Michigan law requires a seller to provide a buyer prior to a binding purchase agreement being executed the Seller's Disclosure Statement form which is prescribed by the law for the following type of transfers; any interest in real estate consisting of not less than 1 or more than 4 residential dwelling units, whether by sale, exchange, installment land contract, lease with an option to purchase, any other option to purchase, or ground lease coupled with proposed improvements by the purchaser or tenant or a transfer of stock or an interest in a residential cooperative.
There are a number of exemptions from the Seller Disclosure requirements. The most common ones encountered are as follows:
- Transfers by a non occupant fiduciary in the course of the administration of a decedent's estate, guardianship, conservatoireship or trust.
- Transfers made to a spouse, parent, grandparent, child, or grandchild.
- Transfer between spouses resulting from a judgment of divorce.
- Transfers made by a person licensed under Article 24 of Act No. 299 of the Public Acts of 1980, being sections 339.240 to 339.2412 of the Michigan Compiled Laws, of newly constructed residential property that has not been inhabited.
What happens if the Seller's Disclosure Statement is delivered after the purchase agreement is executed and becomes binding on the parties? The Buyer can terminate the purchase agreement by a written notice of termination delivered to the Seller or Seller's Agent within the following time limits: (a) Not later than 72 hours after delivery of the disclosure statement to the buyer, if it was delivered in person; (b) Not later than 120 hours after delivery of the disclosure statement to the buyer, if it was delivered by registered mail.
The Buyer's right to terminate the purchase agreement expires upon the transfer of the subject property by deed or installment sales contract.
The Seller's Disclosure Statement's purpose is to have the Seller tell the Buyer what they know about the various aspects of the property. The Statement is not a warranty of any kind by the Seller and is not a substitute for any inspections or warranties the Buyer may wish to obtain.
The Seller's Disclosure Statement mandated by Michigan law is available for purchase at any real estate office or at the Southwestern Michigan Association of REALTORS? office.