SB-0577, As Passed Senate, October 24, 2007

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 120

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 form

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:

     (a) The cost of repair regarding any defects in workmanship

for up to 18 months after completion of construction, first

occupancy, or purchase, whichever comes later.

     (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 18 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.