SB-0577, As Passed House, January 24, 2008
HOUSE SUBSTITUTE FOR
SENATE BILL NO. 577
A bill to regulate certain persons building certain
residential structures; to provide for certain disclosures and
prescribe certain limitations regarding the transfer of that
residential structure; and to provide for remedies and penalties.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 1. This act shall be known and may be cited as the "owner
built residence transfer act".
Sec. 3. As used in this act:
(a) "Owner-builder" means an individual who is not a licensed
residential builder and who builds, or acts as a general contractor
for the construction of, a residential structure in which that
individual or a member of that individual's family actually
resides, or intends to occupy for his or her own use, upon the
issuance of an occupancy permit.
(b) "Residential builder" means a person engaged in the
construction of a residential structure or a combination
residential and commercial structure who, for a fixed sum, price,
fee, percentage, valuable consideration, or other compensation,
other than wages for personal labor only, undertakes with another
or offers to undertake or purports to have the capacity to
undertake with another for the erection, construction, replacement,
repair, alteration, or an addition to, subtraction from,
improvement, wrecking of, or demolition of, a residential structure
or combination residential and commercial structure; a person who
manufactures, assembles, constructs, deals in, or distributes a
residential or combination residential and commercial structure
which is prefabricated, preassembled, precut, packaged, or shell
housing; or a person who erects a residential structure or
combination residential and commercial structure except for the
person's own use and occupancy on the person's property.
(c) "Residential structure" means a premises used or intended
to be used for a residence purpose and related facilities
appurtenant to the premises used or intended to be used as an
adjunct of residential occupancy.
Sec. 5. (1) An owner-builder intending to live in the
residential structure at the onset of construction shall do either
of the following upon completion of construction and issuance of
the occupancy permit regarding a residential structure:
(a) Reside in the residential structure.
(b) Place the residential structure up for sale in any manner
allowed by law if, due to unforeseen circumstances, the owner-
builder is unable to reside in the residential structure. This
subdivision allows the owner-builder to utilize this exception not
more than once per calendar year.
(2) An owner-builder who actually lives, full- or part-time,
in that residential structure shall not sell or transfer ownership
of the residential structure to another person for at least 365
days after the owner-builder actually begins living, full- or part-
time, in that residential structure.
Sec. 7. (1) An owner-builder who sells the residential
structure, within 2 years or less after the date of the issuance of
the occupancy permit, shall note in the owner-builder notice the
fact that the residential structure was built by the owner.
(2) An owner-builder shall supply, at the time of offering the
residential structure and on a separate sheet of paper, an owner-
builder notice stating in 12-point font or larger that the
residential structure was built by an owner-builder that is not a
licensed builder. The notice shall be signed and dated by the
owner-builder.
Sec. 9. (1) An owner-builder who fails to make the disclosures
required under this act is liable for the following for up to 24
months after the completion of construction, first occupancy, or
purchase, whichever occurs later:
(a) The cost of repair regarding any defects in workmanship.
(b) The cost of any repairs needed to bring the structure into
compliance with the building code in effect at the time of the
issuance of the occupancy permit.
(c) The cost for temporary shelter for the buyers if the
repairs require the buyer to vacate temporarily or if the defects
in the residential structure render it uninhabitable.
(2) The buyer of an owner-builder residential structure may
bring an action in a court of competent jurisdiction for damages
resulting from a violation of the disclosures required under this
act. The action shall be brought not later than 24 months after
completion of construction, first occupancy, or purchase, whichever
comes later. If the buyer prevails in whole or part in an action
brought under this section, the court shall award cost and actual
attorney fees.
(3) The remedies under this act are cumulative and the use of
a remedy under this act does not prevent the use of any other
remedies allowed under law.
Sec. 11. This act takes effect 180 days after the date it is
enacted into law.