July 2026

An informative e-newsletter for the Real Property Law Section of the State Bar of Michigan.

PA 116 Is Only Half the Story: Understanding Potential Recapture Tax Exposure

By Kevin Hirzel, Hirzel Law, PLC 

FarmWhen Michigan farmland is sold and the buyer intends to convert the property into a future residential or commercial development, attorneys often focus on whether the property is subject to a Farmland Development Rights Agreement under Public Act 116, the Farmland and Open Space Preservation Program. That focus is understandable. PA 116 agreements, administered by the Michigan Department of Agriculture and Rural Development, are a well-known component of agricultural real estate due diligence. However, attorneys should be careful not to overlook a separate and potentially more significant issue: Public Act 260 of 2000, in particular MCL 211.27a(7)(o), and the Agricultural Property Recapture Act under MCL 211.1001 et seq.

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The views and opinions expressed in these articles are those of the authors, and they do not reflect in any way the positions of the State Bar of Michigan or the Real Property Law Section. These columns are meant for informational purposes only and should not be construed as legal advice. IRS Circular 230 Disclosure: To ensure compliance with requirements imposed by the Internal Revenue Service, we inform you that any U.S. federal tax advice contained in this communication (including any attachments) was not intended or written to be used, and cannot be used, by any person for the purpose of (i) avoiding tax-related penalties or (ii) promoting, marketing, or recommending to another person any transaction or matter addressed in this communication.