Minnesota Legislature
HF 1270
1st Engrossment - 82nd Legislature (2001 - 2002) Posted on 12/15/2009 12:00am
KEY: stricken = removed, old language.
underscored = added, new language.
1.1 A bill for an act 1.2 relating to commerce; regulating currency exchanges, 1.3 real estate brokers, real property appraisers, 1.4 subdivided land sales licenses, residential 1.5 contractors, and collection agencies; modifying 1.6 certain continuing education requirements; regulating 1.7 certain fees, costs, duties, rights, penalties, and 1.8 recovery fund amounts; regulating nonprofit 1.9 corporations; providing certain real property 1.10 transaction disclosures; amending Minnesota Statutes 1.11 2000, sections 45.0295; 53A.081, subdivision 2; 1.12 60K.19, subdivision 8; 72B.04, subdivisions 6, 7; 1.13 80B.03, subdivision 4a; 82.195, subdivision 2; 82.196, 1.14 subdivision 2; 82.197, subdivisions 1, 4, by adding a 1.15 subdivision; 82.22, subdivision 13; 82.24, subdivision 1.16 8; 82.27, subdivision 3; 82.32; 82.34, subdivision 15; 1.17 82B.14; 83.25, subdivision 1; 317A.203; 326.91, 1.18 subdivision 1; 326.975, subdivision 1; 332.33, by 1.19 adding a subdivision; 332.41; 359.02; proposing coding 1.20 for new law in Minnesota Statutes, chapter 325F. 1.21 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 1.22 Section 1. Minnesota Statutes 2000, section 45.0295, is 1.23 amended to read: 1.24 45.0295 [FEES.] 1.25 (a) The following fees shall be paid to the commissioner: 1.26 (1) for each hour or fraction of one hour of education 1.27 course approvalfor continuing educationsought, $10; and 1.28 (2) for eachcontinuing educationcourse coordinator 1.29 approval, $100. 1.30 (b) All fees paid to the commissioner under this section 1.31 are nonrefundable, except that an overpayment of a fee shall be 1.32 returned upon proper application. 1.33 Sec. 2. Minnesota Statutes 2000, section 53A.081, 2.1 subdivision 2, is amended to read: 2.2 Subd. 2. [INVESTIGATION.] The commissioner may at any time 2.3and shall at least once in each yearinvestigate the currency 2.4 exchange business of any licensee and of every person, 2.5 partnership, association, and corporation engaged in the 2.6 business of operating a currency exchange in the manner provided 2.7 under section 45.027. 2.8 Sec. 3. Minnesota Statutes 2000, section 60K.19, 2.9 subdivision 8, is amended to read: 2.10 Subd. 8. [MINIMUM EDUCATION REQUIREMENT.] Each person 2.11 subject to this section shall complete a minimum of 30 credit 2.12 hours of courses accredited by the commissioner during each 2.13 24-month licensing period. Any person whose initial licensing 2.14 period extends more than six months shall complete 15 hours of 2.15 courses accredited by the commissioner during the initial 2.16 license period. Any person teaching or lecturing at an 2.17 accredited course qualifies for1-1/2three times the number of 2.18 credit hours that would be granted to a person completing the 2.19 accredited course. No more than 15 credit hours per licensing 2.20 period may be credited to a person for courses sponsored by, 2.21 offered by, or affiliated with an insurance company or its 2.22 agents. Courses sponsored by, offered by, or affiliated with an 2.23 insurance company or agent may restrict its students to agents 2.24 of the company or agency. 2.25 Sec. 4. Minnesota Statutes 2000, section 72B.04, 2.26 subdivision 6, is amended to read: 2.27 Subd. 6. [EXCEPTIONS.] A person who on January 1, 1972, 2.28 meets all of the qualifications specified in subdivision 2 with 2.29 regard to the class of license applied for and, if experience is 2.30 one of the requisites, has gained the experience within the 2.31 three years next preceding January 1, 1972, shall be eligible 2.32 for the issuance of a license without taking an examination. 2.33 A person who has held a license of any given class or in 2.34 any field or fields within three years prior to the application 2.35 shall be entitled to a renewal of the license in the same class 2.36 or in the same fields without taking an examination. 3.1 A person applying for a license as a crop hail adjuster 3.2 shall not be required to comply with the requirements of 3.3 subdivision 5. 3.4 The commissioner may issue a license under sections 72B.01 3.5 to 72B.14 without an examination, if the applicant presents 3.6 sufficient and satisfactory evidence of having passed a similar 3.7 examination in another state and if the commissioner, with the 3.8 advice of the advisory board, has determined that the standards 3.9 of such other state are equivalent to those in Minnesota for the 3.10 class of license applied for. Any applicant who presents 3.11 sufficient and satisfactory evidence of having successfully 3.12 completed all six parts of the insurance institute of America 3.13 program in adjusting or other programs approved by the 3.14 commissioner shall be entitled to an adjuster's license without 3.15 taking the examination prescribed in subdivision 5. 3.16 Sec. 5. Minnesota Statutes 2000, section 72B.04, 3.17 subdivision 7, is amended to read: 3.18 Subd. 7. [LICENSE TERM.]Every adjuster's and public3.19adjuster solicitor's license shall be for a term expiring on3.20October 31 next following the date of its issuance, and may be3.21renewed for the ensuing calendar year upon the timely filing of3.22an application for renewal.(a) Initial licenses issued under 3.23 this section are valid for a period not to exceed two years. 3.24 Each initial license must expire on October 31 of the expiration 3.25 year assigned by the commissioner. 3.26 (b) Licenses issued under this section may be renewed upon 3.27 the timely filing of an application for renewal. Every renewal 3.28 license is valid for a period of 24 months. 3.29 Sec. 6. Minnesota Statutes 2000, section 80B.03, 3.30 subdivision 4a, is amended to read: 3.31 Subd. 4a. Within threecalendarbusiness days of the date 3.32 of filing of the registration statement, the commissioner may by 3.33 order summarily suspend the effectiveness of the takeover offer 3.34 if the commissioner determines that the registration statement 3.35 does not contain all of the information specified in 3.36 subdivisions 2 and 6 or that the takeover offer materials 4.1 provided to offerees do not provide full disclosure to offerees 4.2 of all material information concerning the takeover offer. The 4.3 suspension shall remain in effect only until the determination 4.4 following a hearing held pursuant to subdivision 5. 4.5 Sec. 7. Minnesota Statutes 2000, section 82.195, 4.6 subdivision 2, is amended to read: 4.7 Subd. 2. [CONTENTS.] All listing agreements must be in 4.8 writing and must include: 4.9 (1) a definite expiration date; 4.10 (2) a description of the real property involved; 4.11 (3) the list price and any terms required by the seller; 4.12 (4) the amount of any compensation or commission or the 4.13 basis for computing the commission; 4.14 (5) a clear statement explaining the events or conditions 4.15 that will entitle a broker to a commission; 4.16 (6) information regarding an override clause, if 4.17 applicable, including a statement to the effect that the 4.18 override clause will not be effective unless the licensee 4.19 supplies the seller with a protective list within 72 hours after 4.20 the expiration of the listing agreement; 4.21 (7) the following notice in not less than ten point 4.22 boldface type immediately preceding any provision of the listing 4.23 agreement relating to compensation of the licensee: 4.24 "NOTICE: THECOMMISSION RATECOMPENSATION FOR THE SALE, 4.25 LEASE, RENTAL, OR MANAGEMENT OF REAL PROPERTY SHALL BE 4.26 DETERMINED BETWEEN EACH INDIVIDUAL BROKER ANDITSTHE BROKER'S 4.27 CLIENT."; 4.28 (8) for residential property listings, the following "dual 4.29 agency" disclosure statement: 4.30 If a buyer represented by broker wishes to buy your 4.31 property, a dual agency will be created. This means that broker 4.32 will represent both you and the buyer(s), and owe the same 4.33 duties to the buyer(s) that broker owes to you. This conflict 4.34 of interest will prohibit broker from advocating exclusively on 4.35 your behalf. Dual agency will limit the level of representation 4.36 broker can provide. If a dual agency should arise, you will 5.1 need to agree that confidential information about price, terms, 5.2 and motivation will still be kept confidential unless you 5.3 instruct broker in writing to disclose specific information 5.4 about you. All other information will be shared. Broker cannot 5.5 act as a dual agent unless both you and the buyer(s) agree to 5.6 it. By agreeing to a possible dual agency, you will be giving 5.7 up the right to exclusive representation in an in-house 5.8 transaction. However, if you should decide not to agree to a 5.9 possible dual agency, and you want broker to represent you, you 5.10 may give up the opportunity to sell your property to buyers 5.11 represented by broker. 5.12 Seller's Instructions to Broker 5.13 5.14 Having read and understood this information about dual 5.15 agency, seller(s) now instructs broker as follows: 5.16 ....... Seller(s) will agree to a dual agency 5.17 representation and will consider offers made 5.18 by buyers represented by broker. 5.19 5.20 ....... Seller will not agree to a dual agency 5.21 representation and will not consider offers 5.22 made by buyers represented by broker. 5.23 5.24 5.25 ......................... ......................... 5.26 Seller Broker 5.27 5.28 5.29 ......................... By: .................... 5.30 Seller Salesperson 5.31 5.32 Date: ..................; 5.33 (9) a notice requiring the seller to indicate in writing 5.34 whether it is acceptable to the seller to have the licensee 5.35 arrange for closing services or whether the seller wishes to 5.36 arrange for others to conduct the closing. The notice must also6.1include the disclosure of any controlled business arrangement,6.2as the term is defined in United States Code, title 12, section6.32602, between the licensee and the real estate closing agent6.4through which the licensee proposes to arrange closing services; 6.5 and 6.6 (10) for residential listings, a notice stating that after 6.7 the expiration of the listing agreement, the seller will not be 6.8 obligated to pay the licensee a fee or commission if the seller 6.9 has executed another valid listing agreement pursuant to which 6.10 the seller is obligated to pay a fee or commission to another 6.11 licensee for the sale, lease, or exchange of the real property 6.12 in question. This notice may be used in the listing agreement 6.13 for any other type of real estate. 6.14 Sec. 8. Minnesota Statutes 2000, section 82.196, 6.15 subdivision 2, is amended to read: 6.16 Subd. 2. [CONTENTS.] All buyer's broker agreements must be 6.17 in writing and must include: 6.18 (1) a definite expiration date; 6.19 (2) the amount of any compensation or commission, or the 6.20 basis for computing the commission; 6.21 (3) a clear statement explaining the services to be 6.22 provided to the buyer by the broker, and the events or 6.23 conditions that will entitle a broker to a commission or other 6.24 compensation; 6.25 (4)a provision for cancellation of the agreement by either6.26party upon terms agreed upon by the parties;6.27(5)information regarding an override clause, if 6.28 applicable, including a statement to the effect that the 6.29 override clause will not be effective unless the licensee 6.30 supplies the buyer with a protective list within 72 hours after 6.31 the expiration of the buyer's broker agreement; 6.32(6)(5) the following notice in not less than ten point 6.33 bold face type immediately preceding any provision of the 6.34 buyer's broker agreement relating to compensation of the 6.35 licensee: 6.36 "NOTICE: THECOMMISSION RATECOMPENSATION FOR THE 7.1 PURCHASE, LEASE, RENTAL, OR MANAGEMENT OF REAL PROPERTYIS7.2NEGOTIABLE ANDSHALL BE DETERMINED BETWEEN EACH INDIVIDUAL 7.3 BROKER ANDITSTHE BROKER'S CLIENT."; 7.4(7)(6) the following "dual agency" disclosure statement: 7.5 If you choose to purchase a property listed by broker, a 7.6 dual agency will be created. This means that broker will 7.7 represent both you and the seller(s), and owe the same duties to 7.8 the seller(s) that broker owes to you. This conflict of 7.9 interest will prohibit broker from advocating exclusively on 7.10 your behalf. Dual agency will limit the level of representation 7.11 broker can provide. If a dual agency should arise, you will 7.12 need to agree that confidential information about price, terms, 7.13 and motivation will still be kept confidential unless you 7.14 instruct broker in writing to disclose specific information 7.15 about you. All other information will be shared. Broker cannot 7.16 act as a dual agent unless both you and the seller(s) agree to 7.17 it. By agreeing to a possible dual agency, you will be giving 7.18 up the right to exclusive representation in an in-house 7.19 transaction. However, if you should decide not to agree to a 7.20 possible dual agency, and you want broker to represent you, you 7.21 may give up the opportunity to purchase the properties listed by 7.22 broker. 7.23 Buyer's Instructions to Broker 7.24 7.25 ....... Buyer(s) will agree to a dual agency representation 7.26 and will consider properties listed by broker. 7.27 7.28 ....... Buyer will not agree to a dual agency 7.29 representation and will not consider 7.30 properties listed by broker. 7.31 7.32 7.33 ......................... ......................... 7.34 Buyer Broker 7.35 7.36 ......................... By: .................... 8.1 Buyer Salesperson 8.2 8.3 Date: ...................; and 8.4(8)(7) for buyer's broker agreements which involve 8.5 residential real property, a notice stating that after the 8.6 expiration of the buyer's broker agreement, the buyer will not 8.7 be obligated to pay the licensee a fee or commission if the 8.8 buyer has executed another valid buyer's broker agreement 8.9 pursuant to which the buyer is obligated to pay a fee or 8.10 commission to another licensee for the purchase, lease, or 8.11 exchange of real property. 8.12 Sec. 9. Minnesota Statutes 2000, section 82.197, 8.13 subdivision 1, is amended to read: 8.14 Subdivision 1. [AGENCY DISCLOSURE.] A real estate broker 8.15 or salesperson shall provide to a consumer in the sale and 8.16 purchase of a residential real property transaction at the first 8.17 substantive contact with the consumer an agency disclosure form 8.18 in substantially the form set forth in subdivision 4. The 8.19 agency disclosure form shall be intended to provide a 8.20 description of available options for agency and nonagency 8.21 relationships, and a description of the role of a licensee under 8.22 each option. The agency disclosure form shall provide a 8.23 signature line for acknowledgment of receipt by the consumer. 8.24 Sec. 10. Minnesota Statutes 2000, section 82.197, 8.25 subdivision 4, is amended to read: 8.26 Subd. 4. [AGENCY DISCLOSURE FORM.] The agency disclosure 8.27 form shall be in substantially the form set forth below: 8.28 AGENCY RELATIONSHIPS IN REAL ESTATE TRANSACTIONS 8.29 Minnesota law requires that early in any relationship, real 8.30 estate brokers or salespersons discuss with consumers what type 8.31 of agency representation or relationship they desire.(1) The 8.32 available options are listed below. This is not a contract. 8.33 This is an agency disclosure form only. If you desire 8.34 representation, you must enter into a written contract according 8.35 to state law (a listing contract or a buyer representation 9.1 contract). Until such time as you choose to enter into a 9.2 written contract for representationor assistance, you will be 9.3 treated as a customerof the broker or salesperson and not9.4represented by the brokerageand will not receive any 9.5 representation from the broker or salesperson. The broker or 9.6 salespersonwould thenwill be acting as aSeller's broker9.7 Facilitator (see paragraphIV below),or as a nonagent (see9.8paragraph IV below)unless the broker or salesperson is 9.9 representing another party as described below. 9.10 ACKNOWLEDGMENT: I/We acknowledge that I/We have been 9.11 presented with the below-described options. I/We understand 9.12 that until I/We have signed a representation contract, I/We are 9.13 not represented by the broker/salesperson and information given 9.14 to the broker/salesperson may be disclosed. I/We understand 9.15 that written consent is required for a dual agency 9.16 relationship. THIS IS A DISCLOSURE ONLY, NOT A CONTRACT FOR 9.17 REPRESENTATION. 9.18 ............... .......... 9.19 Signature Date 9.20 ............... .......... 9.21 Signature Date 9.22 I. 9.23 Seller's Broker: A broker who lists a property, or a 9.24 salesperson who is licensed to the listing broker, 9.25 represents the Seller and acts on behalf of the Seller.A9.26broker or salesperson working with a Buyer may also act as9.27a subagent of the Seller, in which case the Buyer is the9.28broker's customer and is not represented by that broker.A 9.29 Seller's broker owes to the Seller the fiduciary duties 9.30 described below.(2) The broker must also disclose to the 9.31 Buyeranymaterial facts(3) of which the broker is aware 9.32 that could adversely and significantly affect the Buyer's 9.33 use or enjoyment of the property. If a broker or 9.34 salespersonwho isworking with a Buyer as a customerand9.35 is representing the Sellerand to whom any information is9.36disclosed, he or she must act in the Seller'sinterests10.1 best interest and must tell the Sellertheany information 10.2 disclosed to him or her, except confidential information 10.3 acquired in a facilitator relationship (see paragraph V 10.4 below). In that case, the Buyer will not be represented 10.5 and will not receive advice and counsel from the broker or 10.6 salesperson. 10.7 II. 10.8 Subagent: A broker or salesperson who is working with a 10.9 Buyer but represents the Seller. In this case, the Buyer 10.10 is the broker's customer and is not represented by that 10.11 broker. If a broker or salesperson working with a Buyer as 10.12 a customer is representing the Seller, he or she must act 10.13 in the Seller's best interest and must tell the Seller any 10.14 information that is disclosed to him or her. In that case, 10.15 the Buyer will not be represented and will not receive 10.16 advice and counsel from the broker or salesperson. 10.17 III. 10.18 Buyer's Broker: A Buyer may enter into an agreement for 10.19 the broker or salesperson to represent and act on behalf of 10.20 the Buyer. The broker may represent the Buyer only, and 10.21 not the Seller, even ifthe brokerhe or she is being paid 10.22 in whole or in part by the Seller. A Buyer's broker owes 10.23 to the Buyer the fiduciary duties described below.(2) The 10.24 broker must disclose to the Buyeranymaterial facts(3) of 10.25 which the broker is aware that could adversely and 10.26 significantly affect the Buyer's use or enjoyment of the 10.27 property. If a broker or salesperson working with a Seller 10.28 as a customer is representing the Buyer, he or she must act 10.29 in the Buyer's best interest and must tell the Buyer any 10.30 information disclosed to him or her, except confidential 10.31 information acquired in a facilitator relationship (see 10.32 paragraph V below). In that case, the Seller will not be 10.33 represented and will not receive advice and counsel from 10.34 the broker or salesperson. 10.35III.IV. 10.36 Dual Agency-Broker Representing both Seller and Buyer: 11.1 Dual agency occurs when one broker or salesperson 11.2 represents both parties to a transaction, or when two 11.3 salespersons licensed to the same broker each represent a 11.4 party to the transaction. Dual agency requires the 11.5 informed consent of all parties, and means that the broker 11.6 and salesperson owe the same duties to the Seller and the 11.7 Buyer. This role limits the level of representation the 11.8 broker and salespersons can provide, and prohibits them 11.9 from acting exclusively for either party. In a dual 11.10 agency, confidential information about price, terms, and 11.11 motivation for pursuing a transaction will be kept 11.12 confidential unless one party instructs the broker or 11.13 salesperson in writing to disclose specific information 11.14 aboutthe party writinghim or her. Other information will 11.15 be shared. Dual agents may not advocate for one party to 11.16 the detriment of the other.(3)(4) 11.17 Within the limitations described above, dual agents owe to 11.18 both Seller and Buyer the fiduciary duties described 11.19 below.(2) Dual agents must disclose to Buyersanymaterial 11.20 facts(3) of which the broker is aware that could adversely 11.21 and significantly affect the Buyer's use or enjoyment of 11.22 the property. 11.23IV.V. 11.24NonagentFacilitator: A broker or salespersonmay perform11.25 who performs services foreither party as a nonagent, if11.26that party signs a nonagency services agreementa Buyer, a 11.27 Seller, or both but does not represent either in a 11.28 fiduciary capacity as a Buyer's Broker, Seller's Broker, or 11.29 Dual Agent.As a nonagent the broker or salesperson11.30facilitates the transaction, but does not act on behalf of11.31either party.THENONAGENTFACILITATOR BROKER OR 11.32 SALESPERSON DOES NOT OWE ANY PARTY ANY OF THE FIDUCIARY 11.33 DUTIES LISTED BELOW, UNLESS THOSE DUTIES ARE INCLUDED IN 11.34 THE WRITTENNONAGENCYFACILITATOR SERVICES AGREEMENT. The 11.35nonagentfacilitator broker or salesperson owesonlythe 11.36 duty of confidentiality to the party but owes no other duty 12.1 to the party except those duties required by law or 12.2 contained inthea writtennonagencyfacilitator services 12.3 agreement, if any. In the event a facilitator broker or 12.4 salesperson, working with a Buyer, shows a property listed 12.5 by the facilitator broker or salesperson, then the 12.6 facilitator broker or salesperson must act as a Seller's 12.7 Broker (see paragraph I above). In the event a facilitator 12.8 broker or salesperson, working with a Seller, accepts a 12.9 showing of the property by a Buyer being represented by the 12.10 facilitator broker or salesperson, then the facilitator 12.11 broker or salesperson must act as a Buyer's Broker (see 12.12 paragraph III above). 12.13ACKNOWLEDGMENT: I/We acknowledge that I/We have been presented12.14with the above-described options. I/We understand that Buyers12.15who have not signed a Buyer representation contract or nonagency12.16services agreement are not represented by the broker/salesperson12.17and information given to the broker/salesperson will be12.18disclosed to the Seller. I/We understand that written consent12.19is required for a dual agency relationship. This is a12.20disclosure only, NOT a contract for representation.12.21.................................................12.22SellerDateBuyerDate12.24.................................................12.25SellerDateBuyerDate12.29 **************************************************************** 12.30 (1) This disclosure is required by law in any transaction 12.31 involving property occupied or intended to be occupied by one to 12.32 four families as their residence. 12.33 (2) The fiduciary duties mentioned above are listed below 12.34 and have the following meanings: 12.35 Loyalty-broker/salesperson will act only in client(s)' best 12.36 interest. 13.1 Obedience-broker/salesperson will carry out all client(s)' 13.2 lawful instructions. 13.3 Disclosure-broker/salesperson will disclose to client(s) 13.4 all material facts of which broker/salesperson has knowledge 13.5 which might reasonably affect the client's rights and interests. 13.6 Confidentiality-broker/salesperson will keep client(s)' 13.7 confidences unless required by law to disclose specific 13.8 information (such as disclosure of material facts to Buyers). 13.9 Reasonable Care-broker/salesperson will use reasonable care 13.10 in performing duties as an agent. 13.11 Accounting-broker/salesperson will account to client(s) for 13.12 all client(s)' money and property received as agent. 13.13 (3) Material facts. Licensees and/or seller(s) shall 13.14 disclose to any prospective purchaser all material facts 13.15 pertaining to adverse physical conditions in the property, of 13.16 which the licensees and/or seller(s) are aware, which could 13.17 adversely and significantly affect an ordinary purchaser's use 13.18 or enjoyment of the property, or any intended use of the 13.19 property of which the licensees and/or seller(s) are aware. 13.20 (4) If Seller(s) decides not to agree to a dual agency 13.21 relationship, Seller(s) may give up the opportunity to sell the 13.22 property to Buyers represented by the broker/salesperson. If 13.23 Buyer(s) decides not to agree to a dual agency relationship, 13.24 Buyer(s) may give up the opportunity to purchase properties 13.25 listed by the broker. 13.26 Sec. 11. Minnesota Statutes 2000, section 82.197, is 13.27 amended by adding a subdivision to read: 13.28 Subd. 6. [MATERIAL FACTS.] (a) Licensees shall disclose to 13.29 any prospective purchaser all material facts pertaining to 13.30 adverse physical conditions in the property, of which the 13.31 licensees are aware, which could adversely and significantly 13.32 affect an ordinary purchaser's use or enjoyment of the property, 13.33 or any intended use of the property of which the licensees are 13.34 aware. 13.35 (b) It is not a material fact relating to real property 13.36 offered for sale and no cause of action shall arise against an 14.1 owner of real property or a licensee for failure to disclose in 14.2 any real estate transaction the fact or suspicion that the 14.3 property: 14.4 (1) is or was occupied by an owner or occupant who is or 14.5 was suspected to be infected with human immunodeficiency virus 14.6 or diagnosed with acquired immunodeficiency syndrome; 14.7 (2) was the site of a homicide, suicide, accidental death, 14.8 natural death, perceived paranormal activity, or felony; or 14.9 (3) resides in a neighborhood containing any adult family 14.10 home, community-based residential facility, or nursing home. 14.11 An owner of real property or a licensee shall be immune 14.12 from civil liability or criminal penalty for failure to disclose 14.13 a fact contained in clauses (1) through (3). 14.14 (c) A licensee or employee of the licensee has no duty to 14.15 disclose information regarding an offender who is required to 14.16 register under section 243.166, or about whom notification is 14.17 made under that section, and a licensee or employee of a 14.18 licensee is immune from liability for failure to disclose this 14.19 information if the broker or salesperson, in a timely manner, 14.20 provides a written notice that information about the predatory 14.21 offender registry and persons registered with the registry may 14.22 be obtained by contacting local law enforcement where the 14.23 property is located or the department of corrections. 14.24 (d) A licensee is not required to disclose, except as 14.25 otherwise provided in paragraph (e), information relating to the 14.26 physical condition of the property or any other information 14.27 relating to the real estate transaction, if a written report 14.28 that discloses the information has been prepared by a qualified 14.29 third party and provided to the person. For the purposes of 14.30 this paragraph, "qualified third party" means a federal, state, 14.31 or local governmental agency, or any person whom the broker, 14.32 salesperson, or a party to the real estate transaction 14.33 reasonably believes has the expertise necessary to meet the 14.34 industry standards of practice for the type of inspection or 14.35 investigation that has been conducted by the third party in 14.36 order to prepare the written report and who is acceptable to the 15.1 person to whom the disclosure is being made. 15.2 (e) A licensee shall disclose to the parties to a real 15.3 estate transaction any facts known by the broker or salesperson 15.4 that contradict any information included in a written report, if 15.5 a copy of the report is provided to the licensee, described in 15.6 paragraph (d). 15.7 (f) Disclosures made in accordance with the requirements of 15.8 this subdivision relating to disclosure of material facts are 15.9 sufficient to satisfy common-law disclosure requirements. 15.10 Sec. 12. Minnesota Statutes 2000, section 82.22, 15.11 subdivision 13, is amended to read: 15.12 Subd. 13. [CONTINUING EDUCATION.] (a) After their first 15.13 renewal date, all real estate salespersons and all real estate 15.14 brokers shall be required to successfully complete 30 hours of 15.15 real estate continuing education, either as a student or a 15.16 lecturer, in courses of study approved by the commissioner, 15.17 during each 24-month license period. At least 15 of the 30 15.18 credit hours must be completed during the first 12 months of the 15.19 24-month licensing period. Salespersons and brokers whose 15.20 initial license period extends more than 12 months are required 15.21 to complete 15 hours of real estate continuing education during 15.22 the initial license period. Those licensees who will receive a 15.23 12-month license on July 1, 1995, because of the staggered 15.24 implementation schedule must complete 15 hours of real estate 15.25 continuing education as a requirement for renewal on July 1, 15.26 1996. Licensees may not claim credit for continuing education 15.27 not actually completed as of the date their report of continuing 15.28 education compliance is filed. 15.29 (b) The commissioner shall adopt rules defining the 15.30 standards for course and instructor approval, and may adopt 15.31 rules for the proper administration of this subdivision. The 15.32 commissioner may not approve a course which can be completed by 15.33 the student at home or outside the classroom without the 15.34 supervision of an instructorapproved by the department of15.35commerce. The commissioner has discretion to establish a pilot15.36program to explore delivery ofexcept accredited courses using 16.1 new delivery technology, including interactive technology, and 16.2 the Internet.This pilot program expires on August 1,16.32001.Courses in motivation, salesmanship, psychology, or time 16.4 management shall not be approved by the commissioner for 16.5 continuing education credit. 16.6 (c) Any program approved by Minnesota continuing legal 16.7 education shall be approved by the commissioner of commerce for 16.8 continuing education for real estate brokers and salespeople if 16.9 the program or any part thereof relates to real estate. 16.10 (d) As part of the continuing education requirements of 16.11 this section, the commissioner shall require that all real 16.12 estate brokers and salespersons receive: 16.13 (1) at leasttwo hoursone hour of training during each 16.14 license period in courses in laws or regulations on agency 16.15 representation and disclosure; and 16.16 (2) at leasttwo hoursone hour of training during each 16.17 license period in courses in state and federal fair housing 16.18 laws, regulations, and rules, or other antidiscrimination laws. 16.19ClauseClauses (1)doesand (2) do not apply to real estate 16.20 salespersons and real estate brokers engaged solely in the 16.21 commercial real estate business who file with the commissioner a 16.22 verification of this status along with the continuing education 16.23 report required under paragraph (a). 16.24 (e) The commissioner is authorized to establish a procedure 16.25 for renewal of course accreditation. 16.26 (f) Approved courses may be sponsored or offered by a 16.27 broker of a real estate company and may be held on the premises 16.28 of a company licensed under this chapter. All course offerings 16.29 must be open to any interested individuals. Access may be 16.30 restricted by the sponsor based on class size only. Courses 16.31 must not be approved if attendance is restricted to any 16.32 particular group of people. A broker must comply with all 16.33 continuing education rules prescribed by the commissioner. 16.34 (g) No more than one-half of the credit hours per licensing 16.35 period, including continuing education required under 16.36 subdivision 6, may be credited to a person for attending any 17.1 combination of courses either: (1) sponsored by, offered by, or 17.2 affiliated with a real estate company or its agents; or (2) 17.3 offered using new delivery technology, including computer, 17.4 interactive technology, and the Internet. 17.5 Sec. 13. Minnesota Statutes 2000, section 82.24, 17.6 subdivision 8, is amended to read: 17.7 Subd. 8. [ACCRUED INTEREST.] (a) Each broker shall 17.8 maintain a pooled interest-bearing trust account for deposit of 17.9 client funds. The interest accruing on the trust account, less 17.10 reasonable transaction costs, must be paid to the state 17.11 treasurer for deposit in the housing trust fund account created 17.12 under section 462A.201 unless otherwise specified pursuant to an 17.13 expressed written agreement between the parties to a transaction. 17.14 (b) For an account created under paragraph (a), each broker 17.15 shall direct the financial institution to: 17.16 (1) pay the interest, less reasonable transaction costs, 17.17 computed in accordance with the financial institution's standard 17.18 accounting practice, at least quarterly, to the state treasurer; 17.19 and 17.20 (2) send a statement to the state treasurer showing the 17.21 name of the broker for whom the payment is made, the rate of 17.22 interest applied, the amount of service charges deducted, and 17.23 the account balance for the period in which the report is made. 17.24 The state treasurer shall credit the amount collected under 17.25 this subdivision to the housing trust fund account established 17.26 in section 462A.201. 17.27 (c) The financial institution must promptly notify the 17.28 commissioner if a draft drawn on the account is dishonored. A 17.29 draft is not dishonored if a stop payment order is requested by 17.30 an issuer who has a good faith defense to payment on the draft. 17.31 Sec. 14. Minnesota Statutes 2000, section 82.27, 17.32 subdivision 3, is amended to read: 17.33 Subd. 3. [ORDER TO SHOW CAUSE.] The commissioner shall 17.34 issue an order requiring a licensee or applicant for a license 17.35 to show cause why the license should not be revoked or 17.36 suspended, or the licensee censured, or the application denied. 18.1 The order shall be calculated to give reasonable notice of the 18.2 time and place for hearing thereon, and shall state thereasons18.3 specific statute or rule that has been violated for the entry of 18.4 the order. The commissioner may by order summarily suspend a 18.5 license pending final determination of any order to show cause. 18.6 If a license is suspended pending final determination of an 18.7 order to show cause, a hearing on the merits shall be held 18.8 within 30 days of the issuance of the order of suspension. All 18.9 hearings shall be conducted in accordance with the provisions of 18.10 chapter 14. After the hearing, the commissioner shall enter an 18.11 order making such disposition of the matter as the facts 18.12 require. If the licensee or applicant fails to appear at a 18.13 hearing after having been duly notified of it, such person shall 18.14 be deemed in default, and the proceeding may be determined 18.15 against the licensee or applicant upon consideration of the 18.16 order to show cause, the allegations of which may be deemed to 18.17 be true. 18.18 Sec. 15. Minnesota Statutes 2000, section 82.32, is 18.19 amended to read: 18.20 82.32 [PENALTY.] 18.21 Any person who violates any provision of this chapter, or 18.22 any rule or order of the commissioner, shall be guilty of 18.23 agrossmisdemeanor. 18.24 Sec. 16. Minnesota Statutes 2000, section 82.34, 18.25 subdivision 15, is amended to read: 18.26 Subd. 15. Any sums received by the commissioner pursuant 18.27 to any provisions of this section shall be deposited in the 18.28 state treasury, and credited to the real estate education, 18.29 research and recovery fund, and said sums shall be allocated 18.30 exclusively for the purposes provided in this section. All 18.31 moneys in the fund are appropriated annually to the commissioner 18.32 for the purposes of this section. 18.33 All money credited to the fund under section 462A.201 may 18.34 only be used for purposes under subdivision 6, clause (g). 18.35 Beginning in 1990, the commissioner must, on February 1 of each 18.36 year, review the amount of money spent or allocated for uses 19.1 under subdivision 6, clause (g), for the previous calendar 19.2 year. If the amount spent or allocated is less than the amount 19.3 credited to the fund under section 462A.201 during the same 19.4 calendar year, the difference must be transferred from the fund 19.5 to the housing trust fund account established in section 19.6 462A.201. If the fund balance exceeds $6,000,000, the 19.7 commissioner may suspend the fee imposed under subdivision 3. 19.8 Sec. 17. Minnesota Statutes 2000, section 82B.14, is 19.9 amended to read: 19.10 82B.14 [EXPERIENCE REQUIREMENT.] 19.11 (a) As a prerequisite for licensing as aregistered real19.12property appraiser orlicensed real property appraiser, an 19.13 applicant must present evidence satisfactory to the commissioner 19.14 that the person has obtained 2,000 hours of experience in real 19.15 property appraisal. 19.16 As a prerequisite for licensing as a certified residential 19.17 real property appraiser, an applicant must present evidence 19.18 satisfactory to the commissioner that the person has obtained 19.19 2,500 hours of experience in real property appraisal. 19.20 As a prerequisite for licensing as a certified general real 19.21 property appraiser, an applicant must present evidence 19.22 satisfactory to the commissioner that the person has obtained 19.23 3,000 hours of experience in real property appraisal. At least 19.24 50 percent, or 1,500 hours, must be in nonresidential appraisal 19.25 work. 19.26 (b) Each applicant for license under section 82B.11, 19.27 subdivision 3, 4, or 5, shall give under oath a detailed listing 19.28 of the real estate appraisal reports or file memoranda for which 19.29 experience is claimed by the applicant. Upon request, the 19.30 applicant shall make available to the commissioner for 19.31 examination, a sample of appraisal reports that the applicant 19.32 has prepared in the course of appraisal practice. 19.33 (c) Applicants may not receive credit for experience 19.34 accumulated while unlicensed, if the experience is based on 19.35 activities which required a license under this section. 19.36 Sec. 18. Minnesota Statutes 2000, section 83.25, 20.1 subdivision 1, is amended to read: 20.2 Subdivision 1. No person shall offer or sell in this state 20.3 any interest in subdivided lands without having obtained:20.4(1)a license under chapter 82; and20.5(2) an additional license to offer or dispose of subdivided20.6lands. This license may be obtained by submitting an20.7application in writing to the commissioner upon forms prepared20.8and furnished by the commissioner. Each application shall be20.9signed and sworn to by the applicant and accompanied by a20.10license fee of $10 per year. The commissioner may also require20.11an additional examination for this license. 20.12 Sec. 19. Minnesota Statutes 2000, section 317A.203, is 20.13 amended to read: 20.14 317A.203 [NUMBER.] 20.15 A board of directors must consist of three or more 20.16 individuals, with the number specified in or fixed in accordance 20.17 with the articles or bylaws, except that if the corporation has20.18either one or two members with voting rights, the number of20.19directors may be less than three but not less than the number of20.20members with voting rights. 20.21 Sec. 20. [325F.995] [REAL PROPERTY SALE DISCLOSURES.] 20.22 Subdivision 1. [GENERALLY.] When selling real property, a 20.23 seller shall disclose to any prospective purchaser all material 20.24 facts pertaining to adverse physical conditions in the property 20.25 of which the seller is aware and which could adversely and 20.26 significantly affect an ordinary purchaser's use or enjoyment of 20.27 the property, or any intended use of the property of which the 20.28 seller is aware. 20.29 Subd. 2. [NOT MATERIAL FACTS.] It is not a material fact 20.30 relating to real property offered for sale and no cause of 20.31 action shall arise against an owner of real property for failure 20.32 to disclose in any real estate transaction the fact or suspicion 20.33 that the real property: 20.34 (1) is or was occupied by an owner or occupant who is or 20.35 was suspected to be infected with human immunodeficiency virus 20.36 or diagnosed with acquired immunodeficiency syndrome; 21.1 (2) was the site of a homicide, suicide, accidental death, 21.2 natural death, perceived paranormal activity, or felony; or 21.3 (3) resides in a neighborhood containing any adult family 21.4 home, community-based residential facility, or nursing home. 21.5 An owner of real property shall be immune from civil 21.6 liability or criminal penalty for failure to disclose a fact 21.7 contained in clauses (1) through (3). 21.8 Subd. 3. [OFFENDERS.] A seller has no duty to disclose 21.9 information regarding an offender who is required to register 21.10 under section 243.166, or about whom notification is made under 21.11 that section, and a seller is immune from liability for failure 21.12 to disclose the information if the seller, in a timely manner, 21.13 provides a written notice that information about the predatory 21.14 offender registry and persons registered with the registry may 21.15 be obtained by contacting local law enforcement where the 21.16 property is located or the department of corrections. 21.17 Subd. 4. [REMEDIES.] A person injured by a violation of 21.18 this section may bring a civil action and recover damages, 21.19 together with costs and disbursements, including costs of 21.20 investigation and reasonable attorney's fees, and receive other 21.21 equitable relief as determined by the court. 21.22 Sec. 21. Minnesota Statutes 2000, section 326.91, 21.23 subdivision 1, is amended to read: 21.24 Subdivision 1. [CAUSE.] The commissioner may by order 21.25 deny, suspend, or revoke any license or may censure a licensee, 21.26 and may impose a civil penalty as provided for in section 21.27 45.027, subdivision 6, if the commissioner finds that the order 21.28 is in the public interest, and that the applicant, licensee, or 21.29 affiliate of an applicant or licensee, or other agent, owner, 21.30 partner, director, governor, shareholder, member, officer, 21.31 qualifying person, or managing employee of the applicant or 21.32 licensee or any person occupying a similar status or performing 21.33 similar functions: 21.34 (1) has filed an application for a license which is 21.35 incomplete in any material respect or contains any statement 21.36 which, in light of the circumstances under which it is made, is 22.1 false or misleading with respect to any material fact; 22.2 (2) has engaged in a fraudulent, deceptive, or dishonest 22.3 practice; 22.4 (3) is permanently or temporarily enjoined by any court of 22.5 competent jurisdiction from engaging in or continuing any 22.6 conduct or practice involving any aspect of the business; 22.7 (4) has failed to reasonably supervise employees, agents, 22.8 subcontractors, or salespersons, or has performed negligently or 22.9 in breach of contract, so as to cause injury or harm to the 22.10 public; 22.11 (5) has violated or failed to comply with any provision of 22.12 sections 326.83 to 326.98 or any rule or order under sections 22.13 326.83 to 326.98; 22.14 (6) has been shown to be incompetent, untrustworthy, or 22.15 financially irresponsible; 22.16 (7) hasbeen convicted of a violationfailed to meet the 22.17 minimum standards of the State Building Code in the construction 22.18 or improvement of residential real estate; 22.19 (8) has failed to use the proceeds of any payment made to 22.20 the licensee for the construction of, or any improvement to, 22.21 residential real estate, as defined in section 326.83, 22.22 subdivision 17, for the payment of labor, skill, material, and 22.23 machinery contributed to the construction or improvement, 22.24 knowing that the cost of any labor performed, or skill, 22.25 material, or machinery furnished for the improvement remains 22.26 unpaid; 22.27 (9) has not furnished to the person making payment either a 22.28 valid lien waiver as to any unpaid labor performed, or skill, 22.29 material, or machinery furnished for an improvement, or a 22.30 payment bond in the basic amount of the contract price for the 22.31 improvement conditioned for the prompt payment to any person or 22.32 persons entitled to payment; 22.33 (10) has engaged in conduct which was the basis for a 22.34 contractor's recovery fund payment pursuant to section 326.975, 22.35 which payment has not been reimbursed; 22.36 (11) has engaged in bad faith, unreasonable delays, or 23.1 frivolous claims in defense of a civil lawsuit arising out of 23.2 their activities as a licensee under this chapter; 23.3 (12) has had a judgment entered against them for failure to 23.4 make payments to employees or subcontractors, and all appeals of 23.5 the judgment have been exhausted or the period for appeal has 23.6 expired; 23.7 (13) if unlicensed, has obtained a building permit by the 23.8 fraudulent use of a fictitious license number or the license 23.9 number of another, or, if licensed, has knowingly allowed an 23.10 unlicensed person to use the licensee's license number for the 23.11 purpose of fraudulently obtaining a building permit; or 23.12 (14) has made use of forged mechanics' lien waivers under 23.13 chapter 514. 23.14 Sec. 22. Minnesota Statutes 2000, section 326.975, 23.15 subdivision 1, is amended to read: 23.16 Subdivision 1. [GENERALLY.] (a) In addition to any other 23.17 fees, each applicant for a license under sections 326.83 to 23.18 326.98 shall pay a fee to the contractor's recovery fund. The 23.19 contractor's recovery fund is created in the state treasury and 23.20 must be administered by the commissioner in the manner and 23.21 subject to all the requirements and limitations provided by 23.22 section 82.34 with the following exceptions: 23.23 (1) each licensee who renews a license shall pay in 23.24 addition to the appropriate renewal fee an additional fee which 23.25 shall be credited to the contractor's recovery fund. The amount 23.26 of the fee shall be based on the licensee's gross annual 23.27 receipts for the licensee's most recent fiscal year preceding 23.28 the renewal, on the following scale: 23.29 Fee Gross Receipts 23.30 $100 under $1,000,000 23.31 $150 $1,000,000 to $5,000,000 23.32 $200 over $5,000,000 23.33 Any person who receives a new license shall pay a fee based on 23.34 the same scale; 23.35 (2) the sole purpose of this fund is to compensate any 23.36 aggrieved owner or lessee of residential property located within 24.1 this state who obtains a final judgment in any court of 24.2 competent jurisdiction against a licensee licensed under section 24.3 326.84, on grounds of fraudulent, deceptive, or dishonest 24.4 practices, conversion of funds, or failure of performance 24.5 arising directly out of any transaction when the judgment debtor 24.6 was licensed and performed any of the activities enumerated 24.7 under section 326.83, subdivision 19, on the owner's residential 24.8 property or on residential property rented by the lessee, or on 24.9 new residential construction which was never occupied prior to 24.10 purchase by the owner, or which was occupied by the licensee for 24.11 less than one year prior to purchase by the owner, and which 24.12 cause of action arose on or after April 1, 1994; 24.13 (3) nothing may obligate the fund for more than $50,000 per 24.14 claimant, nor more than$50,000$100,000 per licensee; and 24.15 (4) nothing may obligate the fund for claims based on a 24.16 cause of action that arose before the licensee paid the recovery 24.17 fund fee set in clause (1), or as provided in section 326.945, 24.18 subdivision 3. 24.19 (b) Should the commissioner pay from the contractor's 24.20 recovery fund any amount in settlement of a claim or toward 24.21 satisfaction of a judgment against a licensee, the license shall 24.22 be automatically suspended upon the effective date of an order 24.23 by the court authorizing payment from the fund. No licensee 24.24 shall be granted reinstatement until the licensee has repaid in 24.25 full, plus interest at the rate of 12 percent a year, twice the 24.26 amount paid from the fund on the licensee's account, and has 24.27 obtained a surety bond issued by an insurer authorized to 24.28 transact business in this state in the amount of at least 24.29 $40,000. 24.30 Sec. 23. Minnesota Statutes 2000, section 332.33, is 24.31 amended by adding a subdivision to read: 24.32 Subd. 4a. [EXAMINATION AND INVESTIGATION COSTS.] The 24.33 licensee shall pay the costs of an examination or investigation 24.34 by the commissioner or on the commissioner's behalf in the 24.35 manner provided under section 60A.03, subdivision 5. 24.36 Sec. 24. Minnesota Statutes 2000, section 332.41, is 25.1 amended to read: 25.2 332.41 [APPEALS.] 25.3Subdivision 1. [FILING OF APPEAL.] In the rejection of an25.4application for a license or the renewal thereof filed under25.5sections 332.31 to 332.45 or of the suspension or revocation of25.6a license granted under sections 332.31 to 332.45 the applicant25.7or licensee may within 90 days after receipt of notice of such25.8rejection, suspension, or revocation, file an appeal and25.9thereafter prosecute the appeal in accordance with the25.10provisions of the statutes governing appeal from, or review of,25.11decisions of administrative agencies in this state.25.12Subd. 2. [SUPERSEDEAS.] The filing of an appeal from an25.13order of the commissioner of commerce rejecting an application25.14for a license by a collection agency engaged in business as of25.15July 1, 1969, or rejecting an application for the renewal of a25.16license, or suspending or revoking a license within 60 days25.17after the date of such order, shall operate as a supersedeas25.18which shall continue pending final determination of such appeal.25.19 Appeal from a denial, suspension, revocation, or censure of 25.20 a license must be made according to chapter 14. 25.21 Sec. 25. Minnesota Statutes 2000, section 359.02, is 25.22 amended to read: 25.23 359.02 [TERM.] 25.24 A notary commissioned under section 359.01 holds office for 25.25 five years, unless sooner removed by the governor or the 25.26 district court, or by action of the commissioner. Withinseven25.27months60 days before the expiration of the commission a notary 25.28 maybe reappointedapply for reappointment for a new term to 25.29 commence and to be designated in the new commission as beginning 25.30 upon the day immediately following the date of the expiration. 25.31 The reappointment takes effect and is valid although the 25.32 appointing governor may not be in the office of governor on the 25.33 effective day. 25.34(a) All notary commissions issued before January 31, 1995,25.35will expire on January 31, 1995.25.36(b) All notary commissions issued after January 31, 1995,26.1will expire at the end of the licensing period, which will end26.2every fifth year following January 31, 1995.26.3(c)All notary commissionsissued during a licensing period26.4expire at the end of that period as set forth in this26.5sectionexpire on January 31 of the fifth year following the 26.6 year of issue. 26.7 Sec. 26. [EFFECTIVE DATE.] 26.8 Sections 1 to 6, 16, 17, 21, and 24 are effective the day 26.9 following final enactment. Section 22 is effective January 1, 26.10 2001, and applies to claims arising from incidents or conduct 26.11 occurring on or after that date.