§1.1 Seller disclosure statements (SDSs) are a relatively routine part of most residential transactions but can also be the lynchpin of litigation when a buyer feels they were misled about a purchase. In this virtual seminar, Deborah Lapin and Matthew Turchyn explain how to evaluate the merits of a new case and pursue litigation, mediation, or other remedies.
§1.2 Segment 1—Initial ReviewSDSs in Michigan are governed by the Seller Disclosure Act, MCL 565.951 et seq. Sellers will generally complete these forms without the benefit of an attorney. What are some common mistakes sellers make?What should practitioners be looking for when reviewing a new case involving a dispute over an SDS?
Segment 2—Evidentiary Issues One of the challenges in bringing an SDS case is that of proof, showing that a seller knowingly failed to disclose a defect with the property. What sort of evidence is likely to be persuasive in this type of case, and how hard is it to come by? If there has been an effort to conceal a defect, a buyer may not discover a problem with the property. How does the six-year statute of limitations figure into that?
Segment 3—Damages and Remedies Even if a seller knowingly conceals a defect on a property, the actual amount of damages may not warrant pursuing the matter. What sort of case would be worth pursuing? Is rescinding the sale ever an option? What are some other options for resolving these cases that don’t involve going to court?
Segment 4—Third Parties Most residential transactions involve lenders, inspectors, real estate agents, and even homeowner’s insurance carriers. Do these third parties ever get pulled into this type of dispute following a transaction? Any tips for attorneys in working with these third parties to craft a resolution for their clients?
§1.3 Boyle v GMC, 468 Mich 226, 661 NW2d 557 (2003), discusses the running of the statute of limitations for fraud claims.Roberts v Saffell, 280 Mich App 397, 760 NW2d 715 (2008); Pena v Ellis, No 257840 (Mich Ct App Apr 18, 2006) (unpublished); and Locher v Estate of Zimmerman, No 346566 (Mich Ct App Feb 18, 2020) (unpublished), discuss no private right of action to bring a civil suit under the Seller Disclosure Act.In Flynn v Korneffel, 451 Mich 186, 199, 547 NW2d 249 (1996), a fraud claim also has its limitations because it must be proven by clear and convincing evidence.In Haines v Maple Island Estates, Inc, No 285849 (Mich Ct App Dec 3, 2009) (unpublished), innocent misrepresentation also has challenges because the representation must be made in connection with a contract, and an SDS is technically separate from a purchase agreement.
§1.4 The following are additional resources for this topic:Seller’s Disclosure Statement (MCL 565.957(1))Michigan Residential Real Estate Transactions (see chapter 4) Understand Seller Disclosure Requirements for Residential Property