Ch2 Michigan Licensing Law Flashcards
What can happen if a licensee does not immediately present a purchase offer to a seller ?
The licensee can face disciplinary action
Brokerage firms often pay a fee to other brokers for
Referring clients
When writing up a purchase offer, the licensee should
Make certain that all the terms & conditions are listed in the written offer
Why is a transaction coordinator role a precarious one ?
Cannot give advice to either customer at risk for creating an implied agency
Applications for initial licensure & updates may be found at
www.michigan.gov/icola
Who can file a compliant alleging violations of the code?
Anyone from the public, private associations, department, board or attorney general’s
Branch office Licenses are issued for terms of
3 years
Those acts that a licensee might perform for a consumer which are informative & do not establish active representation on the consumers behalf are known as
Ministerial acts
What must a licensee carry at all times while transacting real estate business
The pocket card sent from the department
What is a licensee prohibited from disclosing?
If the seller has HIV orAIDS
What is the rate for county/state transfer tax?
County: $.55 per $500 or fraction thereof
State: $3.75 per $500 or fraction thereof
What role does the board have with schools, courses & continuing education?
They recommend school, courses & continuing education
What exceptions exist to the number of continuing education hours required?
Licenses issued in the second year of the 3 year cycle is required to 12 hours of continuing education for renewal
Licenses issued in the third year of the three year cycle are required 6 hours of continuing education for renewal
Types of real estate licenses in Michigan are
Broker
Associate broker
Salesperson
Branch office
If an agent represents a seller & disclosures confidential information to a buyer
It is a beach duty & could result in civil action against the agent
Under what circumstances can a citation be removed from a licensee’s public file?
If the licensee does not have any additional disciplinary action within the next five years
How are ministerial acts different from specific assistance?
Ministerial acts are routine acts that can be performed without creating an agency relationship
Specific assistance is any communication beyond casual convo that leads to the discovery of confidential information
The disbursement of an earnest money deposit is made
At the consummation or termination of a purchase agreement
A licensee should inform their buyer that after submitting a purchase offer the seller
Does not have to look at offers in the order they come in & can consider multiple offers
What happened to listings buyer’s agency agreement & property management agreement if a broker’s license is revoked?
They are automatically cancelled. They cannot be transferred or sold. The seller & lessors must be notified of their rights to list or lease with someone else
Real estate License Laws is designed to do what?
To protect the general public
The fiduciary relationship between an agent & principal refers to
The principal’s trust & confidence in the agent
What is the makeup of the board?
Total of 9 members
6 are real estate licensees, the other members of the general public
In a listing agreement one of the duties a seller owes to an agent
Paying a commission for a ready, willing & able buyer
What piece of information must be included in any/all real estate ads?
Brokers name as licensed
Telephone number or street address
What happens if a seller does not provide a disclosure before they executes a binding purchase agreement with a buyer?
The buyer has 72 to 120 hours ( depending on the method of delivery) to terminate the agreement.
How does a non principle broker differ from a principal broker?
It’s not an owner, partner, officer, or member
Has the same duties as a salespersons
What is a License limitation?
Limitation mean a condition or restriction attached to a license
When does a new construction purchase agreement for a condominium become binding?
9 days after the developer has delivered the required documents to the purchaser
In an agency relationship the person the agent represents is known as the
Principal
What happens if a complaint is not resolved?
It will be scheduled for a hearing
Under what circumstances can a salesperson close a real estate transaction?
Under direct supervision of their broker
To receive credit for a real estate course a student must attend
100% of the course hours
Who own listing?
The broker owns the listing. A listing agent that is not the broker may not take listings with them when leaving the firm
Under what circumstances can a game promotion be used in real estate business?
No specific payment of any kind is required
Not tied to a specific property or properties
What monetary level of errors & omissions insurance must a licensee carry?
Michigan does not require licensee to carry errors & omissions insurance although it would be wise for licensees to choose to do so
How long must a salesperson whose license was revoked wait until they can reapply for a new license ?
3 years
What duty does an agent have to disclose about psychologically impacted property?
No duty since it has no material effect on the condition of the property
Janice obtained her license on March 22, 2016 when will her license expire
October 31,2019
As the result of an agency agreement, a [blank] relationship is created between the agent & principal
Fiduciary
The illegal practice of having two contracts from one buyer-one to purchase the property & a second contract that is used to gain financing is called a
Dual contracts
A current balance of all trust accounts must be maintained & available to [blank] upon request
The department
The purpose of a seller’s disclosure act?
To forewarn buyers of property’s condition before making an offer
A licensee can get 60 hours credited towards a broker’s license if they
Has a masters degree in business administration
Michigan allows a broker to maintain personal funds in the trust account but not to exceed
$2,000
A qualified salesperson applicant must complete how many hours of approved instruction?
40 hours
If a lender or title company conducts the closing, who is responsible for the closing statement?
The listing broker
If a residential unit converts to a condominium how long can a disabled person continue to lease?
From 1 to 10 years depends on the circumstances
Once the pre license course has been successfully completed, a broker candidate has how long to apply for a license?
36 months
The most common types of listing agreements. which is the most often used in Michigan*.
*Exclusive right to sell
Exclusive agency
Open listing
Purchase offers can be delivered in what ways
By telephone
In person
By email
The person who is authorized by the broker to act as the agent of a specific principal in a transaction is known as
The designated agent
The broker’s compensation is set forth in the
Brokerage agreement
If a license is suspended or revoked the licensee must
Return their license & pocket card to the department & refrain from real estate activities
What specific info is a licensee prohibited from disclosing under the Michigan person with disabilities act?
Seller having HIV or AIDS
What role does the department have with schools, courses & continuing education
Approved schools, courses & continuing education
How long is the grace period for a salesperson who does not renew their license by the expiration date?
60 days
What are a licensee’s responsibilities & liabilities regarding the seller’s disclosure?
Responsibilities:
Obtain the completed form
Deliver form to buyers
Request signed copy from buyers before presenting offer to seller.
Liabilities:
None - if the agent didn’t know if they violated the act
What the county tax, state tax & total tax for a home sold for $275,750
You will need a calculator 😀
County/state tax $275,750 divided by $500 = 551.5 round up to 552
State tax
552 x $3.75 = $2070
County tax
552 x $.55 = $303.60
Total transfer tax on the $275,750 sale
$303.60 + $2070 = 2373.60
What are the duties that an agent owes to their client
Confidentiality Obedience Loyalty Disclosure info Accounting Care
What must a broker do if they decide to work for another broker as a salesperson?
Surrender their broker license & apply for a salesperson license
How many hours of continuing education are required in a three year cycle
18 hours
A written agency disclosure form must be completed & signed by the client
Prior to giving any specific assistance
Which situation would a licensee be a transaction coordinator?
When the licensee is not working with customers but is not anyone’s agent
If a licensee has their license revoked, what happens
The licensee must return the license & pocket card to the department & must cease engaging in any real estate activities
A(n) [blank] agent has complete authority over the principal’s property & can bind the principal in any contact, including buying, selling, leasing, exchanging or encumbering
Universal agent
What happens to the salesperson & associate broker in a firm when the broker’s license is suspended or revoked?
All licenses will be suspended pending change of broker & issuing of new licenses
A situation in which a broker mixes their personal funds with their other funds in their broker trust account is known as
Commingling
What’s the difference between a employee & an independent contractor
An “employee” has federal and state taxes withdrawn from their real estate compensation and is subject to rules by the broker regarding office hours vacation hours etc.
An “independent contractor” pays their own federal & state income taxes and at least 75% of the annual compensation paid to them by the broker is from commissions from the sale of real estate
What is a protection clause?
The protection clause states that the broker is still entitled to a Commission for a set period after the listing expires if the properties is sold to anyone who looked at the property with The broker or any cooperating broker during the period the property was listed.
Under what condition does Michigan allow for dual agency?
With the informed written consent of both buyer & seller
If there is evidence of a violation that Attorney’s general office may issue one of the four notices. What are they?
A formal complaint
A cease & desist order
A notice of summary suspension
A citation
Brokers compensation is determined by
The listing agreement
Define the duty of confidentiality. how long does this duty last
Agents have a strict duty to keep information confidential. Disclosing confidential information is a breach of duty and could result in civil action against the agent.
the duty extends beyond the time of the Ancy contract.
What does Michigan require of a broker who wants to manage property?
A written property management employment contract that outlines the broker duties, responsibilities & activities as the property manager; & describes the handling, management, safekeeping, investment, disbursement & use of the property management money funds & accounts.
If a person whose license was suspended or revoked as a result of disciplinary action wishes to reapply for relicensure, the department may require the applicant to
File a surety bond of up to $5000 for a period of up to 5 years
Non principal
Is not a owner partner, officer, or member but can be primary signatory on broker’s trust account and can sign closing statements.
List the violations of the condominium act
Misrepresenting the facts in the recorded master deed
Distributing an advertising pamphlet prospectus or letter concerning the project which contains false statements
Representing a project as a condominium project when it has not been recorded as such
Who initiated action when the Michigan uniform securities act has been violated
The securities administrator
When a new construction purchase agreement is signed it’s not binding until
9 business days after the developer delivers the required documents to purchaser
The securities administrator may
Suspended or revoked registration
Issue a cease & desist order
Impose a civil fine of up to $1000 for each violation not to exceed a total of $10,000
