Get it in Writing!

If you want to acquire someone’s real property, GET IT IN WRITING.  An unpublished opinion highlighting this principle, Exclusive Auto, Inc. v Mattawan Holdings, LLC, was recently released by the Michigan Court of Appeals.

Plaintiff-Lessee negotiated with the mother of the owner of real property.  He claimed that they agreed upon a “rent to own” contract, but the document signed was a lease.  It provided that Plaintiff could make improvements to the property, which would remain on the property at the end of the lease.  The lease also contained an integration clause, stating that it was the complete agreement between the parties and neither party was relying on any prior or contemporaneous oral representations.  At the end of the lease, he attempted to negotiate a land contract, but signed a second lease containing the same provisions.  When negotiations for a land contract fell through, Lessee began escrowing his rent.  He filed suit claiming breach of contract, promissory estoppel, and unjust enrichment.  The lessor counterclaimed for possession and back rent.  The trial court entered a judgment for the lessor and dismissed Lessee’s complaint.

The court of appeals affirmed.  Because the written lease provided for the improvements to stay at the end of the lease term, Lessee’s unjust enrichment claim was dismissed:  there can be no recovery on a theory of unjust enrichment when there is an express contract between the parties.  Also, his promissory estoppel claim failed, because the long-standing doctrine that an interest in real property cannot be acquired by estoppel.

Lessee clearly intended to acquire the property; his mistake was not getting it in writing.

© Steve Sowell 2018