Bill Text: MI HB5794 | 2013-2014 | 97th Legislature | Engrossed
Bill Title: Civil procedure; foreclosure; property inspections during redemption period; correct procedural requirement. Amends secs. 3238 & 3241a of 1961 PA 236 (MCL 600.3238 & 600.3241a).
Spectrum: Partisan Bill (Republican 2-0)
Status: (Passed) 2014-12-31 - Assigned Pa 431'14 With Immediate Effect 2014 Addenda [HB5794 Detail]
Download: Michigan-2013-HB5794-Engrossed.html
HB-5794, As Passed House, November 6, 2014
HOUSE BILL No. 5794
September 10, 2014, Introduced by Reps. Callton and Lyons and referred to the Committee on Financial Services.
A bill to amend 1961 PA 236, entitled
"Revised judicature act of 1961,"
by amending sections 3238 and 3241a (MCL 600.3238 and 600.3241a),
section 3238 as added by 2014 PA 125 and section 3241a as amended
by 2006 PA 579.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 3238. (1) After a foreclosure sale under this chapter and
providing notice under section 3237, the purchaser at the sale may
inspect the property, including the exterior and interior of any
structures on the property, as provided in this section.
(2) The purchaser may conduct an initial inspection of the
interior of any structures on the property. In addition to the
notice provided in section 3237, the purchaser shall provide notice
to the mortgagor by certified mail, physical posting on the
property, or in any manner reasonably calculated to achieve actual
notice of the purchaser's intent to inspect the property at least
72 hours in advance and shall set the time of the inspection at a
reasonable time of day, in coordination with the mortgagor if
possible.
(3) The purchaser may conduct any number of exterior
inspections of the property and any structures on the property
during the redemption period.
(4) After the initial inspection described in subsection (2),
the purchaser may request by certified mail, physical posting on
the property, or in any manner reasonably calculated to achieve
actual notice that the mortgagor provide information on or evidence
of the condition of the interior of any structures on the property,
in any form reasonably necessary to assess the condition of the
property. The purchaser shall not make such a request more than
once in a calendar month or more often than 3 times in any 6 months
of the redemption period, unless the purchaser has reasonable cause
to believe that damage to the property is imminent or has occurred.
(5) If the mortgagor refuses to provide information or
evidence requested under subsection (4) within 5 business days
after receipt of the request, or if the information or evidence
provided reveals that damage has occurred or is imminent, the
mortgagor
purchaser may schedule an inspection of the interior of
any structures on the property. For an inspection under this
subsection, the purchaser shall provide notice as described in
subsection (2) of the purchaser's intent to inspect the property at
least 72 hours in advance, and shall set the time of the inspection
at a reasonable time of day, in coordination with the mortgagor if
possible. If the mortgagor provides the information or evidence
requested under subsection (4) and damage has not occurred or does
not appear imminent, the purchaser shall not conduct an interior
inspection under this subsection related to that request.
(6) If an inspection under this section 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. If
a purchaser commences an action for possession or any other relief
under this section, the purchaser may also name as a party to the
action any person who may redeem the property under section 3240.
(7) Before commencing summary proceedings for possession of
the property under this section, the purchaser shall provide notice
to the mortgagor by certified mail, physical posting on the
property, or in any other manner reasonably calculated to achieve
actual notice, that the purchaser intends to commence summary
proceedings if the damage or condition causing reasonable belief
that damage is imminent is not repaired or corrected within 7 days
after receipt of the notice.
(8) A purchaser shall not commence summary proceedings for
possession under this section if either of the following conditions
exists:
(a) The damage or condition causing reasonable belief that
damage is imminent is repaired or corrected within the 7-day period
described in the notice of intent under subsection (7).
(b) The mortgagor and the purchaser agree on procedures and a
timeline to repair the damage or correct the condition causing
reasonable belief that damage is imminent and the procedures are
completed by the original date agreed to by the mortgagor and
purchaser or by an extended date that is agreed to by the mortgagor
and purchaser.
(9) In determining whether to enter judgment for possession in
favor of the purchaser in summary proceedings under this section,
the judge shall consider the totality of the circumstances
surrounding the damage or condition that threatens imminent damage,
including, but not limited to, all of the following:
(a) The cause of the damage or condition.
(b) Whether the mortgagor has taken appropriate steps to
repair the damage or correct the condition and to secure the
property from further damage.
(c) Whether the mortgagor has promptly contacted the purchaser
and any property insurer regarding the damage or condition.
(d) Whether any delay in repairs or corrections is
affirmatively caused by the purchaser or the property insurer.
(10) If a judgment for possession is entered in favor of the
purchaser in an action under chapter 57 as described in subsection
(6), the right of redemption under section 3240 is extinguished and
title to the property vests in the purchaser as provided in section
3236 as to all persons against whom judgment was entered.
(11) As used in this section, "damage" includes, but is not
limited to, any of the following:
(a) The failure to comply with local ordinances regarding
maintenance of the property or blight prevention, if the failure is
the subject of enforcement action by the appropriate governmental
unit.
(b) An exterior condition that presents a significant risk to
the security of the property or significant risk of criminal
activity occurring on the property.
(c) Stripped plumbing, electrical wiring, siding, or other
metal material.
(d) Missing or destroyed structural aspects or fixtures,
including, but not limited to, a furnace, water heater, air-
conditioning unit, countertop, cabinetry, flooring, wall, ceiling,
roofing, toilet, or any other fixtures. As used in this
subdivision, "fixtures" means that term as defined in section 9102
of the uniform commercial code, 1962 PA 174, MCL 440.9102.
(e) Deterioration below, or being in imminent danger of
deteriorating below, community standards for public safety and
sanitation that are established by statute or local ordinance.
(f) A condition that would justify recovery of the premises
under section 5714(1)(d).
Sec. 3241a. For purposes of this chapter, if foreclosure
proceedings have been commenced under this chapter against
residential
property not exceeding 4 units, abandonment of there is
a
conclusive presumption that the premises
shall be conclusively
presumed
upon satisfaction of have
been abandoned if all of the
following requirements are satisfied before the end of the
redemption period:
(a) The mortgagee has made a personal inspection of the
mortgaged premises and the inspection does not reveal that the
mortgagor or persons claiming under the mortgagor are presently
occupying or will occupy the premises.
(b) The mortgagee has posted a notice at the time of making
the personal inspection and has mailed by certified mail, return
receipt requested, a notice to the mortgagor at the mortgagor's
last known address, which notices state that the mortgagee
considers the premises abandoned and that the mortgagor will lose
all
rights of ownership 30 days 1
month after the foreclosure sale
or when the time to provide the notice required by subdivision (c)
expires, whichever is later, unless the mortgagor; the mortgagor's
heirs ,
executor, or administrator; or
personal representative; or
a person lawfully claiming from or under 1 of them provides the
notice required by subdivision (c).
(c) Within 15 days after the notice required by subdivision
(b)
was posted and mailed, the mortgagor; the mortgagor's heirs ,
executor,
or administrator; or personal
representative; or a person
lawfully claiming from or under 1 of them has not given written
notice by first-class mail to the mortgagee at an address provided
by the mortgagee in the notices required by subdivision (b) stating
that the premises are not abandoned.
