Michigan Now Regulates Deed Solicitation

As of July 11, 2016, soliciting a fee for providing a copy of deed is a now regulated activity in the State of Michigan and carries civil penalties for noncompliance. The new law is known as the “Solicitation of Deeds Act. [1] A previous article provides background into what has been a contentious issue with several register of deeds offices in Michigan. Whatever the opinion on the merits of private business versus county office or public protection, this new law now severely limits what can be done in the deed solicitation business and puts significant obstacles in front of running such a business.

The 2016 law sets out the following requirements for a person soliciting a fee for providing a copy of a deed even if the copy itself is free, and these requirements are:

1. The solicitation must state on the top of the document used for the solicitation, in at least 24-point type, all of the following:
   • That the solicitation is not from a public body.
   • That no action is legally required from the person being solicited.
   • The amount of the fee for obtaining a copy of the deed from the public body that has custody of the record.
   • The information necessary to reach the custodial public body.
   • The name and physical address of the person soliciting the fee
2. The document used as the solicitation shall not be a form or use deadline dates so as to appear issued from a public body or that appears to impose a legal duty on the person being solicited.
3. A person soliciting a fee for providing a copy of the sees shall not charge a fee 4 times more than the statutory fee charged by the custodial public body.
4. A person soliciting the fee shall furnish a copy of the solicitation to be use to the office of the register of deeds in each county where the solicitation will be distributed. [2]

Certain business are specifically exempted from the Act. These are title insurance companies, mortgage companies including brokers and lenders, and real estate brokers, and real estate brokers and salespeople. [3] Curiously omitted are attorneys. However , the definition of “solicitation” in the statute is “to advertise or market to a person with whom the solicitor has no preexisting business relationship”. Therefore, an attorney pulling a deed for a client and charging that client for the time or service is not within the purview of the Act.

Penalties for noncompliance are as follows: for a first time offense, $100 per solicitation/document in violation of the Act; and for a subsequent offense, $200.00 per solicitation/document. [4]  Civil fines collected go to support public libraries. [5] The Act authorizes Attorney general action against violators. [6] There appears to be no private cause of action under the statute.

The new law should have a chilling effect on the private business of deed solicitation in Michigan. If the goal is to protect elderly or unsophisticated persons who tend to be disproportionately affected by misleading solicitations, this appears to be in the public interest. Otherwise, the merits of the law are less clear.  GJR

Notes:

1. MCL 445.1031 et seq.
2. MCL445.1033.
3. MCL 445.1034.
4. MCL 445.1035.
5. MCL 445.1035.
6. Id., MCL 445.1036.