Michigan restoration and disclosure law

Michigan law requires most home sellers to give buyers a signed disclosure statement before the sale closes. The statute sets the exact form the seller must fill out and sign.

The form asks specific yes/no/unknown questions, including: "Basement/crawl space: Has there been evidence of water?", "Roof: Leaks?", "Settling, flooding, drainage, structural, or grading problems?", "Major damage to the property from fire, wind, floods, or landslides?", and "Do you have flood insurance on the property?"

The form does not use the word "mold" anywhere, and it does not ask a direct question about mold or fungal growth. Michigan law does not create a separate, named mold-disclosure question. A seller who knows about past water damage must still answer the water and structural questions above.

The form discloses what the seller knows. It is not a warranty and not a substitute for a home inspection; the form itself states this. If a seller does not give the buyer a signed disclosure statement, the buyer can terminate an otherwise binding purchase agreement.

Michigan licenses two kinds of residential contractors through LARA's Bureau of Construction Codes.

Residential Builder (RB) MCL 339.2401(a) defines a residential builder as a person who, for compensation, erects, constructs, replaces, repairs, alters, adds to, or demolishes a residential structure. This license covers new construction and rebuilding a home.

Residential Maintenance and Alteration Contractor (M&A) MCL 339.2401(b) covers repair, alteration, addition, improvement, wrecking, or demolition of a residential structure. MCL 339.2404(3) lists the specific trades an M&A license covers: carpentry, concrete, swimming pool installation, basement waterproofing, excavation, insulation, masonry, roofing, siding and gutters, screen or storm sash installation, tile and marble work, and house wrecking. A person can hold an RB license or an M&A license, not both.

What this means for restoration work Basement waterproofing is a named M&A trade. Roofing, carpentry, and masonry repair, the trades used to rebuild after a loss, are also named M&A or RB trades. Neither statute section names "water mitigation," "water extraction," "structural drying," or "mold remediation" as a licensed trade. The statute text does not say whether mitigation work itself, extracting water, running air movers and dehumidifiers, removing wet material before rebuild starts, needs a contractor license at all. LARA's own FAQ states the bureau "cannot provide legal advice or give interpretations of the Statute" and will not tell an applicant whether their specific work needs a license.

One exemption: MCL 339.2403(f) exempts a person from licensure for a single project where the total contract price for labor, material, and other items is less than $600. Splitting a job into smaller contracts to get under $600 on purpose does not qualify.

Michigan's Insurance Code sets a timeline and a penalty for an insurer that does not pay a claim on time.

An insurer must specify in writing what it needs as proof of loss within 30 days of receiving a claim, unless the claim is already settled within those 30 days. Once the insurer has a satisfactory proof of loss, it has 60 days to pay the supported part of the claim. A later-supported remainder gets its own 60-day clock, running from when its proof of loss arrives.

If the insurer does not pay on time, the law requires it to pay the claim with simple interest at 12% per year, starting 60 days after the insurer received satisfactory proof of loss. Failing to pay on time, or failing to pay the required interest, is an unfair trade practice under Michigan law, unless the claim is reasonably in dispute.

This statute applies to an insurer's payment to its own insured, to a person directly entitled to policy benefits, or to a third-party tort claimant, though the exact terms differ slightly for a third-party claimant.

MCL 554.139 puts two covenants on every residential lease or license. The landlord must keep the premises "fit for the use intended by the parties," and must "keep the premises in reasonable repair" during the lease term and comply with applicable health and safety laws. This duty does not apply if the disrepair was caused by the tenant's own willful or irresponsible conduct.

This statute covers rental housing. It does not apply to a homeowner in their own home.

The Michigan Department of Community Health, now part of the Michigan Department of Health and Human Services, published a consumer flyer that states this directly: "There are no laws about mold in Michigan, but there are other laws that may help you."

The flyer explains that a mold problem tied to a covered peril, for example a burst pipe, may be covered by a homeowner's policy as water damage, and that mold tied to contractor negligence can be raised with the contractor or with the Attorney General's Consumer Complaint Hotline. The flyer states plainly that it is not legal advice.

DIFS states that "flood damage is not covered under a standard homeowners policy." DIFS advises a homeowner with water damage to report it as water damage, not automatically as a "flood," because other causes, such as a sewer backup or a failing sump pump, may be covered under the policy even when flood itself is not.

DIFS also notes that a homeowner can buy separate flood coverage through the National Flood Insurance Program or a private insurer, and can add endorsements for water or sewer backup.