Michigan Community Associations With Older Property Restrictions Must Act Now to Retain Those Limitations

Restrict CovenantsLast year, Michigan enacted a real estate law that could have a profound impact on the continued viability and enforceability of restrictive covenants and other limitations established by homeowners and condominium associations. Amendments to the Michigan Marketable Record Title Act (“Act”) that became effective on March 29, 2019, make it imperative that associations take proactive steps before March 2021 to preserve their claims of interest in individual properties. Failure to do so will extinguish any restrictions established over 40 years ago that may have previously bound owners of those properties.

Associations Must File a Claim of Interest Before March 28, 2021, to Preserve Their Covenants

Under the Act, a property owner has a marketable record title to an interest in land if they possess an unbroken chain of title to that land for 40 years. The Act’s purpose is to provide clear title to property owners by eliminating any interests in land that are over 40 years old and are not contained within the chain of title. These “interests” include restrictive covenants established by HOAs and condominium associations as to the maintenance and use of individual properties within those associations.

Under the amendments to the Act, if an owner’s unbroken chain of title of more than 40 years does not specifically identify any restrictive covenants, those covenants become unenforceable against the owner. Associations that want to preserve those restrictions and limitations must file a claim of interest with the applicable register of deeds within two years of the effective date of the amendment – March 28, 2021. Covenants fewer than 40 years old must be preserved by filing public notice before 40 years pass since they were established.

What a Claim of Interest Must Contain

To protect the viability of their covenants, community associations must ensure that the claim of interest document they file contains all of the following:

  • An accurate and full description of all the property affected by the notice, set forth in particular terms and not by general inclusions.
  • For claims based on a recorded instrument, the notice must also state the liber and page or other county-assigned unique identifying number of the recorded instrument on which the claim is based. Failing to include the liber and page or other county-assigned unique identifying number renders the recording ineffective and the claim unpreserved.
  • The claimant’s name.
  • The claimant’s mailing address.
  • The interest claimed to be preserved.
  • The legal description of the property affected by the claimed interest.
  • The claimant’s signature.
  • A legally sufficient acknowledgment.
  • The drafter’s name and address.
  • An address where the document can be returned.

Associations must file their notice of claim in the register of deeds office of the county or counties where the land described in the notice is located.

Questions About Preserving Your Association’s Restrictive Covenants? Speak With One of Kreis Enderle’s Real Estate Attorneys Today

Community association board members already burdened with significant management responsibilities now must also contend with the risk that the very covenants they preserve and enforce may disappear without swift action. We recommend that boards consult with experienced real estate counsel to discuss the impact of these amendments to the Michigan Marketable Record Title Act.

Contact the attorneys in Kreis Enderle’s Real Estate Practice Group today to learn how your board can avoid any adverse consequences and protect its interests.

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