Michigan License Law Practice Test

Which of the following is NOT exempt from the Seller's Disclosure Act?

1. Sale of a two-unit residence by the owner

2. Sale of a property between family members

3. Sales involving a licensed real estate agent

4. Sale of a commercial property

The correct answer is: Sale of a two-unit residence by the owner

The Seller's Disclosure Act in Michigan is designed to ensure that buyers receive important information about the physical condition of a property before completing a transaction. Understanding the exemptions to this act is crucial for both buyers and sellers. The correct answer identifies a situation that is indeed not exempt from the Act. The sale of a two-unit residence by the owner falls under the act's requirements because it involves a residential property that does not meet the criteria for exemption. Properties that consist of two units are considered multifamily dwellings, and the Seller's Disclosure Act applies to these types of properties to ensure that potential buyers are made aware of any material defects or issues. In contrast, sales between family members, sales involving licensed real estate agents, and the sale of commercial property have specific exemptions under the Seller's Disclosure Act. Family transactions often involve a close personal relationship where the seller may be less likely to have the same disclosure obligations. Likewise, licensed real estate agents typically provide disclosures through their professional standards and practices, potentially exempting those transactions. Lastly, commercial properties have different disclosure requirements compared to residential properties, frequently allowing sellers to bypass the disclosure obligations set forth for residential sales. This highlights the unique nature of the obligations for different types of properties and transactions under Michigan law.