Bill Summary – FastDemocracy

HOUSE BILL NO. 5756
     May 30, 2024, Introduced by Reps. Price, Wilson, Weiss, O'Neal, Hope, Morgan, Tsernoglou and
       Brenda Carter and referred to the Committee on Economic Development and Small Business.
          A bill to amend 1961 PA 236, entitled
    "Revised judicature act of 1961,"
    by amending sections 3238, 5714, 5735, 5744, 5775, and 5779 (MCL
3238, 600.5714, 600.5735, 600.5744, 600.5775, and 600.5779),
    section 3238 as amended by 2014 PA 431, section 5714 as amended by
PA 223, section 5735 as amended by 2004 PA 105, section 5744
    as amended by 2019 PA 2, and sections 5775 and 5779 as added by
PA 336.
                     THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
       Sec. 3238. (1) After a foreclosure sale under this chapter and
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 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
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 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:
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       (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:
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         (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).5714(2)(d).
         Sec. 5714. (1) Except as otherwise provided in subsection (2),
 a person entitled to possession of premises shall not recover
 possession of the premises by excluding or removing a person in
 possession or refusing to renew a lease or rental agreement. A
 person that violates this subsection has unlawfully interfered with
 the tenant's possession of the property as provided under section
 2918. A tenant in possession of premises whose possessory interest
 has been unlawfully interfered with by a person entitled to
 possession may recover damages as provided under section 2918.
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       (2) (1) A person entitled to possession of premises may
 recover possession by summary proceedings if there is good cause to
 recover possession of the premises. For purposes of this section,
 good cause exists in the following circumstances:
       (a) When a person in possession holds over premises after
 failing or refusing to pay rent due under the lease or rental
 agreement by which the person holds the premises within 7 14 days
 from the service of a written demand for possession for nonpayment
 of the rent due. The rent due and owing, or any part of the rent
 due, must not result from a rent increase that is unreasonable or
 imposed for the purpose of circumventing the intent of this
 section. In determining whether all or part of the rent due and
 owing is the result of an unreasonable rent increase, it is a
 rebuttable presumption that the rent for the premises is
 unreasonable if it is grossly in excess of the fair market value of
 comparable rental units in the area. For the purpose of this
 subdivision, rent due does not include any accelerated indebtedness
 because of a breach of the lease under which the premises are held.
       (b) When a person in possession holds over premises for 24
 hours following service of a written demand for possession for
 termination of the lease pursuant to a clause in the lease
 providing for termination because a tenant, a member of the
 tenant's household, or other person under the tenant's control has
 unlawfully manufactured, delivered, possessed with intent to
 deliver, or possessed a controlled substance on the leased
 premises. This subdivision applies only if a formal police report
 has been filed alleging that the person has unlawfully
 manufactured, delivered, possessed with intent to deliver, or
 possessed a controlled substance on the leased premises. For
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 purposes of this subdivision, "controlled substance" means a
 substance or a counterfeit substance classified in schedule 1, 2,
 or 3 pursuant to sections 7211 to 7216 of the public health code,
 1978 PA 368, MCL 333.7211 to 333.7216.
       (c) When a person holds over premises in 1 or more of the
 following circumstances:
       (i) After termination of the lease, pursuant to a power to
 terminate provided in the lease or implied by law.
       (ii) After the term for which the premises are demised to the
 person or to the person under whom he or she holds.
       (iii) After the termination of the person's estate by a notice
 to quit as provided by section 34 of 1846 RS 66, MCL 554.134.
       (c) Except as otherwise provided in this subdivision, when a
 person in possession holds over premises after the termination of
 the person's estate by a notice to quit as provided under section
 34 of 1846 RS 66, MCL 554.134. For purposes of this subdivision,
 holdover of premises by a person after the termination of that
 person's estate by a notice to quit under section 34(1) or (3) of
 1846 RS 66, MCL 554.134, is not on its own sufficient to establish
 good cause. A landlord that is entitled to recover possession of
 premises because of the termination of a tenancy under section
 34(1) or (3) of 1846 RS 66, MCL 554.134, and seeks to recover
 possession of the premises under this subdivision must also show 1
 of the grounds for good cause as provided under this subsection.
       (d) When the person in possession willfully or negligently
 causes a serious and continuing health hazard to exist on the
 premises, or causes extensive and continuing physical injury to the
 premises, which was discovered or should reasonably have been
 discovered by the party seeking possession not earlier than 90 days
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 before the institution of proceedings under this chapter and when
 the person in possession neglects or refuses for 7 days after
 service of a demand for possession of the premises to deliver up
 possession of the premises or to substantially restore or repair
 the premises.
       (e) When a person in possession holds over premises for 7 days
 following service of a written notice to quit for termination of
 the lease after the tenant, a member of the tenant's household, or
 a person under the tenant's control, on real property owned or
 operated by the tenant's landlord, has caused or threatened
 physical injury to an individual. This subdivision applies only if
 the police department with jurisdiction has been notified a formal
 police report has been filed alleging that the person, on real
 property owned or operated by the tenant's landlord, caused or
 threatened physical injury to an individual. This subdivision does
 not apply in either of the following cases:
       (i) The individual who was physically injured or threatened is
 the tenant or a member of the tenant's household.
       (ii) Application would result in a violation of federal housing
 regulations.
       (f) When a person takes possession of premises by means of a
 forcible entry, holds possession of premises by force after a
 peaceable entry, or comes into possession of premises by trespass
 without color of title or other possessory interest. This remedy is
 in addition to the remedy of entry permitted under section 5711(3).
       (g) When a person continues in possession of premises sold by
 virtue of a mortgage or execution, after the time limited by law
 for redemption of the premises.
       (h) When a person continues in possession of premises sold and
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 conveyed by a personal representative under license from the
 probate court or under authority in the will.
       (i) When a person in possession substantially breached a
 material provision in the lease or rental agreement, other than the
 obligation to surrender possession of the premises, and has failed
 to cure the breach within 30 days after written notice and option
 to cure was provided. The obligation for which the violation is
 alleged may not be imposed for the purpose of circumventing the
 intent of this section.
       (j) Except as otherwise provided in this subdivision, when the
 occupancy of the premises by a person in possession violates or
 causes a violation of law that subjects the person seeking
 possession to civil or criminal sanction and a state agency or
 local unit of government that has jurisdiction over the premises
 has issued an order requiring the person in possession to vacate
 the premises. A person seeking possession may not recover
 possession under this subdivision unless a court finds that removal
 of the person in possession is necessary to cure the violation of
 law and the person seeking possession did not create the condition
 necessitating removal through willful or irresponsible conduct or
 lack of conduct. Notwithstanding this subdivision, the person in
 possession may recover possession of the premises 7 days after the
 violation is cured. If the person seeking possession does not cure
 the violation of law 30 days after the state agency or local unit
 of government that has jurisdiction over the premises issues the
 order to vacate under this subdivision, the person in possession
 may cure the violation. Any expenses incurred by the person in
 possession to cure the violation must be deducted from the rent. If
 the removal of the person in possession from the premises is
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 necessary to protect the person's health and safety, and a court
 finds that the person seeking possession caused, by an act or
 omission, the condition creating the need to vacate, the person
 seeking possession may be ordered to pay for up to 60 calendar days
 of housing expenses incurred by the person in possession,
 including, but not limited to, temporary motel costs, security
 deposit and first month's rent for a new premises, and moving and
 cleaning service expenses. Nothing in this subdivision abrogates or
 limits the rights of the person in possession to bring an action
 for monetary damages or injunctive relief against the person
 seeking possession to compel compliance by the person seeking
 possession with all applicable housing state laws, ordinances, or
 regulations.
       (k) When a person in possession holds over premises for 3 days
 following service of a written demand for possession for
 termination of the lease or rental agreement pursuant to a clause
 in the lease or rental agreement pr