BizLawBuz …. The Power of Know

Parental Waivers Do Not Count For Much
In June of last year, we informed you that the Michigan Supreme Court held that parental waivers were unenforceable. At the same time, we were optimistic that the Michigan Legislature would pass a law that would give effect to parental waivers. Well, the Legislature did give us a law - MCL 700.5109: “Release for injury of minor during recreational activity” - but many are questioning whether the law changes anything.

Statute carves out large exceptions
MCL 700.5109 states that a parent or guardian of a minor may “release a person from liability… for personal injury sustained by the minor during the specific recreational activity for which the release is provided.” So, mom or dad can release the YMCA from liability for Jimmy’s soccer injury if the release was specific to the soccer activity. That’s not a bad start, but the statute goes on to carve out large exceptions, whittling away the strength of the statute.

Statute only applies to non-governmental non-profit organizations
The first exception (and the most glaring problem) is that the statute only applies to non-governmental non-profit organizations. If you operate a for-profit business that provides recreational activity, this statute does not apply, and you are not protected from liability - period. Representative John Walsh, R-Livonia, sponsored the bill and said that private, for-profit organizations weren’t included in the statute because “they probably have a greater opportunity to buy insurance.”*

When an individual or organization initially released is open to a lawsuit
Next, if the statute does apply to your organization, the release can only apply to an injury or death that resulted “solely from the inherent risks of the recreational activity.” Therefore, if Jimmy trips on a little divot in the soccer field and injures himself, as long as no one knew about the divot, the release could block a lawsuit against the non-profit organization. This is because tripping on an uneven patch of grass while running on a soccer field is likely an inherent risk of the sport. But, if the organizer, sponsor, owner, lessee, employee, agent, or other person causes or contributes to the injury or death through negligence (for instance, if the employee knew about the divot and forgot to warn the kids or take corrective action), the release is ineffective, and the individual or the organization initially released is now open to a lawsuit. With regard to this carve-out, Rep. Walsh stated, “[W]e still preserve the right to sue if there’s negligence involved, improper equipment, poor coaching, things of that nature. We didn’t want to leave the parents without any recourse, but we wanted to protect volunteer coaches and non-profits[.]“*

Our recommendations
Unfortunately, it appears that we find ourselves in precisely the same situation as last year – parental waivers do not count for much. Accordingly, we continue to recommend that organizations and individuals act prudently, maintain adequate insurance, and continue use of pre-injury waivers (understanding the limits of those waivers). Additionally, contracts that provide for the parents themselves to “indemnify” (or reimburse) the organization for any losses that arise from a child’s injuries may still be a viable option. While parents cannot contract for their children, they can enter contractual commitments of their own and agree that, “If my child is injured while participating in your activity – and if that injury leads to a claim against you – I will reimburse you for the cost of that claim.” Again, this tool is not nearly as clean or risk free as a release, but it might be useful in defending an injury claim.

*Brian Frasier, Esq., New Law Allows Some Parental Waivers, 25 Michigan Lawyers Weekly, 1 (2011).

Julie P. Cotant

Meeting certain criteria
There is a little known exception to the rule that a homeowner can claim a Principal Residence Exemption on only one residence at a time. In response to the sluggish real estate market, Michigan enacted a law in 2008 allowing a homeowner who has acquired a new residence to claim a Principal Residence Exemption (PRE) on both the new residence and the homeowner’s prior residence if certain criteria are met.

How to take advantage of the dual exemptions
The homeowner must file a Conditional Rescission of Principal Residence Exemption Form with the local assessor. The Conditional Rescission allows the homeowner to claim dual principal residence exemptions for up to three tax years if the previous residence (1) is not occupied, (2) is for sale, (3) is not leased out, and (4) is not used for any business or commercial purposes.

When you must file
If you happen to move out of your home and rescind your principal residence exemption at that time in order to claim it on your new residence, you can reverse the rescission by later filing the Conditional Rescission Form if it appears that your old home will remain on the market for a while. Just remember that the form must be filed by May 1 in order to be effective for the current year. Also remember that the conditional rescission must be renewed annually. If you have a conditional rescission that is effective for 2011, you must file again by December 31, 2011, in order to claim the exemption for 2012.

Restrictions
There are several other restrictions that apply. For example, if you move out of your previous residence and do not purchase a new one, the conditional rescission is not available. It is also not available if you move to another state, or if you lease out your former home even if it later becomes vacant again. If you need assistance in determining whether dual principal residence exemptions may be available to you, please call us, or visit Wright Penning & Beamer’s Michigan Property Tax Appeal website www.PropertyTaxAppealSpecialist.com where we have provided answers to frequently asked questions about the Conditional Rescission of Principal Residence Exemption.

Lee Flaherty