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2011-2012 Michigan Attorney General Reports and Opinions 1 (2011-2012)

handle is hein.sag/sagmi0085 and id is 1 raw text is: http://www.ag.state.mi.us/opinion/datafiles/201Os/opl0337.htm The following opinion is presented on-line for informational use only and does not replace the official version. STATE OF MICHIGAN BILL SCHUETIE, ATTORNEY GENERAL REVENUE BOND ACT: Municipal collection of delinquent utility-service charges on tax foreclosed property GENERAL PROPERTY TAX ACT: A municipality cannot require purchasers of tax foreclosed property to pay delinquent utility-service charges incurred by former owners of the foreclosed property before the municipality will provide utility services to the new owners of the property. Under the General Property Tax Act, MCL 211.1 et seq, a judgment of foreclosure extinguishes all liens and interests related to unpaid utility-service charges against the property. MCL 211.78k. A municipality may, however, seek to recover such charges by including the delinquent charges in the cost of the property at the time it is offered for sale under the General Property Tax Act, or by instituting other lawful action against the former owners. Opinion No. 7258 May 6, 2011 Honorable Paul E. Opsommer State Representative The Capitol Lansing, MI 48909 You have asked whether a municipality may require purchasers of tax foreclosed property to pay delinquent utility-service charges incurred by former owners of the foreclosed property before the municipality will provide utility services to the new owners. In particular, you ask about water and sewage charges, as well as charges for electrical service from a municipally-owned power plant. Information provided to this office indicates the municipality relies on 1939 PA 178 as amended, MCL 123.161 et seq, and section 21 of the Revenue Bond Act of 1933, MCL 141.121, as the bases for refusing to provide utility service to new owners of tax foreclosed properties that have delinquent utility charges. The first statute, 1939 PA 178, addresses water and sewage services. Section 2, MCL 123.162, provides that a municipality supplying water or sewage services has a lien on the premises served, as security for the collection of water or sewage system rates or charges. This lien shall become effective immediately upon the distribution of the water or provision of the sewage system service to the premises or property supplied, but shall not be enforceable for more than 3 years after it becomes effective. Section 3, iviCL 123.o6, provides that the lien may be enforced in the manner prescribed in the charter of the municipality, by the general laws of the state providing for the enforcement of tax liens, or by an ordinance duly passed by the governing body of the municipality. Section 5, MCL 123.165, provides that the lien has priority over all other liens except taxes or special assessments: 11/8/2012 1:47 PM Opinion #7258

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