Bill Text: MI HB4227 | 2011-2012 | 96th Legislature | Engrossed
Bill Title: Construction; contracts; capital recovery fees; prohibit for nonresidential development. Creates new act.
Spectrum: Partisan Bill (Republican 7-0)
Status: (Passed) 2011-05-25 - Assigned Pa 34'11 With Immediate Effect [HB4227 Detail]
Download: Michigan-2011-HB4227-Engrossed.html
HB-4227, As Passed Senate, May 17, 2011
SUBSTITUTE FOR
HOUSE BILL NO. 4227
A bill to prohibit certain covenants attaching to
nonresidential real property; to prohibit the imposition of certain
fees upon transfer of that real property; and to provide for
remedies.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 1. As used in this act:
(a) "Transfer fee" means a fee or charge payable upon the
subsequent sale, gift, conveyance, assignment, inheritance, or
other transfer of an ownership interest in nonresidential real
property located in this state, or payable for the right to make or
accept such a transfer, regardless of whether the fee or charge is
a fixed amount or is determined as a percentage of the value of the
property, the purchase price, or other consideration given for the
transfer. Transfer fee does not include any of the following:
(i) Any consideration payable by the grantee to the grantor for
the interest in real property being transferred, including any
subsequent additional consideration for the property payable by the
grantee based upon any subsequent appreciation, development, or
sale of the property, provided such additional consideration is
payable on a 1-time basis only and the obligation to make such
payment does not bind successors in title to the property. For the
purposes of this subdivision, an interest in real property may
include a separate mineral estate and its appurtenant surface
access rights.
(ii) Any commission payable to a licensed real estate broker
for the transfer of real property pursuant to an agreement between
the broker and the grantor or the grantee, including any subsequent
additional commission for that transfer payable by the grantor or
the grantee based upon any subsequent appreciation, development, or
sale of the property.
(iii) Any interest, charges, fees, or other amounts payable by a
borrower to a lender pursuant to a loan secured by a mortgage
against real property, including, but not limited to, any fee
payable to the lender for consenting to an assumption of the loan
or a transfer of the real property subject to the mortgage, any
fees or charges payable to the lender for estoppel letters or
certificates, and any shared appreciation interest or profit
participation or other consideration payable to the lender in
connection with the loan.
(iv) Any rent, reimbursement, charge, fee, or other amount
payable by a lessee to a lessor under a lease, including, but not
limited to, any fee payable to the lessor for consenting to an
assignment, subletting, encumbrance, or transfer of the lease.
(v) Any consideration payable to the holder of an option to
purchase an interest in real property or the holder of a right of
first refusal or first offer to purchase an interest in real
property for waiving, releasing, or not exercising the option or
right upon the transfer of the property to another person.
(vi) Any tax, fee, charge, assessment, fine, or other amount
payable to or imposed by a governmental authority.
(vii) Any fee, charge, assessment, fine, or other amount
payable to a homeowners', condominium, cooperative, mobile home, or
property owners' association pursuant to a declaration or covenant
or law applicable to such association, including, but not limited
to, fees or charges payable for estoppel letters or certificates
issued by the association or its authorized agent.
(viii) Any fee, charge, assessment, dues, contribution, or other
amount imposed by a declaration or covenant encumbering a
community, and payable to a nonprofit or charitable organization
for the purpose of supporting cultural, educational, charitable,
recreational, environmental, conservation, or other similar
activities benefiting the community that is subject to the
declaration or covenant.
(ix) Any fee, charge, assessment, dues, contribution, or other
amount pertaining to the purchase or transfer of a club membership
relating to real property owned by the member, including, but not
limited to, any amount determined by reference to the value,
purchase price, or other consideration given for the transfer of
the real property.
(b) "Transfer fee covenant" means a declaration or covenant
that requires or purports to require the payment of a transfer fee
to the declarant or other person specified in the declaration or
covenant or to that person's successors or assigns.
Sec. 2. A transfer fee covenant that is executed on or after
the effective date of this section, whether or not recorded, does
not run with the title to real property and is not binding on or
enforceable against any subsequent owner, purchaser, or mortgagee
of any interest in the real property as an equitable servitude or
otherwise.
Sec. 3. Any lien purporting to secure the payment of a
transfer fee under a transfer fee covenant that is executed on or
after the effective date of this section is void.
Sec. 4. (1) Any person aggrieved by the imposition of a
transfer fee, whether the original or subsequent transferee or
purchaser, may bring an action to clear the title and void the
transfer fee and for other equitable relief.
(2) In a successful action brought under subsection (1), the
court may award actual reasonable attorney fees and other costs of
bringing the action.
