The following opinion is presented on-line for informational use only and does not replace the official version. (Mich Dept of Attorney General Web Site - www.ag.state.mi.us) STATE OF MICHIGAN FRANK J. KELLEY, ATTORNEY GENERAL Opinion No. 5337 June 23, 1978 REAL ESTATE BROKERS AND SALESMEN: Need for licensure to appraise for a lending institution Persons engaged in the business of appraising real estate for lending institutions for a fee must be licensed under the provisions of the real estate license law. Honorable Jack L. Gingrass House of Representatives State Capitol Lansing, Michigan 48933 You have requested my opinion on the following question: 'If a person is a certified assessor with the State of Michigan, and if he does appraising for a lending institution for a fee, is it necessary for him to have a Real Estate License?' A certified assessor is a person who has been certified as qualified under 1893 PA 206, Sec. 10(c) and (d), added by 1969 PA 203, MCLA 211.10(c)(d); MSA 7.10(3)(4), to assess property for ad valorem tax purposes. The real estate license law, 1919 PA 306, MCLA 451.201 et seq; MSA 19.791 et seq, provides for the licensure of real estate brokers and salespersons. 1919 PA 306, supra, provides in its title: 'AN ACT to define, regulate, and license real estate brokers and real estate salespersons, including within the term real estate broker, also those who act as real estate appraisers, real estate mortgage brokers, building job brokers, business chance brokers, and those who, as owners or otherwise, engage in the sale of real estate as a principal vocation, and persons employed by any of them as salespersons, and to provide a penalty for a violation of the provisions hereof.' (emphasis supplied) Section 1 of the act (1) provides: 'A person, firm, partnership association, copartnership, or corporation, whether operating under an assumed name or otherwise, from and after January 1, 1920, shall not engage in the business or capacity, either directly or indirectly, of a real estate broker or real estate salesperson within this state without first obtaining a license under this act.' Section 2 of the act (2) defines, for the purposes of the act, a real estate broker and salesperson as follows: 'A real estate broker within the meaning of this act a person, firm, partnership association, copartnership, or corporation, who with intent to collect or receive a fee, compensation, or valuable consideration, sells or offers for sale, buys or offers to buy, appraises or offers to appraise, lists or offers or attempts to list, or negotiates the purchase or sale or exchange or mortgage of real estate, or negotiates for the construction of buildings thereon, or who leases or offers to lease or rents or offers for rent real estate or the improvements thereon for others, as a whole or partial vocation, or who sells or offers for sale, buys or offers to buy, leases or offers to lease, or negotiates the purchase or sale or exchange of a business, business opportunity, or the goodwill of an existing business for others, or who, as owner or otherwise, engages in the sale of real estate as a principal vocation. A real estate salesperson within the meaning of this act is a person who for compensation or valuable consideration is employed either directly or indirectly by a licensed real estate broker to sell or offer to sell, or buy or offer to buy, to appraise or offer to appraise, to list, or offer or attempt to list, or to negotiate the purchase or sale or exchange or mortgage of real estate, or to negotiate for the construction of buildings thereon, or to lease or offer to lease, rent or offer for rent real estate, or who sells or offers for sale, buys or offers to buy, leases or offers to lease, or negotiates the purchase or sale or exchange of a business, business opportunity, or the goodwill of an existing business for others, as a whole or partial vocation. . . .' (emphasis supplied) In addition, section 3 of the act (3) reads as follows: 'One acting for a compensation or valuable consideration of buying or selling real estate of or for another, or offering for another to buy or sell or exchange or mortgage or appraise real estate, or to negotiate for the construction of buildings thereon, or leasing or renting or offering to rent real estate, or selling or offering for sale, or buying or offering to buy, or leasing or offering to lease, or negotiating the purchase or sale or exchange of a business, business opportunity, or the goodwill of an existing business for others, or one who, as owner or otherwise, engages in the sale of real estate as a principal vocation, except as herein specifically excepted, shall constitute the person, firm, partnership association, copartnership, or corporation performing, offering or attempting to perform any of the acts enumerated herein, a real estate broker or a real estate salesperson within the meaning of this act. The commission of a single act prohibited hereunder shall constitute a violation.' (emphasis supplied) In 1 OAG, 1959-1960, No 3401, p 161 (August 14, 1959), the attorney general considered the status of persons who conducted appraisals of real estate for insurance purposes only. The opinion stated that activities performed by insurance appraisers have no relationship to those defined in 1919 PA 306, Sec. 2, supra, stating: 'The purpose of Act 306 is to regulate the activities of those who are engaged in the real estate business. From the definition of Section 2 this business consists generally of selling, buying, appraising, listing, leasing, negotiating the purchase, sale, exchange or mortgaging of real estate, or the construction of buildings thereon. 'Each of the activities defined in Section 2, except that of appraising, has an inherent common characteristic, i.e., they affect the transfer, financing or use of real estate. An appraisal of real estate, however, can be made for purposes other than for the purpose of effecting the transfer, financing, or use thereof. In order to determine the kind of appraisal which is subject to the sanctions of Act 306, the term 'appraises or offers to appraise' in Section 2 should not be read out of context, because it is susceptible, when standing alone, to nuances which are not common to other activities with which it is associated in Section 2. 'The appraisers with which we are concerned in this opinion have no affinity to the activities which are defined in Section 2. They have no relationship to the real estate business as that term is generally understood. The appraisals they make do not affect the transfer, financing or use of real estate.' See also 2 OAG, 1959-1960, No 3484, p 17 (February 9, 1960) which held that persons engaged in the business of appraising property for the establishment of replacement costs for accounting procedures need not be licensed. The appraisals with which we are concerned in this opinion do have an affinity to the activities which are defined in Section 2, supra. The appraisals are conducted for lending institutions for a fee. Clearly said appraisals affect the transfer, financing or use of real estate. Therefore, it is my opinion that persons engaged in the business of appraising real estate for lending institutions for a fee, must be licensed under the provisions of the real estate license law, supra, regardless of the fact that they may be certified as qualified to make assessments for ad valorem tax purposes. Frank J. Kelley Attorney General (1)
(2)
1919 PA 306, Sec. 2; MCLA 451.202; MSA 19.792.(3)
1919 PA 306, Sec. 3; MCLA 451.203; MSA 19.793.