Bulletin: MI2016003

Date:
July 28, 2016
To:
All Michigan Issuing Offices
RE:
UNDERWRITING - Withdrawal of Undeveloped Land in Condominiums

Dear Associates:

Please be advised that on June 22, 2016, the Governor signed into law Public Act 233 of 2016 (attached) which law establishes that a Condominium Association must record a declaration of reversion of the lands to general common elements of the project that the Developer fails to withdraw from the project (or covert undeveloped units to “must be built”) before the expiration of the applicable time frames. This law will become effective September 21, 2016.

MCL 559.167 (Section 67) was modified to remove the confusion as to whether undeveloped lands (“need not be built” units or expansion areas) in conventional or site condominium projects were owned and controlled by the Developer or whether they reverted to general common elements of the project under the control of the Association when the time frames identified in Section 67 had lapsed.

Now, before an Association can claim that the undeveloped land constitutes general common elements of the project, the Association must record its Declaration at the county Register of Deeds.  Also, the reversion of the land to general common elements, whether “occurring before or after the date of the 2016 amendatory act” is not effective unless the election, notice and recording requirements of subsection (4) have been met. This, in essence, creates a retroactive effect.

In the event that a Declaration has been recorded, contact the Underwriting Department for appropriate requirements to insure a sale of such lands. 

If you have questions related to this bulletin, please contact your local underwriting personnel or Stewart Legal Services. Please disseminate this Bulletin to all appropriate office personnel.

If you have any questions relating to this or other bulletins, please contact a Stewart Title Guaranty Company underwriter.

For on-line viewing of this and other bulletins, please log onto www.vuwriter.com.

THIS BULLETIN IS FURNISHED TO INFORM YOU OF CURRENT DEVELOPMENTS. AS A REMINDER, YOU ARE CHARGED WITH KNOWLEDGE OF THE CONTENT ON VIRTUAL UNDERWRITER  AS IT EXISTS FROM TIME TO TIME AS IT APPLIES TO YOU, AS WELL AS ANY OTHER INSTRUCTIONS. OUR UNDERWRITING AGREEMENTS DO NOT AUTHORIZE OUR ISSUING AGENTS TO ENGAGE IN SETTLEMENTS OR CLOSINGS ON BEHALF OF STEWART TITLE GUARANTY COMPANY. THIS BULLETIN IS NOT INTENDED TO DIRECT YOUR ESCROW OR SETTLEMENT PRACTICES OR TO CHANGE PROVISIONS OF APPLICABLE UNDERWRITING AGREEMENTS. CONFIDENTIAL, PROPRIETARY, OR NONPUBLIC PERSONAL INFORMATION SHOULD NEVER BE SHARED OR DISSEMINATED EXCEPT AS ALLOWED BY LAW. IF APPLICABLE STATE LAW OR REGULATION IMPOSES ADDITIONAL REQUIREMENTS, YOU SHOULD CONTINUE TO COMPLY WITH THOSE REQUIREMENTS.

References

Bulletins Replaced:
None
Related Bulletins:
None
Underwriting Manual:
3.40 Condominiums
Exceptions Manual:
Condominiums
Forms:
None