Independent Contractor Agreement (Agent–Broker) — Michigan Edition Template

The agent–broker relationship in U.S. real estate runs on independent contractor status — and that status is legally fragile if the paperwork is wrong. Federal tax law provides a statutory safe harbor: under 26 U.S.C. § 3508, a licensed real estate agent is treated as a non-employee for federal tax purposes if substantially all compensation is tied to sales output rather than hours worked AND there is a written contract providing the agent will not be treated as an employee for federal tax purposes. No written agreement, no safe harbor. State-level classification (wage law, unemployment, workers' comp) adds another layer — many states have real-estate-specific carve-outs from tests like California's ABC test (see Cal. Bus. & Prof. Code § 10032), but those carve-outs typically also require a written independent contractor agreement.

This 7-page agreement is built to hold that status together. It covers: engagement and license status; the § 3508 written-contract language stating the agent will not be treated as an employee for federal tax purposes; commission-based compensation with a defined split schedule and changes-on-notice mechanics; broker supervision duties that coexist with contractor status (license law requires broker supervision — the agreement distinguishes regulatory supervision from employment-style control); expenses, fees, and chargebacks; E&O insurance; lead and listing ownership; conduct, compliance, and fair housing obligations; termination and post-termination commission treatment for pending deals; and dispute resolution.

The 50-state variation notes cover state contractor statutes, workers' comp election rules, and states requiring specific contract language. This is the single most important document in a brokerage's file cabinet — use this template as a strong starting point and have brokerage counsel adapt it to your state.

About this Michigan Edition: the template and its drafting notes are adapted for Michigan practice under Article 25 of the Michigan Occupational Code (MCL 339.2501 et seq.), which governs broker, associate broker, and salesperson licensing and requires that all compensation flow through the employing broker, and under Michigan's agency disclosure statute, MCL 339.2517, which requires the written Disclosure Regarding Real Estate Agency Relationships before a client shares confidential information. Michigan permits dual agency only with the informed written consent of both parties and also recognizes designated agency, so this edition's agency document is a Dual Agency Disclosure & Informed Consent that offers designated agency as the alternative. Seller disclosure follows the Michigan Seller Disclosure Act (MCL 565.951–565.966), with the Seller's Disclosure Statement delivered before a binding purchase agreement and statutory purchaser rescission rights for late delivery. Electronic signatures rely on the Michigan Uniform Electronic Transactions Act (MCL 450.831 et seq.); commission agreements are drafted to satisfy Michigan's statute of frauds (MCL 566.132), and broker lien references are limited to the Commercial Real Estate Broker's Lien Act (MCL 570.581 et seq.). Michigan-specific drafting notes accompany the template for review before use.