HB-4850, As Passed House, October 5, 2005
SUBSTITUTE FOR
HOUSE BILL NO. 4850
A bill to amend 1980 PA 299, entitled
"Occupational code,"
by amending section 2517 (MCL 339.2517), as amended by 2000 PA
436.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
1 Sec. 2517. (1) A licensee shall disclose to a potential
2 buyer or seller in a real estate transaction all types of agency
3 relationships available and the licensee's duties that each
4 agency relationship creates before the disclosure by the
5 potential buyer or seller to the licensee of any confidential
6 information specific to that potential buyer or seller.
7 (2) The disclosure of the type of agency relationship shall
8 be in writing and substantially conform to the following:
1 DISCLOSURE REGARDING REAL ESTATE AGENCY RELATIONSHIPS
2 Before you disclose confidential information to a real
3 estate licensee regarding a real estate transaction, you should
4 understand what type of agency relationship you have with that
5 licensee. A real estate transaction is a transaction involving
6 the sale or lease of any legal or equitable interest in real
7 estate consisting of not less than 1 or not more than 4
8 residential dwelling units or consisting of a building site for a
9 residential unit on either a lot as defined in section 102 of the
10 land division act, 1967 PA 288, MCL 560.102, or a condominium
11 unit as defined in section 4 of the condominium act, 1978 PA 59,
12 MCL 559.104.
13 An agent providing services under an exclusive service
14 provision agreement owes the following duties to the client: (1)
15 When representing a seller or lessor, the marketing of the
16 client's property in the manner agreed upon in the agreement; (2)
17 Acceptance of delivery and presentation of offers and
18 counteroffers to buy, sell, or lease the client's property; (3)
19 Assistance in developing, communicating, negotiating, and
20 presenting offers, counteroffers, and related notices or
21 documents until a purchase or lease agreement is executed by all
22 parties and all contingencies are satisfied or waived; (4) After
23 execution of a purchase agreement, assistance as necessary to
24 complete the transaction under the terms specified in the
25 purchase agreement; (5) Furnishing, or causing to be furnished, a
26 complete and detailed closing statement.
1 Michigan law requires real estate licensees who are acting
2 as agents of sellers or buyers of real property to advise the
3 potential sellers or buyers with whom they work of the nature of
4 their agency relationship.
5 Seller's Agents
6 A seller's agent, under a listing agreement with the seller,
7 acts solely on behalf of the seller. A seller can authorize a
8 seller's agent to work with subagents, buyer's agents and/or
9 transaction coordinators. A subagent is one who has agreed to
10 work with the listing agent, and who, like the listing agent,
11 acts solely on behalf of the seller. Seller's agents and
12 subagents will disclose to the seller known information about the
13 buyer which may be used to the benefit of the seller.
14 Buyer's Agents
15 A buyer's agent, under a buyer's agency agreement with the
16 buyer, acts solely on behalf of the buyer. Buyer's agents and
17 subagents will disclose to the buyer known information about the
18 seller which may be used to benefit the buyer.
19 Dual Agents
20 A real estate licensee can be the agent of both the seller
21 and the buyer in a transaction, but only with the knowledge and
22 informed consent, in writing, of both the seller and the buyer.
23 In such a dual agency situation, the licensee will not be
1 able to disclose all known information to either the seller or
2 the buyer.
3 The obligations of a dual agent are subject to any specific
4 provisions set forth in any agreement between the dual agent, the
5 seller, and the buyer.
6 Licensee Disclosure (check one)
7 I hereby disclose that the agency status of the licensee
8 named below is:
9 _____ Seller's Agent
10 _____ Buyer's Agent
11 _____ Dual Agent
12 _____ None of the above
13 Affiliated Licensee Disclosure (check one)
14 _____Only the licensee's broker and a named supervisory
15 broker have the same agency relationship as the licensee named
16 below. If the other party in a transaction is represented by an
17 affiliated licensee, then the licensee's broker and all named
18 supervisory brokers shall be considered disclosed consensual dual
19 agents.
20 _____All affiliated licensees have the same agency
21 relationship as the licensee named below.
22 Further, this form was provided to the buyer or seller
23 before disclosure of any confidential information.
1 ______________________ _____________________
2 Licensee Date
3 ______________________ _____________________
4 Licensee Date
5 Acknowledgment
6 By signing below, the parties confirm that they have
7 received and read the information in this agency disclosure
8 statement and that this form was provided to them before the
9 disclosure of any confidential information specific to the
10 potential sellers or buyers.
11 _______________________________________ ____________________
12 Potential Buyer/Seller (circle one) Date
13 _______________________________________ ____________________
14 Potential Buyer/Seller (circle one) Date
15 (3) This article does not prevent a licensee from acting as
16 a transaction coordinator upon proper notice to all parties to a
17 real estate transaction.
18 (4) A broker and a client may enter into a designated agency
19 agreement. In the absence of a written designated agency
20 agreement, a client is considered to have an agency relationship
21 with the broker and all affiliated licensees.
22 (5) A designated agency agreement shall contain the name of
23 all associate brokers who are authorized to act as supervisory
24 brokers. If designated agents who are affiliated licensees
25 represent different parties in the same real estate transaction,
26 the broker and all supervisory brokers are considered disclosed
1 consensual dual agents for that real estate transaction.
2 Designated agents who are affiliated licensees representing
3 different parties in the same transaction shall notify their
4 clients that their broker represents both buyer and seller before
5 an offer to purchase is made or presented.
6 (6) Except as otherwise provided in subsection (5), a client
7 with a designated agency agreement is not considered to have an
8 agency relationship with any affiliated licensees of the
9 designated agent. Two designated agents who are affiliated
10 licensees may each represent a different party in the same
11 transaction and shall not be considered dual agents. The
12 designated agent's knowledge of confidential information of a
13 client is not imputed to any affiliated licensee not having an
14 agency relationship with that client.
15 (7) A designated agent shall not disclose confidential
16 information of a client to any licensee, whether or not an
17 affiliated licensee, except that a designated agent may disclose
18 to any supervisory broker confidential information of a client
19 for purposes of seeking advice or assistance for the benefit of
20 the client. A licensee who represents a client in an agency
21 capacity does not breach any duty or obligation owed to that
22 client by failing to disclose to that client information obtained
23 through a present or prior agency relationship.
24 (8) A listing agreement or a buyer's agency agreement may be
25 amended to establish a designated agency relationship, to change
26 a designated agent, or to change supervisory brokers at any time
27 pursuant to a written addendum signed by the parties.
1 (9) As used in this section:
2 (a) "Affiliated licensees" means individuals licensed as
3 salespersons or associate brokers who are employed by the same
4 broker.
5 (b) "Buyer" means a purchaser, tenant, or lessee of any
6 legal or equitable interest in real estate.
7 (c) "Buyer's agent" means a licensee acting on behalf of the
8 buyer in a real estate transaction who undertakes to accept the
9 responsibility of serving the buyer consistent with those
10 fiduciary duties existing under common law.
11 (d) "Designated agent" means an individual salesperson or an
12 associate broker who is designated by the broker as the client's
13 legal agent pursuant to a designated agency agreement.
14 (e) "Designated agency agreement" means a written agreement
15 between a broker and a client in which an individual salesperson
16 or associate broker affiliated with that broker is named as that
17 client's designated agent.
18 (f) "Dual agent" means a licensee who is acting as the agent
19 of both the buyer and the seller and provides services to
20 complete a real estate transaction without the full range of
21 fiduciary duties owed by a buyer's agent and a seller's agent.
22 (g) "Real estate transaction" means the sale or lease of any
23 legal or equitable interest in real estate where the interest in
24 real estate consists of not less than 1 or not more than 4
25 residential dwelling units or consists of a building site for a
26 residential unit on either a lot as defined in section 102 of the
27 land division act, 1967 PA 288, MCL 560.102, or a condominium
1 unit as defined in section 4 of the condominium act, 1978 PA 59,
2 MCL 559.104.
3 (h) "Seller" means the equitable or legal owner of real
4 estate.
5 (i) "Seller's agent" means a licensee acting on behalf of
6 the seller in a real estate transaction who undertakes to accept
7 the responsibility of serving the seller consistent with those
8 fiduciary duties existing under common law.
9 (j) "Supervisory broker" means an associate broker
10 designated in a written agency agreement to act in a supervisory
11 role in an agency relationship.
12 (k) "Transaction coordinator" means a licensee who is not
13 acting as the agent of either the buyer or the seller.
14 Enacting section 1. This amendatory act does not take
15 effect unless House Bill No. 4849 of the 93rd Legislature is
16 enacted into law.