Final Case Scenario - Bus422 Uof P

Case Scenario: Mr. and Mrs. Green

1. Is the coin collection a gift or can it be given to a coin collectors club upon the death of the Greens?

2. If the liability of loss or damaged clothing is a bailment, what kind is it and what, if any are the liabilities?

3. How should the Greens take title to the land and building of the dry cleaning business? What types of real property will they encounter and what items will be considered fixtures?

How the Greens take title to the property will depend on the a few things. If they are purchasing an existing business they will need to find out how the current owner possesses the property. If the current owner holds the title to the property fee simple absolute then the Greens could choose to purchase the property along with the business, or could purchase the business alone and lease the property from the current owner. If the property is currently leased by the current business owner then the Greens would most likely be taking over the existing lease. Once this is decided, the ownership of the business and property should be set up as joint tenancy or tenancy by the entirety if the Greens' state permits it.

The most obvious real property the Greens will encounter when starting the dry cleaning business is the building and the land that it sits on. There are other types of real property that will also be involved. There will most likely be a parking lot of some sort which will be part of the real property. The sidewalks surrounding the building and walkway leading to the entrance will also be real property. If the Greens choose to have any type of landscaping surrounding their business, the plants will be part of the real property as long as they are present year-round. The exterior of the building will have fixtures such as a business sign. The keys to the building would be fixtures, and part of the real property, since they are unique to the building. Inside the building the fixtures included would be the counters. The dry cleaning equipment inside the building may be considered constructively annexed fixtures; therefore it would be part of the real property.

4. Who would be the trustee of Greenacres and what types of interest will Mary, William and the historical Society have?

The trust to be set up is called a testamentary trust because it will not go into effect until the elder Greens die. The trustee should be the bank where the account is set up, and it should be given specific instructions as to how the funds should be used to maintain the property so that they do not deplete too quickly. Mary, William and the historical society would have no interest to collect the money other than for the purpose of property upkeep. The trust should be set up as spendthrift trust.

5. Advise on landlord and tenant duties, responsibilities and liabilities on owning an apartment building. What type of insurance do they need?

The Greens will be required to comply with local laws regarding the duties and

responsibilities of owning an apartment complex. They will be required to keep their premises up

to code, by maintaining the structural components and providing control programs for pests.

They will have to hire someone to keep the common areas clean and safe and maintain the

appliances that are furnished with the rental of the units. In owning an apartment complex the

Greens will be liable to protect their tenants from thieves and criminal acts of their fellow

tenants, this liability can be avoided by providing and maintaining an adequate lock system. In

order to avoid the liability of neighborhood crimes and/or drug dealing, the Greens should

investigate the surrounding areas of their apartment complex, and be educated on the criminal

activity from the past. When suspicious activity and security issues are reported, the Greens will

have to respond to the tenants concerns, or they could be held liable for any injury or loss that the

tenant may experience after contacting the Greens.

The tenant must comply with the rental agreement, such as paying rent on time, keeping the

premises clean and preventing damage to the unit. The tenant must also restore the property to its initial condition or will be held liable for the costs that may be incurred by the Greens having to make repairs that were created by neglect, willful damage or misuse. The Greens should also be aware that they are not responsible for the tenants' possessions that may be damaged by fire or theft, since their insurance covers the building and not the contents.