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In a published opinion, the Michigan Court of Appeals reversed itself on reconsideration and held that the statute of limitations on a quiet title action starts running only when the owner of real property has actual notice of the recording of an adverse deed. The Michigan Court of Appeals reconsidered its opinion in this case when Kemp Klein attorney, Richard D. Bisio, showed that a body of case law prohibits a fraudulently procured deed from transferring title. The original opinion, which held that the statute started running against an owner when a deed is recorded regardless of the owner’s actual knowledge, had far-reaching consequences which could have required all property owners in Michigan to periodically check their title to make sure an improper instrument had not been recorded without their knowledge.
Bisio was successful in getting the Court to rule that constructive notice does not occur until the property owner first receives notice of recording of an adverse deed. Under the Court’s original opinion, the clock on the statute of limitations would start ticking when a deed transferring title is properly recorded. In the Adams case, that was 17 years ago. Our client, however, had no idea the adverse deed existed until 2005 and believed that the papers she signed at her husband’s direction were merely loan documents, not a deed transferring her interest. In a rare action, the Court vacated its original published opinion and completely reversed the result based on our arguments and those of the State Bar Real Property Section, which filed an amicus brief at our request. |
The Michigan Supreme Court recently agreed with Kemp Klein attorneys Raymond L. Morrow and Ronald S. Nixon by ruling that a local city’s installation of a fenced, off-leash dog run on a lot owned by the city (but located within a platted subdivision bordering the city in which all lots were subject to a “strictly residential use” deed restriction) was a violation of that restriction.
Morrow and Nixon were successful in spite of the fact that the lot in question had been used by the city for several decades as part of a larger city park. The case was reported to have implications for real estate throughout Michigan.
The Supreme Court ruled that the “dog park” use was substantially more offensive than any prior uses of the lot. So, the court ruled, the subdivision association which had filed suit to enforce the deed restriction for the benefit of its residents had therefore not waived its right to complain about the new, threatened, more serious use. |
Conservation easements offer powerful protection for remarkable attributes of real property and, if correctly planned and implemented, may offer significant, income tax benefits. The Federal Appeals Court has recently upheld an important U.S. Tax Court decision supporting conservation easements.
Kemp Klein shareholder, William B. Acker, played a leading role in the landmark, 2005 U.S. Tax Court decision that approved federal income tax benefits for Michigan conservation easements. The Federal Appeals Court agreed with the Tax Court’s opinion, confirming the tax benefits claimed, and further clarifying and strengthening the law supporting conservation easements by echoing the U.S. Tax Court’s conclusions that we argued for on behalf of our client. The Federal Appeals Court decision is important for many of the reasons we advocated. Both decisions provide important guidance for existing and future conservation easements.
Mr. Acker has for years been a council member of the Real Property Section Council of the State Bar of Michigan and is also chair of the Federal Tax Committee of that Section. For more details on these matters, please contact Mr. Acker at 248.740.5665 or william.acker@kkue.com. |
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