March 6, 2007, Introduced by Reps. Farrah and Schuitmaker and referred to the Committee on Regulatory Reform.
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) A real estate broker or real estate salesperson
8 providing services under any service provision agreement shall,
1 at a minimum, provide to the client the duties described in
2 section 2512d(2) and the services described in section 2512d(3).
3 (3) The services described in section 2512d(3)(b), (c), and
4 (d) may be waived under a limited service agreement.
5 (4) (2) The disclosure of the type of agency
relationship
6 shall be in writing and substantially conform to the following:
7 DISCLOSURE REGARDING REAL ESTATE AGENCY RELATIONSHIPS
8 Before you disclose confidential information to a real
9 estate licensee regarding a real estate transaction, you should
10 understand what type of agency relationship you have with that
11 licensee. A real estate transaction is a transaction involving
12 the sale or lease of any legal or equitable interest in real
13 estate consisting of not less than 1 or not more than 4
14 residential dwelling units or consisting of a building site for a
15 residential unit on either a lot as defined in section 102 of the
16 land division act, 1967 PA 288, MCL 560.102, or a condominium
17 unit as defined in section 4 of the condominium act, 1978 PA 59,
18 MCL 559.104.
19 An agent providing services under any service provision
20 agreement owes, at a minimum, the following duties to the client:
21 (a) The exercise of reasonable care and skill in
22 representing the client and carrying out the responsibilities of
23 the agency relationship.
24 (b) The performance of the terms of the service provision
25 agreement.
1 (c) Loyalty to the interest of the client.
2 (d) Compliance with the laws, rules, and regulations of this
3 state and any applicable federal statutes or regulations.
4 (e) The recommendation to the client to obtain expert advice
5 related to material matters when necessary or appropriate.
6 (f) An accounting in a timely manner of all money and
7 property received by the agent in which the client has or may
8 have an interest.
9 (g) Confidentiality of all information, unless disclosed
10 with the client's permission or as provided by law, including the
11 duty not to disclose confidential information to any licensee who
12 is not an agent of the client.
13 A real estate broker or real estate salesperson acting
14 pursuant to a service provision agreement shall provide the
15 following services to his or her client:
16 (a) When the real estate broker or real estate salesperson
17 is representing a seller or lessor, the marketing of the client's
18 property in the manner agreed upon in the service provision
19 agreement.
20 (b) Acceptance of delivery and presentation of offers and
21 counteroffers to buy, sell, or lease the client's property or the
22 property the client seeks to purchase or lease.
23 (c) Assistance in developing, communicating, negotiating,
24 and presenting offers, counteroffers, and related documents or
25 notices until a purchase or lease agreement is executed by all
26 parties and all contingencies are satisfied or waived.
27 (d) After execution of a purchase agreement by all parties,
1 assistance as necessary to complete the transaction under the
2 terms specified in the purchase agreement.
3 (e) Furnishing, or causing to be furnished, a complete and
4 detailed closing statement as required by R 339.22311 of the
5 Michigan administrative code.
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
17 subagents will disclose to the seller known information about the
18 buyer which may be used to the benefit of the seller. Certain
19 individual services may be waived by the seller through means of
20 a limited service agreement, which are waived by the seller
21 signing a separate waiver document.
22 Buyer's Agents
23 A buyer's agent, under a buyer's agency agreement with the
24 buyer, acts solely on behalf of the buyer. Buyer's agents and
1 subagents will disclose to the buyer known information about the
2 seller which may be used to benefit the buyer. Certain individual
3 duties may be waived by the buyer through means of a limited
4 service agreement, which are waived by the buyer signing a
5 separate waiver document.
6 Dual Agents
7 A real estate licensee can be the agent of both the seller
8 and the buyer in a transaction, but only with the knowledge and
9 informed consent, in writing, of both the seller and the buyer.
10 In such a dual agency situation, the licensee will not be
11 able to disclose all known information to either the seller or
12 the buyer.
13 The obligations of a dual agent are subject to any specific
14 provisions set forth in any agreement between the dual agent, the
15 seller, and the buyer.
16 Licensee Disclosure (check one)
17 I hereby disclose that the agency status of the licensee
18 named below is:
19 _____ Seller's Agent
20 _____ Seller's Agent – limited service agreement
21 _____ Buyer's Agent
22 _____ Buyer's Agent – limited service agreement
23 _____ Dual Agent
24 _____ None of the above
1 Affiliated Licensee Disclosure (check one)
2 _____Only the licensee's broker and a named supervisory
3 broker have the same agency relationship as the licensee named
4 below. If the other party in a transaction is represented by an
5 affiliated licensee, then the licensee's broker and all named
6 supervisory brokers shall be considered disclosed consensual dual
7 agents.
8 _____All affiliated licensees have the same agency
9 relationship as the licensee named below.
10 Further, this form was provided to the buyer or seller
11 before disclosure of any confidential information.
12 ______________________ _____________________
13 Licensee Date
14 ______________________ _____________________
15 Licensee Date
16 Acknowledgment
17 By signing below, the parties confirm that they have
18 received and read the information in this agency disclosure
19 statement and that this form was provided to them before the
20 disclosure of any confidential information specific to the
21 potential sellers or buyers.
22 __________________________________ _________________
23 Potential Buyer/Seller (circle one) Date
24 ___________________________________ _________________
25 Potential Buyer/Seller (circle one) Date
1 (5) On a separate form, the following shall be provided to a
2 client desiring to waive any of the services required under
3 section 2512d(3)(b), (c), and (d) pursuant to a limited service
4 agreement:
5 SERVICES THAT MAY BE WAIVED ARE AS FOLLOWS:
6 Under Michigan law, a real estate licensee is required to
7 perform certain duties for his or her client unless these
8 services are waived by the client. By signing below, the
9 client agrees that the real estate licensee will not perform
10 the services initialed (only initial the services waived)
11 Sellers may waive: Initial if waived:
12 --Acceptance of delivery and presenta-
13 tion of offers and counteroffers
14 to buy, sell, or lease the client's
15 property or the property the client
16 seeks to purchase or lease. ______ ______
17 --Assistance in developing, communica-
18 ting, negotiating, and presenting
19 offers, counteroffers, and related
20 documents or notices until a purchase
21 or lease agreement is executed by all
22 parties and all contingencies are
23 satisfied or waived. ______ ______
24 --After execution of a purchase
25 agreement by all parties,
26 assistance as necessary to complete
27 the transaction under the terms
28 specified in the purchase agreement. ______ ______
29 Buyers may waive:
30 --Acceptance of delivery and presenta-
1 tion of offers and counteroffers
2 to buy, sell, or lease the client's
3 property or the property the client
4 seeks to purchase or lease. ______ ______
5 --Assistance in developing, communica-
6 ting, negotiating, and presenting
7 offers, counteroffers, and related
8 documents or notices until a purchase
9 or lease agreement is executed by all
10 parties and all contingencies are
11 satisfied or waived. ______ ______
12 --After execution of a purchase
13 agreement by all parties,
14 assistance as necessary to complete
15 the transaction under the terms
16 specified in the purchase agreement. ______ ______
17 Agreement to Waive
18 By signing below, I agree that the real estate licensee
19 who represents me will not provide the services that are
20 initialed above. I also understand that in any proposed
21 real estate transaction, no other real estate licensee
22 is required to provide the waived services unless I
23 subsequently hire them to do so, and realize that I may
24 need to hire other professionals such as an attorney.
25 _________________________________ ____________________
26 Seller or Buyer Date
27 _________________________________ ____________________
28 Seller or Buyer Date
29 _________________________________ ____________________
30 Real Estate Broker or Salesperson Date
31 _________________________________
32 Brokerage Name
1 (6) (3) This article does not prevent a licensee
from acting
2 as a transaction coordinator upon proper notice to all parties to
3 a real estate transaction.
4 (7) (4) A broker and a client may enter into a
designated
5 agency agreement. In the absence of a written designated agency
6 agreement, a client is considered to have an agency relationship
7 with the broker and all affiliated licensees.
8 (8) (5) A designated agency agreement shall
contain the name
9 of all associate brokers who are authorized to act as supervisory
10 brokers. If designated agents who are affiliated licensees
11 represent different parties in the same real estate transaction,
12 the broker and all supervisory brokers are considered disclosed
13 consensual dual agents for that real estate transaction.
14 Designated agents who are affiliated licensees representing
15 different parties in the same transaction shall notify their
16 clients that their broker represents both buyer and seller before
17 an offer to purchase is made or presented.
18 (9) (6) Except as otherwise provided in
subsection (5) (8),
19 a client with a designated agency agreement is not considered to
20 have an agency relationship with any affiliated licensees of the
21 designated agent. Two designated agents who are affiliated
22 licensees may each represent a different party in the same
23 transaction and shall not be considered dual agents. The
24 designated agent's knowledge of confidential information of a
25 client is not imputed to any affiliated licensee not having an
26 agency relationship with that client.
27 (10) (7) A designated agent shall not disclose
confidential
1 information of a client to any licensee, whether or not an
2 affiliated licensee, except that a designated agent may disclose
3 to any supervisory broker confidential information of a client
4 for purposes of seeking advice or assistance for the benefit of
5 the client. A licensee who represents a client in an agency
6 capacity does not breach any duty or obligation owed to that
7 client by failing to disclose to that client information obtained
8 through a present or prior agency relationship.
9 (11) (8) A listing agreement or a buyer's agency
agreement
10 may be amended to establish a designated agency relationship, to
11 change a designated agent, or to change supervisory brokers at
12 any time pursuant to a written addendum signed by the parties.
13 (12) (9) As used in this section:
14 (a) "Affiliated licensees" means individuals licensed as
15 salespersons or associate brokers who are employed by the same
16 broker.
17 (b) "Buyer" means a purchaser, tenant, or lessee of any
18 legal or equitable interest in real estate.
19 (c) "Buyer's agent" means a licensee acting on behalf of the
20 buyer in a real estate transaction who undertakes to accept the
21 responsibility of serving the buyer consistent with those
22 fiduciary duties existing under common law.
23 (d) "Designated agent" means an individual salesperson or an
24 associate broker who is designated by the broker as the client's
25 legal agent pursuant to a designated agency agreement.
26 (e) "Designated agency agreement" means a written agreement
27 between a broker and a client in which an individual salesperson
1 or associate broker affiliated with that broker is named as that
2 client's designated agent.
3 (f) "Dual agent" means a licensee who is acting as the agent
4 of both the buyer and the seller and provides services to
5 complete a real estate transaction without the full range of
6 fiduciary duties owed by a buyer's agent and a seller's agent.
7 (g) "Real estate transaction" means the sale or lease of any
8 legal or equitable interest in real estate where the interest in
9 real estate consists of not less than 1 or not more than 4
10 residential dwelling units or consists of a building site for a
11 residential unit on either a lot as defined in section 102 of the
12 land division act, 1967 PA 288, MCL 560.102, or a condominium
13 unit as defined in section 4 of the condominium act, 1978 PA 59,
14 MCL 559.104.
15 (h) "Seller" means the equitable or legal owner of real
16 estate.
17 (i) "Seller's agent" means a licensee acting on behalf of
18 the seller in a real estate transaction who undertakes to accept
19 the responsibility of serving the seller consistent with those
20 fiduciary duties existing under common law.
21 (j) "Supervisory broker" means an associate broker
22 designated in a written agency agreement to act in a supervisory
23 role in an agency relationship.
24 (k) "Transaction coordinator" means a licensee who is not
25 acting as the agent of either the buyer or the seller.
26 Enacting section 1. This amendatory act does not take effect
27 unless Senate Bill No.____ or House Bill No. 4416(request no.
1 01803'07) of the 94th Legislature is enacted into law.
2 Enacting section 2. This amendatory act takes effect July 1,
3 2007.