September 2019

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

Proposed MZEA Amendments for Short-Term Rentals

Proposed MZEA Amendments for Short-Term Rentals

By Moriam Aigoro, Bodman PLC

Short-term rentals of residential properties for vacation use have increased dramatically; so has the controversy surrounding their operations. Resort communities love them, but neighbors often complain about noise, overflow parking, and loss of peace and quiet. For more background information see Joseph A. Doerr, Regulating Short-Term Vacation Rentals in Michigan Using Existing Remedies and New Legislation, 45 Nos. 1-2 Mich. Real Prop. Rev. 16, 16-22 (Spring & Summer 2018). Some municipalities have outright banned short-term rentals under zoning ordinances while real estate brokers strongly favor liberal short-term rental policies.

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Only “Borrower” Can Sue Under RESPA

Only “Borrower” Can Sue Under RESPA

By Howard Lax, Bodman PLC

In Keen v. Helson and Ocwen Loan Servicing, LLC (CA6 No. 18-6035, July 18, 2019), the U.S. Sixth Circuit Court of Appeals held that only the persons signing a mortgage note have a right to sue for Real Estate Settlement Procedures Act (RESPA) violations under federal law. RESPA grants a private right of action to borrowers, but the statute does not define “borrower.” The court held that a borrower is the person who signs a note and directly receives the loan proceeds. Other loan beneficiaries do not have a right to sue the lender or loan servicer for violations of RESPA consumer protections. Hence, a spouse who signs the mortgage to release dower and/or homestead rights does not have the right to sue a loan servicer for violation of borrower protection requirements (12 CFR §§ 1024.30 to 1024.41), even when the spouse makes payments after the borrower dies. The court suggested that Keen might pursue her claims in state court under state consumer protection laws.

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Legislative Report

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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.