Which Conveyances Involving a Joint Tenancy Are or Are Not Transfers of Ownership
A revised case memo has been issued by the State Tax Commission that discusses the Michigan Supreme Court's decision in Klooster v. City of Charlevoix, No. 140423 (2011). The issue addressed by the Supreme Court is regarding the interpretation of MCL 211.27a(7)(h) and specifically which conveyances involving a joint tenancy are or are not transfers of ownership for local property tax assessment purposes.
The Michigan Supreme Court found that the death of the only other joint tenant is a conveyance under the general property tax provisions and does not require a written instrument beyond the deed initially creating the joint tenancy. The court also determined that MCL 211.27a(7)(h) establishes requirements for an exception from the definition of transfer of ownership in three separate and distinct types of conveyances: (1) termination of a joint tenancy; (2) creation of a joint tenancy where the property was not previously held in joint tenancy; or (3) the creation of a successive joint tenancy.
The memo also discusses how to determine if a property should uncap and provides the following conclusions.