HOUSE BILL No. 5719 May 2, 2000, Introduced by Reps. Richner, Raczkowski, Frank, Howell, Sheltrown, Neumann, Woodward, Sanborn, Pestka, Pappageorge, Shulman, Green, DeRossett, Schermesser, DeHart, Minore, Voorhees, Rivet, Schauer, O'Neil, Callahan and Daniels and referred to the Committee on Family and Civil Law. A bill to amend 1980 PA 299, entitled "Occupational code," by amending section 2517 (MCL 339.2517), as added by 1993 PA 93. THE PEOPLE OF THE STATE OF MICHIGAN ENACT: 1 Sec. 2517. (1) A licensee shall disclose to a potential 2 buyer or seller all types of agency relationships available and 3 the licensee's duties that each agency relationship creates,4prior toBEFORE the disclosure by the potential buyer or seller 5 to the licensee of any confidential information specific to that 6 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: 06086'00 LBO 2 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. 6 Michigan law requires real estate licensees who are acting 7 as agents of sellers or buyers of real property to advise the 8 potential sellers or buyers with whom they work of the nature of 9 their agency relationship. 10 Seller's Agents 11 A seller's agent, under a listing agreement with the seller, 12 acts solely on behalf of the seller. A seller can authorize a 13 seller's agent to work with subagents, buyer's agents and/or 14 transaction coordinators. A subagent is one who has agreed to 15 work with the listing agent, and who, like the listing agent, 16 acts solely on behalf of the seller. Seller's agents and sub- 17 agents will disclose to the seller known information about the 18 buyer which may be used to the benefit of the seller. 19 Buyer's Agents 20 A buyer's agent, under a buyer's agency agreement with the 21 buyer, acts solely on behalf of the buyer. Buyer's agents and 22 subagents will disclose to the buyer known information about the 23 seller which may be used to benefit the buyer. 24 Dual Agents 25 A real estate licensee can be the agent of both the seller 26 and the buyer in a transaction, but only with the knowledge and 27 informed consent, in writing, of both the seller and the buyer. 06086'00 3 1 In such a dual agency situation, the licensee will not be 2 able to disclose all known information to either the seller or 3 the buyer. 4 The obligations of a dual agent are subject to any specific 5 provisions set forth in any agreement between the dual agent, the 6 seller, and the buyer. 7 Licensee Disclosure (CHECK ONE) 8 I hereby disclose that the agency statusI/we have with the9buyer and/or sellerOF THE LICENSEE NAMED below is: 10 _____ Seller's Agent 11 _____ Buyer's Agent 12 _____ Dual Agent 13 _____ None of the above 14 AFFILIATED LICENSEE DISCLOSURE (CHECK ONE) 15 _____ONLY THE LICENSEE'S BROKER AND A NAMED SUPERVISORY 16 BROKER HAVE THE SAME AGENCY RELATIONSHIP AS THE LICENSEE NAMED 17 BELOW. IF THE OTHER PARTY IN A TRANSACTION IS REPRESENTED BY AN 18 AFFILIATED LICENSEE, THEN THE LICENSEE'S BROKER AND ALL NAMED 19 SUPERVISORY BROKERS SHALL BE CONSIDERED DISCLOSED CONSENSUAL DUAL 20 AGENTS. 21 _____ALL AFFILIATED LICENSEES HAVE THE SAME AGENCY RELATION- 22 SHIP AS THE LICENSEE NAMED BELOW. 23 Further, this form was provided tothemTHE BUYER OR 24 SELLER before disclosure of any confidential information. 25 _________________________ ____________________ 26 Licensee Date 27 28 29 _________________________ ____________________ 06086'00 4 1 Licensee Date 2 3 4 Acknowledgment 5 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 dis- 9 closure of any confidential information specific to the potential 10 sellers or buyers. 11 ______________________________________ ____________________ 12 Potential Buyer/Seller (circle one) Date 13 14 15 ______________________________________ ____________________ 16 Potential Buyer/Seller (circle one) Date 17 18 19 (3) This article does not prevent a licensee from acting as 20 a transaction coordinator upon proper notice to all parties to a 21 real estate transaction. 22 (4) A BROKER AND A CLIENT MAY ENTER INTO A DESIGNATED AGENCY 23 AGREEMENT. IN THE ABSENCE OF A WRITTEN DESIGNATED AGENCY AGREE- 24 MENT, A CLIENT IS CONSIDERED TO HAVE AN AGENCY RELATIONSHIP WITH 25 THE BROKER AND ALL AFFILIATED LICENSEES. 26 (5) A DESIGNATED AGENCY AGREEMENT SHALL CONTAIN THE NAME OF 27 ALL ASSOCIATE BROKERS WHO ARE AUTHORIZED TO ACT AS SUPERVISORY 28 BROKERS. IF DESIGNATED AGENTS WHO ARE AFFILIATED LICENSEES REP- 29 RESENT DIFFERENT PARTIES IN THE SAME REAL ESTATE TRANSACTION, THE 30 BROKER AND ALL SUPERVISORY BROKERS ARE CONSIDERED DISCLOSED CON- 31 SENSUAL DUAL AGENTS FOR THAT REAL ESTATE TRANSACTION. 32 (6) EXCEPT AS OTHERWISE PROVIDED IN SUBSECTION (5), A CLIENT 33 WITH A DESIGNATED AGENCY AGREEMENT IS NOT CONSIDERED TO HAVE AN 34 AGENCY RELATIONSHIP WITH ANY AFFILIATED LICENSEES OF THE 06086'00 5 1 DESIGNATED AGENT. DESIGNATED AGENTS WHO ARE AFFILIATED LICENSEES 2 MAY REPRESENT DIFFERENT PARTIES IN THE SAME TRANSACTION AND ARE 3 NOT CONSIDERED DUAL AGENTS. THE DESIGNATED AGENT'S KNOWLEDGE OF 4 CONFIDENTIAL INFORMATION OF A CLIENT IS NOT IMPUTED TO ANY AFFIL- 5 IATED LICENSEE NOT HAVING AN AGENCY RELATIONSHIP WITH THAT 6 CLIENT. 7 (7) A DESIGNATED AGENT SHALL NOT DISCLOSE CONFIDENTIAL 8 INFORMATION OF A CLIENT TO ANY LICENSEE, WHETHER OR NOT AN AFFIL- 9 IATED LICENSEE, EXCEPT THAT A DESIGNATED AGENT MAY DISCLOSE TO 10 ANY SUPERVISORY BROKER CONFIDENTIAL INFORMATION OF A CLIENT FOR 11 PURPOSES OF SEEKING ADVICE OR ASSISTANCE FOR THE BENEFIT OF THE 12 CLIENT. A LICENSEE WHO REPRESENTS A CLIENT IN AN AGENCY CAPACITY 13 DOES NOT BREACH ANY DUTY OR OBLIGATION OWED TO THAT CLIENT BY 14 FAILING TO DISCLOSE TO THAT CLIENT INFORMATION OBTAINED THROUGH A 15 PRESENT OR PRIOR AGENCY RELATIONSHIP. 16 (8) A LISTING AGREEMENT OR A BUYER'S AGENCY AGREEMENT MAY BE 17 AMENDED TO ESTABLISH A DESIGNATED AGENCY RELATIONSHIP, TO CHANGE 18 A DESIGNATED AGENT, OR TO CHANGE SUPERVISORY BROKERS AT ANY TIME 19 PURSUANT TO A WRITTEN ADDENDUM SIGNED BY THE PARTIES. 20 (9)(4)As used in this section: 21 (A) "AFFILIATED LICENSEES" MEANS INDIVIDUALS LICENSED AS 22 SALESPERSONS OR ASSOCIATE BROKERS WHO ARE EMPLOYED BY THE SAME 23 BROKER. 24 (B)(a)"Buyer" means a purchaser, tenant, or lessee of 25 any legal or equitable interest in real estate. 26 (C)(b)"Buyer's agent" means a licensee acting on behalf 27 of the buyer who undertakes to accept the responsibility of 06086'00 6 1 serving the buyer consistent with those fiduciary duties existing 2 under common law. 3 (D) "DESIGNATED AGENT" MEANS AN INDIVIDUAL SALESPERSON OR AN 4 ASSOCIATE BROKER WHO IS DESIGNATED BY THE BROKER AS THE CLIENT'S 5 LEGAL AGENT PURSUANT TO A DESIGNATED AGENCY AGREEMENT. 6 (E) "DESIGNATED AGENCY AGREEMENT" MEANS A WRITTEN AGREEMENT 7 BETWEEN A BROKER AND A CLIENT IN WHICH AN INDIVIDUAL SALESPERSON 8 OR ASSOCIATE BROKER AFFILIATED WITH THAT BROKER IS NAMED AS THAT 9 CLIENT'S DESIGNATED AGENT. 10 (F)(c)"Dual agent" means a licensee who is acting as the 11 agent of both the buyer and the seller and provides services to 12 complete a real estate transaction without the full range of 13 fiduciary duties owed by a buyer's agent and a seller's agent. 14 (G)(d)"Real estate transaction" means the sale or lease 15 of any legal or equitable interest in real estate. 16 (H)(e)"Seller" means the equitable or legal owner of 17 real estate. 18 (I)(f)"Seller's agent" means a licensee acting on behalf 19 of the seller who undertakes to accept the responsibility of 20 serving the seller consistent with those fiduciary duties exist- 21 ing under common law. 22 (J) "SUPERVISORY BROKER" MEANS AN ASSOCIATE BROKER DESIG- 23 NATED IN A WRITTEN AGENCY AGREEMENT TO ACT IN A SUPERVISORY ROLE 24 IN AN AGENCY RELATIONSHIP. 25 (K)(g)"Transaction coordinator" means a licensee who is 26 not acting as the agent of either the buyer or the seller. 06086'00 Final page. 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