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REAL ESTATE 83: Circuit court entered an order vacating the district court’s termination of redemption rights and permitting KN to redeem the property.

KN purchased condominium unit 20 by covenant deed. The deed was recorded, and it showed KN’s home address in Ann Arbor, Michigan. KN then sold the unit to non-party AC on land contract.

Property Taxes / Condominium Association Dues

AC failed to pay property taxes or condominium association dues, as required by the land contract. In October of 2014, the condominium association sent a notice to KN at his Ann Arbor address of a lien for unpaid condominium assessments. The association also recorded a notice of the lien, which also listed KN’s Ann Arbor address.

KN received the notice but took no action because he relied on AC’s assurances that she would pay any outstanding dues. AC continued to evade payment. KN contends that on March 30, 2016, to avoid tax foreclosure, he paid $8,200.31 on the 2014 delinquent real estate taxes to the Wayne County Register of Deeds. KN further contends that after pursuing foreclosure against AC, she agreed to vacate the condominium by May 1, 2016, and quit-claim her interest back to KN.

Notice of Foreclosure

However, in the meantime, on March 16, 2016, the Association posted a Notice of a Foreclosure Sale on the condominium and published the notice in the Detroit Legal News. The notice stated an amount owed of $4,950.00 and a Sheriff’s sale date of April 21, 2016. No notice was sent to KN’s Ann Arbor address. Unbeknownst to KN, the Sheriff’s sale was held as scheduled, and DCH purchased the condominium.

DCH contends that on April 27, 2016, it was unable to gain access to the condominium unit when its representative attempted to conduct an inspection. The inspector deemed the property vacant and in damaged condition—a broken window, a damaged garage door, and overgrown grass. Relying on MCL 600.3238(6), DCH then initiated summary proceedings for possession of the property, asserting that KN unreasonably refused to allow DCH access to the condominium unit for an inspection and that damage to the property had occurred.

Default Judgment of Possession

On June 9, 2016, the district court entered a default judgment of possession against KN, ordering that DCH had a right to possession and that KN was to be evicted. DCH then recorded an affidavit of termination of redemption rights with the Wayne County Register of Deeds.

Circuit Court

The circuit court noted that everybody knew that KN did not live at the condominium, yet DCH continued to mail notices to the vacant property and made no further efforts to discover KN’s whereabouts. The circuit court ultimately concluded that MCL 600.3240 and MCL 559.208, when read in conjunction, indicated that KN’s period to exercise his right of redemption would have been six months.

In October 2017, the circuit court entered an order vacating the district court’s default judgment, and the affidavit of termination of redemption rights, and permitting KN to redeem the property before January 5, 2018.

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