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HB 5229

AN ACT RELATING TO STATE AFFAIRS AND GOVERNMENT -- THE DEPARTMENT OF HOUSING

2025 Regular Session Introduced by Edith Ajello and 7 co-sponsors

The bill clarifies minimum broker duties under service agreements, allows limited services to be waived, and tightens disclosures, confidentiality, and closing‑statement requiremen

06/27/2025 Signed by Governor
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Bill Summary · HB 5229

Summary — HB 5229 (2025): Real estate occupations — limited service agreements; modify duties and waivers

Status: Introduced March 14, 2025; electronically reproduced Nov 6, 2025; referred to Committee on Regulatory Reform (11/06/2025). This bill would amend section 2512d of the Michigan Occupational Code (1980 PA 299), as last amended by 2016 PA 502. It is tied to HB 5227 and HB 5228 (enacting section requires all three bills be enacted).

Purpose / intent

To clarify and update the minimum duties that licensed real estate brokers and salespersons owe to clients under a written “service provision agreement,” to specify which services may be waived in limited‑service agreements, and to tighten certain disclosure and closing‑statement requirements.

Key provisions

  • Establishes minimum duties owed by a licensee acting under a service provision agreement, including:
    • Exercise of reasonable care and skill.
    • Performance of the terms of the service provision agreement.
    • Loyalty to the client’s interests.
    • Compliance with applicable state and federal law.
    • Referral to other licensed professionals for matters outside the broker’s expertise.
    • Timely accounting of money and property in which the client has an interest.
    • Confidentiality of information obtained in the agency relationship; expressly prohibits disclosure of confidential client information to any licensee who is not an agent of the client (unless client consents or law requires disclosure).
  • Permits a real estate broker to authorize a designated agent to represent the client, but only if that authorization is in writing.
  • Specifies services licensees must provide to clients (when representing seller/lessor or buyer/lessee), including:
    • Marketing the seller’s/lessor’s property as agreed in the service provision agreement.
    • Acceptance and presentation of offers and counteroffers.
    • Recommending that purchasers require the seller to provide a fee title policy in the amount of the purchase price, issued or certified to the approximate closing date.
    • Assistance with developing, communicating, negotiating, and presenting offers until a purchase/lease is executed and contingencies are satisfied or waived.
    • Post‑execution assistance to complete the transaction as specified by the purchase agreement; a licensee may not close on terms contrary to the executed agreement without written approval of buyer and seller.
    • Where a broker/associate broker is involved in closing, furnishing a complete and signed closing statement to buyer and seller showing each party’s receipts/disbursements — except when closing is conducted by a title insurance company or its authorized agent.
  • Advertising restriction: a broker or salesperson representing a seller may not advertise the property as “for sale by owner” or mislead the public into believing the seller is unrepresented.
  • Waiver in limited‑service agreements: the services listed in subsections (3)(b), (c), and (d) (accepting/presenting offers; assistance negotiating/presenting offers; post‑execution assistance to complete the transaction) may be waived by a seller or lessor in a limited service agreement.

Who is affected

  • Licensed real estate brokers, associate brokers, and salespersons in Michigan.
  • Sellers, lessors, buyers, and lessees who enter written service provision or limited‑service agreements (including flat‑fee or limited service listings).
  • Title insurance companies and closing agents (because of closing statement exceptions and title policy recommendation).
  • Consumers interacting with real estate licensees — impacts the level of services they can expect and the manner of advertising.

Procedural / timeline notes

  • Introduced March 14, 2025; read and referred multiple times; most recent reading and referral to Committee on Regulatory Reform recorded Nov 6, 2025.
  • Enacting section conditions effectiveness on enactment of HB 5227 and HB 5228 (tie‑bar): HB 5229 would not take effect unless those companion bills also become law.
  • The provision updates state statutory duties and may require brokerage policy changes (forms, written authorizations, limited‑service disclosures, and closing procedures) if enacted.

Impact: The bill clarifies mandatory broker duties while preserving the ability for sellers/lessors to opt out of certain services in limited‑service agreements. It strengthens confidentiality rules and closing‑statement duties, and limits misleading advertising. Implementation would likely require updates to service agreements and brokerage practices.

Compiled from official sources — confirm details with the bill’s official record.

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