3.2 Michigan Seller Disclosure Requirements
Key Takeaways
- Michigan requires sellers to provide a Seller Disclosure Statement for most residential transactions
- The disclosure covers known defects, conditions, and material facts about the property
- Sellers must update disclosures if conditions change before closing
- Buyers have a right to terminate within a specified period after receiving disclosure
- Certain transactions are exempt from disclosure requirements (foreclosures, estates, etc.)
Michigan law requires sellers to provide disclosure of known property conditions in most residential transactions.
Seller Disclosure Statement
Michigan requires a Seller Disclosure Statement for most residential real estate transactions involving 1-4 units.
What Must Be Disclosed
| Category | Items Covered |
|---|---|
| Structural | Foundation, roof, walls, floors |
| Systems | HVAC, plumbing, electrical, well, septic |
| Environmental | Flood zone, underground tanks, contamination |
| Legal | Liens, encroachments, easements, assessments |
| Physical Defects | Water damage, mold, pests, leaks |
| Boundaries | Survey issues, encroachments |
Disclosure Timing
- Seller should provide disclosure before or at the time of offer
- Buyer has right to review before making decision
- Buyer may have termination rights after receiving disclosure
Updating Disclosures
If conditions change after initial disclosure but before closing:
- Seller must update the disclosure
- Material changes must be communicated to buyer
- Buyer may have new rights based on changes
Key Point: Disclosure is of known conditions. Sellers are not required to investigate or discover unknown defects.
Exemptions from Disclosure
Certain transactions are exempt from the seller disclosure requirement:
| Exemption | Description |
|---|---|
| Foreclosures | Bank-owned or foreclosure sales |
| Estate sales | Sales by personal representatives |
| Court-ordered sales | Bankruptcy, judicial sales |
| New construction | Sales by builders (warranty applies) |
| Transfers between family | Certain family transfers |
| Government sales | Sales by government entities |
Agent Responsibilities
Even when seller disclosure is exempt, agents must:
- Disclose known material facts
- Not misrepresent property conditions
- Answer questions honestly
- Recommend professional inspections
Federal Disclosure Requirements
Regardless of Michigan law, federal requirements apply:
Lead-Based Paint Disclosure (Pre-1978 Homes)
| Requirement | Description |
|---|---|
| EPA pamphlet | "Protect Your Family From Lead in Your Home" |
| Known hazards | Disclose any known lead-based paint |
| Records | Provide any lead test results |
| 10-day inspection | Buyer's right (can be waived) |
| Signatures | Both parties must sign disclosure |
Consequences of Non-Disclosure
Failure to provide required disclosures can result in:
- Buyer termination rights
- Liability for damages
- Civil penalties
- License discipline for agents
What Sellers Don't Have to Disclose
Michigan law generally does not require disclosure of:
| Category | Examples |
|---|---|
| Deaths | Deaths on the property |
| Crimes | Crimes that occurred on property |
| Health history | Prior occupant health conditions |
| Stigmatized property | Perceived paranormal activity |
Best Practice: While not legally required, sellers should consult with their agent about what to disclose. Honest disclosure reduces liability.
Which residential transactions typically require a Seller Disclosure Statement in Michigan?
For homes built before 1978, what federal disclosure is required?