Real Estate Professionals E&O Insurance in Michigan

Michigan at a glance

Regulator

Michigan Department of Licensing and Regulatory Affairs

Licenses brokers and salespersons and enforces the Occupational Code.

Disclosure statute

Michigan Seller Disclosure Act statement

Covers known conditions only, not conditions a reasonable inspection would reveal.

Lakefront exposure

Riparian-rights and shared-dock disputes on Great Lakes and inland lake frontage

A distinct disclosure and documentation issue absent from inland transactions.

Agency disclosure timing

Required at first substantive contact with a buyer or seller

Designated agency within one brokerage is permitted with proper documentation.

Seller Disclosure Act statement and its limits

Michigan’s Seller Disclosure Act requires a seller to complete a statutory disclosure statement describing known conditions of the property, but the obligation covers only what the seller actually knows, not what a reasonable inspection would reveal. Agents are frequently drawn into disputes over whether they should have caught inconsistencies between what a seller disclosed and what the agent observed during showings, since Michigan case law has held licensees can be liable for actively concealing or failing to disclose facts within their own knowledge even when the seller’s form was technically complete.

Lakefront and riparian-rights complications

Michigan’s extensive Great Lakes and inland lake frontage creates riparian-rights disputes over shared docks, bottomland ownership, and lake-level fluctuation that a standard disclosure form does not address well. Agents representing buyers or sellers of lakefront property face distinct exposure around whether riparian rights, easements, or shared-access agreements were fully explained before closing, a fact pattern that does not arise in Michigan’s inland residential markets.

Agency relationship disclosure and buyer representation

Michigan requires licensees to provide a written disclosure of the agency relationship at the first substantive contact with a buyer or seller, and the state permits designated agency within a single brokerage. Claims often turn on whether that first-contact disclosure happened early enough, particularly in a fast-moving Detroit-suburb resale market where a buyer may tour several properties with an agent before any written relationship disclosure is signed.

Winter-condition and older-housing-stock exposure

Detroit and other older Michigan cities carry significant pre-1978 housing stock subject to federal lead-paint disclosure, while freeze-thaw cycles and ice-dam damage create recurring latent-defect claims tied to roofs, foundations, and basement water intrusion that surface only after a change of season. Agents should document showings and disclosure conversations around seasonal conditions carefully, since a defect that was not visible during a summer showing is a common basis for a later Michigan claim.

Who we write this for in Michigan

Real estate E&O FAQs for Michigan