Helping You Protect Your Real Estate Investment And Your Bottom Line

Homebuyers may recover damages for sellers’ failure to disclose

On Behalf of | Oct 12, 2021 | Real Estate Law

Purchasing a new property can be a nerve-racking experience. Many people purchase a home that seems to be free of defects, only to discover major structural or shortly after closing on the property. Under the Michigan Seller Disclosure Act, property sellers must provide potential buyers with a seller’s disclosure statement, or a standardized checklist indicating the physical condition of the property, as well as any problems or imperfections. Possible disclosures may include:

  • Roof leaks, basement flooding, or other water damage
  • Condition of the appliances
  • Condition of the HVAC system
  • History of termites and other infestations
  • Environmental issues (e.g., lead based paint, asbestos, radon gas)
  • Boundary lines
  • Flood insurance
  • Structural changes made without necessary permits or licensed contractors

Under Michigan law, sellers are not obligated to disclose that a property has been ‘stigmatized’ by death or another unfortunate incident.

What happens if a seller fails to disclose pertinent information?

In Michigan, sellers are obligated to act in good faith when providing information about a property. If certain information is not available or unknown to the seller, the seller can mark it as unknown on the disclosure statement.

If the seller leaves out information or simply makes a mistake in the seller’s disclosure statement, they can only be held liable if they did not exercise ordinary care when sharing/omitting the information. Generally, if the seller’s error was not within their personal knowledge or was based on information provided by a licensed professional, the seller will not be liable. The seller will also not be liable for failing to disclose information that could only be obtained by inspecting an inaccessible part of the property or by an expert.

However, if a seller makes fraudulent material misrepresentations or intentionally withheld material information about the property, the buyer may be able to pursue a claim against the seller to recover damages. An attorney specializing in real estate law can review your case and help determine whether you have a strong case.