SB-0383, As Passed Senate, June 20, 2013

HOUSE SUBSTITUTE FOR

SENATE BILL NO. 383

     A bill to amend 1961 PA 236, entitled

"Revised judicature act of 1961,"

by amending section 3240 (MCL 600.3240), as amended by 2011 PA 303.

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

     Sec. 3240. (1) A purchaser's deed under section 3232 is void

if the mortgagor, the mortgagor's heirs or personal representative,

or any person lawfully claiming under the mortgagor or the

mortgagor's heirs or personal representative redeems the entire

premises sold by paying the amount required under subsection (2)

and any amount required under subsection (4), within the applicable

time limit prescribed in subsections (7) to (13), (12), to the

purchaser or the purchaser's personal representative or assigns, or

to the register of deeds in whose office the deed is deposited for

the benefit of the purchaser.

     (2) The amount required to be paid under subsection (1) is the

sum amount that was bid for the entire premises sold, with interest

from the date of the sale at the interest rate provided for by the

mortgage, together with the amount of the sheriff's fee paid by the

purchaser under section 2558(2)(q), and an additional $5.00 as a

fee for the care and custody of the redemption money if the payment

is made to the register of deeds. Except as provided in subsection

(15), the register of deeds shall not determine the amount

necessary for redemption. The purchaser shall attach provide an

affidavit with the deed to be recorded under this section that

states the exact amount required to redeem the property under this

subsection, including any daily per diem amounts, and the date by

which the property must be redeemed shall be stated on the

certificate of sale. The purchaser may include in the affidavit the

name of a designee responsible on behalf of the purchaser to assist

the person redeeming the property in computing the exact amount

required to redeem the property. The designee may charge a fee as

stated in the affidavit and may be authorized by the purchaser to

receive redemption funds. money. The purchaser shall accept the

amount computed by the designee.

     (3) If a distinct lot or parcel separately sold is redeemed,

leaving a portion of the premises unredeemed, the deed shall be is

void only to the redeemed parcel or parcels.

     (4) If, after the a sale under section 3220, the purchaser,

the purchaser's heirs or personal representative, or any person

lawfully claiming under the purchaser or the purchaser's heirs or

personal representative pays taxes assessed against the property,

amounts necessary to redeem senior liens from foreclosure,

condominium assessments, homeowner association assessments,

community association assessments, or premiums on an insurance

policy covering any buildings located on the property that under

the terms of the mortgage it would have been the duty of the

mortgagor to pay if the mortgage had not been foreclosed and that

are necessary to keep the policy in force until the expiration of

the period of redemption, redemption shall be made only upon

payment of the sum specified in subsection (2) plus the amounts

specified in this subsection with interest on the amounts specified

in this subsection from the date of the payment to the date of

redemption at the interest rate specified in the mortgage. This

subsection does not apply unless all of the following are filed

with the register of deeds with whom the deed is deposited:

     (a) An affidavit by the purchaser or someone in his or her

behalf who has knowledge of the facts of the payment showing the

amount and items paid.

     (b) The receipt or copy of the canceled check evidencing the

payment of the taxes, amounts necessary to redeem senior liens from

foreclosure, condominium assessments, homeowner association

assessments, community association assessments, or insurance

premiums.

     (c) An affidavit of an insurance agent of the insurance

company stating that the payment was made and what portion of the

payment covers the premium for the period before the expiration of

the period of redemption.

     (5) If the redemption payment in subsection (4) includes an

amount used to redeem a senior lien from a nonjudicial foreclosure,

the mortgagor shall have has the same defenses against the

purchaser with respect to the amount used to redeem the senior lien

as the mortgagor would have had against the senior lien.

     (6) The register of deeds shall indorse on the documents filed

under subsection (4) the time they are received. The register of

deeds shall record the affidavit of the purchaser only and shall

preserve in his or her files the recorded affidavit, receipts,

insurance receipts, and insurance agent's affidavit until

expiration of the period of redemption.

     (7) For Subject to subsection (13), for a mortgage executed on

or after January 1, 1965, of commercial or industrial property, or

multifamily residential property in excess of 4 units, the

redemption period is 6 months from the date of the sale.

     (8) Subject to subsections (9) to (12), (11) and (13), for a

mortgage executed on or after January 1, 1965, of residential

property not exceeding 4 units, if the amount claimed to be due on

the mortgage at the date of the notice of foreclosure is more than

66-2/3% of the original indebtedness secured by the mortgage, the

redemption period is 6 months.

     (9) Subject to subsection (10), for For a mortgage of

residential property not exceeding 4 units, if the property is

abandoned as determined under section 3241, the redemption period

is 3 months.1 month.

     (10) For a mortgage of residential property not exceeding 4

units, if the amount claimed to be due on the mortgage at the date

Senate Bill No. 383 (H-1) as amended June 20, 2013

of the notice of foreclosure is more than 66-2/3% of the original

indebtedness secured by the mortgage and the property is abandoned

as determined under section 3241, the redemption period is 1 month.

(10) (11) If the property is abandoned as determined under

section 3241a, the redemption period is 30 days 1 month or until

the time to provide the notice required by section 3241a(c)

expires, whichever is later.

(11) (12) For Subject to subsection (13), for a mortgage of

property that is used for agricultural purposes, the redemption

period is 1 year from the date of the sale.

(12) (13) If subsections (7) to (12) (11) do not apply, and

subject to subsection (13), the redemption period is 1 year from

the date of the sale.

     (13) After the sale under section 3220 and periodically

throughout the redemption period, the purchaser at the sale may

inspect the exterior and interior of the property and all ancillary

structures. If inspection is unreasonably refused or if damage to

the property is imminent or has occurred, the purchaser may

immediately commence summary proceedings for possession of the

property under chapter 57 or file an action for any other relief

necessary to protect the property from damage. [A court shall not enter a

 judgment for possession in an action under chapter 57 if, before the hearing for possession, the mortgagor repairs any damage to the property that was the basis for the action.] If a judgment for

possession is entered in favor of the purchaser, the right of

redemption is extinguished and full title to the property vests in

the purchaser. As used in this subsection, "damage" includes, but

is not limited to, any of the following:

     (a) The failure to comply with local ordinances regarding

maintenance of the property, if the failure is the subject of

enforcement action by the appropriate governmental unit.

     (b) A boarded up or closed off window or entrance.

     (c) Multiple broken and unrepaired window panes.

     (d) A smashed through, broken off, or unhinged door.

     (e) Accumulated rubbish, trash, or debris.

     (f) Stripped plumbing, electrical wiring, siding, or other

metal material.

     (g) Missing fixtures, including, but not limited to, a

furnace, water heater, or air conditioning unit.

     (h) Deterioration below, or being in imminent danger of

deteriorating below, community standards for public safety and

sanitation.

     (i) A condition that would justify recovery of the premises

under section 5714(1)(d).

     (14) The amount stated in any affidavits recorded under this

section shall be the amount necessary to satisfy the requirements

for redemption under this section.

     (15) The register of deeds of a county having with a

population of more than 750,000 and less than 1,500,000, at the

request of a person entitled to redeem the property under this

section, shall determine the amount necessary for redemption. In

determining the amount, the register of deeds shall consider only

the affidavits recorded under subsections (2) and (4). A county,

register of deeds, or employee of a county or register of deeds is

not liable for damages proximately caused by an incorrect

determination of an amount necessary for redemption under

subsection (2).

Senate Bill No. 383 (H-1) as amended June 20, 2013

     (16) A register of deeds may charge not more than $50.00 for

determining the amount necessary for redemption under this section.

     (17) For purposes of this section, there is a presumption that

the property is used for agricultural purposes if, before the

foreclosure sale under this chapter, the mortgagor provides the

party foreclosing the mortgage and the foreclosing party's attorney

proof that the mortgagor filed a schedule F to the mortgagor's

federal income tax form 1040 for the year preceding the year in

which the proceedings to foreclose the mortgage were commenced and

records an affidavit with the register of deeds for the county in

which the property is located stating that the proof has been

delivered. If the mortgagor fails to provide proof and record an

affidavit as required by this subsection before the foreclosure

sale, there is a presumption that the property is not used for

agricultural purposes. The party foreclosing the mortgage or the

mortgagor may file a civil action to produce evidence to rebut a

presumption created by this subsection. An action under this

section shall be filed before the expiration of the redemption

period that would apply if the property is determined not to be

used for agricultural purposes.

[Enacting section 1. This amendatory act takes effect January 10, 2014.]

     Enacting section [2]. This amendatory act does not take effect

unless all of the following bills of the 97th Legislature are

enacted into law:

     (a) Senate Bill No. 380.

     (b) House Bill No. 4765.

     (c) House Bill No. 4766.