Legal Essentials for Brokers and Agents: Key Takeaways from WMLAR’s Annual Business Meeting
At WMLAR’s 25th anniversary annual business meeting, Michigan REALTORS® General Counsel Brian Westrin, Esq., and Director of Legal Education Becky Berke, Esq., presented on key legal topics relevant to brokers, agents, and office staff. The session offered practical guidance on agency relationships, disclosure obligations, and independent contractor agreements under Michigan law.
Agency Relationships
The presentation clarified the distinctions between agency and customer service relationships. Under Michigan law:
- Agency Relationship: The licensee acts on behalf of the client and owes fiduciary duties, including loyalty, disclosure, and confidentiality.
- Customer Service Relationship: The licensee provides assistance without acting as an agent, and fiduciary duties are not owed.
Attendees were reminded that Michigan recognizes “implied agency,” so it is important to ensure clients understand the type of relationship they have with their REALTOR®.
Disclosures
Brian and Becky highlighted the proper use of the Michigan Seller Disclosure Form and the importance of accurate disclosure. Key points included:
- Sellers are required to disclose known property conditions but are not obligated to volunteer information beyond the form.
- Amendments to the Seller’s Disclosure Form should be made when material facts change.
- Accurate disclosure protects both the seller and the licensee from legal liability, including claims of misrepresentation or fraud.
Independent Contractor Agreements and Team Structures
The presentation also addressed legal requirements for independent contractor arrangements within brokerages:
- Independent contractor agreements must exist between the broker and the licensed salesperson or associate broker, not with an informal “team entity.”
- Team members must be paid and supervised directly by the broker under whom they are licensed.
- Licensees classified as employees versus independent contractors must meet specific legal criteria, including compensation structure and written agreements.
Additional Guidance
Members were encouraged to review their agreements, disclosure practices, and policies to ensure compliance with Michigan real estate law. Additionally, WMLAR members may contact Becky Berke, Esq., (517-334-5553 x553) for questions regarding legal matters, including sign advertising and brokerage compliance.
Access the Presentation
The full PowerPoint from Brian and Becky’s session is available for members who wish to review the material in detail. Email Andrea at WMLAR to receive a copy.
