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Seller Disclosure and COVID-19

As the real estate market reopens in Michigan, one issue which will arise concerns the duty of house sellers to disclose the presence of COVID-19 or other infectious diseases  on their property.

The Michigan Seller Disclosure Act, MCL 565.951 et seq., (the “SDA”) is the primary statute governing the duty to disclose such hazards.  Operation of the SDA is based largely upon the Seller Disclosure Statement, which requires Sellers to respond to the specified required disclosures presented on that Statement.

None of those distinct inquiries directly addresses the presence of COVID-19 or other infectious diseases. Even more fundamentally, the Statement concentrates on the condition of the HOUSE and the REAL ESTATE, not the condition of its OCCUPANTS.   Questions about house occupants simply are not posed in the Seller Disclosure Statement.

The fact that the COVID-19 pathogen does not remain on most surfaces for more than seven days will present an additional factor concerning potential legal liability under the SDA.  Sellers ordinarily sign the Statement weeks and even months in advance of its distribution.   While the Statement requires updates specifying changes to the property’s condition, application of that requirement to the property’s occupants faces the same hurdles as those specified for the Statement in general.

For now, parties to a house sale must develop their own contractual solutions to this potential issue.  The legal forms, law, and realtors will undoubtedly catch up in due course.

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