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  1. #1
    Join Date
    Aug 2015
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    Default Can a Seller Enforce a Loan Agreement for Real Estate After Conveying the Property

    My question involves real estate located in the State of: Michigan

    In 2011, my now husband decided to make payments to a house his grandfather was selling. His grandfather put the deed into my husbands name with no lean holder (saying my husband purchased it) . Now his grandfather is trying to come after us for missing payments and i was wondering what he is able to do / no do. <(the grandfather)
    Any help would be great

  2. #2
    Join Date
    Mar 2013
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    18,340

    Default Re: Help

    That's "lienholder."

    Anyway, Gramps can't do anything.

    Michigan Statute 566.132 Agreements, contracts, or promises required to be in writing and signed; enforcement; “financial institution” defined.

    Sec. 2.

    (1) In the following cases an agreement, contract, or promise is void unless that agreement, contract, or promise, or a note or memorandum of the agreement, contract, or promise is in writing and signed with an authorized signature by the party to be charged with the agreement, contract, or promise:

    (a) An agreement that, by its terms, is not to be performed within 1 year from the making of the agreement.


    In other words, a real estate loan that takes more than a year to repay has to be in writing or it's void and there is no contract.

    I don't know what you mean by "trying to come after us" but if your husband hasen't been served with a summons and complaint he is free to ignore Gramps if he wants to cheat the old man out of his money.

  3. #3
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    Default Re: Help

    Quote Quoting kmmorley94
    View Post
    Now his grandfather is trying to come after us for missing payments and i was wondering what he is able to do / no do. <(the grandfather)
    Why doesn't your husband simply pay grandpa the money he owes, such that this is no longer an issue?
    Quote Quoting adjusterjack
    View Post
    Anyway, Gramps can't do anything.... In other words, a real estate loan that takes more than a year to repay has to be in writing or it's void and there is no contract.
    It should be noted that a plaintiff can use claims of part performance / equitable estoppel, equitable mortgage, and unjust enrichment to seek enforcement of a contract where the contract is otherwise void under the statute of frauds.
    Quote Quoting Guzorek v. Williams, 300 Mich. 633, 638-639, 2 N.W.2d 796 (1942) (citations omitted).
    If one party to an oral contract, in reliance upon the contract, has performed his obligation thereunder so that it would be a fraud upon him to allow the other party to repudiate the contract, by interposing the statute, equity will regard the contract as removed from the operation of the statute. The contract to be enforced must be established by clear and convincing evidence.
    Quote Quoting Barber v SMH (US), Inc, 202 Mich App 366, 375; 509 NW2d 791 (1993)
    The elements of a claim for unjust enrichment are: (1) receipt of a benefit by the defendant from the plaintiff and (2) an inequity resulting to the plaintiff because of the retention of the benefit by the defendant. Dumas v Auto Club Ins Ass'n, 437 Mich 521, 546; 473 NW2d 652 (1991). In such instances, the law operates to imply a contract in order to prevent unjust enrichment.
    Quote Quoting Schultz v Schultz, 117 Mich App 454, 457; 324 NW2d 48 (1982).
    The demand for writing in the statute of frauds "was intended for persons dealing with each other at arm's length and on an equal footing". Emerson v Atwater, 7 Mich 12, 23 (1859). Thus, a review of Michigan case law reveals two instances in which it is proper to declare an equitable mortgage in order to circumvent the requirement for a writing. One such instance occurs when the deed is between parties where one party stands in a relationship of trust or guidance to the other party, such as attorney to client, guardian to ward, or parent to child, and the relationship has been abused.... In that situation, a court may declare a deed to be subject to an equitable mortgage where the deed would have been held to be unencumbered had the parties not been so related.

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