Bill Text: MI HB5366 | 2025-2026 | 103rd Legislature | Introduced
Bill Title: Occupations: real estate; real estate wholesaling and mandatory disclosures; provide for. Amends secs. 2501, 2502b, 2503 & 2512e of 1980 PA 299 (MCL 339.2501 et seq.) & adds sec. 2517a.
Sponsorship: Partisan Bill (Democrat 13)
Status: (Introduced) 2025-12-17 - Bill Electronically Reproduced 12/16/2025 [HB5366 Detail]
Download: Michigan-2025-HB5366-Introduced.html
HOUSE BILL NO. 5366
A bill to amend 1980 PA 299, entitled
"Occupational code,"
by amending sections 2501, 2502b, 2503, and 2512e (MCL 339.2501, 339.2502b, 339.2503, and 339.2512e), section 2501 as amended by 2024 PA 122 and sections 2502b and 2512e as added and section 2503 as amended by 2016 PA 502, and by adding section 2517a.
the people of the state of michigan enact:
Sec. 2501. As used in this article:
(a) "Assignment fee" means the fee, commission, or other valuable consideration paid to the assignor in exchange for the assignment of a real estate purchase agreement.
(b) "Assignment of a real estate purchase agreement" means the transfer of rights or interest in a real estate purchase agreement from 1 party to another.
(c) (a) "Associate broker" or "associate real estate broker" means an individual who meets the requirements for licensure as a real estate broker under this article and who is licensed as an associate real estate broker under section 2505 to provide real estate brokerage services as an employee or independent contractor of a real estate broker.
(d) (b) "Business entity" means a person described in section 105(5)(b) or (c), except a sole proprietorship.
(e) (c) "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.
(f) (d) "Clock hour" means either of the following:
(i) For a classroom course at a location described in subdivision (c)(i), (e)(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 (c)(ii), (e)(ii), the period required for a student to process the amount of material provided in 50 minutes of distance learning instruction.
(g) (e) "Control person" means an individual who is a sole proprietor, is a partner in a partnership or limited partnership, is an officer, director, or shareholder in a corporation, is a member or manager in a limited liability company, or holds a responsible position in any other form of business entity authorized under the laws of this state or the state in which the entity is organized or formed.
(h) (f) "Distance learning" means the technology and educational process used to provide instruction to a student when the student and the instructor are not necessarily physically present at the same time or place. The term Distance learning includes, but is not limited to, instruction provided through an interactive classroom, computer conferencing, or an interactive computer system.
(i) (g) "Employ" or "employment" means the relationship between a real estate broker and an associate real estate broker or a real estate salesperson which that 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 does not relieve the real estate broker of the responsibility to supervise acts of the licensee that are regulated under this article.
(j) "Equitable interest" means an interest acquired by a purchaser under a valid and binding agreement of sale or purchase contract for the purchase of real estate.
(k) (h) "Independent contractor relationship" means a relationship between a real estate broker and an associate real estate 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 real estate broker or real estate salesperson as an employee for federal and state income tax purposes.
(ii) At least Not less than 75% of the annual compensation paid by the real estate broker to the associate real estate broker or real estate salesperson is from commissions from the sale of real estate.
(l) (i) "License cycle" means the term of a license issued under this article.
(m) (j) "Limited service agreement" means a written service provision agreement by which a real estate broker and client establish an agency relationship in which certain enumerated services, as set forth described in section 2512d(3)(b), (c), and (d), are knowingly waived in whole or part by the client.
(n) (k) "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, the secondary mortgage loan act, 1981 PA 125, MCL 493.51 to MCL 493.81, or the mortgage loan originator licensing act, 2009 PA 75, MCL 493.131 to 493.171.
(o) (l) A "nonprincipal" of a real estate broker means a control person who is licensed as an associate real estate broker under this article, but is not designated as a principal under section 2505(1).
(p) (m) "Place of business" means a physical location that a real estate broker, by advertisement, signage, or otherwise, represents to the public is a place where clients and customers may consult or do business with a licensee.
(q) (n) "Pocket card" means the card that contains information about a licensee's license that the department provides under section 2506 when it the department issues a license under this article.
(r) (o) "Prelicensure course" means a course that is represented to the public as fulfilling, in whole or in part, the requirements of section 2504.
(s) (p) A "principal" of a real estate broker means a control person who is licensed as an associate real estate broker and is designated as a principal under section 2505(1).
(t) (q) "Professional designation" means a certification from a real estate professional association 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 awarded by the certifying entity.
(u) (r) "Property management" means leasing or renting, or offering to lease or rent, real property of others for a fee, commission, compensation, or other valuable consideration pursuant to under a property management employment contract.
(v) (s) "Property management account" means an interest-bearing or noninterest-bearing account or instrument used in the operation of property management.
(w) (t) "Property management employment contract" means 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; that describes the real estate broker's duties, responsibilities, and activities as a property manager; and that describes the handling, management, safekeeping, investment, disbursement, and use of property management money, funds, and accounts.
(x) (u) "Real estate broker" means an individual or business entity 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, sale, or exchange of real estate; that negotiates the mortgage of real estate; that negotiates for the construction of a building on real estate; 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; that engages in property management as a whole or partial vocation; 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 that, as owner or otherwise, engages in the sale of real estate as a principal vocation; or that advertises, markets, offers, or negotiates an assignment or other transfer of a buyer's legal interest or equitable interest in residential real property, whether or not the person holds legal title. Real estate broker includes a person that engages in real estate wholesaling.
(y) (v) "Real estate salesperson" means 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, buy or offer to buy, provide or offer to provide market analyses of, list or offer or attempt to list, or negotiate the purchase, sale, or exchange of real estate; 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.
(z) "Real estate wholesaling" means advertising, marketing, offering, or negotiating an assignment or other transfer of a buyer's legal interest or equitable interest in residential real property, whether or not the person holds legal title.
(aa) "Residential real property" means real property with 1 to 4 dwelling units.
(bb) (w) "Right-to-list home sale agreement" means an agreement between an owner of residential real estate and a real estate broker that obligates the owner to list the residential real estate for sale with the real estate broker at a future date in exchange for consideration. As used in this subdivision, "residential real estate" means the type of real estate described in section 2517(3). Right-to-list home sale agreement does not include a service provision agreement.
(cc) (x) "Service provision agreement" means a buyer agency agreement or listing agreement that is executed by a real estate broker and a client and establishes an agency relationship.
(dd) (y) "Sponsor" means a person that represents to the public that the courses it the person conducts for purposes of this article fulfill the requirements of section 2504a for continuing education.
Sec. 2502b. (1) Unless the owner engages the services of a real estate broker in connection with those sales, an individual who 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 he or she the individual is principally engaged in the sale of real estate.
(c) Devoting over 50% of his or her the individual's working time, or more than 15 hours per week in any 6-month period, to the sale of real estate.
(d) If he or she the individual is a real estate salesperson, a sale of real estate other than his or her the individual's 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.
(4) If an individual holds only an equitable interest in residential real property and advertises or markets the residential real property to the public, that advertisement or marketing is not considered a sale of that residential real property by the owner.
Sec. 2503. (1) This Except as otherwise provided in subsection (2), this article does not apply to a person that, as owner, sells or offers for sale a detached, single family dwelling, duplex, triplex, or quadruplex, that has never been occupied and that was built by the person while licensed under article 24. This article does not apply to an owner or lessor, an attorney-in-fact acting under a duly executed and recorded power of attorney from the owner or lessor, or 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) Subsection (1) does not apply to a person that, as owner, engages in advertising, marketing, offering, or assigning an equitable interest in residential real property to the public.
(3) (2) This article does not apply to an attorney-at-law who is rendering performing services as an attorney-at-law; to a receiver, trustee in bankruptcy, administrator, executor, a person selling real estate under order of a court; or to a trustee selling under a deed of trust, unless the trustee makes repeated or successive sales of real estate not through a licensed real estate broker.
(4) (3) This article does not apply to a person that is regulated under the mortgage brokers, lenders, and servicers licensing act, 1987 PA 173, MCL 445.1651 to 445.1684, and that does not perform any other act requiring a license as a real estate broker, associate broker, or real estate salesperson.
Sec. 2512e. (1) Except as otherwise 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 must include the broker's name or the name under which the broker is conducting business, ; shall include the broker's telephone number or street address, ; and shall state a statement 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 the individual personally owns for sale or for lease in his or her the individual's 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 must 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 otherwise provided in subsection (2) or (4), a real estate salesperson or an associate 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 business name of, his or her the real estate salesperson's or associate broker's employing broker. Any advertising displayed or published on or after January 1, 2018, that includes the name of an associate broker, a salesperson, or a cooperating group of associate brokers or salespersons employed by the same real estate broker, shall must include all both of the following:
(a) The telephone number or street address of the employing broker.
(b) The business name of the employing broker, in equal or greater type size than the name of the associate broker, salesperson, or cooperating group.
(4) A real estate salesperson shall not advertise to sell real property under his or her the real estate salesperson's own name unless the property is the principal residence of the salesperson. A real estate salesperson shall not advertise real property for rent or lease under his or her the real estate salesperson's own name unless the salesperson is the owner of the property.
(5) An advertisement of residential real property by a licensee that holds only an equitable interest in the residential real property must disclose this status and must not represent that the licensee is the titled owner of the residential real property.
(6) (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 or under an assumed name that is authorized by law. A real estate broker shall notify the department of its the real estate broker's adoption of an assumed name with its the real estate broker's license application, or within not later than 30 days after it the real estate broker adopts an assumed name, whichever is earlier.
Sec. 2517a. (1) Before an assignment of a real estate purchase agreement, a buyer who is an assignor shall provide a seller who is the owner of a residential real property a written disclosure that includes all of the following:
(a) That the buyer is an assignor and does not intend to occupy the property.
(b) The expected resale price or assignment fee. If the exact dollar amount of the expected resale price or assignment fee is not fixed at the time of the written disclosure, the assignor shall disclose the maximum percentage of the purchase price or the maximum fixed dollar amount the assignor will retain as an assignment fee.
(c) That the seller has a 5-business-day cancellation right.
(2) The department shall create any necessary forms for a written disclosure required under this section.
