Before you read
Test yourself first: 5 questions
Question 1 of 5
Under Michigan brokerage practice, who is ultimately responsible for the proper maintenance and reconciliation of the firm's trust/escrow account?
Answer: D. The employing or managing broker bears ultimate responsibility for the firm's trust accounting, including proper deposits, record-keeping, and reconciliation. Even when staff handle day-to-day entries, the broker is accountable to LARA for the integrity of the account.
Question 2 of 5
A Michigan broker discovers that the trust-account balance is short by several thousand dollars due to a bookkeeping error and a personal withdrawal. The broker's correct response is to:
Answer: B. A trust account must always hold the full amount owed to clients. The broker must promptly restore the account to the proper balance, correct the records, and ensure client funds are intact. Leaving a shortage, or moving client funds into the operating account, would constitute commingling/conversion violations.
Question 3 of 5
In Michigan, real-estate advertising of listed property by a salesperson must:
Answer: B. Because a salesperson acts on behalf of the employing broker, advertising must be done in the name of and under the supervision of that broker, and must identify the brokerage. A salesperson may not advertise listed property solely in his or her own name as if independent.
Question 4 of 5
Which advertisement would be considered an improper 'blind ad' in Michigan?
Answer: B. A blind ad conceals that the property is being offered by a real-estate licensee. Michigan requires advertising by licensees to disclose the brokerage so consumers know they are dealing with a licensed firm. An ad showing only a phone number with no broker identification is a prohibited blind ad.
Question 5 of 5
A group of Michigan licensees within one brokerage wants to market themselves under a team name. Which requirement generally applies to such team advertising?
Answer: B. A team or group operates within a licensed brokerage, not as an independent entity. Team advertising and naming must still clearly identify the affiliated licensed brokerage so the public is not misled into thinking the team is a separate, independently licensed firm.
Keep the streak going with more questions like these, each with a full rationale.
What you need to know
Brokers are responsible for the advertising conducted by their affiliated licensees and for ensuring it is not deceptive. LARA rules require brokers to maintain complete and accurate transaction and trust-account records and to retain them for the period the agency prescribes. These records must be available for inspection by LARA upon request as part of its oversight authority.
Michigan Advertising & Record-Keeping Rules: FAQs
Is Michigan Advertising & Record-Keeping Rules on the real estate exam?
Yes. State License Law is a scored domain on the Michigan real estate licensing exam, and this topic appears in the state license-law portion.
Is this cheat sheet free?
Yes — every page on Cinna RE's resource library is free to read, print and share. The app adds practice questions, mock exams and a readiness score.
Does Michigan test this differently?
Michigan applies its own license law on top of the national portion. This page covers the Michigan rules specifically, which is what the state section of your exam tests.
