michigan uniform assignment of rents

Act No. 115

Public Acts of 2022

Approved by the Governor

June 24, 2022

Filed with the Secretary of State

EFFECTIVE DATE:  September 22, 2022

state of michigan

101st Legislature

Regular session of 2022

Introduced by Reps. Filler and Bolden

ENROLLED HOUSE BILL No. 4799

AN ACT to enact the uniform assignment of rents act; to provide for the creation, perfection, and enforcement of security interests in rents; to provide remedies; and to repeal acts and parts of acts.

The People of the State of Michigan enact:

Sec. 1. This act may be cited as the “Michigan uniform assignment of rents act”.

Sec. 2. As used in this act:

(a) “Assignee” means a person entitled to enforce an assignment of rents. Assignee includes the purchaser at a foreclosure sale by operation of law.

(b) “Assignment of rents” means a transfer of an interest in rents in connection with an obligation secured by real property located in this state and from which the rents arise.

(c) “Assignor” means a person that makes an assignment of rents or the successor owner of the real property from which the rents arise.

(d) “Cash proceeds” means proceeds that are money, checks, deposit accounts, or the like.

(e) “Day” means calendar day.

(f) “Deposit account” means a demand, time, savings, passbook, or similar account maintained with a bank, savings bank, savings and loan association, credit union, or trust company.

(g) “Document” means information that is inscribed on a tangible medium or that is stored on an electronic or other medium and is retrievable in perceivable form.

(h) “Notification” means a document containing information that this act requires a person to provide to another, signed by the person required to provide the information.

(i) “Person” means an individual, corporation, business trust, estate, trust, partnership, limited liability company, association, joint venture, public corporation, government, or governmental subdivision, agency, or instrumentality, or any other legal or commercial entity.

(j) “Proceeds” means personal property that is received or collected on account of a tenant’s obligation to pay rents.

(k) “Purchase” means to take by sale, lease, discount, negotiation, mortgage, pledge, lien, security interest, issue or reissue, gift, or any other voluntary transaction creating an interest in property.

( l ) “Rental agreement” means an agreement by which a person is obligated to pay rents to the assignor.

(m) “Rents” means any of the following:

( i ) Sums payable for the right to possess or occupy, or for the actual possession or occupation of, real property of another person.

( ii ) Sums payable to an assignor under a policy of rental interruption insurance covering real property.

( iii ) Claims arising out of a default in the payment of sums payable for the right to possess or occupy real property of another person.

( iv ) Sums payable to terminate an agreement to possess or occupy real property of another person.

( v ) Sums payable to an assignor for payment or reimbursement of expenses incurred in owning, operating, and maintaining, or constructing or installing improvements on, real property.

( vi ) Fees, charges, accounts, or other payments for the use or occupancy of rooms and other facilities in hotels, motels, or other lodging properties.

( vii ) Any other sums payable under an agreement relating to the real property of another person that constitute rents under law of this state other than this act.

(n) “Secured obligation” means an obligation the performance of which is secured by an assignment of rents.

(o) “Security instrument” means a document, however denominated, that creates or provides for a security interest in real property, including a land contract, whether or not it also creates or provides for a security interest in personal property.

(p) “Security interest” means an interest in property that arises by agreement and secures performance of an obligation.

(q) “Sign” means, with present intent to authenticate or adopt a document, to do either of the following:

( i ) Execute or adopt a tangible symbol.

( ii ) Attach to or logically associate with the document an electronic sound, symbol, or process.

(r) “State” means a state of the United States, the District of Columbia, Puerto Rico, the United States Virgin Islands, or any territory or insular possession subject to the jurisdiction of the United States.

(s) “Submit for recording” means to submit a document complying with applicable legal standards, with required fees and taxes, to the register of deeds for the county in which the real property is located.

(t) “Tenant” means a person that has an obligation to pay sums for the right to possess or occupy, or for possessing or occupying, the real property of another person.

Sec. 3. (1) Except as otherwise provided in subsections (3) and (4), a person gives a notification or a copy of a notification under this act by doing either of the following:

(a) Depositing it with the United States Postal Service or with a commercially reasonable delivery service, properly addressed to the intended recipient’s address as specified in subsection (2), with first-class postage or cost of delivery provided for.

(b) If the recipient agreed to receive notification by facsimile transmission, e mail, or other electronic transmission, sending it to the recipient in the agreed manner at the address specified in the agreement.

(2) The following rules determine the proper address for giving a notification under subsection (1):

(a) A person giving a notification to an assignee shall use the address for notices to the assignee provided in the document creating the assignment of rents, but, if the assignee has provided the person giving the notification with a more recent address for notices, the person giving the notification shall use that address.

(b) A person giving a notification to an assignor shall use the address for notices to the assignor provided in the document creating the assignment of rents, but, if the assignor has provided the person giving the notification with a more recent address for notices, the person giving the notification shall use that address.

(c) If a tenant’s agreement with an assignor provides an address for notices to the tenant and the person giving notification has received a copy of the agreement or knows the address for notices specified in the agreement, the person giving the notification shall use that address in giving a notification to the tenant. Otherwise, the person shall use the address of the premises covered by the agreement.

(3) If a person giving a notification pursuant to this act and the recipient have agreed to the method for giving a notification, any notification must be given by that method.

(4) If a notification is received by the recipient, it is effective even if it was not given in accordance with subsection (1) or (3).

Sec. 4. (1) An assignment of rents is created by an assignment in either an enforceable security instrument that grants a security interest in rents or a document that grants a security interest in rents which is signed in connection with an enforceable security instrument as to any real property described in the document creating the assignment of rents.

(2) Except as provided in subsection (5), an assignment of rents creates a presently effective security interest in all accrued and unaccrued rents arising from the real property described in the document creating the assignment, regardless of whether the document is in the form of an absolute assignment, an absolute assignment conditioned upon default, an assignment as additional security, or any other form. The security interest in rents is separate and distinct from any security interest held by the assignee in the real property.

(3) A discharge of a security instrument discharges by operation of law any assignment of rents made in connection with the discharged security instrument.

(4) Upon a foreclosure of the security instrument, all of the following apply:

(a) The assignment of rents made in connection with the security instrument continues to be effective to the extent of the remaining secured obligation and transfers to the purchaser at the foreclosure sale by operation of law whether or not the foreclosure notice makes reference to the assignment of rents. Any transfer of the foreclosure deed by the holder of the deed also transfers the assignment of rents to the transferee by operation of law.

(b) The assignment of rents made in connection with the security instrument automatically terminates upon the earlier of the following:

( i ) Redemption from the foreclosure sale.

( ii ) Expiration of the redemption period without redemption. For purposes of this subparagraph, the assignment of rents in connection with any subordinate security instrument automatically terminates.

(5) This act does not apply to an assignment of rents regarding an interest in real property improved by 1 to 4 dwelling units unless 1 or more of the following apply:

(a) The interest is used for agricultural, commercial, industrial, or mineral-extraction purposes, other than incidental uses by an assignor occupying the property as the assignor’s primary residence.

(b) The interest secures an obligation incurred at a time when the property was used or planned for use for agricultural, commercial, industrial, or mineral-extraction purposes.

(c) The assignor planned or is planning to develop the property into 1 or more dwelling units to be sold or leased in the ordinary course of the owner’s business.

(d) The assignor is collecting or has the right to collect rents or other income from the property from a person other than an affiliate of the assignor.

Sec. 5. (1) A document creating an assignment of rents may be submitted for recording to the register of deeds in the same manner as any other document evidencing a conveyance of an interest in real property.

(2) Upon recording, the security interest in rents created by an assignment of rents is fully perfected, even if a provision of the document creating the assignment or law of this state other than this act would preclude or defer enforcement of the security interest until the occurrence of a subsequent event, including a subsequent default of the assignor, the assignee’s obtaining possession of the real property, or the appointment of a receiver.

(3) Except as otherwise provided in subsection (4), a perfected security interest in rents takes priority over the rights of a person that, after the security interest is perfected, does either of the following:

(a) Acquires a judicial lien against the rents or the real property from which the rents arise. If the judicial lien arises out of a construction lien, the priority of the security interests in the rents must be determined under the construction lien act, 1980 PA 497, MCL 570.1101 to 570.1305.

(b) Purchases an interest in the rents or the real property from which the rents arise.

(4) A perfected security interest in rents has priority over the rights of a person described in subsection (3) with respect to future advances to the same extent as the assignee’s security interest in the real property has priority over the rights of that person with respect to future advances.

Sec. 6. (1) An assignee may enforce an assignment of rents using 1 or more of the methods specified in sections 7, 8, and 9 or any other method sufficient to enforce the assignment under law of this state other than this act.

(2) From the first date of enforcement, the assignee or, in the case of enforcement by appointment of a receiver under section 7, the receiver, is entitled to collect all of the following:

(a) Rents that have accrued but remain unpaid on that date.

(b) Rents that accrue on or after that date, as those rents accrue.

(3) From the first date of enforcement, a modification of the rental agreement is not binding on the assignee without the written consent of the assignee.

Sec. 7. (1) An assignee is entitled to the appointment of a receiver for the real property subject to the assignment of rents if either of the following applies:

(a) The assignor is in default and any of the following apply:

( i ) The assignor has agreed in a signed document to the appointment of a receiver in the event of the assignor’s default.

( ii ) It appears likely that the real property and any other collateral granted by the assignor to the assignee may not be sufficient to satisfy the secured obligation.

( iii ) The assignor has failed to turn over to the assignee proceeds that the assignee was entitled to collect under this act.

( iv ) A subordinate assignee of rents obtains the appointment of a receiver for the real property.

(b) Other circumstances exist that would justify the appointment of a receiver under law of this state other than this act.

(2) An assignee may file a petition for the appointment of a receiver if any of the following apply:

(a) The petition is filed in connection with an action to foreclose the security instrument.

(b) The petition is filed in connection with an action for specific performance of the assignment.

(c) The petition is filed in connection with an action seeking a remedy on account of waste or threatened waste of the real property subject to the assignment.

(d) The petition is filed in connection with an action to otherwise enforce the secured obligation or the assignee’s remedies arising from the assignment.

(e) Other circumstances exist that would justify the appointment of a receiver under law of this state other than this act.

(3) An assignee that files a petition for the appointment of a receiver shall also give a copy of the petition in the manner specified in section 3 to any other person that, 10 days before the date the petition is filed, held a recorded assignment of rents arising from the real property.

(4) If an assignee enforces an assignment of rents by seeking the appointment of a receiver, the date of enforcement is the date on which the assignee files a petition to appoint a receiver as to the assignment of rents if the court enters an order appointing a receiver for the real property subject to the assignment.

(5) From the date of its appointment, a receiver is entitled to collect rents as provided in section 6(2). The receiver also has the authority provided in the order of appointment and law of this state other than this act.

(6) The following rules govern priority among receivers:

(a) If more than 1 assignee qualify under this section for the appointment of a receiver, a receivership requested by an assignee entitled to priority in rents under this act has priority over a receivership requested by a subordinate assignee, even if a court has previously appointed a receiver for the subordinate assignee.

(b) If a subordinate assignee obtains the appointment of a receiver, the receiver may collect the rents and apply the proceeds in the manner specified in the order appointing the receiver until a receiver is appointed under a senior assignment of rents.

Sec. 8. (1) Upon the assignor’s default, or as otherwise agreed by the assignor, the assignee may give the assignor a notice demanding that the assignor pay over the proceeds of any rents that the assignee is entitled to collect under section 6. The assignee shall record the notice in the office of the register of deeds in the same manner as the security instrument is recorded. The filing of a petition for appointment of a receiver, if it is served in the manner provided in section 3 within 10 days after it is filed, constitutes a recorded notification demanding that the assignor pay over the proceeds of any rents that the assignee is entitled to collect under section 6. The assignee shall also give a copy of the recorded or filed notification to any other person that, 10 days before the notification date, held a recorded assignment of rents arising from the real property.

(2) If an assignee enforces an assignment of rents under this section, the date of enforcement is the date on which the assignor receives a notification under subsection (1). If the notification was served in the manner provided in section 3 within 10 days after it was recorded, the date of enforcement is the date of recording.

(3) An assignee’s failure to give a notification under subsection (1) to any person holding a recorded assignment of rents does not affect the effectiveness of the notification as to the assignor, but the other person is entitled to any relief permitted under law of this state other than this act.

Sec. 9. (1) Upon the assignor’s default, or as otherwise agreed by the assignor, the assignee may give to a tenant of the real property a notification demanding that the tenant pay to the assignee all unpaid accrued rents and all unaccrued rents as they accrue. The assignee shall give a copy of the notification to the assignor and to any other person that, 10 days before the notification date, held a recorded assignment of rents arising from the real property. The notification must be signed by the assignee and do all of the following:

(a) Identify the tenant, assignor, assignee, premises covered by the agreement between the tenant and the assignor, and assignment of rents being enforced.

(b) Provide the recording data for the document creating the assignment or other reasonable proof that the assignment was made.

(c) State that the assignee has the right to collect rents in accordance with the assignment.

(d) Direct the tenant to pay to the assignee all unpaid accrued rents and all unaccrued rents as they accrue.

(e) Describe the manner in which subsections (3) and (4) affect the tenant’s payment obligations.

(f) Provide the name and telephone number of a contact person and an address to which the tenant can direct payment of rents and any inquiry for additional information about the assignment or the assignee’s right to enforce the assignment.

(g) Contain a statement that the tenant may consult a lawyer if the tenant has questions about its rights and obligations.

(h) Have attached a copy of the recorded or filed notification to the assignor as provided in section 8.

(2) If an assignee enforces an assignment of rents under this section, the date of enforcement as to the tenant is the date on which the tenant receives a notification substantially complying with subsection (1).

(3) Subject to subsection (4) and any other claim or defense that a tenant has under an agreement enforceable against the assignee or under the law of the United States or this state other than this act, following receipt of a notification substantially complying with subsection (1), all of the following apply:

(a) A tenant is obligated to pay to the assignee all unpaid accrued rents and all unaccrued rents as they accrue, unless the tenant has previously received a notification from another assignee of rents given by that assignee in accordance with this section and the other assignee has not canceled that notification.

(b) Unless a tenant occupies the premises as the tenant’s primary residence, a tenant that pays rents to the assignor is not discharged from the obligation to pay rents to the assignee.

(c) A tenant’s payment to the assignee of rents then due satisfies the tenant’s obligation under the tenant’s rental agreement to the extent of the payment made.

(d) A tenant’s obligation to pay rents to the assignee continues until the tenant receives a court order directing the tenant to pay the rent in a different manner or a signed document from the assignee canceling its notification, whichever occurs first.

(e) A modification of the rental agreement is not binding on the assignee without the assignee’s written consent.

(4) A tenant that has received a notification under subsection (1) is not in default under its rental agreement for nonpayment of rents accruing within 30 days after the date the notification is received before the earlier of the following:

(a) Ten days after the date the next regularly scheduled rental payment would be due.

(b) Thirty days after the date the tenant receives the notification.

(5) Upon receiving a notification from another creditor that is entitled to priority under section 5(3) that the other creditor has enforced and is continuing to enforce its interest in rents, an assignee that has given a notification to a tenant under subsection (1) shall immediately give another notification to the tenant canceling the earlier notification.

(6) An assignee’s failure to give a notification under subsection (1) to any person holding a recorded assignment of rents does not affect the effectiveness of the notification as to the assignor and those tenants receiving the notification. However, the person entitled to the notification is entitled to any relief permitted by law of this state other than this act.

Sec. 10. No particular phrasing is required for the notification specified in section 9. However, the following form of notification, when properly completed, is sufficient to satisfy the requirements of section 9:

You may obtain additional information about the Assignment of Rents and the Assignee’s right to enforce it at the address listed above.

2. The Landlord is in default under the Assignment of Rents. Under the Assignment of Rents, the Assignee is entitled to collect rents from the Premises.

3. This notification affects your rights and obligations under the rental agreement under which you occupy the Premises (your “Rental Agreement”). In order to provide you with an opportunity to consult with a lawyer, if your next scheduled rental payment is due within 30 days after you receive this notification, neither the Assignee nor the Landlord can hold you in default under your Rental Agreement for nonpayment of that rental payment until 10 days after the due date of that payment or 30 days following the date you receive this notification, whichever occurs first. You may consult a lawyer at your expense concerning your rights and obligations under your Rental Agreement and the effect of this notification.

4. You must pay to the Assignee at the address listed above all rents under your Rental Agreement which are due and payable on the date you receive this notification and all rents accruing under your Rental Agreement after you receive this notification. If you pay rents to the Assignee after receiving this notification, the payment will satisfy your rental obligation to the extent of that payment.

5. Unless you occupy the premises as your primary residence, if you pay any rents to the Landlord after receiving this notification, your payment to the Landlord will not discharge your rental obligation, and the Assignee may hold you liable for that rental obligation notwithstanding your payment to the Landlord.

6. Any modification of the Rental Agreement is not binding on the Assignee without the Assignee’s written consent.

7. If you have previously received a notification from another person that also holds an assignment of the rents due under your Rental Agreement, you should continue paying your rents to the person that sent that notification until that person cancels that notification. Once that notification is canceled, you must begin paying rents to the Assignee in accordance with this notification.

8. Your obligation to pay rents to the Assignee will continue until you receive either:

(a) a written order from a court directing you to pay the rent in a manner specified in that order; or

(b) written instructions from the Assignee canceling this notification.

Sec. 11. The enforcement of an assignment of rents by 1 or more of the methods identified in sections 7, 8, and 9, the application of proceeds by the assignee under section 12 after enforcement, the payment of expenses under section 13, or an action under section 14(4) does not do any of the following:

(a) Make the assignee a mortgagee in possession of the real property.

(b) Make the assignee an agent of the assignor.

(c) Constitute an election of remedies that precludes a later action to enforce the secured obligation or the security instrument.

(d) Make the secured obligation or the security instrument unenforceable.

(e) Limit any right available to the assignee with respect to the secured obligation.

Sec. 12. Unless otherwise agreed, an assignee that collects rents under this act or collects upon a judgment in an action under section 14(4) shall apply the sums collected in the following order:

(a) To the assignee’s reasonable expenses of enforcing its assignment of rents, including, to the extent provided for by agreement and not prohibited by law of this state other than this act, reasonable attorney fees and costs incurred by the assignee.

(b) To reimbursement of any expenses incurred by the assignee to protect or maintain the real property subject to the assignment.

(c) To payment of the secured obligation.

(d) To payment of any obligation secured by a subordinate security interest or other lien on the rents if, before distribution of the proceeds, the assignor and assignee receive a notification from the holder of the interest or lien demanding payment of the proceeds.

(e) To the assignor.

Sec. 13. (1) Unless otherwise agreed by the assignee, and subject to subsection (3), an assignee that collects rents following enforcement under section 8 or 9 need not apply them to the payment of expenses of protecting or maintaining the real property subject to the assignment.

(2) Unless a tenant has made an enforceable agreement not to assert claims or defenses, the right of the assignee to collect rents from the tenant is subject to the terms of the agreement between the assignor and tenant and any claim or defense arising from the assignor’s nonperformance of that agreement.

(3) This act does not limit the standing or right of a tenant, assignor, or other affected person to request a court to appoint a receiver for the real property subject to the assignment or to seek other relief on the ground that the assignee’s nonpayment of expenses of protecting or maintaining the real property has caused or threatened harm to the tenant’s, assignor’s, or other affected person’s interest in the property.

Sec. 14. (1) In this section, “good faith” means honesty in fact and the observance of reasonable commercial standards of fair dealing.

(2) If an assignor collects rents that the assignee is entitled to collect under this act, both of the following apply:

(a) The assignor shall turn over the proceeds to the assignee, less any amount representing payment of expenses authorized by the assignee.

(b) The assignee continues to have a security interest in the proceeds so long as they are identifiable.

(3) For purposes of this act, cash proceeds are identifiable if they are maintained in a segregated account or, if commingled with other funds, to the extent the assignee can identify them by a method of tracing, including application of equitable principles, that is permitted under law of this state other than this act with respect to commingled funds.

(4) In addition to any other remedy available to the assignee under law of this state other than this act, if an assignor fails to turn over proceeds to the assignee as required by subsection (2), the assignee may recover from the assignor or a person liable under the uniform voidable transactions act, 1998 PA 434, MCL 566.31 to 566.45, or both, in a civil action, both of the following:

(a) The proceeds, or an amount equal to the proceeds, that the assignor was obligated to turn over under subsection (2).

(b) Reasonable attorney fees and costs incurred by the assignee to the extent provided for by agreement and not prohibited by law of this state other than this act.

(5) The assignee may maintain an action under subsection (4) without bringing an action to foreclose any security interest that it may have in the real property, and an action under subsection (4) does not bar a foreclosure by advertisement under chapter 32 of the revised judicature act of 1961, 1961 PA 236, MCL 600.3201 to 600.3285. Any sums recovered in the action must be applied in the manner specified in section 12.

(6) Unless otherwise agreed, if an assignee entitled to priority under section 5(3) enforces its interest in rents after another creditor holding a subordinate security interest in rents has enforced its interest under section 8 or 9, the creditor holding the subordinate security interest in rents is not obligated to turn over any proceeds that it collects in good faith before the creditor receives notification that the senior assignee has enforced its interest in rents. The creditor shall turn over to the senior assignee any proceeds that it collects after it receives the notification.

Sec. 15. (1) As used in this section:

(a) “Article 9” means article 9 of the uniform commercial code, 1962 PA 174, MCL 440.9101 to 440.9809, or, to the extent applicable to any particular issue, article 9 of the uniform commercial code as adopted by the state whose laws govern that issue under the choice-of-laws rules contained in article 9 as adopted by this state.

(b) “Conflicting interest” means an interest in proceeds, held by a person other than an assignee, that is either of the following:

( i ) A security interest arising under article 9.

( ii ) Any other interest if article 9 resolves the priority conflict between that person and a secured party with a conflicting security interest in the proceeds.

(2) An assignee’s security interest in identifiable cash proceeds is perfected if its security interest in rents is perfected. An assignee’s security interest in identifiable noncash proceeds is perfected only if the assignee perfects that interest in accordance with article 9.

(3) Except as otherwise provided in subsection (4), priority between an assignee’s security interest in identifiable proceeds and a conflicting interest is governed by the priority rules in article 9.

(4) An assignee’s perfected security interest in identifiable cash proceeds is subordinate to a conflicting interest that is perfected by control under article 9 but has priority over a conflicting interest that is perfected other than by control.

Sec. 16. This act does not preclude subordination by agreement as to rents or proceeds.

Sec. 17. In applying and construing this uniform act, consideration must be given to the need to promote uniformity of the law with respect to its subject matter among states that enact it.

Sec. 18. This act modifies, limits, or supersedes the electronic signatures in global and national commerce act, 15 USC 7001 to 7031, but does not modify, limit, or supersede 15 USC 7001(c), or authorize electronic delivery of any of the notices described in 15 USC 7003(b).

Sec. 19. (1) Except as otherwise provided in this section, this act governs the enforcement of an assignment of rents and the perfection and priority of a security interest in rents, even if the document creating the assignment was signed and delivered before the effective date of this act.

(2) This act does not affect an action or proceeding commenced before the effective date of this act.

(3) This act does not affect any of the following:

(a) The enforceability of an assignee’s security interest in rents or proceeds if, immediately before the effective date of this act, that security interest was enforceable.

(b) The perfection of an assignee’s security interest in rents or proceeds if, immediately before the effective date of this act, that security interest was perfected.

(c) The priority of an assignee’s security interest in rents or proceeds with respect to the interest of another person if, immediately before the effective date of this act, the interest of the other person was enforceable and perfected, and that priority was established.

Sec. 20. The following acts are repealed:

(a) 1925 PA 228, MCL 554.211 to 554.214.

(b) 1953 PA 210, MCL 554.231 to 554.233.

Enacting section 1. This act takes effect 90 days after the date it is enacted into law.

Enacting section 2. This act does not take effect unless House Bill No. 4800 of the 101st Legislature is enacted into law.

Clerk of the House of Representatives

Secretary of the Senate

Approved___________________________________________

____________________________________________________

• Demorest Law Firm
• Detroit Hospitality Law.com

Detroit Business Law – Resources for Metro-Detroit Businesses

Resources for Metro-Detroit Businesses

Michigan Uniform Assignment of Rents Act

Michigan recently signed into law the Michigan Uniform Assignment of Rents Act (the “MUARA” or the “Act”), MCL 554.1051 et seq , which goes into effect on September 22, 2022. The MUARA changes how an assignment of rents is treated under Michigan law for collection and bankruptcy purposes. Pursuant to the MUARA, an assignment of rents is now considered a security interest, rather than an absolute assignment of the rents.

Any assignment of rents previously properly perfected and recorded does not have to be amended or otherwise redone. Pending litigation as of September 21, 2022 will be treated under the prior law, and litigation filed on September 22, 2022 or later will be governed by the MUARA.

Here are the highlights of the new Act:

• Clarifies that an assignment of rents may be included in the mortgage (or other enforceable security interest). A separate assignment may still be prepared and recorded, but it is no longer necessary.
• The term “rents” is broadly defined.
• Act applies to all commercial property (except properties where 1-4 dwelling units are located, which have special rules).
• Clarifies that an assignment of rents creates a security interest, not an absolute assignment of rents (ownership of rents remains with the debtor).
• The steps required to perfect an assignment of rents are now codified, and upon recording, the security interest is fully perfected.
• Lien priority is consistent with the UCC – 1 st in time is 1 st in right, and a properly recorded assignment will have priority over a later judgment creditor.
• In this scenario, the lender will also retain the right to foreclose the property by advertisement.
• There is a penalty of actual attorney fees if the borrower is found to have improperly diverted rents away from lender.
• There are some practical issues for any tenants of the borrower that may have to be resolved – who to pay; what’s proper notice from the lender; how to address setoffs; etc.
• Receiverships – both the MUARA and the Michigan Receivership Act contain language governing receiverships, so there will be some interplay between the two statutes that will have to be resolved.

If you’re a lender, borrower, tenant, or just have questions about the new law, Demorest Law Firm can help.

Related Posts

Federal trade commission proposes rule to ban noncompete agreements and clauses.

January 27, 2023 January 26, 2023

Real Estate Commission Agreements Must Be Written and Signed to be Enforceable

January 20, 2023 January 20, 2023

Demorest Law Firm Obtains $1.976 Million Verdict Against the City of Detroit

December 22, 2022 December 21, 2022

About Melissa Demorest LeDuc, Attorney

Melissa focuses her practice on business formation, mergers and acquisitions, real estate transactions, other business transactions, and estate planning. Melissa has particular experience with family-owned businesses, hotels, apartment complexes, and bars/restaurants. Read More

March 4, 2023

Volume xiii, number 63.

March 03, 2023

• Visas for F and M Students Can Now Be Issued 365 Days Ahead of... by: Jacob A. Kanyusik and Rosa M. Corriveau
• Good News for Employers: Good Faith Belief of Compliance Precludes... by: Kate Gold and Sehreen Ladak
• Accepting Cryptocurrency and Digital Asset Donations: What Charities... by: Andie Kramer
• Telehealth in a Post-PHE World by: Arushi Pandya and Esperance Becton
• Europe: Is Eltif 2.0 a More Viable Structure for Long-Term Investment... by: Dr. Philipp Riedl
• New Jersey Court Says Employee Discharged for Discipline Not Entitled... by: Michael Nacchio and Zachary V. Zagger
• Expanding Regulatory Reach over Intermediaries That May Constitute... by: Peter Y. Malyshev and Maurine R. Bartlett
• How to Value Digital Assets for Donation to Charity by: Andie Kramer
• Supreme Court Clarifies the Meaning “Salary Basis” Under Federal... by: Brendan J. Lowd and Kathryn R. Droumbakis
• OIRA Calls for Feedback on Recommendations to Encourage More... by: Lynn L. Bergeson and Carla N. Hutton
• FTC’s One-Two Punch on Data Tracking and Health Privacy by: Ryan P. Blaney
• Justice and Commerce Departments Announce Creation of Disruptive... by: United States Department of Justice (DOJ)
• Biden Executive Order 14091 Strengthens Equity for Federal Agencies by: Molly A. Lawrence and Rachael L. Lipinski
• Justice Department Announces Application Form for Marijuana Pardon... by: United States Department of Justice (DOJ)
• HERE IT IS: The Czar’s HUGE Breakdown of the FCC NPRM is NOW... by: Eric J. Troutman
• Telehealth Update: DEA Issues Long-Awaited Proposed Rule on... by: Ellen L. Janos and Cassandra L. Paolillo
• CFPB Provides Guidance on Auto Finance Data Pilot by: Moorari Shah and A.J. S. Dhaliwal
• Two Maui Men Sentenced for Racially Motivated Attack on White Man by: United States Department of Justice (DOJ)
• US Executive Branch Update – March 3, 2023 by: Stacy A. Swanson
• Stillbirth Baby Lawsuits by: Lawrence J. Buckfire
• Backdating: What To Do … and Not To Do by: Eric Starr
• BIS Charging Letter by: Dr. Nick Oberheiden
• EPA Holds Third and Final TSCA Engineering Initiative Webinar by: Government Regulation
• House Energy & Commerce Subcommittee Holds Hearing on U.S.... by: Hunton Andrews Kurth’s Privacy and Cybersecurity
• Personal Jurisdiction of Opt-In Plaintiffs Under the FLSA: Will the... by: Matt Abee and Debbie Whittle Durban
• Recent CFPB Actions Focus on Protecting Military Families by: Moorari Shah and A.J. S. Dhaliwal
• New and Updated Guidance on the Scope of the UK Plastic Packaging Tax by: Oliver Bristow
• Rule 105 Revisited: SEC Actions Remind Private Fund Managers About... by: Scott Budlong and Scott L. Beal
• The Supreme Court Grants Petition to Decide Constitutionality of CFPB... by: Rachel Rodman and Keith M. Gerver
• Understanding Your Law Firm’s Value Proposition by: Bill4Time
• Spike in Migrants Crossing U.S.-Canada Border Raising Concerns by: Meredith K. Stewart
• Bill to Amend the Gramm-Leach-Bliley Act Introduced to Congress by: Hunton Andrews Kurth’s Privacy and Cybersecurity
• Energy & Sustainability Washington Update — March 2023 by: R. Neal Martin
• As EPA continues to move toward identifying PFAS as Hazardous... by: Jeffrey R. Porter
• Is an OSHA Workplace Violence Standard for the Healthcare Industry on... by: Wayne E. Pinkstone and Phillip J. Jones
• Yellen Calls on World Bank to Take Decisive Action on Climate Change by: Jason M. Halper and Jayshree Balakrishnan
• To Volunteer or Not: The Role of Community Association Board Members by: John S. Prisco
• The Future of Stablecoins, Crypto Staking and Custody of Digital... by: Anjali C. Das
• White House Climate and Environmental Justice Screening Tool by: Molly A. Lawrence and Rachael L. Lipinski
• "It Ain't Over 'Til It's Over" - Use Of A... by: Jennifer V. Boyer and John R. Sloan
• PTO Introduces Trademark Decisions and Proceedings Search Tool by: Bernard P. Codd
• FDA Issues Draft Guidance on Labeling of Plant-Based Milk Alternatives by: Lauren Petrin and Tracey T. Gonzalez
• Government Wins $43 Million Verdict in False Claims Act Case by: D. Jacques Smith and Randall A. Brater
• BETO Will Host March 23 Listening Session on Next Billion-Ton Report by: Lynn L. Bergeson and Carla N. Hutton
• Growing Calls to Ban Chinese Owned TikTok App and Other Software Apps... by: Kathleen M. Porter
• Advanced Planning Can Reduce Your Tax Burden When Buying Property or... by: Steven Hadjilogiou
• DEA Proposes Limited Post-PHE Telemedicine Prescription of Controlled... by: Amanda Enyeart and Marshall E. Jackson, Jr.
• So You're Green – Prove It or Be Prosecuted: ACCC Sweep Finds 57... by: Ayman Guirguis and Jessica C. Mandla
• California Court of Appeal Addresses When Violations are “Willful” or... by: Leonora M. Schloss
• What’s new in Belgium on the employment front? Part 1 – training plans by: Marga Caproni
• Nevada Legislature Mulls Creation Of Fund For Victims Of Securities... by: Keith Paul Bishop
• OSHA Activates U and T Nonimmigrant Visas—‘Law Enforcement Visas’—as... by: Leigh N. Ganchan and John Surma
• BREAKING DOWN THE PRIVACY ACT REVIEW REPORT #3: Removal of The Small... by: Cameron Abbott and Rob Pulham
• White House Releases National Cybersecurity Strategy by: Hunton Andrews Kurth’s Privacy and Cybersecurity
• FRB Releases LISCC Supervision Manual by: Daniel Meade

March 02, 2023

• Utah Passes Innovative DAO Legislation by: Robert B. Lamb
• Illinois High Court Rules “Per-Scan” Damages Can Be Awarded Under BIPA by: Anne-Marie D. Dao and David M. Poell
• Grassley-Wyden Bill Aims to Fix Broken Tax Whistleblower Law by: Mary Jane Wilmoth
• Lessons Learned From 2022’s Trade Secret Verdicts by: Steven J Pearlman and Joseph C O'Keefe
• Mass. AG Clamps Down on Local Solar and Battery Storage Moratoria by: Tess C. Edwards
• Dirty Steel-Toe Boots, Episode 16: Investigations and the OSH Act’s... by: Phillip B. Russell and Thomas R. Chibnall
• DOE Issues FOA for Carbon Capture Large-Scale Pilots and Carbon... by: Frederick R. Eames
• A Forward Look at IRA’s Sweeping Impact on the EV Sector [PODCAST] by: Birgit Matthiesen and Samantha Overly
• All Things Chemical: Product Stewardship, Supply Chain, and... by: Lynn L. Bergeson
• US Executive Branch Update – March 2, 2023 by: Stacy A. Swanson
• Gold Dome Report – Legislative Day 27 by: Stanley S. Jones, Jr. and Helen L. Sloat
• Delaware Court of Chancery Establishes Duty of Oversight Extends to... by: Ari B. Lustig and Robert A. Penza
• Are Highly Paid Daily Rate Workers Entitled to Overtime Under FLSA?... by: Shira R. Yoshor
• It’s Here – The New National Cybersecurity Strategy by: Kurt R. Erskine and Romaine C. Marshall
• NLRB Places New Limitations on Confidentiality and Non-Disparagement... by: Alexander Pringle and Daniel R. Strader
• Settlement Will Benefit Many Aging-Out Children in the Green Card... by: Tejas Shah
• SEC Commissioner Discusses Reform to Regulation D by: David J. Lavan and David A. Lopez-Kurtz
• Massachusetts AG Settles Enforcement Action Against Auto Lender by: Moorari Shah and A.J. S. Dhaliwal
• Employers Beware: Non-Disparagement and Confidentiality Covenants in... by: Charlotte F. Franklin and Irving M. Geslewitz
• Consultation Paper On Review of Corporate Governance Norms For A High... by: Anurag Shah and Parina Muchhala
• California’s War On The Fast-Food Industry Continues by: Anthony J Oncidi and Ariel N. Brotman
• EPA Releases Proposed Approach for Considering Cumulative Risks under... by: TCSA Blog at Bergeson Campbell
• Revised Colorado Privacy Act Rules Adopted for Review by Colorado AG by: Hunton Andrews Kurth’s Privacy and Cybersecurity
• H-2B Cap for Fiscal Year 2023 Is Met: A Supplemental Cap Increase... by: David J. Wagner
• As COVID-19 Emergency Waivers End, DEA Proposes to Expand Tele-... by: Conor O. Duffy
• How Employers Need to Prepare for the End of the COVID Public Health... by: Jacob Mattinson and Sarah G. Raaii
• USPTO To Transition To Electronically Granted Patents In April 2023 by: Courtenay C. Brinckerhoff
• Reductions in Force: Some High-Level Issues To Consider by: Brooke C. Bahlinger
• CMS Streamlines Stark Law Self-Referral Disclosure Protocol (SRDP) by: Michael W. Paddock and Amy J. Dilcher
• The Alice Eligibility Two-Step Dance Continues by: McDermott Will & Emery
• FTC is “Talking Trash” and Zeroing-in on “Recyclable” Claims by: Phyllis H. Marcus
• FTC Hosts Forum on Proposed Rule to Ban Noncompete Clauses by: Danielle Dillon and Marc N. Aspis
• Free Speech Shines Bright, Illuminates Patent Owner’s Right to Allege... by: Anisa Noorassa
• California Supreme Court to Address Rounding of Employee Time by: John P. Zaimes and Natalie C. Kreeger
• The Health AI Frontier: New Opportunities for Innovation Across the... by: Navid Fanaeian
• FTC to Hold Workshop on “Recyclable” Claims by: Sheila A. Millar and Jean-Cyril Walker
• EXPOSED: Does a New NCLC Ex Parte Filing Expose Their True Agenda to... by: Eric J. Troutman
• Little Weight Given to Conclusory Expert Declaration That Repeats IPR... by: Amol Parikh
• Department of Homeland Security Provides Information Related to EB-5... by: Seongbae Park
• PTAB: Vidal Refocuses Guidance On Fintiv Factors And Discretionary... by: Steven D. Shipe
• Aluminum Is Now A Hot Topic In Supply Chain And Trade by: Alexis B. Chandler and Ludmilla L. Kasulke
• The 2023 AIEN Model Form JOA Placing ESG Issues at The Heart of Oil... by: Darren Spalding and Adam Blythe
• BACKSLIDING: Latest BAD TCPA ATDS Case Allows Debt Collection Text... by: Eric J. Troutman
• All the Benefits of a Reverse Triangular Merger, None of the IP... by: Benjamin N. Ediger, PhD
• Public Company Accounting Oversight Board (PCAOB) Enforcement... by: Elaine M. Harwood and Alison M. Forman
• Ninth Circuit Decision in Live Nation and Ticketmaster’s Favor... by: Anna S. McLean and Michael A. Lundholm
• Legislative Package Includes Bills to Advance Biofuels Research by: Lynn L. Bergeson and Carla N. Hutton
• PTO to Begin Issuing Electronic Patent Grants by: Bernard P. Codd
• OSHA to Expand the Use of Instance-by-Instance Penalties by: Megan Baroni
• Locking Tik Tok? White House Requires Removal of TikTok App from... by: J. William Manuel and Anne R. Yuengert
• FDA Withdraws Proposed Rule on General Principles for Food Standards... by: Food and Drug Law at Keller and Heckman
• New FAQs Dramatically Expand Scope of California “Labor Contractor... by: Christopher T. Patrick and Jacklin Rad
• Today is the Day – Don’t Miss the Employer Deadline to Report to OSHA by: Carlos A. Ortiz
• PTO Seeks Comments on Role of Artificial Intelligence in Inventorship by: Amol Parikh
• DC Circuit to Disputes Ancillary to Patent Matters: “You Can’t Sit... by: McDermott Will & Emery
• Consumer Fraud PFAS Cases Continue To Rise by: John Gardella
• OFCCP Rescinds Trump-Era Expansion of Religious Exemption to... by: Jack Blum
• Mobile Arbeit und regionale Feiertage – was gilt? by: Dr. Gudrun Germakowski and Ilva Woeste
• Can Nonprecedential Decisions Be Relied Upon? by: Keith Paul Bishop
• Michigan PFAS Challenge Arguments Briefed For The Court by: John Gardella
• China Again Top Originator of International Patent Cooperation Treaty... by: Aaron Wininger
• Non-Willful Failure to File FBAR Under BSA Should Be Penalized on a... by: Jared E. Dwyer and Barbara T. Kaplan

March 01, 2023

• Mandatory Arbitration Agreements Remain Valid in California by: Lindsay L. Ryan and William C. Vail
• Antitrust Practitioners Expect Activity With Climate Issues by: Jacob H. Hupart
• How Modern Manufacturing Plants Can Protect Against Ransomware,... by: Roland J. De Monte and Jackson E. Biesecker
• FTC Will Host May 23, 2023, Workshop on Recyclable Claims and the... by: Lynn L. Bergeson and Carla N. Hutton
• Appellate Court Affirmed An Order Denying A Beneficiary’s Request For... by: David Fowler Johnson
• An Overview of Why Class Action Privacy Lawsuits May Have Just Gotten... by: Adam B. Korn and Sebastian A. Navarro
• Gold Dome Report – Legislative Day 26 (2023) by: Stanley S. Jones, Jr. and Helen L. Sloat
• White House Reviewing Proposed Regulations on Reinstated Superfund... by: Bruce White
• You Don’t Need a Machine to Predict What the FTC Might Do About... by: James G. Gatto
• Is It Compensable? Federally Recognized Holidays by: Keith E. Kopplin and Suzanne M. Watson
• Employer Considerations for DOL’s New AEWR Rule by: Kimberly A. Clarke and Kristiana M. Coutu
• BIPA ALERT: Illinois Supreme Court Opens the Door to “Punitive,... by: Zachary J. Watters and Joseph A. Strubbe
• President Biden to Nominate Julie Su as New Secretary of Labor by: Jeffrey W. Brecher and Justin R. Barnes
• The European Unitary Patent: Why Retailers Should Care by: Steven L. Wood and Andrew D. Kasnevich
• What’s New in 5G - March 2023 by: Angela Y. Kung and Christen B'anca Glenn
• New York City Employers Prepare for AI Bias Law [VIDEO] by: Nathaniel M. Glasser
• Administration's WOTUS Rule Muddies Jurisdictional Waters by: Lisa M. Bruderly
• GT's The Performance Review Episode 19: Is the Fight Over AB 51... by: Philip Person and Ryan Bykerk
• 5 Reasons Community Associations Need an Attorney That Specializes in... by: Melissa A. Volet
• New York Proposes Regulatory Review and Approval of Material Health... by: Jean D. Krebs and Pamela Polevoy
• New Federal M&A Broker Exemption by: Bryan K. Prosek and John R. Chadd
• CMS Issues Long-Awaiting Medicare Advantage RADV Final Rule by: Christine M. Clements and John M. Tilton
• Preventing the Use of Cryptocurrencies to Evade Sanctions by: Andrew Pimlott
• New York Proposes Regulatory Overhaul for HealthCare Transactions... by: Danielle H. Tangorre and Leslie J. Levinson
• Breaking the Link – New Developments on U.S. Licenses for Exports to... by: Reid Whitten and Curtis M. Dombek
• Are You Ready for the UPC? Act Now to Prepare for its Opening on June... by: Dr. Henrik Holzapfel and Charles (Chuck) Larsen
• New NLRB Decision Renders Previously Legal Severance Agreements... by: Robert K. Carrol and Darrell S. Gay
• Litigation Setback for Employers Under Illinois Biometric Information... by: Daniel Campbell and David P. Saunders
• Senate Committee Holds Hearing on Future of Low Carbon Transportation... by: Lynn L. Bergeson and Carla N. Hutton
• North Carolina Senate Passes Compassionate Care Act – at Exactly 4:20... by: Rachel M. LaBruyere
• States and Feds Signal Big Changes to Telehealth Prescribing by: Erin Sutton and Amy F. Lerman
• Desperate Times, Desperate Measuring Cups – FTC Brings Enforcement... by: Dan Jasnow and Emily P. Caylor
• Trending in Telehealth: February 20 – 26, 2023 by: Angela Irene Theodoropoulos and Amanda Enyeart
• IRS Sets Deadline For Using 401(K) Plan Forfeitures by: Lori L. Shannon
• How Generative AI Generates Legal Issues in the Games Industry by: James G. Gatto
• When A High Rating Is Not Good by: Wes Scott and Christine Burke Worthen
• SCOTUS Weighs In On Day Rate Pay by: Holly H. Williamson and J. Marshall Horton
• DOJ Announces New Nationwide Voluntary Self-Disclosure Policy by: Ellen H. Persons and Kurt R. Erskine
• California Law May Limit Hospitals’ Ability to Adopt The Joint... by: Sarah G. Benator and Candace C. Sandoval
• Employment Tip of the Month – March 2023 by: Jeremy A. Stephenson
• Ankura CTIX FLASH Update - February 28, 2023 by: Ankura Cyber Threat Investigations and Expert Services
• USPTO Director Vidal Closes Fintiv Escape Hatch on Discretionary... by: Roberto J. Fernandez
• Unpacking Averages: Exploring New Data on FDA Responses to FOIA... by: Bradley Merrill Thompson
• Waters of the United States and Winston Churchill by: Jeffrey R. Porter
• Breaking Down the Privacy Act Review Report #2: Modifying the... by: Cameron Abbott and Rob Pulham
• Confidentiality and Non-Disparagement Agreements with Non-Supervisory... by: S. McKinley Gray, III and Grant B. Osborne
• USCIS Confirms It Will Accept Employment-Based I-485 Applications... by: Geeta M. Shah
• New Jersey Enacts ‘Bill of Rights’ for Temporary Workers by: Martin W. Aron and Luke P. Breslin
• DOJ Implements Nationwide “Voluntary Self-Disclosure” Program by: Alyse I. Constantinide and Evynn M. Overton
• Good News for American Businesses: H1-B Denial Rates Plummet Under... by: Raymond G. Lahoud
• USCIS Extends Comment Period for Proposed Fee Increases by: Michael H. Neifach
• OFCCP Rescinds Trump-Era Religious Exemption Rule by: Laura A. Mitchell
• To Benefit from Insurance Coverage in France Businesses Must File a... by: Stéphanie Faber and Charles-Albert Helleputte
• Words With Friends, Part 1: Insurance Requirements and Contracts,... by: Vincent E. Morgan and Suzanne F. Day
• Legislator Proposes To Expand CFL To Encompass "Commercial... by: Keith Paul Bishop
• CERCLA PFAS Scope May Broaden To Many More PFAS by: John Gardella
• AI Avatar App is the Latest Target of BIPA Class Action Litigation by: Christina Lamoureux

Related Practices & Jurisdictions

• Administrative & Regulatory
• Real Estate
• Litigation / Trial Practice
• Printer-friendly
• Email this Article
• REPRINTS & PERMISSIONS

Foreclosure Does Not Extinguish Assignment of Rents

Previously,  we alerted you  that Michigan had passed its version of the Uniform Assignment of Rents Act (MUARA). Among other things, this law clarifies that an assignment of rents is not extinguished by a foreclosure sale itself, but instead terminates either at the end of the redemption period or when the property is redeemed.

Before the MUARA, this was not clear. On the one hand, some cases suggested that an assignment of rents continued at least to the end of the redemption period. For example, a strict reading of Security Trust Co v Sloman suggests that an assignment of rents continues until the debt is paid in full or the redemption period expires without a redemption—meaning it might continue if there is a redemption. [1]  On the other hand, others—such as dictum in Dunitz v Woodford Apartments Co [2]  stating that “foreclosure of a mortgage extinguishes it”—suggest that the mortgage as a whole, including any assignment of rents it contains, might be extinguished by a foreclosure sale itself. Unless a separate instrument was recorded embodying an assignment of rents, this could allow a foreclosed commercial owner to collect rents for months before the purchaser at the foreclosure sale could step in. Unsurprisingly, this confusion has led to conflicting decisions by different courts.

The MUARA resolves this uncertainty. Now, an assignment of rents automatically terminates when either (i) the redemption period expires, or (ii) an earlier redemption occurs. [3]  Moreover, if a third party submits the winning bid at a foreclosure sale, the assignment of rents transfers to it “to the extent of the remaining secured obligation” by operation of law, regardless of what the foreclosure notice says. [4]  These important clarifications add certainty to an ambiguous area of law that can have a real financial impact.

[1] 252 Mich. 266; 233 N.W. 216 (1930).

[2] 236 Mich. 45, 49; 209 N.W. 809 (1926). 

[3] Public Act No. 115 of 2022. The MUARA takes effect September 22, 2022.

[4] Id. § 4(4)(a).

• REPRINTS & PERMISSIONS

Latest Legal News & Analysis

Trending legal analysis, upcoming legal education events.

About this Author

As a leader on Miller Canfield's highly experienced Commercial Real Estate Workout Team, Scott uses his knowledge and expertise to avoid and resolve his clients' concerns before they develop into true issues. Although this often means employing creative strategies to amicably resolve disputes in a way that serves his clients' underlying business purpose, Scott does not shy away from receivership, foreclosure, guaranty or other litigation actions when appropriate.

Scott prides himself on guiding his clients and fellow practitioners alike to practical solutions to distressed real...

Gergana Sivrieva is an associate in Miller Canfield's Real Estate Group. Gergana assists a broad range of clients in a variety of commercial real estate transactions, with a focus on workouts and foreclosures, commercial leasing, and acquisitions and dispositions. Prior to joining Miller Canfield, Gergana worked as a judicial intern for the Honorable Bernard A. Friedman at the U.S. District Court for the Eastern District of Michigan and was a Research Assistant for Law Professor Robert M. Ackerman. She is a graduate of Wayne State University Law School, where she was a...

Hotel Revenues Are "Rents" Under New Michigan Law

On June 24, 2022, Michigan passed the Michigan Uniform Assignment of Rents Act (MUARA). When it did, Michigan became the first state with a Uniform Assignment of Rents Act that expands the definition of "rents" to include hotel revenues. [1] This distinction makes a significant difference and, perhaps surprisingly, is not clear in many states.

Michigan had not previously addressed this question directly. Although lenders in Michigan and elsewhere often act as though hotel receipts are rents, the majority position among courts is actually that hotel room revenues are personal property. [2] Whether they are rents or personal property changes how a lender perfects and enforces its interest: security interests in rents are typically perfected through recording a mortgage or assignment of rents, while personal property security interests are established in accordance with the Uniform Commercial Code (UCC). For example, if rents are personal property, a lender with a recorded mortgage or deed of trust who inadvertently files a financing statement in the wrong state or allows it to lapse might find itself behind other creditors in priority as to the hotel’s revenue stream.

With the MUARA, Michigan provides lodging lenders with a level of comfort that does not exist in many other states. The MUARA applies to any loan that is enforced after its enactment, even loans made before its enactment. [3] This may affect how loans secured by such properties are underwritten, documented, and enforced going forward. Critically, though, multistate loans will still require examining each State’s law separately.

This is part of our continuing series of alerts regarding the MUARA. 

[1] Public Act 115 of 2022, § 2(m)(vi). Nevada, New Mexico, Texas, Utah, and North Dakota have also implemented versions of the Uniform Assignment of Rents Act, but at most contain general “catch-all” language.

[2] See, e.g. , In re Ocean Place Dev., LLC , 447 B.R. 726, 732-33 (Bankr. D. N.J. 2011).

[3] Public Act 115 of 2022, § 19(1).

Related Posts

• Michigan Adopts Its Version of the Uniform Assignment of Rents Act

Latest Posts

• Construction Liens in Ontario: An Introductory Guide for Contractors
• NLRB: Confidentiality and Non-Disparagement Provisions are Unlawful
• CBP Allocates Funding for Uyghur Forced Labor Prevention Act Enforcement
• Innocence Is No Defense: Debt Obtained by Fraud Is Nondischargable

See more »

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

Refine your interests »

Written by:

Published In:

Miller canfield on:.

"My best business intelligence, in one easy email…"

• About About collapsed link
• News News collapsed link
• Issues & Accomplishments Issues & Accomplishments collapsed link
• Appointments
• Lt Governor Lt Governor collapsed link
• Contact the Governor
• About the Governor
• About the Lt Governor

Governor Gretchen Whitmer is a lifelong Michigander.  She is a lawyer, an educator, former prosecutor, State Representative and Senator.  She was the first woman to lead a Senate caucus. But the most important title she boasts is MOM. Inspired by her family, she’s devoted her life to building a stronger Michigan for everyone.  

• Press Releases
• State Orders and Directives
• Flag Honors
• State of the State
• Proclamations
• 2023 State of the State
• 2022 State of the State
• 2021 State of the State
• 2020 State of the State
• 2019 State of the State
• Accomplishments
• Michigan Infrastructure Office
• Tribal Affairs
• Michigan Infrastructure Permits
• Technical Assistance
• Thriving Cities

Thriving Cities Tour

• Battle Creek
• Benton Harbor
• Grand Rapids
• Issues & Accomplishments
• Lt Governor

Popular on michigan.gov

• Agriculture and Rural Development
• Civil Rights
• Environment
• Health and Human Services
• Natural Resources
• Secretary of State

How Do I...

• Register to Vote
• Renew My License Plate
• View assistance programs

The web Browser you are currently using is unsupported, and some features of this site may not work as intended. Please update to a modern browser such as Chrome, Firefox or Edge to experience all features Michigan.gov has to offer. 

• Google Chrome
• Microsoft Edge

Whitmer Signs Bills to Lower Health Care Costs and Increase Public Safety Among Other Legislation

June 27, 2022

FOR IMMEDIATE RELEASE 

Contact: [email protected]

Governor Whitmer Signs Bills to Lower Health Care Costs and Increase Public Safety, Among Other Legislation 

LANSING, Mich. -- On Friday , Governor Gretchen Whitmer signed six bipartisan bills -- House Bills 4173, 4799, 4800, 5659, and 5660 and Senate Bill 447 -- bringing the total of bipartisan bills signed by Governor Whitmer to 865.

“I am proud to sign six bipartisan bills,” said Governor Whitmer . “Since I took office, I have signed 865 bipartisan bills, and our record of effective collaboration will help us stay focused on growing Michigan’s economy, creating good-paying jobs, and lowering costs. Let’s continue to work together to get things done that put Michiganders first.”

Lowering Health Care Costs  

Senate Bill 447 fosters more competitive health care pricing by increasing transparency surrounding costs and coverage. This bill requires an insurer to provide a large employer group customer with specific information about costs of its insurance plan upon request.

"Everyone knows insurance is a major cost in our lives. I’m glad the legislature and the Governor were able to support this change which can lead to greater transparency and lower insurance costs for the people of Michigan," said state Senator Dan Lauwers (R-Brockway Township)

Senate Bill 447 was sponsored by Sen. Dan Lauwers, R – Brockway Township, and a copy can be found here . 

Increasing Public Safety in Communities   

House Bill 4173 will help communities stay safe by increasing the maximum allowable reward that county boards of commissions can offer and pay an individual for information that leads to the arrest or conviction of criminal suspects. Under previous law, the reward was limited to $2,000. 

"This common sense law will improve public safety and help with criminal investigations. I'm grateful that this additional tool will be available to Michigan counties," said state Representative Kara Hope (D-Holt)

House Bill 4173 was sponsored by Rep. Kara Hope, D – Holt, and a copy can be found here . 

Expanding Renter Rights

House Bill 4799 creates the Michigan Uniform Assignment of Rents Act (MUARA) which provides and regulates rights and responsibilities for renters, landlord-borrowers and creditors. House Bill 4799 was sponsored by Rep. Graham Filler, R – DeWitt, and a copy can be found here .

House Bill 4800 is tie-barred to House Bill 4799 and specifies that an action to enforce an assignment of rents under MUARA would not be an action to recover debt for the purposes of foreclosure. 

“The work done on this bipartisan legislation will bring needed stability and clarity to our Uniform Assignment of Rent laws,” said state Representative Kyra Harris Bolden (D-Southfield).” I am proud to have worked across the aisle to revise outdated statue with common sense solutions that will benefit Michiganders.”

House Bill 4800 was sponsored by Rep. Kyra Harris Bolden, D – Southfield, and a copy can be found here .

Protecting Vulnerable Michiganders 

House Bills 5659 and 5660 together increase transparency in adult care facilities and nursing home facilities by requiring reports containing feedback and input from inspectors of these facilities that are regulated by the Bureau of Community Health Systems.

House Bills 5659 and 5660 were sponsored by Rep. Jeff Yaroch, R – Richmond and can be found here and here . 

Related News

March 30, 2023: medical billers day, march 27, 2023: amniotic fluid embolism awareness day, march 25, 2023: medal of honor day, march 20-26, 2023: fix a leak week, march 19-25, 2023: family medicine week, march 19-25, 2023: lynch syndrome awareness week, march 15, 2023: conservation officer appreciation day, march 15, 2023: mi small business development center day, march 13-17, 2023: environmental health week, march 12-18, 2023: americorps week.

United States Bankruptcy Court

Eastern district of michigan, hon. daniel s. opperman, chief judge - todd m. stickle, clerk of court, search form.

• Decrease font size
• Reset font size
• Increase font size

You are here

The sbm and fba present: the new michigan uniform assignment of rents act.

State Issues

Jump to Legislative  |  Jump to Regulatory  | Jump to Appropriations

Key State Talking Points

LEGISLATIVE

Below is a list of current state legislative issues.

Small Dollar Loans by Payday Lenders

(Opposed) H.B. 4004 has been introduced by Rep. Matt Hall and it would allow payday lenders to offer installment loans for as much as $2,500 for up to one year, with a monthly service fee that equates to triple digit APR at 132%. This rate is far in excess of what is allowed under Michigan usury laws, and for products offered by traditional financial institutions or under the Military Lending Act. While the bill purports to have some consumer protections, the legislation still allows the high-priced loan to be refinanced by another small loan, and a lender could loan to a borrower that has an outstanding small loan or payday loan from another provider, still leaving the window open for cyclical renewals on products that are difficult for vulnerable borrowers to pay back. Many credit unions offer alternative products and services to help borrowers avoid these types of loans, provide free financial counseling, and will work with members in their individual situations when they need help. From emergency loan products, to skip a pay and other solutions, invariably a credit union will be able to offer a much lower-cost solution for a borrower with acute financial needs. The MCUL opposes HB 4004 and encourages legislators to explore meaningful and non-predatory solutions to address the need for additional financial products in the market.

Data/Cyber Security and Privacy

(Support) Massive data breaches at the national and state levels continue to impact hundreds of thousands of credit union members. Michigan credit unions continue to bear the costs of these breaches. While credit unions have been subject to strict federal privacy requirements since 1999, merchants have not been held to the same data standards. Inaction on data breach protections at the federal level has led to MCUL seeking a state solution. Senator Wayne Schmidt has introduced SB 672 this bill would provide protections for businesses that adhere to industry data/cyber security standards through giving them an affirmative defense were they to be sued as a result of a data breach as long as they are following industry cyber/data security standards. This legislation had an initial hearing in January in Senate Energy and Technology committee and was voted out of the Senate in March. The legislation was referred to the House Financial Services committee and is awaiting a hearing.

Financial Education Legislation

(Support) This session Representative Diana Farrington introduced HB 5190 which would require all students take a ½ credit class of financial education prior to graduating from High School. Credit unions have long been supportive of financial education and overall financial wellbeing for all Michiganders. This legislation was signed by the Governor and is now PA 105 of 2022.

Below is a list of current state regulatory issues.

Electronic Lien Termination

On March 16, 2021 , the Michigan Department of State (MDOS) will allow for the electronic exchange of lien and title information with lienholders in lieu of paper certificates of title. All financial institutions will be required to participate in this program. Our team was able to have MDOS do a walk through of what the program looks like and were able to have the MDOS team answer some questions on the program and implementation. To view this presentation please click here . For additional information from MDOS on how to participate please review the below document entitled ELT Information for Financial Institutions.

April 23 Q&A Session on ELT with SOS

Lienholder e-Services Overview

TR-11 Information for ELT Implementation

ELT Information for Financial Institutions

DIFS Model Bylaw Review

(Support) An outcome of our MCUA dialog with DIFS, this review would modernize the state's bylaws, providing clarity for credit unions who look to the bylaws for guidance. Amendments seek to provide clarity and consistency with the MCUA. Additionally, MCUL will seek to provide clarification on the voting process. Through this effort, MCUL, along with the Michigan Department of Insurance and Financial Services (DIFS), will work to create a procedural toolkit for credit unions to assist with FOM expansion, mergers and charter conversions as a resource to Michigan’s state-chartered credit unions..

MCUL Examination Survey

Twice a year, in an effort to improve the examination experience and pre- and post-exam communication between credit unions and the state and federal regulators, MCUL seeks your input on your overall examination experience. You can take the survey here .

DIFS also has their own examination survey they encourage credit unions to complete. Providing feedback to the examination staff not only assists the examiners but credit unions as well, and builds stronger relationships between credit unions and the regulators.

To ensure appropriate protections of consumer finances are in place, it was determined that amending the current letters of guardianship would be the most viable option to address confusion. The amendments should specifically address what authorities have been granted prior to presentation to a financial institution.

MCUL is working with SCAO on potential process and forms amendments.

APPROPRIATIONS

Fy23 budget appropriations wins.

$2.5 million in funding was included in the FY23 budget for the Michigan Saves program. This is up over FY22 from a high of $1.5 million.

$75 million in funding was included in the FY23 budget for a new Community Development Financial Institution (CDFI) fund. This one-time funding will be spread out between all CDFI’s in the state of Michigan both depository and non-depository. This is a huge win for CDFI’s as nationally the CDFI fund gets around approximately $375 million a year.