US Michigan Salesperson License Exam Set Two

The legal analysis hinges on the specific statutory requirements for executing a valid deed in Michigan. Voluntary alienation of real property through a deed necessitates strict compliance with state law to be effective. Under Michigan Compiled Laws (MCL 565.8), a deed or other conveyance of land made within the state must be executed in the presence of two witnesses. These witnesses are required to subscribe their names to the instrument as part of the execution process. This requirement is fundamental to the validity of the deed itself, not merely a prerequisite for recording it. While a grantor’s signature, intent to convey, and delivery of the document are all crucial elements, they are insufficient if the statutory execution formalities are not met. The absence of the two witnesses constitutes a fatal defect in the execution of the purported deed, rendering it invalid to transfer legal title. Therefore, the attempted conveyance fails. The property was never legally transferred from the grantor’s ownership. As a result, the property remains an asset of the grantor’s estate upon their death and must be distributed according to the terms of their valid will or, if no will exists, by the laws of intestate succession. The lack of notarial acknowledgment is a separate issue that primarily affects the deed’s eligibility for recording, but the lack of witnesses invalidates the instrument’s execution.

The correct outcome is determined by applying the Michigan Dormant Minerals Act (MCL 554.291 et seq.). This Act provides a mechanism for terminating severed oil and gas interests that have been inactive for a significant period. The core principle of the Act is that a severed oil and gas interest is deemed abandoned and automatically reverts to the current surface owner if the mineral interest owner fails to perform one of several specified actions within any continuous 20-year period. These qualifying actions, often called preservation events, include the actual production of oil or gas, the issuance of a drilling permit, the sale or lease of the mineral rights, or the recording of a specific claim of interest with the county register of deeds. In the described situation, the mineral rights were severed in 1952. Since that time, no preservation event has been recorded. Therefore, after the first 20-year period of inactivity passed (1952-1972), the mineral rights would have automatically vested in the person who owned the surface estate at that time. This vesting is automatic by operation of law and does not require a court action to take effect, although a quiet title action may be pursued to formally confirm it on the record. The rights pass to subsequent surface owners. Therefore, Kenji, as the current surface owner, now holds those mineral rights.

In Michigan, the legal framework governing severed property rights establishes the mineral estate as the dominant estate and the surface estate as the servient estate. This means the owner of the subsurface mineral rights possesses an implied easement to use the surface of the land in a manner that is reasonably necessary to explore, develop, and produce the minerals. The surface owner cannot unilaterally prevent the mineral rights holder from accessing their property for these purposes. However, this right of the mineral owner is not unlimited. The mineral owner must exercise their rights with “due regard” for the rights of the surface owner. This principle, often referred to as the accommodation doctrine in a broader sense, requires the mineral owner to avoid negligent or wanton destruction of the surface and to accommodate the existing uses of the surface estate if reasonable alternatives are available. Therefore, the surface owner’s primary legal recourse is not to block access entirely, but to challenge the reasonableness of the mineral owner’s specific operational plan. The surface owner can argue that the proposed activities cause more damage than is reasonably necessary or that a less intrusive alternative exists that still allows for mineral extraction. This often leads to negotiation or litigation to determine a plan that minimizes surface impact while still allowing the mineral owner to exercise their property rights. The Michigan Right to Farm Act protects farmers from nuisance lawsuits, not from the exercise of dominant, severed property rights. Similarly, while local zoning may impose some restrictions, state-level regulation of oil and gas often preempts local ordinances, and the fundamental dispute is one of competing property rights.

This question does not require a mathematical calculation. In Michigan, the legal framework governing real estate service provision agreements, which includes buyer agency agreements, is very specific to protect consumers and ensure clarity for all parties. According to the Michigan Occupational Code, specifically Article 25, a service provision agreement must be in writing and signed by the client. A critical and non-negotiable component of this agreement is a definite expiration date. The law explicitly prohibits agreements that do not have a fixed termination point. An agreement that states it is valid “until a property is purchased” or for any other indefinite period is considered void from its inception. This means the contract is not legally binding and cannot be enforced by the broker or salesperson. The purpose of this requirement is to prevent consumers from being locked into perpetual or long-term agreements without a clear end date, ensuring they have the freedom to change representation after a reasonable, defined period. If an agreement lacks this definite expiration date, the broker has no legal claim to a commission, even if they were the procuring cause of the sale. The agreement is treated as if it never existed, and the licensee who created it could face disciplinary action from the Michigan Department of Licensing and Regulatory Affairs (LARA) for violating the Occupational Code.

The core legal principle at issue is the Michigan Statute of Frauds, specifically as it applies to interests in real estate. Michigan law, under MCL 566.106, mandates that any contract for the sale of land or any interest in land is void unless it is in writing and signed by the party by whom the sale is to be made. An option to purchase real estate is considered an interest in land and therefore falls squarely under this requirement. A verbal agreement for such an option is, on its face, unenforceable. However, courts of equity have developed the doctrine of part performance as an exception to the strict application of the Statute of Frauds. This doctrine is designed to prevent the statute from being used to perpetrate a fraud. For the doctrine of part performance to apply, the party seeking to enforce the oral contract must demonstrate that they have performed acts in reliance on the agreement that are exclusively referable to the contract. These acts must be so significant that it would be unjust and inequitable to permit the other party to repudiate the agreement. In this scenario, the tenant’s actions of investing a substantial sum of personal funds into making permanent, non-removable improvements to the property, such as a complete kitchen renovation, go far beyond the typical obligations of a tenant under a one-year lease. These actions are strong evidence of reliance on the verbal option to purchase. Therefore, a court of equity would likely find that the tenant’s significant, permanent improvements constitute part performance, making the verbal option to purchase potentially enforceable despite the lack of a written instrument.

In Michigan, tenancy by the entirety is a special form of joint property ownership available exclusively to married couples. It is founded on the legal theory that a husband and wife are a single legal entity. This form of ownership possesses five unities: time, title, interest, possession, and person (the marital unit). A primary and crucial feature of tenancy by the entirety is the significant protection it offers against creditors. Because the property is considered to be owned by the marital unit itself, and not by the individual spouses as separate persons, a creditor holding a debt against only one spouse cannot attach a lien to or force the sale of the property to satisfy that individual’s separate obligation. The entire property is shielded. This protection is fundamental to this type of ownership. For a creditor to successfully attach a claim to the property, the debt must be a joint debt for which both spouses are liable. There are some exceptions, such as a federal tax lien, but for general, individual, non-federal debts, the property is protected. Therefore, a judgment creditor of one spouse alone cannot compel the partition or sale of a home owned as tenants by the entirety. The ownership structure itself serves as a barrier to such collection actions.

The option contract was signed on March 1st for a 180-day period. The expiration date is calculated as follows: Remaining days in March: 30 (31 – 1) Days in April: 30 Days in May: 31 Days in June: 30 Days in July: 31 Total days accumulated by July 31st: \(30 + 30 + 31 + 30 + 31 = 152\) days. Remaining days needed to reach 180: \(180 – 152 = 28\) days. Therefore, the option expires 28 days into August, on August 28th. Amir’s action on June 15th occurs well within the valid option period. An option contract is a unilateral agreement where the optionor, the property owner, is bound to sell under the agreed terms, but the optionee, the potential buyer, is not obligated to purchase. The option fee serves as consideration to make the optionor’s offer irrevocable for the specified time. A critical aspect of an option contract is the nature of the interest held by the optionee. Until the option is exercised, the optionee does not possess legal or equitable title to the real estate. They hold only a contractual right to acquire the property in the future. In this scenario, Amir, the optionee, does not own the commercial lot. By proposing to enter into a purchase agreement to sell the lot to the corporation, he is marketing and contracting to sell property to which he has no ownership interest. Under the Michigan Occupational Code, specifically MCL 339.2517, a licensee who is buying or selling property on their own behalf must disclose their interest as a principal in the transaction in writing to all parties. Amir’s primary failure is not just the timing, but the misrepresentation of his capacity. He is acting as a seller of a property he does not own, which is a violation. To proceed correctly, he would need to first exercise his option with Brenda, thereby gaining equitable title, and then he could legally contract to sell the property, fully disclosing his role as a principal in the transaction.

\[ \text{Valuation Logic:} \] \[ \text{Let } V_A \text{ be the value of the Traverse City parcel and } V_B \text{ be the value of the rural parcel.} \] \[ V_A \propto \text{Situs}_{\text{High}} + \text{Improvements}_{\text{Low}} \] \[ V_B \propto \text{Situs}_{\text{Low}} + \text{Improvements}_{\text{High}} \] \[ \text{In real estate economics, the economic influence of a prime location (Situs) generally exceeds the value added by physical improvements in a less desirable location.} \] \[ \text{Therefore, the primary determinant for the probable outcome } V_A > V_B \text{ is Situs.} \] The value of real property is determined by a combination of physical and economic characteristics. In this scenario, the core issue is understanding which economic characteristic has the most significant impact on value. The parcel near Traverse City, despite being undeveloped, possesses a highly desirable location. This concept is known as situs, or area preference. Situs is not about the land itself, but about the value derived from its specific position and the surrounding economic and social factors, such as proximity to employment centers, quality schools, transportation networks, and recreational amenities like Lake Michigan. These factors create high demand for a finite supply of land in that area. Conversely, the rural parcel has significant physical improvements in the form of new infrastructure. While these improvements have an intrinsic cost and add some value, their economic utility is severely limited by the property’s remote location. The economic principle of permanence of investment, or fixity, is relevant here, as the capital invested in the rural infrastructure is sunk and cannot be moved to a better location. However, situs is the dominant factor because the location itself drives the fundamental demand and, consequently, the highest and best use of the property. The most sophisticated infrastructure in an undesirable location will not generate the same market value as unimproved land in a location where people have a strong preference to live and work.

This is a conceptual question, and no calculation is required. Michigan operates as a lien theory state regarding mortgages. In a lien theory state, the mortgage instrument creates a lien on the property, which serves as security for the underlying loan. The borrower, also known as the mortgagor, retains both legal and equitable title to the property during the life of the loan. The lender, or mortgagee, does not hold any form of title but rather a security interest. Consequently, if the borrower defaults on the loan, the lender cannot simply take possession of the property. The borrower’s ownership rights, including the right of possession, remain intact until a legal foreclosure process is completed. To enforce their security interest, the lender must initiate foreclosure proceedings, which in Michigan is typically a judicial foreclosure. This process involves filing a lawsuit and obtaining a court order to have the property sold to satisfy the outstanding debt. The lender’s right is to force the sale of the property through this legal process, not to automatically acquire title or possession upon default. This system provides significant protection for the borrower’s property rights, ensuring they are not displaced without due legal process.

The creditor’s attempt to force the sale of the home will be unsuccessful. In Michigan, tenancy by the entirety is a special form of joint ownership available exclusively to married couples. It is founded on the legal theory that a husband and wife are a single legal entity. Consequently, property held in this manner is considered owned by the marital unit, not by the individual spouses as separate persons. A primary and crucial feature of this tenancy is the protection it affords against the individual creditors of one spouse. A debt incurred solely by one spouse, such as Mateo’s personal business debt, cannot attach to or become a lien on the property held by the entirety. The entire property is shielded from the reach of a creditor who has a claim against only one of the spouses. Therefore, the creditor cannot compel a partition or sale of the residence to satisfy the judgment against Mateo alone. This protection remains in place as long as the couple remains married and the property is titled as a tenancy by the entirety. The only way the creditor might eventually collect is if the debtor spouse, Mateo, survives the non-debtor spouse, Sofia, at which point the property would become his sole property and be subject to his individual debts.

The landlord’s proposed policy is a direct violation of Michigan’s Elliott-Larsen Civil Rights Act (ELCRA). While the federal Fair Housing Act (FHA) prohibits discrimination based on race, color, religion, sex, national origin, disability, and familial status, Michigan law provides broader protections. ELCRA expands the list of protected classes to include age, height, weight, and, most relevant to this scenario, marital status. The landlord’s policy of refusing to rent a one-bedroom apartment to any couple, regardless of whether they are married or unmarried, constitutes discrimination based on marital status. This is because the policy treats individuals differently based on whether they are single or part of a couple. The decision to rent is being made not on the applicants’ qualifications but on their status as a couple, which falls squarely under the protection of “marital status.” A licensee has an obligation to advise their client against implementing any policy that violates fair housing laws, including the more stringent state-level statutes. Enforcing such a rule would expose both the landlord and the brokerage to legal action and disciplinary measures from the Michigan Department of Civil Rights and LARA. The policy is not a neutral occupancy standard; it is a direct prohibition against a group protected by state law.

The primary legal issue is determining whether an item installed by a commercial tenant for business purposes becomes part of the real property or remains the tenant’s personal property. In Michigan, the courts use a three-part test, often summarized by the acronym MARIA (Method of attachment, Adaptability, Relationship of the parties, Intention, and Agreement), to determine if an item is a fixture. However, a crucial exception exists for items installed by a tenant for use in their trade or business. These items are known as trade fixtures. Unlike standard fixtures, which are presumed to be permanent additions to the property, trade fixtures are legally considered the tenant’s personal property. The law presumes that the tenant intended to remove these items upon the termination of the lease. In this scenario, the specialized tempering machine was installed by Amara, a commercial tenant, specifically for the purpose of operating her chocolate business. Even though it is physically attached to the property by being bolted to the floor and connected to the building’s systems, its use defines it as a trade fixture. Therefore, it does not become the landlord’s real property through the process of annexation. Amara retains ownership of the machine and has the right to remove it before her lease expires. An important corollary to this right is the tenant’s obligation to repair any damage caused to the premises during the removal process. If the tenant fails to remove the trade fixture before the lease terminates, it may be considered abandoned and become the property of the landlord through accession.

The core issue is the legal status of property purchased in Michigan using funds that originated as community property in another state. Michigan is a common law state, not a community property state. Therefore, Michigan law governs the characterization and division of real property located within its borders. When a married couple divorces in Michigan, the courts apply the principle of equitable distribution to divide the marital estate. The marital estate generally includes all assets acquired by either party during the marriage. In this scenario, even though the Ann Arbor home is titled solely in Alejandro’s name, it was purchased during the marriage with funds derived from the sale of a marital asset from their previous state of residence. A Michigan court will not apply Texas community property law directly. Instead, it will classify the Ann Arbor home as part of the marital estate. The legal principle of equitable distribution requires the court to divide the marital estate in a manner that is fair and just, which does not automatically mean a 50/50 split. The court will consider numerous factors, including the source of the funds used for the purchase. The fact that the down payment came from the proceeds of a community property asset will be a significant factor, establishing that both spouses contributed to its acquisition. The court will trace the funds to their community property origin and weigh this heavily in its determination of a fair division. The property is not automatically Alejandro’s separate property due to the title, nor is it automatically 50% Isabella’s due to the funds’ origin. It is marital property subject to a fair division.

The statutory period for adverse possession in Michigan is 15 years. The claim requires possession that is actual, open and notorious, exclusive, hostile, and continuous for this entire period. In this scenario, Leo’s possession lasted for 10 years and Beatrice’s possession lasted for 6 years. Neither individual period meets the 15-year requirement. However, Michigan law permits “tacking,” which allows successive adverse possessors to combine their periods of possession to meet the statutory requirement. For tacking to be valid, there must be “privity of estate” between the successive occupants. Privity of estate means there is a direct, recognized legal connection between the possessors, such as a transfer through a deed, a will, or inheritance. In this case, Leo sold the property to Beatrice and the deed purported to include the disputed strip of land. This sale and deed create the necessary privity of estate between Leo and Beatrice. Therefore, Beatrice can tack Leo’s 10 years of adverse possession onto her 6 years. The total continuous period of adverse possession is \(10 \text{ years} + 6 \text{ years} = 16 \text{ years}\). Since 16 years exceeds the 15-year statutory requirement, and all other elements of adverse possession were met continuously throughout that time, Beatrice has a valid claim. The element of “hostile” possession does not require ill will; it simply means the possession is without the true owner’s permission and is under a claim of right, even if that claim is based on a mistake.

When real property is placed into a living trust, the legal title is transferred from the individual owners to the trust itself. The trust becomes the legal owner of the property. The individuals who create the trust are the grantors or settlors, and the individuals or entities appointed to manage the trust assets are the trustees. In a real estate transaction involving trust property, the trustee is the only party with the legal authority to convey the property. Therefore, for a listing agreement or a purchase agreement to be legally valid and enforceable, it must correctly identify the seller as the trust. The signature on the contract must be that of the trustee, acting in their official capacity as trustee. For example, the seller would be listed as “The Beaumont Family Revocable Living Trust,” and the signature line would read “Genevieve, Trustee.” If the grantors are also the trustees, as is common with revocable living trusts, they must sign as trustees, not as individuals. Signing in their individual capacity is legally ineffective because they no longer hold title as individuals. A prudent real estate licensee should always request and review a Certificate of Trust Existence and Authority or the relevant sections of the trust document to verify the name of the trust and confirm that the person signing has the authority to sell the property on behalf of the trust. This diligence prevents potential title defects and ensures a smooth closing.

The core of this scenario revolves around the legal distinction between a failed contract contingency and a breach of contract. A financing contingency in a Michigan purchase agreement is a condition precedent. This means the contract’s obligation to be performed, specifically the buyer’s obligation to purchase, is contingent upon the buyer successfully securing a loan as described in the agreement within a specified timeframe. The buyer must make a good faith effort to obtain this financing. In this case, Amina diligently pursued the loan, but it was not approved by the deadline due to external factors beyond her control. When a contingency is not met by its deadline despite the buyer’s good faith efforts, it does not constitute a breach of contract. Instead, the contract typically becomes void or terminates according to its own terms. Consequently, the remedies for a breach, such as the seller retaining the earnest money deposit as liquidated damages or suing for specific performance, are not available. The proper resolution is the termination of the agreement and the return of the parties to their pre-contract status. This includes the full refund of the buyer’s earnest money deposit. The seller is then free to place the property back on the market and accept other offers.

This question does not require a mathematical calculation. The legal principle at the core of this scenario is the power of eminent domain and its specific limitations under the Michigan Constitution. Eminent domain is the inherent right of the government to take private property for a public use. Condemnation is the legal process used to execute this power. A critical requirement for any valid condemnation action is that the taking must be for a “public use.” While this is a federal requirement under the Fifth Amendment, Michigan’s state constitution, specifically Article X, Section 2, provides more stringent protections for property owners. Following a 2006 statewide vote on Proposal 4, the Michigan Constitution was amended to explicitly narrow the definition of “public use.” The amendment specifies that the transfer of private property to another private entity for the primary purpose of economic development or to increase tax revenues is not considered a public use. Therefore, even if a city argues that a new private development will bring economic benefits to the community, such as increased tourism and tax base, this justification alone is insufficient to support the use of eminent domain if the property is being taken from one private owner to be given to another for private commercial enterprise. The government must provide “just compensation,” but the requirement of a legitimate public use is a separate and essential prerequisite that must be met before the issue of compensation is even reached.

The correct answer is derived from a core legal principle tied to the physical nature of real property. The physical characteristics of land are immobility, indestructibility, and uniqueness (also known as non-homogeneity). While all three are fundamental, the legal remedy of specific performance is primarily based on the concept of uniqueness. Uniqueness means that no two parcels of land are exactly the same. Even two adjacent lots are different because they occupy different points on the earth. Because each parcel is unique and cannot be perfectly substituted, courts of equity have determined that monetary damages are an inadequate remedy for a buyer in the event a seller breaches a valid purchase agreement. The buyer contracted for a specific, one-of-a-kind asset. Simply receiving money would not allow the buyer to purchase an identical property elsewhere, as one does not exist. Therefore, the buyer can sue for specific performance, which is a court order compelling the breaching seller to perform their obligation under the contract and convey title to the property. Immobility, the fact that land cannot be moved, contributes to its uniqueness and value, but it is not the direct legal basis for this remedy. Indestructibility, the permanence of land, speaks to its value as a long-term asset but does not form the foundation for compelling a sale. The inability to find an exact substitute is the critical factor, which is the definition of uniqueness. This principle is a cornerstone of real estate contract law in Michigan and across the United States.

The four primary types of leasehold estates are the estate for years, the periodic estate, the estate at will, and the estate at sufferance. An estate for years is a lease for a fixed, definite period of time, with a specific beginning and end date. It terminates automatically at the end of the term without any requirement for notice. A periodic estate, or periodic tenancy, continues for successive periods, such as month to month or year to year, until one of the parties gives proper notice to terminate. An estate at will has an indefinite duration and can be terminated by either the landlord or the tenant at any time by providing the legally required notice. An estate at sufferance arises when a tenant, who came into possession of the property lawfully, wrongfully remains in possession after their legal right to occupy the property has ended. This is often called a holdover tenancy. The landlord has the option to either evict the tenant or accept rent. In the described scenario, the tenant’s initial one-year lease constitutes an estate for years. Upon its expiration on the specified date, the tenant’s continued presence without the landlord’s consent creates an estate at sufferance. However, the critical event is the landlord’s acceptance of a rent payment after the original lease term has expired. Under Michigan law, specifically MCL 554.134, when a tenant for a year or more holds over after the end of their term and the landlord accepts rent, a new tenancy from year to year is created by operation of law, unless the original lease agreement specifies otherwise.

The core issue revolves around the validity of a listing agreement that includes an automatic renewal clause under Michigan law. According to the Michigan Administrative Rules, specifically Rule 339.22309(c), a broker is prohibited from entering into a listing agreement that contains a provision requiring the seller to notify the broker of their intent to cancel the agreement after its definite expiration date. This rule effectively makes automatic renewal clauses in listing agreements unenforceable and a violation of the code. The law mandates that every listing agreement must have a definite, specified expiration date. Once this date passes, the agreement is terminated. The presence of a clause that attempts to automatically extend this term renders that portion of the agreement, and any action taken under it, void. Therefore, even if the property sold during a period that the contract purported to have “renewed” into, the listing agreement had legally expired at its original termination date. The broker’s claim for a commission is based on a period when no valid listing agreement was in effect. Consequently, the broker has no legal right to a commission from the sale. This regulation is in place to protect consumers from being locked into indefinite agreements and to ensure clarity and certainty in the contractual relationship between a seller and their broker.

The legal analysis hinges on Michigan’s specific constitutional limitations on the power of eminent domain, which were enacted in direct response to the U.S. Supreme Court’s decision in Kelo v. City of New London. While the federal constitution allows for takings for “public use,” which the Kelo decision interpreted broadly to include economic development, Michigan law is significantly more restrictive. In 2006, Michigan voters approved a constitutional amendment, now found in Article X, Section 2 of the Michigan Constitution. This amendment explicitly states that “public use” does not include the taking of private property for the purpose of transfer to a private entity for economic development or the enhancement of tax revenues. This provision was specifically designed to prevent scenarios like the one described. Therefore, even though Wolverine City’s goal is to create jobs and stimulate the economy, the act of taking Mr. Chen’s private property to give to a private corporation, Great Lakes Innovations, for its own economic purposes, falls directly within the prohibition established by the Michigan Constitution. The city’s justification of “economic development” is not a legally sufficient “public use” in Michigan for this type of transfer. While the Uniform Condemnation Procedures Act (UCPA) governs the process of condemnation, including the requirement for a good faith offer and determination of just compensation, its provisions only apply to lawful takings. Since the fundamental purpose of this taking is unconstitutional under Michigan law, any procedural steps taken by the city are invalid. The exceptions to this rule, such as for public utilities, transportation projects, or the elimination of blight, do not apply to the facts presented in the scenario. The primary purpose is clearly economic development for a private entity, which is forbidden.

This question does not require a mathematical calculation. The solution is based on the legal principles of adverse possession in Michigan. Involuntary alienation is the transfer of title to real property against the owner’s will. One form of this is adverse possession, where an individual can acquire legal title to another’s land by possessing it for a specific duration under certain conditions. In Michigan, the statutory period for adverse possession is 15 years. For a claim to be successful, the possession must meet five critical elements: it must be Open, Notorious, Continuous, Hostile, and Exclusive. In the provided scenario, Leo’s actions must be evaluated against these five elements. His construction of a cabin and maintenance of a path are considered Open and Notorious, meaning they were visible and apparent enough to put a reasonably diligent owner on notice of a potential claim. The Hostile element is met because Leo’s use was without the true owner’s permission and was an infringement on her ownership rights; it does not require animosity or confrontation. Amelia’s passive awareness without granting formal permission does not negate the hostile nature of the possession. The Continuous element is also satisfied. For a property whose nature is seasonal, such as a hunting parcel, consistent seasonal use for the statutory period is legally considered continuous possession. Since Leo used the property for hunting each fall for 18 years, he has exceeded the 15-year requirement. Finally, his use of the cabin and surrounding area was for his own purposes, meeting the Exclusive element. Therefore, all conditions for a successful adverse possession claim under Michigan law appear to have been met.

The logical deduction for the correct remedy is as follows. First, a legally binding and enforceable purchase agreement was established between the two parties. Second, the seller, without a valid legal reason, communicated her intent to not fulfill her contractual obligations, which constitutes an anticipatory breach of the contract. Third, the subject matter of the contract is a specific parcel of real estate. Under long-standing legal principles in Michigan and elsewhere, every piece of real property is considered unique. This uniqueness means that no other property is an exact substitute. Fourth, because of this uniqueness, simply receiving money (monetary damages) is often considered an inadequate remedy for a buyer who wants to acquire that particular property. The buyer cannot use the money to buy the identical property elsewhere. Therefore, the most suitable and powerful remedy for the aggrieved buyer, who wishes to complete the purchase, is to seek an equitable remedy from a court. This remedy would compel the seller to perform the specific action she agreed to in the contract, which is to sell the property to the buyer under the agreed-upon terms. This legal action forces the seller to honor the contract and transfer title as promised. Other remedies exist, but they do not fulfill the buyer’s primary objective of obtaining the specific property they contracted for. Rescission would only cancel the contract and return the parties to their original positions, and while compensatory damages could provide financial relief, they fail to address the loss of the unique property itself.

In Michigan, real property ownership can be divided into separate estates, most commonly the surface estate and the subsurface estate, which includes mineral rights like oil and gas. When these rights are severed from the surface through a reservation in a deed or a separate conveyance, they become an independent interest in real property. However, to prevent title issues from old, unexercised claims, Michigan enacted the Dormant Minerals Act. This law states that if the owner of a severed oil or gas interest does not perform one of several specific acts for a continuous 20-year period, their interest is deemed abandoned and automatically reverts to the current owner of the surface estate. The acts that preserve the mineral interest and prevent it from becoming dormant include: the actual production of minerals, conducting drilling operations, leasing the rights for mineral exploration, or selling, mortgaging, or transferring the interest via a recorded instrument. Most importantly for passive owners, the interest can be preserved by recording a “claim of interest” with the Register of Deeds in the county where the land is located. This filing must be done within the 20-year period. If none of these actions are taken for 20 years, the law provides for an automatic transfer of the mineral rights to the surface owner, effectively extinguishing the old claim and reuniting the estates. This process does not require a court action or notice from the surface owner; it is an automatic operation of the statute.

The correct answer is determined by analyzing the core driver of value in the presented scenario. The concept of situs, often referred to as area preference, is the most critical economic characteristic at play. Situs describes the economic attributes of a location, including the impact of surrounding land uses, public services, transportation access, and general community reputation. It is the sum of external factors that make a specific location desirable, and therefore valuable. In the scenario, the developer is not just comparing two pieces of dirt; she is comparing two distinct economic environments. The parcel in the established, high-traffic university town has a high present situs value due to its proximity to a major university, existing businesses, and a stable, affluent population. The parcel near the future industrial plant has a high potential situs value, contingent on the economic growth the new plant is expected to generate. The decision hinges on which location’s set of external factors will yield a higher long-term return. While other characteristics like improvements and permanence of investment are relevant to any development project, they do not explain the fundamental difference in value and potential between these two specific locations. The core of the analysis is about location preference, which is the essence of situs.

The fundamental concept being tested is the bundle of legal rights associated with fee simple ownership of real property, often remembered by the acronym DEEPC: Disposition, Enjoyment, Exclusion, Possession, and Control. In the given scenario, Anika holds these rights to her land. The Michigan Department of Natural Resources (DNR) is proposing to create a public access trail across her property. This action directly targets Anika’s right of exclusion, which is the right to prevent others from entering or using her property. While her quiet enjoyment might be impacted by public traffic, the core right being legally appropriated by the government is the ability to exclude. The government’s authority to do this stems from the power of eminent domain, which allows the taking of private property for public use, provided that just compensation is paid to the owner. This is not an exercise of police power, which regulates property use for public welfare (like zoning), nor is it escheat, which is the reversion of property to the state when an owner dies without heirs. The DNR’s action is a partial taking, specifically an easement, that curtails the right of exclusion. Under Michigan’s Uniform Condemnation Procedures Act, the DNR must demonstrate public necessity and provide Anika with just compensation for the loss of this specific property right.

In Michigan, the rights of a property owner whose land abuts one of the Great Lakes are known as littoral rights. A critical concept governing these rights is the Public Trust Doctrine, which holds that the waters and the submerged lands of the Great Lakes are held in trust by the state for the benefit of the public. The boundary between private property and public trust land is not the water’s edge, which can fluctuate, but rather the ordinary high-water mark (OHWM). The OHWM is a legally defined line determined by physical characteristics such as where the presence and action of water are so continuous as to leave a distinct mark either by erosion, destruction of terrestrial vegetation, or other easily recognized characteristics. The land below this OHWM, including the beach area down to the water, is subject to the public trust. This doctrine grants the public the right to use this area for specific purposes, including navigation, fishing, and, as affirmed by the Michigan Supreme Court, walking along the shoreline. Therefore, a private property owner cannot legally prevent the public from walking on the beach area that lies between the OHWM and the water. Any structure, such as a fence, built in this public trust area without a permit from the Michigan Department of Environment, Great Lakes, and Energy (EGLE) would be considered an illegal encroachment.

Calculation: Loan Amount = $150,000 Collateral Type = Vacant Commercial Lot (Non-single-family residence) Stipulated Interest Rate = \(12\%\) Applicable Statute = Michigan Usury Act, specifically MCL 438.61 (Business Entity Exemption) Analysis: 1. Is the loan amount greater than $100,000? Yes, $150,000 > $100,000. 2. Is the primary security for the loan a single-family residence? No, it is a vacant commercial lot. 3. Is the interest rate agreed to in writing? Yes, it is stipulated in the land contract. Conclusion: The transaction meets the criteria for the business loan exemption under the Michigan Usury Act. Therefore, the state’s general usury ceilings do not apply, and the agreed-upon rate of \(12\%\) is legally permissible. The Michigan Usury Act establishes the maximum interest rates that can be legally charged for loans of money or for the forbearance of collecting debts. The general statutory limit for written agreements between private parties is \(7\%\) per annum. Any rate charged above the legally allowed maximum is considered usurious, which can lead to penalties for the lender, such as the forfeiture of all interest on the loan. However, the law provides for several significant exemptions. One of the most important exemptions in commercial real estate financing pertains to business loans. Under statute MCL 438.61, state usury limitations do not apply to any loan over $100,000 where the primary security is not a single-family residence. This exemption is designed to facilitate commercial transactions by allowing sophisticated parties or those engaged in business ventures to freely negotiate interest rates. In the described scenario, the land contract is for $150,000, which satisfies the monetary threshold. Furthermore, the collateral is a commercial lot, not a single-family home. Because both conditions of this specific exemption are met, the parties are permitted to agree to any interest rate in writing, provided it does not reach the level of criminal usury, which is \(25\%\).

The governing law in this situation is the Michigan Dormant Minerals Act. This act was established to simplify land titles and encourage the use of mineral resources by providing a mechanism for surface owners to acquire title to severed mineral interests that have been inactive for an extended period. The Act specifies that a severed interest in oil, gas, or other minerals is considered abandoned and will vest in the owner of the surface estate if it has been dormant for a continuous period of 20 years. An interest is not considered dormant if certain actions, defined as “acts of use,” have occurred within that 20 year period. These acts include the actual production or withdrawal of minerals, the issuance of a permit for drilling or mining, the leasing of the mineral rights for storage, or the recording of a transaction or notice of claim with the county register of deeds. In the described scenario, the mineral rights were severed in 1995, and no acts of use have occurred since. Therefore, the 20 year dormancy period was met in 2015. However, the ownership does not transfer automatically. The surface owner must take affirmative legal steps by filing an action in the circuit court for the county where the property is located to have the dormant mineral interest formally declared abandoned and merged with the surface title.

In Michigan, a buyer agency agreement establishes a fiduciary relationship between a buyer and a real estate brokerage. A critical component of many such agreements, particularly exclusive buyer agency agreements, is the protection clause, sometimes referred to as a carryover or extender clause. This clause is designed to protect the broker’s commission for a specified period after the agency agreement expires. However, its application is not absolute. The protection clause is typically enforceable only for properties that the licensee or brokerage introduced to the buyer during the term of the agency agreement. The broker must usually provide the buyer with a written list of these properties before or upon the expiration of the agreement for the clause to be valid. In the described scenario, the buyer purchased a property that was discovered through an independent source, a family member, after the agency agreement had terminated. The salesperson, Anya, had never shown or otherwise introduced this specific property to the buyer, Kenji. Therefore, the conditions required to trigger the protection clause have not been met. The purchase occurred within the protection period, but the crucial link of the agent’s involvement with that particular property is missing. Consequently, the brokerage is not legally entitled to a commission on this transaction. The buyer did not breach the agreement, as their contractual obligation to the agent pertained to properties the agent presented or helped procure.