Real Property Notes Blog

Mortgagor who removes fixtures during redemption period has not committed larceny

The Michigan Supreme Court has issued an opinion upholding dismissal of charges against a mortgagor who removed cabinets, counter tops, sinks, the furnace, doors, the water heater, and other fixtures from a home after the mortgagee foreclosed but before the redemption period.  The court held that, because the mortgagor retained the exclusive right of possession during the redemption period, he did not remove “property of another” under the larceny statute.

Lest anybody think that mortgagors can now strip property during the redemption period with impunity, the court was quick to point out, in a footnote, that foreclosure sale purchasers have various rights under the foreclosure statutes to address such conduct.  The court also withheld opinion on whether the prosecutor could charge the mortgagor with embezzlement or with malicious destruction of property.

Unincorporated Association is a Legal Entity

The Michigan Court of Appeals has recently held that an unincorporated association comprised of the presidents of four condominium associations, formed to to make decisions regarding the community areas shared by the four condominiums, is a legal entity separate and distinct from the condominium associations themselves or their presidents.  The plaintiff, president of one of the associations, filed suit seeking various forms of relief, all of which hinged upon the actions of the unincorporated association being invalid because the unincorporated association was not a legal entity.  The trial court held otherwise and the court of appeals affirmed.

Several statutes as well as various common law decisions stretching back over 100 years have recognized unincorporated societies or associations as separate legal entities.  The Court of Appeals was not plowing new ground in so holding.  

Unincorporated associations consisting of the board members of condominiums which are part of a larger planned unit development are not uncommon.  However, there are good strategic reasons for incorporating, not the least of which are the provisions which can be incorporated in the Articles of Incorporation requiring the corporation to indemnify and defend board members from claims brought against them as a result of actions taken on behalf of the entity.

Khouri Analysis Extended to other Statutory Fees

In Pirgu v USAA, the Michigan Supreme Court extended the framework, first expounded in Smith v Khouri, 481 Mich 519 (2008), for determination of a reasonable attorney fee to a case under the No-Fault Act.  While it may seem surprising that this blog, dealing with real estate issues, should remark on a no-fault case, this case extends the trend of using the Khouri analysis to determine a reasonable attorney fee to other statutory provisions authorizing attorney fees.  It seems only a matter of time before the Khouri framework will be applied in a published opinion to attorney fees under the MI Condominium Act; indeed, at least one unpublished opinion has already done so.

© Steve Sowell 2018