HB-4417, As Passed Senate, March 20, 2008
SUBSTITUTE FOR
HOUSE BILL NO. 4417
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) Unless knowingly waived by execution of a limited
1 service agreement, a real estate broker or real estate
2 salesperson providing services under any service provision
3 agreement shall, at a minimum, provide to the client the duties
4 described in section 2512d(2) and the services described in
5 section 2512d(3).
6 (3) (2) The disclosure of the type of agency
relationship
7 shall be in writing, shall be provided to the client, and shall
8 substantially conform to the following:
|
9 |
DISCLOSURE REGARDING REAL ESTATE AGENCY RELATIONSHIPS |
10 Before you disclose confidential information to a real
11 estate licensee regarding a real estate transaction, you should
12 understand what type of agency relationship you have with that
13 licensee. A real estate transaction is a transaction involving
14 the sale or lease of any legal or equitable interest in real
15 estate consisting of not less than 1 or not more than 4
16 residential dwelling units or consisting of a building site for a
17 residential unit on either a lot as defined in section 102 of the
18 land division act, 1967 PA 288, MCL 560.102, or a condominium
19 unit as defined in section 4 of the condominium act, 1978 PA 59,
20 MCL 559.104.
21 (1) An agent providing services under any service provision
22 agreement owes, at a minimum, the following duties to the client:
23 (a) The exercise of reasonable care and skill in
24 representing the client and carrying out the responsibilities of
25 the agency relationship.
26 (b) The performance of the terms of the service provision
1 agreement.
2 (c) Loyalty to the interest of the client.
3 (d) Compliance with the laws, rules, and regulations of this
4 state and any applicable federal statutes or regulations.
5 (e) Referral of the client to other licensed professionals
6 for expert advice related to material matters that are not within
7 the expertise of the licensed agent.
8 (f) An accounting in a timely manner of all money and
9 property received by the agent in which the client has or may
10 have an interest.
11 (g) Confidentiality of all information obtained within the
12 course of the agency relationship, unless disclosed with the
13 client's permission or as provided by law, including the duty not
14 to disclose confidential information to any licensee who is not
15 an agent of the client.
16 (2) A real estate broker or real estate salesperson acting
17 pursuant to a service provision agreement shall provide the
18 following services to his or her client:
19 (a) When the real estate broker or real estate salesperson
20 is representing a seller or lessor, the marketing of the client's
21 property in the manner agreed upon in the service provision
22 agreement.
23 (b) Acceptance of delivery and presentation of offers and
24 counteroffers to buy, sell, or lease the client's property or the
25 property the client seeks to purchase or lease.
26 (c) Assistance in developing, communicating, negotiating,
27 and presenting offers, counteroffers, and related documents or
House Bill No. 4417 (H-2) as amended February 26, 2008
1 notices until a purchase or lease agreement is executed by all
2 parties and all contingencies are satisfied or waived.
3 (d) After execution of a purchase agreement by all parties,
4 assistance as necessary to complete the transaction under the
5 terms specified in the purchase agreement.
6 (e) [FOR A BROKER OR ASSOCIATE BROKER WHO IS INVOLVED AT THE
7 CLOSING OF A REAL ESTATE OR BUSINESS OPPORTUNITY TRANSACTION FURNISHING,
8 OR CAUSING TO BE FURNISHED, TO THE BUYER AND SELLER, A COMPLETE AND
9 DETAILED CLOSING STATEMENT SIGNED BY THE BROKER OR ASSOCIATED BROKER
SHOWING EACH PARTY ALL RECEIPTS AND DISBURSEMENTS AFFECTING THAT PARTY.]
10 Michigan law requires real estate licensees who are acting
11 as agents of sellers or buyers of real property to advise the
12 potential sellers or buyers with whom they work of the nature of
13 their agency relationship.
|
14 |
Seller's Agents |
15 A seller's agent, under a listing agreement with the seller,
16 acts solely on behalf of the seller. A seller can authorize a
17 seller's agent to work with subagents, buyer's agents and/or
18 transaction coordinators. A subagent is one who has agreed to
19 work with the listing agent, and who, like the listing agent,
20 acts solely on behalf of the seller. Seller's agents and
21 subagents will disclose to the seller known information about the
22 buyer which may be used to the benefit of the seller. Individual
23 services may be waived by the seller through execution of a
24 limited service agreement. Only those services set forth in
25 paragraph (2)(b), (c), and (d) above may be waived by the
1 execution of a limited service agreement.
|
2 |
Buyer's Agents |
3 A buyer's agent, under a buyer's agency agreement with the
4 buyer, acts solely on behalf of the buyer. Buyer's agents and
5 subagents will disclose to the buyer known information about the
6 seller which may be used to benefit the buyer. Individual
7 services may be waived by the buyer through execution of a
8 limited service agreement. Only those services set forth in
9 paragraph (2)(b), (c), or (d) above may be waived by execution of
10 a limited service agreement.
|
11 |
Dual Agents |
12 A real estate licensee can be the agent of both the seller
13 and the buyer in a transaction, but only with the knowledge and
14 informed consent, in writing, of both the seller and the buyer.
15 In such a dual agency situation, the licensee will not be
16 able to disclose all known information to either the seller or
17 the buyer.
18 The obligations of a dual agent are subject to any specific
19 provisions set forth in any agreement between the dual agent, the
20 seller, and the buyer.
|
21 |
Licensee Disclosure (check one) |
22 I hereby disclose that the agency status of the licensee
23 named below is:
|
1 |
|
_____ Seller's Agent |
|
2 |
|
_____ Seller's Agent – limited service agreement |
|
3 |
|
_____ Buyer's Agent |
|
4 |
|
_____ Buyer's Agent – limited service agreement |
|
5 |
|
_____ Dual Agent |
|
6 |
|
_____ None of the above |
|
7 |
Affiliated Licensee Disclosure (check one) |
8 _____Only the licensee's broker and a named supervisory
9 broker have the same agency relationship as the licensee named
10 below. If the other party in a transaction is represented by an
11 affiliated licensee, then the licensee's broker and all named
12 supervisory brokers shall be considered disclosed consensual dual
13 agents.
14 _____All affiliated licensees have the same agency
15 relationship as the licensee named below.
16 Further, this form was provided to the buyer or seller
17 before disclosure of any confidential information.
|
18 |
______________________ |
_____________________ |
|
19 |
Licensee |
Date |
|
20 |
______________________ |
_____________________ |
|
21 |
Licensee |
Date |
|
22 |
Acknowledgment |
23 By signing below, the parties confirm acknowledge that they
24 have received and read the information in this agency disclosure
25 statement and acknowledge that this form was provided to them
26 before the disclosure of any confidential information. specific
1 to the potential sellers or buyers.
|
2 |
__________________________________ |
_________________ |
|
3 |
Potential Buyer/Seller (circle one) |
Date |
|
4 |
___________________________________ |
_________________ |
|
5 |
Potential Buyer/Seller (circle one) |
Date |
6 (4) On a separate form, the following information in the
7 following format shall be provided to a client desiring to waive
8 any of the services required under section 2512d(3)(b), (c), and
9 (d) by execution of a limited service agreement:
|
10 |
LIMITED SERVICE AGREEMENT |
|
11 |
Pursuant to Michigan law certain services provided by |
|
12 |
a real estate license MAY be waived. |
|
13 |
A real estate licensee is required to perform certain |
|
14 |
services for his or her client unless these services are |
|
15 |
waived by the client. By signing below, you agree that |
|
16 |
the real estate licensee will not be required to perform |
|
17 |
the services initialed (only initial the services waived). |
|
18 |
Initial if waived: |
|
19 |
--Acceptance of delivery and presenta- |
|
20 |
tion of offers and counteroffers |
|
21 |
to buy, sell, or lease your |
|
22 |
property or the property you |
|
23 |
seek to purchase or lease. ______ ______ |
|
24 |
--Assistance in developing, communica- |
|
25 |
ting, negotiating, and presenting |
|
26 |
offers, counteroffers, and related |
|
27 |
documents or notices until a purchase |
|
28 |
or lease agreement is executed by all |
|
1 |
parties and all contingencies are |
|
2 |
satisfied or waived. ______ ______ |
|
3 |
--After execution of a purchase |
|
4 |
agreement by all parties, |
|
5 |
assistance as necessary to complete |
|
6 |
the transaction under the terms |
|
7 |
specified in the purchase agreement. ______ ______ |
|
8 |
Agreement to Waive |
|
9 |
By signing below, I acknowledge that the duties owed to |
|
10 |
me pursuant to Michigan law have been explained to me and |
|
11 |
that I knowingly agree that the real estate licensee |
|
12 |
who represents me will not provide the services that are |
|
13 |
initialed above. I also understand that in any proposed |
|
14 |
real estate transaction, no other real estate licensee |
|
15 |
is required to provide the waived services unless I |
|
16 |
subsequently hire them to do so. I also acknowledge |
|
17 |
that in order to protect my interests I may need to |
|
18 |
retain other professionals, such as an attorney. |
|
19 |
_________________________________ ____________________ |
|
20 |
Seller or Buyer Date |
|
21 |
_________________________________ ____________________ |
|
22 |
Seller or Buyer Date |
|
23 |
_________________________________ ____________________ |
|
24 |
Real Estate Broker or Salesperson Date |
|
25 |
_________________________________ |
|
26 |
Brokerage Name |
27 (5) (3) This article does not prevent a licensee
from acting
28 as a transaction coordinator upon proper notice to all parties to
29 a real estate transaction.
30 (6) (4) A broker and a client may enter into a
designated
31 agency agreement. In the absence of a written designated agency
1 agreement, a client is considered to have an agency relationship
2 with the broker and all affiliated licensees.
3 (7) (5) A designated agency agreement shall
contain the name
4 of all associate brokers who are authorized to act as supervisory
5 brokers. If designated agents who are affiliated licensees
6 represent different parties in the same real estate transaction,
7 the broker and all supervisory brokers are considered disclosed
8 consensual dual agents for that real estate transaction.
9 Designated agents who are affiliated licensees representing
10 different parties in the same transaction shall notify their
11 clients that their broker represents both buyer and seller before
12 an offer to purchase is made or presented.
13 (8) (6) Except as otherwise provided in
subsection (5) (7),
14 a client with a designated agency agreement is not considered to
15 have an agency relationship with any affiliated licensees of the
16 designated agent. Two designated agents who are affiliated
17 licensees may each represent a different party in the same
18 transaction and shall not be considered dual agents. The
19 designated agent's knowledge of confidential information of a
20 client is not imputed to any affiliated licensee not having an
21 agency relationship with that client.
22 (9) (7) A designated agent shall not disclose
confidential
23 information of a client to any licensee, whether or not an
24 affiliated licensee, except that a designated agent may disclose
25 to any supervisory broker confidential information of a client
26 for purposes of seeking advice or assistance for the benefit of
27 the client. A licensee who represents a client in an agency
1 capacity does not breach any duty or obligation owed to that
2 client by failing to disclose to that client information obtained
3 through a present or prior agency relationship.
4 (10) (8) A listing agreement or a buyer's agency
agreement
5 may be amended to establish a designated agency relationship, to
6 change a designated agent, or to change supervisory brokers at
7 any time pursuant to a written addendum signed by the parties.
8 (11) (9) As used in this section:
9 (a) "Affiliated licensees" means individuals licensed as
10 salespersons or associate brokers who are employed by the same
11 broker.
12 (b) "Buyer" means a purchaser, tenant, or lessee of any
13 legal or equitable interest in real estate.
14 (c) "Buyer's agent" means a licensee acting on behalf of the
15 buyer in a real estate transaction who undertakes to accept the
16 responsibility of serving the buyer consistent with those
17 fiduciary duties existing under common law.
18 (d) "Designated agent" means an individual salesperson or an
19 associate broker who is designated by the broker as the client's
20 legal agent pursuant to a designated agency agreement.
21 (e) "Designated agency agreement" means a written agreement
22 between a broker and a client in which an individual salesperson
23 or associate broker affiliated with that broker is named as that
24 client's designated agent.
25 (f) "Dual agent" means a licensee who is acting as the agent
26 of both the buyer and the seller and provides services to
27 complete a real estate transaction without the full range of
1 fiduciary duties owed by a buyer's agent and a seller's agent.
2 (g) "Real estate transaction" means the sale or lease of any
3 legal or equitable interest in real estate where the interest in
4 real estate consists of not less than 1 or not more than 4
5 residential dwelling units or consists of a building site for a
6 residential unit on either a lot as defined in section 102 of the
7 land division act, 1967 PA 288, MCL 560.102, or a condominium
8 unit as defined in section 4 of the condominium act, 1978 PA 59,
9 MCL 559.104.
10 (h) "Seller" means the equitable or legal owner of real
11 estate.
12 (i) "Seller's agent" means a licensee acting on behalf of
13 the seller in a real estate transaction who undertakes to accept
14 the responsibility of serving the seller consistent with those
15 fiduciary duties existing under common law.
16 (j) "Supervisory broker" means an associate broker
17 designated in a written agency agreement to act in a supervisory
18 role in an agency relationship.
19 (k) "Transaction coordinator" means a licensee who is not
20 acting as the agent of either the buyer or the seller.
21 Enacting section 1. This amendatory act does not take effect
22 unless House Bill No. 4416 of the 94th Legislature is enacted
23 into law.
24 Enacting section 2. This amendatory act takes effect July 1,
25 2008.