On May 9, 2017, the Michigan Court of Appeals issued an opinion in ‘In re $55,336.17 Surplus Funds. The Surplus Fund case is important as the Court was called on to interpret the procedure for distributing foreclosure sale surplus funds and determining the priority of parties claiming an interest in the surplus funds.
At some point in their lives, most adults have signed a lease agreement, whether it be the leasing of an automobile, an apartment on campus while attending college or renting a home. Since most of these leases are standard forms offered on a “take it or leave it” basis by the lessor or landlord, negotiating the base rent and term of the lease is typically the main and only focus for the lessee.
When a business enters into a commercial lease however, the lease is usually signed by the business entity itself, which is typically organized as a corporation or limited liability company. By forming a corporation or LLC, the owners of a business can shield themselves from personal liability for the debts of the business in most situations. Accordingly, when a business entity signs a commercial lease to rent space in a commercial building, the entity signing the lease, as opposed to the owners of the business entity, is the one legally responsible for making the payments under the lease.
On January 12, 2017, the Michigan Court of Appeals issued an unpublished opinion in the matter of JPMorgan Chase Bank v Zair. The Zair case is important as a reminder that a mortgagor may, for the first time in any proceedings, contest the validity of the foreclosure by advertisement sale in the summary proceeding.
The case involves real property located in West Bloomfield. Defendants Kays Zair and Patrice Zair (“Zair”) were the record title owners of the real property and executed a promissory note and mortgage against the property in favor of Peoples State Bank in April of 2002 (“Peoples mortgage”). In December of 2006, the Zairs executed a promissory note and mortgage in favor of JPMorgan Chase Bank (“JPMorgan mortgage”). JPMorgan Chase claimed that a subordination agreement was entered into between Peoples State Bank and JPMorgan Chase Bank so that the Peoples mortgage was made subordinate to the JPMorgan mortgage, placing the JPMorgan mortgage in a first/senior lien position against the property.
A quiet title action is a type of lawsuit that resolves a dispute as to the ownership of real estate or resolves a dispute regarding an interest in real estate relating to somebody that may not be the owner of the real estate. Quiet title actions are often necessary to ensure that a property owner retains possession of their property and to ensure that the property owner has marketable title that can later be transferred. In Michigan, a quiet title action is authorized by statute. MCL 600.2932 provides as follows: Read more