HB 5227 Michigan House · 2025-2026 Regular Session

Occupations: real estate; real estate broker prohibited conduct; modify. Amends sec. 2512 of 1980 PA 299 (MCL 339.2512). TIE BAR WITH: HB 5228'25, HB 5229'25

HB 5227 amends Michigan's real estate broker regulations to strengthen rules about handling client funds and prevent conflicts of interest. It requires real estate brokers to deposit client money into separate trust accounts within 2 banking days (instead of their business accounts), mandates detailed record-keeping, and prohibits mixing client funds with broker money. The bill also bars brokers from sharing commissions with unlicensed individuals (except for commercially prepared name lists) and mandates written agency disclosures before negotiating offers for buyers. These changes directly affect licensed real estate brokers and salespersons conducting transactions in Michigan.

Bill status passed both 4 of 5 stages cleared

Introduction

Nov 2025

Committee Review

Apr 2026

House Passage

Apr 2026

Senate Passage

Apr 2026

Governor

Introduced Nov 6, 2025 Last action Apr 16, 2026

Maddy AI version diff · 1 comparison

What changed between versions

House Introduced Bill → As Passed by the House · 7 edits · Mar 5, 2026

MODERATE

This bill amends the Michigan Occupational Code to update the list of violations for real estate licensees, adding new requirements for agency disclosures and trust account management while removing outdated property management penalties. It also clarifies that a prospective buyer remains a 'customer' until a written agreement is signed and establishes an 18-month statute of limitations for filing complaints. These changes aim to modernize regulations, protect consumers from unauthorized agency relationships, and ensure proper handling of client funds.

Scope change

The bill expands the scope of prohibited conduct for real estate licensees by adding specific requirements for agency disclosure and trust account deposits, while narrowing the scope of property management violations by removing them from the general licensee penalty list.

REQUIREMENT

Added a requirement for licensees to provide a written agency disclosure to prospective buyers or sellers in real estate transactions.

Added a requirement for real estate brokers to return a salesperson's license within 5 days if the salesperson is terminated.

Added detailed requirements for depositing client funds into trust accounts, including specific timelines for depositing accepted offers and record-keeping rules.

Removed specific penalties related to property management violations from the general list of licensee violations.

Modified the minimum services requirement to specify that waivers must be in writing by the client, seller, or lessor.

DEFINITION

Clarified that a prospective buyer is considered a 'customer' until a written buyer agency agreement is entered into.

ENFORCEMENT

Established an 18-month statute of limitations for filing complaints regarding violations of this section.

Floor votes · House Apr 15, 2026

How they voted

This bill passed the Senate by voice vote (no roll call recorded).

Full legislative history

Actions timeline

Total actions

Key actions

Committee

Apr 16, 2026

Committee

REFERRED TO COMMITTEE ON REGULATORY AFFAIRS

upper

Apr 16, 2026

Upper · Passed

PASSED BY HOUSE WITH IMMEDIATE EFFECT

upper

Apr 15, 2026

Lower · Passed

passed; given immediate effect Roll Call #109 Yeas 105 Nays 1 Excused 0 Not Voting 4

lower

Mar 19, 2026

Committee

referred to second reading

lower

Mar 19, 2026

Lower · Passed

reported with recommendation without amendment

lower

Mar 5, 2026

Lower · Passed

recommendation concurred in

lower

Mar 5, 2026

Lower · Passed

reported with recommendation for referral to Committee on Rules

lower

Nov 6, 2025

Committee

referred to Committee on Regulatory Reform

lower

Nov 6, 2025

Introduced

introduced by Representative Rep. Parker Fairbairn

lower

1 primary · 3 co-sponsors