Real Prop Flashcards
Fixtures
A fixture is an item of personal property that becomes so affixed to real estate that the law treats it as part of the real property.
Three part test (AAA):
1) the degree to which the item has been annexed to the realty,
2) the extent to which the item has become adopted to the use of the real estate, and
3) whether the parties intended to make the good an accession to the real property
Trade Fixture Doctrine
An item that is used in a trade or business, and these items are not part of realty and this may almost always be removed by the owner in Michigan and this doctrine only applies to leasehold estates
Race-Notice Act
Michigan is a race-notice state. Owners of an interest in land can protect their interest by properly recording it. When a purchaser fails to record their interest in property, that interest is void against any subsequent purchaser so long as the subsequent purchaser acts in good faith and takes the interest without notice of the prior interest. Notice can be actual or constructive.
Bona Fide Purchaser
A person acquiring rights in realty with notice of existence of a prior mortgage takes subject to the rights of the mortgagee. However, where the person does not have notice, if the subsequent mortgage is supported by actual present consideration and given in good faith, the mortgagee is regarded as a bona fide purchaser for value and as such, is protected against adverse claims of which the mortgage lacked notice. Notice may be actual or constructive. Constructive included notice of all interests in property that are recorded.
Foreclosure by Advertisement
Michigan follows process PPPP
1) First, must be a power of sale clause in the mortgage and the mortgage must not otherwise be in foreclosure at the time the mortgage seeks to foreclose. The mortgage must be properly recorded.
2) Second, the mortgagee must publish notice that the mortgage will be foreclosed by sale by publishing the same for four successive weeks, in a newspaper published in the county where the premises included in the mortgage and intended to be sold is situated.
3) Within 15 days after the first publication of notice, the mortgagee must post a copy of the notice in a conspicuous place on a part of the premises.
4) A public foreclosure sale must be held on the set date and the purchaser must record the deed within 20 days of the sale.
Note: foreclosing party must be either the owner of the indebtedness or have an interest in the indebtedness secured y the mortgage or the servicing of the mortgage. and mortgagee may, in good faith, purchase the property at the sale
Statutory Right of Redemption
The statutory right of redemption allows a foreclosed homeowner to recover the property from the purchaser by paying the amount the purchaser paid for the property, plus all taxes, insurance, fees, and interest.
It has legal effect of voiding the purchaser’s deed. In order to exercise this right, the homeowner must act within a period of time set by the statute, which is normal 6 months for a non-abandoned home (outstanding is balance more than 66 2/3% of the original indebtedness) or one year (balance less than 66 2/3%)
Purchaser at Sheriff’s Sale
Inherent right for purchaser at the sheriff’s sale (many times, a bank) to inspect the interior and exterior of the homeowners entire property after the ale and periodically through the redemption period. The purchaser must give 72 hours’ notice prior to inspection. If the inspection is unreasonably refused or if damage to property is imminent or has occurred the purchaser of the sale can immediately begin eviction proceedings to seek possession of the property and eliminate the homeowner’s redemption period. However, the court will not enter a judgment for possession if the homeowner repairs the damage
Easements Generally
An easement merely grants the right to use a piece of property, but only to the extent necessary to enjoy the rights conferred by the easement. An easement may be created by express grant or by operation of law.
Note: on exam person seeking easement usually wins, although they cannot materially increase the burden of it upon the servant estate or impose thereon a new and additional burden.
Prescriptive Easement
Similar to adverse possession, must be:
1) open and notorious;
2) adverse; and
3) continuous and uninterrupted;
4) for the statutory period (15 years)
Easement by Necessity
Arises when landowner sells a portion of his tract and by this division deprives one of a lot of access to a public Roa or utility line. Owner of servant parcel has right to locate this easement.
Note: Michigan law used to hold that property does not have to be landlocked for the court to find an easement by necessity. However, recent COA decision states that Michigan requires a strict necessity.
Easement Implied by Preexisting Use/Implied in Law
MI courts will imply where an owner of land subdivides and sells a portion of the property. The law generally presumes that a purchaser buys the land with the understanding that he will be able to use the existing easement.
Will be implied if:
1) prior to the division of single tract;
2) an apparent and continuous use exists on the ‘servant’ part;
3) that is reasonably necessary for the enjoyment of the dominant part; and
4) the court determines that the parties intended the use to continue after the division of the land
Note: holder of easement implied in law cannot increase the burden of the easement on the servient tenement. Use is limited to that which existed at the time land was subdivided. Owner of easement cannot materially increase the burden of it upon the servant estate or impose thereon a new and additional burden.
Acquiring Prop by Acquiescence
Under MI law, if adjoining property owners acquiesce to a boundary line for more than 15 years, the court treats that line as the legal boundary between the lots. This theory is based on an implied agreement between property owners.
Seller Disclosure Act
Seller may be liable for certain hidden defects in real property. Buyer may resident the sale contract if he discovered misrepresentation/fraud/silent fraud/false statements by seller before closing.
Party transferring property is required to provide a written disclosure statement to the purchaser. The seller must disclose any history of infestation, including terminates and must make each disclosure in good faith. The seller is not liable for inaccuracies if the info was not within personal knowledge of the seller, or was based entirely on information provided by an expert. Seller has no duty of ordinary care to discover defects.
Implied Warranty of Habitability
Landlords have general duty to keep residential premises in a habitable condition. The lessor covenants that the premises and all common areas must be fit for the use intended by the parties and that he will keep the premises in a reasonable repair during the term of the lead or license and will comply with applicable health and safety laws of the state and of the local unit of government where the premises are located.
When premises unlivable, MI law provides that lessee or occupant may quit and surrender possession of the building and of the land so injured, destroyed, or rendered untenanable or unfit for occupancy. A lessee who does so is ‘not liable to pay the lessor or owner rent for the time subsequent to the surrender. A tenant is also allowed to withhold rent under MI law when a landlord fails duty until prop is habitable again.
Retaliatory Eviction
In action for landlord to recover possession of realty, MI law provides tenant defense of retaliatory eviction.
Defense can be raised where termination is intended as a penalty for tenant’s attempt to secure or enforce rights under the lease or the law, or where the termination is intended as a penalty for the tenant’s complaint to gov’tal authority with report of landlord’s violation.
Rebuttable presumption if tenant shows that within 90 days before landlord eviction he attempted to secure/enforce rights against landlord. Landlord must show by preponderance of evidence that termination was not in retaliation for such acts.
