[BUYING AND SELLING REAL ESTATE IN THE UNITED STATES - MICHIGAN]
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the locale, a certificate of inspection from the local municipality or health department may be required. D. Seller’s Disclosures . For improved residential property, the seller is required to provide a seller’s disclosure statement where the seller discloses certain conditions (water infiltration, condition of heating unit, etc.) of which it is aware. For houses built before 1978, a lead paint disclosure is also required. E. Certificates of Occupancy and Building Permits. Some cities and townships require that a home be inspected to verify that it meets the applicable building codes before it can be sold. If code violations are cited, the parties often negotiate a price reduction if the seller is not willing or able to cure the violation(s). A buyer should also check the municipality building department to determine if there are any open permits for work that have not been approved through a final inspection. F. Commercial: In addition to the inspections performed by residential buyers, commercial buyers also usually obtain a survey, an environmental review, and a use and zoning and/or permit compliance review. Depending on the municipality, a certificate of occupancy may also be needed before commercial property can be transferred. If commercial tenants occupy the premises, a thorough review of the leases is advised (buyers are advised not to rely on rent rolls or lease summaries) and it is not uncommon for commercial leases to contain a right of first refusal to buy the property that must be complied with or waived before
a sale can proceed. A certificate from the commercial tenants certifying the exact lease and all amendments thereto and that the seller-landlord is not in default are often obtained as part of the due diligence. IV. FORMS OF OWNERSHIP A. Typically, residential property is held in a trust or an individual’s name. If held in a trust, the trust may be either irrevocable or revocable. Irrevocable trusts typically cannot be modified or terminated by the grantor without the consent of all of the beneficiaries or court approval. In Michigan, trusts are generally governed by the Michigan Trust Code, MCL 700.7101 et seq . Joint owners to property may take title as: 1. Tenants in Common. Tenants in common each hold a separate and distinct interest in property but share a right of possession. There is no right of survivorship. In other words, if property is owned by two individuals, and one individual dies, the deceased’s interest reverts to his or her estate, and not the other owner. 2. Joint Tenants. Joint Tenants hold equal and undivided interests in property, with a right of survivorship. In other words, if property is owned by two individuals, and one individual dies, the deceased’s interest reverts to the other owner of the property. 3. Tenants by the Entirety. A married couple can hold real property as tenants by the entirety, where each spouse holds equal and undivided
ILN Real Estate Group – Buying and Selling Real Estate Series
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