Principal residence exemption; MCL 211.7cc(1); VanderWerp v. Plainfield Charter Twp.; Effect of a quitclaim deed; Eastbrook Homes, Inc. v. Department of Treasury; Owner defined; MCL 211.7dd(a)(i); Statutory interpretation; Benedict v. Department of Treasury; People v. Peltola; Distinguishing EldenBrady v. City of Albion; Waived equitable estoppel argument; People v. Matuszak; Adams v. Detroit

The court affirmed the Tax Tribunal’s (TT) ruling that the petitioners-Allis were not entitled to a principal residence exemption (PRE) for the 2013 and 2014 tax years because, when they quitclaimed their interest in the property to petitioner-BASA Family Limited Partnership, “they ceased to be owners of the property.” Further, the limited partnership was not entitled to a PRE given the definition of an owner eligible for the exemption under § 7cc. The Allis, husband and wife, are the general partners of the limited partnership (the LP). They had lived at the property at issue since 1994. The LP sold it to them in 1999 via land contract, and quitclaimed its interest in the property to them in 2006. They quitclaimed their interest in the property back to the LP in 2012. The respondent denied the LP a PRE for the 2013 and 2014 tax years because the LP “was not an individual and, thus, not an owner. The Allis challenged this decision, arguing that they were the owners.” The TT found that they were not the owners of the property because the most recent deed, from 2012, showed that the LP owned it. The court noted that the plain language of the statute limits the PRE, “also called a homestead exemption, to an owner.” A quitclaim deed “conveys the grantor’s full interest in the property unless expressly stated or reserved.” The 2012 quitclaim deed “did not reserve to the Allis any of the property rights conveyed in the 1999 land contract or the 2006 quitclaim deed.” Thus, they were no longer the owners and not eligible for the PRE. As to whether the LP was entitled to a PRE, “MCL 211.7dd(a)(i) defines an owner as a ‘person who owns property or who is purchasing property under a land contract.’” For purposes of § 7cc, a person is defined as an individual – a single human being. Thus, the definition of an owner eligible for a PRE “under § 7cc does not include business entities.” The court held in VanderWerp that a limited liability company “was not eligible for the homestead exemption because it was not an individual.” Similarly, the LP here was not an individual.