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Imposition of real estate transfer tax on affidavits filed with Register of Deeds

No tax may be imposed by a County Register of Deeds under the State Real Estate Transfer Tax Act, 1993 PA 330, MCL 207.521 et seq, upon the filing of an affidavit attesting to a lost deed and related facts unless the affidavit attaches a document that is, or purports to be, the deed or a true copy of the deed.

Opinion No. 7209

October 4, 2007

Ms. Terrie J. Case
Montmorency County Prosecuting Attorney
Montmorency County Courthouse
P.O. Box 789
Atlanta, MI 49709

Dear Ms. Case:

You have requested an opinion concerning the application of the State Real Estate Transfer Tax Act to affidavits filed for recording with the Register of Deeds that attest to lost deeds, including related facts, such as their execution, acknowledgement, and delivery.

The State Real Estate Transfer Tax Act, 1993 PA 330, MCL 207.521 et seq (Act), imposes a state tax upon written instruments transferring an interest in real property. Section 2 of the Act, MCL 207.522, defines the persons and property covered by the Act as follows:

(a) "Person" means an individual, partnership, corporation, limited liability company, association, governmental entity, or other legal entity. If used in a penalty clause, person includes the partners or members of a firm, a partnership, or an association and the officers of a corporation.

(b) "Property" includes land, tenements, real estate, and real property and all rights to and interests in land, tenements, real estate, or real property.

Section 3 of the Act imposes the tax on written instruments conveying title to or any interest in property:1

(1) There is imposed, in addition to all other taxes, a tax upon the following written instruments executed within this state when the instrument is recorded:

(a) Contracts for the sale or exchange of property or any interest in the property or any combination of sales or exchanges or any assignment or transfer of property or any interest in the property.

(b) Deeds or instruments of conveyance of property or any interest in property, for consideration.

(2) The person who is the seller or grantor of the property is liable for the tax imposed under this act. [MCL 207.523(1) and (2).]

Under these provisions, the real estate transfer tax is imposed upon the seller or grantor of the property and is due when the particular instrument is presented to the County Register of Deeds for recording.

The County Register of Deeds holds a constitutional office. The powers and duties of that office are to be provided by law. Const 1963, art 7, 4. The Register is to accept for recording and to record all deeds and other instruments affecting title to or interests in property that meet the formal requirements for recordation and for which the requisite fees have been paid. MCL 565.25. Certified copies of deeds and other instruments so recorded may be offered as evidence in judicial proceedings and are accorded the same legal effect as the original documents. MCL 600.2107-MCL 600.2110 and MCL 600.2138. See also MCL 24.401; and the Michigan and Federal Rules of Evidence and the Federal Rules of Civil Procedure, MRE 902 and MRE 1005; FRE 902 and FRE 1005 and FR Civ P 44.

More importantly, the prompt recording of these documents provides actual or constructive notice to all persons of the interests in lands claimed by an owner, holder, lienor, or other claimant and affords priority and security to these persons and parties. As summarized in Michigan Land Title Standard 3.18:2

A CONVEYANCE OF REAL PROPERTY IS VOID AS AGAINST THE GRANTEE IN A SUBSEQUENT RECORDED CONVEYANCE GIVEN FOR A VALUABLE CONSIDERATION, IF THE SUBSEQUENT GRANTEE HAS NO KNOWLEDGE OF THE PRIOR CONVEYANCE AND THE PRIOR CONVEYANCE IS NOT RECORDED OR IS RECORDED AFTER THE RECORDING OF THE SUBSEQUENT CONVEYANCE. [Michigan Land Title Standards, 5th Edition, Supplement No. 6, citing MCL 565.25, MCL 565.29, and Attwood v Bearss, 47 Mich 72; 10 NW112 (1881); Michigan National Bank v Morren, 194 Mich App 407; 487 NW2d 784 (1992); and First of America Bank West Michigan v Alt, 848 F Supp 1343 (WD Mich, 1993).]

Clearly, because the timing associated with the recording of deeds and other instruments transferring title to or an interest in property plays so prominent a role in resolving disputes concerning property rights, the need for promptness in the recording process cannot be overstated.

For a deed or instrument affecting title to be properly recorded, it is essential that it meet current statutory requirements. A deed or instrument that fails to satisfy the requirements for recording may, even though recorded, be ineffectual as notice. Galpin v Abbott, 6 Mich 17 (1858) and Wing v McDowell, Walk Ch 175 (1843).3

More specifically, in Galpin v Abbott, the Court held that a deed not bearing the requisite number of witnesses was not entitled to be recorded and, though recorded, was "notice to no one." 6 Mich at 45. In Dutton v Ives, 5 Mich 515, 519-520 (1858), the Court held that an agreement to pay off and discharge a first mortgage and including related terms was not a document of a kind for which recording was allowed, and therefore the filing of the document was not binding notice on subsequent purchasers. In Hall v Redson, 10 Mich 21 (1862), the Court considered a recorded deed from several grantors, as to some of whom, but not all, the deed had been properly executed and witnessed. The Court held that the record only constituted proper evidence of the deed insofar as it affected those grantors as to whom the deed was properly executed and witnessed.

Among the statutes prescribing requirements for recording is 1937 PA 103, MCL 565.201 et seq. The title of this act describes it as "AN ACT to prescribe certain conditions relative to the execution of instruments entitled to be recorded in the office of the register of deeds." Section 1 of this act, MCL 565.201, states the following requirements:4

(1) An instrument executed after October 29, 1937 by which the title to or any interest in real estate is conveyed, assigned, encumbered, or otherwise disposed of shall not be received for record by the register of deeds of any county of this state unless that instrument complies with each of the following requirements:

(a) The name of each person purporting to execute the instrument is legibly printed, typewritten, or stamped beneath the original signature or mark of the person.

(b) A discrepancy does not exist between the name of each person as printed, typewritten, or stamped beneath their signature and the name as recited in the acknowledgment or jurat on the instrument.

(c) The name of any notary public whose signature appears upon the instrument is legibly printed, typewritten, or stamped upon the instrument immediately beneath the signature of that notary public.

(d) The address of each of the grantees in each deed of conveyance or assignment of real estate, including the street number address if located within territory where street number addresses are in common use, or, if not, the post office address, is legibly printed, typewritten, or stamped on the instrument.

The former requirement concerning witnesses to an instrument was removed by 2002 PA 19. But MCL 565.8 continues to require an acknowledgment by the person or persons executing the deed taken by a notary public or other person authorized by law. The officer taking the acknowledgment "shall endorse on the deed a certificate of the acknowledgment, and the true date of taking the acknowledgment, under his or her hand." MCL 565.8.

The Statute of Frauds, RS 1846, Ch 80, section 8, MCL 566.108, is another statute relevant to your inquiry. It provides:

Every contract for the leasing for a longer period than 1 year, or for the sale of any lands, or any interest in lands, shall be void, unless the contract, or some note or memorandum thereof be in writing, and signed by the party by whom the lease or sale is to be made, or by some person thereunto by him lawfully authorized in writing: Provided, That whenever any lands or interest in lands shall be sold at public auction and the auctioneer or the clerk of the auction at the time of the sale enters in a sale book a memorandum specifying the description and price of the land sold and the name of the purchaser, such memorandum, together with the auction bills, catalog or written or printed notice of sale containing the name of the person on whose account the sale is made and the terms of sale, shall be deemed a memorandum of the contract of sale within the meaning of this section. [MCL 566.108.]

In addition, RS 1846, Ch 65, MCL 565.1 et seq, as evidenced by its title, concerns the "Alienation by Deed, and the Proof and Recording of Conveyances, and the Canceling of Mortgages." Section 1 of chapter 65 provides in pertinent part:

Conveyances of lands, or of any estate or interest therein, may be made by deed, signed and sealed[5] by the person from whom the estate or interest is intended to pass, being of lawful age, or by his lawful agent or attorney, and acknowledged or proved and recorded as directed in this chapter, without any other act or ceremony whatever. [MCL 565.1.]

As explained by the Michigan Supreme Court in Boothroyd v Engles, 23 Mich 19, 21 (1871): "Our statutes now require every deed to be 'signed and sealed by the person from whom the estate or interest is intended to pass,' as well as acknowledged by the person executing it."

According to materials provided with your letter, the Montmorency County Register's Office has been presented with certain affidavits attesting to facts relative to "lost deeds," meaning deeds the originals of which have not been recorded in the Office of the Register of Deeds and have been purportedly lost. This prompts your inquiry whether these affidavits are subject to tax under the State Real Estate Transfer Tax Act upon recording by the Register's Office.

1915 PA 123, MCL 565.451a et seq, permits the filing of affidavits attesting to facts affecting lands and title to or interests in lands. The matters affecting title that an affidavit may cover are specified in section 1a:

An affidavit stating facts relating to any of the following matters which may affect the title to real property in this state made by any person having knowledge of the facts or by any person competent to testify concerning such facts in open court, may be recorded in the office of the register of deeds of the county where the real property is situated:

(a) Birth, age, sex, marital status, death, name, residence, identity, capacity, relationship, family history, heirship, homestead status and service in the armed forces of parties named in deeds, wills, mortgages and other instruments affecting real property;

(b) Knowledge of the happening of any condition or event which may terminate an estate or interest in real property;

(c) Knowledge of surveyors duly registered under the laws of this state with respect to the existence and location of monuments and physical boundaries, such as fences, streams, roads and rights of way of real property;

(d) Knowledge of such registered surveyors reconciling conflicting and ambiguous descriptions in conveyances with descriptions in a regular chain of title;

(e) Knowledge of facts incident to possession or the actual, open, notorious and adverse possession of real property; or

(f) Knowledge of the purchaser, or in the case of a corporation, of its president, vice president, secretary or other duly authorized representative acting in a fiduciary or representative capacity, of real property sold upon foreclosure or conveyed in lieu of foreclosure of a trust mortgage or deed of trust securing an issue of bonds or other evidences of indebtedness, or of any mortgage, land contract or other security instrument held by a fiduciary or other representative, as to the authority of such purchaser to purchase the real property and as to the terms and conditions upon which the real property is to be held and disposed of. [MCL 565.451a.]

Sections 2 and 3 of the act describe the Register's duties and the legal effect to be given the affidavit:

(2) The register of deeds of the county where the affidavit is offered for record shall receive and record it in the manner that deeds are recorded. The register of deeds shall collect the same fee for recording the affidavit as is provided by law for recording deeds.[6]

(3) The affidavit, whether recorded before or after the passage of this act, may be received in evidence in any civil cause, in any court of this state and by any board or officer of the state in any suit or proceeding affecting the real estate and shall be prima facie evidence of the facts and circumstances therein contained. [MCL 565.452 and MCL 565.453.]

The recordation of an affidavit attesting to "a lost deed," the content of the deed, and the proper execution, acknowledgement, and delivery of the deed may be sufficient to place subsequent purchasers or encumbrancers on notice of the claimed acquisition on title to or an interest in the affected real property. See In re Camacho, 311 Bankr ED Mich 186; 52 Collier Bankr Cas 2d (MB) 588 (2004.) But see also, Dutton v Ives, supra.

But these affidavits are not themselves deeds. They are not instruments effectuating the transfer of fee title to or any other interest in land, and they do not satisfy the requirements of 1937 PA 103, MCL 565.201, quoted above. An affidavit, in itself, can create no estate or interest in land, consistent with the Fraudulent Conveyances Act, RS 1846, Ch 80, section 6, MCL 566.106:

No estate or interest in lands, other than leases for a term not exceeding 1 year, nor any trust or power over or concerning lands, or in any manner relating thereto, shall hereafter be created, granted, assigned, surrendered or declared, unless by act or operation of law, or by a deed or conveyance in writing, subscribed by the party creating, granting, assigning, surrendering or declaring the same, or by some person thereunto by him lawfully authorized by writing.

Moreover, these affidavits do not substitute for deeds or other instruments of conveyance necessary to establish marketable record title in an interest in land by "an unbroken chain of title of record" for a period of at least 40 years under the Marketable Record Title Act, 1945 PA 2000, MCL 565.101 to MCL 565.109. Michigan Land Title Standards, 1.1, 1.2, and 1.3 summarize the relevant concepts as follows:

Standard 1.1:

* * *

The stated legislative purpose of the Marketable Record Title Act is to simplify and facilitate land title transactions by providing a statutory basis for establishing record title with reference to a period of at least 40 years (at least 20 years for certain mineral interests). The effect of the Act is to extinguish by operation of law certain interests and claims which arise out of any act, transaction, event or omission preceding the 40-year period (or the 20-year period for certain mineral interest), subject to specified exceptions and limitations. The 20-year period applies only to a mineral interest other than an interest in oil, gas, sand, gravel, limestone, clay or marl, owned by a person other than the surface owner.

Standard 1.2:


Standard 1.3:


A "lost deed" suggests a "broken" chain, not an "unbroken chain."

In OAG, 1945-1946, No 3546, p 340 (May 25, 1945), the Attorney General opined that a Register of Deeds should accept for record under 1915 PA 123 an affidavit containing:

[N]ot only averments as to heirs to estates not probated in the state of Michigan and other conclusions of law, but also a definite description of real estate in which certain persons named in the affidavit are said to have an interest.

The Attorney General cautioned, however:

The averment of fact or conclusions of law which appear in the affidavit and which are not provided for in the statute in question would be of no evidentiary value in view of Section 3 of the act quoted above which limits the evidentiary value to the type of affidavits provided for in the statute.

In the following year, in OAG, 1945-1946, No 4376, pp 612-613 (February 18, 1946), the Attorney General, responding to a request for advice concerning how lost records may be established, duplicated, and recorded, said:

Several methods of recording the copy found in the abstract office may be followed, but the effect of recording may be different in each case.

For example, if the copy in question [a previously recorded plat destroyed in a courthouse fire] is made a part of an affidavit entitled to record under the provisions of Act No. 123, Public Acts of 1915, as amended ( 26.731, et seq., Mich. Stat. Ann.), it would be as much a part of the public records as the rest of the affidavit, but the effect of such recording would be limited by the allegations contained in the affidavit. Such an affidavit could not have the effect of restoring the lost original, nor could it have the effect of a judicial determination as to the authenticity of the copy.

In 1 OAG, 1955-1956, No 1944, p 462 (September 8, 1955), the Attorney General responded to the question of what affidavits should be recorded by the Register of Deeds and explained that the Register's duties in that regard are ministerial in nature:

"Generally, the duty of the register is to receive and file, or receive and record, as the case may be, such instruments, and only such instruments, as by law are entitled to be filed or recorded, and to file or record them in such manner as to serve all the purposes of the law. In the absence of a statute to the contrary, it is not his province to determine whether the parties have made valid instruments or to add notations with respect to their validity."

76 C.J.S. Registers of Deeds, 10b., pg. 514.

It has been held that:

"A county recorder of deeds is a 'ministerial officer', and his authority to record notices of United States tax liens is limited to such notices as comply with requirements of Michigan statute."

Youngblood v. United States, 141 F. 2d 912 (quoting syllabus).

A register of deeds can be compelled to perform only such duties or services as are imposed upon him by law. State v. Holm, 70 Neb. 606; 97 N.W. 821.

Section 26.761, M.S.A.; 565.491, C.L. 1948, lists the documents which the register of deeds is required to record, as "all deeds, mortgages, maps and instruments or writings authorized by law to be recorded in his office, and left with him for that purpose."

In light of the above, an affidavit offered for recording that purports to attach an original deed or true copy of a deed should, for purposes of the State Real Estate Transfer Act, be treated as taxable. It does not matter that the deed or true copy may itself be unrecordable for some reason, such as that it lacks notarization or that it may or may not provide notice or establish an unbroken chain of title. To the extent it purports to be the deed or a true copy of a deed and it is recorded as an attachment to a properly recorded affidavit, it is a "deed or instrument of conveyance" within the meaning of MCL 207.523(1)(b) and a tax is properly imposed under the State Real Estate Transfer Act "when the instrument is recorded."

In summary, the state real estate transfer tax is imposed upon the grantor upon the filing of deeds and other instruments of conveyance effectuating a transfer of title to or an interest in real property. Affidavits do not themselves effectuate such a transfer. Affidavits may appropriately be used for those purposes expressed in 1915 PA 123, MCL 565.451a, but they cannot serve as a substitute for a deed or other written instrument in terms of assuring marketability of title, satisfying the statute of frauds, or securing a priority over subsequent purchasers or lienors. When accompanied by a document characterized in the affidavit as a deed or true copy of a deed, however, the filing of both the affidavit and attachment qualifies as a filing in connection with which the taxes specified in the State Real Estate Transfer Tax Act may be imposed.

It is my opinion, therefore, that no tax may be imposed by a County Register of Deeds under the State Real Estate Transfer Tax Act, 1993 PA 330, MCL 207.521 et seq, upon the filing of an affidavit attesting to a lost deed and related facts unless the affidavit attaches a document that is or purports to be the deed or a true copy of the deed.

Attorney General

1Under section 6 of the Act, MCL 207.526, certain written instruments and transfers of property are expressly exempted from the tax imposed by the Act. This tax must be distinguished from recording fees required under other provisions of law. See, e.g., MCL 600.2567, MCL 600.2567a, and MCL 600.2568.

2Michigan Land Title Standards is a compilation prepared by a committee of the Real Property Law Section of the State Bar of Michigan as a practice aid to real estate attorneys. Various standards have been cited by the courts as representing constructions of property laws that have been relied upon for years. See, e.g., Snover v Snover, 199 Mich App 627, 629; 502 NW2d 370 (1993).

3Wing v McDowell is a decision rendered by an early Michigan chancery court. Upon the establishment of Michigan's state government, equity and common law jurisdiction were separated and vested in distinct courts. All equity powers were vested in a court of chancery exclusively. The chancery court was abolished by the revised statutes of 1846, and its jurisdiction was conferred upon the several circuit courts. Michigan Official Directory and Legislative Manual, (1931-1932), pp 183-184.

4Section 3 of the act, MCL 565.203, makes the following exceptions:

The provisions of this act shall not apply to the following instruments: any decree, order, judgment or writ of any court, will, death certificate, or any instrument executed or acknowledged outside of the state of Michigan. The provisions of paragraphs (a), (c) and (d) of section 1 shall not apply to any instrument upon which the signature itself is printed, typewritten or stamped.

5The necessity for "sealing" was removed by 1937 PA 63, MCL 565.241.

6This is a reference to the fees required for recording of a deed under MCL 600.2567 and MCL 600.2567a cited at n 1. The fee must be distinguished from the tax imposed under the State Real Estate Transfer Act, MCL 207.521 et seq.