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Real Estate ArticlesMichigan Termite Case Potentially Bad for Sellers
Caveat emptor is Latin for "let the buyer beware" and is the property law doctrine that controls the sale of real property after closing. A Michigan real estate case clearly exemplifies the term. After a number of years in the court system, the has finally been settled by the Michigan Supreme Court. This case involves the purchase of a $475,000 home on Michigan's scenic Leelanau Peninsula. Richard and Stacey Roberts purchased the home in 2003 from Robert and Joanne Saffell who owned the property for over 35 years. The Saffell's lived in California and spent their summers in the Leland, Michigan home. About a year after the sale closed the buyers noticed an infestation of bugs. When the Roberts bought the home the sellers had provided a tip sheet that noted, among other things, "a million" bugs would hatch in the spring. The Saffells advised the Roberts there was no way to avoid the insects and they would not last very long. After the bugs showed up the Roberts brought in a pest control expert who determined the bugs were termites. Around the same time, the Roberts had hired a contractor to do some remodeling. The contractor, however, indicated the house was structurally unsound as a result of termite damage. The case is groundbreaking as it could have left sellers with liability if something wrong is discovered after the sale of their home. The Seller Disclosure Act in Michigan only requires sellers to disclose known problems. The sellers claim they did not know about the termite infestation. The buyers claim the sellers did know and withheld that information from the disclosure statement. In 2006, a Leelanau County jury awarded the Robertses $86,000 for the termite infestation. The state appeals court, on a 2-1 vote, reversed the decision. The ruling stated that the sellers were unaware the insects were termites, so they could not be held liable. The buyers took the case one step further. The Michigan Supreme Court recently ruled in favor of the sellers-which is quite a relief for both sellers and Realtors in Michigan.
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