I’ve got my house on the market right now, here in Michigan, and there is nothing—absolutely nothing—on any of our disclosures that comes remotely close to an “emotionally-distressed property” declaration, or whatever the heck the nonsense is.
This is a tricky topic and the law is not clear or settled in most states. But just because it is not on the state form, does not mean you are protected. Michigan law specifically protects real estate agents, but offers no specific protection for buyers. It is conceivable that a judge in Michigan could rule that a murder in a home did have material effect on the value of the property and rescind the sale. It sounds silly, but there have been cases in the country where it has happened.
http://www.oscn.net/applications/oscn/deliverdocument.asp?citeid=379591
15. Michigan
Michigan's occupational code protects real estate brokers and salespersons from causes of action for failing to disclose psychological impacts.
103 There are no such protections given to owners/transferors elsewhere in the Michigan statutes. The statute separates disease-type and death/crime-type impacts in two subsections. Subsection 339.2518(a) covers disease-type impacts by referring to the Fair Housing Act.104 Michigan is one of only two states to refer to the Fair Housing Act instead of listing disease-type impacts such as AIDS or HIV.105 Under this subsection real estate agents are protected from causes of action for failing to disclose the handicap of a prior occupant as defined by the Fair Housing Act and "disclosure of which would constitute unlawful discrimination under, sections 804,[106] 805,[107] 806,[108] or 818[109] . . . of the Act."110 Subsection 339.2518(b) covers crime/ death-type impacts. These are homicide, suicide, or other unlawful acts "which had no material effect on the condition of the real property or improvements."111103 *************** See Mich. Comp. Laws § 339.2518 (1996).
104 Pub. L. No. 100-430, 102 Stat. 1619 (codified as amended at 42 U.S.C. §§ 3601-3619, 3631 and 28 U.S.C. §§ 2341-2342 (1994)). The Fair Housing Act defines "handicap" as:
(h) "Handicap" means, with respect to a person --
(1) a physical or mental impairment which substantially limits one or more of such person's major life activities,
(2) a record of having such an impairment, or
(3) being regarded as having such an impairment,
but such term does not include current, illegal use of or addiction to a controlled substance (as defined in section 802 of Title 21).
42 U.S.C. § 3602(h) (1994).
105 See Mich. Comp. Laws § 339.2518(a) (1996). The Wisconsin psychologically impacted property statute also refers to the Fair Housing Act. Wis. Stat. Ann. § 452.23(i) (West. Supp. 1996).
106 42 U.S.C. § 3604 (1994) ("Sale or Rental of Housing").
107 Id. § 3605 ("Residential Real Estate-Related Transactions").
108 Id. § 3606 ("Provision of Brokerage Services").
109 Id. § 3617 ("Interference, Coercion, or Intimidation").
110 Mich. Comp. Laws § 339.2518(a) (1996).
111 *************** Id. § 339.2518(b).