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Page 15 of 22

More Disclosures
Instructor: John Henderson

0:26 Minutes

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Module 2 Lesson 2 – Agent Duty


A real estate agent is required to disclose all types of agency relationships and the licensee’s duties under each relationship before the disclosure of any confidential information.  The Michigan Legislature provides the required language when disclosing an agency relationship. The disclosure must be in writing and a copy provided to the client/customer.


339.2517 Disclosure of agency relationship.

Sec. 2517.

  (1) A licensee shall disclose to a potential buyer or seller in a real estate transaction all types of agency relationships available and the licensee's duties that each agency relationship creates before the disclosure by the potential buyer or seller to the licensee of any confidential information specific to that potential buyer or seller.

  (2) Unless knowingly waived by execution of a limited service agreement, a real estate broker or real estate salesperson providing services under any service provision agreement shall, at a minimum, provide to the client the duties described in section 2512d(2) and the services described in section 2512d(3).

  (3) The disclosure of the type of agency relationship shall be in writing, shall be provided to the client, and shall substantially conform to the following:



  Before you disclose confidential information to a real estate licensee regarding a real estate transaction, you should understand what type of agency relationship you have with that licensee. A real estate transaction is a transaction involving the sale or lease of any legal or equitable interest in real estate consisting of not less than 1 or not more than 4 residential dwelling units or consisting of a building site for a residential unit on either a lot as defined in section 102 of the land division act, 1967 PA 288, MCL 560.102, or a condominium unit as defined in section 4 of the condominium act, 1978 PA 59, MCL 559.104.

  (1) An agent providing services under any service provision agreement owes, at a minimum, the following duties to the client:

  (a) The exercise of reasonable care and skill in representing the client and carrying out the responsibilities of the agency relationship.

  (b) The performance of the terms of the service provision agreement.

  (c) Loyalty to the interest of the client.

  (d) Compliance with the laws, rules, and regulations of this state and any applicable federal statutes or regulations.

  (e) Referral of the client to other licensed professionals for expert advice related to material matters that are not within the expertise of the licensed agent.

  (f) An accounting in a timely manner of all money and property received by the agent in which the client has or may have an interest.

  (g) Confidentiality of all information obtained within the course of the agency relationship, unless disclosed with the client's permission or as provided by law, including the duty not to disclose confidential information to any licensee who is not an agent of the client.

  (2) A real estate broker or real estate salesperson acting pursuant to a service provision agreement shall provide the following services to his or her client:

  (a) When the real estate broker or real estate salesperson is representing a seller or lessor, the marketing of the client's property in the manner agreed upon in the service provision agreement.

  (b) Acceptance of delivery and presentation of offers and counteroffers to buy, sell, or lease the client's property or the property the client seeks to purchase or lease.

  (c) Assistance in developing, communicating, negotiating, and presenting offers, counteroffers, and related documents or notices until a purchase or lease agreement is executed by all parties and all contingencies are satisfied or waived.

  (d) After execution of a purchase agreement by all parties, assistance as necessary to complete the transaction under the terms specified in the purchase agreement.

  (e) For a broker or associate broker who is involved at the closing of a real estate or business opportunity transaction furnishing, or causing to be furnished, to the buyer and seller, a complete and detailed closing statement signed by the broker or associated broker showing each party all receipts and disbursements affecting that party.

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