Michigan Real Estate Practices
- Attorney Involvement
- Cancellation/Commitment Fee
- Certificate of Release (of Mortgage)
- Good Funds Requirements
- Joinder of Spouses
- Mortgage Tax
- Payment Customs
- Policy Countersignatures
- Real Estate Taxes
- Search and Examination Fees
- Search Requirements
- Security Instruments (Deed of Trust vs. Mortgage)
- Standard Exceptions and Requirements
- State-specific Policy Variations
- Title Insurance Form and Filing Regulations
- Transfer Taxes
- Withholding Taxes
- Witness Requirements
Please describe any requirements under applicable state law for attorney, abstractor or other special professional involvement, for example, in the search, examination, opinion of title, signing, closing, disbursement, recording, preparation of documents, and/or policy-issuance.
Attorney involvement is not required for title searches or issuance of policies. However, an attorney must draft “non-form” instruments if the seller is unwilling to act as drafter.
Does your state permit or require a cancellation fee or commitment fee upon cancellation?
A cancellation fee is not permitted as the Michigan Rate Manual does not currently provide for such a fee.
Certificate of Release (of Mortgage)
If anyone other than the lender (such as a title agent, settlement agent, underwriter or attorney) has the authority to release the security instrument, please describe.
Only the lender can discharge their mortgage.
Please describe the kinds of deeds that are customary for commercial and residential transactions. Please describe the kinds of deeds that are generally not insurable.
Warranty deeds, covenant deeds, fiduciary deeds, and quit claim deeds are acceptable. A limited warranty deed cannot be used in Michigan because statutes prohibit the limiting of warranties.
Good Funds Requirements
Is there a good funds requirement in your state?
Joinder of Spouses
If a non-title holding spouse is required to join in the execution of a deed or a security instrument, please describe. Any analogous rights, such as those in a civil union or equivalent, should also be addressed.
The non-owning spouse must join in a mortgage other than a purchase money mortgage. The non-owning spouse is not required to join in a purchase money mortgage. A non-owning wife must sign on a deed to sell property to release her Dower interest, but a non-owning husband does not need to join in on a conveyance by the wife. Michigan does not recognize civil unions.
Is there a mortgage tax in your state? If yes, is it uniform across the state or does it vary? If it is uniform, please describe.
Who customarily pays for:
(a) Owner’s Policy?
(b) Transfer Tax & Recording Fee?
(c) Survey Charges?
(d) Closing/Settlement Fees?
(a) Owner’s policy: Seller
(b) Transfer tax and recording fee: Seller
(c) Survey charges: Seller
(d) Closing/settlement charges: Buyer
What kinds of countersignatures, if any, are required to issue the policy?
The policy must be signed by a licensed issuing agent
Real Estate Taxes
Please describe the general tax year, due dates, and delinquency dates, including lien dates and payment cycle.
Please consult with a local underwriter for information relating to real estate taxes on the subject property.
Search and Examination Fees
Is it permissible and/or customary to charge a separate search and/or examination fee, and under what circumstances? If your jurisdiction is all-inclusive, please state that.
There is no separate search and examination fee. Michigan is an all-inclusive filed rate state.
Is there a minimum period of time for a title search required: (a) by state law, (b) pursuant to marketable record title acts, or (c) by any other applicable title examination standards (e.g., state bar association)? Please respond to each category. If a minimum search period exists for any category, please state it.
There are no statutory or case law search parameters establishing minimum search periods.
Security Instruments (Deed of Trust vs. Mortgage)
Please describe the customary and permissible form(s) of security instruments used in your state.
Who can be listed as the trustee on the Deed of Trust (e.g., residency and/or natural person requirements, etc.)? Can an underwriter or title agent be designated as the trustee, and, if so, is it customary?
Mortgages only. Deeds of Trust are not recognized.
Standard Exceptions and Requirements
Please identify the standard exceptions and requirements that are customarily used in your state.
Michigan utilizes the Stewart standard exceptions:
Rights or claims of parties in possession not recorded in the Public Records.
Easements or claims of easements not recorded in the Public Records.
Encroachments, overlaps, boundary line disputes, or other matters which would be disclosed by an accurate survey or inspection of the Land.
Any lien, or right to a lien, for services, labor, material or equipment, heretofore or hereafter furnished, imposed by law and not recorded in the Public Records.
Taxes or assessments which are not recorded as existing liens in the Public Records.
State-specific Policy Variations
If there are state-specific changes to the provisions in the ALTA policies (e.g., Arbitration, Minerals), please describe.
Title Insurance Form and Filing Regulations
Please describe the form and/or rate filing requirements, if any, related to policies and endorsements. Please describe any applicable rating bureau.
Michigan is a filed-rate state and our Rate Manuals for both Commercial and Residential can be found on our website: www.stewart.com/michigan. We do not have to file forms for approval but we must keep our forms in a central repository for review or audit by the Michigan Insurance Bureau, OFER. All our forms (policies, schedules and endorsements) are also available on the website.
Is there a transfer tax in your state? If yes, is it uniform across the state or does it vary? If it is uniform, please describe.
Deed transfer taxes are provided by statute. They are uniform across the state. The taxes are based upon the total value of the property being conveyed.
The rates are:
$7.50 per thousand for State; plus
$1.10 per thousand for County
Is usury coverage available?
Usury coverage through an endorsement is available. The usury statute is MCL § 438.31 et sec.
Issue the MI Usury 1 Endorsement, which excepts from coverage any loan providing for interest in excess of the criminal usury section MCL 438.41 (rate exceeding 25%) and for interest charged on interest of 10%.
What are your state’s requirements, if any, with regard to withholding proceeds from a sale, similar to but not including FIRPTA?
Are witnesses required on a deed or security instrument? If so, please describe.
Witnesses are no longer required.