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A Better Partnership
June 16, 2016

COA: A previous owner of property cannot file an affidavit that the property was qualified agricultural property for tax purposes

The Court of Appeals held in Lyle Schmidt Farms LLC v. Township of Mendon, Nos. 326609, 326611 that only a current owner of the property can file an affidavit pursuant to MCL 211.7dd(d) to ensure that the property remains capped for agricultural property tax purposes.
In 2004, the Wiegel family purchased five parcels of agricultural land from First National Bank. During the time the Wiegel’s owned the property, they failed to file an affidavit pursuant to MCL 211.27(a)(7)(o) to state that the property was qualified agricultural property. Therefore, the transfer was considered a transfer of ownership which “uncapped” the parcels for taxation purposes. After the parcels were “uncapped” the respondent townships assessed the taxable values at a higher rate than it would have had the property remained “capped”.  In 2006, Schmidt Farm and Equity Trust purchased the parcels of land from the Wiegel family and executed the appropriate affidavits to verify that the property was still qualified agricultural property. However, the taxes on the property remained at the higher “uncapped” value.
In 2008, Schmidt Farm and Equity Trust protested the tax assessments of the property and requested that the parcels be reassessed or “recapped” according to their 2004 values. However, the board of review denied these requests. In 2014, Schmidt Farm and Equity Trust made the same protest arguing that because the Wiegel family were former owners of the property, the affidavit they filed in 2007 should have recapped the property and allowed it to be assessed as to the 2004 value. Once again, the requests were denied by the board of review and the Michigan Tax Tribunal (MTT) denied the petitioners’ appeals.
The Court of Appeals held that the Michigan Tax Tribunal did not err in denying the petitioners’ appeals because the Wiegels were not current owners of the property when they filed the affidavit in 2007. The Court considered the Black’s Law dictionary definition of owner, which defines the word as “[s]omeone who has the right to possess, use, and convey something; a person in whom one or more interests are vested.” Blacks Law Dictionary (7th ed). The Court determined that because affidavit in 2007 was not filed by persons who had the right to possess, use, and convey the property, it did not conform with the requirements set forth in MCL 211.27(a)(7)(o). 

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