SENATE BILL No. 1092

 

 

April 25, 2012, Introduced by Senators JONES, NOFS, HILDENBRAND, BIEDA, BRANDENBURG, PROOS, MOOLENAAR, PAPPAGEORGE and SCHUITMAKER and referred to the Committee on Judiciary.

 

 

     A bill to amend 1961 PA 236, entitled

 

"Revised judicature act of 1961,"

 

by amending sections 2803, 2805, 2807, 2811, and 2819 (MCL

 

600.2803, 600.2805, 600.2807, 600.2811, and 600.2819), as added by

 

2004 PA 136.

 

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

 

     Sec. 2803. (1) A judgment lien attaches to a judgment debtor's

 

interest in real property if a notice of judgment lien is recorded

 

in accordance with this chapter in the land title records of the

 

register of deeds for the county where in which the property is

 

located. The judgment lien attaches at the time the notice of

 

judgment lien is recorded or, for after acquired property, at the

 

time the judgment debtor acquires the interest in the property.

 

     (2) At the request of the judgment creditor, the fee charged

 

by a register of deeds for recording a notice of judgment lien


 

shall be taxed and awarded as a cost against the judgment debtor.

 

     Sec. 2805. (1) The clerk of a court that entered a judgment

 

shall certify a notice of judgment lien that has been filed with

 

the court and that includes all of the following:

 

     (a) The case caption and docket number.

 

     (b) The current name and address of the judgment creditor and,

 

if the judgment creditor has an attorney, the attorney.

 

     (c) The name, last 4 digits of the social security or tax

 

identification number, and last known address of the judgment

 

debtor.

 

     (d) The current balance due on the judgment.

 

     (e) The date the judgment was entered, the expiration date of

 

the judgment, and the expiration date of the judgment lien.

 

     (f) The signature of the judgment creditor or the judgment

 

creditor's attorney.

 

     (2) A notice of judgment lien need not include a legal

 

description of the debtor's interest in real property.

 

     (3) Except as provided by subsection (4), a A copy of a notice

 

of judgment lien that has been certified under subsection (1) shall

 

be served by certified first-class mail on the judgment debtor at

 

the judgment debtor's last known address. Proof of service shall be

 

filed with the court that issued the judgment.

 

     (4) If the judgment that is the subject of the judgment lien

 

is for $25,000.00 or more, a copy of a notice of judgment lien that

 

has been certified under subsection (1) shall be personally served

 

on the judgment debtor and proof of service filed with the court

 

that issued the judgment.


 

     Sec. 2807. (1) A judgment lien does not attach to an interest

 

in real property owned as tenants by the entirety unless the

 

underlying judgment is entered against both the husband and wife.

 

     (2) With the following exceptions, and subject to section

 

2819, a judgment lien has priority over a lien recorded with the

 

register of deeds after the notice of judgment lien is recorded:

 

     (a) A purchase money mortgage.

 

     (b) A mortgage to the extent that proceeds of the mortgage are

 

used to pay 1 or more of the following:

 

     (i) Purchase money mortgage debt.

 

     (ii) A subsequent refinancing of purchase money mortgage debt.

 

     (iii) A nonpurchase money mortgage recorded before attachment of

 

the judgment lien.

 

     (c) A lien that secures an advance made under a previously

 

recorded future-advance mortgage.

 

     (d) A lien that has or acquires priority by operation of law.

 

     (e) A claim of lien recorded with the register of deeds under

 

section 111 of the construction lien act, 1980 PA 497, MCL

 

570.1111.

 

     (f) A lien for unpaid assessments or charges due to a

 

condominium association, homeowners' association, or property

 

owners' association that arises from or pursuant to recorded

 

restrictions that run with the land.

 

     (g) A state or federal tax lien.

 

     (3) If property subject to a judgment lien recorded under this

 

chapter is sold or refinanced, proceeds of the sale or refinancing

 

due to a judgment creditor are limited to the judgment debtor's


 

equity in the property at the time of the sale or refinancing after

 

all liens senior to the judgment lien, property taxes, and costs

 

and fees necessary to close the sale or refinancing are paid or

 

extinguished.

 

     Sec. 2811. (1) Within 28 days after payment in full of the

 

amount due on a judgment that is the basis for a judgment lien, the

 

judgment creditor or the judgment creditor's attorney shall record

 

a discharge of judgment lien with the office of the register of

 

deeds where with which the judgment lien is recorded.

 

     (2) If payment on a judgment lien is made from the judgment

 

debtor's equity as described in from proceeds of the parcel or

 

parcels of property sold under section 2807(3) and is not payment

 

in full of the amount due on the lien, the judgment creditor or the

 

judgment creditor's attorney shall record a partial discharge of

 

judgment lien for the amount paid.

 

     (3) A partial discharge of judgment lien under subsection (2)

 

shall include the legal description of the parcel or parcels sold

 

and shall fully release the parcel or parcels from the lien.

 

     Sec. 2819. (1) There Except as provided in subsection (2),

 

there is no right to foreclose a judgment lien created under this

 

chapter. At the time the judgment debtor makes a conveyance, as

 

that term is defined in section 35 of 1846 RS 65, MCL 565.35, of,

 

sells under an executory contract, or refinances the interest in

 

real property that is subject to the judgment lien, the judgment

 

debtor shall pay the amount due to the judgment creditor, as

 

determined under section 2807(3), to the judgment creditor.

 

     (2) If a judgment debtor conveys, sells, or refinance real


 

property encumbered by a judgment lien and does not pay the amount

 

due to the judgment creditor as required by subsection (1), the

 

judgment lien continues to encumber the real property with priority

 

over all interests perfected after the judgment lien, including any

 

lien, deed, encumbrance, or mortgage that results from the

 

conveyance, sale, or refinancing, and the judgment creditor may

 

foreclose the judgment lien on the real property as provided in

 

this section. On foreclosure, the judgment creditor may recover the

 

amount that was due to the judgment creditor under subsection (1)

 

and both of the following:

 

     (a) Interest on the amount from the date that payment was due

 

at the applicable judgment interest rate.

 

     (b) Costs incurred in the foreclosure process.

 

     (3) A judgment creditor foreclosing a judgment lien under

 

subsection (2) shall obtain, in the action in which the judgment

 

was entered, a determination of the amount the judgment creditor is

 

entitled to recover through foreclosure because of the nonpayment

 

of the amount due under subsection (1) and a determination of which

 

interests in the property, recorded before the foreclosure

 

proceeding is commenced, are inferior in priority to the

 

foreclosure rights of the judgment creditor. The court's

 

determination of the amount the judgment creditor is entitled to

 

recover through foreclosure and the priority as to other claimants

 

in the property shall be obtained in a proceeding supplementary to

 

judgment in the same manner as title to property is determined in

 

supplementary proceedings under section 6128. If the judgment

 

creditor asserts a priority over an interest in the property and


 

the person holding that interest is not a party to the action, the

 

court shall by show cause order or otherwise order the person to be

 

made a party to the action and set the proceeding for an early

 

hearing.

 

     (4) After a determination under subsection (3) in favor of a

 

judgment creditor has become final, the judgment creditor may

 

proceed with a foreclosure sale by advertisement of the property to

 

collect the amount the judgment creditor was entitled to receive

 

under subsection (1), interest, and court and foreclosure costs.

 

The foreclosure sale by advertisement shall be conducted in the

 

manner provided in this section by the sheriff of the county in

 

which the property is located or by another officer from the

 

sheriff's office. For services relating to posting of public

 

notices and conducting a sale of the property, the sheriff or

 

officer may charge the same amounts as allowed for those services

 

in regard to a mortgage sale by foreclosure.

 

     (5) Before the sale of real property in foreclosing a judgment

 

lien, notice that describes the real property with common certainty

 

by stating the name or number of the township or city in which it

 

is located and the number of the lot, or by other appropriate

 

description of the property, and that gives the time and place of

 

the sale shall be given as follows:

 

     (a) A written or printed notice shall be displayed in 3 public

 

places in the township or city where the real property is located

 

at least 6 weeks before the sale.

 

     (b) A copy of the notice shall be published once each week for

 

the 6 successive weeks before the sale in a newspaper printed in


 

the county in which the property is located or, if there is no such

 

newspaper, in a newspaper printed in an adjoining county.

 

     (c) If the sheriff or other officer adjourns the sale for more

 

than 1 week, he or she shall give notice in the newspaper in which

 

the original notice was published and shall continue to publish

 

notices weekly throughout the adjournment. Notice of adjournment

 

shall also be displayed throughout the adjournment at the place

 

where the sale is to be held. If there is an adjournment of 1 week

 

or less, posting the adjournment at the place of the sale is

 

sufficient notice of the adjournment.

 

     (6) A sale of real property in foreclosing a judgment lien

 

shall be by public sale between 9 a.m. and 4 p.m. at the place

 

where the circuit court is located in the county in which the real

 

property to be sold is located. The property shall be sold to the

 

highest bidder. The sheriff or other officer conducting the sale

 

may adjourn the sale for reasonable cause and for a reasonable

 

period. The same requirements for prompt payment of the purchase

 

price by the bidder that apply to mortgage foreclosures by

 

advertisement or execution sales of real property apply to

 

successful bidders at a sale in foreclosing a judgment lien. The

 

judgment creditor, an assignee of the judgment creditor, or a legal

 

representative of the judgment creditor or the assignee may, fairly

 

and in good faith, purchase the real property at the sale. A

 

judgment creditor, assignee, or legal representative who purchases

 

the property may apply the amount determined to be owing to the

 

judgment creditor under subsection (3) against the bid made by the

 

judgment creditor, assignee, or legal representative and is only


 

required to pay money to the sheriff or officer if the bid exceeds

 

the amount determined to be owing.

 

     (7) Before the date of a scheduled foreclosure sale under this

 

section, the judgment debtor or any person whose interest in the

 

property would be wholly or partially eliminated by a final

 

foreclosure sale may cause the foreclosure sale to be canceled by

 

paying to the judgment creditor or the judgment creditor's attorney

 

by cashier's check the amount determined by the court under

 

subsection (3) and interest and costs to the date of the payment.

 

     (8) If real property is sold under subsection (6), the sheriff

 

or other officer conducting the sale shall pay the proceeds of the

 

sale, up to the amount due to the judgment creditor as determined

 

by the court under subsection (3), to the judgment creditor. The

 

sheriff or other officer conducting the sale shall pay any

 

remaining sale proceeds to the persons whose interests in the

 

property have been eliminated by the foreclosure sale in the order

 

of the priority of their interests in the property.

 

     (9) After the sale of real property to foreclose a judgment

 

lien, the sheriff or other officer conducting the sale shall sign

 

as many certificates of the sale as are necessary, that contain all

 

of the following information:

 

     (a) A particular description of the property sold.

 

     (b) The price bid for each distinct lot or parcel sold.

 

     (c) The consideration paid for each lot or parcel.

 

     (10) The sheriff or other officer conducting the sale shall

 

deliver a certificate under subsection (9) to each purchaser at the

 

sale and, within 10 days after the sale, file 1 of the certificates


 

to be recorded in the office of the register of deeds of the county

 

in which the property is located. The register of deeds shall

 

record the certificate in a book kept for that purpose. The

 

original certificate, a record of the certificate, or a transcript

 

of the record, certified by the register of deeds, is prima facie

 

evidence of the facts contained in the deed, of the regularity of

 

the sale, and of all proceedings in the action before the sale. The

 

sheriff or other officer conducting the sale shall also, within 10

 

days after the sale, provide to the purchaser at the sale a

 

sheriff's deed making a final conveyance of the real property to

 

the purchaser.

 

     (11) A sheriff or other officer who, after the fees specified

 

in this section have been tendered, neglects or refuses any of the

 

services required by this section is liable to the party injured

 

for all damages the party sustains because of that neglect or

 

refusal.

 

     (12) A person who removes or defaces a notice of sale

 

displayed under subsection (5) without authorization is liable to

 

the judgment creditor for $50.00 or more per instance plus the

 

amount of actual damages sustained by the judgment creditor.