A Michigan salesperson, David, works for Metro Realty. He listed a home for the Johnsons and also has a buyer client, Ms. Rivera, who wants to purchase that home. David explains the situation to both parties. Under Michigan law, who is technically the dual agent in this transaction?
Correct Answer
C) Metro Realty (the broker), because the broker is the legal agent for all clients of the brokerage
Under Michigan law, a salesperson is not an independent agent — the salesperson acts on behalf of and under the authority of the employing broker. The broker is the legal agent for all clients of the brokerage. Therefore, when two clients of the same brokerage are on opposite sides of a transaction, it is the broker (Metro Realty) who is the dual agent, not the individual salesperson David. MCL 339.2512 establishes the broker's legal responsibility for the acts of affiliated salespersons.
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Related Topics & Key Terms
Key Terms:
Related Concepts
An agency relationship created when a principal's actions or words lead a third party to reasonably believe that an agent has authority, and the principal fails to correct this belief.
An agency relationship created when a principal approves or accepts an agent's previously unauthorized actions, effectively granting authority after the fact.
The legal requirement for real estate agents to inform all parties about who they represent in a transaction, typically provided at first substantive contact.
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