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Real Estate Transaction Mistakes: Consequences of Forgetting About “Dower” Interests

I was finalizing creating an easement agreement for a client of mine – a married couple. They reminded me of a recent case that I read this week, Zaher v Miotke, Docket NO. 307394 (March 28, 2013), concerning a married couple who forgot to include the spouse when he created an easement document.

The case of Zaher v Miotke

In Zaher, the husband, Greg Hoover (“Greg”) granted an easement to his neighbor and did not include his wife’s, Linda Hoover, (“Linda”) name in the easement.  Greg didn’t think he needed to include Linda in this easement document since he owned the property individually, he did not have Linda’s name on the document.

I see Greg’s logic. It makes sense, right?

Well, not in Michigan, where our laws recognize a married woman’s right of a “dower interest” in real estate.

i. What is a Dower Right?

Michigan Compiled Laws 558.1 governs a wife’s dower interest:
“The widow of every deceased person, shall be entitled to dower, or the use during her natural life, of 1/3 part of all the lands whereof her husband was seized of an estate of inheritance, at any time during the marriage, unless she is lawfully barred thereof.
Basically, dower provides a wife a life estate to one-third of her husband’s real property after his death. Stearns v. Perrin, 130 Mich. 456, 459; 90 NW 297 (1902)

So as you can see, Greg granted his neighbor an easement, and an easement under Michigan law is an interest in land. Forge v Smith, 458 Mich 198, 205 (1998).

The problem is readily apparent – Linda has a rights in Greg’s property, and she didn’t sign off on the easement. This transaction therefore violated Michigan law, particularly what is known as the “statute of frauds”  which provides that every conveyance of interest in land must be in writing for it to be valid. MCL 566.108.
ii. Moving on to the Facts:
Greg granted his neighbor, Zaher, a “joint driveway easement”  over part of his lot, so that Zaher could have a larger access to his driveway. The easement was recorded.
The problem comes into play when Greg sells his house to Miotke. Miotke doesn’t like the Joint Driveway and actively puts brick pavers in and plants rose bushes to divide the driveway. Zaher was out of town at the time and returned to his home to discover he could no longer park his vehicles in his garages.
Thus the litigation begins.
Zaher sought an injunction to return the property to the way that it had been before, Miotke sought an order compelling Zaher to demolish his garage – you can tell from the facts that emotions must have been flying high on both sides.
Miotke argued that the joint driveway easement was void from its inception, since it did not include Linda’s dower interest.
Zaher argued that Linda’s failure to sign the easement did not render it “void” but merely created an uncertainty in title – that would only be realized if Greg died before Linda.
iii. The Court’s Ruling
The Court went into an in depth analysis of case law that seemed to offer rulings in favor of both parties. However, at the end of the day the Court of Appeals held that the failure to include Linda does not void the Easement.   That “an inchoate dower interest is merely a potential future interest….This is not an ownership interest that prevents a current transfer to another.”
The court recognized that both parties in the case were asking the Court to make an “equitable decision”.  They weren’t asking specifically for money damages, but they were asking the Court to order the other party to do something.  The Court made the equitable decision here.  As it noted: “[p]roperty law is equitable at its core and voiding a contract because of a murky potential interest can be unjust.
Lesson:
Real Estate Transactions can be nuanced.  Making sure all the right parties are signing off in a conveyance is crucial.
I think another takeaway is simply this: real estate disputes involved “equity”.  A Court judging a dispute in equity will look at whether injustice would result if the Judge does what a party is asking.  In Zaher  the court realized that if it would do what Miotke asked it to do – an injustice would result.  That certainly played a role in its decision.
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