SB-0641, As Passed House, March 20, 2014

HOUSE SUBSTITUTE FOR

SENATE BILL NO. 641

     A bill to amend 1980 PA 299, entitled

"Occupational code,"

by amending sections 2502a, 2504, and 2508 (MCL 339.2502a,

339.2504, and 339.2508), section 2502a as added by 2002 PA 611,

section 2504 as amended by 2003 PA 196, and section 2508 as amended

by 1988 PA 16, and by adding section 2504a.

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

     Sec. 2502a. (1) Beginning November 1, 2003, the The department

shall issue a license for a real estate broker, associate real

estate broker, and real estate salesperson for a term of 3 years.

     (2) The department shall renew a license for a real estate

broker, associate real estate broker, or real estate salesperson if

the department receives an application for renewal on a form

prescribed by the department, and payment of the appropriate fees,

within the time period described in section 411(1) or (2), and the

applicable requirements of section 2504a are met.

     (3) The department may relicense without examination a person

that fails to renew a license issued under this article within the

time period described in subsection (2) if all of the following are

met:

     (a) The person applies within 3 years after the expiration

date of the person's last license.

     (b) The person pays an application processing fee, the late

renewal fee, and the per-year license fee for the upcoming

licensure period.

     (c) The person completes 6 clock hours of continuing education

for each year and partial year that have elapsed since the

expiration of the person's last license, on the topics described in

section 2504a(1).

     (4) The department may relicense a person that failed to renew

a real estate broker license within 3 years after the expiration

date of the person's last license if the person pays an application

processing fee, the late renewal fee, and the per-year license fee

for the upcoming licensure period and submits proof that the

person, if the person is an individual, or the individual

designated as the person's principal under section 2505 if the

person is not an individual, meets any of the following:

     (a) Has completed a total of 6 clock hours of continuing

education for each year and partial year that have elapsed since

the expiration of the person's last license, on the topics

described in section 2504a(1).

     (b) Has completed 90 clock hours of prelicensure courses

described in section 2504(3).

     (c) Has passed the examination required for a real estate

broker license under section 2505(5).

     (5) The department may relicense an individual who failed to

renew a real estate salesperson license within 3 years after the

expiration date of his or her last license if he or she pays an

application processing fee, the late renewal fee, and the per-year

license fee for the upcoming licensure period and submits proof

that he or she meets any of the following:

     (a) Has completed a total of 6 clock hours of continuing

education for each year and partial year that have elapsed since

the expiration of his or her last license, on the topics described

in section 2504a(1).

     (b) Has completed 40 clock hours of prelicensure courses

described in section 2504(3).

     (c) Has passed the examination required for a real estate

salesperson license under section 2505(5).

     Sec. 2504. (1) Before receiving Both of the following must be

met before an applicant receives a real estate broker's license ,

an applicant shall under this article:

     (a) The applicant must submit an application as described in

under section 2505. and shall have successfully completed not less

than

     (b) The applicant, if the applicant is an individual, or the

individual designated as the principal of the applicant under

section 2505 if the applicant is not an individual, must

successfully complete at least 90 clock hours of approved

prelicensure classroom courses in real estate, of which not less

than at least 9 clock hours shall be is instruction on civil rights

law and equal opportunity in housing. The 90 hours shall be are in

addition to the hours required to obtain a real estate

salesperson's license.

     (2) Before being he or she is permitted to take the real

estate salesperson's examination, an the applicant shall must show

proof of successful completion of not less than that he or she has

successfully completed at least 40 clock hours of approved

prelicensure classroom courses in principles of real estate, of

which not less than at least 4 clock hours shall be is instruction

on civil rights law and equal opportunity in housing.

     (3) For purposes of subsections (1) and (2), approved

prelicensure courses may be on the following topics:

     (a) Real estate license law and related regulatory laws.

     (b) Real property law, including property interests and

restrictions.

     (c) Federal, state, and local tax laws affecting real

property.

     (d) Conveyances, including contracts, deeds, and leases.

     (e) Financing, including mortgages, land contracts,

foreclosure, and limits on lending procedures and interest rates.

     (f) Appraisal of real property.

     (g) Design and construction.

     (h) Marketing, exchanging, and counseling.

     (i) The law of agency.

     (j) Sales and office management, including listing and selling

techniques.

     (k) Real estate securities and syndications.

     (l) Investments, including property management.

     (4) Except as otherwise provided in this subsection, before

being permitted to renew an active real estate broker's or real

estate salesperson's license, a licensee shall have successfully

completed, within the preceding 12 months, not less than 6 clock

hours of continuing education approved by the department involving

any topics relevant to the management, operation, and practice of

real estate and covering changes in economic conditions, law,

rules, court cases, and interpretations, or any combination of

those changes, relating to real property which are pertinent to the

activities of a real estate broker or real estate salesperson.

Beginning November 1, 2003, a licensee shall complete not less than

18 hours of continuing education per 3-year license cycle. A

licensee shall complete at least 6 hours of the required 18 hours

of continuing education courses during the time period from

November 1, 2003 and ending on December 31, 2004. During calendar

year 2005, a licensee shall complete at least 6 hours of the

required 18 hours of continuing education courses. During calendar

year 2006, a licensee shall complete at least 4 hours of the

required 18 hours of continuing education courses. During calendar

year 2007 and thereafter, a licensee shall complete at least 2

hours per calendar year of the required 18 hours of continuing

education courses. Any education successfully completed by a

licensee for further professional designation and approved by the

department as continuing education may be counted toward the total

continuing education credits required for the 3-year license cycle.

Each licensee, in completing the appropriate number of clock hours,

will have the option of selecting the education courses in that

licensee's area of expertise, as long as the education courses are

approved by the department and as long as at least 2 hours of an

education course per calendar year involve law, rules, and court

cases regarding real estate. Notwithstanding the provisions of this

subsection, the department may renew the license of a licensee who

has completed not less than 18 hours of continuing education in the

subject matter areas required by this subsection during the 3-year

license cycle but has not otherwise met the requirements of this

section if the licensee provides evidence satisfactory to the

department that he or she has good cause for not complying with the

requirements in this subsection.

     (5) The department may relicense without examination a

licensee whose license has lapsed for less than 3 years if the

licensee shows proof of completion of not less than 6 clock hours

of continuing education for each year the license was lapsed, on

topics as described in subsection (4).

     (6) The department may relicense a broker whose license has

lapsed for 3 or more continuous years if the licensee provides

proof of the successful completion of 1 of the following:

     (a) Six clock hours of continuing education for each of the

years the license was lapsed on topics described in subsection (4).

     (b) Ninety clock hours of instruction described in subsections

(1) and (3).

     (c) Passing the examination required for licensure as a broker

as provided for in section 2505(5).

     (7) A salesperson whose license has been lapsed for 3 or more

continuous years may be relicensed if the licensee provides proof

of the successful completion of 1 of the following:

     (a) Six clock hours of continuing education for each of the

years the license was lapsed on topics described in subsection (4).

     (b) Forty clock hours of instruction described in subsections

(2) and (3).

     (c) Passing the examination required for licensure as a

salesperson as provided in section 2505(5).

     (8) The department shall not apply the course credits used to

meet continuing education requirements provided in subsections (4)

through (7) towards the real estate broker's license education

requirements provided in subsection (1), and course credits taken

under real estate broker's license education requirements shall not

be applied towards the continuing education requirements. The

department shall apportion the approved course credits eligible for

education requirements in subsection (1) and subsections (4)

through (7) to meet either requirement upon the licensee's request.

     (9) For real estate brokers, associate brokers, and

salespersons who receive a license issued in the second or third

years of a 3-year license cycle, continuing education shall be in

compliance with subsection (4), except for the following:

     (a) A real estate broker, associate broker, or salesperson who

receives a license issued in the second year of the 3-year license

cycle is required to complete 12 hours of continuing education to

renew his or her license.

     (b) A real estate broker, associate broker, or salesperson who

receives a license issued in the third year of the 3-year licensing

cycle is required to complete 6 hours of continuing education to

renew his or her license.

(4) (10) A person who that offers or conducts a prelicensure

course or courses of study represented to meet the educational

requirements of this article section shall first shall obtain

approval from the department and shall comply with the rules of the

department concerning curriculum, instructor qualification, grading

system, and other related matters. In addition to other

requirements imposed under rule, in order to receive approval a A

course shall be designed to be taught for not less than at least 1

clock hour, not including time spent on breaks, meals, or other

unrelated activities. , provided the course is only approved for

less than 2 clock hours if, based upon the subject matter, course

outline, instructional materials, methodology, and other

considerations consistent with rules of the department, the

department determines that the course objectives can be effectively

met in the proposed time period. The department may suspend or

revoke the approval of a person for a violation of this article or

of the rules promulgated under this article. A person offering or

conducting that offers or conducts a course shall not represent

that its students are assured of passing an examination required by

the department. A person shall not represent that the issuance of

departmental approval is a recommendation or indorsement of the

person to which it is issued or of a course of instruction given by

it. A pre-licensure prelicensure course approved under this article

section shall be conducted by a local public school district, a

community college, an institution of higher education authorized to

grant degrees, or a proprietary school licensed by the department

of career development under the proprietary schools act, 1943 PA

148, MCL 395.101 to 395.103.

(5) (11) A person who in operating a school that violates

subsection (10) (4) in operating a school that provides 1 or more

courses described in this section is subject to the penalties set

forth in article 6.

(6) (12) The department may conduct, hold, or assist in

conducting or holding, a real estate clinic, meeting, course, or

institute, which shall be open to a person licensed under this

article, and may incur the necessary expenses in connection with

the clinic, meeting, course, or institute. The department, in the

public interest, may assist educational institutions within in this

state in sponsoring studies, research, and programs for the purpose

of raising the standards of professional practice in real estate

and the competence of a licensee.

     Sec. 2504a. (1) Within each 3-year license cycle, a licensee

shall successfully complete at least 18 clock hours of continuing

education courses that involve any subjects that are relevant to

the management, operation, and practice of real estate or any other

subject that contributes to the professional competence of a

licensee or applicant. All of the following apply to this

continuing education requirement:

     (a) In each calendar year of each 3-year license cycle, a

licensee shall complete at least 2 hours of the required 18 hours

of continuing education courses.

     (b) In completing the appropriate number of continuing

education courses, a licensee may select education courses in his

or her area of expertise, but at least 2 hours of the education

courses in a calendar year must involve law, rules, and court cases

regarding real estate.

     (c) At the time he or she attends a continuing education

course, a licensee shall do both of the following to confirm his or

her identity:

     (i) Present his or her pocket card, or provide his or her

license identification number, from the department to the course

provider.

     (ii) Present his or her operator's license or chauffeur's

license issued under the Michigan vehicle code, 1949 PA 300, MCL

257.1 to 257.923, an official state personal identification card

issued under 1972 PA 222, MCL 28.291 to 28.300, or other

government-issued photo identification to the course provider.

     (d) Any education course that the licensee successfully

completes to obtain a professional designation is counted toward

the total continuing education credits required in a 3-year license

cycle.

     (e) If a licensee successfully completes a continuing

education course, he or she does not earn additional hours toward

the requirements of this section if he or she repeats that course.

     (2) An applicant for license renewal under section 2502a shall

certify compliance with subsection (1) to the department. A

licensee shall retain evidence acceptable to the department that

demonstrates he or she has met the continuing education

requirements under this section, for at least 4 years after the

date of that certification, and shall produce the record that

contains that evidence at the request of the department. The

department shall consider the following as acceptable evidence

under this subsection:

     (a) The name and contact information of the continuing

professional education program sponsor.

     (b) The participant's name.

     (c) The course title and course field of study.

     (d) The date the course was offered or completed.

     (e) If applicable, the location of the course.

     (f) The type of instruction or delivery method used for

presenting the course.

     (g) Verification by a representative of the continuing

professional education program sponsor of the participant's

completion of the course.

     (h) A time statement from the continuing professional

education program sponsor that states that continuing professional

education credits for the course were granted on a 50-minute hour.

     (3) An applicant for license renewal under section 2502a is

subject to audit by the department for compliance with subsection

(1) or (6) and may be required to submit the documentation

described in subsection (2) to the department on request.

     (4) If the department finds as the result of an audit under

subsection (3) that an applicant for license renewal under section

2502a has not completed sufficient hours of continuing education to

renew his or her license, the department may allow the applicant to

renew his or her license by completing both of the following, if

applicable:

     (a) A sufficient number of additional hours of continuing

education to fulfill the requirements for the period determined by

audit to be deficient.

(b) If the period determined by the audit to be deficient is

at least 60 days, additional hours of continuing education in 1 of

the following amounts:

     (i) If the deficiency period is at least 60 days and less than

120 days, 4 hours.

     (ii) If the deficiency period is 120 days or more, 8 hours.

     (5) Hours of additional continuing education required under

subsection (4)(b) do not apply toward continuing education required

in the next 3-year license cycle. The department may waive the

requirement for additional hours under subsection (4)(b) if the

applicant demonstrates to the department that the additional hours

would present an undue hardship on the applicant.

     (6) A real estate broker, associate broker, or salesperson who

receives a license issued in the second or third year of a 3-year

license cycle is required to comply with the continuing education

requirements under subsection (1), except as follows:

     (a) A real estate broker, associate broker, or salesperson who

receives a license issued in the second year of the 3-year license

cycle is required to complete 12 hours of continuing education.

     (b) A real estate broker, associate broker, or salesperson who

receives a license issued in the third year of the 3-year license

cycle is required to complete 6 hours of continuing education.

     (7) Course credits used to meet continuing education

requirements under this section do not apply toward the real estate

broker's license prelicensure education requirements under section

2504, and course credits successfully completed under real estate

broker's license prelicensure education requirements under section

2504 do not apply toward the continuing education requirements of

this section.

     Sec. 2508. (1) A The department may issue a real estate

broker's license may be issued to an individual, sole

proprietorship, partnership, association, corporation, limited

liability company, common law trust, or a combination of those

entities. A real estate broker's license that is issued to an

individual or a sole proprietorship shall entitle entitles the

individual named on the license to perform acts regulated by under

this article. Subject to subsection (2), a real estate broker's

license issued to a partnership, association, corporation, limited

liability company, common law trust, or a combination of those

entities shall entitle entitles those individuals designated as

principals under section 2505(1) to perform acts regulated by under

this article. A broker's license issued to a partnership,

association, corporation, limited liability company, common law

trust, or a combination of those entities is not transferable.

     (2) Before performing acts regulated under this article, each

principal shall apply for and obtain, and any other individual may

apply for and obtain, an associate real estate broker's license. An

applicant for an associate real estate broker's license shall be is

subject to the same requirements as an applicant for a real estate

broker's license. An The department shall only issue an associate

real estate broker's license shall only be issued to individuals.an

individual.

     (3) The associate real estate broker's license of a principal

who ceases to be connected with a partnership, association,

corporation, limited liability company, common law trust, or a

combination of those entities shall be is suspended automatically.

     (4) An associate real estate broker's license that is issued

to a principal is not transferable. An associate real estate

broker's license issued to a nonprincipal may be transferred in the

same manner as provided in section 2507 for the transfer of a real

estate salesperson's license.

     (5) Upon the revocation of If a real estate broker's license

is revoked, the licenses of all real estate salespersons who are

employed by the real estate broker and all affiliated associate

real estate brokers shall are automatically be suspended, pending a

change of employer and the issuance of a new license. A The

department shall issue a new license shall be issued under this

subsection without charge , if the license is issued during the

same term in which the original license was issued.

     (6) In the event of the death or disability of a sole

principal associate broker, the department shall allow all

affiliated real estate licensees a reasonable time to either wind

up the business of the real estate broker or designate a new

principal associate broker.

     Enacting section 1. R 339.22651 of the Michigan administrative

code is rescinded.

     Enacting section 2. This amendatory act takes effect January

1, 2015.