Bulletin: MI2024004

Dear Associates:

Please be advised that on July 25, 2024, the Governor of Michigan signed into law Public Act 122 of 2024, which Act was given immediate effect (attached). The Act modifies MCL 339.2501 and MCL 339.2512 which, inter alia, addresses Right-to-list Home Sale Agreements.

Section 2501 (w) defines a Right-to-list Home Sale Agreement as:

“Right-to-list home sale agreement” means an agreement between an owner of residential real estate and a real estate broker that obligates the owner to list the residential real estate for sale with the real estate broker at a future date in exchange for consideration. As used in this subdivision, “residential real estate” means the type of real estate described in section 2517(3). A right-to-list home sale agreement does not include a service provision agreement.

Section 2512g provides:

(1)   A right-to-list home sale agreement is void and unenforceable if any of the following apply to the agreement:

(a) It is not in writing.
(b) It is not signed by all persons that have an ownership interest in the residential real estate considered in the agreement.
(c) It is for a period of more than 2 years.
(d) It does not include both of the following:

(i) An option for the owner to terminate the agreement before its expiration date for an amount of consideration payable to the real estate broker that is not more than the initial consideration the broker paid to the owner with interest of 6% per annum that starts from the date the broker provided the initial consideration through the date that the owner terminated the agreement.
(ii) The period of time that the agreement is effective and an explanation of the early termination option on the first page of the agreement in a conspicuous manner.

(2) This section applies to a right-to-list home sale agreement that is entered into, extended, or renewed on or after the effective date of the amendatory act that added this section.

Please note subsection (2) makes this effective for only those agreements entered into, extended, or renewed on or after July 25, 2024. For agreements entered into prior to that date we will still require a release.

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