USA Statutes : minnesota
Title : SECURITIES, COMMERCIAL REGULATIONS
Chapter : Real estate brokers and salespersons
82.01 Repealed, 1973 c 410 s 19
82.02 Repealed, 1973 c 410 s 19
82.03 Repealed, 1973 c 410 s 19; 1974 c 406 s 89
82.035 Repealed, 1973 c 410 s 19
82.04 Repealed, 1973 c 410 s 19
82.05 Repealed, 1973 c 410 s 19
82.06 Repealed, 1973 c 410 s 19
82.07 Repealed, 1973 c 410 s 19
82.08 Repealed, 1973 c 410 s 19
82.09 Repealed, 1973 c 410 s 19
82.10 Repealed, 1973 c 410 s 19
82.11 Repealed, 1973 c 410 s 19
82.12 Repealed, 1973 c 410 s 19
82.125 Repealed, 1973 c 410 s 19
82.13 Repealed, 1973 c 410 s 19
82.14 Repealed, 1973 c 410 s 19
82.15 Repealed, 1973 c 410 s 19
82.16 Repealed, 1973 c 410 s 19
82.17 Definitions.
Subdivision 1. Scope. For the purposes of this chapter the terms defined in this section have the meanings given to them.
Subd. 2. MS 2002 Renumbered subd 13
Subd. 2. Business of financial planning. "Business of financial planning" means providing, or offering to provide, financial planning services or financial counseling or advice, on a group or individual basis. A person who, on advertisements, cards, signs, circulars, letterheads, or in any other manner, indicates that the person is a "financial planner,""financial counselor," "financial adviser," "investment counselor," "estate planner," "investment adviser," "financial consultant," or any other similar designation or title or combination thereof, is considered to be representing himself or herself to be engaged in the business of financial planning.
Subd. 3. MS 2002 Renumbered subd 4
Subd. 3. Closing agent; real estate closing agent. "Closing agent" or "real estate closing agent" means any person whether or not acting as an agent for a title company, a licensed attorney, real estate broker, or real estate salesperson, who for another and with or without a commission, fee, or other valuable consideration or with or without the intention or expectation of receiving a commission, fee, or other valuable consideration, directly or indirectly provides closing services incident to the sale, trade, lease, or loan of residential real estate, including drawing or assisting in drawing papers incident to the sale, trade, lease, or loan, or advertises or claims to be engaged in these activities.
Subd. 4. MS 2002 Renumbered subd 18
Subd. 4. Commissioner. "Commissioner" means the commissioner of commerce or a designee.
Subd. 5. MS 2002 Renumbered subd 19
Subd. 5. Dual agency. "Dual agency" means a situation in which a licensee owes a duty to more than one party to the transaction.
Circumstances which establish dual agency include the following:
(1) when one licensee represents both the buyer and the seller in a real estate transaction; or
(2) when two or more licensees, licensed to the same broker, each represent a party to the transaction.
Subd. 6. MS 2002 Renumbered subd 23
Subd. 6. Electronic agent. "Electronic agent" means a computer program or an electronic or other automated means used independently to initiate an action or respond to electronic records or performances, in whole or in part, without review or action by an individual.
Subd. 7. MS 2002 Renumbered subd 24
Subd. 7. Electronic record. "Electronic record" means a record created, generated, sent, communicated, received, or stored by electronic means.
Subd. 8. MS 2002 Renumbered subd 17
Subd. 8. Electronic signature. "Electronic signature"means an electronic sound, symbol, or process attached to or logically associated with a record and executed or adopted by a person with the intent to sign the record.
Subd. 9. MS 2002 Renumbered subd 16
Subd. 9. Licensee. "Licensee" means a person duly licensed under this chapter.
Subd. 10. MS 2002 Renumbered subd 3
Subd. 10. Loan broker. "Loan broker" means a licensed real estate broker or salesperson who, for another and for an advance fee or with the intention or expectation of receiving the same, directly or indirectly, negotiates or offers or attempts to negotiate a loan secured or to be secured by a mortgage or other encumbrance on real estate, or represents himself or herself or otherwise holds himself or herself out as a licensed real estate broker or salesperson, either in connection with any transaction in which he or she directly or indirectly negotiates or offers or attempts to negotiate a loan, or in connection with the conduct of his or her ordinary business activities as a loan broker.
"Loan broker" does not include a licensed real estate broker or salesperson who, in the course of representing a purchaser or seller of real estate, incidentally assists the purchaser or seller in obtaining financing for the real property in question if the licensee does not receive a separate commission, fee, or other valuable consideration for this service.
For the purposes of this subdivision, an "advance fee" means a commission, fee, charge, or compensation of any kind paid before the closing of a loan, that is intended in whole or in part as payment for finding or attempting to find a loan for a borrower. Advance fee does not include pass-through fees or commitment or extended lock fees or other fees as determined by the commissioner.
Subd. 11. MS 2002 Renumbered subd 5
Subd. 11. Overpayment. "Overpayment" means any payment of money in excess of a statutory fee or for a license for which a person does not qualify.
Subd. 12. MS 2002 Renumbered subd 21
Subd. 12. Override clause. "Override clause" means a provision in a listing agreement or similar instrument allowing the broker to receive compensation when, after the listing agreement has expired, the property is sold to persons with whom a broker or salesperson had negotiated or exhibited the property prior to the expiration of the listing agreement.
Subd. 13. Person. "Person" means a natural person, firm, partnership, corporation or association, and the officers, directors, employees and agents thereof.
Subd. 14. Primary broker. "Primary broker" means the broker on whose behalf salespersons are licensed to act pursuant to section 82.43, subdivision 4. In the case of a corporation licensed as a broker, "primary broker" means each officer of the corporation who is individually licensed to act as broker for the corporation. In the case of a partnership, "primary broker" means each partner licensed to act as a broker for the partnership.
Subd. 15. Protective list. "Protective list" means the written list of names and addresses of prospective purchasers with whom a licensee has negotiated the sale or rental of the property or to whom a licensee has exhibited the property before the expiration of the listing agreement. For the purposes of this subdivision, "property" means the property that is the subject of the listing agreement in question.
Subd. 16. Public member. "Public member" means a person who is not, or never was, a real estate broker, real estate salesperson, or a closing agent or the spouse of such person, or a person who has no, or never has had a material financial interest in acting as a real estate broker, real estate salesperson, or a closing agent or a directly related activity.
Subd. 17. Real estate. For purposes of this chapter, "real estate" shall also include a manufactured home, when such manufactured home is affixed to land. Manufactured home means any factory built structure or structures equipped with the necessary service connections and made so as to be readily movable as a unit or units and designed to be used as a dwelling unit or units.
Subd. 18. Real estate broker; broker. "Real estate broker" or "broker" means any person who:
(a) for another and for commission, fee, or other valuable consideration or with the intention or expectation of receiving the same directly or indirectly lists, sells, exchanges, buys or rents, manages, or offers or attempts to negotiate a sale, option, exchange, purchase or rental of an interest or estate in real estate, or advertises or holds out as engaged in these activities;
(b) for another and for commission, fee, or other valuable consideration or with the intention or expectation of receiving the same directly or indirectly negotiates or offers or attempts to negotiate a loan, secured or to be secured by a mortgage or other encumbrance on real estate, which is not a residential mortgage loan as defined by section 58.02, subdivision 18;
(c) "real estate broker" or "broker" as set forth in clause (b) shall not apply to the originating, making, processing, selling, or servicing of a loan in connection with the ordinary business activities of a mortgagee, lender, or servicer approved or certified by the secretary of Housing and Urban Development, or approved or certified by the administrator of Veterans Affairs, or approved or certified by the administrator of the Farmers Home Administration, or approved as a multifamily seller/servicer by the Federal Home Loan Mortgage Corporation, or as a multifamily partner approved by the Federal National Mortgage Association;
(d) for another and for commission, fee, or other valuable consideration or with the intention or expectation of receiving the same directly or indirectly lists, sells, exchanges, buys, rents, manages, offers or attempts to negotiate a sale, option, exchange, purchase or rental of any business opportunity or business, or its good will, inventory, or fixtures, or any interest therein;
(e) for another and for commission, fee, or other valuable consideration or with the intention or expectation of receiving the same directly or indirectly offers, sells or attempts to negotiate the sale of property that is subject to the registration requirements of chapter 83, concerning subdivided land;
(f) for another and for commission, fee, or other valuable consideration or with the intention or expectation of receiving the same, promotes the sale of real estate by advertising it in a publication issued primarily for this purpose, if the person:
(1) negotiates on behalf of any party to a transaction;
(2) disseminates any information regarding the property to any party or potential party to a transaction subsequent to the publication of the advertisement, except that in response to an initial inquiry from a potential purchaser, the person may forward additional written information regarding the property which has been prepared prior to the publication by the seller or broker or a representative of either;
(3) counsels, advises, or offers suggestions to the seller or a representative of the seller with regard to the marketing, offer, sale, or lease of the real estate, whether prior to or subsequent to the publication of the advertisement;
(4) counsels, advises, or offers suggestions to a potential buyer or a representative of the seller with regard to the purchase or rental of any advertised real estate; or
(5) engages in any other activity otherwise subject to licensure under this chapter;
(g) engages wholly or in part in the business of selling real estate to the extent that a pattern of real estate sales is established, whether or not the real estate is owned by the person. A person shall be presumed to be engaged in the business of selling real estate if the person engages as principal in five or more transactions during any 12-month period, unless the person is represented by a licensed real estate broker or salesperson.
Subd. 19. Real estate salesperson. "Real estate salesperson" means one who acts on behalf of a real estate broker in performing any act authorized by this chapter to be performed by the broker.
Subd. 20. Rental service. "Rental service" means a person who gathers and catalogs information concerning apartments or other units of real estate available for rent, and who, for a fee, provides information intended to meet the individual needs of specifically identified lessors or prospective lessees. "Rental service" does not apply to newspapers or other periodicals with a general circulation or individual listing contracts between an owner or lessor of property and a licensee.
Subd. 21. Residential real property or residential real estate. "Residential real property" or "residential real estate" means property occupied by, or intended to be occupied by, one to four families as their residence.
Subd. 22. Sponsor. "Sponsor" means a person offering or providing real estate education.
Subd. 23. Trust account. "Trust account" means, for purposes of this chapter, a savings account, negotiable order of withdrawal account, demand deposit or checking account maintained for the purpose of segregating trust funds from other funds. A trust account must be an interest-bearing account paying the highest current passbook savings account rate of interest and must not allow the financial institution a right of set off against money owed it by the licensee.
Subd. 24. Trust funds. "Trust funds" means funds received by a broker, salesperson, or closing agent in a fiduciary capacity as a part of a real estate or business opportunity transaction, pending the consummation or termination of a transaction, and includes all down payments, earnest money deposits, rents for clients, tax and insurance escrow payments, damage deposits, and any funds received on behalf of any person.
82.175 Repealed, 1998 c 343 art 1 s 18
82.176 Renumbered 82.49
82.18 Civil actions.
Subdivision 1. Compensation actions; proof of license. No person shall bring or maintain any action in the courts of this state for the collection of compensation for the performance of any of the acts for which a license is required under this chapter without alleging and proving that the person was a duly licensed real estate broker, salesperson, or closing agent at the time the alleged cause of action arose.
Subd. 2. Compensation actions; written agreement required. No person required by this chapter to be licensed shall be entitled to or may bring or maintain any action in the courts for any commission, fee or other compensation with respect to the purchase, sale, lease or other disposition or conveyance of real property, or with respect to the negotiation or attempt to negotiate any sale, lease or other disposition or conveyance of real property unless there is a written agreement with the person required to be licensed.
Subd. 3. Compensation actions; residential real property; disclosure of agency. No person required by this chapter to be licensed shall be entitled to bring any action to recover any commission, fee, or other compensation with respect to the purchase, sale, lease, or other disposition or conveyance of residential real property, or with respect to the negotiation or attempt to negotiate any sale, lease, or other disposition or conveyance of residential real property unless the person's agency relationships have been disclosed to the parties to the transaction in accordance with the requirements of this chapter.
Subd. 4. Contract enforcement actions; limitation. No person required to be licensed by this chapter may maintain an action in the courts of this state to enforce any provision of a purchase agreement, earnest money contract, or similar contract for the purchase, rental, or lease of real property if the provision to be enforced violates section 82.41, subdivision 5.
82.19 Compensation.
Subdivision 1. MS 2002 Renumbered 82.41, subdivision 1
Subdivision 1. Licensee to receive only from broker. A licensee shall not accept a commission compensation or other valuable consideration for the performance of any acts requiring a real estate license from any person except the real estate broker to whom the licensee is licensed or to whom the licensee was licensed at the time of the transaction.
Subd. 2. MS 2002 Renumbered 82.41, subd 2
Subd. 2. Undisclosed compensation. A licensee shall not accept, give, or charge any undisclosed compensation or realize any direct or indirect remuneration that inures to the benefit of the licensee on an expenditure made for a principal.
Subd. 3. MS 2002 Renumbered 82.41, subd 3
Subd. 3. Limitation on broker when transaction not completed. When the owner fails or is unable to consummate a real estate transaction, through no fault of the purchaser, the listing broker may not claim any portion of any trust funds deposited with the broker by the purchaser, absent a separate agreement with the purchaser.
Subd. 4. Renumbered 82.41, subd 4
Subd. 4a. Renumbered 82.41, subd 5
Subd. 5. Renumbered 82.41, subd 6
Subd. 6. Renumbered 82.41, subd 7
Subd. 7. Renumbered 82.41, subd 8
Subd. 8. Renumbered 82.41, subd 9
Subd. 9. MS 1993 Supp Repealed, 1994 c 587 art 5 s 31
Subd. 9. MS 2002 Renumbered 82.41, subd 10
82.195 Renumbered 82.21, subd 2
82.196 Renumbered 82.21, subdivision 1
82.197 Renumbered 82.22
82.20 Computation of time.
Subdivision 1. MS 2002 Renumbered 82.34, subdivision 1
Subdivision 1. Days. Where performing or doing any act, duty, matter, payment, or thing is ordered or directed, and the period of time or duration for performing or doing it is prescribed and fixed by law, rule, or order, the time, except as otherwise provided in subdivision 2, is computed so as to exclude the first and include the last day of any such prescribed or fixed period or duration of time. When the last day of the period falls on Sunday or on any day made a legal holiday, by the laws of this state or of the United States, the day is omitted from the computation.
Subd. 2. MS 2002 Renumbered 82.31, subdivision 1
Subd. 2. Months. When the lapse of a number of months before or after a certain day is required by law, rule, or order, the number of months is computed by counting the months from the day, excluding the calendar month in which the day occurs, and including the day of the month in the last month so counted having the same numerical order as the day of the month from which the computation is made, unless there be not so many days in the last month so counted, in which case the period computed shall expire with the last day of the month so counted.
Subd. 3. Renumbered 82.31, subd 2
Subd. 4. Renumbered 82.31, subd 4
Subd. 5. Renumbered 82.34, subd 3
Subd. 6. Renumbered 82.34, subd 4
Subd. 7. Renumbered 82.34, subd 5
Subd. 8. Paragraph (a), renumbered 82.33, subd 2
Paragraph (b), renumbered 82.33, subd 3
Subd. 9. Paragraphs (a) and (b), renumbered 82.34, subd 6
Paragraph (c), renumbered 82.34, subd 10
Subd. 10. Renumbered 82.35, subd 2
Subd. 11. Renumbered 82.39, subdivision 1
Subd. 12. Renumbered 82.34, subd 11
Subd. 13. Renumbered 82.34, subd 13
Subd. 14. Renumbered 82.34, subd 14
Subd. 15. Renumbered 82.34, subd 16
82.21 Contracts.
Subdivision 1. Buyer's broker agreements. (a) Requirements. Licensees shall obtain a signed buyer's broker agreement from a buyer before performing any acts as a buyer's representative and before a purchase agreement is signed.
(b) Contents. All buyer's broker agreements must be in writing and must include:
(1) a definite expiration date;
(2) the amount of any compensation or commission, or the basis for computing the commission;
(3) a clear statement explaining the services to be provided to the buyer by the broker, and the events or conditions that will entitle a broker to a commission or other compensation;
(4) a clear statement explaining if the agreement may be canceled and the terms under which the agreement may be canceled;
(5) information regarding an override clause, if applicable, including a statement to the effect that the override clause will not be effective unless the licensee supplies the buyer with a protective list within 72 hours after the expiration of the buyer's broker agreement;
(6) the following notice in not less than ten point boldface type immediately preceding any provision of the buyer's broker agreement relating to compensation of the licensee:
"NOTICE: THE COMPENSATION FOR THE PURCHASE, LEASE, RENTAL, OR MANAGEMENT OF REAL PROPERTY SHALL BE DETERMINED BETWEEN EACH INDIVIDUAL BROKER AND THE BROKER'S CLIENT.";
(7) the following "dual agency" disclosure statement:
If the buyer(s) choose(s) to purchase a property listed by broker, a dual agency will be created. This means that broker will represent both the buyer(s) and the seller(s), and owe the same duties to the seller(s) that broker owes to the buyer(s). This conflict of interest will prohibit broker from advocating exclusively on the buyer's behalf. Dual agency will limit the level of representation broker can provide. If a dual agency should arise, the buyer(s) will need to agree that confidential information about price, terms, and motivation will still be kept confidential unless the buyer(s) instruct broker in writing to disclose specific information about the buyer(s). All other information will be shared. Broker cannot act as a dual agent unless both the buyer(s) and the seller(s) agree to it. By agreeing to a possible dual agency, the buyer(s) will be giving up the right to exclusive representation in an in-house transaction. However, if the buyer(s) should decide not to agree to a possible dual agency, and the buyer(s) want(s) broker to represent the buyer(s), the buyer(s) may give up the opportunity to purchase the properties listed by broker.
Buyer's Instructions to Broker
....... Buyer(s) will agree to a dual agency representation
and will consider properties listed by broker.
....... Buyer(s) will not agree to a dual agency
representation and will not consider properties listed by broker.
......................... .........................
Buyer Real Estate Company Name
......................... By: ....................
Buyer Salesperson
Date: ...................; and
(8) for buyer's broker agreements which involve residential real property, a notice stating that after the expiration of the buyer's broker agreement, the buyer will not be obligated to pay the licensee a fee or commission if the buyer has executed another valid buyer's broker agreement pursuant to which the buyer is obligated to pay a fee or commission to another licensee for the purchase, lease, or exchange of real property.
(c) Prohibited provisions. Licensees shall not include in a buyer's broker agreement a holdover clause, automatic extension, or any other similar provision, or an override clause the length of which is more than six months after the expiration of the buyer's broker agreement.
(d) Override clauses. Licensees shall not seek to enforce an override clause unless a protective list has been furnished to the buyer within 72 hours after the expiration of the buyer's broker agreement.
(e) Protective lists. A licensee has the burden of demonstrating that each property on the protective list has been shown to the buyer, or specifically brought to the attention of the buyer, during the time the buyer's broker agreement was in effect.
(f) Application. This section applies only to residential real property transactions.
Subd. 2. Listing agreements. (a) Requirement. Licensees shall obtain a signed listing agreement or other signed written authorization from the owner of real property or from another person authorized to offer the property for sale or lease before advertising to the general public that the real property is available for sale or lease.
For the purposes of this section "advertising" includes placing a sign on the owner's property that indicates that the property is being offered for sale or lease.
(b) Contents. All listing agreements must be in writing and must include:
(1) a definite expiration date;
(2) a description of the real property involved;
(3) the list price and any terms required by the seller;
(4) the amount of any compensation or commission or the basis for computing the commission;
(5) a clear statement explaining the events or conditions that will entitle a broker to a commission;
(6) information regarding an override clause, if applicable, including a statement to the effect that the override clause will not be effective unless the licensee supplies the seller with a protective list within 72 hours after the expiration of the listing agreement;
(7) the following notice in not less than ten point boldface type immediately preceding any provision of the listing agreement relating to compensation of the licensee:
"NOTICE: THE COMPENSATION FOR THE SALE, LEASE, RENTAL, OR MANAGEMENT OF REAL PROPERTY SHALL BE DETERMINED BETWEEN EACH INDIVIDUAL BROKER AND THE BROKER'S CLIENT.";
(8) for residential property listings, the following "dual agency" disclosure statement:
If a buyer represented by broker wishes to buy the seller's property, a dual agency will be created. This means that broker will represent both the seller(s) and the buyer(s), and owe the same duties to the buyer(s) that broker owes to the seller(s). This conflict of interest will prohibit broker from advocating exclusively on the seller's behalf. Dual agency will limit the level of representation broker can provide. If a dual agency should arise, the seller(s) will need to agree that confidential information about price, terms, and motivation will still be kept confidential unless the seller(s) instruct broker in writing to disclose specific information about the seller(s). All other information will be shared. Broker cannot act as a dual agent unless both the seller(s) and the buyer(s) agree to it. By agreeing to a possible dual agency, the seller(s) will be giving up the right to exclusive representation in an in-house transaction. However, if the seller(s) should decide not to agree to a possible dual agency, and the seller(s) want broker to represent the seller(s), the seller(s) may give up the opportunity to sell the property to buyers represented by broker.
Seller's Instructions to Broker
Having read and understood this information about dual agency, seller(s) now instructs broker as follows:
....... Seller(s) will agree to a dual agency
representation and will consider offers made
by buyers represented by broker.
....... Seller(s) will not agree to a dual agency
representation and will not consider offers
made by buyers represented by broker.
......................... .........................
Seller Real Estate Company Name
......................... By: ....................
Seller Salesperson
Date: ..................;
(9) a notice requiring the seller to indicate in writing whether it is acceptable to the seller to have the licensee arrange for closing services or whether the seller wishes to arrange for others to conduct the closing; and
(10) for residential listings, a notice stating that after the expiration of the listing agreement, the seller will not be obligated to pay the licensee a fee or commission if the seller has executed another valid listing agreement pursuant to which the seller is obligated to pay a fee or commission to another licensee for the sale, lease, or exchange of the real property in question. This notice may be used in the listing agreement for any other type of real estate.
(c) Prohibited provisions. Except as otherwise provided in paragraph (d), clause (2), licensees shall not include in a listing agreement a holdover clause, automatic extension, or any similar provision, or an override clause the length of which is more than six months after the expiration of the listing agreement.
(d) Override clauses. (1) Licensees shall not seek to enforce an override clause unless a protective list has been furnished to the seller within 72 hours after the expiration of the listing agreement.
(2) A listing agreement may contain an override clause of up to two years in length when used in conjunction with the purchase or sale of a business. The length of the override clause must be negotiable between the licensee and the seller of the business. The protective list provided in connection with the override clause must include the written acknowledgment of each party named on the protective list, that the business which is the subject of the listing agreement was presented to that party by the licensee.
(e) Protective lists. A broker or salesperson has the burden of demonstrating that each person on the protective list has, during the period of the listing agreement, either made an affirmative showing of interest in the property by responding to an advertisement or by contacting the broker or salesperson involved or has been physically shown the property by the broker or salesperson. For the purpose of this section, the mere mailing or other distribution by a licensee of literature setting forth information about the property in question does not, of itself, constitute an affirmative showing of interest in the property on the part of a subsequent purchaser.
For listings of nonresidential real property which do not contain the notice described in paragraph (b), clause (10), the protective list must contain the following notice in boldface type:
"IF YOU RELIST WITH ANOTHER BROKER WITHIN THE OVERRIDE PERIOD AND THEN SELL YOUR PROPERTY TO ANYONE WHOSE NAME APPEARS ON THIS LIST, YOU COULD BE LIABLE FOR FULL COMMISSIONS TO BOTH BROKERS. IF THIS NOTICE IS NOT FULLY UNDERSTOOD, SEEK COMPETENT ADVICE."
82.22 Disclosure requirements.
Subdivision 1. MS 2002 Renumbered 82.29, subdivision 1
Subdivision 1. Advertising. Each licensee shall identify himself or herself as either a broker or an agent salesperson in any advertising for the purchase, sale, lease, exchange, mortgaging, transfer, or other disposition of real property, whether the advertising pertains to the licensee's own property or the property of others.
Subd. 2. MS 2002 Renumbered 82.29, subd 4
Subd. 2. Agency disclosure. A real estate broker or salesperson shall provide to a consumer in the sale and purchase of a residential real property transaction at the first substantive contact with the consumer an agency disclosure form in substantially the form set forth in subdivision 4. The agency disclosure form shall be intended to provide a description of available options for agency and facilitator relationships, and a description of the role of a licensee under each option. The agency disclosure form shall provide a signature line for acknowledgment of receipt by the consumer. The disclosures required by this subdivision apply only to residential real property transactions.
Subd. 3. MS 2002 Renumbered 82.29, subd 7
Subd. 3. Scope and effect. Disclosures made in accordance with the requirements for disclosure of agency relationships set forth in this chapter are sufficient to satisfy common law disclosure requirements.
Subd. 4. MS 2002 Renumbered 82.29, subd 3
Subd. 4. Agency disclosure form. The agency disclosure form shall be in substantially the form set forth below:
AGENCY RELATIONSHIPS IN REAL ESTATE TRANSACTIONS
Minnesota law requires that early in any relationship, real estate brokers or salespersons discuss with consumers what type of agency representation or relationship they desire.(1) The available options are listed below. This is not a contract. This is an agency disclosure form only. If you desire representation, you must enter into a written contract according to state law (a listing contract or a buyer representation contract). Until such time as you choose to enter into a written contract for representation, you will be treated as a customer and will not receive any representation from the broker or salesperson. The broker or salesperson will be acting as a Facilitator (see paragraph V below), unless the broker or salesperson is representing another party as described below.
ACKNOWLEDGMENT: I/We acknowledge that I/We have been presented with the below-described options. I/We understand that until I/We have signed a representation contract, I/We are not represented by the broker/salesperson. I/We understand that written consent is required for a dual agency relationship. THIS IS A DISCLOSURE ONLY, NOT A CONTRACT FOR REPRESENTATION.
............... .......... Signature Date............... .......... Signature Date
I.
Seller's Broker: A broker who lists a property, or a salesperson who is licensed to the listing broker, represents the Seller and acts on behalf of the Seller. A Seller's broker owes to the Seller the fiduciary duties described below.(2) The broker must also disclose to the Buyer material facts as defined in Minnesota Statutes, section 82.22, subdivision 6, of which the broker is aware that could adversely and significantly affect the Buyer's use or enjoyment of the property. If a broker or salesperson working with a Buyer as a customer is representing the Seller, he or she must act in the Seller's best interest and must tell the Seller any information disclosed to him or her, except confidential information acquired in a facilitator relationship (see paragraph V below). In that case, the Buyer will not be represented and will not receive advice and counsel from the broker or salesperson.
II.
Subagent: A broker or salesperson who is working with a Buyer but represents the Seller. In this case, the Buyer is the broker's customer and is not represented by that broker. If a broker or salesperson working with a Buyer as a customer is representing the Seller, he or she must act in the Seller's best interest and must tell the Seller any information that is disclosed to him or her. In that case, the Buyer will not be represented and will not receive advice and counsel from the broker or salesperson.
III.
Buyer's Broker: A Buyer may enter into an agreement for the broker or salesperson to represent and act on behalf of the Buyer. The broker may represent the Buyer only, and not the Seller, even if he or she is being paid in whole or in part by the Seller. A Buyer's broker owes to the Buyer the fiduciary duties described below.(2) The broker must disclose to the Buyer material facts as defined in Minnesota Statutes, section 82.22, subdivision 6, of which the broker is aware that could adversely and significantly affect the Buyer's use or enjoyment of the property. If a broker or salesperson working with a Seller as a customer is representing the Buyer, he or she must act in the Buyer's best interest and must tell the Buyer any information disclosed to him or her, except confidential information acquired in a facilitator relationship (see paragraph V below). In that case, the Seller will not be represented and will not receive advice and counsel from the broker or salesperson.
IV.
Dual Agency-Broker Representing both Seller and Buyer: Dual agency occurs when one broker or salesperson represents both parties to a transaction, or when two salespersons licensed to the same broker each represent a party to the transaction. Dual agency requires the informed consent of all parties, and means that the broker and salesperson owe the same duties to the Seller and the Buyer. This role limits the level of representation the broker and salespersons can provide, and prohibits them from acting exclusively for either party. In a dual agency, confidential information about price, terms, and motivation for pursuing a transaction will be kept confidential unless one party instructs the broker or salesperson in writing to disclose specific information about him or her. Other information will be shared. Dual agents may not advocate for one party to the detriment of the other.(3)
Within the limitations described above, dual agents owe to both Seller and Buyer the fiduciary duties described below.(2) Dual agents must disclose to Buyers material facts as defined in Minnesota Statutes, section 82.22, subdivision 6, of which the broker is aware that could adversely and significantly affect the Buyer's use or enjoyment of the property.
V.
Facilitator: A broker or salesperson who performs services for a Buyer, a Seller, or both but does not represent either in a fiduciary capacity as a Buyer's Broker, Seller's Broker, or Dual Agent. THE FACILITATOR BROKER OR SALESPERSON DOES NOT OWE ANY PARTY ANY OF THE FIDUCIARY DUTIES LISTED BELOW, EXCEPT CONFIDENTIALITY, UNLESS THOSE DUTIES ARE INCLUDED IN A WRITTEN FACILITATOR SERVICES AGREEMENT. The facilitator broker or salesperson owes the duty of confidentiality to the party but owes no other duty to the party except those duties required by law or contained in a written facilitator services agreement, if any. In the event a facilitator broker or salesperson, working with a Buyer, shows a property listed by the facilitator broker or salesperson, then the facilitator broker or salesperson must act as a Seller's Broker (see paragraph I above). In the event a facilitator broker or salesperson, working with a Seller, accepts a showing of the property by a Buyer being represented by the facilitator broker or salesperson, then the facilitator broker or salesperson must act as a Buyer's Broker (see paragraph III above).

(1) This disclosure is required by law in any transaction
involving property occupied or intended to be occupied by one to four
families as their residence. (2) The fiduciary duties mentioned
above are listed below and have the following meanings:
Loyalty-broker/salesperson will act only in client(s)' best interest.Obedience-broker/salesperson will carry out all client(s)' lawful
instructions. Disclosure-broker/salesperson will disclose to
client(s) all material facts of which broker/salesperson has
knowledge which might reasonably affect the client's use and
enjoyment of the property. Confidentiality-broker/salesperson
will keep client(s)' confidences unless required by law to disclose
specific information (such as disclosure of material facts to
Buyers). Reasonable Care-broker/salesperson will use reasonable
care in performing duties as an agent.
Accounting-broker/salesperson will account to client(s) for all
client(s)' money and property received as agent. (3) If
Seller(s) decides not to agree to a dual agency relationship,
Seller(s) may give up the opportunity to sell the property to Buyers
represented by the broker/salesperson. If Buyer(s) decides not to
agree to a dual agency relationship, Buyer(s) may give up the
opportunity to purchase properties listed by the broker. Subd.
5. MS 2002 Renumbered 82.31,
subd 5 Subd. 5. Creation of dual agency. If
circumstances create a dual agency situation, the broker must make
full disclosure to all parties to the transaction as to the change in
relationship of the parties to the broker due to dual agency. A
broker, having made full disclosure, must obtain the consent of all
parties to these circumstances in residential real property
transactions in the purchase agreement in the form set forth below
which shall be set off in a boxed format to draw attention to it:
Broker represents both the seller(s) and the buyer(s) of the property
involved in this transaction, which creates a dual agency. This
means that broker and its salespersons owe fiduciary duties to both
seller(s) and buyer(s). Because the parties may have conflicting
interests, broker and its salespersons are prohibited from advocating
exclusively for either party. Broker cannot act as a dual agent in
this transaction without the consent of both seller(s) and buyer(s).Seller(s) and buyer(s) acknowledge that: (1) confidential
information communicated to broker which regards price, terms, or
motivation to buy or sell will remain confidential unless seller(s)
or buyer(s) instruct(s) broker in writing to disclose this
information. Other information will be shared; (2) broker and
its salespersons will not represent the interests of either party to
the detriment of the other; and (3) within the limits of dual
agency, broker and its salespersons will work diligently to
facilitate the mechanics of the sale. With the knowledge and
understanding of the explanation above, seller(s) and buyer(s)
authorize(s) and instruct(s) broker and its salespersons to act as
dual agents in this transaction. ...............
............... Seller Buyer ...............
............... Seller Buyer ...............
............... Date Date Subd. 6. MS 2002 Renumbered 82.29,
subd 8 Subd. 6. Agent of broker disclosure. A
salesperson shall only conduct business under the licensed name of
and on behalf of the broker to whom the salesperson is licensed. An
individual broker shall only conduct business under the broker's
licensed name. A broker licensed to a corporation or partnership
shall only conduct business under the licensed corporate or
partnership name. A licensee shall affirmatively disclose, before
the negotiation or consummation of any transaction, the licensed name
of the broker under whom the licensee is authorized to conduct
business in accordance with this section. Subd. 7. MS 1992
Repealed, 1993 c 309 s 32 Subd. 7. Financial interests
disclosure; licensee. (a) Prior to the negotiation or
consummation of any transaction, a licensee shall affirmatively
disclose to the owner of real property that the licensee is a real
estate broker or agent salesperson, and in what capacity the licensee
is acting, if the licensee directly, or indirectly through a third
party, purchases for himself or herself or acquires, or intends to
acquire, any interest in, or any option to purchase, the owner's
property. (b) When a principal in the transaction is a licensee
or a relative or business associate of the licensee, that fact must
be disclosed in writing. Subd. 8. MS 2002 Renumbered 82.33,
subdivision 1 Subd. 8. Material facts. (a) Licensees
shall disclose to any prospective purchaser all material facts of
which the licensees are aware, which could adversely and
significantly affect an ordinary purchaser's use or enjoyment of the
property, or any intended use of the property of which the licensees
are aware. (b) It is not a material fact relating to real
property offered for sale the fact or suspicion that the property:(1) is or was occupied by an owner or occupant who is or was
suspected to be infected with human immunodeficiency virus or
diagnosed with acquired immunodeficiency syndrome; (2) was the
site of a suicide, accidental death, natural death, or perceived
paranormal activity; or (3) is located in a neighborhood
containing any adult family home, community-based residential
facility, or nursing home. (c) A licensee or employee of the
licensee has no duty to disclose information regarding an offender
who is required to register under section 243.166,
or about whom notification is made under that section, if the broker
or salesperson, in a timely manner, provides a written notice that
information about the predatory offender registry and persons
registered with the registry may be obtained by contacting local law
enforcement where the property is located or the Department of
Corrections. (d) A licensee is not required to disclose, except
as otherwise provided in paragraph (e), information relating to the
physical condition of the property or any other information relating
to the real estate transaction, if a written report that discloses
the information has been prepared by a qualified third party and
provided to the person. For the purposes of this paragraph,
"qualified third party" means a federal, state, or local governmental
agency, or any person whom the broker, salesperson, or a party to the
real estate transaction reasonably believes has the expertise
necessary to meet the industry standards of practice for the type of
inspection or investigation that has been conducted by the third
party in order to prepare the written report and who is acceptable to
the person to whom the disclosure is being made. (e) A licensee
shall disclose to the parties to a real estate transaction any facts
known by the broker or salesperson that contradict any information
included in a written report, if a copy of the report is provided to
the licensee, described in paragraph (d). (f) The limitation on
disclosures set forth in paragraphs (b) and (c) shall modify any
common law duties with respect to disclosure of material facts.
Subd. 9. MS 2002 Repealed, 2004 c 203 art 2 s 62 Subd. 9.
Nonperformance of any party. If a licensee is put on notice by
any party to a real estate transaction that the party will not
perform in accordance with the terms of a purchase agreement or other
similar written agreement to convey real estate, the licensee shall
immediately disclose the fact of that party's intent not to perform
to the other party or parties to the transaction. Whenever
reasonably possible, the licensee shall inform the party who will not
perform of the licensee's obligation to disclose this fact to the
other party or parties to the transaction prior to making the
disclosure. The obligation required by this section shall not apply
to notice of a party's inability to keep or fulfill any contingency
to which the real estate transaction has been made subject.
Subd. 10. Renumbered 82.33,
subd 4 Subd. 11. Renumbered 82.29,
subd 2 Subd. 12. Renumbered 82.44Subd. 13. Renumbered 82.32
82.23 Exceptions. Unless a person is licensed or
otherwise required to be licensed under this chapter, the term real
estate broker does not include: (a) a licensed practicing
attorney if the attorney complies in all respects with the trust
account provisions of this chapter; (b) a receiver, trustee,
administrator, guardian, executor, or other person appointed by or
acting under the judgment or order of any court; (c) any person
owning and operating a cemetery and selling lots therein solely for
use as burial plots; (d) any custodian, janitor, or employee of
the owner or manager of a residential building who leases residential
units in the building; (e) any bank, trust company, savings
association, industrial loan and thrift company, regulated lender
under chapter 56, public utility, or land mortgage or farm loan
association organized under the laws of this state or the United
States, when engaged in the transaction of business within the scope
of its corporate powers as provided by law; (f) public officers
while performing their official duties; (g) employees of persons
enumerated in clauses (b), (e), and (f), when engaged in the specific
performance of their duties; (h) any person who acts as an
auctioneer bonded in conformity with section 330.02,
when that person is engaged in the specific performance of duties as
an auctioneer, and when that person has been employed to auction real
estate by a person licensed under this chapter or when the auctioneer
has engaged a licensed attorney to supervise the real estate
transaction; (i) any person who acquires real estate for the
purpose of engaging in and does engage in, or who is engaged in the
business of constructing residential, commercial or industrial
buildings for the purpose of resale if no more than 25 such
transactions occur in any 12-month period and the person complies
with section 82.50;(j) any person who is licensed as a securities broker-dealer or
is licensed as a securities agent representing a broker-dealer
pursuant to chapter 80A and who offers to sell or sells an interest
or estate in real estate which is a security as defined in section 80A.14,
subdivision 18, and is registered or exempt from registration or part
of a transaction exempt from registration pursuant to chapter 80A,
when acting solely as an incident to the sale of these securities;(k) any person who offers to sell or sells a business opportunity
which is a franchise registered pursuant to chapter 80C, when acting
solely to sell the franchise; (l) any person who contracts with
or solicits on behalf of a provider a contract with a resident or
prospective resident to provide continuing care in a facility,
pursuant to the Continuing Care Facility Disclosure and
Rehabilitation Act (chapter 80D), when acting solely as incident to
the contract; (m) any broker-dealer or agent of a broker-dealer
when participating in a transaction in which all or part of a
business opportunity or business, including any interest therein, is
conveyed or acquired pursuant to an asset purchase, merger, exchange
of securities, or other business combination, if the agent or
broker-dealer is licensed pursuant to chapter 80A; (n) an
accountant acting incident to the practice of the accounting
profession if the accountant complies in all respects with the trust
account provisions of this chapter.
82.24 Fees. Subdivision 1. MS 2002 Renumbered 82.50,
subdivision 1 Subdivision 1. Amounts. The following fees
shall be paid to the commissioner: (a) a fee of $150 for each
initial individual broker's license, and a fee of $100 for each
renewal thereof; (b) a fee of $70 for each initial salesperson's
license, and a fee of $40 for each renewal thereof; (c) a fee of
$85 for each initial real estate closing agent license, and a fee of
$60 for each renewal thereof; (d) a fee of $150 for each initial
corporate, limited liability company, or partnership license, and a
fee of $100 for each renewal thereof; (e) a fee for payment to
the education, research and recovery fund in accordance with section
82.43;(f) a fee of $20 for each transfer; (g) a fee of $50 for
license reinstatement; and (h) a fee of $20 for reactivating a
corporate, limited liability company, or partnership license without
land. Subd. 2. MS 2002 Renumbered 82.50,
subd 2 Subd. 2. Forfeiture. All fees shall be retained
by the commissioner and shall be nonreturnable, except that an
overpayment of any fee shall be the subject of a refund upon proper
application. Subd. 3. MS 2002 Renumbered 82.50,
subd 3 Subd. 3. Broker payment consolidation. For all
license renewal fees, recovery fund renewal fees, and recovery fund
assessments pursuant to this section and section 82.43,
the broker must remit the fees or assessments for the company,
broker, and all salespersons licensed to the broker, in the form of a
single check. Subd. 4. MS 2002 Renumbered 82.50,
subd 4 Subd. 4. Deposit of fees. Unless otherwise
provided by this chapter, all fees collected under this chapter shall
be deposited in the state treasury. Subd. 5. MS 2002 Renumbered
82.50,
subd 5 Subd. 5. Initial license expiration; fee
reduction. If an initial license issued under subdivision 1,
paragraph (a), (b), (c), or (d) expires less than 12 months after
issuance, the license fee shall be reduced by an amount equal to
one-half the fee for a renewal of the license. Subd. 6. MS 2002
Renumbered 82.50,
subd 6 Subd. 6. Cash not accepted. All fees must be paid
by check, draft, credit card, or other negotiable or nonnegotiable
instrument or order of withdrawal that is drawn against funds held by
a financial institution. Cash will not be accepted. Subd. 7.
MS 2002 Renumbered 82.50,
subd 7 Subd. 7. Overpayment of fees. An overpayment of a
fee paid pursuant to this chapter shall be refunded within a
reasonable time after a letter requesting the refund is received by
the commissioner and signed by the person making the overpayment.Refunds shall not be given for other than overpayment of fees. A
request for a refund of an overpayment must be received by the
commissioner within six months of the date of deposit or it will be
forfeited. Subd. 8. Renumbered 82.50,
subd 8
82.26 Repealed, 1987 c 336 s 47
82.27 Guaranteed sale programs. If a broker
advertises or offers a guaranteed sale program, or other program
whereby the broker undertakes to purchase real property in the event
he or she is unable to effectuate a sale to a third party within a
specified period of time, a written disclosure that sets forth
clearly and completely the general terms and conditions under which
the broker agrees to purchase the property and the disposition of any
profit at the time of resale by the broker must be provided to the
seller prior to the execution of a listing agreement.
82.28 Renumbered
82.29 Licensing; examinations and instruction. Subdivision
1. Generally. Each applicant for a license must pass an
examination conducted by the commissioner. The examinations shall be
of sufficient scope to establish the competency of the applicant to
act as a real estate broker or a real estate salesperson. Subd.
2. Examination eligibility; revocation. No applicant shall
be eligible to take any examination if a license as a real estate
broker or salesperson has been revoked in this or any other state
within two years of the date of the application. Subd. 3.
Examination frequency. The commissioner shall hold examinations
at such times and places as the commissioner may determine, except
that said examinations will be held at least every 45 days.
Subd. 4. Broker's examination. (a) The examination for a
real estate broker's license shall be more exacting than that for a
real estate salesperson, and shall require a higher degree of
knowledge of the fundamentals of real estate practice and law.
(b) Every application for a broker's examination shall be accompanied
by proof that the applicant has had a minimum of two years of actual
experience within the previous five-year period prior to application
as a licensed real estate salesperson in this or in another state
having comparable requirements or is, in the opinion of the
commissioner, otherwise or similarly qualified by reason of education
or practical experience. The applicant shall have completed
educational requirements in accordance with subdivision 8. An
applicant for a limited broker's license pursuant to section 82.34,
subdivision 13, shall not be required to have a minimum of two years
of actual experience as a real estate person in order to obtain a
limited broker's license to act as principal only. Subd. 5.
Waivers. The commissioner may waive the real estate licensing
experience requirement for the broker's examination. (a) An
applicant for a waiver shall provide evidence of: (1) successful
completion of a minimum of 90 quarter credits or 270 classroom hours
of real estate-related studies; (2) a minimum of five consecutive
years of practical experience in real estate-related areas; or
(3) successful completion of 30 credits or 90 classroom hours and
three consecutive years of practical experience in real
estate-related areas. (b) A request for a waiver shall be
submitted to the commissioner in writing and be accompanied by
documents necessary to evidence qualification as set forth in
paragraph (a). (c) The waiver will lapse if the applicant fails
to successfully complete the broker's examination within one year
from the date of the granting of the waiver. Subd. 6.
Passing grade for examination. A passing grade for a
salesperson's and broker's examination shall be a score of 75 percent
or higher on the uniform portion and a score of 75 percent or higher
on the state portion of the examination. The commissioner shall
not accept the scores of a person who has cheated on an examination.
Cheating on a real estate examination shall be grounds for denying an
application for a broker's or salesperson's license. Subd. 7.Reexaminations. An examination may be required before the
renewal of any license which has been suspended, or before the
issuance of a license to any person whose license has been
ineffective for a period of two years, except no reexamination shall
be required of any individual who has failed to cause renewal of an
existing license because of absence from the state while on active
duty with the armed services of the United States of America, and no
reexamination shall be required of an individual whose license has
not been renewed under section 82.35,
subdivision 9. Subd. 8. Instruction; new licenses. (a)
Every applicant for a salesperson's license shall be required to
successfully complete a course of study in the real estate field
consisting of 30 hours of instruction approved by the commissioner
before taking the examination specified in subdivision 1. Every
applicant for a salesperson's license shall be required to
successfully complete an additional course of study in the real
estate field consisting of 60 hours of instruction approved by the
commissioner, of which three hours shall consist of training in state
and federal fair housing laws, regulations, and rules, and of which
two hours must consist of training in laws and regulations on agency
representation and disclosure, before filing an application for the
license. This subdivision does not apply to salespeople licensed in
Minnesota before July 1, 1969. (b) An applicant for a broker's
license must successfully complete a course of study in the real
estate field consisting of 30 hours of instruction approved by the
commissioner, of which three hours shall consist of training in state
and federal fair housing laws, regulations, and rules. The course
must have been completed within 12 months prior to the date of
application for the broker's license. (c) An applicant for a
real estate closing agent's license must successfully complete a
course of study relating to closing services consisting of eight
hours of instruction approved by the commissioner. 82.30
Subdivision 1. Repealed, 1993 c 337 s 20 Subd. 2. Repealed, 1975
c 315 s 26 Subd. 3. Repealed, 1975 c 315 s 26
82.31 Licensing: application. Subdivision 1.
Qualification of applicants. Every applicant for a real estate
broker, real estate salesperson, or real estate closing agent license
shall be at least 18 years of age at the time of making application
for said license. Subd. 2. Application for license;
contents. (a) Every applicant for a license as a real estate
broker, real estate salesperson, or closing agent shall make an
application in writing upon forms prepared and furnished by the
commissioner. Each application shall be signed and sworn to by the
applicant and shall be accompanied by the license fee required by
this chapter. (b) Each application for a real estate broker
license, real estate salesperson license, or real estate closing
agent license shall contain such information as required by the
commissioner consistent with the administration of the provisions and
purposes of this chapter. (c) Each application for a real estate
salesperson license shall give the applicant's name, age, residence
address, and the name and place of business of the real estate broker
on whose behalf the salesperson is to be acting. (d) Each
application for a real estate closing agent license shall give the
applicant's name, age, residence address, and the name and place of
business of the closing agent. (e) The commissioner may require
such further information as the commissioner deems appropriate to
administer the provisions and further the purposes of this chapter.(f) Applicants for a real estate salesperson license shall submit
to the commissioner, along with the application for licensure, a copy
of the course completion certificate for courses I, II, and III.
Subd. 3. Application for broker's license. After successful
completion of the real estate broker's examination, an individual
shall have one year from the date of the examination to apply for a
broker's license, unless the individual is a salesperson who remains
continuously active in the real estate field as a licensee. Failure
to apply for the broker's license or to remain continuously active in
the real estate field will necessitate a reexamination. Subd. 4.Corporate and partnership licenses. (a) A corporation
applying for a license shall have at least one officer individually
licensed to act as broker for the corporation. The corporation
broker's license shall extend no authority to act as broker to any
person other than the corporate entity. Each officer who intends to
act as a broker shall obtain a license. (b) A partnership
applying for a license shall have at least one partner individually
licensed to act as broker for the partnership. Each partner who
intends to act as a broker shall obtain a license. (c)
Applications for a license made by a corporation shall be verified by
the president and one other officer. Applications made by a
partnership shall be verified by at least two partners. (d) Any
partner or officer who ceases to act as broker for a partnership or
corporation shall notify the commissioner upon said termination. The
individual licenses of all salespersons acting on behalf of a
corporation or partnership, are automatically ineffective upon the
revocation or suspension of the license of the partnership or
corporation. The commissioner may suspend or revoke the license of
an officer or partner without suspending or revoking the license of
the corporation or partnership. (e) The application of all
officers of a corporation or partners in a partnership who intend to
act as a broker on behalf of a corporation or partnership shall
accompany the initial license application of the corporation or
partnership. Officers or partners intending to act as brokers
subsequent to the licensing of the corporation or partnership shall
procure an individual real estate broker's license prior to acting in
the capacity of a broker. No corporate officer who maintains a
salesperson's license may exercise any authority over any trust
account administered by the broker nor may they be vested with any
supervisory authority over the broker. (f) The corporation or
partnership applicant shall make available upon request, such records
and data required by the commissioner for enforcement of this
chapter. (g) The commissioner may require further information,
as the commissioner deems appropriate, to administer the provisions
and further the purposes of this chapter. Subd. 5. Period
for application. An applicant who obtains an acceptable score on
a salesperson's examination must file an application and obtain the
license within one year of the date of successful completion of the
examination or a second examination must be taken to qualify for the
license. Subd. 6. Change of application information.
The commissioner must be notified in writing of a change of
information contained in the license application on file with the
commissioner within ten days of the change. 82.32 Licensing: continuing education and instruction. (a)
All real estate salespersons and all real estate brokers shall be
required to successfully complete 30 hours of real estate continuing
education, either as a student or a lecturer, in courses of study
approved by the commissioner, during the initial license period and
during each succeeding 24-month license period. At least 15 of the
30 credit hours must be completed during the first 12 months of the
24-month licensing period. Licensees may not claim credit for
continuing education not actually completed as of the date their
report of continuing education compliance is filed. (b) The
commissioner may adopt rules defining the standards for course and
instructor approval, and may adopt rules for the proper
administration of prelicense instruction as required under section 82.29,
subdivision 8, and continuing education as required under this
section and sections 82.29;
82.31,
subdivisions 5 and 6; 82.33,
subdivisions 1 and 4 to 6; and 82.44.
The commissioner may not approve a course which can be completed by
the student at home or outside the classroom without the supervision
of an instructor except accredited courses using new delivery
technology, including interactive technology, and the Internet. The
commissioner may approve courses of study in the real estate field
offered in educational institutions of higher learning in this state
or courses of study in the real estate field developed by and offered
under the auspices of the National Association of Realtors, its
affiliates, or private real estate schools. Courses in motivation,
salesmanship, psychology, or time management shall not be approved by
the commissioner for continuing education credit. The commissioner
may approve courses in any other subjects, including, but not limited
to, communication, marketing, negotiation, and technology for
continuing education credit. (c) Any program approved by
Minnesota continuing legal education shall be approved by the
commissioner of commerce for continuing education for real estate
brokers and salespeople if the program or any part thereof relates to
real estate. (d) As part of the continuing education
requirements of this section and sections 82.29;
82.31,
subdivisions 5 and 6; 82.33,
subdivisions 1 and 4 to 6; and 82.44,
the commissioner shall require that all real estate brokers and
salespersons receive: (1) at least one hour of training during
each license period in courses in laws or regulations on agency
representation and disclosure; and (2) at least one hour of
training during each license period in courses in state and federal
fair housing laws, regulations, and rules, other antidiscrimination
laws, or courses designed to help licensees to meet the housing needs
of immigrant and other underserved populations. Clauses (1) and
(2) do not apply to real estate salespersons and real estate brokers
engaged solely in the commercial real estate business who file with
the commissioner a verification of this status along with the
continuing education report required under paragraph (a). (e)
The commissioner is authorized to establish a procedure for renewal
of course accreditation. (f) Approved continuing education
courses may be sponsored or offered by a broker of a real estate
company and may be held on the premises of a company licensed under
this chapter. All continuing education course offerings must be open
to any interested individuals. Access may be restricted by the
sponsor based on class size only. Courses must not be approved if
attendance is restricted to any particular group of people. A broker
must comply with all continuing education rules prescribed by the
commissioner. The commissioner shall not approve any prelicense
instruction courses offered by, sponsored by, or affiliated with any
person or company licensed to engage in the real estate business.(g) Credit may not be earned if the licensee has previously
obtained credit for the same course as either a student or instructor
during the same licensing period. (h) The real estate education
course completion certificate must be in the form set forth by the
commissioner. Students are responsible for maintaining copies of
course completion certificates. 82.33 Licensing: renewal. Subdivision 1. Duration.
No renewal of a salesperson's license shall be effective beyond a
date two years after the granting of such salesperson's license
unless the salesperson has furnished evidence of compliance with
section 82.29,
subdivision 8. The commissioner shall cancel the license of any
salesperson who fails to comply with section 82.29,
subdivision 8. This subdivision shall not apply to salespeople
licensed in Minnesota prior to July 1, 1969. Subd. 2.
Timely renewals. Persons whose applications have been properly
and timely filed who have not received notice of denial of renewal
are deemed to have been approved for renewal and may continue to
transact business either as a real estate broker, salesperson, or
closing agent whether or not the renewed license has been received on
or before July 1 of the renewal year. Application for renewal of a
license shall be deemed to have been timely filed if received by the
commissioner by, or mailed with proper postage and postmarked by,
June 15 of the renewal year. Applications for renewal shall be
deemed properly filed if made upon forms duly executed and sworn to,
accompanied by fees prescribed by this chapter and contain any
information which the commissioner may require. Subd. 3.
Failure to renew. Persons who have failed to make a timely
application for renewal of a license and who have not received the
renewal license as of July 1 of the renewal year, shall be unlicensed
until such time as the license has been issued by the commissioner
and is received. Subd. 4. Renewal; examination. Except
as provided in section 82.29,
subdivision 7, no examination shall be required for the renewal of
any license, provided, however, any licensee having been licensed as
a broker or salesperson in the state of Minnesota and who shall fail
to renew the license for a period of two years shall be required by
the commissioner to again take an examination. Subd. 5.
Failure to renew license. If a license lapses or becomes
ineffective due to the licensee's failure to file a timely renewal
application or otherwise, the commissioner may institute a revocation
or suspension proceeding within two years after the license was last
effective and enter a revocation or suspension order as of the last
date on which the license was in effect. Subd. 6.
Cancellation of salesperson's or broker's license. A
salesperson's or broker's license that has been canceled for failure
of a licensee to complete postlicensing education requirements must
be returned to the commissioner by the licensee's broker within ten
days of receipt of notice of cancellation. The license shall be
reinstated without reexamination by completing the required
instruction, filing an application, and paying the fee for a
salesperson's or broker's license within two years of the
cancellation date. 82.34 Licensing; other requirements. Subdivision 1. MS 2002
Renumbered 82.43,
subdivision 1 Subdivision 1. Generally. (a) The
commissioner shall issue a license as a real estate broker, real
estate salesperson, or closing agent to any person who qualifies for
such license under the terms of this chapter. (b) The
commissioner is authorized to establish by rule a special license for
real estate brokers and real estate salespeople engaged solely in the
rental or management of an interest or estate in real estate, to
prescribe qualifications for the license, and to issue the license
consistent with the terms of this chapter. This clause shall not be
construed to require those owners or managers or their agents or
employees who are excluded by section 82.23,
clause (d), from the definition of real estate broker, to obtain the
special license. Subd. 2. MS 2002 Renumbered 82.43,
subd 2 Subd. 2. Additional broker's license. An
individual who holds a broker's license in his or her own name or for
or on behalf of a corporation or partnership must be issued an
additional broker's license only upon demonstrating that the
additional license is necessary in order to serve a legitimate
business purpose; that the broker will be capable of supervising all
salespersons over whom he or she will have supervisory responsibility
or, in the alternative, that the broker will have no supervisory
responsibilities under the additional license; and that the broker
has a substantial ownership interest in each corporation or
partnership for or on whose behalf he or she holds or will hold a
broker's license. The requirement of a substantial ownership
interest does not apply where the broker seeking the additional
license or licenses is an officer of a corporation for or on whose
behalf the broker already holds a license and the broker is applying
for the additional license or licenses for or on behalf of an
affiliated corporation or corporations of which he or she is also an
officer. For the purpose of this section and sections 82.31,
subdivisions 1 to 4; 82.33,
subdivisions 1 to 3; 82.35,
subdivision 2; and 82.39,
"affiliated corporation" means a corporation which is directly or
indirectly controlled by the same persons as the corporation for or
on whose behalf the broker is already licensed to act. For the
purposes of this section and sections 82.31,
subdivisions 1 to 4; 82.33,
subdivisions 1 to 3; 82.35,
subdivision 2; and 82.39,
a legitimate business purpose includes engaging in a different and
specialized area of real estate or maintaining an existing business
name. Subd. 3. MS 2002 Renumbered 82.43,
subd 3 Subd. 3. Responsibility. Each broker shall be
responsible for the acts of any and all of the broker's sales people
and closing agents while acting as agents on the broker's behalf.
Each officer of a corporation or partner in a partnership licensed as
a broker shall have the same responsibility under this chapter as a
corporate or partnership broker with regard to the acts of the
salespeople and closing agents acting on behalf of the corporation or
partnership. Subd. 4. MS 2002 Renumbered 82.43,
subd 4 Subd. 4. Issuance of license; salesperson. A
salesperson must be licensed to act on behalf of a licensed broker
and may not be licensed to act on behalf of more than one broker in
this state during the same period of time. The license of each real
estate salesperson shall be mailed to and remain in the possession of
the licensed broker with whom the salesperson is or is to be
associated until canceled or until such licensee leaves such broker.Subd. 5. MS 2002 Renumbered 82.43,
subd 5 Subd. 5. Effective date of license. Licenses
renewed pursuant to this chapter are valid for a period of 24 months.
New licenses issued during a 24-month licensing period will expire on
June 30 of the expiration year assigned to the license.
Implementation of the 24-month licensing program must be staggered so
that approximately one-half of the licenses will expire on June 30 of
each even-numbered year and the other one-half on June 30 of each
odd-numbered year. Those licensees who will receive a 12-month
license on July 1, 1995, because of the staggered implementation
schedule will pay for the license a fee reduced by an amount equal to
one-half the fee for renewal of the license. Subd. 6. MS 2002
Renumbered 82.43,
subd 6 Subd. 6. Terminations; transfers. (a) Except as
provided in paragraph (b), when a salesperson terminates activity on
behalf of a broker, the salesperson's license shall be ineffective.
Within ten days of the termination the broker shall notify the
commissioner in writing, and shall return to the commissioner the
license of the salesperson. The salesperson may apply for transfer
of the license to another broker at any time during the remainder of
the license period, on forms provided by the commissioner. If the
application for transfer qualifies, the commissioner shall grant the
application. Upon receipt of a transfer application and payment of
the transfer fee, the commissioner may issue a 45-day temporary
license. If an application for transfer is not made within the
license period, the commissioner shall require that an application
for a new license be filed. (b) When a salesperson terminates
activity on behalf of a broker in order to begin association
immediately with another broker, the commissioner shall permit the
automatic transfer of the salesperson's license. The transfer shall
be effective either upon the mailing of the required fee and the
executed documents by certified mail or upon personal delivery of the
fee and documents to the commissioner's office. The commissioner may
adopt rules and prescribe forms as necessary to implement this
paragraph. Subd. 7. MS 2002 Renumbered 82.43,
subd 7 Subd. 7. Automatic transfer of salesperson's
license. A salesperson may utilize the automatic license transfer
provisions of subdivision 6, clause (b), if the salesperson commences
association with the broker to whom the salesperson is transferring,
as evidenced by the dates of the signatures of both brokers on the
form prescribed by the commissioner, within five days after
terminating the salesperson's association with the broker from whom
the salesperson is transferring, provided the salesperson's
educational requirements are not past due. A salesperson may not
utilize the automatic license transfer provisions of subdivision 6,
clause (b), if the sales person has failed to notify the commissioner
within ten days of any change of information contained in the
salesperson's license application on file with the commissioner or of
a civil judgment, disciplinary action, or criminal offense, which
notice is required pursuant to section 82.39,
subdivision 1. Subd. 7a. Renumbered 82.43,
subd 8 Subd. 8. MS 2002 Renumbered 82.43,
subd 9 Subd. 8. Procedure. An application for automatic
transfer shall be made only on the form prescribed by the
commissioner. The transfer is ineffective if the form is not
completed in its entirety. The form shall be accompanied by a
$10 transfer fee, and the license renewal fee, if applicable. Cash
will not be accepted. The signature of the broker from whom the
salesperson is transferring must predate the signature of the broker
to whom the salesperson is transferring. The salesperson is
unlicensed for the period of time between the times and dates of both
signatures. The broker from whom the salesperson is transferring
shall sign and date the transfer application upon the request of the
salesperson and shall destroy the salesperson's license immediately.Subd. 9. MS 2002 Renumbered 82.43,
subd 10 Subd. 9. Effective date. (a) The transfer is
effective when the broker to whom the salesperson is transferring
signs and dates the transfer application form, provided the
commissioner receives the form and fee within 72 hours after the date
and time of the new broker's signature, either by certified mail, or
personal delivery to the commissioner's office. The commissioner may
accept an application for license transfer made by an electronic
agent or an electronic record with an electronic signature if the
commissioner has the capability of accepting the application
electronically. In the event of a delay in mail delivery, an
application postmarked within 24 hours of the date of the signature
of the new broker shall be deemed timely received. The properly
executed automatic transfer form serves as a temporary real estate
license for no more than 45 days. (b) The transfer is
ineffective if the fee is paid by means of a check, draft, or other
negotiable or nonnegotiable instrument or order of withdrawal drawn
on an account with insufficient funds. (c) The salesperson shall
retain the certified mail return receipt, if the transfer application
is delivered to the commissioner by mail, retain a photocopy of the
executed transfer application, and provide a photocopy of the
executed transfer application to the broker from whom the salesperson
is transferring. (d) The real estate salesperson automatic
transfer must be in the form prescribed by the commissioner.
Subd. 10. MS 2002 Renumbered 82.43,
subd 11 Subd. 10. Automatic transfer of broker's
license. When a broker terminates activity in order to begin
association with another broker, the commissioner shall permit the
automatic transfer of the broker's license to a salesperson's
license. If there are licensed salespeople working for the broker,
the broker shall certify that a broker will remain in the company
that the broker is leaving prior to issuance of the transfer. The
transfer shall be effective either upon the mailing of the required
fee and the executed documents by certified mail or upon personal
delivery of the fee and documents to the commissioner's office.
Subd. 11. MS 2002 Renumbered 82.43,
subd 12 Subd. 11. Nonresidents. A nonresident of
Minnesota may be licensed as a real estate broker, real estate
salesperson, or a real estate closing agent upon compliance with all
provisions of this chapter. Subd. 12. MS 1988 Repealed, 1989 c
347 s 43 Subd. 12. Temporary broker's permit. In the
event of death or incapacity of a broker, the commissioner may issue
a 45-day temporary permit to an individual who has had a minimum of
two years actual experience as a licensed real estate salesperson and
who is otherwise reasonably qualified to act as a broker. Upon
application prior to its expiration, the 45-day temporary permit
shall be renewed once by the commissioner if the applicant
demonstrates that he or she has made a good faith effort to obtain a
broker's license within the preceding 45 days and an extension of
time will not harm the public interest. Only those salespersons
licensed to the deceased or incapacitated broker at the time of death
or incapacity may conduct business for or on behalf of the person to
whom the temporary broker's license was issued. Subd. 13. MS
2002 Renumbered 82.43,
subd 13 Subd. 13. Limited broker's license. (a) The
commissioner shall have the authority to issue a limited real estate
broker's license authorizing the licensee to engage in transactions
as principal only. Such license shall be issued only after receipt
of the application described in section 82.31,
subdivision 2, and payment of the fee prescribed by section 82.24,
subdivision 1. No salesperson may be licensed to act on behalf of an
individual holding a limited broker's license. An officer of a
corporation or partner of a partnership licensed as a limited broker
may act on behalf of that corporation or partnership without being
subject to the licensing requirements. (b) A limited broker's
license shall also authorize the licensee to engage in negotiation of
mortgage loans, other than residential mortgage loans, as described
in section 82.17,
subdivision 18, clause (b). Subd. 14. MS 2002 Renumbered 82.43,
subd 14 Subd. 14. Licenses; extending duration.
Notwithstanding the provisions of subdivision 5 and section 82.33,
subdivisions 2 and 3, the commissioner may institute a system by rule
pursuant to chapter 14 to provide three year licenses from the date
of issuance for any license prescribed by this section and sections
82.31,
subdivisions 1 to 4; 82.33,
subdivisions 1 to 3; 82.35,
subdivision 2; and 82.39.Subd. 15. MS 2002 Renumbered 82.43,
subd 15 Subd. 15. Withdrawal of license or application.
A licensee or license applicant may at any time file with the
commissioner a request to withdraw from the status of licensee or to
withdraw a pending license application. Withdrawal from the status
of licensee or withdrawal of the license application becomes
effective 30 days after receipt of a request to withdraw or within a
shorter period the commissioner determines unless a revocation,
suspension, or denial proceeding is pending when the request to
withdraw is filed or a proceeding to revoke, suspend, deny, or to
impose conditions upon the withdrawal is instituted within 30 days
after the request to withdraw is filed. If a proceeding is pending
or instituted, withdrawal becomes effective at the time and upon the
conditions the commissioner determines by order. If no proceeding is
pending or instituted and withdrawal automatically becomes effective,
the commissioner may institute a revocation or suspension proceeding
within one year after withdrawal became effective and enter a
revocation or suspension order as of the last date on which the
license was in effect. Subd. 16. MS 2002 Renumbered 82.43,
subd 16 Subd. 16. Exemption. The following persons, when
acting as closing agents, are exempt from the requirements of
sections 82.41
and 82.50
unless otherwise required in this chapter: (1) a direct employee
of a title insurance company authorized to do business in this state,
or a direct employee of a title company, or a person who has an
agency agreement with a title insurance company or a title company in
which the agent agrees to perform closing services on the title
insurance company's or title company's behalf and the title insurance
company or title company assumes responsibility for the actions of
the agent as if the agent were a direct employee of the title
insurance company or title company; (2) a licensed attorney or a
direct employee of a licensed attorney; (3) a licensed real
estate broker or salesperson; (4) a direct employee of a licensed
real estate broker if the broker maintains all funds received in
connection with the closing services in the broker's trust account;(5) any bank, trust company, savings association, credit union,
industrial loan and thrift company, regulated lender under chapter
56, public utility, or land mortgage or farm loan association
organized under the laws of this state or the United States, when
engaged in the transaction of businesses within the scope of its
corporate powers as provided by law; (6) a title insurance
company authorized to do business in this state; and (7) a title
company that has a contractual agency relationship with a title
insurance company authorized to do business in this state, where the
title insurance company assumes responsibility for the actions of the
title company and its employees or agents as if they were the
employees or agents of the title insurance company. Subd. 17.
Renumbered 82.43,
subd 17 Subd. 18. Renumbered 82.43,
subd 18 Subd. 19. Renumbered 82.43,
subd 19 Subd. 20. Repealed, 1992 c 555 art 1 s 13
82.35 Licensing: denial, suspension and revocation of licenses. Subdivision 1. General authority. The commissioner
may by order deny, suspend or revoke any license or may censure a
licensee if the commissioner finds (1) that the order is in the
public interest, and (2) that the applicant or licensee or, in the
case of a broker, any officer, director, partner, employee or agent
or any person occupying a similar status or performing similar
functions, or any person directly or indirectly controlling the
broker or closing agent or controlled by the broker or closing agent:(a) has filed an application for a license which is incomplete in
any material respect or contains any statement which, in light of the
circumstances under which it is made, is false or misleading with
respect to any material fact; (b) has engaged in a fraudulent,
deceptive, or dishonest practice; (c) is permanently or
temporarily enjoined by any court of competent jurisdiction from
engaging in or continuing any conduct or practice involving any
aspect of the real estate business; (d) has failed to reasonably
supervise brokers, salespersons, or closing agents so as to cause
injury or harm to the public; (e) has violated or failed to
comply with any provision of this chapter or any rule or order under
this chapter; (f) has, in the conduct of the licensee's affairs
under the license, been shown to be incompetent, untrustworthy, or
financially irresponsible; (g) has acted on behalf of any party
to a transaction, where the licensee has a conflict of interest that
may affect the licensee's ability to represent that party, without
the knowledge and consent of the party; or (h) has, while
performing residential mortgage activities regulated under chapter 58
violated any provision of chapter 58. Subd. 2. Effect of
suspension or revocation. The license of a salesperson is not
effective during any period for which the license of the broker on
whose behalf the salesperson is acting is suspended or revoked. The
salesperson may apply for transfer to some other licensed broker by
complying with section 82.34,
subdivisions 6 and 10. Subd. 3. Regulation of practice;
rulemaking. The commissioner may promulgate rules further
specifying and defining those actions and omissions which constitute
fraudulent, deceptive, or dishonest practices, and establishing
standards of conduct for real estate brokers, salespeople, or closing
agents. Subd. 4. Monetary settlements. The commissioner
shall not coerce or attempt to coerce a licensee to enter into any
monetary settlement with a consumer in connection with any complaint
investigation. The commissioner may consider the totality of the
circumstances, including any efforts by the licensee to mitigate any
losses by a consumer, in determining the appropriateness or severity
of administrative sanction. Subd. 5. Order to show
cause. The commissioner shall issue an order requiring a licensee
or applicant for a license to show cause why the license should not
be revoked or suspended, or the licensee censured, or the application
denied. The order shall be calculated to give reasonable notice of
the time and place for hearing thereon, and shall state the specific
statute or rule that has been violated for the entry of the order.
The commissioner may by order summarily suspend a license pending
final determination of any order to show cause. If a license is
suspended pending final determination of an order to show cause, a
hearing on the merits shall be held within 30 days of the issuance of
the order of suspension. All hearings shall be conducted in
accordance with the provisions of chapter 14. After the hearing, the
commissioner shall enter an order making such disposition of the
matter as the facts require. If the licensee or applicant fails to
appear at a hearing after having been duly notified of it, such
person shall be deemed in default, and the proceeding may be
determined against the licensee or applicant upon consideration of
the order to show cause, the allegations of which may be deemed to be
true. Subd. 6. ALJ hearing. The commissioner may
delegate to an administrative law judge the authority to conduct a
hearing. The examiner shall make proposed findings of fact and
submit them to the commissioner. The examiner shall have the same
power as the commissioner to compel the attendance of witnesses, to
examine them under oath, to require the production of books, papers
and other evidence, and to issue subpoenas and cause the same to be
served and executed in any part of the state. Subd. 7.
Judicial review of orders. Orders of the commissioner shall be
subject to judicial review pursuant to chapter 14. Subd. 8.
Hearing procedures; rulemaking. The commissioner may promulgate
rules of procedure concerning all hearings and other proceedings
conducted pursuant to this chapter. Subd. 9. Tax clearance
certificate. (a) In addition to the provisions of subdivision 1,
the commissioner may not issue or renew a license if the commissioner
of revenue notifies the commissioner and the licensee or applicant
for a license that the licensee or applicant owes the state
delinquent taxes in the amount of $500 or more. The commissioner may
issue or renew the license only if (1) the commissioner of revenue
issues a tax clearance certificate and (2) the commissioner of
revenue or the licensee or applicant forwards a copy of the clearance
to the commissioner. The commissioner of revenue may issue a
clearance certificate only if the licensee or applicant does not owe
the state any uncontested delinquent taxes. (b) For purposes of
this subdivision, the following terms have the meanings given.
(1) "Taxes" are all taxes payable to the commissioner of revenue,
including penalties and interest due on those taxes. (2)
"Delinquent taxes" do not include a tax liability if (i) an
administrative or court action that contests the amount or validity
of the liability has been filed or served, (ii) the appeal period to
contest the tax liability has not expired, or (iii) the licensee or
applicant has entered into a payment agreement to pay the liability
and is current with the payments. (c) In lieu of the notice and
hearing requirements of subdivisions 5, 6, 7, and 8 when a licensee
or applicant is required to obtain a clearance certificate under this
subdivision, a contested case hearing must be held if the licensee or
applicant requests a hearing in writing to the commissioner of
revenue within 30 days of the date of the notice provided in
paragraph (a). The hearing must be held within 45 days of the date
the commissioner of revenue refers the case to the Office of
Administrative Hearings. Notwithstanding any law to the contrary,
the licensee or applicant must be served with 20 days' notice in
writing specifying the time and place of the hearing and the
allegations against the licensee or applicant. The notice may be
served personally or by mail. (d) The commissioner shall require
all licensees or applicants to provide their Social Security number
and Minnesota business identification number on all license
applications. Upon request of the commissioner of revenue, the
commissioner must provide to the commissioner of revenue a list of
all licensees and applicants, including the name and address, Social
Security number, and business identification number. The
commissioner of revenue may request a list of the licensees and
applicants no more than once each calendar year. Subd. 10.
Revocations. If the commissioner finds that any licensee or
applicant is no longer in existence or has ceased to do business as a
broker or salesperson or is subject to an adjudication of mental
incompetence or to the control of a committee, conservator, or
guardian, or cannot be located after reasonable search, the
commissioner may by order revoke the license or deny the application.
82.36 Loan brokers. Subdivision 1. Compliance. Loan
brokers shall comply with the requirements of subdivisions 2 to 7.Subd. 2. Contract provisions. A loan broker shall enter
into a written contract with each customer and shall provide a copy
of the written contract to each customer at or before the time of
receipt of any fee or valuable consideration paid for loan brokerage
services. The written contract shall: (1) identify the escrow
account into which the fees or consideration will be deposited;
(2) set forth the circumstances under which the loan broker will be
entitled to disbursement from the escrow account; (3) set forth
the circumstances under which the customer will be entitled to a
refund of all or part of the fee; (4) specifically describe the
services to be provided by the loan broker and the dates by which the
services will be performed; (5) state the maximum rate of
interest to be charged on any loan obtained; (6) contain a
statement which notifies the customer of his or her rights to cancel
the contract pursuant to subdivision 3; (7) disclose, with
respect to the 12-month period ending ten business days prior to the
date of the contract in question, the percentage of the loan broker's
customers for whom loans have actually been funded as a result of the
loan broker's services. This disclosure need not be made for any
period prior to September 8, 1986; and (8) disclose the
cancellation rights and procedures set forth in subdivision 3.
Subd. 3. Cancellation. Any customer of a loan broker who
pays a fee prior to the time a loan is actually funded shall have an
unconditional right to rescind the contract for loan brokerage
services at any time until midnight of the third business day after
the day on which the contract is signed. Cancellation is evidenced
by the customer giving written notice of cancellation to the loan
broker at the address stated in the contract. Notice of
cancellation, if given by mail, is effective upon deposit in a
mailbox properly addressed to the loan broker with postage prepaid.
Notice of cancellation need not take a particular form and is
sufficient if it indicates by any form of written expression the
intention of the customer not to be bound by the contract. No act of
a customer of a loan broker shall be effective to waive the right to
rescind as provided in this subdivision. Subd. 4. Escrow
account. The loan broker shall deposit in an escrow account
within 48 hours all fees received prior to the time a loan is
actually funded. The escrow account shall be in a bank located
within the state of Minnesota and shall be controlled by an
unaffiliated accountant, lawyer, or bank. Subd. 5.
Records. The loan broker shall maintain a separate record of all
fees received for services performed or to be performed as a loan
broker. Each record shall set forth the date funds are received, the
person from whom the funds are received, the amount received, the
date of deposit in the escrow account, the account number, the date
the funds are disbursed and the check number of the disbursement, and
a description of each disbursement and the justification for the
disbursement. Subd. 6. Monthly statement. The loan
broker shall provide to each customer at least monthly a detailed
written accounting of all disbursements of the customer's funds from
the trust account. Subd. 7. Disclosure of lenders. The
loan broker shall provide to each customer at the expiration of the
contract a list of the lenders or loan sources to whom loan
applications were submitted on behalf of the customer.
82.37 Negotiations. Subdivision 1. Written offers. All
written offers to purchase or lease shall be promptly submitted in
writing to the seller or lessor. Subd. 2. Nondisclosure of
terms of offer. A licensee shall not disclose the terms of an
offer to another prospective buyer or the licensee representing or
assisting the buyer prior to the presentation of the offer to the
seller. Subd. 3. Closing costs. Licensees shall
disclose to a buyer or a seller at or before the time an offer is
written or presented that the buyer or seller may be required to pay
certain closing costs, which may effectively reduce the proceeds from
the sale or increase the cash outlay at closing. Subd. 4.
Required documents. Licensees shall furnish to the parties to the
transaction at the time the documents are signed or become available
a true and accurate copy of listing agreements, earnest money
receipts, purchase agreements, contracts for deed, option agreements,
closing statements, truth-in-housing forms, energy audits, and any
other record, instrument, or document that is material to the
transaction and that is in the licensee's possession. Subd. 5.Closing statement. The listing broker or his or her designee
shall deliver to the seller, at the time of closing, a complete and
detailed closing statement setting forth all of the receipts and
disbursements handled by the broker for the seller. The listing
broker shall also deliver to the buyer, at the time of closing, a
complete and detailed statement setting forth the disposition of all
money received in the transaction from the buyer. 82.38 Nonresident service of process. Subdivision 1.
Appointment of agent. Every nonresident, before being licensed as
a real estate broker, real estate salesperson, or real estate closing
agent shall appoint the commissioner and a successor or successors in
office as true and lawful attorney, upon whom may be served all legal
process in any action or proceedings against such person, or in which
such person may be a party, in relation to or involving any
transaction covered by this chapter or any rule or order hereunder,
which appointment shall be irrevocable. Service upon such attorney
shall be as valid and binding as if due and personal service had been
made upon such person. Any such appointment shall be effective upon
the issuance of the license in connection with which the appointment
was filed. Subd. 2. Violation as appointment. The
commission of any act which constitutes a violation of this chapter
or rule or order hereunder by any nonresident person who has not
theretofore appointed the commissioner as attorney in compliance with
subdivision 1 shall be conclusively deemed an irrevocable appointment
by such person of the commissioner and a successor or successors in
any action or proceedings against the nonresident or in which the
nonresident may be a party in relation to or involving such
violation; and such violation shall be a signification of agreement
that all such legal process which is so served shall be as valid and
binding upon the nonresident as if due and personal service thereof
had been made. Subd. 3. How made. Service of process
under this section shall be made in compliance with section 45.028,
subdivision 2. 82.39 Notice to commissioner. Subdivision 1. Notice.
Notice in writing shall be given to the commissioner by each licensee
of any change in personal name, trade name, address or business
location not later than ten days after such change. The commissioner
shall issue a new license if required for the unexpired period.
Subd. 2. Mandatory. Licensees shall notify the commissioner
of the facts in subdivisions 3 to 5. Subd. 3. Civil
judgment. Licensees must notify the commissioner in writing
within ten days of a final adverse decision or order of a court,
whether or not the decision or order is appealed, regarding any
proceeding in which the licensee was named as a defendant, and which
alleged fraud, misrepresentation, or the conversion of funds, if the
final adverse decision relates to the allegations of fraud,
misrepresentation, or the conversion of funds. Subd. 4.
Disciplinary action. The licensee must notify the commissioner in
writing within ten days of the suspension or revocation of the
licensee's real estate or other occupational license issued by this
state or another jurisdiction. Subd. 5. Criminal
offense. The licensee must notify the commissioner in writing
within ten days if the licensee is charged with, adjudged guilty of,
or enters a plea of guilty or nolo contendere to a charge of any
felony, or of any gross misdemeanor alleging fraud,
misrepresentation, conversion of funds, or a similar violation of any
real estate licensing law. 82.40 Penalty. Any person who violates any provision of this
chapter, or any rule or order of the commissioner, shall be guilty of
a gross misdemeanor. 82.41 Prohibitions. Subdivision 1. License required. No
person shall act as a real estate broker, salesperson, or real estate
closing agent unless licensed as herein provided. Subd. 2.
Misrepresenting status as licensee. No persons shall advertise or
represent themselves to be real estate brokers, salespeople, or
closing agents unless licensed as herein provided. Subd. 3.
Commission-splitting, rebates, and fees. No real estate broker,
salesperson, or closing agents shall offer, pay, or give, and no
person shall accept, any compensation or other thing of value from
any real estate broker, salesperson, or closing agents by way of
commission-splitting, rebate, finder's fees, or otherwise, in
connection with any real estate or business opportunity transaction.
This subdivision does not apply to transactions (1) between a
licensed real estate broker or salesperson and the parties to the
transaction, (2) among persons licensed as provided herein, (3)
between a licensed real estate broker or salesperson and persons from
other jurisdictions similarly licensed in that jurisdiction, (4)
involving timeshare or other recreational lands where the amount
offered or paid does not exceed $150, and payment is not conditioned
upon any sale but is made merely for providing the referral and the
person paying the fee is bound by any representations the person
receiving the fee makes, and (5) involving a person who receives a
referral fee from a person or an agent of a person licensed under
this section, provided that in any 12-month period, no recipient may
earn more than the value of one month's rent, that the recipient is a
resident of the property or has lived there within 60 days of the
payment of the fee, and that the person paying the fee is bound by
any representations made by the recipient of the fee. A licensed
real estate broker or salesperson may assign or direct that
commissions or other compensation earned in connection with any real
estate or business opportunity transaction be paid to a corporation,
limited liability company, or sole proprietorship of which the
licensed real estate broker or salesperson is the sole owner.
Subd. 4. Authorizing or engaging unlicensed person to act on
licensee's behalf. No real estate broker, salesperson, or closing
agent shall engage or authorize any person, except one licensed as
provided herein, to act as a real estate broker, salesperson, or
closing agent on the engager's or authorizer's behalf. Subd. 5.Self-serving provision prohibited. No purchase agreement,
earnest money contract, or similar contract for the purchase, rental,
or lease of real property may contain any hold harmless clause or
arbitration clause which addresses the rights or liabilities of
persons required to be licensed pursuant to this chapter unless the
person required to be licensed is a principal in the transaction.This does not prohibit separate and independent written
agreements between any of the parties and persons required to be
licensed pursuant to this chapter. Subd. 6. Disclosure
regarding representation of parties. (a) No person licensed
pursuant to this chapter or who otherwise acts as a real estate
broker or salesperson shall fail to provide at the first substantive
contact with a consumer in a residential real property transaction an
agency disclosure form as set forth in section 82.22.(b) The seller may, in the listing agreement, authorize the
seller's broker to disburse part of the broker's compensation to
other brokers, including the buyer's brokers solely representing the
buyer. Subd. 7. Closing agents. A real estate closing
agent may not charge a fee for closing services to a borrower, and a
borrower may not be required to pay such a fee at settlement, if the
fee was not previously disclosed in writing at least one business day
before the settlement. This disclosure requirement will be
considered satisfied if a disclosure is made or an estimate given
under section 507.45.Subd. 8. Securities sold by businesses outside scope of
licensing. A license issued under this chapter does not allow a
licensee to engage in the business of buying, selling, negotiating,
brokering, or otherwise dealing in vendor's interests in contracts
for deed, mortgagee's interests in mortgages, or other evidence of
indebtedness regarding real estate, except that a licensee may, if
there is no compensation in addition to the brokerage commission or
fee, and if the licensee represents the seller, buyer, lessor, or
lessee in the sale, lease, or exchange of real estate, arrange for
the sale of a contract, mortgage, or similar evidence of indebtedness
for the subject property. Subd. 9. Closing services. No
real estate broker, salesperson, or closing agent shall require a
person to use any particular lender, licensed attorney, real estate
broker, real estate salesperson, real estate closing agent, or title
company in connection with a residential real estate closing.
Subd. 10. Exclusive agreements. (a) Except as provided in
paragraph (c), a licensee shall not negotiate the sale, exchange,
lease, or listing of any real property directly with the owner or
lessor knowing that the owner or lessor has executed a written
contract granting exclusive representation or assistance in
connection with the property to another real estate broker, buyer, or
lessee, nor shall a licensee negotiate the purchase, lease, or
exchange of real property knowing that the buyer or lessee has
executed a written contract granting exclusive representation or
assistance for the purchase, lease, or exchange of the real property
with another real estate broker. (b) Licensees shall not induce
any party to a contract of sale, purchase, lease, or option, or to an
exclusive listing agreement or buyer's agreement, or facilitator
services agreement, to breach the contract, option, or agreement.(c) A licensee may discuss the terms upon which a listing or
buyer representation contract or a contract for facilitator services
may be entered into after expiration of any existing exclusive
contract when the inquiry or discussion is initiated by the owner,
lessor, buyer, or lessee. The licensee must inquire of the owner,
lessor, buyer, or lessee whether such an exclusive contract exists.Subd. 11. Prohibition on guaranteeing future profits.
Licensees shall not, with respect to the sale or lease of real
property, guarantee or affirmatively encourage another person to
guarantee future profits or earnings that may result from the
purchase or lease of the real property in question unless the
guarantee and the assumptions upon which it is based are fully
disclosed and contained in the contract, purchase agreement, or other
instrument of sale or lease. Subd. 12. Prohibition against
discouraging use of attorney. Licensees shall not discourage
prospective parties to a real estate transaction from seeking the
services of an attorney. Subd. 13. Fraudulent, deceptive,
and dishonest practices. (a) Prohibitions. For the
purposes of section 82.35,
subdivision 1, clause (b), the following acts and practices
constitute fraudulent, deceptive, or dishonest practices: (1) act
on behalf of more than one party to a transaction without the
knowledge and consent of all parties; (2) act in the dual
capacity of licensee and undisclosed principal in any transaction;(3) receive funds while acting as principal which funds would
constitute trust funds if received by a licensee acting as an agent,
unless the funds are placed in a trust account. Funds need not be
placed in a trust account if a written agreement signed by all
parties to the transaction specifies a different disposition of the
funds, in accordance with section 82.35,
subdivision 1; (4) violate any state or federal law concerning
discrimination intended to protect the rights of purchasers or
renters of real estate; (5) make a material misstatement in an
application for a license or in any information furnished to the
commissioner; (6) procure or attempt to procure a real estate
license for himself or herself or any person by fraud,
misrepresentation, or deceit; (7) represent membership in any
real estate-related organization in which the licensee is not a
member; (8) advertise in any manner that is misleading or
inaccurate with respect to properties, terms, values, policies, or
services conducted by the licensee; (9) make any material
misrepresentation or permit or allow another to make any material
misrepresentation; (10) make any false or misleading statements,
or permit or allow another to make any false or misleading
statements, of a character likely to influence, persuade, or induce
the consummation of a transaction contemplated by this chapter;
(11) fail within a reasonable time to account for or remit any money
coming into the licensee's possession which belongs to another;
(12) commingle with his or her own money or property trust funds or
any other money or property of another held by the licensee; (13)
demand from a seller a commission to compensation which the licensee
is not entitled, knowing that he or she is not entitled to the
commission compensation; (14) pay or give money or goods of value
to an unlicensed person for any assistance or information relating to
the procurement by a licensee of a listing of a property or of a
prospective buyer of a property (this item does not apply to money or
goods paid or given to the parties to the transaction); (15) fail
to maintain a trust account at all times, as provided by law;
(16) engage, with respect to the offer, sale, or rental of real
estate, in an anticompetitive activity; (17) represent on
advertisements, cards, signs, circulars, letterheads, or in any other
manner, that he or she is engaged in the business of financial
planning unless he or she provides a disclosure document to the
client. The document must be signed by the client and a copy must be
left with the client. The disclosure document must contain the
following: (i) the basis of fees, commissions, or other
compensation received by him or her in connection with rendering of
financial planning services or financial counseling or advice in the
following language: "My compensation may be based on the
following: (a) ... commissions generated from the products I sell
you; (b) ... fees; or (c) ... a combination of (a) and (b).Comments "; (ii) the name and address of any company or
firm that supplies the financial services or products offered or sold
by him or her in the following language: "I am authorized to
offer or sell products and/or services issued by or through the
following firm(s): List The products will be traded,
distributed, or placed through the clearing/trading firm(s) of: List "; (iii) the license(s) held by the person under
this chapter or chapter 60A or 80A in the following language: "I
am licensed in Minnesota as a(n): (a) ... insurance agent;
(b) ... securities agent or broker/dealer; (c) ... real estate
broker or salesperson; (d) ... investment adviser"; and (iv)
the specific identity of any financial products or services, by
category, for example mutual funds, stocks, or limited partnerships,
the person is authorized to offer or sell in the following language:"The license(s) entitles me to offer and sell the following
products and/or services: (a) ... securities, specifically the
following: List ; (b) ... real property; (c) ...
insurance; and (d) ... other: List ." (b)
Determining violation. A licensee shall be deemed to have
violated this section if the licensee has been found to have violated
sections 325D.49
to 325D.66,
by a final decision or order of a court of competent jurisdiction.(c) Commissioner's authority. Nothing in this section
limits the authority of the commissioner to take actions against a
licensee for fraudulent, deceptive, or dishonest practices not
specifically described in this section.
82.42 Publication of information. The commissioner may publish by
newspaper, newsletter or otherwise information to assist in the
administration of this chapter, or to educate and protect the public
regarding fraudulent, deceptive or dishonest practices. The
commissioner may also publish materials for the benefit of license
applicants. 82.43 Real estate education, research and recovery fund.
Subdivision 1. Administration. There is established a "real
estate education, research and recovery fund" to be administered by
the commissioner of commerce. The commissioner of finance shall be
the custodian of the fund and shall operate under the direction of
the commissioner. Subd. 2. Creation. There is hereby
created in the state treasury a real estate education, research and
recovery fund which shall be administered by the commissioner in the
manner and for the purposes prescribed in this section. Subd. 3.Fee for real estate fund. Each real estate broker, real
estate salesperson, and real estate closing agent entitled under this
chapter to renew a license shall pay in addition to the appropriate
renewal fee a further fee of $20 per licensing period which shall be
credited to the real estate education, research, and recovery fund.
Any person who receives an initial license shall pay, in addition to
all other fees payable, a fee of $30. Subd. 4. Additional
assessment. If the amount in the fund is at any time less than
the commissioner believes is necessary to carry out the purposes of
this section every licensee, when renewing a license, shall pay, in
addition to the annual renewal fee and the fee set forth in
subdivision 3, an assessment not to exceed $100, said sum having been
reasonably determined by the commissioner to be necessary to restore
a balance in the fund of an amount adequate to carry out the purposes
of this section. Subd. 5. Investment of funds. Any
funds shall, upon request of the commissioner, be invested by the
state Board of Investment in the class of securities specified in
section 11A.24
and acts amendatory thereto. All interest and profits from such
investments shall be credited to the real estate education, research
and recovery fund. The commissioner of finance shall be the
custodian of securities purchased under the provisions of this
section. Subd. 6. Authorized expenditures. The
commissioner may expend money as appropriated for the following
purposes: (a) to promote the advancement of education and
research in the field of real estate for the benefit of those
licensed under this chapter; (b) to underwrite educational
seminars and other forms of educational projects for the benefit of
real estate licensees; (c) to establish a real estate chair or
courses at Minnesota state institutions of higher learning for the
purpose of making such courses available to licensees and the general
public; (d) to contract for a particular educational or research
project in the field of real estate to further the purposes of this
chapter; (e) to pay any reasonable costs and disbursements,
excluding attorney's fees, incurred in defending actions against the
real estate education, research and recovery fund including the cost
of mailing or publication of notice pursuant to subdivision 14; and(f) to provide information to the public on housing issues,
including but not limited to, environmental safety and housing
affordability. Subd. 7. Application for recovery. When
any aggrieved person obtains a final judgment in any court of
competent jurisdiction regardless of whether the judgment has been
discharged by a bankruptcy court against an individual licensed under
this chapter, on grounds of fraudulent, deceptive, or dishonest
practices, or conversion of trust funds arising directly out of any
transaction when the judgment debtor was licensed and performed acts
for which a license is required under this chapter, or performed acts
permitted by section 327B.04,
subdivision 5, the aggrieved person may, upon the judgment becoming
final, and upon termination of all proceedings, including reviews and
appeals, file a verified application in the court in which the
judgment was entered. The application shall state with specificity
the grounds upon which the application seeks to recover from the
fund, and request an order directing payment out of the fund of the
amount of actual and direct out of pocket loss in the transaction,
but excluding any attorney's fees, interest on the loss and on any
judgment obtained as a result of the loss, up to the sum of $150,000
of the amount unpaid upon the judgment, provided that nothing in this
chapter shall be construed to obligate the fund for more than
$150,000 per claimant, per transaction, subject to the limitations
set forth in subdivision 14, regardless of the number of persons
aggrieved or parcels of real estate involved in the transaction,
provided that regardless of the number of claims against a licensee,
nothing in this chapter may obligate the fund for more than $250,000
per licensee. An aggrieved person who has a cause of action under
section 80A.23
shall first seek recovery as provided in section 80A.05,
subdivision 5, before the commissioner may order payment from the
recovery fund. For purposes of this section, persons who are joint
tenants or tenants in common are deemed to be a single claimant. A
copy of the verified application shall be served upon the
commissioner and upon the judgment debtor, and a certificate or
affidavit of service filed with the court. For the purpose of this
section, "aggrieved person" does not include a government agency,
financial institution, or other entity that purchases, guarantees, or
insures a loan secured by real estate, and does not include a
licensee unless (1) the licensee is acting in the capacity of
principal in the sale of interests in real property owned by the
licensee; or (2) the licensee is acting in the capacity of principal
in the purchase of interests in real property to be owned by the
licensee. Under no circumstances shall a licensee be entitled to
payment under this section for the loss of a commission or similar
fee. For the purposes of this section, recovery is limited to
transactions where the property involved is intended for the direct
personal habitation or commercial use of the buyer. Except for
securities permitted to be sold by a licensee pursuant to section 82.41,
subdivision 8, for any action commenced after July 1, 1993, recovery
under this section is not available where the buyer's participation
is for investment purposes only, and is limited to providing capital
to fund the transaction. Subd. 8. Accelerated claims
payment. (a) The commissioner shall pay claims from the recovery
portion of the fund that do not exceed the jurisdiction limits for
conciliation court matters as specified in section 491A.01
on an accelerated basis if all of the requirements in subdivision 7
and paragraphs (b) to (f) have been satisfied. (b) When any
aggrieved person as defined in subdivision 7 obtains a judgment in
any court of competent jurisdiction, regardless of whether the
judgment has been discharged by a bankruptcy court against a licensee
on grounds specified in subdivision 7, the aggrieved person may file
a verified application with the commissioner for payment out of the
recovery portion of the fund of the amount of actual and direct
out-of-pocket loss in the transaction, but excluding any attorney
fees, interest on the loss, and on any judgment obtained as a result
of the loss, up to the conciliation court jurisdiction limits, of the
amount unpaid upon the judgment. For purposes of this section,
persons who are joint tenants or tenants in common are deemed to be a
single claimant. (c) The commissioner shall send the licensee a
copy of the verified application by first-class mail to the
licensee's address as it appears in the records of the Department of
Commerce with a notice that the claim will be paid 15 days from the
date of the notice unless the licensee notifies the commissioner
before that date of the commencement of an appeal of the judgment, if
the time for appeal has not expired, and that payment of the claim
will result in automatic suspension of the licensee's license.
(d) If the licensee does not notify the commissioner of the
commencement of an appeal, the commissioner shall pay the claim at
the end of the 15-day period. (e) If an appeal is commenced, the
payment of the claim is stayed until the conclusion of the appeal.(f) The commissioner may pay claims which total no more than
$50,000 against the licensee under this accelerated process. The
commissioner may prorate the amount of claims paid under this
subdivision if claims in excess of $50,000 against the licensee are
submitted. Any unpaid portions of these claims must be satisfied in
the manner set forth in subdivision 7. Subd. 9. Application
hearing. The court shall conduct a hearing upon such application
30 days after service of the application upon the commissioner. Upon
petition of the commissioner, the court shall continue the hearing up
to 60 days further; and upon a showing of good cause may continue the
hearing for such further period as the court deems appropriate. At
the hearing the aggrieved person shall be required to show that the
person: (a) is not a spouse of debtor, or the personal
representative of such spouse; (b) has complied with all the
requirements of this section; (c) has obtained a judgment as set
out in subdivision 7, stating the amount thereof and the amount owing
thereon at the date of the application; (d) has made all
reasonable searches and inquiries to ascertain whether the judgment
debtor is possessed of real or personal property or other assets,
liable to be sold or applied in satisfaction of the judgment; (e)
by such search has discovered no personal or real property or other
assets liable to be sold or applied, or has discovered certain of
them, describing them, owned by the judgment debtor and liable to be
so applied, and has taken all necessary action and proceedings for
the realization thereof, and that the amount thereby realized was
insufficient to satisfy the judgment, stating the amount so realized
and the balance remaining due on the judgment after application of
the amount realized; (f) has diligently pursued remedies against
all the judgment debtors and all other persons liable to that person
in the transaction for which that person seeks recovery from the real
estate education, research and recovery fund; (g) is making said
application no more than one year after the judgment becomes final,
or no more than one year after the termination of any review or
appeal of the judgment. Subd. 10. Effect of judgment.
Whenever the court proceeds upon an application as set forth in
subdivision 7, it shall order payment out of the fund only upon a
determination that the aggrieved party has a valid cause of action
within the purview of subdivision 7 and has complied with the
provisions of subdivision 9. The judgment shall be only prima facie
evidence of such cause of action and for the purposes of this section
shall not be conclusive. The commissioner may defend any such action
on behalf of the fund and shall have recourse to all appropriate
means of defense and review including examination of witnesses. The
commissioner may move the court at any time to dismiss the
application when it appears there are no triable issues and the
petition is without merit. The motion may be supported by affidavit
of any person or persons having knowledge of the facts, and may be
made on the basis that the petition, and the judgment referred to
therein, does not form the basis for a meritorious recovery claim
within the purview of subdivision 7; provided, however, the
commissioner shall give written notice at least ten days before such
motion. The commissioner may, subject to court approval, compromise
a claim based upon the application of an aggrieved party but shall
not be bound by any prior compromise or stipulation of the judgment
debtor. Subd. 11. Commissioner's duties. The
commissioner may defend any such action on behalf of the fund and
shall have recourse to all appropriate means of defense and review,
including examination of witnesses. The judgment debtor may defend
any such action on the debtor's own behalf and shall have recourse to
all appropriate means of defense and review, including examination of
witnesses. Whenever an applicant's judgment is by default,
stipulation, or consent, or whenever the action against the licensee
was defended by a trustee in bankruptcy, the applicant shall have the
burden of proving the cause of action for fraudulent, deceptive or
dishonest practices, or conversion of trust funds. Otherwise, the
judgment shall create a rebuttable presumption of the fraudulent,
deceptive or dishonest practices, or conversion of trust funds. This
presumption is a presumption affecting the burden of producing
evidence. Subd. 12. Payment order. If the court finds
after the hearing that said claim should be levied against the fund,
the court shall enter an order directed to the commissioner requiring
payment from the fund of whatever sum it shall find to be payable
upon the claim pursuant to the provisions of and in accordance with
the limitations contained in this section. Subd. 13.
License suspension. Should the commissioner pay from the recovery
portion of the fund any amount in settlement of a claim or toward
satisfaction of a judgment against a licensee, the license shall be
automatically suspended upon the effective date of an order by the
court as set forth herein authorizing payment from the recovery
portion of the fund. No broker, salesperson, or closing agent shall
be granted reinstatement until the person has repaid in full, plus
interest at the rate of 12 percent a year, twice the amount paid from
the fund on the person's account, and has obtained a surety bond
issued by an insurer authorized to transact business in this state in
the amount of $40,000. The bond shall be filed with the
commissioner, with the state of Minnesota as obligee, conditioned for
the prompt payment to any aggrieved person entitled thereto, of any
amounts received by the real estate broker, salesperson, or closing
agent or to protect any aggrieved person from loss resulting from
fraudulent, deceptive, or dishonest practices or conversion of trust
funds arising out of any transaction when the real estate broker or
salesperson was licensed and performed acts for which a license is
required under this chapter. The bond shall remain operative for as
long as that real estate broker, salesperson, or closing agent is
licensed. No payment shall be made from the fund based upon claims
against any broker, salesperson, or closing agent who is granted
reinstatement pursuant to this subdivision. A discharge in
bankruptcy shall not relieve a person from the penalties and
disabilities provided in this section. Subd. 14.
Satisfaction of claims. The commissioner shall satisfy all claims
against licensees for which an order pursuant to subdivision 12
directing payment from the recovery portion of the fund has become
final during the calendar year. Each claim shall be satisfied by the
commissioner by July 15 of the calendar year after the year in which
the order directing payment of the claim becomes final, subject to
the limitations of this section. If, at the end of any calendar
year, the commissioner determines that the courts have issued orders
that have become final during the year directing payment out of the
recovery portion of the fund in a total amount in excess of the funds
available for recovery purposes, the commissioner shall allocate the
funds available for recovery purposes among all claimants in the
ratio that the amount ordered paid to each claimant bears to the
aggregate of all amounts ordered paid. The commissioner shall mail
notice of the allocation to all claimants not less than 45 days
following the end of the calendar year. Any claimant who objects to
the plan of allocation shall file a petition in the District Court of
Ramsey or Hennepin County within 20 days of the mailing of notice
setting forth the grounds for objection. Upon motion of the
commissioner, the court shall summarily dismiss the petition and
order distribution in accordance with the proposed plan of allocation
unless it finds substantial reason to believe that the distribution
would be in violation of the provisions of this section. If a
petition is filed, no distribution shall be made except in accordance
with a final order of the court. In the event no petition is filed
within 20 days of the mailing of notice, the commissioner shall make
a distribution in accordance with the plan of allocation. Any
distribution made by the commissioner in accordance with this
subdivision shall be deemed to satisfy and extinguish the claims of
any claimant receiving a distribution against the fund. Subd.
15. Appropriation. Any sums received by the commissioner
pursuant to any provisions of this section shall be deposited in the
state treasury, and credited to the real estate education, research
and recovery fund, and said sums shall be allocated exclusively for
the purposes provided in this section. All moneys in the fund are
appropriated annually to the commissioner for the purposes of this
section. All money credited to the fund under section 462A.201
may only be used for purposes under subdivision 6, clause (f).
Beginning in 1990, the commissioner must, on February 1 of each year,
review the amount of money spent or allocated for uses under
subdivision 6, clause (f), for the previous calendar year. If the
amount spent or allocated is less than the amount credited to the
fund under section 462A.201
during the same calendar year, the difference must be transferred
from the fund to the housing trust fund account established in
section 462A.201.
If the fund balance exceeds $4,000,000, the commissioner may suspend
the fee imposed under subdivision 3. Subd. 16. Criminal
penalty. It shall be unlawful for any person or the agent of any
person to knowingly file with the commissioner any notice, statement,
or other document required under the provisions of this section which
is false or untrue or contains any material misstatement of fact.
Such conduct shall constitute a gross misdemeanor. Subd. 17.Right of subrogation. When, upon the order of the court, the
commissioner has paid from the recovery portion of the fund any sum
to the judgment creditor, the commissioner shall be subrogated to all
of the rights of the judgment creditor to the extent of the amount so
paid and the judgment creditor shall assign all right, title and
interest in the judgment to the extent of the amount so paid to the
commissioner and any amount and interest so recovered by the
commissioner on the judgment shall be deposited to the fund.
Subd. 18. Effect of section on commissioner's authority.
Nothing contained in this section shall limit the authority of the
commissioner to take disciplinary action against any licensee under
other provisions of this chapter; nor shall the repayment in full of
all obligations to the recovery portion of the fund by any licensee
nullify or modify the effect of any other disciplinary proceeding
brought pursuant to the provisions of this chapter. Subd. 19.Periodic report of fund activities. The commissioner shall,
on or before October 1 in each even-numbered year, prepare and file
in the Office of the Governor for the preceding two fiscal years
ending June 30 a report on the activities of the real estate
education, research and recovery fund; noting the amount of money
received by the fund, the amount of money expended and the purposes
therefor. 82.44 Reciprocity. The requirements of sections 82.29,
subdivision 8, and 82.32
may be waived for individuals of other jurisdictions, provided: (1) a
written reciprocal licensing agreement is in effect between the
commissioner and the licensing officials of that jurisdiction, (2)
the individual is licensed in that jurisdiction, and (3) the
licensing requirements of that jurisdiction are substantially similar
to the provisions of this chapter. 82.45 Records. Subdivision 1. Delivery. Each real estate
broker, real estate salesperson, or closing agent shall furnish
parties to a transaction a true and accurate copy of any document
pertaining to their interests as the commissioner through appropriate
rules may require. Subd. 2. Examination of records. The
commissioner may make examinations within or without this state of
each broker's or closing agent's records at such reasonable time and
in such scope as is necessary to enforce the provisions of this
chapter. Subd. 3. Retention. A licensed real estate
broker shall retain for three years copies of all listings, buyer
representation and facilitator services contracts, deposit receipts,
purchase money contracts, canceled checks, trust account records, and
such other documents as may reasonably be related to carrying on a
real estate brokerage business. The retention period shall run from
the date of the closing of the transaction, or from the date of the
document if the document is not consummated. The following documents
need not be retained: (1) agency disclosure forms provided to
prospective buyers or sellers, where no contractual relationship is
subsequently created and no services are provided by the licensee;
and (2) facilitator services contracts or buyer representation
contracts entered into with prospective buyers, where the prospective
buyer abandons the contractual relationship before any services have
been provided by the licensee. 82.46 Rental services. Subdivision 1. License. A rental
service shall obtain a real estate broker's license before engaging
in business or holding itself out as being engaged in business. No
person shall act as a real estate salesperson on behalf of a rental
service without first obtaining a real estate salesperson's license
on behalf of the rental service. Subd. 2. Dissemination of
unit information. A rental service shall not provide information
regarding a rental unit without the express authority of the owner of
the unit. Subd. 3. Advertising. A rental service shall
not advertise in a manner that is misleading with regards to fees
charged, services provided, the availability of rental units, or
rental terms or conditions. 82.47 Rulemaking powers. The commissioner may promulgate such
rules as are reasonably necessary to carry out and make effective the
provisions and purposes of this chapter. 82.48 Standards of conduct. Subdivision 1. Access to
governing statutes and rules. Every real estate office and branch
office shall have a current copy of this chapter and chapter 83 and
the rules adopted under those chapters, available for the use of
licensees. Access to the statutes and rules required by this section
may be made available through an electronic agent. Subd. 2.
Penalty for noncompliance. The methods, acts, or practices set
forth in subdivisions 1 and 3 and sections 82.19;
82.22;
82.27;
82.31,
subdivision 6; 82.37;
and 82.41,
subdivision 11, are standards of conduct governing the activities of
real estate brokers and salespersons. Failure to comply with these
standards shall constitute grounds for license denial, suspension, or
revocation, or for censure of the licensee. Subd. 3.
Responsibilities of brokers. (a) Supervision of
personnel. Brokers shall adequately supervise the activities of
their salespersons and employees. Supervision includes the ongoing
monitoring of listing agreements, purchase agreements, other real
estate-related documents which are prepared or drafted by the
broker's salespersons or employees or which are otherwise received by
the broker's office, and the review of all trust account books and
records. If an individual broker maintains more than one place of
business, each place of business shall be under the broker's
direction and supervision. If a partnership or corporate broker
maintains more than one place of business, each place of business
shall be under the direction and supervision of an individual broker
licensed to act on behalf of the partnership or corporation. The
primary broker shall maintain records specifying the name of each
broker responsible for the direction and supervision of each place of
business. If an individual broker, who may be the primary broker, is
responsible for supervising more than one place of business, the
primary broker shall, upon written request of the commissioner, file
a written statement specifying the procedures which have been
established to ensure that all salespersons and employees are
adequately supervised. Designation of another broker to supervise a
place of business does not relieve the primary broker of the ultimate
responsibility for the actions of licensees. (b) Preparation
and safekeeping of documents. Brokers shall be responsible for
the preparation, custody, safety, and accuracy of all real estate
contracts, documents, and records, even though another person may be
assigned these duties by the broker. (c) Documentation and
resolution of complaints. Brokers shall investigate and attempt
to resolve complaints made regarding the practices of any individual
licensed to them and shall maintain, with respect to each individual
licensed to them, a complaint file containing all material relating
to any complaints received in writing for a period of three years.(d) Disclosure of listed property information. A broker
may allow any unlicensed person, who is authorized by the broker, to
disclose any factual information pertaining to the properties listed
with the broker, if the factual information is provided to the
unlicensed person in written form by the broker representing or
assisting the seller(s). 82.49 Table funding. Subdivision 1. Definitions. (a) For
purposes of this section, the terms in this subdivision have the
meanings given them. (b) "Closing agent" has the meaning given
in section 82.17,
subdivision 3. (c) "Collected funds" means funds deposited,
finally settled, and credited to the closing agent's escrow account.(d) "Established business relationship" means that the closing
agent has performed at least 25 residential closings on behalf of the
lender. (e) "Federally insured financial institution" means an
institution in which monetary deposits are insured by the Federal
Deposit Insurance Corporation or National Credit Union
Administration. (f) "Lender" means a person who makes
residential mortgage loans including a person who engages in table
funding. "Lender" does not include any organization described in
section 501(c)(3) or 501(c)(4) of the Internal Revenue Code of 1986,
as amended, if the organization is exempt from tax under section
501(a) of the Internal Revenue Code of 1986, as amended. "Lender"
does not include a state or any political subdivision of a state.(g) "Qualified loan funds" means funds in one of the following
forms: (1) lawful money of the United States; (2) wired funds
when unconditionally held by the closing agent; (3) cashier's
checks, certified checks, bank money orders, or teller's checks
issued by a federally insured financial institution and
unconditionally held by the closing agent; and (4) United States
treasury checks, Federal Reserve Bank checks, federal home loan bank
checks, and state of Minnesota warrants. (h) "Table funding"
means a closing or settlement at which a mortgage loan is funded by a
lender by a contemporaneous advance of mortgage loan funds and an
assignment of the mortgage loan to the lender advancing the funds.Subd. 2. Requirements. (a) A closing agent shall not
make disbursements out of an escrow, security deposit, settlement, or
closing account unless the funds received from the lender are
collected funds or qualified loan funds. This subdivision does not
prohibit a closing agent from electing to disburse out of an escrow,
security deposit, settlement, or closing account, other than with
collected funds or qualified loan funds, if the closing agent has an
established business relationship with the lender on whose behalf the
closing is being conducted. (b) A lender, using the closing
services of a closing agent, shall at or before the time of the
closing deliver loan funds to the closing agent either in the form of
collected funds or qualified loan funds.
82.50 Trust account requirements. Subdivision 1.
Generally. All trust funds received by a broker or the broker's
salespeople or closing agents shall be deposited forthwith upon
receipt in a trust account, maintained by the broker for such purpose
in a bank, savings association, credit union, or an industrial loan
and thrift company with deposit liabilities designated by the broker
or closing agent, except as such money may be paid to one of the
parties pursuant to express written agreement between the parties to
a transaction. The depository bank shall be a Minnesota bank or
trust company or any foreign bank and shall authorize the
commissioner to examine its records of such deposits upon demand by
the commissioner. The industrial loan and thrift company shall be
organized under chapter 53. The savings association or credit union
shall be organized under the laws of any state or the United States.Subd. 2. Licensee acting as principal. A licensee acting
in the capacity of principal in a real estate transaction where the
seller retains any liability, contingent or otherwise, for the
payment of an obligation on the property shall deposit in a Minnesota
bank or trust company, any foreign bank which authorizes the
commissioner to examine its records of the deposits, a savings
association, credit union, or an industrial loan and thrift company
organized under chapter 53 with deposit liabilities, in a trust
account, those parts of all payments received on contracts that are
necessary to meet any amounts concurrently due and payable on any
existing mortgages, contracts for deed or other conveyancing
instruments, and reserve for taxes and insurance or any other
encumbrance on the receipts. The deposits must be maintained until
disbursement is made under the terms of the encumbrance and proper
accounting on the property made to the parties entitled to an
accounting. The provisions of this subdivision relating to rental of
interests in real estate apply only to residential property.
Subd. 3. Nondepositable items. In the event earnest money or
other down payments in a real estate transaction are received by the
broker or salesperson in the form of a nondepositable item such as a
note, bond, stock certificate, treasury bill, or any other instrument
or equity or thing of value received by a broker, salesperson, or
closing agent received in lieu of cash shall be deposited immediately
with an authorized escrow agent, whose authority is evidenced by a
written agreement executed by the offeror and the escrow agent. A
receipt shall be issued to the buyer for the value of the
nondepositable item. In the event the broker acts as the escrow
agent, the broker shall obtain written authority from the buyer and
seller to hold such items in escrow. In all cases, the parties shall
be advised of the details relative to the nondepositable item,
including the nature of the item, the amount, and in whose custody
such item is being held. The fact that such an item is being held by
the broker shall be duly recorded in the broker's trust account
records. Subd. 4. Commingling funds. A broker,
salesperson, or closing agent shall deposit only trust funds in a
trust account and shall not commingle personal funds or other funds
in a trust account, except that a broker, salesperson, or closing
agent may deposit and maintain a sum in a trust account from personal
funds, which sum shall be specifically identified and used to pay
service charges or satisfy the minimum balance requirements relating
to the trust account. Subd. 5. Trust accounts. (a) Each
broker or closing agent shall maintain and retain records of all
trust funds and trust accounts. The commissioner may prescribe
information to be included in the records by appropriate rules.
(b) Unless otherwise agreed upon in writing by the parties to a
transaction, the broker with whom trust funds are to be deposited in
satisfaction of subdivision 1 shall be the listing broker. (c) A
check received from a potential buyer shall be deposited into the
listing broker's trust account not later than the third business day
after delivery of the check to the broker, except that the check may
be held by the listing broker until acceptance or rejection of the
offer if: (1) the check by its terms is not negotiable by the
broker or if the potential buyer has given written instructions that
the check shall not be deposited nor cashed until acceptance or shall
be immediately returned if the offer is rejected; and (2) the
potential seller is informed that the check is being so held before
or at the time the offer is presented to that person for acceptance.If the offer is accepted, the check shall be deposited in a
neutral escrow depository or the trust fund account of the listing
broker not later than the third business day following acceptance of
the offer unless the broker has received written authorization from
all parties to the transaction to continue to hold the check. If the
offer is rejected, the check shall be returned to the potential buyer
not later than the next business day after rejection. (d) Trust
funds must be maintained in a trust account until disbursement is
made in accordance with the terms of the applicable agreements and
proper accounting is made to the parties entitled to an accounting.Disbursement must be made within a reasonable time following the
consummation or termination of a transaction if the applicable
agreements are silent as to the time of disbursement. Subd. 6.Notice of trust account status. The names of the banks,
savings associations, credit unions, and industrial loan and thrift
companies and the trust account numbers used by a broker or closing
agent shall be provided to the commissioner at the time of
application for the broker's or closing agent's license. The broker
shall immediately report to the commissioner any change of trust
account status including changes in banks, savings associations,
credit unions, and industrial loan and thrift companies, account
numbers, or additional accounts in the same or other banks, savings
associations, credit unions, and industrial loan and thrift
companies. A broker or closing agent shall not close an existing
trust account without giving ten days' written notice to the
commissioner. Subd. 7. Interest bearing accounts.
Notwithstanding the provisions of sections 82.17,
82.19
to 82.39,
82.41,
and 82.42,
a real estate broker may establish and maintain interest bearing
accounts for the purpose of receiving deposits in accordance with the
provisions of section 504B.178.Subd. 8. Accrued interest. (a) Each broker shall
maintain a pooled interest-bearing trust account for deposit of
client funds. The interest accruing on the trust account, less
reasonable transaction costs, must be paid to the commissioner of
finance for deposit in the housing trust fund account created under
section 462A.201
unless otherwise specified pursuant to an expressed written agreement
between the parties to a transaction. (b) For an account created
under paragraph (a), each broker shall direct the financial
institution to: (1) pay the interest, less reasonable transaction
costs, computed in accordance with the financial institution's
standard accounting practice, at least quarterly, to the commissioner
of finance; and (2) send a statement to the commissioner of
finance showing the name of the broker for whom the payment is made,
the rate of interest applied, the amount of service charges deducted,
and the account balance for the period in which the report is made.The commissioner of finance shall credit the amount collected
under this subdivision to the housing trust fund account established
in section 462A.201.(c) The financial institution must promptly notify the
commissioner if a draft drawn on the account is dishonored. A draft
is not dishonored if a stop payment order is requested by an issuer
who has a good faith defense to payment on the draft. Subd. 9.Consent to place in special account. Trust funds may be
placed by the broker in a special account which may be an
interest-bearing account or certificate of deposit if the buyer and
the seller consent in writing to the special account and to the
disposition of the trust funds, including any interest thereon.
Subd. 10. Licensee as principal. Funds which would
constitute trust funds if received by a licensee acting as an agent
must, if received by a licensee acting as principal, be placed in a
trust account unless a written agreement signed by all parties to the
transaction specifies a different disposition of the funds. The
written agreement shall state that the funds would otherwise be
placed in a real estate trust account. Subd. 11. Trust
account records. (a) Every broker shall keep a record of all
trust funds received, including notes, savings certificates, uncashed
or uncollected checks, or other similar instruments. Said records
shall set forth: (1) date funds received; (2) from whom
received; (3) amount received; (4) with respect to funds
deposited in a trust account, the date of said deposit; (5) with
respect to funds previously deposited in a trust account, the check
number or date of related disbursements; and (6) a monthly
balance of the trust account. Each broker shall maintain a
formal trust cash receipts journal and a formal cash disbursement
journal, or similar records, in accordance with generally accepted
accounting principles. All records and funds shall be subject to
inspection by the commissioner or an agent of the commissioner at any
time. (b) Each broker shall keep a separate record for each
beneficiary or transaction, accounting for all funds therein which
have been deposited in the broker's trust bank account. These
records shall set forth information sufficient to identify the
transaction and the parties thereto. At a minimum, each record shall
set forth: (1) the date funds are deposited; (2) the amount
deposited; (3) the date of each related disbursement; (4) the
check number of each related disbursement; (5) the amount of each
related disbursement; and (6) a description of each disbursement.
82.51 Unclaimed Property Act compliance. Upon the initial
application for a real estate broker's license and upon each annual
application for renewal, the applicant or broker shall be required to
inform the commissioner of compliance with the requirements set forth
in chapter 345 relating to unclaimed property.