Minnesota Legislature
Office of the Revisor of Statutes
Minnesota Session Laws - 2004, Regular Session
Key: (1) language to be deleted (2) new language
CHAPTER 203-S.F.No. 2379
An act relating to commerce; regulating real estate
brokers and salespersons; making various changes in
real property law; recodifying the laws and rules
regulating these licensees; making technical and
conforming changes; amending Minnesota Statutes 2002,
sections 58.13, subdivision 1; 58.16, subdivisions 2,
4; 82.17, subdivision 4, by adding subdivisions;
82.19, subdivisions 3, 5, by adding subdivisions;
82.195; 82.196; 82.197; 82.20, subdivisions 3, 4, 8,
by adding subdivisions; 82.21, by adding subdivisions;
82.22, subdivisions 6, 8, 12, 13, by adding
subdivisions; 82.24, subdivisions 3, 5, by adding
subdivisions; 82.27, by adding a subdivision; 513.55,
subdivision 1; 513.56, by adding a subdivision;
515B.4-106; 515B.4-108; 559.21, subdivision 4;
proposing coding for new law in Minnesota Statutes,
chapters 82; 325F; 559; repealing Minnesota Statutes
2002, sections 58.02, subdivision 24; 82.22,
subdivision 9; Minnesota Rules, parts 2800.0100;
2800.0200; 2800.0300; 2800.1100; 2800.1200; 2800.1300;
2800.1400; 2800.1500; 2800.1600; 2800.1700; 2800.1750;
2800.1751; 2800.1800; 2800.1900; 2800.2000; 2800.2100;
2800.2150; 2805.0100; 2805.0200; 2805.0300; 2805.0400;
2805.0500; 2805.0600; 2805.0700; 2805.0800; 2805.0900;
2805.1000; 2805.1100; 2805.1300; 2805.1400; 2805.1500;
2805.1600; 2805.1700; 2805.1800; 2805.1900; 2805.2000.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
ARTICLE 1
CHANGES IN REAL ESTATE LAW
Section 1. Minnesota Statutes 2002, section 58.13,
subdivision 1, is amended to read:
Subdivision 1. [GENERALLY.] No person acting as a
residential mortgage originator or servicer, including a person
required to be licensed under this chapter, and no person exempt
from the licensing requirements of this chapter under section
58.04, shall:
(1) fail to maintain a trust account to hold trust funds
received in connection with a residential mortgage loan;
(2) fail to deposit all trust funds into a trust account
within three business days of receipt; commingle trust funds
with funds belonging to the licensee or exempt person; or use
trust account funds for any purpose other than that for which
they are received;
(3) unreasonably delay the processing of a residential
mortgage loan application, or the closing of a residential
mortgage loan. For purposes of this clause, evidence of
unreasonable delay includes but is not limited to those factors
identified in section 47.206, subdivision 7, clause (d);
(4) fail to disburse funds according to its contractual or
statutory obligations;
(5) fail to perform in conformance with its written
agreements with borrowers, investors, other licensees, or exempt
persons;
(6) charge a fee for a product or service where the product
or service is not actually provided, or misrepresent the amount
charged by or paid to a third party for a product or service;
(7) fail to comply with sections 345.31 to 345.60, the
Minnesota unclaimed property law;
(8) violate any provision of any other applicable state or
federal law regulating residential mortgage loans including,
without limitation, sections 47.20 to 47.208;
(9) make or cause to be made, directly or indirectly, any
false, deceptive, or misleading statement or representation in
connection with a residential loan transaction including,
without limitation, a false, deceptive, or misleading statement
or representation regarding the borrower's ability to qualify
for any mortgage product;
(10) conduct residential mortgage loan business under any
name other than that under which the license or certificate of
exemption was issued;
(11) compensate, whether directly or indirectly, coerce or
intimidate an appraiser for the purpose of influencing the
independent judgment of the appraiser with respect to the value
of real estate that is to be covered by a residential mortgage
or is being offered as security according to an application for
a residential mortgage loan;
(12) issue any document indicating conditional
qualification or conditional approval for a residential mortgage
loan, unless the document also clearly indicates that final
qualification or approval is not guaranteed, and may be subject
to additional review;
(13) make or assist in making any residential mortgage loan
with the intent that the loan will not be repaid and that the
residential mortgage originator will obtain title to the
property through foreclosure;
(14) provide or offer to provide for a borrower, any
brokering or lending services under an arrangement with a person
other than a licensee or exempt person, provided that a person
may rely upon a written representation by the residential
mortgage originator that it is in compliance with the licensing
requirements of this chapter;
(15) claim to represent a licensee or exempt person, unless
the person is an employee of the licensee or exempt person or
unless the person has entered into a written agency agreement
with the licensee or exempt person;
(16) fail to comply with the record-keeping and
notification requirements identified in section 58.14 or fail to
abide by the affirmations made on the application for licensure;
(17) represent that the licensee or exempt person is acting
as the borrower's agent after providing the nonagency disclosure
required by section 58.15, unless the disclosure is retracted
and the licensee or exempt person complies with all of the
requirements of section 58.16;
(18) make, provide, or arrange for a residential mortgage
loan that is of a lower investment grade if the borrower's
credit score or, if the originator does not utilize credit
scoring or if a credit score is unavailable, then comparable
underwriting data, indicates that the borrower may qualify for a
residential mortgage loan, available from or through the
originator, that is of a higher investment grade, unless the
borrower is informed that the borrower may qualify for a higher
investment grade loan with a lower interest rate and/or lower
discount points, and consents in writing to receipt of the lower
investment grade loan.
For purposes of this section, "investment grade" refers to
a system of categorizing residential mortgage loans in which the
loans are: (i) commonly referred to as "prime" or "subprime";
(ii) commonly designated by an alphabetical character with "A"
being the highest investment grade; and (iii) are distinguished
by interest rate or discount points or both charged to the
borrower, which vary according to the degree of perceived risk
of default based on factors such as the borrower's credit,
including credit score and credit patterns, income and
employment history, debt ratio, loan-to-value ratio, and prior
bankruptcy or foreclosure;
(19) make, publish, disseminate, circulate, place before
the public, or cause to be made, directly or indirectly, any
advertisement or marketing materials of any type, or any
statement or representation relating to the business of
residential mortgage loans that is false, deceptive, or
misleading;
(20) advertise loan types or terms that are not available
from or through the licensee or exempt person on the date
advertised, or on the date specified in the advertisement. For
purposes of this clause, advertisement includes, but is not
limited to, a list of sample mortgage terms, including interest
rates, discount points, and closing costs provided by licensees
or exempt persons to a print or electronic medium that presents
the information to the public; and
(21) use or employ phrases, pictures, return addresses,
geographic designations, or other means that create the
impression, directly or indirectly, that a licensee or other
person is a governmental agency, or is associated with,
sponsored by, or in any manner connected to, related to, or
endorsed by a governmental agency, if that is not the case; or
(22) violate section 82.176, relating to table funding.
Sec. 2. Minnesota Statutes 2002, section 58.16,
subdivision 2, is amended to read:
Subd. 2. [CONTRACT PROVISIONS.] (a) A residential mortgage
originator who engages in the activities described in
subdivision 1 shall enter into a written contract with each
borrower and shall provide a copy of the written contract to
each borrower at or before the time of receipt of any fee or
valuable consideration paid for mortgage origination services.
The written contract must:
(1) specifically describe the services to be provided by
the residential mortgage originator and if the originator
collects an advance fee, the dates by which the services will be
performed;
(2) specifically identify whether the residential mortgage
originator may receive compensation from sources other than the
borrower in connection with the loan transaction;
(3) state the total amount of commission or compensation
that the borrower agrees to pay for the residential mortgage
originator's services, or the basis on which the compensation
will be computed;
(4) state the maximum rate of interest to be charged on any
residential mortgage loan obtained;
(5) contain a statement that notifies the borrower of the
right to cancel the contract according to subdivision 3 and
disclose the cancellation rights and procedures provided in
subdivision 3; and
(6) disclose, with respect to the 12-month period ending
ten business days before the date of the contract in question,
the percentage of the mortgage originator's customers for whom
loans have actually been funded as a result of the residential
mortgage originator's services.
(b) If an advance fee is solicited or received the contract
must also:
(1) identify the trust account into which the fees or
consideration will be deposited;
(2) set forth the circumstances under which the residential
mortgage originator will be entitled to disbursement from the
trust account; and
(3) set forth the circumstances under which the borrower
will be entitled to a refund of all or part of the fee.
Sec. 3. Minnesota Statutes 2002, section 58.16,
subdivision 4, is amended to read:
Subd. 4. [TRUST ACCOUNT.] The residential mortgage
originator shall deposit in a trust account within three
business days all fees received before the time a loan is
actually funded. The trust account must be in a financial
institution located within the state of Minnesota and must be
controlled by an unaffiliated accountant, attorney, or bank
officer or employee.
Sec. 4. [325F.691] [UNREASONABLE DELAY IN MORTGAGE LOAN
CLOSING.]
Subdivision 1. [PROHIBITED CONDUCT.] (a) A lender, as
defined in section 47.206, who causes unreasonable delay in
processing a loan application beyond the expiration date of an
interest rate or discount point agreement is liable to the
borrower for a penalty in an amount not to exceed the borrower's
actual out-of-pocket damages, including the present value of the
increased interest costs over the normal life of the loan, or
specific performance of the agreement. This paragraph applies
to an agreement entered into after July 1, 2004.
(b) For purposes of this section, evidence of unreasonable
delay includes, but is not limited to:
(1) failure of the lender to return telephone calls or
otherwise respond to the borrower's inquiries concerning the
status of the loan;
(2) the addition by the lender of new requirements for
processing or approving the loan that were not disclosed to the
borrower under section 47.206, subdivision 2, clause (3), unless
the requirements result from governmental agency or secondary
mortgage market changes, other than changes in interest rates,
that occur after the date of the agreement; or
(3) failure by the lender to take actions necessary to
process or approve the loan within a reasonable period of time,
if the borrower provided information requested by the lender in
a timely manner.
Subd. 2. [ADDITIONAL PENALTY.] In addition to the remedies
in subdivision 1 of this section, a lender is liable to the
borrower for $500 for each unreasonable delay in processing a
loan application which causes an interest rate or discount point
agreement to expire before closing.
Sec. 5. Minnesota Statutes 2002, section 513.55,
subdivision 1, is amended to read:
Subdivision 1. [CONTENTS.] (a) Before signing an agreement
to sell or transfer residential real property, the seller shall
make a written disclosure to the prospective buyer. The
disclosure must include all material facts pertaining to adverse
physical conditions in the property of which the seller is aware
that could adversely and significantly affect:
(1) an ordinary buyer's use and enjoyment of the property;
or
(2) any intended use of the property of which the seller is
aware.
(b) The disclosure must be made in good faith and based
upon the best of the seller's knowledge at the time of the
disclosure.
Sec. 6. Minnesota Statutes 2002, section 513.56, is
amended by adding a subdivision to read:
Subd. 4. [EFFECT ON COMMON LAW.] The limitation on
disclosure in subdivisions 1 and 2 modifies any common law
duties with respect to disclosure of material facts.
Sec. 7. Minnesota Statutes 2002, section 515B.4-106, is
amended to read:
515B.4-106 [PURCHASER'S RIGHT TO CANCEL.]
(a) A person required to deliver a disclosure statement
pursuant to section 515B.4-101(b) shall provide at least one of
the purchasers of the unit with a copy of the disclosure
statement and all amendments thereto before conveyance of the
unit. If a purchaser is not given a disclosure statement more
than ten five days before execution of the purchase agreement,
the purchaser may, before conveyance, cancel the purchase
agreement within ten five days after first receiving the
disclosure statement. If a purchaser is given the disclosure
statement more than ten five days before execution of the
purchase agreement, the purchaser may not cancel the purchase
agreement pursuant to this section. Except as expressly
provided in this chapter, the ten-day five-day rescission period
cannot be waived.
(b) If an amendment to the disclosure statement materially
and adversely affects a purchaser, then the purchaser shall have
ten five days after delivery of the amendment to cancel the
purchase agreement in accordance with this section.
(c) If a purchaser elects to cancel a purchase agreement
pursuant to this section, the purchaser may do so by giving
notice thereof pursuant to section 515B.1-115. Cancellation is
without penalty, and all payments made by the purchaser before
cancellation shall be refunded promptly. Notwithstanding
anything in this section to the contrary, the purchaser's
cancellation rights under this section terminate upon the
purchaser's acceptance of a conveyance of the unit.
(d) If a declarant obligated to deliver a disclosure
statement fails to deliver to the purchaser a disclosure
statement which substantially complies with this chapter, the
declarant shall be liable to the purchaser in the amount of
$1,000, in addition to any damages or other amounts recoverable
under this chapter or otherwise. Any action brought under this
subsection shall be commenced within the time period specified
in section 515B.4-115, subsection (a).
Sec. 8. Minnesota Statutes 2002, section 515B.4-108, is
amended to read:
515B.4-108 [PURCHASER'S RIGHT TO CANCEL RESALE.]
(a) Unless a purchaser is given the information required to
be delivered by section 515B.4-107, by a delivery method
described in that section, more than ten five days prior to the
execution of the purchase agreement for the unit the purchaser
may, prior to the conveyance, cancel the purchase agreement
within ten five days after receiving the information. Except as
expressly provided in this chapter, the ten-day five-day
rescission period cannot be waived.
(b) A purchaser who elects to cancel a purchase agreement
pursuant to subsection (a), may do so by hand delivering notice
thereof or mailing notice by postage prepaid United States mail
to the seller or the agent. Cancellation is without penalty and
all payments made by the purchaser shall be refunded promptly.
Sec. 9. Minnesota Statutes 2002, section 559.21,
subdivision 4, is amended to read:
Subd. 4. [LAW PREVAILS OVER CONTRACT; PROCEDURE;
CONDITIONS.] (a) The notice required by this section must be
given notwithstanding any provisions in the contract to the
contrary, except that earnest money contracts, purchase
agreements, and exercised options that are subject to this
section may, unless by their terms they provide for a longer
termination period, be terminated on 30 days' notice, or may be
canceled under section 559.217. The notice must be served
within the state in the same manner as a summons in the district
court, and outside of the state, in the same manner, and without
securing any sheriff's return of not found, making any
preliminary affidavit, mailing a copy of the notice or doing any
other preliminary act or thing whatsoever. Service of the
notice outside of the state may be proved by the affidavit of
the person making the same, made before an authorized officer
having a seal, and within the state by such an affidavit or by
the return of the sheriff of any county therein.
(b) If a person to be served is a resident individual who
has departed from the state, or cannot be found in the state; or
is a nonresident individual or a foreign corporation,
partnership, or association, service may be made by publication
as provided in this paragraph. Three weeks' published notice
has the same effect as personal service of the notice. The
published notice must comply with subdivision 3 and state (1)
that the person to be served is allowed 90 days after the first
date of publication of the notice to comply with the conditions
of the contract, and (2) that the contract will terminate 90
days after the first date of publication of the notice, unless
before the termination date the purchaser complies with the
notice. If the real estate described in the contract is
actually occupied, then, in addition to publication, a person in
possession must be personally served, in like manner as the
service of a summons in a civil action in state district court,
within 30 days after the first date of publication of the
notice. If an address of a person to be served is known, then
within 30 days after the first date of publication of the notice
a copy of the notice must be mailed to the person's last known
address by first class mail, postage prepaid.
(c) The contract is reinstated if, within the time
mentioned, the person served:
(1) complies with the conditions in default;
(2) if subdivision 1d or 2a applies, makes all payments due
and owing to the seller under the contract through the date that
payment is made;
(3) pays the costs of service as provided in subdivision
1b, 1c, 1d, or 2a;
(4) if subdivision 2a applies, pays two percent of the
amount in default, not including the final balloon payment, any
taxes, assessments, mortgages, or prior contracts that are
assumed by the purchaser; and
(5) pays attorneys' fees as provided in subdivision 1b, 1c,
1d, or 2a.
(d) The contract is terminated if the provisions of
paragraph (c) are not met.
(e) In the event that the notice was not signed by an
attorney for the seller and the seller is not present in the
state, or cannot be found in the state, then compliance with the
conditions specified in the notice may be made by paying to the
court administrator of the district court in the county wherein
the real estate or any part thereof is situated any money due
and filing proof of compliance with other defaults specified,
and the court administrator of the district court shall be
deemed the agent of the seller for such purposes. A copy of the
notice with proof of service thereof, and the affidavit of the
seller, the seller's agent or attorney, showing that the
purchaser has not complied with the terms of the notice, may be
recorded with the county recorder, and is prima facie evidence
of the facts stated in it; but this section in no case applies
to contracts for the sale or conveyance of lands situated in
another state or in a foreign country. If the notice is served
by publication, the affidavit must state that the affiant
believes that the party to be served is not a resident of the
state, or cannot be found in the state, and either that the
affiant has mailed a copy of the notice by first class mail,
postage prepaid, to the party's last known address, or that such
address is not known to the affiant.
Sec. 10. [559.217] [DECLARATORY CANCELLATION OF PURCHASE
AGREEMENT.]
Subdivision 1. [DEFINITIONS.] (a) For purposes of this
section, the terms defined in this subdivision have the meanings
given.
(b) "Purchase agreement" means an earnest money contract,
purchase agreement, or exercised option that could be canceled
under section 559.21, subdivision 4, paragraph (a).
(c) "Residential real property" means real property,
including vacant land, occupied by, or intended to be occupied
by, one to four families as their residence.
Subd. 2. [USE OF THIS SECTION.] Either the purchaser or
the seller may cancel a purchase agreement for residential real
property under this section. If either a seller or purchaser
initiates a cancellation proceeding under this section and
before completion of the proceeding the other party initiates a
cancellation proceeding under this section, whether under
subdivision 3 or 4, the purchase agreement is deemed canceled as
of the date the second cancellation notice is served upon the
other party under this section. Either party can later pursue
legal remedies at law to recover the earnest money. A court
shall make a determination of which party is entitled to the
earnest money without regard to which party first initiated the
cancellation proceeding and may consider the terms of the
canceled purchase agreement in making its determination.
Subd. 3. [CANCELLATION WITH RIGHT TO CURE.] (a) If a
default occurs or an unfulfilled condition exists after the date
specified for fulfillment in the terms of a purchase agreement
for the conveyance of residential real property, which does not
by its terms cancel the purchase agreement, the purchaser or the
seller may initiate a cancellation by serving upon the other
party to the purchase agreement and any third party that is
holding earnest money under the purchase agreement a notice:
(1) specifying the residential real property that is the
subject of the purchase agreement, including the legal
description;
(2) specifying the purchase agreement by date and names of
parties, and the unfulfilled condition or default; and
(3) stating that the purchase agreement will be canceled 15
days after service of the notice unless prior to the
cancellation date the party upon whom the notice is served
complies with the conditions in default and completes the
unfulfilled conditions, including, if applicable, completion of
the purchase or sale of the residential real property according
to the terms of the purchase agreement.
(b) The notice must be served in the manner provided in
section 559.21, subdivision 4, paragraphs (a) and (b).
(c) The purchase agreement is canceled unless, within 15
days after the service of the notice, the party upon whom the
notice was served fully complies with the conditions in default
and completes the unfulfilled conditions or secures from a court
an order suspending the cancellation.
Subd. 4. [DECLARATORY CANCELLATION.] (a) If a default
occurs or an unfulfilled condition exists after the date
specified for fulfillment in the terms of a purchase agreement
for the conveyance of residential real property, which by the
terms of the purchase agreement cancels the purchase agreement,
either the purchaser or the seller may confirm the cancellation
by serving upon the other party and any third party that is
holding earnest money under the purchase agreement a notice:
(1) specifying the residential real property that is the
subject of the purchase agreement, including the legal
description;
(2) specifying the purchase agreement by date and names of
parties, and the unfulfilled condition or default; and
(3) stating that the purchase agreement has been canceled.
(b) The notice must be served in the manner provided in
section 559.21, subdivision 4, paragraphs (a) and (b).
(c) The cancellation of the purchase agreement is complete,
unless, within 15 days after the service of the notice, the
party upon whom the notice was served secures from a court an
order suspending the cancellation.
Subd. 5. [FORM OF NOTICE OF CANCELLATION.] (a) For
purposes of subdivision 3, the term "notice" means a writing
stating the information required in subdivision 3, paragraph
(a), stating the name, address, and telephone number of that
party serving the notice or of an attorney authorized by such
party to serve the notice, and including the following
information in 12-point or larger underlined uppercase type, or
8-point type if published, or in large legible handwritten
letters:
"THIS NOTICE IS TO INFORM YOU THAT BY THIS NOTICE THE
(SELLER) (PURCHASER) (STRIKE ONE) HAS BEGUN PROCEEDINGS UNDER
MINNESOTA STATUTES, SECTION 559.217, TO CANCEL YOUR PURCHASE
AGREEMENT FOR THE (PURCHASE) (SALE) (STRIKE ONE) OF THE ABOVE
PROPERTY FOR THE REASONS SPECIFIED IN THIS NOTICE. THE PURCHASE
AGREEMENT WILL BE CANCELED ... DAYS AFTER (SERVICE OF THIS
NOTICE UPON YOU) (THE FIRST DAY OF PUBLICATION OF THIS NOTICE)
(STRIKE ONE) UNLESS BEFORE THEN:
(A) YOU HAVE FULLY COMPLIED WITH ALL OF YOUR OBLIGATIONS
UNDER THE PURCHASE AGREEMENT THAT WERE REQUIRED TO BE PERFORMED
AS OF THE DATE OF SERVICE OF THIS NOTICE, INCLUDING WITHOUT
LIMITATION, THE ITEMS OF DEFAULT SPECIFIED IN THIS NOTICE; OR
(B) YOU SECURE FROM A DISTRICT COURT AN ORDER THAT THE
TERMINATION OF THE PURCHASE AGREEMENT BE SUSPENDED UNTIL YOUR
CLAIMS OR DEFENSES ARE FINALLY DISPOSED OF BY TRIAL, HEARING, OR
SETTLEMENT. YOUR ACTION MUST SPECIFICALLY STATE THOSE FACTS AND
GROUNDS THAT DEMONSTRATE YOUR CLAIMS OR DEFENSES.
IF YOU DO NOT DO ONE OR THE OTHER OF THE ABOVE THINGS
WITHIN THE TIME PERIOD SPECIFIED IN THIS NOTICE, YOUR PURCHASE
AGREEMENT WILL BE CANCELED AT THE END OF THE PERIOD (AND YOU
WILL LOSE ALL EARNEST MONEY YOU HAVE PAID ON THE PURCHASE
AGREEMENT) (STRIKE IF NOT APPLICABLE); AND YOU MAY LOSE YOUR
RIGHT TO ASSERT ANY CLAIMS OR DEFENSES THAT YOU MIGHT HAVE. IF
YOU HAVE ANY QUESTIONS ABOUT THIS NOTICE, CONTACT AN ATTORNEY
IMMEDIATELY."
(b) For purposes of subdivision 4, the term "notice" means
a writing stating the information required in subdivision 4,
paragraph (a), stating the name, address, and telephone number
of the party serving the notice or of an attorney authorized by
that party to serve the notice, and including the following
information in 12-point or larger underlined uppercase type, or
8-point type if published, or in large legible handwritten
letters:
"THIS NOTICE IS PURSUANT TO MINNESOTA STATUTES, SECTION
559.217, TO INFORM YOU THAT YOUR PURCHASE AGREEMENT FOR THE
(PURCHASE) (SALE) (STRIKE ONE) OF THE ABOVE PROPERTY HAS BEEN
CANCELED FOR THE REASONS SPECIFIED IN THIS NOTICE. THE
CANCELLATION WILL BE CONFIRMED ... DAYS AFTER (SERVICE OF THIS
NOTICE UPON YOU) (THE FIRST DAY OF PUBLICATION OF THIS NOTICE)
(STRIKE ONE) UNLESS BEFORE THEN YOU SECURE FROM A DISTRICT COURT
AN ORDER THAT THE CONFIRMATION OF CANCELLATION OF THE PURCHASE
AGREEMENT BE SUSPENDED UNTIL YOUR CLAIMS OR DEFENSES ARE FINALLY
DISPOSED OF BY TRIAL, HEARING, OR SETTLEMENT. YOUR ACTION MUST
SPECIFICALLY STATE THOSE FACTS AND GROUNDS THAT DEMONSTRATE YOUR
CLAIMS OR DEFENSES.
IF YOU DO NOT OBTAIN SUCH A COURT ORDER WITHIN THE TIME
PERIOD SPECIFIED IN THIS NOTICE, THE CONFIRMATION OF
CANCELLATION OF YOUR PURCHASE AGREEMENT WILL BE FINAL AT THE END
OF THE PERIOD (AND YOU WILL LOSE ALL EARNEST MONEY YOU HAVE PAID
ON THE PURCHASE AGREEMENT) (STRIKE IF NOT APPLICABLE); AND YOU
MAY LOSE YOUR RIGHT TO ASSERT ANY CLAIMS OR DEFENSES THAT YOU
MIGHT HAVE. IF YOU HAVE ANY QUESTIONS ABOUT THIS NOTICE,
CONTACT AN ATTORNEY IMMEDIATELY."
Subd. 6. [ATTORNEY FEES, COURT FEES, AND COSTS OF
SERVICE.] If the party upon whom the notice is served commences
a proceeding to obtain a court order to suspend the cancellation
of a purchase agreement under this section, the court shall
award court filing fees, attorney fees, and costs of service
actually expended to the prevailing party in an amount not to
exceed $3,000.
Subd. 7. [AFFIDAVIT OF CANCELLATION.] (a) After a
cancellation under subdivision 3 or a confirmation of
cancellation under subdivision 4, the purchase agreement is void
and of no further force or effect, and, except as provided in
subdivision 2, any earnest money held under the purchase
agreement must be distributed to, and become the sole property
of, the party completing the cancellation of the purchase
agreement.
(b) When a cancellation under this section has been
completed, the party who served the notice, or that party's
attorney, may execute an affidavit stating that the party caused
a notice of cancellation to be served upon the other party, that
the other party neither complied with the actions required in
the notice, if applicable, nor obtained a court order suspending
the cancellation, and that the property is residential real
property.
(c) A copy of the affidavit of cancellation, when attached
to a copy of the notice, is prima facie evidence of the facts
therein stated.
(d) Except as provided in subdivision 2, the affidavit of
cancellation, when delivered to a person holding earnest money
under the purchase agreement, is a sufficient basis for that
person to release the earnest money to the party initiating the
cancellation.
(e) If either a seller or purchaser commences a
cancellation proceeding under this section and before completion
of the first proceeding the other party initiates a cancellation
proceeding under this section, either party or that party's
attorney may execute an affidavit stating that both parties
caused the notice of cancellation to be served upon the other
party and further specifying the date the second notice of
cancellation was served upon the other party. A copy of the
affidavit of cancellation, when attached to copies of both
notices of cancellation, is prima facie evidence of the
cancellation of the purchase agreement and of the effective date
of the cancellation of the purchase agreement.
Subd. 8. [ATTORNEY AS AGENT FOR SERVICE.] Any attorney
authorized to serve the notice of cancellation by a party
initiating a cancellation under this section is designated as
the attorney who may receive service as agent for the party
initiating the cancellation of all summons, complaints, orders,
and motions made in connection with an action by the party upon
whom the notice is served to restrain the cancellation. Service
in the action may be made upon the party initiating the
cancellation by mailing a copy of the process to such party or
to such party's attorney, by first class mail, postage prepaid,
to the address stated in the notice.
Sec. 11. [REPEALER.]
Minnesota Statutes 2002, section 58.02, subdivision 24, is
repealed.
Sec. 12. [EFFECTIVE DATE.]
Sections 1 to 11 are effective August 1, 2004. Section 10
applies to purchase agreements entered into on or after that
date.
ARTICLE 2
RECODIFICATION
Section 1. Minnesota Statutes 2002, section 82.17,
subdivision 4, is amended to read:
Subd. 4. [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 broker's
ordinary business activities by 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 or certified by
the federal Home Loan Mortgage Corporation, or approved or
certified 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;
(d) (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;
(e) (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;
(f) (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.
Sec. 2. Minnesota Statutes 2002, section 82.17, is amended
by adding a subdivision to read:
Subd. 13. [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.
Sec. 3. Minnesota Statutes 2002, section 82.17, is amended
by adding a subdivision to read:
Subd. 14. [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.
Sec. 4. Minnesota Statutes 2002, section 82.17, is amended
by adding a subdivision to read:
Subd. 15. [ELECTRONIC RECORD.] "Electronic record" means a
record created, generated, sent, communicated, received, or
stored by electronic means.
Sec. 5. Minnesota Statutes 2002, section 82.17, is amended
by adding a subdivision to read:
Subd. 16. [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.
Sec. 6. Minnesota Statutes 2002, section 82.17, is amended
by adding a subdivision to read:
Subd. 17. [LICENSEE.] "Licensee" means a person duly
licensed under this chapter.
Sec. 7. Minnesota Statutes 2002, section 82.17, is amended
by adding a subdivision to read:
Subd. 18. [LOAN BROKER.] "Loan broker" means a licensed
real estate broker or salesperson who, for another and for a
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, 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.
Sec. 8. Minnesota Statutes 2002, section 82.17, is amended
by adding a subdivision to read:
Subd. 19. [OVERPAYMENT.] "Overpayment" means any payment
of money in excess of a statutory fee or for a license for which
a person does not qualify.
Sec. 9. Minnesota Statutes 2002, section 82.17, is amended
by adding a subdivision to read:
Subd. 20. [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.
Sec. 10. Minnesota Statutes 2002, section 82.17, is
amended by adding a subdivision to read:
Subd. 21. [PRIMARY BROKER.] "Primary broker" means the
broker on whose behalf salespersons are licensed to act pursuant
to section 82.20, subdivision 6. 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.
Sec. 11. Minnesota Statutes 2002, section 82.17, is
amended by adding a subdivision to read:
Subd. 22. [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.
Sec. 12. Minnesota Statutes 2002, section 82.17, is
amended by adding a subdivision to read:
Subd. 23. [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.
Sec. 13. Minnesota Statutes 2002, section 82.17, is
amended by adding a subdivision to read:
Subd. 24. [SPONSOR.] "Sponsor" means a person offering or
providing real estate education.
Sec. 14. Minnesota Statutes 2002, section 82.19,
subdivision 3, is amended to read:
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 person by whom the broker or salesperson
is engaged to purchase or sell real estate or business
opportunity 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.
Sec. 15. Minnesota Statutes 2002, section 82.19,
subdivision 5, is amended to read:
Subd. 5. [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 82.197.
(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. A broker representing a buyer shall make known to
the seller or the seller's agent the fact of the agency
relationship before any showing or negotiations are initiated.
Sec. 16. Minnesota Statutes 2002, section 82.19, is
amended by adding a subdivision to read:
Subd. 10. [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.
Sec. 17. Minnesota Statutes 2002, section 82.19, is
amended by adding a subdivision to read:
Subd. 11. [PROHIBITION AGAINST DISCOURAGING USE OF
ATTORNEY.] Licensees shall not discourage prospective parties to
a real estate transaction from seeking the services of an
attorney.
Sec. 18. Minnesota Statutes 2002, section 82.19, is
amended by adding a subdivision to read:
Subd. 12. [FRAUDULENT, DECEPTIVE, AND DISHONEST
PRACTICES.] (a) [PROHIBITIONS.] For the purposes of section
82.32, 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 82.27,
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.
Sec. 19. [82.191] [COMPENSATION.]
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. [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. [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.
Sec. 20. Minnesota Statutes 2002, section 82.195, is
amended to read:
82.195 [LISTING AGREEMENTS.]
Subdivision 1. (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.
Subd. 2. (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 your the
seller's property, a dual agency will be created. This means
that broker will represent both you the seller(s) and the
buyer(s), and owe the same duties to the buyer(s) that broker
owes to you the seller(s). This conflict of interest will
prohibit broker from advocating exclusively on your the seller's
behalf. Dual agency will limit the level of representation
broker can provide. If a dual agency should arise, you the
seller(s) will need to agree that confidential information about
price, terms, and motivation will still be kept confidential
unless you the seller(s) instruct broker in writing to disclose
specific information about you the seller(s). All other
information will be shared. Broker cannot act as a dual agent
unless both you the seller(s) and the buyer(s) agree to it. By
agreeing to a possible dual agency, you the seller(s) will be
giving up the right to exclusive representation in an in-house
transaction. However, if you the seller(s) should decide not to
agree to a possible dual agency, and you the seller(s) want
broker to represent you the seller(s), you the seller(s) may
give up the opportunity to sell your 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 Broker 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.
Subd. 3. (c) [PROHIBITED PROVISIONS.] Except as otherwise
provided in subdivision 4, paragraph (b) (d)(ii), 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.
Subd. 4. (d) [OVERRIDE CLAUSES.] (a) (i) 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.
(b) (ii) 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.
Subd. 5. (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 subdivision 2 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."
Sec. 21. Minnesota Statutes 2002, section 82.196, is
amended to read:
82.196 [BUYER'S BROKER AGREEMENTS.]
Subdivision 1. (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.
Subd. 2. (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 you 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 you the buyer(s) and the seller(s),
and owe the same duties to the seller(s) that broker owes to you
the buyer(s). This conflict of interest will prohibit broker
from advocating exclusively on your the buyer's behalf. Dual
agency will limit the level of representation broker can
provide. If a dual agency should arise, you the buyer(s) will
need to agree that confidential information about price, terms,
and motivation will still be kept confidential unless you the
buyer(s) instruct broker in writing to disclose specific
information about you the buyer(s). All other information will
be shared. Broker cannot act as a dual agent unless both you
the buyer(s) and the seller(s) agree to it. By agreeing to a
possible dual agency, you the buyer(s) will be giving up the
right to exclusive representation in an in-house transaction.
However, if you the buyer(s) should decide not to agree to a
possible dual agency, and you the buyer(s) want(s) broker to
represent you the buyer(s), you 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 Broker 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.
Subd. 3. (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.
Subd. 4. (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.
Subd. 5. (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.
Subd. 6. (f) [APPLICATION.] This section applies only to
residential real property transactions.
Sec. 22. Minnesota Statutes 2002, section 82.197, is
amended to read:
82.197 [DISCLOSURE REQUIREMENTS.]
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. [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. 2. [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) instructs 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 and instruct broker and
its salespersons to act as dual agents in this transaction.
........................... ...........................
Seller Buyer
........................... ...........................
Seller Buyer
........................... ...........................
Date Date
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. In addition, 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 in addition to any other required disclosures.
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 82.197, 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 82.197, 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 82.197,
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 rights and interests
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. [APPLICATION CREATION OF DUAL AGENCY.] The
disclosures required by subdivision 4 apply only to residential
real property transactions. 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 it 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) instructs 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 and instruct broker and
its salespersons to act as dual agents in this transaction.
............... ...............
Seller Buyer
............... ...............
Seller Buyer
............... ...............
Date Date
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. [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. 6. 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 and no regulatory action shall be brought
against a licensee for failure to disclose in any real estate
transaction 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. [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.
Sec. 23. Minnesota Statutes 2002, section 82.20, is
amended by adding a subdivision to read:
Subd. 2a. [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, "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, a legitimate business
purpose includes engaging in a different and specialized area of
real estate or maintaining an existing business name.
Sec. 24. Minnesota Statutes 2002, section 82.20,
subdivision 3, is amended to read:
Subd. 3. [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.
Sec. 25. Minnesota Statutes 2002, section 82.20, is
amended by adding a subdivision to read:
Subd. 3a. [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.
Sec. 26. Minnesota Statutes 2002, section 82.20,
subdivision 4, is amended to read:
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.
Sec. 27. Minnesota Statutes 2002, section 82.20, is
amended by adding a subdivision to read:
Subd. 7a. [AUTOMATIC TRANSFER OF SALESPERSON'S LICENSE.] A
salesperson may utilize the automatic license transfer
provisions of subdivision 9, 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 9, 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 82.20, subdivision 11.
Sec. 28. Minnesota Statutes 2002, section 82.20,
subdivision 8, is amended to read:
Subd. 8. [TIMELY RENEWALS.] (a) 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.
(b) 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.
Sec. 29. Minnesota Statutes 2002, section 82.20, is
amended by adding a subdivision to read:
Subd. 8a. [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.
Sec. 30. Minnesota Statutes 2002, section 82.20, is
amended by adding a subdivision to read:
Subd. 9a. [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.
Sec. 31. Minnesota Statutes 2002, section 82.20, is
amended by adding a subdivision to read:
Subd. 11a. [MANDATORY.] Licensees shall notify the
commissioner of the facts in subdivisions 11b to 11d.
Sec. 32. Minnesota Statutes 2002, section 82.20, is
amended by adding a subdivision to read:
Subd. 11b. [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.
Sec. 33. Minnesota Statutes 2002, section 82.20, is
amended by adding a subdivision to read:
Subd. 11c. [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.
Sec. 34. Minnesota Statutes 2002, section 82.20, is
amended by adding a subdivision to read:
Subd. 11d. [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.
Sec. 35. Minnesota Statutes 2002, section 82.20, is
amended by adding a subdivision to read:
Subd. 12a. [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.
Sec. 36. Minnesota Statutes 2002, section 82.20, is
amended by adding a subdivision to read:
Subd. 14a. [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.
Sec. 37. [82.201] [COMPUTATION OF TIME.]
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. [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.
Sec. 38. Minnesota Statutes 2002, section 82.21, is
amended by adding a subdivision to read:
Subd. 5. [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.
Sec. 39. Minnesota Statutes 2002, section 82.21, is
amended by adding a subdivision to read:
Subd. 6. [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.
Sec. 40. Minnesota Statutes 2002, section 82.22, is
amended by adding a subdivision to read:
Subd. 5a. [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.
Sec. 41. Minnesota Statutes 2002, section 82.22, is
amended by adding a subdivision to read:
Subd. 5b. [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.
Sec. 42. Minnesota Statutes 2002, section 82.22,
subdivision 6, is amended to read:
Subd. 6. [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) 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. The commissioner shall not approve any
course offered by, sponsored by, or affiliated with any person
or company licensed to engage in the real estate business. The
commissioner may by rule prescribe the curriculum and
qualification of those employed as instructors.
(c) 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.
(d) (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.
Sec. 43. Minnesota Statutes 2002, section 82.22, is
amended by adding a subdivision to read:
Subd. 6a. [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.
Sec. 44. Minnesota Statutes 2002, section 82.22, is
amended by adding a subdivision to read:
Subd. 6b. [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.
Sec. 45. Minnesota Statutes 2002, section 82.22, is
amended by adding a subdivision to read:
Subd. 6c. [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.
Sec. 46. Minnesota Statutes 2002, section 82.22,
subdivision 8, is amended to read:
Subd. 8. [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 either subdivisions 6 or 7 section
82.22, subdivision 6. The commissioner shall cancel the license
of any salesperson who fails to comply with subdivisions 6 or 7
section 82.22, subdivision 6. This subdivision shall not apply
to salespeople licensed in Minnesota prior to July 1, 1969.
Sec. 47. Minnesota Statutes 2002, section 82.22,
subdivision 12, is amended to read:
Subd. 12. [RECIPROCITY.] The requirements of this
section subdivisions 6 and 13 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.
Sec. 48. Minnesota Statutes 2002, section 82.22,
subdivision 13, is amended to read:
Subd. 13. [CONTINUING EDUCATION.] (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 shall may adopt rules defining the
standards for course and instructor approval, and may adopt
rules for the proper administration of this subdivision
prelicense instruction as required under section 82.22,
subdivision 6, and continuing education as required under this
section. 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, 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) No more than one-half of the credit hours per licensing
period, including continuing education required under
subdivision 6, may be credited to a person for attending any
combination of courses either: 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.
(1) sponsored by, offered by, or affiliated with a real
estate company or its agents; or
(2) offered using new delivery technology, including
interactive technology, and the Internet.
(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.
Sec. 49. Minnesota Statutes 2002, section 82.24,
subdivision 3, is amended to read:
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 as earnest money or down payment
in a real estate transaction shall be held by 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.
Sec. 50. Minnesota Statutes 2002, section 82.24,
subdivision 5, is amended to read:
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.
Sec. 51. Minnesota Statutes 2002, section 82.24, is
amended by adding a subdivision to read:
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.
Sec. 52. Minnesota Statutes 2002, section 82.24, is
amended by adding a subdivision to read:
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.
Sec. 53. Minnesota Statutes 2002, section 82.24, is
amended by adding a subdivision to read:
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.
Sec. 54. [82.261] [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.
Sec. 55. Minnesota Statutes 2002, section 82.27, is
amended by adding a subdivision to read:
Subd. 8. [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.
Sec. 56. [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
officer or employee.
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.
Sec. 57. [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.
Sec. 58. [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.
Sec. 59. [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 sections 82.19, subdivision 10;
82.191; 82.197; 82.22, subdivision 6a; 82.261; 82.37; and
subdivisions 1 and 3, 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).
Sec. 60. [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.
Sec. 61. [REVISOR'S INSTRUCTION.]
The revisor of statutes shall renumber each section of
Minnesota Statutes listed in column A with the number listed in
column B. The revisor shall also make the necessary
cross-reference changes consistent with the renumbering.
Column A Column B
82.17, subdivision 13 82.17, subdivision 2
82.17, subdivision 10 82.17, subdivision 3
82.17, subdivision 3 82.17, subdivision 4
82.17, subdivision 11 82.17, subdivision 5
82.17, subdivision 14 82.17, subdivision 6
82.17, subdivision 15 82.17, subdivision 7
82.17, subdivision 16 82.17, subdivision 8
82.17, subdivision 17 82.17, subdivision 9
82.17, subdivision 18 82.17, subdivision 10
82.17, subdivision 19 82.17, subdivision 11
82.17, subdivision 20 82.17, subdivision 12
82.17, subdivision 2 82.17, subdivision 13
82.17, subdivision 21 82.17, subdivision 14
82.17, subdivision 22 82.17, subdivision 15
82.17, subdivision 9 82.17, subdivision 16
82.17, subdivision 8 82.17, subdivision 17
82.17, subdivision 4 82.17, subdivision 18
82.17, subdivision 5 82.17, subdivision 19
82.17, subdivision 23 82.17, subdivision 20
82.17, subdivision 12 82.17, subdivision 21
82.17, subdivision 24 82.17, subdivision 22
82.17, subdivision 6 82.17, subdivision 23
82.17, subdivision 7 82.17, subdivision 24
82.33 82.18
82.191 82.19
82.201 82.20
82.196 82.21, subdivision 1
82.195 82.21, subdivision 2
82.197 82.22
82.18 82.23
82.21 82.24
82.261 82.27
82.22, subdivision 1 82.29, subdivision 1
82.22, subdivision 11 82.29, subdivision 2
82.22, subdivision 4 82.29, subdivision 3
82.22, subdivision 2 82.29, subdivision 4
82.22, subdivision 5a 82.29, subdivision 5
82.22, subdivision 6c 82.29, subdivision 6
82.22, subdivision 3 82.29, subdivision 7
82.22, subdivision 6 82.29, subdivision 8
82.20, subdivision 2 82.31, subdivision 1
82.20, subdivision 3 82.31, subdivision 2
82.20, subdivision 3a 82.31, subdivision 3
82.20, subdivision 4 82.31, subdivision 4
82.22, subdivision 5 82.31, subdivision 5
82.22, subdivision 6a 82.31, subdivision 6
82.22, subdivision 13 82.32
82.22, subdivision 8 82.33, subdivision 1
82.20, subdivision 8,
paragraph (a) 82.33, subdivision 2
82.20, subdivision 8,
paragraph (b) 82.33, subdivision 3
82.22, subdivision 10 82.33, subdivision 4
82.22, subdivision 5b 82.33, subdivision 5
82.22, subdivision 6b 82.33, subdivision 6
82.20, subdivision 1 82.34, subdivision 1
82.20, subdivision 2a 82.34, subdivision 2
82.20, subdivision 5 82.34, subdivision 3
82.20, subdivision 6 82.34, subdivision 4
82.20, subdivision 7 82.34, subdivision 5
82.20, subdivision 9,
paragraphs (a) and (b) 82.34, subdivision 6
82.20, subdivision 7a 82.34, subdivision 7
82.20, subdivision 8a 82.34, subdivision 8
82.20, subdivision 9a 82.34, subdivision 9
82.20, subdivision 9,
paragraph (c) 82.34, subdivision 10
82.20, subdivision 12 82.34, subdivision 11
82.20, subdivision 12a 82.34, subdivision 12
82.20, subdivision 13 82.34, subdivision 13
82.20, subdivision 14 82.34, subdivision 14
82.20, subdivision 14a 82.34, subdivision 15
82.20, subdivision 15 82.34, subdivision 16
82.27, subdivision 1 82.35, subdivision 1
82.20, subdivision 10 82.35, subdivision 2
82.27, subdivision 2 82.35, subdivision 3
82.27, subdivision 2a 82.35, subdivision 4
82.27, subdivision 3 82.35, subdivision 5
82.27, subdivision 4 82.35, subdivision 6
82.27, subdivision 5 82.35, subdivision 7
82.27, subdivision 6 82.35, subdivision 8
82.27, subdivision 7 82.35, subdivision 9
82.27, subdivision 8 82.35, subdivision 10
82.31 82.38
82.20, subdivision 11 82.39, subdivision 1
82.20, subdivision 11a 82.39, subdivision 2
82.20, subdivision 11b 82.39, subdivision 3
82.20, subdivision 11c 82.39, subdivision 4
82.20, subdivision 11d 82.39, subdivision 5
82.32 82.40
82.19, subdivision 1 82.41, subdivision 1
82.19, subdivision 2 82.41, subdivision 2
82.19, subdivision 3 82.41, subdivision 3
82.19, subdivision 4 82.41, subdivision 4
82.19, subdivision 4a 82.41, subdivision 5
82.19, subdivision 5 82.41, subdivision 6
82.19, subdivision 6 82.41, subdivision 7
82.19, subdivision 7 82.41, subdivision 8
82.19, subdivision 8 82.41, subdivision 9
82.19, subdivision 9 82.41, subdivision 10
82.19, subdivision 10 82.41, subdivision 11
82.19, subdivision 11 82.41, subdivision 12
82.19, subdivision 12 82.41, subdivision 13
82.29 82.42
82.34 82.43
82.22, subdivision 12 82.44
82.23, subdivision 2 82.45, subdivision 1
82.23, subdivision 3 82.45, subdivision 2
82.23, subdivision 1 82.45, subdivision 3
82.28 82.47
82.176 82.49
82.24, subdivision 1 82.50, subdivision 1
82.24, subdivision 2 82.50, subdivision 2
82.24, subdivision 3 82.50, subdivision 3
82.24, subdivision 4 82.50, subdivision 4
82.24, subdivision 5 82.50, subdivision 5
82.24, subdivision 6 82.50, subdivision 6
82.24, subdivision 7 82.50, subdivision 7
82.24, subdivision 8 82.50, subdivision 8
82.24, subdivision 9 82.50, subdivision 9
82.24, subdivision 10 82.50, subdivision 10
82.24, subdivision 11 82.50, subdivision 11
Sec. 62. [REPEALER.]
(a) Minnesota Statutes 2002, section 82.22, subdivision 9,
is repealed.
(b) Minnesota Rules, parts 2800.0100; 2800.0200; 2800.0300;
2800.1100; 2800.1200; 2800.1300; 2800.1400; 2800.1500;
2800.1600; 2800.1700; 2800.1750; 2800.1751; 2800.1800;
2800.1900; 2800.2000; 2800.2100; 2800.2150; 2805.0100;
2805.0200; 2805.0300; 2805.0400; 2805.0500; 2805.0600;
2805.0700; 2805.0800; 2805.0900; 2805.1000; 2805.1100;
2805.1300; 2805.1400; 2805.1500; 2805.1600; 2805.1700;
2805.1800; 2805.1900; and 2805.2000, are repealed.
Presented to the governor May 13, 2004
Signed by the governor May 15, 2004, 9:45 p.m.
Official Publication of the State of Minnesota
Revisor of Statutes