Bill Text: MI HB5429 | 2015-2016 | 98th Legislature | Engrossed
Bill Title: Liens; other; marina and boatyard storage lien act; modify. Amends secs. 2, 3, 4, 5 & 6 of 1998 PA 362 (MCL 570.372 et seq.).
Spectrum: Partisan Bill (Republican 6-0)
Status: (Passed) 2016-10-19 - Assigned Pa 286'16 With Immediate Effect [HB5429 Detail]
Download: Michigan-2015-HB5429-Engrossed.html
HB-5429, As Passed House, June 1, 2016
SUBSTITUTE FOR
HOUSE BILL NO. 5429
A bill to amend 1998 PA 362, entitled
"Michigan marina and boatyard storage lien act,"
by amending sections 2, 3, 4, 5, and 6 (MCL 570.372, 570.373,
570.374, 570.375, and 570.376).
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 2. As used in this act:
(a) "Boat" and "vessel" mean boat and vessel as those words
are defined in sections 80101 and 80104 of the natural resources
and environmental protection act, 1994 PA 451, MCL 324.80101 and
324.80104.
(b) "Default" means the failure to pay obligations incurred
for labor, repairs, maintenance services, materials, supplies, or
the storage of a boat, boat motor, boat cradle, or boat trailer.
(c) "Facility" means a marina, boatyard, boat or yacht club,
or marine repair facility that provides, as part of its commercial
operation, for the storage or repair of boats, boat motors, boat
cradles, or boat trailers.
(d) "Fair market value" means the value of the property as
determined by the current issue of a nationally recognized used
vessel guide at the time of the notice to the property owner and
any lienholder under section 5(5)(a).
(e)
"Lienholder" or "lienholder of record" means a person who
to whom either of the following applies:
(i) The person has filed a lien notation on the title of a
boat or boat trailer.
(ii) The person claims an
interest in or lien on the property
pursuant
to a boat motor or boat
cradle under a financing statement
,
title, registration, or other
marine documentation filed with the
secretary
of state , a register of deeds, or other under another
public filing, other than a filing with a register of deeds in this
state.
(f) "Person" means an individual, association, partnership,
limited liability company, corporation, boat or yacht club,
governmental entity, or other legal entity.
(g) "Property" means a boat, boat motor, boat cradle, or boat
trailer in storage at a facility for or following service, repair,
or storage.
Sec. 3. (1) A facility owner has a possessory lien on property
stored at that facility for storage, rent, labor, repairs,
maintenance services, materials, supplies, and other charges and
for expenses reasonably incurred in the sale of that property under
this act. Except as provided in subsection (8), a lien on property
under this section takes priority over any prior lien on the
property unless the prior lienholder pays to the facility owner the
amount of the lien attributable to storage, labor, materials,
supplies,
or other charges reasonably incurred in the sale of that
the property under this act or the following applicable amount,
except as otherwise provided in this section, whichever is less:
(a) For a vessel that is not more than 27 feet long, $5,000.00
or 20% of the fair market value, whichever is less.
(b) For a vessel that is more than 27 feet but not more than
40 feet long, $30,000.00.
(c) For a vessel that is more than 40 feet but not more than
60 feet long, $75,000.00.
(d) For a vessel that is more than 60 feet long, $90,000.00.
(2)
The amount calculated under subsection (1) shall must be
increased by a like amount if the expenditure for labor and
materials was for both primary power engines of a vessel equipped
with 2 engines. However, this subsection does not apply to
auxiliary propulsion or trolling engines.
(3)
The amount calculated under subsection (1) shall must be
reduced by 1/2 if more than half of the expenditure for labor and
materials was attributable only to the repair or replacement of 1
of the following:
(a) Navigational electronics.
(b) Auxiliary power generators.
(4)
The amount calculated under subsection (1) shall must be
reduced by 3/4 if more than half of the expenditure for labor and
materials was attributable only to 1 of the following:
(a) The repair or replacement of a cabin interior.
(b) Painting.
(c) Cosmetic work.
(d) Any combination of subdivisions (a) to (c).
(5) A payment made by a prior lienholder to a facility owner
under
this section shall must be added to the amount of the lien of
the
prior lienholder who made the payment and shall must be
subtracted from the amount of the facility owner's lien.
(6) The facility owner's lien under this act is the only lien
that
a facility owner has on a vessel, property, unless the
facility owner is also the prior lienholder.
(7) This act does not create a lien on a documented vessel
subject to a preferred ship mortgage or other preferred maritime
lien
pursuant to chapter 313 of subtitle III of title 46 of the
United
States Code, under 46 U.S.C. USC 31301 to 31343. A
facility
owner is required to obtain an abstract of title from the United
States
coast guard Coast Guard for a vessel that is documented as
that
term is defined in chapter 301 of subtitle III of title 46 of
the
United States Code, under 46 U.S.C. 30101.USC 12101 to 12152.
(8) The lien created for storage under this act without a
written repair, service, or storage agreement that includes a
notice
of lien shall does not take priority over the lien of a
prior lienholder for repairs, service, or storage incurred before
30 days after the notice of lien required by section 4(1)(b) is
delivered to the prior lienholder. After that 30-day period, the
lien
shall include includes all repair,
service, or storage charges
incurred, including, but not limited to, those incurred during the
30-day period.
(9)
The A prior lienholder shall arrange to remove the
property
from the facility upon on the termination of a the
facility's lien under this act unless the lienholder and the
facility owner enter into a new storage agreement.
Sec. 4. (1) A facility owner shall notify a property owner and
all
prior lienholders of the a
lien created in under this
act
before enforcing the lien. A property owner is notified if either
of the following has occurred:
(a) The property owner has signed a written repair, service,
or
storage agreement that includes a
notice of the lien created in
under this act.
(b) The facility owner has mailed written notification of the
lien created under this act to the property owner and all prior
lienholders or has otherwise satisfied the requirements of section
5(5)(a).
(2) A facility owner who does not have a written storage or
service
agreement that includes a notice of the
a lien created
under
this act on a vessel property
originally left at the facility
only for repairs, labor, maintenance services, or materials
installation on a repair order shall not do either of the
following:
(a)
File a lien for service or storage fees on the vessel
property before 30 days after the notice of intent to commence
service or storage fees was filed with the prior lienholder.
(b) Initiate an enforcement of lien action under section 5
until 30 days after the written notice of a lien required by
subsection (1)(b) is delivered to the property owner and all prior
lienholders.
Sec.
5. (1) A facility owner shall enforce a lien created in
under this act only if the facility owner has notified the property
owner and all prior lienholders of the lien as required by section
4.
(2) If a property owner is in default for a period of more
than 180 days, the facility owner may enforce the lien by selling
the repaired or stored property at a commercially reasonable public
sale. As used in this section, "commercially reasonable" means that
term as defined in the uniform commercial code, 1962 PA 174, MCL
440.1101
to 440.11102. 440.9994. The proceeds of the sale pursuant
to
under this section shall must be
applied in the following order:
(a) To the reasonable expenses of the sale incurred by the
facility owner including, to the extent not prohibited by law,
reasonable attorney fees and legal expenses.
(b)
To satisfy the lien created in under
this act to the
extent that it has priority over all other liens.
(c) To satisfy all other liens on the property held by all
lienholders of record to be paid in the order of priority.
(d) To the extent that the proceeds of sale exceed the sum of
the items described in subdivisions (a) to (c), the facility owner
surplus
shall be paid by the facility
owner pay the surplus to the
property owner.
(3) If, after satisfying the reasonable expenses of the sale
and the lien under subsection (2), there is a dispute concerning
the priority of record lienholders under subsection (2), the
facility owner may hold the proceeds of the sale until the dispute
is settled by the written agreement of the parties or until an
order or final judgment is issued by a court of competent
jurisdiction relative to the dispute. The facility owner may pay
the proceeds of sale to a court with subject matter jurisdiction.
After a facility owner pays the proceeds to a court as described in
this
subsection, the facility owner shall be is relieved of all
further
obligation concerning those the
proceeds.
(4)
If proceeds of the sale pursuant to under this section are
not sufficient to satisfy the property owner's outstanding
obligations to the facility owner or any lienholder of record, the
property owner remains liable to the facility owner or lienholder
for the deficiency.
(5) Before conducting a sale under this section, and within a
reasonable time after default has continued for more than 180 days,
the facility owner shall do both of the following:
(a) Mail a notice of default to the property owner and the
secretary of state by certified mail or by another commercially
available delivery service that provides proof of delivery, and, if
the property is registered in another state or with a federal
agency, mail a notice by certified mail to the other state or
federal agency responsible for registration or documentation of the
property. The If the property is a vessel or trailer, the secretary
of
state shall notify provide
the facility owner and provide him
or
her
with the name and address of the registered owner of the
property
vessel or trailer and a list of all lienholders. If the
owner of property cannot be determined because of the condition of
identification numbers or because a check of the records of the
secretary of state or, if applicable, an agency of another state or
federal agency does not reveal ownership, the facility owner may
send notice of default by certified mail or by another commercially
available delivery service that provides proof of delivery to the
person that delivered the property to the facility, if known, at
the person's last known address and shall publish in the print or
electronic version of a newspaper of general circulation a notice
that contains a description of the property and the information
required to be provided in a notice of default. The facility owner
shall provide a copy of the notice of default to each lienholder of
record
listed on the title, registration, or other marine
documentation.
provided by the secretary of
state. The notice of
default
shall must include all of the following:
(i) A statement that the property is subject to a lien held by
the facility owner.
(ii) A statement of the facility owner's claim indicating the
charges due on the date of the notice, the amount of any additional
charges that will become due before the date of sale, and the date
those
the additional charges will become due.
(iii) A demand for payment of the charges due within a
specified time not less than 30 days after the date the notice is
delivered to the property owner and all lienholders of record.
(iv) A statement that the property will be sold if the claim
is
not paid within the time period stated in the notice. The
statement
shall must include the time and location of the sale.
(v) The name, street address, and telephone number of the
facility owner, or the facility owner's designated agent, whom the
property owner may contact to respond to the notice.
(b) After the expiration of the 30-day period set forth in
subdivision (a)(iii), publish an advertisement of the sale once a
week for 2 consecutive weeks in the print or electronic version of
a newspaper of general circulation in the area where the sale is to
be
held. The advertisement shall must
include a general description
of the property, the name of the property owner, and the time and
location
of the sale. The date of the sale shall must be not less
than 15 days after the date the first advertisement of the sale is
published.
(6)
At any time prior to before
the sale of property under
this act, any lienholder may cure the default by paying the amount
of
the lien claim to the facility owner, which amount shall must be
added to the lien of the lienholder.
(7)
A sale under this act shall must
be held at the facility
or at another reasonable location.
(8) A person who purchases property sold at a commercially
reasonable
sale pursuant to under this act takes the property free
and clear of the rights of the property owner and all lienholders
of record.
(9) A facility owner who complies with this act is liable as
follows:
(a) The facility owner's liability to a lienholder of record
is limited to the net proceeds received from the sale of the
property.
(b) The facility owner's liability to the property owner is
limited to the net proceeds received from the sale of the property
after payment in full of all lienholders of record.
(10) A property owner or lienholder who suffers damages
because of a facility owner's failure to comply with this act may
bring an action in a court of competent jurisdiction for his or her
actual damages or $250.00, whichever is greater.
(11) A facility owner is limited to 1 lien under state law
against
a vessel property for the storage, labor, repairs,
maintenance
services, materials, or supplies for
the vessel.
property.
A facility owner who asserts a lien
against a vessel
property under another statute or the common law shall not also
assert a lien under this act for the same storage, labor, repairs,
maintenance services, materials, or supplies, or other charges or
expenses
related to the vessel.property.
(12) A facility owner may deny a property owner who has been
notified under subsection (5) access to the storage facility,
except that the property owner is entitled to access to the
facility during normal business hours for the purpose of satisfying
the lien or viewing and verifying the condition of the property.
(13) Except as otherwise provided in this act, all notices
required
by this act shall must be mailed by registered or
certified mail, return receipt requested. Notices to a facility
owner
shall must be mailed to the owner's business address or to
the address of the owner's designated representative. Notices to a
property
owner shall must be mailed to the property owner at the
property owner's last known address as listed on the title,
registration, or other marine documentation or as provided in the
most recent agreement concerning storage, labor, repairs,
maintenance services, materials, or supplies entered into between
the facility owner and the property owner. Notices to a lienholder
of
record shall must be sent to the address of the lienholder as
listed
on the title, registration, or other marine documentation in
the
public filings that serve to perfect the lienholder's interest
in
the property. provided by the
secretary of state under
subsection (5). Notices are considered delivered on the date the
recipient of the notice signs the return receipt or, if the notice
is undeliverable, the date the post office last attempts to deliver
the notice.
(14) The facility owner may bid all or a portion of his or her
claim at the auction sale of the property.
Sec. 6. The secretary of state shall issue a new title or
registration
to the purchaser of property a
vessel or trailer at a
sale
conducted pursuant to under
section 5. If the vessel or
trailer was registered in another state, the secretary of state
shall notify the other state that a new title or registration has
been issued.
Enacting section 1. This amendatory act takes effect 90 days
after the date it is enacted into law.
