The diamond drill. (Crystal Falls, Iron County, Mich.) 1887-1996, 1912-01-06
MORTGAGE TAX AND LAND
CONTRACT LAWS EXPLAINED

Two New Laws Going Into Effect are D
gested BY Grand Rapids Authority Thinks
Land Contract Law Should be Repealed
No law OF recent enactment has
created so much discussion as the
mortgage tax law of the last Michigan
legislature. effective Monday. Clark
FL. Gleason, Grand Rapids authority.
has given an opinion on this law and
the new land contract law, in an inter
view which follows
The first named law provides that
beginning Jan. 1. 1912. a tax OF 80
cents shall be paid on each 800 Of all
mortgages. land contracts and deeds
given as security. before the same can
be recorded, enforced or introduced in
evidence This tax is in lieu OF all
other taxes thereon on matter for
what length OF time the mortgage or
contract may run. The law does not
apply 10 building and loan mortgages
or mortgages on church. benevolent or
educational institutions This tax IL
to be paid to the county treasurer. who
will stamp the instrument showing it
has been paid. 1t then may be record
cd or not as the holder chooses. The
new law does not change the rule in
any respect as to recording. There is
no necessity for recording land con.
tracts, and nothing to be gained there
by where the purchaser is in posses
sion under his contract--as possession
is legal notice to everyone of his title.
IF the holder Of mortgages or land
contracts given prior TO Jan. so de.
sires he may or hereafter make nm
affidavit as TO the amount unpaid
thereon. and pay the tax on that a.
mount. which will make them untax-
able thereafter If he does not thus
pay the tax. they will be assessed "a
heretofore The law has some special
provisions regarding security and trust
mortgages.
The new law az to land contracts Is
"a monstrosty. The supreme court
may uphold it and it may not 1t pro-
vide5 that any land contract on which
the first payment IL less than 25 per
cent OF the selling price may be ter
minated in case of default in manner
as in the contract provided, but no
matter what provisions for contract
contains the one in default shall have
one year after he is put out and after
written notice of forfeiture has been
served on him and proof of that service
has been filed with the county CLERK,
served must tell the one In default he
has one year in which 10 redeem and
the amount he must pay in order to
redeem The owner OF the property
hence has it tied mp for one year so
he cannot sooner safely make sale OF
II 10 another This law works a hard
ship upon poor people, on those not
able TO make first payment Of % rer
cent of the selling price. az no land
owner will be willing TO sell home
on contract with small payment IL
he is liable in case OF default to have
HE place tied mp for year before he
can again sell it Leases with option
% purchase ara now being used in
place of such contracts
"The law does not apply 90 contracts
on which % per cent of the purchase
price has been paid. Had II been made
applicable to such contracts and Lot to
those on which less than 90 per cent
bad been paid there woud have been
some sense and perhaps some justice
IN IT. The senator who introduced the
bill was banker mt the 500 and was
acting on n gross misunderstanding OF
the law ~ TO land contracts. In ex.
PLANTATION of the law he wrote
As you know, the foreclosure or
termination OF a land contract under
onf old law required almost the formal
ity and time as TO forecIose mort
gage SIch was not the law.
I'm reply 10 a question as 10 whether
the act was not intended to apply to
those contracts on which more rather
than less than 20 per cent had been
paid his answer was The clause
which says the act shall not apply TO
c ontracts ON which IS per cent or more