Michigan REALTORS® working to scale back 40-Year Right-to-List contracts, updates made to the STR Guide/a reminder of this resource, and Rep. Coffia promises to fight for attainable housing
In this week’s GAD Top Three, we'll first go over Michigan REALTORS' efforts to scale back 40-year right-to-list contracts that are happening in Northern Michigan. Second, I have recently updated the Aspire North REALTORS® Short-Term Rental Policies Guide; check out this resource for you and your clients! And lastly, we'll take a look back at an article by Rep. Coffia on fighting for attainable housing as we look forward to what more can be done to increase housing inventory.
1. Michigan REALTORS Working to Scale Back 40-Year Right-to-List Contracts
You may have caught an article in the Traverse City Record-Eagle on Monday, June 12th regarding a program called the “Homeowner Benefit Program.” These “Right-to-List” contracts by a Florida brokerage (MV Realty) pay an upfront amount of money (ranging from $300 to $5,000) for homeowners to sign an agreement stating that if they decide to sell their home MV Realty has the exclusive right to list their home on commission for the next 40 years. These agreements are being recorded with the local register of deeds offices as a 40-year lien against the properties signing onto these agreements. If the homeowner defaults on the agreement during that 40-year period, through foreclosure or listing the home with another REALTOR, the homeowner would owe MV Realty an early termination fee equal to three percent of the property’s fair market value. Michigan REALTORS is aware of these practices and they are working to better define the practice and provide guardrails to ensure that a prospective seller has clearer options available if they elect to terminate the “Right-to-List” agreement. The amendments Michigan REALTORS has proposed include:
- Providing a statutory definition for a “Right-to-list home sale agreement”
- Establishing that a right-to-list home sale agreement shall not be enforceable if the agreement:
- Is not signed on by all persons with an ownership interest in the real estate
- Is for a period longer than 2 years
- Does not allow early termination of the agreement at an amount not greater than the original consideration paid plus 6% per year from the date of the payment to the date of termination of the agreement
- Does not list on the first page of the agreement the period of the agreement and an explanation of the early termination option.
- A non-compliant right-to-list home sale agreement would be a violation of the Occupational Code
We will share more information on this issue as it becomes available.
2. Updates made to the STR Guide: A Reminder of this Resource
The landscape of short-term rentals seems to be ever-changing. In an effort to keep our REALTOR® members, Affiliates, and their clients in the know, the Regional Short-Term Rental Policies Guide for Northern Michigan was developed in 2020. This resource is continually updated thanks to Aspire North REALTOR staff’s review of curated local government agendas and minutes on a weekly basis and information provided by Aspire North REALTOR members like you! These summaries of short-term rental policies across the 6 county region (Antrim, Benzie, Grand Traverse, Kalkaska, Leelanau and Wexford) can be a helpful starting point for clients who may be positively or negatively sensitive to the short-term rental policy in a community. This resource is a starting point, for more detailed information on the short-term rental landscape in a community, please contact the zoning administrator in the community of interest. Links, if available, to each local government website as included in the Regional Short-Term Rental Policies Guide. If you are aware of a new Short-Term Rental policy in your community, or notice any discrepancies in the Short-Term Rental Policies Guide contact me at firstname.lastname@example.org or 231-944-8315 and I will make sure to update it as soon as possible.
3. Rep. Coffia Promises to Fight for Attainable Housing
As the current State Legislative Session comes to a close on Wednesday, June 28th we begin to look ahead to the real estate issues that will be considered when the Michigan State Legislature returns to their regular session schedule in September. I am taking a look back at an article released by Michigan State Representative Betsy Coffia for Michigan State House District 103 (includes the northern parts of Benzie and Grand Traverse County, including the greater Traverse City area, and all of Leelanau County) on her commitment to “advance both budget priorities and housing policy that partners with both Lansing colleagues (Democrats and Republicans) and with state, regional and local partners to address Michiganders’ need for permanent, attainable housing.” With Michigan State House Bill 4246 (which includes the Housing Readiness Incentive Grant Program supported by Michigan REALTORS) passed out of the Michigan State House thanks to support from Rep. Betsy Coffia but without the support of Rep. John Roth. Let’s continue to remind our legislators as the summer session wines to a close and the fall session comes into view that housing is a nonpartisan issue that we can all continue to make strides to improve together.