Easements.
An easement is a non-possessory interest in land, but a legal right to use land possessed by someone else. The holder of an easement has a limited right to use the tract of land in a specific way. However, the holder does not have a right to possess and enjoy the land. Typically easements allow the laying of utilities or a right of way over land for access to another. Generally the easement is ‘owned’ by the land and not by an individual.

Easements are created or destroyed by by writing either in grant or in reservation on transfer of title, implication where it would be impractical not to allow an easement, or by taking it. Easement by implication is created by operation of law and does not need to be recorded or written.

Easement by taking it (easement by prescription) is less common today than in the past. Like adverse possession of land, it requires (i) open and notorious; (ii) adverse; and, (iii) continuous use for the statutory period.

Adverse Possession.
In Michigan, lawful title may be acquired through adverse possession. Adverse possession was of value in the past, and is of great value and necessity today. In the days of old it specifically kept land from slipping into non-use and rewarded a diligent steward with true ownership.

Today, adverse possession not only protects adjoining property owners who encroach and take for their own necessary use, but also encourages adjoining property owners to be mindful of their own property use. For instance, take any two properties, if owner Aaron needs more space, and the other owner Billy doesn’t; and Billy doesn’t (i) want to sell, (ii) want to allow Aaron access, and (iii) doesn’t stop his Aaron from using the land when Aaron tills the unused land, society will give part of Billy’s land that Aaron has been using (so long as Aaron follows the proper legal steps of adverse possession in Michigan).

Michigan adverse possession requires: (i) actual entry; (ii) exclusive possession; (iii) open and notorious possession; (iv) hostile possession (protect what you are taking); and, (v) continuous possession for the statutory period (and all tolling expired).

Ancient Property — commercial investment property — example study.
In uptown Grand Rapids, Michigan 1920 two vacant lots existed. Phil owned the north lot, Tim owned the south lot. Tim built a several story apartment community housing over 100 individual families, and Phil built a warehouse housing commercial inventory. Resident’s at Tim’s apartment community asked Tim to build a garage for their new automobiles; Tim did so. Phil thought nothing of the garage.

Tim followed an east-west line on what was assumed to be the north boundary (touching Phil’s lot) of his southern lot. Years passed, residents used the garage, Tim passed away, and Phil passed away. The land exchanged hands several times and eventually the southern lot (Tim’s) landed in the hands of Tommy. And the northern lot (Phil’s) landed in Peter’s hands.

In 2010, Tommy approached Brad and asked Brad to purchase the land; Brad agrees. While investigating the survey, Brad’s lender discovers the encroaching the garage.

Result.
There are a number of ways of looking at this problem. Whether it is the boundary line doctrine, or adverse possession, Tommy owns at least the land where the building is encroaching, and Brad’s lender should not fear the wrath of Peter.

The sale of residential real estate in Michigan is regulated by several statutes (including occupational statutes if you use a real estate agent or broker) designed to protect both sellers and buyers. These statutes provide exceptions for certain property and strict penalties for violating a law whether by misinterpretation or intention. Most individuals looking to buy or sell their residential property hire a professional either real estate agent through a broker or attorney.

Real Estate Agents and Brokers
Although oftentimes used, brokers and agents are not necessary conduct a real estate transaction. Real estate brokers offer a service to real estate agents and individuals. In Michigan, brokers are required to take a special exam authorizing them to advertise broker services. Brokers house a particular real estate license authorizing them to work with real estate agents, whereby the agent receives a commission for the sale of a property. Brokers and agents have access to a range of property valuation and listing services based on competitive information in the region. Brokers and agents offer a method of advertising to other brokers and agents representing an ‘inverse’ party (seller to buyer, buyer to seller). Not all “listed” properties through a broker and agent are necessarily part of the multiple service listing (a/k/a MLS); it is important that a seller is aware what their “listing” will include, ask the important questions and be certain to get a pin-point answer (ignore puffery).

Commission is a negotiable point with any broker or agent, a company may have a non-negotiable or ‘fixed’ rate of commission, but by law it is always negotiable. The commission is owed to the broker (not the agent), the agent gets paid by the broker (often times a commission, but from the broker not the seller). Commission rates between 3 and 7% are fairly common on both ends (buyer and seller). Individuals should be careful to understand which type and on what condition the commission is owed; sellers should consider carefully the terms of picking a broker (or agent) who attempts to acquire an exclusive listing.

Sellers and buyers, listen to your gut, brokers and agents have a motivation to sell the home quickly and cheaply because their payment is contingent upon the sale. Never buy or sell a home unless you are certain you are making a choice you can live with. Brokers and agents offer a valuable service, but by the theory of economics, the best broker/agent is the one who can convince the seller to sell low and the buyer to buy high; the number one priority of a broker or agent is to close the sale.

Real Estate Attorneys
Attorneys are brought into real estate transactions for a number of reasons… the buyer or seller want to be certain the purchase agreement accurately reflects their intent; there is a problem with the title; a land contract is asked for; there is a falling out between buyer, seller, and broker or agent; review of mortgage documents or due diligence; or the buyer or seller desire the legal security of a deeply loyal party on their side. An attorney will represent the buyer or seller in a range of services depending upon the desires of the client and how early or late the attorney is brought in.

Where as a broker or agent, either for seller or buyer, is driven off of commission and the desire to sell the property, attorneys by contrast represent the buyer or seller as if the seller or buyer’s interests are that of the attorney. The attorney does not concern him or herself with whether or not the closing will take place, merely on whether or not the real estate transaction is a wise choice for their client. The attorney’s first and only concern is that of their client’s interest; the client must be informed and protected. An attorney will advise a client when a piece of property is not in their best interest, no matter how close to closing they are; an attorney will enforce the rights of their client, when others would throw up their hands and say “its too late”.

The biggest draw back of hiring an attorney to be your loyal servant (over that of a commission based professional), particularly for smaller real estate transactions, is that an attorney will be paid even if the property never closes. This is why many individuals don’t hire attorneys; but you get what you pay for. In the moment, individuals don’t often contemplate the benefit to burden of–risking an investment of several hundreds of thousands of dollars–where if it goes poorly, losing everything or worse. Purchasing real property is one of the biggest, most important, and most risky action an individual will ever undertake.

Michigan forms and documents in some real property transfers:
– Purchase Agreements: Are binding agreements whereby the seller agrees to sell and the buyer agrees to buy real property; it should contain every term and aspect conceivable (pre-printed forms are wisely avoided).
– Seller Disclosure Statement: see MCL 565.957.
– Lead Disclosure
– Closing settlement statement and affidavits
– Real Estate Transfer Valuation
– Property Transfer Affidavit
– Mortgage
– Land Contract
– Notice to assessor of transfer
– Warranty/Quitclaim deed
– Bill of Sale
– Tax prorations
– Home owners association documents
– Condominium documents (often 100 pages or more)

Make inquiries where necessary.

In Michigan when a loved one passes without a will their estate passes through what is known as intestate succession. The estate must then be processed via probate court and Michigan’s intestate statutes is then applied (such as spousal shares MCL 700.2102).

Spousal Share.
If a loved one passes (without a will) and is survived by a spouse, the decedents other relatives (heirs) will effect what the spouse receives.
Generally:

(1) If the decedent’s descendants are also the surviving spouse’s descendants, then the first $150,000* of the estate must then pass to the spouse. Additionally, one-half of the remaining balance then passes to the spouse. The remaining heirs receive the rest.

(2) If the decedent’s descendant’s are not also the descendant’s of the spouse, then only the first $100,000* of the estate must pass to the spouse. Additionally, one-half of the remaining balance also passes to the spouse. The remaining heirs receive the rest.

(3) If there are no descendant’s but the decedent is survived by a parent, then the first $150,000* passes to the spouse. Additionally, three-fourths of the balance also passes to the spouse. The parents receive the rest.

(4) If there is no descendant’s and no parents, 100% passes to the spouse.

*MCL 700.1210 adjusts the above values by a “cost-of-living adjustment factor”; and that is published annually by the Michigan state department of treasury.

The above is one of several intestate succession rules applied in Michigan. All estate put through probate are open record and available for viewing by the public. The best approach is to have a professionally drafted will designed for your estate and planned with tools such as trusts, life insurance, and other financial services. By design, you want your loved ones to get what they deserve with the smallest tax and transfer penalties and in the most discrete and private manner.

Broadly defined, a real estate syndicate pools capital from various investors and then utilizes the capital to: acquire an income producing property; or, develop underutilized land on which an income property can be developed. 

A syndicate structure allows investors to invest in real estate venture they may be unable or unwilling to invest in individually. Generally the investor is not involved in the day-to-day management of the project. A common example of this would be the purchase of a residential apartment complex. 

Investing in a real estate syndicate requires due diligence and a careful analysis of the proposed venture; as there are no guarantees that the venture will be profitable. It is recommended that individuals seek the advice of a qualified attorney and or financial planner when evaluating a syndication offering to fully understand the merits and risks of the investment.

The organization that puts together the syndication, the syndicator generally is compensated for: locating the real estate, due diligence of the acquisition or intended development, and closing the deal. This compensation can be provided in a variety of ways including: acquisition fees – paid to the syndicator at closing; management fees –typically based on a percentage of yearly gross revenue; and, equity carve outs – permits the syndicator or retain an equity interest in the project. 

The investor can realize gains on his investment through the cash flows of the property, the appreciation of their ownership interest that will be realized upon sale, and/or a preferred return on their invested capital. 

Real estate syndication is regulated by the Federal and State government to protect the public as well as potential investors. This regulation can be very difficult to navigate as it is frequently changed, and many governmental agencies are involved in the process. Investing in a real estate syndication should only be done after a thorough investigation of the syndicator and the investment. The securities attorneys at Zamzow PLLC have the expertise and experience to counsel syndicators and investors at each step of the syndication process.

Overview.
Firmly fixed in Michigan state, Federal, and ancient law is the governments power of “eminent domain”; the power of government to take private property for public use. Through the state government’s broad power to regulate, known as the “police power”,  the public health, safety, morals, and the general welfare, land use and development is highly controlled. The fifth and fourteenth amendment (due process clauses) of the United State’s Constitution limit the governments power to deprive life, liberty, or property without due process of law. From these federal protections, and other state constitutional protections (explicit or implicit), when private property is taken by a state or federal actor “just compensation” for the property is required.

Eminent Design.
Our roadways, railways (qualified), waterways (qualified), utilities, public buildings, and some urban revitalization of blighted lands are all a product of eminent domain. It is no coincidence that interstate-highways are straight, the government balances the public good (benefit) with the individual bad (burden); if 10 farms may be spared, with little expense to the public, by designing the highway to run half a mile to the left or right of those farms, ideally, the government will choose to spare the farms. This type of taking is fairly incontestable on constitutional grounds, and lobbying is [oftentimes] unsuccessful; after all, if it isn’t in my backyard, it will be in someone else’s–one way or another–someone will be unhappy.

Private Eminent Domain.
Public Use versus Private Use; and modified to include public purpose. Occasionally, the federal government will grant money to a municipality to purchase ‘blighted’ land, lay new roads, sewers, and other public utilities, then resell the properties to private developers. This relatively new repurpose of the public use, eminent domain power, causes controversy. A government (public) is taking land owned by a private individual, and using the land to resell it to another private individual. Challenges to these governmental takings have been brought largely on two arguments: the land is not blighted, or the land is ultimately going to be transferred to a private party. These arguments generally fail.

A notable case that has centered on private takings:
(1) Kelo v. City of New London 545 U.S. 469 (2005); Which spurred several legislative actions limited the taking of private property by the Federal Government to situations where the ‘true’ purpose is not merely economic of private entities.

Michigan.
A property owner in Michigan whose property has been subjected to a taking by the state is largely left with only one challenge to compensation, and that is in Michigan courts. The Michigan constitution article 10 • §2, provides for just compensation, where the government has taken from a private party.