Bill Text: MI SB1048 | 2013-2014 | 97th Legislature | Introduced
Bill Title: Civil procedure; foreclosure; effect of mortgage foreclosure on oil and gas leases; modify. Amends secs. 3130, 3208 & 3236 of 1961 PA 236 (MCL 600.3130 et seq.) & adds sec. 3106.
Spectrum: Partisan Bill (Republican 1-0)
Status: (Introduced - Dead) 2014-09-10 - Referred To Committee On Banking And Financial Institutions [SB1048 Detail]
Download: Michigan-2013-SB1048-Introduced.html
SENATE BILL No. 1048
September 10, 2014, Introduced by Senator BOOHER and referred to the Committee on Banking and Financial Institutions.
A bill to amend 1961 PA 236, entitled
"Revised judicature act of 1961,"
by amending sections 3130, 3208, and 3236 (MCL 600.3130, 600.3208,
and 600.3236) and by adding section 3106.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 3106. (1) An interest of record under an oil and gas lease
or other instrument related to the exploration for or production of
oil, gas, or other hydrocarbons from property is not affected in
any way by a judgment entered in an action under this chapter to
foreclose a mortgage of the property, by an act taken under this
chapter as a result of the filing of the action, or by a
foreclosure pursuant to the action, unless either of the following
occurs:
(a) Within 15 days after the action is filed, a copy of the
complaint is sent by certified mail, return receipt requested, to
the holder of record of the interest.
(b) The holder is made a party to the action and properly
served with a summons and a copy of the complaint.
(2) This section does not apply to an action filed before the
effective date of the amendatory act that added this section.
Sec.
3130. (1) The person making the a
sale under section 3125
shall execute deeds specifying the names of the parties in the
action to foreclose the mortgage or land contract, the date of the
land
contract or mortgage or land contract, when and where it was
recorded,
a description of the premises property
sold, and the
amount for which each parcel of land described in the deed was
sold. ;
and he
(2) The person making a sale under section 3125 shall indorse
upon
on each deed executed
under subsection (1) the time it
becomes
operative
if the premises are property
is not redeemed according to
law.
Unless Except as provided
in subsection (3), unless the
premises
property or any a parcel of them are the property is
redeemed
within the time limited for redemption, the deed shall
become
becomes operative as to all parcels not redeemed , and shall
vest
vests in the grantee named in the deed ,
his or the grantee's
heirs , or assigns all the right, title, and interest which
that
the mortgagor had at the time of the execution of the mortgage or
land
contract or at any time thereafter.after the execution of the
mortgage or land contract.
(3) An interest of record in a non-surface-activity oil and
gas lease of record of property described in a deed executed under
this section that was created or recorded after the lien of the
mortgage took effect has priority over the mortgage, even though
created or recorded after the lien of the mortgage took effect. The
grantee named in a deed executed under this section and the
grantee's heirs and assigns are subject to the non-surface-activity
oil and gas lease and are entitled to all royalties provided for in
the non-surface-activity oil and gas lease that accrue to the
royalty interest that the mortgagor had by reason of production
after the execution of the deed and the receipt of notice of the
deed by the person responsible for payment of the royalty.
Notwithstanding anything to the contrary in the non-surface-
activity oil and gas lease or any amendment to the lease, the rate
of royalty payable to the grantee named in the deed and the
grantee's heirs and assigns shall be the greater of 1/8 or the rate
stated in the lease or the amendment to the lease. As used in this
subsection, "non-surface-activity oil and gas lease" means an oil
and gas lease that does not grant the right to conduct surface
operations of any kind on the lands subject to the oil and gas
lease, including, but not limited to, drilling of a well from the
surface, pipeline installation, or the creation of a route for
ingress and egress.
(4) Subsection (3) does not apply to a mortgage entered into
before the effective date of the amendatory act that added this
subsection.
(5) (2)
The deed of sale as As soon as practicable and within
20 days after the sale, the person executing a deed under this
section
shall be deposited deposit the deed with the register of
deeds
of the county in which the land therein property described in
the
deed is situated, and the located. The register shall indorse
upon
on the deed the time it was received, and
shall record the
deed
at length in a book to be provided in his the register's
office
for that purpose, and shall index the deed in the regular
index
of deeds. , and the The fee for recording the
deed shall be
included among the other costs and expenses allowed by law.
(6) If the premises property described in a deed executed
under
this section or any a parcel
of them are the property
is
redeemed, the register of deeds shall write on the face of the
record
the work word "Redeemed" and he shall write at what the date
the entry is made and shall sign the entry with his or her official
signature.
Sec.
3208. (1) Notice that the a mortgage
will be foreclosed
under
this chapter by a sale of the mortgaged
premises, property,
or
some part of them, the
property, shall be given by publishing
the
same notice for 4 successive weeks at least once in each week,
in
a newspaper published in the county where the premises included
in
the mortgage and intended to be sold, or some property or part
of
them, are situated. the
property is located. If no newspaper is
published in the county, the notice shall be published in a
newspaper
published in an adjacent county. In every case within
Within 15 days after the first publication of the notice under this
subsection, a true copy of the notice shall be posted in a
conspicuous
place upon on any part of the premises property
described in the notice.
(2) The interest of record under an oil and gas lease or other
instrument related to the exploration for or production of oil,
gas, or other hydrocarbons from property is not affected in any way
by the foreclosure of a mortgage of the property under this chapter
or by any action taken pursuant to this chapter as a result of the
foreclosure unless, within 15 days after the first publication of
the notice under subsection (1), a copy of the notice is sent by
certified mail, return receipt requested, to the holder of record
of the interest of record.
(3) Subsection (2) does not apply to a foreclosure in which
the first notice under subsection (1) is published before the
effective date of the amendatory act that added this subsection.
Sec.
3236. (1) Unless the premises property described
in such
a
deed shall be executed under section 3232 is redeemed within the
time
limited for such redemption as hereinafter provided in this
chapter, such the deed shall thereupon
become becomes operative
,
and, shall
vest subject to subsection
(3), vests in the grantee
therein
named , his in the deed and the grantee's heirs or assigns
,
all the right, title, and interest which
that the mortgagor had
at the time of the execution of the mortgage, or at any time
thereafter,
after the execution of the
mortgage, except as to any
parcel
or parcels which may that have been redeemed and canceled ,
as
hereinafter provided ; and the record thereof shall thereafter,
for
all purposes be deemed in
this chapter. After the operative
date of the deed, the previous recording of the deed is a valid
record
of said deed without the
deed being re-recorded, but no
rerecorded.
(2)
A person having any who has a valid subsisting lien upon
the
mortgaged premises, on property
sold under section 3216 or any
part
thereof, of the property
that was created before the lien of
such
the mortgage took effect , shall be is not prejudiced
by any
such
the sale , nor shall his of the property and the person's
rights
or and interests be are not in any way affected thereby.by
the sale.
(3) An interest of record in a non-surface-activity oil and
gas lease of record of property sold under section 3216 that was
created or recorded after the lien of the mortgage took effect has
priority over the mortgage, even though created or recorded after
the lien of the mortgage took effect. The grantee named in the deed
executed under section 3232 and the grantee's heirs and assigns are
subject to the non-surface-activity oil and gas lease and are
entitled to all royalties provided for in the non-surface-activity
oil and gas lease that accrue to the royalty interest that the
mortgagor had by reason of production after the execution of the
deed and the receipt of notice of the deed by the person
responsible for payment of the royalty. Notwithstanding anything to
the contrary in the non-surface-activity oil and gas lease or any
amendment to the lease, the rate of royalty payable to the grantee
named in the deed and the grantee's heirs and assigns shall be the
greater of 1/8 or the amount stated in the lease or amendment to
the lease. As used in this subsection, "non-surface-activity oil
and gas lease" means an oil and gas lease that does not grant the
right to conduct surface operations of any kind on the lands
subject to the oil and gas lease, including, but not limited to,
drilling of a well from the surface, pipeline installation, or
creation of a route for ingress and egress.
(4) Subsection (3) does not apply to a mortgage entered into
before the effective date of the amendatory act that added this
subsection.
