Michigan License Law Practice Test

Which of the following could lead to a suspended or revoked license in a listing agreement?

1. Lack of commencement date

2. No expiration date

3. Incorrect commission rate

4. Insufficient signatures

The correct answer is: No expiration date

A listing agreement must have a clear expiration date for the agreement to be enforceable and for the licensee to maintain compliance with Michigan real estate laws. The expiration date defines the term of the agreement and protects both the seller and the agent. If an agreement lacks an expiration date, it can lead to uncertainties about the duration of the agent’s authority to sell the property, which may result in legal challenges or disputes. Michigan law mandates that a listing agreement is created with clear terms to ensure that all parties understand their rights and obligations. Failure to include a specific expiration date can jeopardize the validity of the contract and may lead to disciplinary action against the licensee, including suspension or revocation of their license. While other factors such as a lack of commencement date, an incorrect commission rate, and insufficient signatures can certainly create issues within a listing agreement, they do not inherently lead to issues with license suspension or revocation in the same direct manner as failing to include an expiration date.