A few Real Estate Bills made some progress last week in the Michigan Legislature.
I. House Bill 4640, et al. “the Lost Mortgage”
This Bill was introduced in April 2013 and has gone through amendments and substitutions. On Thursday October 2nd Substitute Number 2 passed the Senate 103 – 4 . You can see the entire legislative history of the Bill here
What does the Bill do?
The Report that came out of the committee on banking and financial institutions summarized the bill’s (and its companion bill) effect as follows
- It would provide for the recording and use of affidavits affecting real property to allow an unrecorded mortgage to be recorded.
Why is it necessary?
The State Bar of Michigan’s Real Property Section issued a position statement that clarifies the need for this bill.
Essentially, this Bill is necessary to deal with a Court Decision, In re Neal, 406 BR 288 (2009), which held
Therefore, as the Real Property Law puts it:
Only an original instrument can be recorded, the affidavit and copy of the lost mortgage at issue could neither
perfect any security interest nor count as notice of any interest. The type of affidavit at issue has long been used in
real estate practice.
Banks, if you assigned the mortgage and note to 10 different other banks, and you lost the original, oops… you might have trouble proving you have a perfected security interest. Not any longer, under HB 4640.
II. House Bill 5869 – Truth in Renting Act – Lease Can Include Language That Will Waive a Jury
The Bill applies to the Truth in Renting Act, which holds void certain provisions if they are included in a residential lease. You can see the text of the bill here Basically, residential tenants have certain rights, that they should not be allowed to waive, like a Landlord’s duty to mitigate their damages, for instance.
The Bill was introduced on Wednesday October 1 and referred to the Judiciary Committee
What does the Bill do?
It would provide that a residential lease cannot waive a tenant’s right to notice of legal proceedings (e.g. – summons, complaint, notice to quit tenancy) – but the lease specifically allows a landlord to include language in a lease that would waive a tenant’s right to demand a jury trial.
Why is it necessary?
I haven’t reviewed any policy explanations, but my own observations, providing a landlord and tenant with the opportunity to waive a trial by jury would provide for judicial economy. It is easier to schedule a bench trial, as opposed to creating a jury pool to select from, and then panel a jury to decide whether or not rent is owed (when likely, the case will get resolved short of trial regardless).
Most tenants when they appear on their own behalf at eviction hearings will request a judge, if they request a jury, they are required to pay the jury filing fee, which often times they don’t have (otherwise they would likely be paying their late rent).
Questions? Comments?
email: Jeshua@dwlawpc.com
Purpose Driven General Counsel 