Friday, June 19, 2009

Michigan Seller Disclosure Act -- No Claim for Innocent Misrepresentation, Supreme Court Affirms Ruling

On June 17, 2009, Michigan Supreme Court entered an order affirming a 2008 Michigan Court of Appeals decision, which had held that Michigan law did not recognize claims for innocent misrepresentation under the Michigan Seller Disclosure Act (MCL 565.951, et seq).

As we reported in an earlier posting (here), Roberts v Saffell involved a claim that Defendant Sellers failed to disclose a termite infestation in the home they sold to Plaintiff Buyers. Plaintiff's claim was based on Defendant's "No" answer on their Seller Disclosure Statement in response to the question: "History of infestation, if any: (termites, carpenter ants, etc.)"

In affirming the Court of Appeals decision, the Michigan Supreme Court held:
the [Michigan Seller Disclosure Act] provides that a seller is “not liable for any error, inaccuracy, or omission in any information delivered pursuant to this act if the error, inaccuracy, or omission was not within the personal knowledge of the transferor . . . .” MCL 565.955(1). Thus, because a claim for innocent misrepresentation requires that a defendant make a false statement without knowledge of its falsity, the Court of Appeals correctly held that innocent misrepresentation does not constitute a viable cause of action under the SDA. Whether defendants did or did not possess personal knowledge of the infestation is a matter not before this Court as a result of plaintiffs’ abandonment of their fraudulent misrepresentation claim and their exclusive focus on their innocent misrepresentation claim.
Full Cite: Roberts v Saffell, 280 Mich App 397 (2008), aff'd, 483 Mich 1089 (2009).

Bottom line: Always have your own home inspection done before buying a house!

Questions? Contact Peter Cavanaugh or call (248) 543-8320.

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