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When Abe and Barbara bought their property in 1975, their deed included a parcel description, specifically referring to a certain set of restrictions in a recorded document at the county register of deeds. The couple signed a deed transferring the property to Carl and Dorothy – we’ll refer to them as “Couple #2.” The deed, in this case, included the parcel description, but also stated, “together with restrictions and easements of record.” The specific reference to the recorded restriction information was not included.
This means if Couple #2 conveys the property to another couple (we’ll refer to them as “Couple #3”) after March 2021, and the deed referenced the restrictions and easements of record but does not contain the reference to the original document that restricts the property, then Couple #3 may take ownership of the property without the benefits and burdens set forth in the restrictions.
However, if Couple #3 conveys the property and makes specific reference to the recording data of the original instrument, then they will sufficiently preserve the restrictions affecting the property under the title act. If they want to preserve the restrictions, then they should record a “Notice of Claim in Real Estate Pursuant to the Marketable Record Title Act.”
The Marketable Record Title Act limits how far back a person is required to search the title history on the property for restrictions or other burdens or benefits impacting real property rights. You may own a parcel of land in a subdivision or own a parcel of land in development with restrictions “of record.” Typically, restrictions were originally recorded with the first deed conveying the interest. In later years, however, additional transfers might only include the words, “together with restrictions, easements and covenants of record.”
In Michigan, real property title searches are governed by the “40-year chain of title rule.” This rule essentially dismisses interests and claims in properties that pre-date the 40-year time period. Such claims would limit an owner’s “marketable title” to their property. Old claims – such as restrictions on land or “rights of way” – encumber the owner’s property.
If an owner can show they have an “unbroken” chain of title for 40 years, then the owner can take the property “free and clear of any … interests, claims… or omission” that occurred before the 40-year period, and such claims or interests are void and of no effect in the law. The amendment, which went into effect on March 29, 2019, recognizes that “easements and restrictions of record” is a vague statement and creates uncertainty.
For instance, if a person purchases a residential property in which the deed includes language restricting the property to “no commercial use,” and the owner or the subsequent owner fails to include a reference to the specific original document that created the restriction, then the property would no longer be subject to the restriction after 40 years and could be used for commercial purposes.
Therefore, if you own a property and are aware of an easement, restriction, or right-of-way that you intend should continue to encumber the property, and the encumbrance has been in existence for more than 40 years, you are encouraged to record a notice of claim that contains sufficient information to preserve the right or claimed interest. Otherwise, you run the risk of losing the claim of interest 40 years from the date the claim was originally recorded.
Property owners wanting to preserve the right or claim must do so by March 2021.