Q: I have read your book, and I am interested in buying a new condominium. While the project is being developed by a prominent developer, their name is not on the purchase agreement, which seems strange. How do I find out about what this developer is all about?
A: The disclosure statement that the developer has to give you, unfortunately, will include only information concerning the project in question. It does not require them to divulge information about other developments that the developer or its limited liability companies have developed.
If you find an attorney who has been around for a number of years, that attorney may well know about the history of the developer in other projects and may well also know about whether or not that developer has been saddled with construction defect litigation or other problems with purchasers.
Keep in mind that most developers operate under a separate legal entity for each project, which insulates them from liability and does not require them to disclose other problems that they had at other projects.
The Corporations Division of the Michigan Department of Licensing and Regulatory Affairs provides records online, including filings showing the principals of corporations and limited liability companies. You can go to michigan.gov/lara and find the corporations division under the dropdown list of bureaus.
Purchasing a home is one of the most important financial decisions that you will ever make, so be sure to take advantage of all publicly available information.
You have every right to ask questions of the developer if anything you discover makes you uncomfortable. Even better is to get an attorney to ask those questions.
The more you learn about the developer and the principals of the developer entity, the better you and your attorney will be able to assess the viability of such a purchase for you.