Understanding Seller Disclosure Requirements

Alicia Schaub

The Michigan Seller Disclosure Act (SDA) (MCL 565.951) requires that a seller of residential property must give prospective buyers a disclosure statement before executing a binding purchase agreement with the buyer. In this disclosure, the seller must reveal the condition of all major appliances, systems, and services of the property, along with the general condition of the property, including, but limited to:

  • Basement and roof leaks,
  • Insect infestation,
  • Underground storage tanks,
  • Any outstanding assessments,
  • Pending litigation, and
  • The duration of the seller’s occupancy.

The seller makes these disclosures based on their own knowledge of the property as of the date he or she signs the statement. If the seller is unaware of the condition of an item, then the seller would be responsible for indicating this on the disclosure statement.

A seller disclosure statement is extremely significant because if the seller fails to provide, an otherwise binding purchase agreement becomes voidable. Although a buyer’s rights under the SDA are extinguished once the sale is closed, a buyer may still have a fraud or negligence action again the seller if they can show the seller committed fraud or negligence from their statements on the disclosure.

Therefore, it is important that the seller take the disclosure seriously and make their statements in good faith.

To see if the SDA applies to your situation, see MCL 565.952. For a list of transfer that are exempt from SDA requirements, see MCL 565.953. The most notably exceptions being (1) transfers made to a spouse, parent, grandparent, child or grandchild; and (2) transfers by a nonoccupant fiduciary in the course of the administration of a decedent’s estate, guardianship, conservatorship, or trust.

By Alicia Schaub


Alicia Schaub is Access Title Agency’s on-staff attorney for the Traverse City and Suttons Bay, Michigan offices. She graduated cum laude from Western Michigan University Cooley Law School and is licensed to practice law in the State of Michigan. Contact info: aschaub@accesstitleagency.com or (231) 539-1203.

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