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What must a seller of real property disclose?

Friday, April 25th, 2014

Every homeowner in Michigan is aware of a seller’s duty to disclose issues with water in a basement or mold in that back closet, but is there a duty for a seller in Michigan to disclose details about an event, when the potential buyer has knowledge about, which may adversely impact the desirability of the home? Properties where such events occur are known as Stigmatized Property and in Michigan a seller is not required to disclose such an event.

Michigan is not alone in not requiring such a disclosure but they are in the minority. The general rule in Michigan is caveat emptor, or buyer beware; though it should be noted a seller cannot lie or misrepresent the home if directly questioned. So if you have a concern, or have heard a rumor about a home, ask the question. The buyer is required to answer in good faith (i.e. honestly) and if he or she fails to do so the law will be squarely against the deceptive seller.

If you’re in Michigan and wish to do a bit more reading on Stigmatized Property check out this article from the Michigan Bar. While it’s a few years old its still good law and an informative article. For a more current view of how this works in real life take a look at this article and the associated listing and notice what it doesn’t say.

Finally to find a bit more about stigmatitzed property click here.