Bill Text: MI HB5363 | 2017-2018 | 99th Legislature | Introduced
Bill Title: Property; land contracts; land contract terms and conditions; prohibit certain terms, and prohibit certain mortgages by vendors. Amends title & secs. 1 & 6 of 1879 PA 237 (MCL 565.351 & 565.356) & adds secs. 1a, 1b & 4a.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Introduced - Dead) 2017-12-28 - Bill Electronically Reproduced 12/13/2017 [HB5363 Detail]
Download: Michigan-2017-HB5363-Introduced.html
HOUSE BILL No. 5363
December 13, 2017, Introduced by Rep. Schor and referred to the Committee on Financial Services.
A bill to amend 1879 PA 237, entitled
"An act to provide for the execution, acknowledgment, and recording
of contracts for the sale of land,"
by amending the title and sections 1 and 6 (MCL 565.351 and
565.356), section 1 as amended by 2002 PA 20 and section 6 as
amended by 2002 PA 147, and by adding sections 1a, 1b, and 4a.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
TITLE
An act to prohibit the inclusion of certain provisions in
contracts for the sale of land; to provide for the execution,
acknowledgment,
and recording of land contracts; for the sale of
land.to limit mortgages of land that has been sold under
a land
contract; and to provide for land contract mortgages.
Sec.
1. A contract for the sale of land or any interest in
that
land shall be executed by the vendor named in the contract,
and
acknowledged before any judge or before any notary public
within
this state, and the officer taking the acknowledgment shall
endorse
a certificate of the acknowledgment and the date of making
the
acknowledgment under his or her hand.This act shall be known
and may be cited as the "land contract act".
Sec. 1a. (1) A residential land contract must not include a
provision that does 1 or more of the following:
(a) Provides for a confession of judgment by a party.
(b) Waives or alters a party's right to demand a trial by jury
or any other right of notice or procedure required by law in a
judicial proceeding arising under the land contract.
(c) Provides that a party is liable for legal costs or
attorney fees incurred by another party, in connection with a
dispute arising under the land contract, in excess of costs or fees
specifically permitted by statute.
(d) Violates the Michigan consumer protection act, 1976 PA
331, MCL 445.901 to 445.922.
(e) Provides that property taxes for the property that is the
subject of the land contract will be entered in the name of the
vendor, or that the vendee will pay taxes to the vendor as part of
the land contract payments.
(f) Provides that the land contract will convert to a lease on
default or occurrence of any other condition.
(2) A provision or clause of a residential land contract that
violates this section is void.
Sec. 1b. A contract for the sale of land or any interest in
land must be executed by the vendor named in the contract and
acknowledged before a judge or a notary public in this state. The
judge or notary public shall endorse a certificate of the
acknowledgment and the date of the acknowledgment.
Sec. 4a. (1) A vendor shall not enter into or permit a real
estate mortgage of property that is the subject of a residential
land contract if the amount of the indebtedness secured by the
mortgage is greater than the amount due on the land contract at the
time of the mortgage.
(2) A vendor shall not enter into or permit a real estate
mortgage of property that is the subject of a residential land
contract if the indebtedness that is secured by the mortgage will
not, by the terms of the mortgage or the note or contract secured
by the mortgage, be repaid on or before the conclusion of the term
of the land contract.
Sec. 6. As used in this act:
(a) "Assignee" means assignee of the vendor named in a land
contract, a succeeding assignee, or a land contract mortgagee who
became the absolute holder of the land contract as a result of
security enforcement procedures.
(b) "Grantee" means grantee of the vendor named in a land
contract,
a succeeding grantee, or a grantee pursuant to under a
mortgage
foreclosure of a mortgage upon of the
land but that was
subordinate to the land contract.
(c) "Land contract mortgage" means a mortgage granted by a
vendor or a vendee.
(d) "Land contract mortgagee" means the holder of a land
contract mortgage granted by a vendor or vendee, or his or her
heirs, successors, or assigns.
(e) "Nonmortgaging vendee" means a vendee who has not entered
into a land contract mortgage granted by his or her vendor.
(f) "Nonmortgaging vendor" means a vendor who has not entered
into a land contract mortgage granted by his or her vendee.
(g) "Person" means an individual, partnership, corporation,
association, governmental entity, or other legal entity.
(h) (g)
"Real estate mortgage"
means a mortgage granted upon
on
an interest in real property, other
than a mortgage upon on a
vendor's or vendee's interest in a land contract unless the vendor
and the vendee join in or subject their respective interests to a
single mortgage. A land contract mortgage is not a real estate
mortgage.
(i) "Residential land contract" means a contract for a deed to
convey an interest in real property comprised of 1 to 4 residential
units in which the purchase price is to be paid in 4 or more
installments and a promissory note or mortgage is not involved
between the seller and the buyer.
(j) (h)
"Third parties" means
persons or entities other than
the vendor, vendee, nonmortgaging vendor, nonmortgaging vendee,
assignee,
grantee, or land contract mortgagee, who that have or
claim
an interest in or encumbrance upon on real property or a
vendor's
or vendee's interest which that
is subject to a land
contract mortgage.
(k) (i)
"Vendee" means the vendee
named in the land contract
and the vendee's heirs, successors, or assigns.
(l) (j)
"Vendor" means the vendor
named in the land contract
and the vendor's heirs, successors, or assigns.
Enacting section 1. Sections 1a and 4a of 1879 PA 237, as
added by this amendatory act, only apply to land contracts entered
into on or after the effective date of this amendatory act.
