1.1 Michigan Department of Licensing and Regulatory Affairs (LARA) Overview
Key Takeaways
- The Department of Licensing and Regulatory Affairs (LARA) regulates real estate licensees in Michigan through its Bureau of Professional Licensing (BPL).
- Real estate licensing is governed by the Occupational Code (Public Act 299 of 1980), Article 25 (MCL 339.2501-2518).
- Michigan regulates through the Board of Real Estate Brokers and Salespersons (9 members) working WITHIN LARA's Bureau of Professional Licensing — there is no separate, independent 'real estate commission.'
- The PSI salesperson exam has 115 scored questions, a 180-minute limit, and requires a 70% scaled score to pass.
- All applications, exam authorizations, and renewals run through the online MiPLUS portal.
Michigan Department of Licensing and Regulatory Affairs (LARA)
The Department of Licensing and Regulatory Affairs (LARA) is the umbrella state agency that licenses and disciplines real estate professionals in Michigan. Within LARA, the Bureau of Professional Licensing (BPL) is the operating unit that actually issues, renews, suspends, and revokes real estate licenses, and that approves the schools that deliver pre-license and continuing education.
A Key Michigan Quirk: A Board, Not an Independent Commission
Many states route real estate regulation through an independent, free-standing real estate commission. Michigan is different. Real estate is overseen by the Board of Real Estate Brokers and Salespersons — a nine-member board (six licensed professionals and three public members, each serving four-year terms, appointed by the Governor and confirmed by the Senate) created under Article 25 of the Occupational Code. Crucially, this Board sits inside LARA's Bureau of Professional Licensing (BPL), which provides its staff and administrative support; it is not a separate agency.
The Board approves real estate course curricula and participates in rulemaking and disciplinary recommendations, while the BPL handles the day-to-day licensing, investigation, and enforcement. Exam items that ask "which body regulates real estate licensees in Michigan" want LARA / the Bureau of Professional Licensing and its Board of Real Estate Brokers and Salespersons, not a generic independent "commission" — a frequent trap for candidates who studied a national-only course.
Statutory Framework
Michigan real estate licensing law lives in a single statute and its rules:
| Source | Citation | What it covers |
|---|---|---|
| Occupational Code | Public Act 299 of 1980 | Master licensing statute for many occupations |
| Article 25 | MCL 339.2501-2518 | Real estate brokers and salespersons specifically |
| Administrative Rules | R 339.22101 et seq. | Detailed conduct, trust account, and education rules |
| General penal provisions | MCL 339.601 | Penalties for unlicensed practice |
Article 25 defines who must be licensed: anyone who, for another and for a fee, sells, lists, leases, negotiates, or holds themselves out as engaging in real estate. Memorize the "for another, for a fee" test — an owner selling their own property is exempt and needs no license.
Disciplinary Authority
LARA may investigate complaints, hold contested-case hearings, and impose sanctions. Under MCL 339.602, the available penalties include:
- Censure or formal reprimand
- Civil fines (commonly up to $10,000 per violation under the Occupational Code's fine schedule)
- Probation with conditions
- License suspension (temporary) or revocation (permanent)
- Restitution to harmed consumers
Exam Tip: Distinguish suspension (license paused, may be reinstated) from revocation (license terminated; reapplication required). Test writers love this pair.
LARA also holds authority to issue cease-and-desist orders against unlicensed practice and to seek summary suspension when public health, safety, or welfare is at immediate risk. Routine matters proceed through the slower contested-case path, while egregious conduct such as misappropriation of escrow can justify an expedited suspension before a full hearing.
How LARA Functions Are Organized
| Function | What LARA / BPL does | Why it matters on the exam |
|---|---|---|
| Licensing | Issues salesperson, broker, associate-broker, and entity licenses | Know which license each role requires |
| Education | Approves pre-license and CE providers; sets clock-hour rules | 40 vs. 90 hours, the 4-hour civil rights rule |
| Enforcement | Investigates complaints, holds hearings, disciplines | Suspension vs. revocation; fine ceilings |
| Rulemaking | Promulgates administrative rules under the Occupational Code | No separate commission does this |
The MiPLUS Portal
Michigan retired its older iCOLA system; today MiPLUS is the single online portal where candidates apply for exam eligibility, where LARA transmits the authorization to test to PSI, and where licensees later renew. You cannot schedule the PSI exam until LARA has pushed your eligibility through MiPLUS.
Filing a Complaint
Consumers and licensees file complaints with the BPL Enforcement Division. LARA reviews, may open an investigation, and (if warranted) issues a formal complaint that proceeds to an administrative hearing before an administrative law judge. The licensee receives notice and an opportunity to respond before any sanction is final.
LARA / BPL quick reference: P.O. Box 30670, Lansing, MI 48909; phone (517) 241-0199; web michigan.gov/lara. These contact details and the MiPLUS portal name are the kind of concrete Michigan facts the state portion rewards.
Who Must Be Licensed — and Who Is Exempt
Article 25 reaches anyone performing real estate acts for another, for compensation. Several roles are statutorily exempt and need no real estate license:
| Party | Licensed needed? | Why |
|---|---|---|
| Owner selling/leasing own property | No | Acting for self, not "for another" |
| Attorney handling real estate in the course of law practice | No | Covered by separate licensure |
| Court-appointed receiver, trustee, executor | No | Acting under court authority |
| Salaried, on-site resident manager of an apartment | No | Narrow statutory exemption |
| Auctioneer at a bona fide auction | Limited | Specific carve-out |
| Person paid a fee to find a buyer/tenant for another | Yes | Classic licensed activity |
Scenario: A property owner pays an unlicensed friend a $1,000 "finder's fee" for bringing a tenant. The friend has performed a licensed act for another for compensation and has engaged in unlicensed practice — a violation LARA can pursue under MCL 339.601, and the fee may be unrecoverable in court.
Which body has primary rulemaking and disciplinary authority over real estate licensees in Michigan?
A LARA hearing results in a licensee's authority being terminated permanently, requiring a brand-new application to ever practice again. This sanction is best described as: