Michigan REALTORS Priority Bills to Pass During Lame Duck; Update on Short-Term Rental Regulation Act, HB 5437-5445; Update on Statewide Septic Code Bills, HB 4479 and 4480 and SB 299 and 300
Following the election on November 5th, the Michigan State Legislature is in its lame duck session with only 9 more Michigan Senate session days left and 8 more Michigan House session days left. With the the shift of the Michigan State House from Democrat control to Republican control there is the possibility of a flurry of activity to get priority bills of Michigan Democrats passed before the December 19th session end date. In this week’s GAD Top 3, I cover some of the real estate-related bills Aspire North REALTORS is tracking and Michigan REALTORS is working for or against this lame duck session.
1. Michigan REALTORS Priority Bills to Pass During Lame Duck
Below I have provided some quick updates on state bills that Michigan REALTORS® has determined to be priorities during the Michigan State Legislature’s lame duck. For more detailed information and summaries of these bills, check out the April 29th GAD Top 3.
- Uniform Partition of Heirs Property Act (House Bill 4924) - “Inherited ownership of property supports an heir's wealth. Currently, if an individual dies without a legal will, the individual's property is passed to heirs as tenants in common. Some people have concerns that a tenancy in common allows a single heir to force a partition in the sale of the property. According to testimony, forced partition in sales has led in part to a decline in the small family farm industry because when a property owner dies without a legal will one heir can force a sale and other heirs may not have the means to purchase that portion or make other arrangements. Many low- or middle-income property owners do not have the resources for estate planning and legal counsel, and so it has been suggested to create a process for tenants in common to have input on the future of the property and potential sale of that property for the maintenance of heirs' wealth.” (Senate Fiscal Agency Bill Analysis House Bill 4924)
As of October 8th, this act has been passed by both the Michigan State House and Michigan State Senate and is now awaiting the Governor’s signature.
- Post-Closing Occupancy Bills (House Bills 5384, 5385, and 5386) - “Generally, a post-closing home-purchase agreement can include a provision stipulating that the seller of a residential property may continue to reside in that property for a set amount of time. According to testimony, the need for these agreements has increased due to the current housing shortage in the State, which may result in a seller selling his or her property but not having a purchased property immediately available for occupancy. Reportedly, such stipulations in post-closing agreements are underutilized due to concerns that they could be legally interpreted as a landlord-tenant agreement and fail to provide clear protections if the seller does not vacate the property by the agreed time. It has been suggested that a framework and standards be enacted for these types of agreements.” (Senate Fiscal Agency Bill Analysis House Bills 5384 through 5386).
These bills have passed the Michigan State House and were passed out of the Michigan State Senate Housing and Human Services Committee and currently sit on the Michigan State Senate floor for consideration.
- Land Division Act (Senate Bill 480) - “Senate Bill 480 would amend the Land Division Act to increase the maximum number of parcels that the first ten acres of a parcel (a continuous area or acreage of land) or a tract (a group of parcels under the same ownership that share a common property line) can be divided into from four to 20. It would also allow a municipality to authorize the division of a parcel or tract without being subject to the act’s limitations on the number of resulting parcels or tracts.” (Summary as Passed by the Senate)
This bill passed the Michigan State Senate in November 2023 and currently sits in the Michigan State House Committee on Local Government and Municipal Finance
2. Update on Short-Term Rental Regulation Act, HB 5437-5445
The Short-Term Rental Regulation Act was introduced in February of this year by Representative Joey Andrews and still remains in the Michigan State House Committee on Local Government and Municipal Finance. House Bills 5437 and 5439 to 5446 are te-barred to House Bill (HB) 5438 meaning that HB 5438 must be enacted for the other bills to take effect. “House Bill 5438 would create the “Short-Term Rental Regulation Act.” The new act would create several regulations for a property offered as a short-term rental, including safety and insurance standards, a requirement that a property offered as a short-term rental be registered with the Michigan Department of Licensing and Regulatory Affairs (LARA) and included in a short-term rental database, provisions allowing for limited local regulations on short-term rentals, and additional fees and requirements for rentals listed on a hosting platform. It would also establish a 6% tax for units rented 15 or more days in a year. The bill would take effect 60 days after it is enacted.” (Summary as Introduced)
As of this writing the Short-Term Rental Regulation Act had an important hearing on Thursday, November 14th. In this hearing, major parties Involved in the Short-Term Renta Regulation Act were asked to meet to determine if a consensus could be reached that might allow the Short-Term Rental Regulation Act to potentially move out of the Michigan State House Committee before consideration on the State House floor and the State Senate before December 19th.
3. Update on Statewide Septic Code Bills, HB 4479 and 4480 and SB 299 and 300
There has been a lot of noise in Grand Traverse County about the possibility of a long-discussed statewide septic code being passed during Michigan’s lame-duck session this year. It has been the catalyst for Grand Traverse (GT) County forming a Septic Inspection Program Ad Hoc Committee, resulting from a stipulation in the current draft of the Statewide Septic Code Bills that would allow local municipalities up to 10 years to adopt a time-based septic system inspection program for all properties every 5 years. As of this past Wednesday, November 13th the GT County Health Department has drafted a Draft Inspection Ordinance for consideration which will be further edited and reintroduced at a December 2nd GT County Septic Inspection Program Ad Hoc Committee meeting. As of this writing the two Michigan State Senate Bills have the most traction with strong support from Senator Sam Singh, however, Senate Bills 299 and 300 still sit in the Committee on Natural Resources and Agriculture.
I remain in consistent communication with Michigan REALTORS® on the status of these statewide bills. Any significant updates will be covered in future GAD Top 3s.
