Bill Text: MI HB4227 | 2011-2012 | 96th Legislature | Introduced
Bill Title: Construction; contracts; capital recovery fees; prohibit for nonresidential development. Creates new act.
Spectrum: Partisan Bill (Republican 7-0)
Status: (Passed) 2011-05-25 - Assigned Pa 34'11 With Immediate Effect [HB4227 Detail]
Download: Michigan-2011-HB4227-Introduced.html
HOUSE BILL No. 4227
February 10, 2011, Introduced by Reps. Opsommer, O'Brien, Rendon, Zorn, Bumstead, Lyons and Franz and referred to the Committee on Regulatory Reform.
A bill to prohibit certain covenants attaching to real
property; to prohibit the imposition of certain fees upon transfer
of that real property; and to provide for remedies.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 1. As used in this act, "capital recovery fee" means any
legacy covenant fee or charge imposed upon a parcel of
nonresidential real property, for any period of time, that requires
any subsequent seller or transferor of that real property to pay a
fee to the developer, whether a flat fee or a fee based upon a
percentage of the selling price or other quantitative numerical
figure or sum. However, capital recovery fee does not include any
of the following:
(a) Any consideration payable by the grantee to the grantor
for the interest in real property being transferred, including any
subsequent additional consideration for the property payable by the
grantee based upon any subsequent appreciation, development, or
sale of the property, provided such additional consideration is
payable on a 1-time basis only and the obligation to make such
payment does not bind successors in title to the property. For the
purposes of this subdivision, an interest in real property may
include a separate mineral estate and its appurtenant surface
access rights.
(b) Any commission payable to a licensed real estate broker
for the transfer of real property pursuant to an agreement between
the broker and the grantor or the grantee, including any subsequent
additional commission for that transfer payable by the grantor or
the grantee based upon any subsequent appreciation, development, or
sale of the property.
(c) Any interest, charges, fees, or other amounts payable by a
borrower to a lender pursuant to a loan secured by a mortgage
against real property, including, but not limited to, any fee
payable to the lender for consenting to an assumption of the loan
or a transfer of the real property subject to the mortgage, any
fees or charges payable to the lender for estoppel letters or
certificates, and any shared appreciation interest or profit
participation or other consideration payable to the lender in
connection with the loan.
(d) Any rent, reimbursement, charge, fee, or other amount
payable by a lessee to a lessor under a lease, including, but not
limited to, any fee payable to the lessor for consenting to an
assignment, subletting, encumbrance, or transfer of the lease.
(e) Any consideration payable to the holder of an option to
purchase an interest in real property or the holder of a right of
first refusal or first offer to purchase an interest in real
property for waiving, releasing, or not exercising the option or
right upon the transfer of the property to another person.
(f) Any tax, fee, charge, assessment, fine, or other amount
payable to or imposed by a governmental authority.
(g) Any fee, charge, assessment, fine, or other amount payable
to a homeowners', condominium, cooperative, mobile home, or
property owners' association pursuant to a declaration or covenant
or law applicable to such association, including, but not limited
to, fees or charges payable for estoppel letters or certificates
issued by the association or its authorized agent.
(h) Any fee, charge, assessment, dues, contribution, or other
amount imposed by a declaration or covenant encumbering a
community, and payable to a nonprofit or charitable organization
for the purpose of supporting cultural, educational, charitable,
recreational, environmental, conservation, or other similar
activities benefiting the community that is subject to the
declaration or covenant.
(i) Any fee, charge, assessment, dues, contribution, or other
amount pertaining to the purchase or transfer of a club membership
relating to real property owned by the member, including, but not
limited to, any amount determined by reference to the value,
purchase price, or other consideration given for the transfer of
the real property.
Sec. 2. The owner or developer, or both, of residential real
property shall not impose directly or indirectly, by means of a
covenant or contract, a capital recovery fee.
Sec. 3. (1) Any person aggrieved by the imposition of a
capital recovery fee, whether the original or subsequent transferee
or purchaser, may bring an action in a court of competent
jurisdiction for clearing the title and voiding the capital
recovery fee, including any other equitable relief requested and
granted by the court.
(2) In a successful action brought under subsection (1), the
court may award costs of bringing and completing the action and
actual reasonable attorney fees.
