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Owner Built Residence Transfer Act
Public Act 6 of 2008 (Senate Bill 577) will become effective August 10, 2008. It attempts to curtail the practice by individuals who are not licensed builders, but who build new residences and immediately resell them. Supposedly, many individuals have essentially made a living by doing this without ever being licensed as residential builders.

Unless there are "unforeseen circumstances," a non-builder owner who builds a new residence may not sell it for at least 365 days after receiving an occupancy permit. The "unforeseen circumstances" exception may be used only once per calendar year.

A non-builder owner who sells the residence within two (2) years after receipt of the occupancy permit must provide the buyer with an "owner-builder notice." The notice must be on a "separate piece of paper" (meaning that incorporating the notice into a Buy-Sell Agreement doesn't comply), must be in a 12-point font or larger, must include a statement that the owner is NOT a licensed Michigan builder, and must be signed and dated by the seller.

An owner who fails to comply with this law is liable for all of the following for up to 24 months after completion of construction, first occupancy, or purchase, whichever occurs later: (1) the cost to repair any defects in workmanship; (2) the cost to bring the structure into compliance with the building code in effect at the time the occupancy permit was issued; (3) the cost for temporary shelter for the buyer if repairs require the buyer to vacate temporarily or if structural defects render the home uninhabitable.

Posted: Saturday, October 18, 2008 3:29 PM by Jon Becker


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