Michigan Laws 554.1059 – Demand notice to tenant for payment of rents; notification requirements
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Terms Used In Michigan Laws 554.1059
- Assignee: means a person entitled to enforce an assignment of rents. See Michigan Laws 554.1052
- Assignment of rents: means a transfer of an interest in rents in connection with an obligation secured by real property located in this state and from which the rents arise. See Michigan Laws 554.1052
- Assignor: means a person that makes an assignment of rents or the successor owner of the real property from which the rents arise. See Michigan Laws 554.1052
- Document: means information that is inscribed on a tangible medium or that is stored on an electronic or other medium and is retrievable in perceivable form. See Michigan Laws 554.1052
- Notification: means a document containing information that this act requires a person to provide to another, signed by the person required to provide the information. See Michigan Laws 554.1052
- Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
- Person: means an individual, corporation, business trust, estate, trust, partnership, limited liability company, association, joint venture, public corporation, government, or governmental subdivision, agency, or instrumentality, or any other legal or commercial entity. See Michigan Laws 554.1052
- Real property: Land, and all immovable fixtures erected on, growing on, or affixed to the land.
- Rental agreement: means an agreement by which a person is obligated to pay rents to the assignor. See Michigan Laws 554.1052
- Rents: means any of the following:
(i) Sums payable for the right to possess or occupy, or for the actual possession or occupation of, real property of another person. See Michigan Laws 554.1052State: means a state of the United States, the District of Columbia, Puerto Rico, the United States Virgin Islands, or any territory or insular possession subject to the jurisdiction of the United States. See Michigan Laws 554.1052 Tenant: means a person that has an obligation to pay sums for the right to possess or occupy, or for possessing or occupying, the real property of another person. See Michigan Laws 554.1052 United States: shall be construed to include the district and territories. See Michigan Laws 8.3o
(1) Upon the assignor‘s default, or as otherwise agreed by the assignor, the assignee may give to a tenant of the real property a notification demanding that the tenant pay to the assignee all unpaid accrued rents and all unaccrued rents as they accrue. The assignee shall give a copy of the notification to the assignor and to any other person that, 10 days before the notification date, held a recorded assignment of rents arising from the real property. The notification must be signed by the assignee and do all of the following:
(a) Identify the tenant, assignor, assignee, premises covered by the agreement between the tenant and the assignor, and assignment of rents being enforced.
(b) Provide the recording data for the document creating the assignment or other reasonable proof that the assignment was made.
(c) State that the assignee has the right to collect rents in accordance with the assignment.
(d) Direct the tenant to pay to the assignee all unpaid accrued rents and all unaccrued rents as they accrue.
(e) Describe the manner in which subsections (3) and (4) affect the tenant’s payment obligations.
(f) Provide the name and telephone number of a contact person and an address to which the tenant can direct payment of rents and any inquiry for additional information about the assignment or the assignee’s right to enforce the assignment.
(g) Contain a statement that the tenant may consult a lawyer if the tenant has questions about its rights and obligations.
(h) Have attached a copy of the recorded or filed notification to the assignor as provided in section 8.
(2) If an assignee enforces an assignment of rents under this section, the date of enforcement as to the tenant is the date on which the tenant receives a notification substantially complying with subsection (1).
(3) Subject to subsection (4) and any other claim or defense that a tenant has under an agreement enforceable against the assignee or under the law of the United States or this state other than this act, following receipt of a notification substantially complying with subsection (1), all of the following apply:
(a) A tenant is obligated to pay to the assignee all unpaid accrued rents and all unaccrued rents as they accrue, unless the tenant has previously received a notification from another assignee of rents given by that assignee in accordance with this section and the other assignee has not canceled that notification.
(b) Unless a tenant occupies the premises as the tenant’s primary residence, a tenant that pays rents to the assignor is not discharged from the obligation to pay rents to the assignee.
(c) A tenant’s payment to the assignee of rents then due satisfies the tenant’s obligation under the tenant’s rental agreement to the extent of the payment made.
(d) A tenant’s obligation to pay rents to the assignee continues until the tenant receives a court order directing the tenant to pay the rent in a different manner or a signed document from the assignee canceling its notification, whichever occurs first.
(e) A modification of the rental agreement is not binding on the assignee without the assignee’s written consent.
(4) A tenant that has received a notification under subsection (1) is not in default under its rental agreement for nonpayment of rents accruing within 30 days after the date the notification is received before the earlier of the following:
(a) Ten days after the date the next regularly scheduled rental payment would be due.
(b) Thirty days after the date the tenant receives the notification.
(5) Upon receiving a notification from another creditor that is entitled to priority under section 5(3) that the other creditor has enforced and is continuing to enforce its interest in rents, an assignee that has given a notification to a tenant under subsection (1) shall immediately give another notification to the tenant canceling the earlier notification.
(6) An assignee’s failure to give a notification under subsection (1) to any person holding a recorded assignment of rents does not affect the effectiveness of the notification as to the assignor and those tenants receiving the notification. However, the person entitled to the notification is entitled to any relief permitted by law of this state other than this act.