A Michigan real estate salesperson is representing a seller whose home is listed at $350,000. A buyer submits a full-price cash offer. The salesperson, after learning the buyer's name and seeing a photograph, suspects the buyer is of Middle Eastern descent. Without consulting the seller, the salesperson tells the buyer's agent the property is 'already under contract' — which is false. The buyer files complaints with both HUD and the Michigan Civil Rights Commission. Which of the following best describes the salesperson's exposure under Michigan law?
Correct Answer
A) The salesperson faces liability under both the Michigan Elliott-Larsen Civil Rights Act and the Michigan Occupational Code for discriminatory misrepresentation
The salesperson's conduct implicates two separate bodies of Michigan law. First, national origin (and potentially race) is protected under both the federal Fair Housing Act and the Michigan Elliott-Larsen Civil Rights Act (MCL 37.2102). By falsely representing the property as under contract to discourage a buyer based on perceived national origin, the salesperson engaged in illegal housing discrimination under the Elliott-Larsen Act. Second, making a material misrepresentation — falsely stating the property is under contract — is a violation of the Michigan Occupational Code (MCL 339.2512), which prohibits fraudulent or dishonest dealing by licensees. The salesperson faces disciplinary action from LARA and civil liability under the Elliott-Larsen Act.
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Related Topics & Key Terms
Key Terms:
Related Concepts
Broker supervision is the legal obligation of a designated or managing broker to oversee and be accountable for the real estate activities of all salespersons and associate brokers operating under their license.
Commingling is the illegal act of mixing client funds with a broker's personal or business operating funds, while conversion is the unauthorized use of client funds for the broker's own benefit. Both are serious violations that can result in license revocation.
Commingling is the illegal act of mixing client trust funds with a broker's personal or business operating funds; conversion is the misappropriation of those funds.
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