Legal Question in Real Estate Law in Michigan

Re: broken sewer pipe

Your interpretation is correct--the former owner would only be responsible if the new owner could prove the former owner knew of a problem and fraudulently concealed it or failed to disclose it. Basically, in real estate it's a "Buyer Beware" policy. Anything connecting the home to the main line will be the homeowner and not the municipality's responsibility. And insurance usually won't cover anything to do with sewer systems unless the homeowner has a special rider--very uncommon.

Unfortunately, this isn't a "point and shoot" answer--it's based on a progeny of case analyses, not one specific case or statute. I can't show you one specific case or statute and say, "There's your answer." It's the idea that when a home is sold, each party is able to obtain a private inspection to ascertain any problems with the home. The buyer could have hired a company to send a camera into the pipe to search for cracks but didn't opt to incurr that expense because, frankly, that is pretty out of the ordinary to do unless the area is known for that type of problem (e.g., has the county been replacing a lot of pipes in the area? are there a lot of old trees? has the pipe burst in the past or been replaced since the home was built? if so, when?). Most people would have taken that gamble, too, unfortunately these folks lost.

The seller is under no duty to inspect the premises for unknown defects prior to sale and only must disclose known defects. It's no different than moving into a home with a 25 year old furnace that worked last winter and decides to quit the first day the new buyers move in--just dumb luck!

Also, remember that being right doesn't mean you won't be sued--it just means you have defenses to the complaint that still needs an answer. The court doesn't unilaterally decide what lawsuits have merit before the opposing party responds to the complaint. Maybe this response will help you make your point to the opposing party alleviating the urge to sue. Otherwise, feel free to contact me. Good luck!