Can I Sue a Home Seller in Michigan for Undisclosed Liens and Property Defects?

What Does Michigan Law Require Sellers to Disclose?

Under MCL § 565.957, Michigan sellers must provide a written disclosure statement covering structural defects, environmental hazards, boundary disputes, and any known liens or legal encumbrances on the property. This obligation exists independently of anything listed on a third-party platform like Zillow.

According to the Michigan Association of Realtors, approximately 85% of residential transactions involve the standard seller disclosure form. When a seller deliberately omits material information — such as undisclosed liens — the buyer may pursue legal remedies even after closing.

What Legal Claims Can a Buyer Pursue?

Several causes of action may apply when a seller conceals liens or property defects in Michigan:

• Fraud/Misrepresentation: If the seller knowingly withheld information about liens discovered during your closing process, this constitutes fraudulent concealment under Michigan common law. The statute of limitations is 6 years from discovery.
• Breach of Contract: Your purchase agreement specified "possession at close" with no mention of occupancy holdovers. If the seller violated those terms, you have a breach-of-contract claim.
• Violation of the Seller Disclosure Act: Under MCL § 565.960, a buyer who suffers damages from a seller's failure to disclose may recover actual damages, court costs, and attorney fees.

How Do Undisclosed Liens Affect the Transaction?

Liens that surface after closing — including tax liens, mechanic's liens, or judgment liens — are a serious title defect. In Michigan, title insurance typically protects buyers against undisclosed liens that existed before closing. If you purchased an owner's title insurance policy, file a claim immediately. According to the American Land Title Association, roughly 25% of real estate transactions reveal title issues during the closing process, and title insurance resolved the vast majority.

If the liens were known to the seller and deliberately hidden, this strengthens a fraud claim significantly. Michigan courts have consistently held that a seller's duty to disclose extends to all known encumbrances affecting marketable title.

What About the Seller Remaining in the Property?

If "possession at close" was the agreed-upon term in your purchase agreement but the seller requested 30 days of post-closing occupancy only on a Zillow listing, the signed contract controls — not the online listing. Under Michigan contract law, the written agreement between parties supersedes any informal or third-party representations.

If the seller refused to vacate or caused property damage during any holdover period, you may also have claims for trespass or unjust enrichment.

What Steps Should You Take Now?

1. Gather documentation — Save the original purchase agreement, all disclosure forms, communications about delays, and evidence of undisclosed liens. Review your Michigan property records for any additional encumbrances.
2. Contact your title insurance company — File a claim for any liens that predate your closing.
3. Consult a real estate or litigation attorney — Given the complexity of fraud and disclosure claims, professional legal guidance is essential. You can find an attorney through our directory who handles property disputes.
4. Act promptly — Michigan's statute of limitations on fraud is 6 years, but evidence becomes harder to preserve over time.

Property disputes after closing affect an estimated 1 in 20 home purchases nationally, and Michigan's Seller Disclosure Act provides meaningful protections for buyers. For more context on property rights and real estate issues that intersect with family law, visit our Michigan divorce resources or browse our Divorce Questions hub for related topics.