During a real estate transaction in Grand Rapids, Salesperson Angela secretly accepts a $1,500 referral fee from a home warranty company without disclosing this payment to her client or her employing broker. Under Michigan law, this conduct most likely constitutes:
Correct Answer
A) A disciplinary violation for undisclosed compensation and potential breach of fiduciary duty
Under MCL 339.2512 and Act 299 of 1980, a Michigan real estate licensee must disclose any compensation received from third parties related to a transaction to both the client and the employing broker. Secretly accepting a referral fee without disclosure violates Michigan license law as undisclosed compensation, and also constitutes a breach of fiduciary duty to the client. This is a disciplinary violation regardless of the fee amount.
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Related Topics & Key Terms
Key Terms:
Related Concepts
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.
Continuing education (CE) refers to the ongoing coursework that licensed real estate professionals must complete during each renewal cycle to maintain an active license. CE ensures agents stay current with changes in laws, regulations, and industry practices.
The National Do Not Call Registry is a federal program administered by the FTC that allows consumers to opt out of receiving unsolicited telemarketing calls, including calls from real estate agents soliciting business.
More Practice Of Real Estate Questions
In Wyoming real estate practice, an associate broker or salesperson is not associated with a responsible broker at renewal. What should the licensee remember?
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