DEPARTMENT OF LICENSING AND REGULATORY AFFAIRS
DIRECTOR'S OFFICE
REAL ESTATE BROKERS AND SALESPERSONS - GENERAL RULES
Filed with the secretary of state on
These rules take effect immediately upon filing with the secretary of state unless adopted under section 33, 44, or 45a(6) of the administrative procedures act of 1969, 1969 PA 306, MCL 24.233, 24.244, or 24.245a. Rules adopted under these sections become effective 7 days after filing with the secretary of state.
(By authority conferred on the director of
the department of licensing and regulatory affairs by sections 205, and
308, 2504, 2504a, 2505, 2512, and 2516a, of the occupational
code, 1980 PA 299, MCL 339.205, and 339.308, 339.2504,
339.2504a, 339.2505, 339.2512, and 339.2516a and Executive Reorganization Order
Nos. 1991-9, 1996-2, 2003-1, 2008-4, and 2011-4, MCL 338.3501,
445.2001, 445.2011, 445.2025, and 445.2030)
R 339.22101, R 339.22203, R 339.22217, R 339.22219, R 339.22221, R 339.22305, R 339.22307, R 339.22313, 339.22321, R 339.22618, R 339.22619, R 339.22620, R 339.22621, R 339.22624, R 339.22625, R 339.22626, R 339.22629, R 339.22630, and R 339.22632 of the Michigan Administrative Code are amended as follows:
PART 1. GENERAL PROVISIONS
R 339.22101 Definitions.
Rule 101. (1) As used in these rules:
(a) "Code" means the
occupational code, 1980 PA 299, MCL 339.101 to 339.2677. 339.2919.
(b) “Disability”
means a determinable physical or mental characteristic which may result from
disease, injury, congenital condition of birth, or functional disorder that
prevents a broker from performing his or her duties under 1980 PA 299, MCL
339.101 to 339.2919. “Department” means the department of licensing and
regulatory affairs.
(c) “Disability” means a determinable physical or mental characteristic, which may result from disease, injury, congenital condition of birth, or functional disorder, that prevents a broker from performing his or her duties under the code.
(d) (c) “Instructor” means
an individual who is approved to teach prelicensure classes pursuant to section
2504(4) of the code, MCL 339.2504(4).
(e) (d) “Program coordinator”
means the individual who assumes the responsibility under these rules responsible
for supervising the administration of approved courses.
(f) (e) "Real estate
school" or "institution" means an approved entity that
represents to the public that any of its courses fulfill, in whole or in part,
the requirements of section 2504(l) and (2) of the code, MCL 339.2504(1)
and (2), for prelicensure education.
(2) A term defined in the code has the same meaning when used in these rules.
PART 2. LICENSING
R 339.22203 Validity
of broker Prelicensure education broker license;
prelicensure education equivalents for
broker license;
validity of
salesperson prelicensure education
salesperson license.
Rule 203. (1) An applicant for a real estate broker’s license shall satisfy all requirements of the code including completing 90 hours of approved prelicensure classroom courses in real estate of which 9 clock hours must be on civil rights and fair housing law. The broker prelicensure education must be completed not more than 36 months before the date of application, unless the applicant held an active real estate salesperson license during that period.
(2) Approved prelicensure education for
a real estate broker license Acceptable courses for prelicensure
education must
meet the criteria established by the department but may be reviewed
and preapproved by a statewide real estate trade association for subject matter
relevant to the practice of real estate. Not more than 1 broker course on the
same subject will be accepted for credit.
(2) (3) In meeting the
broker prelicensure education requirements, the An applicant for a real
estate broker license shall be given prelicensure classroom course department
shall give credit for the following:
(a) Possession of a law degree will
be is considered equivalent to 60 clock hours of real estate education
which shall include including credit for 6 clock hours
of instruction in on civil rights law and fair housing law.
(b) Possession of a master's degree in business administration or finance from a degree or certificate granting public or independent nonprofit college or university, junior college, or community college is considered equivalent to 60 clock hours of real estate education.
(c) Possession of a bachelor’s degree in business or finance from a degree or certificate granting public or independent nonprofit college or university, junior college, or community college is considered equivalent to 30 clock hours of real estate education.
(3) (4) An applicant for a
salesperson license shall have completed 40 clock hours of qualifying
prelicensure education classroom courses of which 4 clock hours
must be on civil rights law and fair housing law, as defined in section
2504(2) of the code., MCL 339.2504(2). The salesperson prelicensure education
must be completed not more than 36 months before the date of application.
R 339.22217 Acceptable related experience for broker and associate broker applicants.
Rule 217. For purposes of calculating the
time an applicant for a license as a broker or an associate broker has been
engaged in the real estate business, as required by section 2505(7)(b)(viii) of
the code, MCL 339.2505(7)(b)(viii), any both of the
following apply:
(a) A person holding a real estate
license in another state will shall be given 1 year of credit for
each year in which he or she closed 5 or more real estate transactions.
(b) An applicant will shall be
given 1 year of credit for managing at least 10 units, located in the state of
Michigan, for 3 or more years.
PART 3. LAPSE OF BROKER’S LICENSE AND
BROKER’S DEATH OR DISABILITY
R 339.22219 Lapse of broker’s license.
Rule 219. (1) If a broker’s license
is lapsed, the licenses of all real estate salespersons and all affiliated
associate real estate brokers employed by the that real estate broker
are automatically suspended, until the that real estate
broker is relicensed in accordance with pursuant to section
2502a(3) of the code, MCL 339.2502a(3), or until there is a
change of employer and the issuance of a new license.
(2) If a real estate
salesperson or affiliated associate real estate broker whose license was
suspended pursuant to subrule (1) of this rule there is a change in
employer becomes employed by a different licensed broker, the
department shall issue a new license to the salesperson or associate real
estate broker without charge if the license is issued during the same term in
which the original license was issued.
R 339.22221 Death or disability of broker.
Rule 221. (1) In the event of the
death or disability of If a broker’s sole principal associate
broker dies or becomes disabled, the department shall allow all
affiliated real estate licensees a reasonable time, not to exceed 1 year, to
either wind up the business of the real estate broker or designate a new sole
principal associate broker.
(2) The license of the deceased or
disabled sole principal associate broker must not be used to enter into new New
business transactions shall not be entered into utilizing the license of
a broker whose sole principal associate broker is deceased or disabled.
(3) One year after the date of death or
disability of a broker’s sole associate principal broker, the licenses of all
affiliated real estate salespersons and associate real estate brokers
who are employed by the broker shall be are automatically
suspended, pending a replacement of the sole principal associate broker or
change of employer and the issuance of a new license.
(4) If a real estate salesperson
or affiliated real estate broker whose license was suspended pursuant to
subrule (3) of this rule becomes employed by a different licensed broker, there
is a change in employer, the department shall issue a new license to the associate
broker or real estate salesperson or associate real estate broker
without charge if the license is issued during the same term in which the
original license was issued.
PART 3. 4.
PRACTICE AND CONDUCT
R 339.22305 Service provision agreement.
Rule 305. (1) A In addition
to complying with the provisions of the code, a broker or a licensee acting
on behalf of the employing broker who enters into a service provision agreement
with a party or parties shall provide, at the time of signing, a true executed
copy of the agreement to the party or parties signing the agreement. Every agreement
shall must be fully completed by the licensee before the party
or parties sign it.
(2) A service provision agreement shall
must include a definite expiration date and shall must not
contain a provision requiring the party signing the agreement to notify the broker
of the party's intention to cancel the agreement upon or after the expiration date.
R 339.22307 Delivery of offer to purchase to buyer; delivery of written offers to seller; delivery of copies of acceptance to buyer and seller; inclusion of terms and conditions in offer to purchase.
Rule 307. (1) A licensee shall promptly
deliver to the buyer a signed copy of the offer to purchase immediately
after it has been signed by the buyer.
(2) A licensee shall make certain that all terms and conditions of the real estate transaction are included in the offer to purchase.
(2) (3) A licensee shall promptly
deliver all written offers to purchase to the seller upon receipt. Delivery
may be made through any method acceptable to the parties including in person,
by mail, or through an electronic communication pursuant to the uniform electronic
transactions act, Acceptable methods of delivery include, but are not
limited to, either of the following:
(a) Delivery in person or by mail.
(b) Delivery by electronic
communication as defined in 2000 P.A. PA 305, MCL 450.831 et seq
to 450.849. The use of electronic records or digital signatures for any
real estate transaction requires the prior agreement of the parties.
(3) (4) Upon obtaining a
proper acceptance of the offer to purchase, signed by the seller, the licensee shall
promptly deliver true executed copies of the acceptance to the purchaser and
seller.
(4) A licensee shall make
certain that all terms and conditions of the real estate transaction are included
in the offer to purchase.
(5) A licensee shall is not
be subject to disciplinary action for failing to submit to the seller
any additional offers to purchase which that are received after the
seller has accepted an offer and the sales agreement is fully executed, unless
a service provision agreement requires that subsequent offers be presented.
R 339.22313 Trust or escrow accounts.
Rule 313. (1) In addition to
complying with the provisions of the code, Trust a trust
or escrow accounts account must comply with all of the requirements
of this rule.
(2) be A trust
or escrow account must be maintained in a demand accounts account
only. Checks drawn on the a trust or escrow accounts account
must be signed by a broker or an associate broker. Cosignatories may be used;
however, the signature of a broker or associate broker must accompany this
signature.
(2) (3) A broker must
shall deposit all funds received in a fiduciary capacity, including escrow
funds and earnest money, in maintain a non-interest-bearing demand
trust account when any earnest money deposits or money belonging to others comes
into his or her possession. The account must be maintained in
accordance with pursuant to the requirements of section 2512(1)(k)
of the code, MCL 339.2512(k).
(a) A record that shows the
chronological sequence in which funds are received and disbursed, as follows:
The date that the funds were received and the date of deposit.
(i) For funds received,
the record must include all of the following information:
(A) The date of receipt and
date of deposit.
(b) The name of the party who provided the funds.
(c) The amount of the funds received and deposited and the method of payment.
(B) The name of the party who
provided the funds to the broker.
(C)
The name of the seller.
(D) The amount of the funds.
(5) A broker shall maintain a record of all funds disbursed. At a minimum, the record must include all of the following information:
(a) (ii)For funds
disbursed, the record must include all of the following information: The
name of the party to whom funds were disbursed.
(b) (A) The date of the disbursement.
(B) The payee.
(c) (C) The
check number.
(d)(D) The purpose of
the disbursement.
(e)
(E) The amount of
the disbursement.
(6) (iii) The broker’s records
must reflect A the current account balance of the
each account or accounts must be maintained and must
be made available to the department upon request.
(7) (b) A The broker’s record records must
that shows reflect the receipts and disbursements as
they affect a single, particular transaction between a buyer and seller and
must contain, at a minimum, all of the following information shall
record each transaction, as follows:
(a) (i) For funds received,
the record must include all of the following information:
(i)
(A) The names of both parties to a transaction.
(ii)
(B) The property address or brief legal description.
(iii) (C) The dates and amounts received.
(b) (ii) For funds
disbursed, the record must include all of the following information:
(i) (A) The date of
the disbursement.
(ii) (B) The name
of the payee.
(iii) (C) The check
number.
(iv) (D) The amount
of the disbursement.
(8) (4) All trust or
escrow account records must be maintained for a period of not less than 3 years
from the date of inception of the records.
(9) (5) A broker or
associate broker’s disbursement of an earnest money deposit must be made at
consummation or termination of the agreement in accordance with pursuant
to the agreement signed by the parties. However, any deposit in the trust account
of the broker for which the buyer and seller have made claim must remain in the
broker's trust account until a civil action has determined to whom the deposit
must be paid, or until the buyer and seller have agreed, in writing, to the
disposition of the deposit. The broker may also commence a civil action to interplead
the deposit with the proper court.
R 339.22321 Licensee commissions for other services; disclosure and consent of buyer and seller required.
Rule 321. (1) A licensee who is entitled
to receive, either directly or indirectly, a real estate commission as a result
of the sale of property, may not also receive a referral fee or other valuable
consideration for placing a loan in connection with that transaction unless
the licensee obtains the prior written consent of the buyer and seller in that
transaction and the fee is not otherwise prohibited by the real estate
settlement procedures act of 1974, 12 U.S.C. USC 2601 - to
2617 et seq., or other applicable law.
(2) A licensee who is entitled to receive,
either directly or indirectly, a real estate commission as a result of the
sale of property, may not also receive a referral fee or other valuable
consideration from an abstract, home warranty, title insurance, or other
settlement service provider in connection with that transaction unless the licensee
obtains the prior written consent of the party or parties with whom the
licensee has an agency relationship and the fee is not otherwise prohibited by
the real estate settlement procedures act of 1974, 12 U.S.C. USC
2601 to - 2617 et seq., or other applicable
law.
PART 4.
ENFORCEMENT
PART 5. OUT-OF-STATE
LAND SALES
PART 6. 5.
REAL ESTATE EDUCATION
SUBPART 1. GENERAL
PROVISIONS PRELICENSURE EDUCATION
R 339.22618 Application for approval to offer prelicensure courses; forms; required information.
Rule 618. (1) A real estate school shall
submit a prelicensure course approval application on the form approved
by the department. The application must include, but is not be
limited to, all of the following information:
(a) The school name, business address, telephone number, facsimile number, website address, and e-mail address, if applicable.
(b) The course title.
(c) The names, addresses, telephone numbers, and qualifications of instructors.
(d) The name of the program coordinator.
(e) A summary of topics completed for each prelicensure course to be taught, including the number of hours allocated to each topic.
(f) A sample certificate of completion that contains all of the following information:
(i) The date of course completion.
(ii) Identification of the course including the name of the course as approved by the department.
(iii) The name and approval number of the school.
(iv) The name of the student.
(v) The number of clock hours completed by the student.
(g) Methodology for verifying and monitoring attendance and the make-up policy.
(h) An enrollment application to be completed by prospective students that contains a statement disclosing the percentage of students who successfully completed the program in the past calendar year. The enrollment application must be updated no later than February 1 of each calendar year.
(2) A real estate school shall report to
the department any change in the information on the application forms form
within 30 days. The department shall accept or reject a change within 60 days
of notification of the change.
(3) A real estate school shall apply for and obtain approval as determined by the department for real estate education courses before the courses are offered to the public.
(4) The department shall issue a certificate or letter of course approval or a notice of denial to the school within 60 days after the application is received. Denials must be based on substantive deficiencies and specify the reasons for the denial.
(5) The department shall accept courses for approval that meet the criteria established by these rules and section 2504 of the code, MCL 339.2504.
Rule 339.22619 Expiration date for prelicensure courses; renewal.
Rule 619. (1) Approval of prelicensure
courses issued by the department to a real estate school shall expire
expires 1 year from the date the course was approved.
(2) A proprietary real estate school
licensed under the proprietary schools act, 1943 PA 148, MCL 395.101 to
395.103, shall must comply remain compliant with
the act to maintain approval of the as a real estate prelicensure
school under this subpart.
(3) To maintain course approval, a proprietary
real estate school shall submit to the department a renewal application on the
form that is approved by the department at least 60 days before the
expiration date of the course approval.
R 339.22620 Program coordinator.
Rule 620. Each real estate school shall
designate at least 1 individual as program coordinator. The program coordinator
shall be is responsible for supervising the program of courses
and ensuring compliance with the code and these rules.
R 339.22621 Instructors.
Rule 621. (1) The department shall approve
each instructor before he or she teaches any real estate course. Instructors
An instructor must possess at least 1 of the following minimum
qualifications:
(a) Teaches or has taught real estate courses at an accredited institution of higher learning.
(b) Is licensed or certified by the department or other governmental agency to engage in the real estate aspects of appraising, financing, marketing, brokerage management, real property management, real estate counseling, real property law, or other related subjects.
(2) Instructors are An
instructor is responsible for all of the following:
(a) Complying with all laws and rules relating to real estate education.
(b) Providing students with current and accurate information.
(c) Maintaining an environment conducive to learning.
(d) Assuring and certifying accurate attendance of students enrolled in courses.
(e) Providing assistance to students and responding to questions relating to course materials.
(3) The real estate school shall submit
to the department the qualifications of each instructor teaching an approved
course along with the prelicensure course approval application. The real
estate school shall submit the qualifications to the department not fewer
than at least 60 days before the instructor is scheduled to begin
instruction.
R 339.22624 Student records; content; inspection; certificate of completion;
reporting.
Rule 624. (1) Each A real
estate school shall establish and permanently maintain a record for each
student.
(2) Student records must contain all of the following information:
(a) The student's name and address.
(b) The number of clock hours attended.
(c) The student's grade, if an examination is required to determine successful completion of the course.
(d) The date of course completion.
(e) The last 4 digits of the student's social security number.
(f) The student's date of birth.
(g) The student’s real estate license identification number, if applicable.
(3) All records must be available for inspection during normal business hours by an authorized representative of the department.
(4) A real estate school shall maintain
records in the following manner:
(a) Records of schools must be maintained
permanently.
(b) Records of sponsors must be
maintained for a minimum of 6 years from inception date of the record.
(4) (5) A real estate
school shall issue a certificate of completion to a student who successfully
completes an approved real estate course. The certificate must include all of
the criteria set forth in R 339.22618(1)(f).
(5) (6) Each A student
completing a prelicensure course shall present a state-issued photo
identification or acceptable alternative form of photo identification to the
school before receiving the certificate of completion. Both of the following
apply:
(a) For courses conducted in a traditional
classroom setting, a student students or a licensee licensees
shall present a state-issued photo identification or other acceptable
alternative form of identification that verifies, to the satisfaction of the school,
the identification of the student or licensee.
(b) For courses conducted through
distance education learning, the school shall ensure that the
student or licensee whose attendance is reported to the department is the same
person who completed the distance education learning course. The
school shall take appropriate measures to ensure accurate verification of
the identity of each student or licensee before reporting course completion to
the department.
(6) (7) At least 30 days
before courses are held, schools shall a real estate school shall
submit to the department a schedule and geographic location for each course.
(7) (8) Within 5 business
days of the conclusion of the last course, schools shall a real estate
school shall submit, in a format required by the department, the names of
students who have successfully completed an approved course.
R 339.22625 Denial, suspension, or rescission of approval to offer courses; violation of
code or rules.
Rule 625. A real estate school or
instructor may be subject to the penalties of section 602 of the code, MCL
339.602, including disciplinary action against a course approval, for any
of the following reasons:
(a) Failure to comply with the provisions of the code or these rules.
(b) Revealing or attempting to discover, or soliciting, encouraging, or inducing a person to reveal, the questions on a real estate license examination administered by or on behalf of the department.
(c) Making a substantial misrepresentation or inducement regarding a real estate school or course of study.
(e) (d) Pursuing a
continued and flagrant course of misrepresentation or the making of false promises
through agents, salespersons, advertising, or otherwise.
R 339.22626 Distance-learning Distance
learning.
Rule 626. (1) Real estate education courses
represented as fulfilling the requirements of section 2504 of the code, MCL 339.2504,
and delivered through distance-learning distance learning must
shall be approved, as determined by the department before being
offered to the public.
(2) A distance-learning distance
learning course must contain all of the following:
(a) All requirements listed R 339.22618 for approval of a prelicensure course.
(b) The individual modules of instruction offered on a computer or other interactive program.
(c) A list of at least 1 learning objective for each module of instruction. The learning objective must ensure that if all the objectives are met, the entire content of the course is understood.
(d) A structured learning method to enable the student to attain each learning objective.
(e) A method of assessment of the student's performance during each module of instruction.
(f) A remediation for any student who is deficient in the assessment to repeat the module until the student understands the course content material.
(3) Delivery systems that meet the distance education criteria for current certification by the Association of Real Estate License Law Officials (ARELLO) are acceptable to the department, as follows:
(a) Proof of ARELLO certification as a primary or secondary provider, including the summary sheet and certificate, are provided with the application for course approval.
(b) Upon withdrawal or expiration of ARELLO
certification, the approval to offer distance-learning distance
learning courses are is suspended until ARELLO certification
is reinstated or the real estate school has applied for and received approval
from the department according to subrule (4) of this rule.
(4) Equivalent delivery systems may be
used if they are approved, as determined by the department.
(5) The real estate school shall describe in detail on its application how it will remedy hardware and software failures.
SUBPART 2. CONTINUING EDUCATION
R 339.22629 Continuing education requirements for licensees.
Rule 629. Beginning with the license
cycle after the effective date of these rules, real estate brokers, associate
brokers, and salespersons shall successfully complete 6 hours of continuing education
for each year of the license cycle. (1) A licensee shall complete 18
hours of continuing education in each license cycle as follows:
(a) A minimum of Two 2 hours of
legal education courses involving statutes, rules, and court cases are
required in must be completed during each year of a license cycle
pursuant to section 2504a(2)(a) of the code, MCL 339.2504a(2)(a),
for a total of 6 or more hours of legal education per license cycle.
(b) The remaining 12 hours of
continuing education required for renewal may Remaining hours
can be completed at any time during the license cycle.
(2) Submission of an application for renewal constitutes the applicant’s certification of compliance with the requirements of this rule.
(3) An applicant shall retain for a minimum of 4 years evidence acceptable to the department that he or she has met the continuing education requirements for renewal, and upon request, produce this evidence to the department pursuant to section 2504a(3) of the code, MCL 339.2504a.
R 339.22630 Waiver of continuing education.
Rule 630. A request for a waiver of
continuing education pursuant to section 204(2) of the code, MCL 339.204(2),
must be received by the department before the expiration date of the license
cycle.
R 339.22632 Eligible continuing education program.
Rule 632 (1) An As used in
this rule, eligible “eligible continuing education course”
means a course that is reviewed and certified by a statewide real estate association
that has a membership representing more than 18,000 licensees.
(2) An association that reviews continuing
education courses pursuant to subrule (1) of this rule shall comply with each
all of the following:
(a) Ensure that all continuing education courses that are offered to licensees are compliant with section 2504a of the code, MCL 339.2504a, and involve subjects that are relevant to the management, operation and practice of real estate or otherwise contribute to the professional competence of the licensee.
(b) Provide a system for monitoring a licensee’s compliance with section 2504a of the code, MCL 339.2504a.
(c) Maintain a list of approved courses and ensure the list is available to licensees.
(3) A school, institution,
program, or other person that has been denied certification as an eligible
continuing education course by a statewide real estate association that has a
membership representing more than 18,000 licensees may petition the department
to review the association’s decision in accordance with pursuant to
sections 520 and 521 of the code, MCL 339.520 and 339.521.
(4) If a statewide real estate association that has a membership representing more than 18,000 licensees does not exist, then continuing education courses must be approved by the board.