Splitting Real Estate Under The Michigan Land Division Act

The Michigan Land Division Act, MCL 560.101 et seq., which was enacted on January 1, 1968, sets forth the requirements for altering property boundaries in Michigan. The Michigan Land Division Act governs the process of splitting or dividing a single parcel of land into multiple smaller parcels. This statute was originally referred to as the Subdivision Control Act, but the name was changed when the statute was amended effective March 31, 1997. Prior to 1968, the land division process was governed by the Plat Act of 1929.

Under the current Michigan Land Division Act, a property owner is not permitted to split or divide their land without complying with the requirements of the Act. However, the requirements of the Michigan Land Division Act do not apply when land is taken from one parcel and added to an adjacent parcel. In addition, the requirements of the Michigan Land Division Act do not apply when a condominium project is being created pursuant to Michigan’s Condominium Act, MCL 559.101 et seq.

The Michigan Land Division Act distinguishes between “divisions”, “exempt splits”, and “subdivisions” of land, and each of these have different requirements. Under MCL 560.102, an “exempt split” is the partitioning or splitting of a parcel of land that does not result in 1 or more parcels of less than 40 acres or the equivalent.[1] Under MCL 560.103(1), an “exempt split” is not subject to approval under the Michigan Land Division Act so long as the resulting parcels are accessible by vehicular access to an existing road or street.

Under MCL 560.102, a “division” occurs when there is a partitioning or splitting of a parcel of land that results in 1 or more parcels (for the purpose of sale, lease of more than 1 year, or of building development) of less than 40 acres or the equivalent, and that satisfies the requirements of sections 108 and 109. A “division” is not subject to the platting requirements of the Michigan Land Division Act, but it is subject to the requirements of Sections 108 and 109 of the Michigan Land Division Act. The only difference between a “division” and a “subdivision” is that a “subdivision” is also subject to the platting requirements of the Michigan Land Division Act, while a “division” only needs to comply with Sections 108 and 109 of the Michigan Land Division Act.

Section 108 of the Michigan Land Division Act, MCL 560.108, provides, among other requirements, that a “division” may result in a maximum of the following number of parcels: (a) for the first 10 acres or fraction thereof in the parent parcel or parent tract, 4 parcels; (b) for each whole 10 acres in excess of the first 10 acres in the parent parcel or parent tract, 1 additional parcel, for up to a maximum of 11 additional parcels; (c) for each whole 40 acres in excess of the first 120 acres in the parent parcel or parent tract, 1 additional parcel. The term “parent parcel” or “parent tract” is defined as the parcel of land “lawfully in existence” on March 31, 1997. Section 109 of the Michigan Land Division Act, MCL 560.109, discusses the requirements for obtaining municipal approval for a proposed “division” of land.

If a parent parcel lawfully in existence as of March 31, 1997 contains a total of 40 acres, the property owner could potentially apply for a “division” to create a total of 7 parcels (4 parcels for the first 10 acres and an additional parcel for each additional 10 acres) if all of the other requirements of the Michigan Land Division Act are satisfied. This calculation can become more difficult when there have been a series of prior divisions in the chain of title. It is also important to consider the future division rights if a parcel of land created from a “division” is being transferred to a new owner since the division rights will be retained by the parent parcel by default. Transfers of unplatted land must include a statement on the deed indicating how many available divisions, if any, are being transferred with the land. See MCL 560.109(3). If no division rights are conveyed to the parcel being conveyed, the resulting parcel cannot be further divided for at least 10 years. See MCL 560.108(5).

Since “divisions” and “exempt splits” result in several large parcels and are limited, most developers typically choose to create either a condominium project (under the Michigan Condominium Act) or a platted “subdivision” (under the Michigan Land Division Act) in order to obtain the largest possible number of buildable lots for individual sale. Under MCL 560.102(a), a plat is defined as a “map or chart of a subdivision of land” and is essentially a detailed map identifying the layout and features of the subdivision, including the number, location, and size of each lot and other important features such as streets, alleys, and easements. A plat must include a survey, legal description of the land, and a unique name for that County.

The process of platting is highly regulated and includes various steps and levels of governmental approval, including the County Road Commission, the County Drain Commissioner, the Michigan Department of Transportation, the Michigan Department of Natural Resources, the Michigan Department of Environment, Great Lakes, and Energy, and the local municipality’s health department. The process for amending or vacating a portion of a plat can be even more cumbersome and complicated. Here is a more detailed discussion of amending or vacating plats. Due to the complicated and lengthy process required to plat a subdivision under the Michigan Land Division Act, many developers have moved away from platting and have begun creating condominiums (including site condominiums) under the Michigan Condominium Act.

Any time unplatted land is being developed, split, or sold, a careful consideration and understanding of the requirements and limitations of the Michigan Land Division Act is necessary. In certain cases, it may be beneficial to avoid the platting process entirely by effecting an “exempt split” or obtaining municipal approval to make a “division”. In cases where a division or exempt split will not suffice, the alternatives for development are typically creating a platted subdivision under the Michigan Land Division Act or a condominium project under the Michigan Condominium Act. Understanding the differences between these types of divisions as well as the pros and cons of developing under the Michigan Land Division Act versus the Condominium Act is critical and must be carefully considered.

Brandan A. Hallaq is an attorney with Hirzel Law, PLC where he litigates cases involving defective construction, contract disputes, shareholder/member disputes, quiet title actions to determine interests in property, enforcement of restrictive covenants, real estate foreclosure actions, and bankruptcy matters representing creditors. Mr. Hallaq is also a licensed Real Estate Broker in the State of Michigan and leads the real estate transactions department at Hirzel Law, PLC where he negotiates and prepares the necessary documents for business and real estate transactions, including purchase agreements, franchise agreements, loan/financing documents, and commercial and residential leases and mortgages. In each year from 2018 through 2021, he has been recognized as a Rising Star in the area of real estate law by Super Lawyers Magazine, a designation that is given to no more than 2.5% of the attorneys in the State of Michigan each year. He was also recognized as a 2020 Up & Coming Lawyer by Michigan Lawyer’s Weekly, an award given to no more than 30 attorneys in the state each year, and he was recognized in the inaugural issue of the 2021 Best Lawyers in America: “Ones to Watch” list for professional excellence in real estate law. He can be reached at (248) 480-8704 or at bhallaq@hirzellaw.com.

[1] The phrase “forty acres or the equivalent” is defined as “40 acres, a quarter-quarter section containing not less than 30 acres, or a government lot containing not less than 30 acres.” MCL 560.102(l).

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