21 May 2017

The Seller Disclosure is a form that is statutorily required when there is a transfer of real estate. There are a few instances of transfers that do not require the disclosure form, but those are in very specific situations. Generally, the Seller Disclosure form is required.

The Seller Disclosure Act requires the seller to make a statement that discloses all of the conditions of and information about the property. This information is based on good faith, meaning that the seller is only required to disclose of information that he/she is aware of at the time of disclosure. The seller may be required to make additional disclosures after the delivery of the statement if the seller, prior to the transfer of the property, becomes aware of additional conditions. If the condition is dangerous, then the seller may be held liable for any injuries that occur due to the condition.

In Michigan, there is a form that the seller must deliver to the buyer. The form lists a number of appliances, systems, and services and asks for the condition if the items are applicable. The form also asks about other conditions that may be an issue in the home. Conditions such as wet basements, leaky roofs, underground storage tanks, environmental concerns, etc.[1] These statements, even if false, may not be held against the seller because they are only for “known conditions.” If the seller has no knowledge of the condition, then he/she cannot disclose it.

Buyers Remedies:

If the buyer discovers that there was a violation of the Act there are certain remedies available, however, the Act itself does not expand the buyers remedies that are available. There is a “right for a buyer to bring an action for treble damages against a seller who knowingly violates the Act.”[2] A buyer’s best option comes from tort law. If a buyer feels they have a claim against the seller in tort law, then there are three types of claims that could be made, common-law misrepresentation, innocent misrepresentation, or fraud by non-disclosure.[3]

[1] Michigan Real Estate Practice and Forms: Chapter 4: Preliminary Agreements and Disclosures; §4.33

[2] Id. at §4.40

[3] Michigan Residential Real Estate Transactions: Chapter 12: Remedies §12.1