In which of these transactions must a Michigan real estate licensee provide an agency disclosure?
Duties and Services Required Of A Licensee Posted by: Kevin | May 6th, 2021 Hello Michigan Realtors®, and welcome back to the Letter of the Law. Today we look at some of the differences between fiduciary duties owed to the client and the execution of services agreed to under a service provision agreement. Based on many of the calls that we receive, there seems to be a fair amount of confusion between duties owed and services rendered according to an agency agreement. If the term “service provision agreement” doesn’t ring a bell, be aware that it’s a statutory term in the Occupational Code. Under the Code, a “service provision agreement” is defined as a listing agreement or buyer’s broker agreement that establishes an agency relationship.1 Since 2008, the Code has defined both agency responsibilities (or duties) as well as the minimum services that a licensee must provide to his or her client. The proper execution of a service provision agreement is essential because the language is a service provision agreement that will establish whether the licensee will be acting as a traditional agent or a designated agent and whether he or she will be providing full or limited services. As we’ve discussed in prior Letter of the Law installments, if the service provision agreement is silent on these matters, the default position under the Code is a traditional agency relationship providing full service.*** In traditional agency firms, a firm's client has an agency relationship with the firm and every licensee within the firm. If a firm opts to practice a designated agency, a client of the firm has an agency relationship with only the firm, the individual licensee working with that client, and, if that licensee is a salesperson, the named supervisory broker.2 1MCL 339.2501(j). 2MCL 339.2517(6)–(10). DutiesRegardless of whether the licensee is a designated agent or traditional agent and regardless of whether the licensee is providing full or limited services, the Occupational Code provides that any broker or salesperson acting under a service provision agreement is responsible for the following duties:***
A buyer or seller cannot waive any of these fiduciary duties. In other words, every licensee under a service provision agreement owes all of the listed duties to his or her client. This is true for both designated and traditional agents and both full and limited service agents. The supervising broker must stress the importance of these statutory duties to all affiliated licensees. Failure of a salesperson, team, or associate broker to meet these duties can quickly become the supervising broker’s problem. 3MCL 339.2512d(2). ServicesIn addition to the duties that I have listed, the Occupational Code provides that a broker or salesperson acting under a service provision agreement must provide the following services to the client, which cannot be waived: ***
Again, the services listed above cannot be waived – meaning that every licensee under a service provision agreement must provide these services to his or her clients. However, since April of 2017, an associate broker need not review and sign a closing statement if a licensed title agency conducts the closing. Limited Services and the Necessary WaiverA broker or salesperson acting under a service provision agreement must provide the following additional services unless the client waives those services in writing:***
A waiver of any or all of these services must be done through a limited-service agreement and then disclosed on the agency disclosure form.5 The Code contains specific language that must be included in any limited service agreement.6 A limited services waiver is available on MR’s website (Form “Y”).*** 4MCL 339.2512d(3). ConclusionIn summary, regardless of the type of service provision agreement, the Code provides that a licensee owes traditional agency responsibilities to his or her client – including reasonable care, loyalty, confidentiality, and accounting. In addition, unless the client signs a written limited services agreement, a licensee must provide a client with assistance in preparing and exchanging offers and counteroffers. Once a purchase agreement is signed, assistance in moving the transaction toward closing. A licensee must review and sign the closing statement unless a licensed title agency does that work. And finally, in all events, a licensee working with a seller must market a property as he or she has agreed to do in the listing contract.*** As usual, thank you for watching and providing such valuable suggestions for this video series. If you enjoy the “Letter of the Law” format, please visit ondemand.mirealtors.com for legal continuing education opportunities, especially as we quickly approach the end of the licensing cycle. And keep those suggestions coming to the email below. Thanks again, and we’ll see you next time for a discussion on the Role of the Transaction Coordinator. 5MCL 339.2512d(5), 339.2517. 6MCL 339.2517(4). h/t Michigan Realtors® What is a transaction licensee obligated to disclose?What is a transaction licensee obligated to disclose. Material defects of the property. In addition to the Consumer Notice, the broker of the real estate firm must also establish procedures for disclosing. company policies regarding dual agency and designated agency.
When must an agency disclosure statement be given to a consumer quizlet?If the licensee is a seller's agent, the licensee is required to give an Agency Disclosure statement to a buyer before assisting the buyer in preparing the offer or at the time the offer is being presented to the seller's agent by the buyer. 1.
What are the disclosure requirements for transaction broker quizlet?(1) deal honest and fairly; (2) disclose all known facts that materially affect the value of residential real property that are not readily observable to the buyer; and (3) account for all funds entrusted to the licensee.
Which of the following is not part of the service provision agreement?Which of the following is NOT a service provision agreement? a property management agreement.
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