Bill Text: MI HB6071 | 2011-2012 | 96th Legislature | Introduced

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Bill Title: Civil procedure; foreclosure; condominium association liens; give priority over mortgage liens. Amends secs. 84a & 108 of 1978 PA 59 (MCL 559.184a & 559.208) & repeals sec. 58 of 1978 PA 59 (MCL 559.158).

Spectrum: Partisan Bill (Republican 1-0)

Status: (Introduced - Dead) 2012-12-04 - Printed Bill Filed 11/30/2012 [HB6071 Detail]

Download: Michigan-2011-HB6071-Introduced.html

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HOUSE BILL No. 6071

 

November 29, 2012, Introduced by Rep. McMillin and referred to the Committee on Banking and Financial Services.

 

     A bill to amend 1978 PA 59, entitled

 

"Condominium act,"

 

by amending sections 84a and 108 (MCL 559.184a and 559.208),

 

section 84a as amended by 1983 PA 113 and section 108 as amended by

 

2002 PA 283; and to repeal acts and parts of acts.

 

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

 

     Sec. 84a. (1) The developer shall provide copies of all of the

 

following documents to a prospective purchaser of a condominium

 

unit, other than a business condominium unit:

 

     (a) The recorded master deed.

 

     (b) A copy of a purchase agreement that conforms with section

 

84 , and that is in a form in which the purchaser may sign the

 

agreement , together with and a copy of the escrow agreement.

 

     (c) A condominium buyer's handbook. The handbook shall

 

contain, in a prominent location and in boldface type, the name,

 

telephone number, and address of the person designated by the

 

administrator to respond to complaints. The handbook shall contain

 

a listing of the available remedies as provided in section 145.

 

     (d) A disclosure statement relating to the project containing

 

all of the following:

 

     (i) An explanation of the association of co-owners' possible

 

liability pursuant to section 58.

 

     (i) (ii) The names, addresses, and previous experience with

 

condominium projects of each developer and any management agency,

 

real estate broker, residential builder, and residential

 

maintenance and alteration contractor.

 

     (ii) (iii) A projected budget for the first year of operation of

 

the association of co-owners.

 

     (iii) (iv) An explanation of the escrow arrangement.

 

     (iv) (v) Any express warranties undertaken by the developer ,

 

together with and a statement that express warranties are not

 

provided unless specifically stated.

 

     (v) (vi) If the condominium project is an expandable

 

condominium project, an explanation of the contents of the master

 

deed relating to the election to expand the project prescribed in

 

section 32, and an explanation of the material consequences of

 

expanding the project.

 

     (vi) (vii) If the condominium project is a contractable

 

condominium project, an explanation of the contents of the master

 

deed relating to the election to contract the project prescribed in

 

section 33, an explanation of the material consequences of

 

contracting the project, and a statement that any structures or

 

improvements proposed to be located in a contractable area need not

 

be built.

 

     (vii) (viii) If section 66(2)(j) is applicable, an identification

 

of all structures and improvements labeled pursuant to under

 

section 66 as "need not be built".

 

     (viii) (ix) If section 66(2)(j) is applicable, the extent to

 

which financial arrangements have been provided for completion of

 

all structures and improvements labeled pursuant to under section

 

66 as "must be built".

 

     (ix) (x) Other material information about the condominium

 

project and the developer that the administrator requires by rule.

 

     (e) If a project is a conversion condominium, the developer

 

shall disclose the following additional information:

 

     (i) A statement, if known, of the condition of the main

 

components of the building, including the roofs; foundations;

 

external and supporting walls; heating, cooling, mechanical

 

ventilating, electrical, and plumbing systems; and structural

 

components. If the condition of any of the components of the

 

building listed in this subparagraph is unknown, the developer

 

shall fully disclose that fact.

 

     (ii) A list of any outstanding building code or other municipal

 

regulation violations and the dates the premises were last

 

inspected for compliance with building and housing codes.

 

     (iii) The year or years of completion of construction of the

 

building or buildings in the project.

 

     (2) A purchase agreement may be amended by agreement of the

 

purchaser and developer before or after the agreement is signed. An

 

amendment to the purchase agreement does not afford the purchaser

 

any right or time to withdraw in addition to that provided in

 

section 84(2). An amendment to the condominium documents effected

 

in the manner provided in the documents or provided by law does not

 

afford the purchaser any right or time to withdraw in addition to

 

that provided in section 84(2).

 

     (3) At the time the purchaser receives the documents required

 

in subsection (1) the developer shall provide a separate form that

 

explains the provisions requirements of this section. The signature

 

of the purchaser upon this on the separate form is prima facie

 

evidence that the documents required in subsection (1) were

 

received and understood by the purchaser.

 

     (4) Promptly after recording a master deed for a condominium

 

project containing a business condominium unit, the developer shall

 

provide to a prospective purchaser of a business condominium unit a

 

copy of the recorded master deed for the project.

 

     (5) With regard to any documents required under this section,

 

a developer shall not make an untrue statement of a material fact

 

or omit to state a material fact necessary in order to make the

 

statements made, in the light of the circumstances under which they

 

were made, not misleading.

 

     (6) The developer promptly shall amend a document required

 

under this section to reflect any material change or to correct any

 

omission in the document.

 

     (7) In addition to other liabilities and penalties, a

 

developer who violates this section is subject to section 115.

 

     Sec. 108. (1) Sums An amount assessed to a co-owner by the

 

association of co-owners that are is unpaid together with and

 

interest on such sums, the unpaid amount, collection and late

 

charges, advances made by the association of co-owners for taxes or

 

other liens to protect its lien, attorney fees, and fines in

 

accordance with the condominium documents, constitute are a lien

 

upon on the unit or units in the project owned by the co-owner at

 

the time of the assessment before other liens, except tax liens on

 

the condominium unit in favor of any a state or federal taxing

 

authority. and sums unpaid on a first mortgage of record, except

 

that past Past due assessments that are evidenced by a notice of

 

lien recorded as set forth in under subsection (3) have priority

 

over a first mortgage, regardless of when the mortgage is recorded.

 

subsequent to the recording of the notice of lien. The lien upon on

 

each condominium unit owned by the co-owner shall be is in the

 

amount assessed against the condominium unit, plus a proportionate

 

share of the total of all other unpaid assessments attributable to

 

condominium units no longer owned by the co-owner but which that

 

became due while the co-owner had title to the condominium units.

 

The A lien under this section may be foreclosed by an action or by

 

advertisement by the association of co-owners in the name of the

 

condominium project on behalf of the other co-owners.

 

     (2) A foreclosure under this section shall be conducted in the

 

same manner as a foreclosure under the laws relating to foreclosure

 

of a real estate mortgages mortgage by advertisement or judicial

 

action, except that to the extent the condominium documents

 

provide, the association of co-owners is entitled to reasonable

 

interest, expenses, costs, and attorney fees for foreclosure by

 

advertisement or judicial action. The redemption period for a

 

foreclosure is 6 months from the date of sale unless the property

 

is abandoned, in which event case the redemption period is 1 month

 

from the date of sale.

 

     (3) A foreclosure proceeding may not be commenced without

 

recordation and service of unless a notice of lien in accordance

 

with the following:is recorded and served as follows:

 

     (a) Notice The notice of lien shall set forth contain all of

 

the following:

 

     (i) The legal description of the condominium unit or

 

condominium units to which the lien attaches.

 

     (ii) The name of the co-owner of record.

 

     (iii) The amounts due the association of co-owners at the date

 

of the notice, exclusive of interest, costs, attorney fees, and

 

future assessments.

 

     (b) The notice of lien shall be in recordable form, executed

 

by an authorized representative of the association of co-owners and

 

may contain other information that the association of co-owners

 

considers appropriate.

 

     (c) The notice of lien shall be recorded in the office of the

 

register of deeds in the county in which the condominium project is

 

located and shall be served upon on the delinquent co-owner by

 

first-class mail, postage prepaid, addressed to the last known

 

address of the co-owner at least 10 days in advance of commencement

 

of before the foreclosure proceeding is commenced.

 

     (4) The association of co-owners, acting on behalf of all co-

 

owners, unless prohibited by the master deed or bylaws, may bid in

 

at the a foreclosure sale under this section, and acquire, hold,

 

lease, mortgage, or convey the condominium unit.

 

     (5) An action to recover a money judgments judgment for an

 

unpaid assessments assessment may be maintained without foreclosing

 

or waiving the lien.

 

     (6) An action for money damages and foreclosure may be

 

combined in 1 action.

 

     (7) A receiver may be appointed in an action for foreclosure

 

of the assessment lien and may be empowered to take possession of

 

the condominium unit, if not occupied by the co-owner, and to lease

 

the condominium unit and collect and apply the rental from the

 

condominium unit.

 

     (8) The co-owner of a condominium unit subject to foreclosure

 

under this section, and any purchaser, grantee, successor, or

 

assignee of the co-owner's interest in the condominium unit, is

 

liable for assessments by the association of co-owners chargeable

 

to the condominium unit that become due before expiration of the

 

period of redemption together with and interest, advances made by

 

the association of co-owners for taxes or other liens to protect

 

its lien, costs, and attorney fees incurred in their collection.

 

     (9) The mortgagee of a first mortgage of record of a

 

condominium unit shall give notice to the association of co-owners

 

of the commencement of foreclosure of the first mortgage by

 

advertisement by serving a copy of the published notice of

 

foreclosure required by statute upon on the association of co-

 

owners by certified mail, return receipt requested, addressed to

 

the resident agent of the association of co-owners at the agent's

 

address as shown on the records of the Michigan corporation and

 

securities bureau department of licensing and regulatory affairs,

 

or to the address the association provides to the mortgagee, if

 

any, in those cases where if the address is not registered, within

 

10 days after the first publication of the notice. The mortgagee of

 

a first mortgage of record of a condominium unit shall give notice

 

to the association of co-owners of intent to commence foreclosure

 

of the first mortgage by judicial action by serving a notice

 

setting forth that contains the names of the mortgagors, the

 

mortgagee, and the foreclosing assignee of a recorded assignment of

 

the mortgage, if any; the date of the mortgage and the date the

 

mortgage was recorded; the amount claimed to be due on the mortgage

 

on the date of the notice; and a description of the mortgaged

 

premises that substantially conforms with the description contained

 

in the mortgage upon on the association of co-owners by certified

 

mail, return receipt requested, addressed to the resident agent of

 

the association of co-owners at the agent's address as shown on by

 

the records of the Michigan corporation and securities bureau

 

department of licensing and regulatory affairs, or to the address

 

the association provides to the mortgagee, if any, in those cases

 

where if the address is not registered, not less than 10 days

 

before commencement of the judicial action. Failure of the

 

mortgagee to provide notice as required by this section shall only

 

provide the association with legal recourse and will does not , in

 

any event, invalidate any a foreclosure proceeding between a

 

mortgagee and mortgagor.

 

     Enacting section 1. Section 58 of the condominium act, 1978 PA

 

59, MCL 559.158, is repealed.