Seller disclosure requirements in Michigan

Is a disclosure form required by law?

Yes. Under MCL 565.952, the duty applies to the transfer of an interest in real estate with one to four residential dwelling units. The law covers sales, exchanges, installment land contracts, leases with an option to buy, and ground leases with improvements by the tenant.

The form is written into the statute itself (MCL 565.957). The Act says all disclosures “shall be made on the following form,” so there is no separate agency form to hunt for. Real estate brokers and salespersons must make copies available to the public (MCL 565.958).

What the form covers

The seller answers every question with yes, no, unknown or not available. The statutory form asks about:

• Appliances and systems: range, dishwasher, water heater, plumbing, electrical, sump pump, well and pump, septic tank, city water and sewer, heating and cooling, fireplace and chimney.
• Property conditions: evidence of water in the basement or crawl space, urea formaldehyde foam insulation, roof leaks, well water testing, septic condition, plumbing type, history of infestation, flood insurance and mineral rights.
• Environmental problems: asbestos, radon, formaldehyde, lead-based paint, fuel or chemical storage tanks and contaminated soil.
• Other items: shared walls, fences or driveways; encroachments, easements and zoning violations; homeowners’ associations; work done without permits; settling, flooding or drainage problems; major fire, wind or flood damage; underground tanks; nearby farms, landfills or airports; unpaid utility or municipal assessments; and pending litigation.

The form ends with notices to the buyer: sex offender registry information is available from local law enforcement, assessed value and principal residence exemption data come from the local assessor, and the buyer “should not assume” future tax bills will match the seller’s, because property tax obligations “can change significantly when property is transferred” (MCL 565.957). See our Michigan property tax guide.

The form also lists the dates the seller lived in the home and has owned it. It says the seller may rely on “best information available” and may answer “unknown” when a fact is not known (MCL 565.956). The form’s own text tells the buyer to get professional advice and inspections; see our home inspection cost guide.

When must it be delivered?

The seller must also show compliance on the purchase agreement, an addendum or a separate document (MCL 565.954(2)). A disclosure given to the buyer’s agent counts as given to the buyer. The seller can amend a disclosure in writing, but an amendment delivered after signing triggers the same cancellation window (MCL 565.962).

Exemptions

The Act does not apply to these transfers (MCL 565.953):

• transfers by court order, including estate administration, execution, foreclosure sales and bankruptcy trustees;
• transfers to a lender by a borrower in default, and sales by a lender that acquired the home through foreclosure or a deed in lieu;
• transfers by a non-occupant fiduciary of an estate, guardianship, conservatorship or trust;
• transfers between co-tenants;
• transfers to a spouse, parent, grandparent, child or grandchild;
• transfers between spouses in a divorce or separation;
• transfers to or from a government entity;
• a licensed residential builder’s sale of newly built property that has not been lived in.

What happens if a seller does not disclose?

• Late or missing form: the buyer can cancel a binding agreement within the time limits above. The form itself warns that failing to provide a signed statement lets the purchaser terminate. But a sale “shall not be invalidated solely because of the failure of any person to comply” with the Act (MCL 565.964).
• Honest mistakes: a seller is not liable for an error that was not within the seller’s personal knowledge, or that rests on public agency information, if ordinary care was used. Nor must a seller report what only an expert or an inspection of inaccessible areas could reveal (MCL 565.955(1)).
• Good faith and fraud: every disclosure must be made in good faith, meaning “honesty in fact” (MCL 565.960). The Act does not limit other legal duties about fraud, misrepresentation or deceit (MCL 565.961).
• Agents: a seller’s agent is not liable for the seller’s violation unless the agent knowingly acts in concert with the seller (MCL 565.965).

A city, township or county may require extra disclosures or a different form (MCL 565.959). For legal advice on a dispute, ask a Michigan attorney.

Federal lead-based paint rule (homes built before 1978)

For housing built before 1978, EPA says the seller must, before the buyer is bound:

• give the buyer the pamphlet “Protect Your Family From Lead In Your Home”;
• disclose any known lead-based paint or hazards, with their location and condition;
• hand over available records and reports;
• provide the Lead Warning Statement.

Buyers get a 10-day period to test for lead paint or hazards, which the parties can change in writing or the buyer can waive. Sellers must keep a signed copy of the disclosures for three years after the sale.