Michigan Laws 554.1062 – Collection of rent proceeds; use of funds
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Terms Used In Michigan Laws 554.1062
- 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
- Lien: A claim against real or personal property in satisfaction of a debt.
- 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.
- Proceeds: means personal property that is received or collected on account of a tenant's obligation to pay rents. See Michigan Laws 554.1052
- Real property: Land, and all immovable fixtures erected on, growing on, or affixed to the land.
- 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 554.1052Security interest: means an interest in property that arises by agreement and secures performance of an obligation. See Michigan Laws 554.1052 State: 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
Unless otherwise agreed, an assignee that collects rents under this act or collects upon a judgment in an action under section 14(4) shall apply the sums collected in the following order:
(a) To the assignee’s reasonable expenses of enforcing its assignment of rents, including, to the extent provided for by agreement and not prohibited by law of this state other than this act, reasonable attorney fees and costs incurred by the assignee.
(b) To reimbursement of any expenses incurred by the assignee to protect or maintain the real property subject to the assignment.
(c) To payment of the secured obligation.
(d) To payment of any obligation secured by a subordinate security interest or other lien on the rents if, before distribution of the proceeds, the assignor and assignee receive a notification from the holder of the interest or lien demanding payment of the proceeds.
(e) To the assignor.