Eric Patrick, I’m a law student in Michigan and I’ve decided to begin publishing a blog during my studies of recent Michigan law issues and my stance on the matters. I will admit this was partially inspired by the Arrested Development joke involving a lawyer character named Bob Loblaw running a Law Blog – but I fear mine won’t be nearly as funny.


Anyway, with that done, on to business. As a burgeoning student of Property Law, it came to my attention that in the tail end of last year (December 29 – cutting it awfully close, wouldn’t you say?) a Legislative Update was passed that affected real estate investors and their ability to buy property at the time of (or shortly after) foreclosure.

Now before we proceed I would like to make clear that the idea of buying foreclosed property tends to be a pretty emotional process – that was someone’s house, after all. But the fact remains that plenty of people look for ways to monetize foreclosed property – or in this case, prevent its sale.

Previous Michigan law allowed homeowners the right to a “quitclaim deed” that would allow them to quickly transfer ownership of their property to a third party, thus allowing that third party to manage the sale during something like a tax sale, divorce filing, or property foreclosure. (More information on quitclaims can be found here) Often times, an investor would look for homes that are soon to be foreclosed on and offer a quitclaim deed in exchange for a sum of money, thus allowing them to get the house more cheaply than buying it at auction and preventing any other investors from staking a claim to the property.

The new Michigan legislation requires the deeds to be properly recorded and filed away prior to redemption. Sounds a little obvious, right? Under the previous laws there was no way of verifying a quitclaim deed prior to sale, which stymied many property investors as the burden was on them to try to retain the house, not on the claimee to prove they have right to the property.

Not a huge change, but perhaps a more fair one in the world of real estate. People still have the ability to file quitclaims on property they’re in danger of losing, but now it just requires that the claims are documented a little better.

For more insight on the ruling, check out Jeshua Lauka’s post, or if you’re feeling especially crunchy you can read the actual legislation here.

Michigan Real Estate Law Changes

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