A Michigan residential real estate purchase agreement (“Contract for Sale and Purchase of Real Estate”) is a contract which commits a buyer to an offer to purchase real estate, according to specific terms agreed by the buyer and seller. Negotiated specifics include the purchase price, financing method, closing date, and more.
Do Sellers Have To Disclose Property Defects in Michigan?
Michigan does require real estate sellers to disclose any material defects with a property. In most cases, this is through a standardized disclosure form provided by statute, but any disclosure which provides the required information is valid.
By mutual agreement, it may be possible to waive the use of a standard form and handle required disclosures another way. However, the seller always has a duty to disclose all material defects that are not obvious on a casual inspection of the property, even if the buyer agrees to take the property “as-is.”
The basic duty to disclose cannot be waived, unless the sale falls under a recognized legal exemption. Michigan exempts the following common transfers, among others, from the disclosure form requirement:
- Court-ordered sales and transfers
- Sales by foreclosure or other debt default
- Transfer as part of the execution of a will or estate
- Transfer to a purchaser who will not use the property for residential purposes
- Transfer to a spouse, parent, or child
- Transfers to or from a government entity
Required Seller Disclosures in Michigan
Michigan sellers of residential real estate must make the following disclosures, as appropriate, to meet legal requirements for a real estate purchase agreement:
- Seller’s Property Disclosure Statement: Discloses material defects with a property that are known to the seller at the time of sale, and details any potential issues and conditions that may affect the value of the property.
- Lead-Based Paint Disclosure: Any home constructed earlier than 1978 must come with a disclosure upon the transfer of the property which includes any information about the presence of lead on the premises, as well as educational materials that communicate the health risks associated with lead exposure.
Sources
- 1 Mich. Comp. Laws § 565.953
-
The seller disclosure requirements of sections 4 to 13 do not apply to any of the following:
(a) Transfers pursuant to court order, including, but not limited to, transfers ordered by a probate court in administration of an estate, transfers pursuant to a writ of execution, transfers by any foreclosure sale, transfers by a trustee in bankruptcy, transfers by eminent domain, and transfers resulting from a decree for specific performance.
(b) Transfers to a mortgagee by a mortgagor or successor in interest who is in default, or transfers to a beneficiary of a deed of trust by a trustor or successor in interest who is in default.
(c) Transfers by a sale under a power of sale or any foreclosure sale under a decree of foreclosure after default in an obligation secured by a mortgage or deed of trust or secured by any other instrument containing a power of sale, or transfers by a mortgagee or a beneficiary under a deed of trust who has acquired the real property at a sale conducted pursuant to a power of sale under a mortgage or deed of trust or a sale pursuant to a decree of foreclosure or has acquired the real property by a deed in lieu of foreclosure.
(d) Transfers by a nonoccupant fiduciary in the course of the administration of a decedent’s estate, guardianship, conservatorship, or trust.
(e) Transfers from 1 co-tenant to 1 or more other co-tenants.
(f) Transfers made to a spouse, parent, grandparent, child, or grandchild.
(g) Transfers between spouses resulting from a judgment of divorce or a judgment of separate maintenance or from a property settlement agreement incidental to such a judgment.
(h) Transfers or exchanges to or from any governmental entity.
(i) Transfers made by a person licensed under article 24 of Act No. 299 of the Public Acts of 1980, being sections 339.2401 to 339.2412 of the Michigan Compiled Laws, of newly constructed residential property that has not been inhabited.
Source Link