January 22, 2015, Introduced by Senator KOWALL and referred to the Committee on Regulatory Reform.
A bill to amend 1980 PA 299, entitled
"Occupational code,"
by amending sections 105, 2501, 2502a, 2503, 2504, 2504a, 2505,
2506, 2509, 2510, 2512, and 2512d (MCL 339.105, 339.2501,
339.2502a, 339.2503, 339.2504, 339.2504a, 339.2505, 339.2506,
339.2509, 339.2510, 339.2512, and 339.2512d), section 105 as
amended by 1988 PA 463, sections 2501 and 2512 as amended and
section 2512d as added by 2008 PA 90, sections 2502a and 2504 as
amended and section 2504a as added by 2014 PA 106, section 2503 as
amended by 1990 PA 269, section 2505 as amended by 2003 PA 196,
section 2506 as amended by 2011 PA 33, and section 2509 as amended
by 1988 PA 16, and by adding sections 2502b, 2512e, 2512f, 2516,
and 2516a.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 105. (1) "License" means the document issued to a person
under
this act which will enable that enables
the person to use a
designated title and practice an occupation, which practice would
otherwise be prohibited by this act. License includes a document
issued
by the department which that
permits a school, institution,
or
person to offer training or education in an occupation or which
that permits the operation of a facility, establishment, or
institution in which an occupation is practiced. License includes a
permit or approval.
(2)
"Licensee" means a person who that has been issued a
license under this act.
(3) "Limitation" means a condition, stricture, constraint,
restriction, or probation attached to a license or registration
relative to the scope of practice, including the following:
(a) A requirement that the licensee or registrant perform only
specified functions of the licensee's or registrant's occupation.
(b) A requirement that the licensee or registrant perform the
licensee's or registrant's occupation only for a specified period
of time.
(c) A requirement that the licensee or registrant perform the
licensee's or registrant's occupation only within a specified
geographical area.
(d) A requirement that restitution be made or certain work be
performed before a license or registration is issued, renewed, or
reinstated.
(e)
A requirement that a financial statement certified by a
person
an individual who is licensed as a certified public
accountant be filed with the department at regular intervals.
(f)
A requirement which that reasonably assures a licensee's
or registrant's competence to perform the licensee's or
registrant's occupation.
(g) A requirement that an attorney review all contracts of a
licensee
or registrant. be reviewed by an attorney.
(h) A requirement that a licensee or registrant have on file
with the department a bond that is issued by a surety insurer
approved by the department or cash in an amount determined by the
department.
(i) A requirement that a licensee or registrant deposit money
received in an escrow account which can be disbursed only under
certain conditions as determined by the licensee or registrant and
another party.
(j) A requirement that a licensee or registrant file reports
with the department at intervals determined by the department.
(4)
"Occupation" means a field of endeavor regulated by under
this act.
(5)
"Person" means an individual;
, a sole proprietorship,
partnership, association, corporation, limited liability company,
or
common law trust , or a combination of those legal entities; .
Person
includes or a department, board, school, institution,
establishment, or governmental entity.
(6) "Physical dominion" means control and possession.
(7)
"Physician" means that term as defined in section sections
17001
and section 17501 of the public health code, Act No. 368 of
the
Public Acts of 1978, being sections 333.17001 and 333.17501 of
the
Michigan Compiled Laws.1978
PA 368, MCL 333.17001 and
333.17501.
(8)
"Probation" means a sanction which that permits
a board to
evaluate over a period of time a licensee's or registrant's fitness
to
practice an occupation regulated by under this act.
(9) "Public access" means the right of a person to view and
copy
files pursuant to under the freedom of information act, Act
No.
442 of the Public Acts of 1976, as amended, being sections
15.231
to 15.246 of the Michigan Compiled Laws.1976 PA 442, MCL
15.231 to 15.246.
(10)
"Registrant" means a person who that is registered under
this act.
(11) "Registration" means the document issued to a person
under
this act which will enable that enables
the person to use a
designated title, which use would be otherwise prohibited by this
act.
(12) "Rule" means a rule promulgated under this act and
pursuant
to under the administrative procedures act of 1969, Act
No.
306 of the Public Acts of 1969, as amended, being sections
24.201
to 24.328 of the Michigan Compiled Laws.1969 PA 306, MCL
24.201 to 24.328.
(13) "State" means the District of Columbia or a commonwealth,
state, or territory of the United States.
Sec. 2501. As used in this article:
(a) "Classroom course" means an educational course of
instruction that is provided at either of the following:
(i) A physical location where instruction is offered and
students and an instructor are present.
(ii) A location where a student receives instruction provided
by distance learning.
(b) "Clock hour" means either of the following:
(i) For a classroom course at a location described in
subdivision (a)(i), a period of 50 to 60 minutes of actual classroom
instruction, not including outside assignments and reading.
(ii) For a classroom course at a location described in
subdivision (a)(ii), the period required for a student to process
the amount of material provided in 50 minutes of distance learning
instruction.
(c) "Control person" means an individual who is a sole
proprietor, is a partner in a partnership or limited partnership,
is an officer in a corporation, is a member or manager in a limited
liability company, or holds a responsible position in any other
legal entity authorized under the laws of the state in which the
entity is organized or formed.
(d) "Distance learning" means the technology and educational
process used to provide instruction for when the course provider
and the distance-learning student are not necessarily physically
present at the same time or place. The term includes, but is not
limited to, instruction provided through an interactive classroom,
computer conferencing, or an interactive computer system.
(e) (a)
"Employ" or
"employment" means the relationship
between a real estate broker and an associate broker or a real
estate salesperson which may include an independent contractor
relationship. The existence of an independent contractor
relationship between a real estate broker and an individual
licensed
to the real estate broker shall does
not relieve the real
estate broker of the responsibility to supervise acts of the
licensee
that are regulated by under this article.
(f) (b)
"Independent contractor
relationship" means a
relationship between a real estate broker and an associate broker
or real estate salesperson that satisfies both of the following
conditions:
(i) A written agreement exists in which the real estate broker
does not consider the associate broker or real estate salesperson
as an employee for federal and state income tax purposes.
(ii) Not less than At least 75%
of the annual compensation paid
by the real estate broker to the associate broker or real estate
salesperson is from commissions from the sale of real estate.
(g) (c)
"Limited service
agreement" means a written service
provision
agreement by which the a real estate broker and client
establish an agency relationship in which certain enumerated
services, as set forth in section 2512d(3)(b), (c), and (d), are
knowingly waived in whole or part by the client.
(h) "Negotiate the mortgage of real estate" means engaging in
activity in connection with a mortgage that is not regulated under
the mortgage brokers, lenders, and servicers licensing act, 1987 PA
173, MCL 445.1651 to 445.1684.
(i) A "nonprincipal" of a real estate broker means an
individual who is licensed as an associate real estate broker under
this article, but has not been designated as a principal under
section 2505(1).
(j) "Pocket card" means the pocket card that contains
information about the license that the department provides under
section 2506 when it issues a license under this article.
(k) "Prelicensure course" means a course that is represented
to the public as fulfilling, in whole or in part, the requirements
of section 2504.
(l) A "principal" of a real estate broker means an individual
who is designated as a principal of a real estate broker under
section 2505(1).
(m) (d)
"Professional
designation" means a certification from
a
real estate professional association demonstrating attainment of
that demonstrates that an individual has attained proven skills or
education in a real estate occupational area and may include the
right to use a title or letters after the licensee's name that
represent
the designation bestowed awarded
by the certifying
entity.
(n) (e)
"Property management"
means the leasing or renting, or
the
offering to lease or rent, of real
property of others for a
fee, commission, compensation, or other valuable consideration
pursuant to a property management employment contract.
(o) (f)
"Property management
account" means an interest-
bearing or noninterest-bearing account or instrument used in the
operation of property management.
(p) (g)
"Property management
employment contract" means the a
written agreement that is entered into between a real estate broker
and client concerning the real estate broker's employment as a
property
manager for the client; setting forth that describes the
real estate broker's duties, responsibilities, and activities as a
property
manager; and setting forth that
describes the handling,
management, safekeeping, investment, disbursement, and use of
property management money, funds, and accounts.
(q) (h)
"Real estate broker"
means an individual, sole
proprietorship,
partnership, association, corporation, common law
trust,
or a combination of those entities who a person that, with
intent to collect or receive a fee, compensation, or valuable
consideration, sells or offers for sale, buys or offers to buy,
provides or offers to provide market analyses of, lists or offers
or
attempts to list, or negotiates the purchase, or sale, or
exchange
or mortgage of real estate;
, or that negotiates the
mortgage of real estate; that negotiates for the construction of a
building
on real estate; who that leases or offers or rents or
offers for rent real estate or the improvements on the real estate
for
others, as a whole or partial vocation; who that engages
in
property
management as a whole or partial vocation; who that sells
or offers for sale, buys or offers to buy, leases or offers to
lease, or negotiates the purchase or sale or exchange of a
business, business opportunity, or the goodwill of an existing
business
for others; or who, that, as owner or otherwise, engages
in the sale of real estate as a principal vocation.
(r) (i)
"Real estate salesperson"
means a person an
individual
who for compensation or valuable consideration is employed either
directly or indirectly by a licensed real estate broker to sell or
offer
to sell, to buy or offer to buy, to provide or offer to
provide
market analyses of, to list or offer or attempt to list, or
to
negotiate the purchase, or
sale, or exchange or mortgage of real
estate; ,
or to negotiate the mortgage
of real estate; to negotiate
for the construction of a building on real estate, or to lease or
offer
to lease, or rent or offer for rent, real estate; ,
who is
employed by a real estate broker to engage in property management;
,
or who sells or offers for sale,
buys or offers to buy, leases or
offers to lease, or negotiates the purchase or sale or exchange of
a business, business opportunity, or the goodwill of an existing
business for others, as a whole or partial vocation.
(s) (j)
"Service provision
agreement" means a buyer agency
agreement or listing agreement that is executed by a real estate
broker
and a client that and establishes an agency relationship.
(t) "Sponsor" means a person that is approved by a statewide
real estate trade association, with which the department has
contracted under section 210 for that purpose; and that represents
to the public that the courses it conducts for purposes of this
article fulfill the requirements of section 2504a for continuing
education.
Sec. 2502a. (1) 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. The department shall not issue a
license to an individual who is under the age of 18 years. The
department may require that an applicant who is an individual
submit a report from an independent source pertaining to his or her
previous occupation, criminal record, or any other information the
department considers material to the applicant's qualifications for
licensure.
(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
an individual who 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 individual applies within 3 years after the
expiration
date of the person's his
or her last license.
(b)
The person individual pays an application processing fee,
the late renewal fee, and the per-year license fee for the upcoming
licensure period.
(c)
The person individual completes 6 clock hours of
continuing education for each year and partial year that have
elapsed
since the expiration of the person's individual'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).
(6) A person whose license has been revoked shall not apply
for a new license for at least 3 years after the service of the
final order of the revocation. To be considered for a license
following a revocation, an applicant shall meet all educational and
examination requirements in effect at the time of application, and
the applicant shall not receive credit for education or experience
acquired, or examinations passed, before the revocation.
Sec. 2502b. (1) Unless the owner engages the services of a
real estate broker in connection with those sales, a person that is
the owner of real estate must obtain a license as a real estate
broker to engage in the sale of that real estate as a principal
vocation. For purposes of this subsection, each of the following is
considered engaging in the sale of real estate as a principal
vocation:
(a) Engaging in more than 5 real estate sales in any 12-month
period.
(b) Representing to the public that the person is principally
engaged in the sale of real estate.
(c) Devoting over 50% of an individual's working time, or more
than 15 hours per week in any 6-month period, to the sale of real
estate.
(d) If the person is a real estate salesperson, a sale of real
estate other than his or her principal residence.
(2) A sale of real estate that is owned by, or under option
to, a real estate broker or associate real estate broker is subject
to the provisions of this article.
(3) If a licensee is selling property that is owned by the
licensee or in which the licensee has an interest, the licensee
shall reveal the facts of the licensee's ownership or interest and
the licensee's licensure to the purchaser, in writing, before an
offer to purchase is signed. A licensee shall provide written proof
of this disclosure that is satisfactory to the department on
request by the department.
Sec.
2503. (1) This article shall does
not apply to an
individual,
partnership, association, or corporation, who a person
that, as owner, sells or offers for sale a detached, single family
dwelling,
duplex, triplex, or quadruplex, which that has never been
occupied
and which that was built by the individual, partnership,
association,
or corporation person while licensed under article 24.
This
article does not apply to an individual, partnership,
association,
or corporation, who as owner or
lessor, or as an
attorney-in-fact acting under a duly executed and recorded power of
attorney
from the owner or lessor, or who has been a person
appointed by a court, that performs an act as a real estate broker
or real estate salesperson with reference to property owned by it,
unless performed as a principal vocation not through a licensed
real estate broker.
(2)
This article shall does not include the services rendered
by
apply to an attorney-at-law who
is rendering services as an
attorney-at-law; ,
nor shall it include to a receiver, trustee in
bankruptcy, administrator, executor, a person selling real estate
under
order of a court; , nor or
to a trustee selling under a deed
of
trust, . This exemption of a trustee shall not apply to unless
the
trustee makes repeated or successive
sales of real estate by
the
trustee, unless the sale is made not
through a licensed real
estate broker.
(3)
This article does not apply to a person who that is
regulated under the mortgage brokers, lenders, and servicers
licensing
act, Act No. 173 of the Public Acts of 1987, being
sections
445.1651 to 445.1683 of the Michigan Compiled Laws, 1987
PA
173, MCL 445.1651 to 445.1684, and who
that does not perform any
other act requiring a license as a real estate broker, associate
broker, or real estate salesperson.
(4)
For the purposes of this article, "negotiate the mortgage
of
real estate" as described in section 2501, means engaging in
activity
not regulated under Act No. 173 of the Public Acts of
1987.
Sec. 2504. (1) Both of the following must be met before an
applicant receives a real estate broker's license under this
article:
(a) The applicant must submit an application under section
2505.
(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 at All of
the following apply to these 90 hours of instruction:
(i) At least
9 clock hours is must be instruction on civil
rights
law and equal opportunity in fair
housing law.
(ii) The 90 hours are in addition to the hours required to
obtain a real estate salesperson's license.
(iii) The applicant must complete the 90 hours within the 36-
month period preceding the date of the application unless the
applicant has held a license as a real estate salesperson for that
period.
(iv) Possession of a law degree, obtained any time before the
date of application, is considered equal to, and the applicant
shall receive credit for, 60 of the 90 clock hours of instruction
under this subdivision, and 6 of the 9 clock hours of instruction
in civil rights law and fair housing law required under
subparagraph (iii).
(v) Possession of a master's degree in business administration
from a degree- or certificate-granting public or independent
nonprofit college or university, junior college, or community
college, obtained any time before the date of application, is
considered equal to, and the applicant shall receive credit for, 60
of the 90 clock hours of instruction under this subdivision.
(2) Before he or she is permitted to take the real estate
salesperson's
examination, the an applicant must show proof that he
or she has successfully completed at least 40 clock hours of
approved prelicensure classroom courses in principles of real
estate,
of which including at least 4 clock hours is instruction on
civil rights law and equal opportunity in housing. The applicant
must complete the 40 hours of prelicensure education within the 36-
month period preceding the date of the application.
(3) For purposes of subsections (1) and (2), an approved
prelicensure
courses may be on course
is a classroom course that
meets all of the following:
(a) Meets criteria established by the department.
(b) Is approved by the department; or is reviewed by a
statewide real estate trade association, with which the department
has contracted under section 210 for that purpose, for subject
matter relevant to the practice of real estate.
(c) Covers 1 or more of the following topics:
(i) (a) Real estate license law and related regulatory laws.
(ii) (b) Real property law, including property interests and
restrictions.
(iii) (c) Federal, state, and local tax laws affecting real
property.
(iv) (d) Conveyances, including contracts, deeds, and leases.
(v) (e) Financing, including mortgages, land contracts,
foreclosure, and limits on lending procedures and interest rates.
(vi) (f) Appraisal of real property.
(vii) (g) Design and construction.
(viii) (h) Marketing, exchanging, and counseling.
(ix) (i) The law of agency.
(x) (j) Sales and office management, including listing and
selling techniques.
(xi) (k) Real estate securities and syndications.
(xii) (l) Investments,
including property management.
(4) A person that offers or conducts a prelicensure course or
courses of study that are represented to meet the educational
requirements of this section shall first obtain approval from the
department and shall comply with the rules of the department
concerning curriculum, instructor qualification, grading system,
and other related matters. A course shall be designed to be taught
for at least 1 clock hour, not including time spent on breaks,
meals, or other unrelated activities. The department may suspend or
revoke the approval of a person approved under this subsection for
a violation of this article or of the rules promulgated under this
article. A person 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 under this subsection is a
recommendation or indorsement of the person to which it is issued
or of a course of instruction given by it. A prelicensure course
approved under this 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 under the proprietary schools act, 1943
PA 148, MCL 395.101 to 395.103.
(5) A person that violates subsection (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) 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 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 are approved by a statewide real estate
trade association, with which the department has contracted under
section 210 for that purpose; are conducted by a continuing
education instructor who meets subsection (6); and 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) An individual shall not conduct a continuing education
course under subsection (1) as an instructor unless he or she meets
at least 1 of the following minimum qualifications:
(a) Is or was engaged as an instructor of real estate courses
at a degree- or certificate-granting public or independent
nonprofit college or university, junior college, or community
college.
(b) Is properly certified by a statewide real estate trade
association, with which the department has contracted under section
210 for that purpose, and who is engaged in the real estate aspects
of appraising, financing, marketing, brokerage management, real
property management, real estate counseling, real property law, or
other related subjects.
(c) Possesses alternative qualifications that are approved by
a statewide real estate trade association, with which the
department has contracted under section 210 for that purpose, and
who is qualified by experience, education, or both to supervise and
instruct a course of study described in subsection (1).
(8) (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.
2505. (1) An applicant A
person that is applying for a
real
estate broker's license shall file an application setting
forth
with the department. All of
the following apply to an
application for a real estate broker's license:
(a)
The application must include the
applicant's present
address,
both of business and current
business address; if the
applicant is an individual, the address of his or her residence;
and the complete address of each former place where the applicant
has
resided or been was engaged
in business, or acted as a real
estate salesperson, for a period of 60 days or more, during the 5
years
immediately preceding the date of application. An applicant
for
a real estate broker's license shall state
(b)
The application must include the name
of the individual,
sole
proprietorship, partnership, association, corporation, limited
liability
company, common law trust, or a combination of those
entities
and person that is the
proposed licensee; the location of
the
place for which the license is desired, sought; and set forth
the period of time in which the applicant has been engaged in the
business.
The application shall be executed by the person, or by an
officer
or member of the applicant. An applicant for a real estate
broker's
license which is a partnership, association, corporation,
limited
liability company, common law trust, or a combination of
those
entities
(c) The application must be executed by the applicant, if the
applicant is an individual, or by a principal of the applicant if
the applicant is a legal entity.
(d) If the applicant is a legal entity, the application shall
designate
which individuals who are officers or members of the
partnership,
association, limited liability company, or corporation
control persons of the entity will be performing acts regulated by
this article as principals.
(2) The department shall issue a real estate broker's license
to an applicant that is a legal entity only if 1 or more of the
control persons of the entity hold an associate real estate
broker's license. The department shall not issue a real estate
broker's
license to a new applicant who that
has been convicted of
embezzlement or misappropriation of funds.
(3) A real estate broker shall maintain a principal place of
business at an actual physical location in this state where the
real estate broker conducts its broker business and maintains its
books
and records. If All of the following apply if a real estate
broker
maintains more than 1 its
principal place of business within
the
state, a branch office license shall be secured by the real
estate
broker for each branch office maintained. A branch office
maintained
in excess of in this state:
(a) The real estate broker must obtain a branch office license
for each additional place of business that the real estate broker,
by advertising or signs or otherwise, represents to the public is a
place where clients or customers may do business or consult with a
licensee.
(b) A branch office that is located more than 25 miles from
the
city limits in which the broker maintains a main office its
principal place of business shall be under the personal, direct
supervision of an associate broker.
(4)
An applicant application for a salesperson's license shall
set
forth include the period of time during which the individual
has
been engaged in the business, stating the name of the
applicant's last employer, and the name and the place of business
of
the individual, partnership, association, limited liability
company,
corporation, common law trust, or combination of those
entities
then employing person that
now employs or will employ the
applicant. or
in whose employ the applicant is to enter. The
application
shall be signed by the real estate broker in whose that
will
employ the applicant. is
to enter. The department
shall only
issue a real estate salesperson's license to an individual.
(5)
Before issuing a license, the department may shall require
and procure satisfactory proof of the business experience,
competence, and good moral character of an applicant for a real
estate
broker's or license if the
applicant is an individual; of
each control person of the applicant if the applicant is a legal
entity;
or of an applicant for a salesperson's
license, or of an
officer
or member of an applicant. The department shall require an
applicant
for a broker's or salesperson's license to and, subject
to subsection (6), require that each of those individuals pass an
examination developed by the department or contracted for with a
recognized
outside testing agency establishing, that establishes,
in
a manner satisfactory to the department, that the applicant he
or she has a fair knowledge of the English language, including
reading, writing, spelling, and elementary arithmetic; a
satisfactory understanding of the fundamentals of real estate
practice and of the laws and principles of real estate
conveyancing, deeds, mortgages, land contracts, and leases; the
obligations of a broker to the public and a principal; and the law
defining, regulating, and licensing real estate brokers and
salespersons. The department may require written examination or
written
reexamination of a broker or salesperson, and in that case
an individual described in this subsection, and if the department
does require a written examination or reexamination under this
subsection, the department shall not relicense the real estate
broker or real estate salesperson unless the individual taking the
examination or reexamination achieves a passing score satisfactory
to
the department. is required as a condition precedent to
relicensure
of a broker or salesperson.
(6) All of the following apply to the written examination
requirement described in subsection (5):
(a) An individual who qualifies under the Americans with
disabilities act of 1990, Public Law 101-336, may request
reasonable accommodations to take the examination.
(b) Under section 2502a(3), the department may relicense
without examination of the applicant, or the applicant's principal
if appropriate, an applicant that applies within 3 years of the
expiration date of the applicant's last license.
(c) The department may relicense without examination an
individual who is applying for a real estate broker's or associate
real estate broker's license; has previously surrendered a real
estate broker's or associate real estate broker's license; and has
been continuously licensed as a real estate salesperson since the
surrender.
(d) A passing score on an examination, or on a portion of an
examination if the examination is given in separate parts, is valid
for 1 year from the date of the examination.
(7) The department shall require proof that each applicant for
a real estate broker's license, if the applicant is an individual,
or each principal if the applicant is a legal entity, has the
equivalent of 3 years of full-time experience in the business of
real
estate. or in a field that is determined by the
department to
be
relevant and related to the business of real estate.All of the
following apply in determining whether an individual meets this
experience requirement:
(a) If state law requires that a person hold a license to be
licensed to perform an activity that is considered the business of
real estate, an individual shall not receive credit for experience
performing that activity without proper licensure.
(b) For purposes of calculating whether an individual has the
equivalent of 3 years of experience, the department shall grant the
following credit or credits toward that 3-year requirement:
(i) If the individual is a real estate salesperson, a real
estate broker, or the principal of a real estate broker, 1 year of
credit for each 12-month period of licensure in which he or she
closed 6 or more real estate transactions.
(ii) If the individual is a builder, 1 year of credit for each
12-month period in which he or she built and personally sold or
leased at least 6 residential units, commercial units, or
industrial units or a combination of those types of units.
(iii) If the individual is a real estate investor, 6 months of
credit for each 6 real property transactions personally negotiated
for a purchase or sale by the individual for his or her own
account, with a maximum of 1 year of credit allowed. However, an
individual shall not receive credit under this subdivision if he or
she engaged in more than 6 sales in any 12-month period in
violation of section 2502b.
(iv) If the individual is a land or condominium developer, 1
year of credit for each 2 developments or subdivisions that contain
at least 10 units or parcels that he or she bought, subdivided, and
improved for sale as lots or dwellings.
(v) If the individual is an attorney, 1 year of experience for
each year in which he or she acted as the attorney for at least 6
real estate transactions.
(vi) One year of credit for each period equivalent to at least
40 hours per week, and at least 48 weeks per year, in which the
individual worked in a capacity directly related to the
acquisition, financing, or conveyance of real estate, or in a
position in which the individual was directly involved in a real
estate business, including serving as the decision-making authority
in any of the following positions:
(A) A loan or trust officer of a federal or state-regulated
depository institution.
(B) A loan or trust officer of a mortgage company.
(C) A real estate officer of a corporation, and who is not a
licensed real estate broker.
(D) A title insurance company officer engaged in the closing
of escrow accounts and real estate closings.
(E) A staff or real property appraiser.
Sec. 2506. (1) An individual shall not act as a real estate
broker, associate real estate broker, or real estate salesperson if
he or she has not received from the department his or her license
and pocket card or received a temporary license. An individual
licensed under this article shall not act as a real estate broker,
associate real estate broker, or real estate salesperson if he or
she does not have, on his or her person, his or her pocket card or
temporary license.
(2)
(1) The department shall deliver or mail the license of
a
real estate salesperson to the real estate broker that employs the
real estate salesperson, and the broker shall retain custody and
control of the salesperson's certificate of license and deliver the
pocket card for that license to the salesperson. A real estate
salesperson shall provide proof to the real estate broker that
employs him or her that the real estate salesperson was issued and
currently holds a real estate salesperson license.
(3) (2)
A licensee shall give written
notice to the department
of any change of either a principal or branch business location.
(3)
As used in this subsection, "pocket card" means the pocket
card
that contains information about the license that the
department
provides when it issues a license under this article.
(4) If he or she receives notice that his or her license is
suspended or revoked, a real estate salesperson, or an associate
real estate broker that is not the sole associate real estate
broker for a real estate broker that is not an individual, shall
immediately forward his or her pocket card to the department and
the real estate broker to which the individual was licensed shall
immediately forward the salesperson's or associate real estate
broker's license to the department. If he or she receives notice
that his or her license is suspended or revoked, a real estate
broker who is an individual, or an associate real estate broker who
is the sole associate real estate broker for a real estate broker
that is not an individual, shall immediately forward to the
department his or her license and pocket card, the licenses and
pocket cards of all real estate salespersons and nonprincipal
associate real estate brokers issued under the real estate broker,
and all of the real estate broker's branch office licenses.
Sec. 2509. (1) The department shall only issue an associate
real estate broker's license to an individual.
(2)
(1) A principal may be issued The department may issue
more than 1 associate real estate broker's license to principals of
a real estate broker.
(3) (2)
A nonprincipal shall not be issued The
department may
not issue more than 1 associate real estate broker's license as a
nonprincipal, but a nonprincipal may hold 1 or more associate real
estate broker's licenses as a principal.
(3)
As used in this section and section 2508:
(a)
"Nonprincipal" means an individual who is licensed as an
associate
real estate broker, but has not been designated as a
principal
under section 2505(1).
(b)
"Principal" means an individual designated as a principal
under
section 2505(1).
Sec.
2510. (1) A real estate salesperson shall not accept from
a
person other than the real estate salesperson's employer a
commission or valuable consideration for the performance of an act
specified in this article from any person other than the real
estate broker that employs the salesperson.
(2) If an individual earned commissions or other income while
employed by a real estate broker, it is not grounds for
disciplinary action under section 2512 for that broker to pay those
commissions or income to that individual, regardless of whether
that individual is now employed by another real estate broker or is
no longer licensed.
Sec.
2512. A licensee who that commits 1 or more of the
following is subject to the penalties set forth in article 6:
(a) Except in a case involving property management, acts for
more than 1 party in a transaction without the knowledge of the
parties.
(b) Fails to provide a written agency disclosure to a
prospective buyer or seller in a real estate transaction as defined
in section 2517.
(c)
Represents If the licensee
is an associate real estate
broker or real estate salesperson, represents or attempts to
represent
a real estate broker other than the his or her employer
without the express knowledge and consent of the employer.
(d)
Fails to account for or to remit money coming that comes
into
the licensee's possession which that
belongs to others.
(e) Changes a business location without notification to the
department.
(f)
In the case of If the
licensee is a real estate broker,
fails to return a real estate salesperson's license within 5 days
as
provided in under section 2507.
(g)
In the case of a If the licensee engaged in property
management, violates section 2512c(2), (5), or (6).
(h)
Except as provided in section 2512b, 2510(2), shares or
pays a fee, commission, or other valuable consideration to a person
that is not licensed under this article, including payment to any
person
providing the names that
provides the name of, or any other
information regarding, a potential seller or purchaser of real
estate but excluding payment for the purchase of a commercially
prepared
lists list of names. However, a licensed real estate
broker
may pay a commission to a licensed real estate broker of
that is licensed by another state if the nonresident real estate
broker does not conduct in this state a negotiation for which a
commission is paid.
(i)
Conducts or develops a market analysis not in compliance
that does not comply with section 2601(a)(ii).
(j)
Fails to provide the minimum services as specified in
under
section 2512d(3) when providing
services pursuant to under
a
service provision agreement unless expressly waived in writing by
the
client under section 2517(3).2517(2).
(k)
Except in the case of connection
with a property
management
accounts, account, fails to deposit in the real estate
broker's
custodial trust or escrow account money belonging that
belongs
to others coming that comes into the hands possession
of
the
licensee in compliance with any
of the following types of
transactions:
(i) A real estate broker shall retain a deposit or other money
made
payable to a person , partnership, corporation, or association
holding
that holds a real estate broker's license under this
article pending consummation or termination of the transaction
involved and shall account for the full amount of the money at the
time of the consummation or termination of the transaction.
(ii) A real estate salesperson shall pay over or deliver to the
real
estate broker, upon on receipt, a deposit or other money on
paid in connection with a transaction in which the real estate
salesperson is engaged on behalf of the real estate broker.
(iii) A real estate broker shall not deposit or permit the
deposit
of an advance payment of funds
belonging money that belongs
to
others to be deposited in the real estate broker's business or
personal
account or to be commingled commingle
or permit the
commingling
of that money with funds on deposit belonging
that
belong to the real estate broker.
(iv) A real estate broker shall deposit, within 2 banking days
after the broker has received notice that an offer to purchase is
accepted
by all parties, money belonging that
belongs to others and
is made payable to the real estate broker into a separate custodial
trust or escrow account maintained by the real estate broker with a
bank, savings and loan association, credit union, or recognized
depository until the transaction involved is consummated or
terminated, at which time the real estate broker shall account for
the full amount received.
(v) A real estate broker shall keep records of funds
money
deposited
in its custodial trust or escrow account, which and
indicate
clearly in those records shall
indicate clearly the date
and from whom the money was received, the date deposited, the date
of withdrawal, and other pertinent information concerning the
transaction , and shall show clearly for whose account the money
is
deposited
and to whom the money belongs. The records shall be are
subject to inspection by the department. A real estate broker's
separate custodial trust or escrow account shall designate the real
estate broker as trustee, and the custodial trust or escrow account
shall provide for withdrawal of funds without previous notice. This
article
and the rules promulgated pursuant to under this article do
not prohibit the deposit of money accepted under this section in a
noninterest bearing account of a state or federally chartered
savings and loan association or a state or federally chartered
credit union.
(vi) If a purchase agreement signed by a seller and purchaser
provides
that a deposit be held by an escrowee other than a real
estate broker shall hold a deposit, a licensee in possession of
such
a that deposit shall cause the deposit to be delivered to
the
named
escrowee within 2 banking days after the licensee has
received
receives notice that an offer to purchase is accepted by
all parties.
(l) Becomes a party to a net service provision agreement for an
owner, seller, or buyer as a means of securing a commission.
(m) If the licensee is entitled to receive, either directly or
indirectly, a real estate commission as a result of the sale of
property, also receives a referral fee or other valuable
consideration from a lender abstract, home warranty, or other
settlement service provider in connection with the transaction
unless the licensee obtains the prior written consent of the party
or parties with which the licensee has an agency relationship and
the fee is not otherwise prohibited by the real estate settlement
procedures act of 1974, Public Law 93-533, or other applicable law.
Sec. 2512d. (1) A real estate broker or real estate
salesperson
that is acting pursuant to under the terms of a service
provision
agreement shall perform the duties imposed described in
subsection (2). A real estate broker may authorize a designated
agent
to represent the client, so long as if that authorization is
in writing.
(2) A real estate broker or real estate salesperson acting
pursuant
to under the terms of a service provision agreement owes,
at
a minimum, the following duties to his or her that broker's or
salesperson's client:
(a) The exercise of reasonable care and skill in representing
the client and carrying out the responsibilities of the agency
relationship.
(b) The performance of the terms of the service provision
agreement.
(c) Loyalty to the interest of the client.
(d) Compliance with the laws, rules, and regulations of this
state and any applicable federal statutes or regulations.
(e) Referral of the client to other licensed professionals for
expert advice related to material matters that are not within the
expertise
of the licensed agent.broker.
(f) An accounting in a timely manner of all money and property
received
by the agent broker in which the client has or may have an
interest.
(g) Confidentiality of all information obtained in the course
of the agency relationship, unless disclosed with the client's
permission or as provided by law, including the duty not to
disclose confidential information to any licensee who is not an
agent of the client.
(3) A real estate broker or real estate salesperson that is
acting
pursuant to under the
terms of a service provision agreement
shall
provide the following services to his or her that broker's or
salesperson's client:
(a)
When If the real estate broker or real estate salesperson
is representing a seller or lessor, the marketing of the client's
property
in the manner agreed upon on
in the service provision
agreement.
(b) Acceptance of delivery and presentation of offers and
counteroffers to buy, sell, or lease the client's property or the
property the client seeks to purchase or lease. At the time of
execution of an offer to purchase, a licensee shall recommend to
the purchaser that the purchaser require that the seller provide a
fee title policy in the amount of the purchase price to the
purchaser, issued or certified to the approximate date of closing
of the real estate transaction.
(c) Assistance in developing, communicating, negotiating, and
presenting offers, counteroffers, and related documents or notices
until a purchase or lease agreement is executed by all parties and
all contingencies are satisfied or waived.
(d) After execution of a purchase agreement by all parties,
assistance as necessary to complete the transaction under the terms
specified in the purchase agreement. Without written approval of
the buyer and seller, a licensee shall not close a transaction on
any terms or conditions that are contrary to the terms or
conditions of an executed purchase agreement.
(e)
For a broker or associate broker who that is involved at
the closing of a real estate or business opportunity transaction,
furnishing, or causing to be furnished, to the buyer and seller, a
complete and detailed closing statement signed by the broker or
associated
associate broker showing each party all receipts and
disbursements affecting that party. If the closing is conducted at
a depository financial institution, as defined in section 1a of the
mortgage brokers, lenders, and servicers licensing act, 1987 PA
173, MCL 445.1651a, a title company, or other closing entity, the
real estate broker or associate real estate broker remains
responsible for the content of the closing statement and shall sign
the final closing document. A real estate salesperson shall not
close a real estate or business opportunity transaction unless the
transaction is closed under the supervision of the real estate
broker that employs the salesperson. In a cooperative transaction,
either a real estate broker or associate real estate broker may
close the sale and furnish closing statements, but it remains the
final responsibility of the listing real estate broker to close the
sale and furnish signed closing statements to both the buyer and
seller.
(4) A real estate broker or real estate salesperson that is
representing a seller under a service provision agreement shall not
advertise the property to the public as "for sale by owner" or
otherwise mislead the public to believe that the seller is not
represented by a real estate broker.
(5) The services described in subsection (3)(b), (c), and (d)
may be waived in a limited service agreement.
Sec. 2512e. (1) Except as provided in subsection (2), any
advertisement to buy, sell, exchange, rent, lease, or mortgage real
property or a business opportunity by a real estate broker shall
include the broker's name as it appears on the broker's license;
shall include the broker's telephone number or street address; and
shall state that the person doing the advertising is a real estate
broker.
(2) An individual who is licensed as a real estate broker or
associate real estate broker may advertise real property that he or
she personally owns for sale or for lease in his or her own name,
and is not required to include the name of the real estate broker,
or the name of the real estate broker that employs the associate
real estate broker, as the sales or leasing agent for the property
in the advertisement. However, the advertising shall indicate
affirmatively that the individual who is selling or leasing the
real property is a licensed real estate broker or associate real
estate broker.
(3) Except as provided in subsection (2) or (4), a real estate
salesperson or an associate real estate broker shall only advertise
to buy, sell, exchange, rent, lease, or mortgage real property or a
business opportunity under the supervision of, and in the licensed
name of, the real estate broker that employs him or her.
(4) A real estate salesperson may only advertise to sell real
property under his or her own name if the property is the principal
residence of the salesperson. A real estate salesperson may only
advertise real property for rent or lease under his or her own name
if the salesperson is the owner of the property.
(5) A real estate broker shall not conduct business or
advertise under a name other than that in which the broker's
license is issued. A real estate broker that intends to operate
under an assumed name shall send to the department, with the
application for a real estate broker license, a copy of a
certificate of assumed name that is filed with this state or a
clerk of the county, as required by law.
Sec. 2512f. (1) A real estate broker or associate real estate
broker shall supervise the work of a real estate salesperson. For
purposes of this subsection, supervision of a real estate
salesperson includes at least all of the following:
(a) Direct communication in person or by radio, telephone, or
electronic communication, on a regular basis.
(b) Review of the practice of the salesperson.
(c) Review of the salesperson's reports.
(d) Analyses and guidance of the salesperson's performance in
regulated activities.
(e) Providing written operating policies and procedures to the
salesperson.
(2) A real estate broker shall not contract with an individual
real estate salesperson or nonprincipal associate real estate
broker who is employed by the real estate broker in a manner that
limits the broker's authority to supervise the salesperson under
subsection (1).
Sec. 2516. (1) If a licensee buys or otherwise acquires,
directly or indirectly, an interest in real property, the licensee
shall disclose the licensee's licensure as a real estate broker,
associate real estate broker, or real estate salesperson clearly,
in writing, to the owner of the property before the owner is asked
to sign the purchase agreement.
(2) If a licensee acquires, directly or indirectly, an option
to purchase real property from an owner that requested the
licensee's services as a real estate licensee in connection with
that property, the licensee shall disclose the licensee's licensure
as a real estate broker, associate real estate broker, or real
estate salesperson, in writing, to the owner before the owner is
asked to sign the option agreement.
(3) A licensee that buys or otherwise acquires an interest in
real property, directly or indirectly, and that is owed a
commission, fee, or other valuable consideration as a result of the
sale, shall obtain the written permission from the seller or owner
to receive the specified consideration.
(4) On request of the department, a licensee shall provide
written proof of any disclosures and consents required under this
section to the department.
Sec. 2516a. A licensee shall provide for inspection, by an
authorized representative of the department, of any document or
record that the department determines is reasonably necessary for
an investigation of the licensee or the business activities of the
licensee, the administration of this act, or the administrative
rules promulgated under this article.
Enacting section 1. This amendatory act takes effect January
1, 2016.