There is an old expression in the law that “An oral contract isn’t worth the paper that it’s written on.” This is especially true for contracts that involve real estate. A contract to buy or sell real estate MUST be in writing in order to be enforced by a court. A lease lasting more than one year must also be in writing to be enforced.
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Michigan’s depressed real estate market has caused many home sellers to consider becoming a landlord and renting their homes to tenants instead of trying to sell them. Before jumping into the role of a landlord, one needs to be aware that Michigan law is designed to protect tenants (who in the eyes of the law have less bargaining power than a landlord).
Do you do business as a Michigan limited liability company or a Michigan corporation? Did you know that you need to file an annual report with the State of Michigan (and pay a small fee) in order to keep that company or corporation in existence?
Do you own your own business? Getting ready to start a new business? Wading through legal documentation can be a daunting task, to say nothing of writing your own. If you’ve ever downloaded or purchased a CD of legal forms with the intent of drafting your own contract, please proceed cautiously. Many of these documents are not drafted with Michigan law in mind.
Investors are frequently looking for creative ways to avoid the transfer tax that comes with the sale of real estate. One recent “trick” has been to create a limited liablity company (LLC) which owns the real estate. This allows the investor to simply sell the LLC, instead of the real estate, to the new buyer, thus avoiding the transfer tax.
Because of the skyrocketing number of foreclosed homes, the Michigan Legislature has added extra protections for homeowners who are in default of the mortgages on their principal residences. (The law does not apply to investors in residential property or owners of commercial property).
Michigan landlords should be aware that on October 5, 2010, the Michigan legislature enacted a new law to protect victims of domestic assault or stalking. The new law requires a landlord to release a tenant from a lease if there is a threat of domestic violence.
It is not uncommon during these tough economic times to offer temporary shelter to family or friends who are unemployed, have lost their home to foreclosure, are going through a divorce or are otherwise temporarily between homes. However, even this short-term, informal agreement creates a “landlord tenant” relationship under Michigan law.