Reference no: EM133261378

Assignment:

1. Haru is a skilled carpenter who built a custom bar for the basement of his home where he throws many parties for his friends. Haru has decided to sell his home, but he has stipulated that the bar is to be considered personal property in a contractual agreement with the buyers of the home. Explain whether the bar is considered a fixture.

2. Carmen owns a high-end clothing store. She decides she needs a bigger store to support the business's popularity. Her current lease expires next month, and Carmen is worried that she won't be able to take her vintage chandelier and custom flooring and shelving. Which, if any, of these items can be removed to her new location?

3. Not long after Billy moved to California from his farm in Iowa, he began craving the farm's sweet corn. Billy decided to plant some corn in the backyard of his rented home. After his lease expired, Billy returned to harvest the sweet corn. Is Billy permitted to do so? Explain.

4. What steps are necessary for a creditor's security interest to attach to personal property or a fixture?

5. Hanna took out a $10,000 loan from Banco on January 26. The loan was secured by a mortgage upon her home. The following month, Hanna went to Lendco and took out a $5,000 loan, which was unsecured, partly because she knew the owner, Meeko, who p. 89knew Hanna would always repay her debts. Then just before the holidays, Hanna went to Loanco and took out a $8,000 loan to buy gifts for all her family and friends. This holiday loan was secured by the title to her car. After the New Year, Hanna was laid off and defaulted on all her loans. Discuss the order in which creditors would be paid if Hanna sold her car and home.

6. Assume the same facts from the previous question, except Hanna has not sold her home or car. Discuss the potential remedies of the creditors. Which remedy do you think would be the most beneficial under these circumstances?

7. Alpha, Inc. finances the purchase and installation of new machinery and equipment in Darren's plant. Alpha receives and timely perfects a security interest in these assets. Darren subsequently borrows from his bank and secures the loan with the machinery and equipment. If Darren were to default in repaying both parties, who would be in a better position to collect? Explain.

8. Constructive annexation and the industrial plant rule can be particularly troublesome to potential sellers of commercial or industrial property. Are these rules fair? Can you think of a better alternative?

9. Research the laws of your state to determine whether a trespasser that installed fixtures has the right to remove them without the landowner's or lender's consent. Do you agree with the law of your state? Why or why not?

10. Do you think it is fair that potential fixtures are subjected to a different test for tax purposes, and that test is administered by objectively reviewing the outward appearances without regard to the agreement or relationship of the parties?