Michigan Association of REALTORS®

Wow, what a month for Michigan’s REALTORS®! There have been many issues recently swirling about Lansing that have seen action. From taxation reform to fighting mortgage fraud and providing foreclosure relief, the voice of the MAR membership is alive and well in the Capitol.

Michigan Business Tax: Pushing Businesses Out of Michigan, Putting Michigan Out of Business

In current form, the new Michigan Business Tax (MBT) devastates the commercial real estate industry in Michigan. Many businesses have been unaware of the negative impact the MBT has on their business only to come to terms with it on their first quarterly tax filing, due in the last few weeks.

While some industries benefit from the MBT, many, including the commercial industry, see dramatic tax increases. The MBT's 22% “surcharge” makes a difficult situation untenable and commercial real estate values will be hurt. Without prompt action, there is grave concern that our commercial real estate values will drop at a time when the real estate market as a whole is particularly vulnerable.

MAR staff, along with the MAR MBT Commercial Workgroup members, continue to press the issue with key legislative leaders. How can you help? Please take the time to familiarize yourself with our policy issues, spread the word, and keep an eye out for upcoming MAR Calls-to-Action to contact your Legislators. Also, please let the MAR know of any commercial deals that have fallen through due to the burdensome tax at 1-800-454-7842.

The Michigan Senate recently passed legislation that aims to stimulate the housing industry. The centerpiece of their plan provides an income tax credit to homebuyers equal to the amount of the "pop-up" in their property taxes. This measure, coupled with the Michigan House passing a moratorium on the "pop-up" tax a year ago, have created an environment for negotiations to take place between the leadership of both chambers. MAR is pleased to see Speaker Andy Dillon (D-Redford) and Senate Majority Leader Mike Bishop (R-Rochester) and an overwhelming number of Legislators supportive of property tax reform. MAR will continue to work with Michigan’s Legislators on short-term and sound long-term public policy that will prove positive for homeowners, homebuyers and industry professionals. Know that should any property tax reform be enacted this year, it will be retroactive to April 1st – do not let the possibility of reform hold up any potential transactions.

Attorney General Mike Cox issued an important opinion clarifying the proper application of an obscure exemption contained in the Michigan Transfer Tax Act. The opinion, arising out of a request from Representative Martin Griffin (D-Jackson), should afford certain home sellers immediate financial relief.

Exemption “t”, as designated in the Michigan Transfer Tax Act, sets forth that a seller may seek an exemption from paying the State Transfer Tax if the following criteria are met:

A property is occupied as a principal residence,
A property’s SEV in the year of transfer is less than or equal to the property’s SEV in the year it was acquired by the seller, and
A property is sold for less than or equal to its true cash value (or twice SEV)

It should be noted that no similar exemption exists in the County Real Estate Transfer Tax Act. It should also be cautioned that advising clients on the applicability of this exemption could border on legal advice. You can best serve your client by making him/her aware of the exemption and telling them to consult a tax attorney or title company for applicability.

For a copy of the form that can be used to apply for a rebate for the Michigan Transfer Tax, please click here.

Take Advantage of a Potential Second Principal Residence Exemption before May 1st!

Public Act 96 enables a person who has established a new principal residence to retain a Principal Residence Exemption (PRE) on property previously exempt as the owner’s principal residence by submitting a Conditional Rescission of Principal Residence Exemption Form #4640. The conditional rescission allows an owner to receive a PRE on his or her new property and on previously exempted property simultaneously if certain criteria are met:

• the property is not occupied,
• the property is for sale,
• the property is not leased, and
• the property is not used for any business or commercial purpose.

The Agency Responsibility Act (ARA), aiming to clearly define those basic duties and services owed under an exclusive agency agreement to a client and provide for a uniform statewide disclosure form for when the consumer and broker choose to waive any of those services, is now law. This is a major accomplishment for REALTORS® - a success that has been years in the making. After meeting extensively with House and Senate Legislators and the Executive Branch about the need to promote a stronger and safer real estate market for Michigan’s consumers, we were pleased to see the overwhelming support for this legislation. The implementation date for the revised agency disclosure form as well as the check-off waiver is July of this year. The MAR has already started the process to update the forms. Visit the MAR advocacy Web site for more details.

Legislation to strengthen the regulation of the mortgage loan industry in Michigan is now in the books. The bipartisan, bicameral legislative package provides licensing and education requirements, along with mandatory background checks for mortgage loan officers in Michigan. It also allows the Office of Financial and Insurance Services (OFIS) to keep better track of individuals within the industry as they may move around. Given increased real estate fraud and foreclosures in this state, the passage of these bills is a big step forward in addressing the root of these problems. Public Acts 59-71 of 2008 represent a compromise from many facets of the real estate community, including banks, credit unions and mortgage brokers.

Legislation that allows the Michigan State Housing Development Authority (MSHDA) to create a loan program to assist homeowners facing adjustments in their interest rate passed both chambers and is awaiting the Governor’s signature. Public Act 58 of 2008 would allow MSHDA to implement the “Save the Dream” refinancing program, which would be available through lenders and remain an option for individuals. The new program would aid those in danger of losing their homes by refinancing for more affordable payments. Every home spared from foreclosure not only helps the individual, but has a positive economic “domino effect” on communities, cities and the entire state.

There is still time to plan candidate interviews for the State House election. The link below contains an election overview, along with the 2008 Candidate Interview Manual to download. The filing deadline is May 13th, and local association recommendations are due at MAR by June 9th. Please contact me if you need any assistance in setting up the interviews. Click here for more information.

The Michigan Association of REALTORS® (MAR) is pleased to announce the addition of new staff member Michelle Brant. Effective May 5th, Michelle will be joining the MAR Public Policy Department and will serve as the Southeast Michigan Field Director.

For the past 3 years, Michelle served as Executive Vice President at the Livingston County Association of REALTORS®. Prior to joining the Livingston association, she worked in the Michigan Legislature from 2001-2005. During this time, Michelle served as Chief of Staff/Legislative Aide for Representative Chris Ward and Legislative Aide for State Representative Judie Scranton.

Michelle received her Bachelor of Arts in Political Science/Pre Law from Michigan State University in 2000 and is an alumnus of the Michigan Political Leadership Program and Leadership Livingston. She is currently pursuing courses towards her Masters in Public Relations at Michigan State University. Please join us in welcoming Michelle!