Michigan Real Estate Broker Exam — All Questions

Which body licenses Michigan real estate brokers and may discipline a broker's license?

• a.The Department of Licensing and Regulatory Affairs (LARA)✓
• b.The Michigan Department of Treasury
• c.The county register of deeds where the broker's office sits
• d.The Michigan Association of Realtors, through its ethics panels

LARA administers Article 25 of the Occupational Code, MCL 339.2501 to 339.2518, and acts through the Board of Real Estate Brokers and Salespersons created by MCL 339.2502; PSI's Michigan bulletin says in terms that on this examination "Department" means LARA and "Board" means that board. Discipline runs from censure through suspension and revocation under MCL 339.602. Treasury is the arm of state government that collects revenue, not the one that grants occupational licenses. The register of deeds is a county recording office that takes in deeds and mortgages; it keeps a record of instruments, not a roster of licensees. A trade association may discipline a member's standing in the association, but it cannot issue, deny, or revoke a state license.

A buyer complains to LARA about a Michigan broker's conduct. Under MCL 339.2512(2), a complaint seeking a penalty must be filed no later than:

• a.6 months after the alleged violation, with no other measuring date
• b.18 months after the later of the violation or the completed transaction✓
• c.3 years after the closing, regardless of when the violation occurred
• d.5 years after the broker's license is next renewed by the department

MCL 339.2512(2) requires a complaint that seeks a penalty under article 5 to be filed not later than 18 months after whichever of two dates occurs later: the date of the alleged violation, or, where the violation occurs in connection with a real estate transaction, the date the transaction is completed. Both prongs matter, because a violation early in a long escrow is measured from the closing rather than from the act. A six-month window is shorter than the statute allows and would cut off complaints the department can still hear. Three years from the closing and five years from a renewal are periods the section does not use at all; the renewal cycle has no bearing on the complaint clock. Once a complaint is lodged, MCL 339.502 requires the department to begin investigating immediately and to send the complainant a written acknowledgment within 15 days.

After a hearing, the Board of Real Estate Brokers and Salespersons assesses penalties under article 6 of the Occupational Code. The largest administrative fine that may be imposed on a licensee is:

• a.$500.00
• b.$2,500.00
• c.$10,000.00✓
• d.$50,000.00

MCL 339.602(e) caps the administrative fine payable to the department at $10,000.00 for a person licensed or registered under the act. It sits alongside the other article 6 penalties: a limitation on the license, suspension, denial, revocation, censure, probation, and restitution based on proofs made to the hearing examiner in a contested case. The $500.00 figure is real but belongs elsewhere — MCL 339.601(4) makes a first offense of practicing without a license a misdemeanor punishable by a fine of not more than $500.00 or 90 days, rising to $1,000.00 or a year on a second offense. Neither $2,500.00 nor $50,000.00 appears in article 6. Procedurally, MCL 339.514(1) gives the board 60 days after it receives the hearing report to determine the penalty, and MCL 339.514(3) bars a member who investigated the complaint or attended the informal conference from taking part in that determination.