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SBM Real Property Law Section eNewsletter

May 2013

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Co-Editors:
Howard A. Lax, Bodman PLC

Patricia Paruch, Kemp Klein Law Firm

What is an Appropriate Deed When the Agreement is Silent?

By Glen Zatz, Bodman PLC

Different types of deeds are commonly used to convey property in Michigan, including a warranty deed, a quitclaim deed, a covenant deed, and a fiduciary deed. Each type provides different levels of title protection to the buyer and imposes different levels of potential liability upon the seller. Under the warranty deed, the seller warrants that the seller has clear fee title subject to no exceptions other than those stated in the deed. Under the quitclaim deed, the seller only conveys what title the seller holds at that time, which may be none at all or may be fee title subject to a myriad of encumbrances. The covenant deed and the fiduciary deed lie somewhere in between those two. With a covenant or fiduciary deed, the seller typically only covenants that he has not encumbered title.

What type of deed is appropriate when the transaction agreement is silent? In Siegler v. Estate of Jean B. Siegler (Mich. App. No. 305783, July 17, 2012, unpublished), the court held that a quitclaim deed was an appropriate deed where the buyer exercised a purchase option under a lease and the lease was silent as to the type of deed to be given. Even though this was a lease, the court relied upon MCL 565.361(1) which provides that under a land contract ". . . if the form of the deed is not specified in the land contract, [conveyance is] by an appropriate deed . . . ."

Attorneys representing sellers or buyers should specify in the land contract, the purchase agreement, the option agreement, or other document what type of deed is to be given. This will avoid your client taking on more risk or getting less protection as to title of the property than it thought it should.

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Interested in writing a future article for the e-Newsletter?
Please contact co-editors:
Howard Lax at HLax@bodmanlaw.com or Patricia Paruch at Pat.Paruch@kkue.com.

Eminent Domain for Personal Gain? Try Guam!

By Ronald E. Reynolds, Vercruysse Murray & Calzone PC

The U. S. Supreme Court's recent refusal to accept certiorari in Ilagan v. Ungacta, US No. 12-723, cert. den. April 15, 2013, illustrates the chasm between the U.S. Constitution, amend. V and the Michigan Constitution, art. X, § 2. Both restrict eminent domain to takings for "public use." Michigan narrowly interpreted "public use" in Wayne Cnty. v. Hathcock, 471 Mich 445 (2004), while the U.S. Supreme Court broadened government takings in Kelo v. City of New London, 545 US 469 (2005). (See, Pesick and Reynolds, Recent Changes in Eminent Domain Law, 86 Mich B J 11 (2007)). The Kelo majority, however, clearly stated the government cannot "take property under the mere pretext of a public purpose, when its actual purpose was to bestow a private benefit."

In the Ilagan case, the Mayor of Agana, the capital city of the U.S. territory Guam, decided that Mr. and Mrs. Ilagan's adjacent property offered good public road access. The Mayor obtained an appraisal, convinced the Guam government to initiate a personally-funded taking of the property, and convinced the legislature to authorize the conveyance from the government to him. The Mayor argued that the taking was pursuant to the "Agana Plan," a long-dormant post-World War II plan to assist Guam in adjusting property lines for economic redevelopment which had never been applied to just a single parcel.

The Ilagans won at trial. On appeal by the Mayor, the Guam Supreme Court, all sitting by designation because its members recused themselves, found that Kelo supported the taking. What about that pretext language? If ever a case cried out for the Supreme Court to clarify that the Fifth Amendment does not allow the politically connected to take property for personal benefit, this would seem to be the case. Not so, said the Court. I'm glad I live in Michigan.


The views and opinions expressed in these articles are those of the authors, and they do not reflect in any way the positions of the State Bar of Michigan or the Real Property Law Section. These columns are meant for informational purposes only and should not be construed as legal advice.
IRS Circular 230 Disclosure: To ensure compliance with requirements imposed by the Internal Revenue Service, we inform you that any U.S. federal tax advice contained in this communication (including any attachments) was not intended or written to be used, and cannot be used, by any person for the purpose of (i) avoiding tax-related penalties or (ii) promoting, marketing, or recommending to another person any transaction or matter addressed in this communication.