How Much Can You Trust a Seller’s Disclosure Statement Up North?
In 2003 a couple bought an old summer house in Leland for $475,000. The sellers had owned it for 35 years, lived in California, and came up for the summers. On the seller's disclosure statement, next to the line that reads "History of infestation, if any: (termites, carpenter ants, etc.)," they answered no.
About two weeks after closing, the sellers handed over a tip sheet for the house. It mentioned that "a million" bugs would hatch in the spring, that a pest company had been out before, and that there was no way to avoid them but they wouldn't last long. The bugs showed up the next spring. They were termites. In 2005 a remodeling contractor opened up the walls and found the house was structurally unsound.
A Leelanau County jury awarded the buyers about $86,000 in 2006. The Court of Appeals reversed it 2 to 1 in August 2008, and the Michigan Supreme Court affirmed that reversal in June 2009. The buyers got nothing.
The case is Roberts v. Saffell, and it's the reason I tell people up here to read the disclosure form for what it is and not for what they hope it is.
What the form is
Every sale of a one-to-four-unit house in Michigan comes with a Seller's Disclosure Statement. The form is printed inside the statute itself (the Seller Disclosure Act, 1993 PA 92, with the form at MCL 565.957), so it looks identical whether you're buying in Kingsley or Glen Arbor. Janel has been reading these forms for 25 years and the form hasn't changed since the 2006 revision. It has a checklist of appliances and systems, a dozen questions about the property (basement water, roof leaks, well, septic, plumbing, infestation, environmental hazards, flood insurance, mineral rights), and eleven "are you aware of" questions about things like shared driveways, easements, unpermitted work, assessments and pending litigation.
The sentence that decides everything is printed right at the top. The statement is "a disclosure of the condition and information concerning the property, known by the seller." Known by the seller. A few lines down it says, in capital letters, that it is not part of any contract.
So the seller is only on the hook for what they knew. Section 5 of the act says the seller isn't liable for an error or omission that "was not within the personal knowledge of the transferor." If they didn't know the crawl space takes on water every April, checking "no" is not a lie, and no lawyer can make it one. That's the whole holding in the Leland termite case. The buyers sued on a theory called innocent misrepresentation, which roughly means "you told me something false even if you believed it," and the courts said that theory cannot exist under this act.
Could the buyers have won on ordinary fraud, by proving the sellers knew? Maybe. The dissenting judge thought that's what the jury had decided anyway. But the buyers dropped their fraud claims a week before trial and rode the one theory the statute kills. I'm not a lawyer and I don't know why they made that call.
Where "unknown" does a lot of work up north
The form lets a seller check "unknown," and Section 6 says that's fine if the information is unknown or unavailable to them.
On a Traverse City subdivision house that was somebody's primary residence for twelve years, "unknown" should be rare. On a Leelanau or Antrim cottage it's everywhere, and a lot of the time it's the truthful answer. The Saffells were in California most of the year. Plenty of the cottages between Suttons Bay and Northport are in the same situation. The owners see the place for eight weeks a summer, the well was drilled by whoever owned it before them, nobody has looked at the septic since the tank got pumped in 2011, and the roof age is a guess.
And a good share of these sales don't come with a disclosure at all. Section 3 exempts transfers by a "nonoccupant fiduciary" administering an estate or trust, and transfers to a child or grandchild. That's a big chunk of the family-cottage pipeline. The trustee kid in Grand Rapids selling mom's place on Lake Leelanau doesn't have to fill out the form, and couldn't answer half of it if they tried.
So if you're buying up here, the disclosure is a list of what one person remembers, filtered through how often they were around. That is useful. It is not an inspection.
What I read it for
I read it against the listing. If the listing says "new roof 2021" and the disclosure says roof age unknown, I ask. If the disclosure says the water was tested and gives a date, I ask for the report. Question 4 asks for the well's depth, diameter, age and repair history, and a seller who fills that whole line in has usually been paying attention to the house. A seller who leaves it blank probably wasn't, which tells me to lean harder on the well and septic inspection.
On a cottage, the two lines I go to first are question 1 (evidence of water in the basement or crawl space) and the first item under "Other Items," which asks about features shared with the neighbors like walls, fences, roads and driveways. That second one is where the shared well and the private road with no maintenance agreement are supposed to show up. Whether they do depends on the seller.
The unpermitted-work question catches a lot up here too, usually the bunkhouse or the porch that got enclosed and turned into a bedroom at some point in the 90s. When a seller checks yes on that one I want to know which township, because whether it matters depends a lot on who the building inspector is.
Read the explanations box at the bottom. That's where a seller writes "sump runs in spring" or "chimney relined 2019" in their own words, and the real information tends to live there, not in the checkmarks.
The 72 hours
One mechanical thing most buyers never hear about. The seller is supposed to deliver the disclosure before signing a binding purchase agreement. If it arrives after, or if the seller amends it after, you have 72 hours from hand delivery (120 hours if it came by registered mail) to terminate in writing, no reason required. That right ends at closing. In practice around here the disclosure is attached to the listing and you've read it before you write the offer, so it rarely matters. But if a seller amends the form mid-deal because the basement took on water in a storm, that clock starts the moment you get the amendment.
The statute also lets a city, township or county require extra disclosures on its own form. I don't know of any township in our five counties that does. If yours does, tell me, because I'd like to be wrong about that.
What it doesn't ask
The form doesn't ask whether the road is private, whether the septic is sized for the number of bedrooms in the listing, or what the taxes will be once they uncap. It does ask about flood insurance, but not whether the property is in a flood zone, which is a different question. And the tax warning at the bottom just says the bills "can change significantly," with no number attached. On Old Mission that gap can run thousands a year, which I walked through in the tax estimate post. A bill introduced in Lansing in 2025, HB 4110, would add a line to the form showing the projected taxes at the uncapped value. As of this week it hasn't moved out of committee as far as I can tell.
Radon isn't on the form either, except as part of a catch-all environmental question that most sellers answer "unknown" in good faith because they've never tested. Whether you should test before closing in Traverse City is its own post, and so is the survey nobody orders anymore.
The disclosure is a starting point for questions. The answers come from the inspector, the health department file, the assessor, and sometimes the neighbor who has lived across the road since 1980. We see buyers treat the form as a warranty every year, usually the ones coming from states where the seller has to disclose much more. Michigan is not one of those states.
If you're looking at a cottage this fall and the disclosure is half "unknown," send it over before you write the offer. I'll tell you which blanks are normal for a summer place and which ones I'd want answered first. You can also see what we're currently listing, and every one of those has a disclosure you're welcome to read.
Taylor Brown, Realtor
Taylor@taylorbrownrealtor.com
