A licensed Michigan salesperson, without her broker's knowledge, negotiates a side agreement with a seller to receive a $2,000 'bonus' after closing in addition to her share of the commission. The seller pays the bonus directly to the salesperson. Under Michigan law, this arrangement violates which principle?
Correct Answer
A) The salesperson may only receive compensation through her employing broker, not directly from a party to the transaction
Under MCL 339.2512 and Act 299 of 1980, a Michigan salesperson may only receive compensation from her employing broker — never directly from a buyer, seller, or any other party to a transaction. Accepting a direct payment from the seller, even with the seller's agreement, violates Michigan license law. All compensation must flow through the employing broker, who then disburses the salesperson's share.
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Related Topics & Key Terms
Key Terms:
Related Concepts
FREC has the authority to impose fines and other disciplinary actions on licensees who violate real estate laws and rules.
A group boycott is an illegal antitrust practice in which two or more competing real estate businesses agree to refuse to work with a specific person, company, or entity in order to harm that party's ability to compete.
In real estate, the distinction between an independent contractor and an employee determines tax treatment, liability, and the level of control a broker may exercise over the agent's daily activities. Most real estate agents operate as independent contractors.
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