How to Transfer Property in Michigan

In the state of Michigan, the transferring of real property occurs through property deeds, of which there are several types. After the transfer of ownership takes place, the deed must be recorded with the county register of deeds in the location of the real property, and the new owner must send the Michigan Department of the Treasury a Property Transfer Affidavit within 45 days of the transfer.

Michigan defines the transfer of ownership as the title conveyance to a present interest in a property. Property deeds are legal documents used when transferring real property ownership from a seller (grantor) to a buyer (grantee.) Real property is land and whatever is attached to the property, such as a road or building. Several types of deeds are used for specific purposes.

A deed typically includes these elements:

• Identities of the buyer and seller.
• Purchase price of the property.
• Property's legal description.
• Signature of the person transferring the property, which must be notarized by a notary public.

To transfer property by deed in Michigan, the current owner must locate the property's most recent deed, which is the one that moved the property's ownership to them. They can then create a new deed to transfer the property to another, and sign and notarize it in front of a notary public or an equivalent official, who acknowledges their signature.

The grantor must sign the deed for it to be valid; the grantee does not have to sign it.

After signing the deed, the grantee will file the deed in the land records or register of deeds office in the county of the property's location. They must pay recording fees when they record the deed. The fees vary by county – in Monroe County, it is $30 to record all documents, and in Wayne County, it is $15 plus $3 for any additional pages.

After recording the deed, the new owner must send the Property Transfer Affidavit to the state Department of the Treasury within 45 days of the transfer.

According to MCL Section 565.201/mileg.aspx?page=getobject&objectname=mcl-565-201&highlight=recording+requirements):

• Names of all deed signers must be legible and stamped, printed or typewritten beneath the signatures or marks.
• Names on the deed must match those used in the notary acknowledgment.
• Notary public's name must be legible and stamped, printed or typewritten beneath their signature.
• Deed must list the street address of the grantee.
• Deed must include an empty margin of at least 2.5 inches at the top of the first page and a half-inch on all remaining sides of each page.
• Deed name should be on the first line of print.
• Deed must be in black ink with 10-point font lettering on letter- or legal-sized white paper, no less than 20-pound weight.

Michigan imposes other requirements for deeds. They are:

• List the name and business address of the deed preparer.

• Deed must state the consideration (anything of legal value exchanged for something of value from another party). If the consideration is nominal, a Real Estate Transfer Tax Valuation Affidavit must be included with the deed.

• If the deed transfers unplatted land, a property parcel not filed in a plat book but instead described using a township, section or range, it must include this statement: "This property may be located within the vicinity of farmland or a farm operation. Generally accepted agricultural and management practices which may generate noise, dust, odors and other associated conditions may be used and are protected by the Michigan Right to Farm Act."

• Deed must also state the statutory basis for any real estate transfer tax exemptions.

A Michigan quitclaim deed gives a new property owner the interest that the former homeowner held in the property upon signing and delivery of the deed. A quitclaim deed makes no promises to the new owner regarding clear title. The new owner assumes the risks associated with its purchase.

A grantor will use a quitclaim deed form to transfer a property:

• To family members including spouses as a gift.
• To an ex-spouse through a divorce.
• To change the marital property's nature.
• To a business owned by the current owner or living trust.
• To an individual who will own the property with the current owners, such as adding that person to the deed.
• From an individual who no longer wishes to hold title on the property, such as taking someone off the deed.
• When the current owner does not want to be legally responsible for issues with the title.

A covenant deed provides a limited warranty of title. The grantor guarantees they have done nothing to cause issues with the title, while making no promises about any issues before acquiring the property.

A property's current owner will use a covenant deed:

• To transfer property to a trust, such as a living trust, that they control or benefit from.
• To transfer property to a business that the grantor owns.
• For selling a commercial building or multi-family residence.
• To transfer property to the grantee purchasing title insurance on the property and who is unconcerned with the limited warranty of title.
  
• When they do not want legal responsibility for title issues that occurred before they owned the property

A warranty deed provides an unlimited warranty of title and guarantees that the current owner has clear title. The warranty is not limited to just the period when the grantor owned the property; they may be legally responsible for title issues before they acquired it.

A property's current owner will use a warranty deed form:

• When a buyer purchases a residential property for full value.
• When a buyer does not purchase title insurance.
  
• When the current owner is comfortable with warranty of title's associated risks; if title problems arise at a later date, a buyer can sue a seller for any breach of warranty or guarantee.

A life estate deed allows two or more people to have property ownership interest in the same property but at different periods. The person holding the life estate deed – the life tenant – possesses the property during their lifetime. The other owner, or remainderman, has an ownership interest but does not take possession of the property until the life tenant dies.

The life tenant controls the property while alive and has the legal responsibility of maintaining it. However, the life tenant cannot mortgage or sell the property without agreement from the remainderman.

At the sale of the property, the life tenant and the remainderman divide the proceeds between them – the older the life tenant, the smaller their share. The property does not go through probate when the life tenant dies, but passes automatically to the remainderman.

A ladybird deed is similar to a life estate deed. The life tenant maintains possession of the property during their lifetime. Upon their death, the property automatically transfers to the remainderman.

The primary difference is that under a life estate deed, the life tenant does not have full control over the property – they cannot mortgage or sell it without approval, but they can do so under a ladybird deed. The remainderman has no right to the property or decisions regarding it while the life tenant is alive.

If the life tenant sells the property and purchases another, a new ladybird deed must be created, as it is not transferable. A life tenant can cancel a ladybird deed or change its remaindermen.

Michigan is a separate property state, and a spouse does not automatically have an interest in a property during the marriage if it has been deeded to the other spouse. If only one spouse is on a deed, that spouse is the property owner.

In the past, a woman who didn't have ownership rights to the property (if her husband was the only person on the deed) would have dower rights. Dower rights is a legal concept that goes back centuries – it gives a widow a portion (typically one-third) of her spouse's real property, allowing her to use that portion to support herself and her family.

A wife would be required to sign a deed to transfer interest in her spouse's property to another to release her rights and give the grantee good title. However, on April 6, 2017, Michigan abolished dower rights, except in the instance of property owned by men who died before that date.

More than one owner can own the same property. In Michigan, there are three ways co-owners of a property can hold title:

• In a Tenancy in Common, each owner has an undivided interest in the property, even if the share they own isn't equal. Each owner has the right to live in or rent the property. When an owner dies, the other owners are entitled to only their share

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the other partners do not inherit that person's share of the property. It goes to the estate and the decedent's heirs inherit it.

• In a Joint Tenancy with Right of Survivorship, each owner has an undivided interest in the property, which passes to the other joint tenant owners upon their death.

• In a Tenancy by the Entirety, married spouses are considered one unit. A spouse cannot transfer property without the other spouse's permission.

Only married couples can hold property under Tenancy by the Entirety, and only individuals can own property under Joint Tenancy with Right of Survivorship; it is not available to businesses or trust owners. Anyone can hold property under Tenancy in Common.

In Michigan, the transfer of property ownership can also occur through a trust. There are different types of trusts. For example, a person can leave their property to a charitable organization by setting up a charitable remainder trust.

This type of trust allows an individual to donate the property while still keeping income made from it. The property then goes to the charitable organization when that person dies, and any future income from the property also goes to the organization.

Another way to transfer property to beneficiaries is through a revocable living trust. The grantor may also be the trustee, which means they will have the right to manage the assets in the living trust.

They will name beneficiaries who will inherit the property when they die and designate a successor trustee who will manage the living trust after they become incapacitated or die. The successor trustee will then distribute assets to beneficiaries per the trust.