REAL ESTATE LICENSE; RIGHT TO LIST S.B. 602 (S-1):
SUMMARY OF SUBSTITUTE BILL
IN COMMITTEE
Senate Bill 602 (Substitute S-1) (Senate-passed version)
CONTENT
The bill would amend the Occupational Code to specify conditions under which a right-to-list home sale agreement between an owner of residential real estate and a real estate broker would be void and unenforceable. It also would subject a licensee who entered a void and unenforceable agreement to certain penalties.
Under the bill, "right-to-list home sale agreement" would mean an agreement between an owner of residential real estate and a real estate broker that obligates the owner to list residential real estate for sale with the real estate broker at a future date in exchange for consideration. "Residential real estate" would mean the type of real estate that consists of not less than one or not more than four residential dwelling units or that consists of a building site for a residential unit on a lot or a condominium unit. The bill specifies that a right-to-list home sale agreement would not include a service provision agreement.
The bill specifies that a right-to-list home sale agreement would be void and unenforceable if any of the following applied to the agreement:
-- It was not in writing.
-- It was not signed by all persons that had an ownership interest in the residential real estate considered in the agreement.
-- It was for a period of more than two years.
Additionally, a right-to-list agreement would have to include an option for the owner to terminate the agreement before its expiration date for an amount of consideration payable to the real estate broker that was not more than the initial consideration the broker paid to the owner with interest of 6% per annum that started from the date the broker provided the initial consideration through the date that the owner terminated the agreement. The right-to-list agreement also would have to include the period that the agreement was effective and an explanation of the early termination option on the first page in a conspicuous manner.
The requirements set forth by the bill would apply only to a right-to-list home sale agreement that was entered, extended, or renewed on or after the bill's effective date. The bill also would subject a real estate licensee who entered into a void and unenforceable agreement to certain penalties, including revocation of a license, an administrative fine of not more than $10,000, restitution, and probation, among others.
FISCAL IMPACT
The bill would have no fiscal impact on State or local government.
MCL 339.2501 et al. Analyst: Nathan Leaman
This analysis was prepared by nonpartisan Senate staff for use by the Senate in its deliberations and does not constitute an official statement of legislative intent.