capitol dome
Michigan Legislative Website


Michigan Compiled Laws Complete Through PA 281 of 2014
House: Adjourned until Tuesday, September 23, 2014 1:30:00 PM
Senate: Adjourned until Tuesday, September 23, 2014 10:00:00 AM

Michigan Legislative Website

Main Content

Act 67 of 2012
Search within this Statute for


NONRECOURSE MORTGAGE LOAN ACT

Act 67 of 2012

AN ACT to regulate the use and enforceability of certain loan covenants in nonrecourse commercial loan transactions in this state.


History: 2012, Act 67, Imd. Eff. Mar. 29, 2012
Compiler's Notes: Enacting section 1 of Act 67 of 2012 provides:"Enacting section 1. The legislature recognizes that it is inherent in a nonrecourse loan that the lender takes the risk of a borrower's insolvency, inability to pay, or lack of adequate capital after the loan is made and that the parties do not intend that the borrower is personally liable for payment of a nonrecourse loan if the borrower is insolvent, unable to pay, or lacks adequate capital after the loan is made. The legislature recognizes that the use of a post closing solvency covenant as a nonrecourse carveout, or an interpretation of any provision in a loan document that results in a determination that a post closing solvency covenant is a nonrecourse carveout, is inconsistent with this act and the nature of a nonrecourse loan; is an unfair and deceptive business practice and against public policy; and should not be enforced. It is the intent of the legislature that this act applies to any claim made or action taken to enforce a post closing solvency covenant on or after the effective date of this act; to any claim made to enforce a post closing solvency covenant that is pending on the effective date of this act; and to any action to enforce a post closing solvency covenant that is pending on the effective date of this act, unless a judgment or final order has been entered in that action and all rights to appeal that judgment or final order have been exhausted or have expired."


© 2009 Legislative Council, State of Michigan

The People of the State of Michigan enact:

DocumentTypeDescription
Section 445.1591SectionShort title.
Section 445.1592SectionDefinitions.
Section 445.1593SectionPost closing solvency covenant; prohibited use.
Section 445.1594SectionLoan documents not containing nonrecourse loan provisions; use.
Section 445.1595SectionEnforcement and interpretation of existing nonrecourse loan documents.