Like many States, Michigan has implemented the Marketable Record Title Act (MRTA), MCL 565.101 et seq., with the goal of determining ownership interests in land by limiting the number of years during which claims like liens or land use restrictions may be asserted. This means that if an interest in land is not asserted during a specified period of time, it will be lost or extinguished by law. The Marketable Record Title Act (MRTA), Public Act 572 of 2018 amended Public Act 200 of 1945, and it applies to and defines a marketable record title to interests in land. Under the Act, these interests appear to include:
- Building and Use Restrictions created in deeds, plats, condominium master deeds, and other recorded documents, including all amendments.
- Easements that have not been improved or visibly used.
If these interests were created in a written instrument recorded more than 40 years ago, or more than 20 years ago for mineral interests, they’re subject to potential extinguishment by the Act. The amendment specifies that a conveyance or other title transaction in the chain of title intends to divest an interest in the property only if it creates the divestment or if it specifically refers to a previously recorded conveyance (or granting) or other title transaction that created the divestment, for example, a Deed, or a Master Deed. The amendment also specifies that if a notice of claim of title is based on a recorded instrument (i.e., a Master Deed, or Building and Use Restrictions), it must contain specific information about that instrument:
· The claimant’s name, mailing address, and signature.
· The interest claimed to be preserved.
· Except as to mineral interests, the liber and page or other unique identification number of the instrument creating the interest to be preserved.
· The legal description of the real property affected by the claimed interest.
· An acknowledgment in the form required by the Uniform Recognition of Acknowledgments Act and Section 27 of the Michigan Notary Public Act.
· The drafter’s name and address.
· An address to which the document should be returned.
The Michigan Senate’s legislative intent of Bill 671 for Public Act 572 of 2018 as Enacted has stated:
Chain of Title; Divestment of Interest
Under the Act, to possess a marketable record title to an interest in land, a person must have held an unbroken chain of title of record for 20 years for mineral interests and 40 years for other interests. The marketable record title is subject only to claims to that interest and defects of title that are not extinguished or barred by application of the Act, as well as any interests and defects in records forming the chain of record title that are recorded during the 20-year period for mineral interests or the 40-year period for other interests. Unbroken chain of title exists if either:
- A conveyance or other title transaction not less than 20 years in the past for mineral interests and 40 years for other interests, that purports to create the interest in that person, with nothing appearing of record purporting to divest that person of that interest.
- A conveyance or other title transaction within the past 20 years for mineral interests and 40 years for other interests, that purports to create the interest in some other person and other conveyances of title transactions of record by which the purported interest has become vested in the person considered to have an unbroken chain of title, with nothing appearing of record purporting to divest the person of the interest.
The Bill specifies that, except as to mineral interests, a conveyance or other title transaction in the chain of title purports to divest an interest in the property only if it creates the divestment or if it specifically refers by liber and page or other county-assigned unique identifying number to a previously recorded conveyance or other title transaction that created the divestment.
Preservation of Claim
The Act states that marketable title is held by a person and is taken by his or her successors in interest free and clear of any and all interests, claims, and charges that depend in whole or in part on any act, transaction, event, or omission that occurred before the 20-year period for mineral interests, or the 40-year period for other interests. A person may preserve an interest, claim, or charge, however, by filing for record during the 20-year period for mineral interests or the 40-year period for other interests, a written notice, verified by oath, setting forth the nature of the claim. To be effective and entitled to be recorded, a notice of claim must contain an accurate and full description of all the land affected by the notice, and the description must be set forth in particular terms. Under the Bill, if the claim is founded on a recorded instrument, in addition to the description of all the land affected, the notice must state the liber and page or other county-assigned unique identifying number of the recorded instrument the claim is founded on. The failure to include the liber and page or other county-assigned unique identifying number renders the recording ineffective and the claim unpreserved.
When a notice of interest is recorded, it extends and re-establishes any potentially expired covenants and preserve them for future property title and enforcement purposes. Under the Act, a person may preserve an interest, claim, or charge by filing for record during the 40-year period for other interests in land (20 years for mineral interests) a written notice, verified by oath (i.e., a notarized Sworn Notice of Interest in Real Estate), describing the nature of the claim, such as building and land use restrictions. For a notice of claim to be effective and entitled to be reported (i.e., be recorded in the Register of Deeds in order to be discovered in a Title Search for Title verification or Title Insurance purposes), it would have to contain an accurate and full description of all land affected by the notice. This description would have to be set forth in particular terms and not by general inclusions, as noted previously. This means that the Act extinguishes all claims that might arise from any act, event, omission, or transaction that occurred before the 40-year period, unless a notice of claim is recorded during that period of time. The Act, as amended, extended the time for interested parties to preserve interests in land, including restrictive covenants, such as Building and Use Restrictions, in order to comply with the requirements of properly recording them.
Under the 2018 and 2020 amendments to the MRTA, the use of broad language such as “subject to easements and restrictions of record” is insufficient to preserve an easement or a restrictive covenant that is over 40 years old. Beginning March 29, 2024, restrictive covenants within the recorded documents of a property’s 40-year chain of title must include specific references to the liber and page of where the restriction was originally recorded. The 2022 amendments excluded “any land or resource use restriction” from the effects of the Act, including environmental restrictions. The notices of claim, as explained above, are going to be the documents filed or recorded that will essentially be preserving the covenants and/or building use and restrictions originally recorded 40 or more years ago in order to comply with the MRTA within the March 29, 2024 deadline.
If you would like to learn more about the Michigan Marketable Record Title Act, contact a bankruptcy attorney in Ann Arbor today! Our bankruptcy attorney at Pear Sperling Eggan & Daniels, P.C., can help assist you with your case and everything in between.
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