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Example FIRAC Case Study

09 Aug

Can you identify each of the FIRAC steps in the following “opinion?”

Storr v. D’Ing

Plaintiff Lisa Storr wanted to start a business. Storr found a vacant building owned by Defendant, Bill D’Ing, and negotiated a lease to rent it for one year. According to the terms of the lease, the building could be used to conduct any legal business but could not be used as a dwelling. Plaintiff agreed to pay rent of $1,000 per month plus a security deposit of $2,000.

Plaintiff claims the security deposit charged by Defendant exceeds the maximum amount permitted by Section 554.602 of the Michigan Landlord-Tenant Relationship Act. That section provides:

A landlord may require a security deposit for each rental unit. A security deposit . . . shall not exceed 1½ months’ rent.

The dispositive question is whether Defendant’s building is a “rental unit.” Section 554.601(a) of the Act defines “rental unit” as “a structure or part thereof used as a home, residence, or sleeping unit by a single person or household unit, or any grounds, or other facilities or area promised for the use of a residential tenant and includes, but without limitation, apartment units, boarding houses, rooming houses, mobile home spaces, and single and 2-family dwellings.” This definition of “rental unit” only encompasses structures, grounds, facilities, and areas used for residential purposes. The listed examples of “rental units” includes “single and 2-family dwellings.” [Emphasis added.]

Plaintiff leased Defendant’s building for the purpose of operating a business therein, not for residential purposes. Indeed, Defendant expressly prohibited the use of the building as a residence by including a term in the lease which provided that Plaintiff could not use the building as a dwelling.

I therefore hold that Defendant’s building is not a “rental unit.” Plaintiff’s claim is denied.

*************************

ANSWERS:

Facts:

Plaintiff Lisa Storr wanted to start a business. Storr found a vacant building owned by Defendant, Bill D’Ing, and negotiated a lease to rent it for one year. According to the terms of the lease, the building could be used to conduct any legal business but could not be used as a dwelling. Plaintiff agreed to pay rent of $1,000 per month plus a security deposit of $2,000.

Issue (law issue):

Plaintiff claims the security deposit charged by Defendant exceeds the maximum amount permitted by Section 554.602 of the Michigan Landlord-Tenant Relationship Act. [Although not phrased as a question, this sentence states the law issue: Did Bill D’Ing violate Section 554.602 of the Michigan Landlord-Tenant Relationship Act?]

Rule:

“A landlord may require a security deposit for each rental unit. A security deposit . . . shall not exceed 1½ months’ rent.” [This is a quotation of the text of Section 554.602.]

Application:

Element issue: The dispositive question is whether Defendant’s building is a “rental unit.” [“Rental unit” is one element of the law. A question that asks whether the facts (Defendant’s building) come within the meaning of an element is an element issue.]Legal reasoning method – using a definition: Section 554.601(a) of the Act defines “rental unit” as “a structure or part thereof used as a home, residence, or sleeping unit by a single person or household unit, or any grounds, or other facilities or area promised for the use of a residential tenant and includes, but without limitation, apartment units, boarding houses, rooming houses, mobile home spaces, and single and 2-family dwellings.” This definition of “rental unit” only encompasses structures, grounds, facilities, and areas used for residential purposes. The listed examples of “rental units” includes “single and 2-family dwellings.” [Emphasis added.]

Comparing the definition of the element to the facts: Plaintiff leased Defendant’s building for the purpose of operating a business therein, not for residential purposes. Indeed, Defendant expressly prohibited the use of the building as a residence by including a term in the lease which provided that Plaintiff could not use the building as a dwelling.

Result of the comparison: I therefore hold that Defendant’s building is not a “rental unit.” [The court determined the element “rental unit” was not satisfied.]

Conclusion (to the law issue):

Plaintiff’s claim is denied. [In other words, Bill D’Ing did not violate Section 554.602 of the Michigan Landlord-Tenant Relationship Act. That law only covers the lease of a “rental unit.” Since the building Defendant leased was not a “rental unit,” his conduct was not covered by the law.]

 
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Posted by on August 9, 2011 in FIRAC Legal Reasoning

 

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