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REAL ESTATE 93: Plaintiff argues whether the land contract violates Michigan’s usury act.

Plaintiff owned real property that was secured by a mortgage loan. Defendant purchased the property at the sheriff’s sale after plaintiff defaulted on the loan. One day before the redemption period expired, plaintiff sold defendant her interest in the property, her redemption rights, and her rights to any surplus from the sheriff’s sale in exchange for an option to buy back the property.

Land Contract

Three months after the redemption period expired, plaintiff exercised her right to buy back the property by entering into a land contract with defendant. Plaintiff failed to pay defendant in accordance with the terms of the land contract. Defendant sent plaintiff a forfeiture notice and then filed a complaint for land contract forfeiture in the district court.

In response, plaintiff filed action in circuit court, requesting that the trial court void the land contract and create an equitable mortgage in favor of defendant. Plaintiff argues that there is a question of fact whether the land contract violates Michigan’s usury act. MCL 438.31c(6) limits the interest rate in certain land contracts to 11% and land contracts provide for a rate of interest not to exceed 11% per annum, which interest shall be inclusive of all amounts defined as the finance charge.

Surplus Funds

Plaintiff acknowledges that the land contract states on its face that the annual interest rate is 7%. But plaintiff argues that a blending approach must be undertaken to account for the surplus funds that defendant received pursuant to the Affidavit of Non-Redemption (AONR).

The land contract does not include any language incorporating the AONR or the surplus funds. The land contract plainly states that no payment was made toward the purchase of the property. And the AONR clearly and unambiguously states that, as consideration for the option to purchase the property outside the six[1]month redemption period, plaintiff wished to sell her interests in the real property along with redemption rights and rights to Surplus (overbid of $43,000) to defendant. A blending approach is not warranted by the facts of this case.

Contract not Usurious

Because it is clear from the face of the document that the land contract was not usurious, the trial court granted defendant’s motion for summary disposition under MCR 2.116(C)(10) as to plaintiff’s usury claim.

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MICHIGAN WILLS/TRUSTS 33: Trustees required to provide notice informing recipients that they may challenge the validity of a trust and the period allowed for bringing such a challenge.

The notice sent clearly advised her that if she wanted to contest the validity of the Trust in a judicial proceeding, the law required her to do so within six months from the date of the letter. Nothing in the statute requires a trustee to inform the recipients of the specific legal consequences of not acting during the time allowed.

MICHIGAN REAL ESTATE 97: The court imposed a constructive trust on defendant’s one-half interest in the property in favor of plaintiff.

The trial court found that plaintiff sustained her burden of establishing that a constructive trust was necessary to prevent defendant from being unjustly enriched. Accordingly, the court imposed a constructive trust on defendant’s one-half interest in the property in favor of plaintiff and ordered defendant to convey his interest in the property to plaintiff.

MICHIGAN REAL ESTATE 95: Property owners did not place a condition upon the delivery of the deed; rather, they delivered the deed to themselves.

When the delivery of a deed is contingent upon the happening of some future event, title to the subject property will not transfer to the grantee until the event has occurred. However, in this case A and J did not place a condition upon the delivery of the deed; rather, they delivered the deed to themselves, then deposited the deed with their attorney with the instruction to record the deed only upon the happening of a future event, thereby placing a condition only upon the recording of the deed.

MICHIGAN PROBATE 57: Brother granted permanent guardianship of siblings.

At a multiday hearing to address the extension of the guardianship, the eldest children, the mother’s relatives and friends, and school personnel testified regarding the mother’s care of the children, appellant’s treatment of and interaction with the children, and the eldest siblings’ role in aiding the mother to raise the children.

FAMILY LAW 88: The trial court found that the children did not have an established custodial environment with defendant because, before the separation, he did not have a large role in the children’s lives.

The trial court credited plaintiff’s testimony that, before the parties’ separation, defendant spent minimal time helping to care for the children, so its finding that the children would not have looked to defendant for guidance, discipline, the necessities of life, and parental comfort during that time was not against the great weight of the evidence.

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