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Capital IconMinnesota Legislature

HF 1112

as introduced - 91st Legislature (2019 - 2020) Posted on 03/27/2019 01:21pm

KEY: stricken = removed, old language.
underscored = added, new language.

Current Version - as introduced

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A bill for an act
relating to commerce; allowing for designated agency in real estate transactions;
amending Minnesota Statutes 2018, sections 82.55, by adding subdivisions; 82.66,
subdivisions 1, 2; 82.67, subdivisions 3, 4; 82.73, subdivision 3, by adding a
subdivision.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

Minnesota Statutes 2018, section 82.55, is amended by adding a subdivision
to read:


new text begin Subd. 5a. new text end

new text begin Designated agency. new text end

new text begin "Designated agency" means the buyer and seller in a real
estate transaction are both represented by the same real estate brokerage, but (1) the buyer's
agent is designated in the buyer's broker agreement and exclusively represents only the
buyer's interest, and (2) the seller's agent is designated in the seller's broker agreement and
exclusively represents only the seller's interest.
new text end

Sec. 2.

Minnesota Statutes 2018, section 82.55, is amended by adding a subdivision to
read:


new text begin Subd. 9a. new text end

new text begin Fiduciary duties. new text end

new text begin "Fiduciary duties" means the following duties, with the
associated meanings given them:
new text end

new text begin (1) "loyalty" means a broker or salesperson acts only in the client's best interest;
new text end

new text begin (2) "obedience" means a broker or salesperson carries out all the client's lawful
instructions;
new text end

new text begin (3) "disclosure" means a broker or salesperson discloses to the client all material facts
the broker or salesperson has knowledge of that might reasonably affect the client's use and
enjoyment of the property;
new text end

new text begin (4) "confidentiality" means a broker or salesperson keeps the client's confidences unless
required by law to disclose specific information, including disclosure of material facts to
buyers;
new text end

new text begin (5) "reasonable care" means a broker or salesperson uses reasonable care to perform
duties as an agent; and
new text end

new text begin (6) "accounting" means a broker or salesperson accounts to the client for all the client's
money and property received as their agent.
new text end

Sec. 3.

Minnesota Statutes 2018, section 82.55, is amended by adding a subdivision to
read:


new text begin Subd. 24a. new text end

new text begin Supervising broker. new text end

new text begin A "supervising broker" is responsible for supervising
the activities of the broker's salespersons and employees in a transaction. In a dual or
designated agency transaction, a supervising broker is responsible for maintaining a neutral
position when advising and supervising the designated buyer's agent and the designated
listing agent on matters directly related to the represented clients.
new text end

Sec. 4.

Minnesota Statutes 2018, section 82.66, subdivision 1, is amended to read:


Subdivision 1.

Listing agreements.

(a) Requirement. Licensees shall obtain a signed
listing agreement or other signed written authorization from the owner of real property or
from another person authorized to offer the property for sale or lease before advertising to
the general public that the real property is available for sale or lease.

For the purposes of this section "advertising" includes placing a sign on the owner's
property that indicates that the property is being offered for sale or lease.

(b) Contents. All listing agreements must be in writing and must include:

(1) a definite expiration date;

(2) a description of the real property involved;

(3) the list price and any terms required by the seller;

(4) the amount of any compensation or commission or the basis for computing the
commission;

(5) a clear statement explaining the events or conditions that will entitle a broker to a
commission;

(6) a clear statement explaining if the agreement may be canceled and the terms under
which the agreement may be canceled;

(7) 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;

(8) 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.";

(9) for residential property listings, the following deleted text begin"dual agency"deleted text endnew text begin "single-brokerage
agency" representation
new text end disclosure statement:

deleted text begin If a buyer represented by broker wishes to buy the seller's property, a dual agency will
be created. This means that broker will represent both the seller(s) and the buyer(s), and
owe the same duties to the buyer(s) that broker owes to the seller(s). This conflict of interest
will prohibit broker from advocating exclusively on the seller's behalf. Dual agency will
limit the level of representation broker can provide. If a dual agency should arise, the seller(s)
will need to agree that confidential information about price, terms, and motivation will still
be kept confidential unless the seller(s) instruct broker in writing to disclose specific
information about the seller(s). All other information will be shared. Broker cannot act as
a dual agent unless both the seller(s) and the buyer(s) agree to it. By agreeing to a possible
dual agency, the seller(s) will be giving up the right to exclusive representation in an in-house
transaction. However, if the seller(s) should decide not to agree to a possible dual agency,
and the seller(s) want broker to represent the seller(s), the seller(s) may give up the
opportunity to sell the property to buyers represented by broker.
deleted text end new text begin SINGLE-BROKERAGE
AGENCY REPRESENTATION: If buyer(s) and seller(s) are both represented by the same
brokerage, then both buyer(s) and seller(s) must consent and agree to a form of
single-brokerage agency representation for the transaction to proceed. There are two options
for single-brokerage agency representation, which are: dual agency and designated agency.
new text end

new text begin What is Dual Agency?
new text end
new text begin Dual agency occurs when the buyer(s) and
seller(s) in a real estate transaction are both
represented by the same real estate brokerage
and all agents of that brokerage act in a dual
agency capacity by representing each side
equally. A dual agent cannot act exclusively
on behalf of one party, or advocate for the
detriment of the other party.
new text end
new text begin What is Designated Agency?
new text end
new text begin Designated agency occurs when the buyer(s)
and seller(s) in a real estate transaction are
both represented by the same real estate
brokerage and a buyer's agent is designated
in the buyer's broker agreement and
exclusively represents only the buyer's
interest, and a listing agent is designated in
the seller's broker agreement and exclusively
represents only the seller's interest.
new text end
new text begin How does Dual Agency affect me?
new text end
new text begin In a dual agency, both the buyer(s) and the
seller(s) are represented by the same
brokerage, and every agent who is licensed
to represent that brokerage owes an equal
obligation of representation and fiduciary
duties to both the buyer(s) and the seller(s).
This means that all agents within that
brokerage cannot advocate for, counsel, or
represent one party in any way that would
adversely affect the other party.
new text end
new text begin How does Designated Agency affect me?
new text end
new text begin In a designated agency, the buyer(s) and the
seller(s) are represented by the same
brokerage. The buyer is represented by a
designated buyer's agent of the buyer's
choosing, and the seller is represented by a
designated listing agent of the seller's
choosing. A designated buyer's agent may
advocate exclusively on behalf of the buyer,
and a designated listing agent may advocate
exclusively on behalf of the seller.
new text end
new text begin What is the supervising broker's role in a
dual agency?
new text end
new text begin The supervising broker's responsibility is to
supervise the activities of the broker's
salespersons and employees. In a dual agency
transaction, a broker is responsible for
maintaining a neutral position when advising
and supervising each of the dual agents.
new text end
new text begin What is the supervising broker's role in a
designated agency?
new text end
new text begin The supervising broker's responsibility is to
supervise the activities of the broker's
salespersons and employees. In a designated
agency transaction, a broker is responsible
for maintaining a neutral position when
advising and supervising the buyer's agent,
as designated in the buyer's broker agreement
and the listing agent, as designated in the
seller's broker agreement.
new text end

Seller's Instructions to Broker

Having read and understood this information about deleted text begindual agencydeleted text endnew text begin single-brokerage agency
representation
new text end, seller(s) now instructs broker as followsnew text begin (check only one of the three below)new text end:

.
new text begin I consent to designated agency (the same brokerage may represent me
and the other party as long as the same agent is not representing us
both).
new text end
.
deleted text beginSeller(s) will agree to a dual agency representation and will consider
offers made by buyers represented by broker
deleted text endnew text begin I consent to dual agency
(the same brokerage may represent me and the other party, but the
brokerage and its agent must remain neutral regardless if one or more
different agents are involved)
new text end.
.
deleted text beginSeller(s) will not agree to a dual agency representation and will not
consider offers made by buyers represented by broker
deleted text endnew text begin I do not consent
to dual agency or designated agency (I reject any form of
single-brokerage agency representation)
new text end.
.
.
Seller
Real Estate Company Name
.
By:
.
Seller
Salesperson
Date : .
;

(10) 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

(11) for residential listings, a notice stating that after the expiration of the listing
agreement, the seller will not be obligated to pay the licensee a fee or commission if the
seller has executed another valid listing agreement pursuant to which the seller is obligated
to pay a fee or commission to another licensee for the sale, lease, or exchange of the real
property in question. This notice may be used in the listing agreement for any other type of
real estate.

(c) Prohibited provisions. Except as otherwise provided in paragraph (d), clause (2),
licensees shall not include in a listing agreement a holdover clause, automatic extension,
or any similar provision, or an override clause the length of which is more than six months
after the expiration of the listing agreement.

(d) Override clauses. (1) Licensees shall not seek to enforce an override clause unless
a protective list has been furnished to the seller within 72 hours after the expiration of the
listing agreement.

(2) A listing agreement may contain an override clause of up to two years in length when
used in conjunction with the purchase or sale of a business. The length of the override clause
must be negotiable between the licensee and the seller of the business. The protective list
provided in connection with the override clause must include the written acknowledgment
of each party named on the protective list, that the business which is the subject of the listing
agreement was presented to that party by the licensee.

(e) Protective lists. A broker or salesperson has the burden of demonstrating that each
person on the protective list has, during the period of the listing agreement, either made an
affirmative showing of interest in the property by responding to an advertisement or by
contacting the broker or salesperson involved or has been physically shown the property
by the broker or salesperson. For the purpose of this section, the mere mailing or other
distribution by a licensee of literature setting forth information about the property in question
does not, of itself, constitute an affirmative showing of interest in the property on the part
of a subsequent purchaser.

For listings of nonresidential real property which do not contain the notice described in
paragraph (b), clause (11), 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. 5.

Minnesota Statutes 2018, section 82.66, subdivision 2, is amended to read:


Subd. 2.

Buyer's broker agreements.

(a) Requirements. Licensees shall obtain a signed
buyer's broker agreement from a buyer before performing any acts as a buyer's representative.

(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 deleted text begin"dual agency"deleted text endnew text begin "single-brokerage agency representation"new text end disclosure
statement:

deleted text begin If the buyer(s) choose(s) to purchase a property listed by broker, a dual agency will be
created. This means that broker will represent both the buyer(s) and the seller(s), and owe
the same duties to the seller(s) that broker owes to the buyer(s). This conflict of interest will
prohibit broker from advocating exclusively on the buyer's behalf. Dual agency will limit
the level of representation broker can provide. If a dual agency should arise, the buyer(s)
will need to agree that confidential information about price, terms, and motivation will still
be kept confidential unless the buyer(s) instruct broker in writing to disclose specific
information about the buyer(s). All other information will be shared. Broker cannot act as
a dual agent unless both the buyer(s) and the seller(s) agree to it. By agreeing to a possible
dual agency, the buyer(s) will be giving up the right to exclusive representation in an in-house
transaction. However, if the buyer(s) should decide not to agree to a possible dual agency,
and the buyer(s) want(s) broker to represent the buyer(s), the buyer(s) may give up the
opportunity to purchase the properties listed by broker.
deleted text end new text begin SINGLE-BROKERAGE AGENCY
REPRESENTATION: If buyer(s) and seller(s) are both represented by the same brokerage,
then both buyer(s) and seller(s) must consent and agree to a form of single-brokerage agency
representation for the transaction to proceed. There are two options for single-brokerage
agency representation, which are: dual agency and designated agency.
new text end

new text begin new text begin What is Dual Agency?
new text end
Dual agency occurs when the buyer(s) and
seller(s) in a real estate transaction are both
represented by the same real estate brokerage
and all agents of that brokerage act in a dual
agency capacity by representing each side
equally. A dual agent cannot act exclusively
on behalf of one party, or advocate for the
detriment of the other party.
new text end
new text begin new text beginWhat is Designated Agency?
new text end
Designated agency occurs when the buyer(s)
and seller(s) in a real estate transaction are
both represented by the same real estate
brokerage and a buyer's agent is designated
in the buyer's broker agreement and
exclusively represents only the buyer's
interest, and a listing agent is designated in
the seller's broker agreement and exclusively
represents only the seller's interest.
new text end
new text begin new text begin How does Dual Agency affect me?
new text end
In a dual agency, both the buyer(s) and the
seller(s) are represented by the same
brokerage, and every agent who is licensed
to represent that brokerage owes an equal
obligation of representation and fiduciary
duties to both the buyer(s) and the seller(s).
This means that all agents within that
brokerage cannot advocate for, counsel, or
represent one party in any way that would
adversely affect the other party.
new text end
new text begin new text beginHow does Designated Agency affect me?
new text end
In a designated agency, the buyer(s) and the
seller(s) are represented by the same
brokerage. The buyer is represented by a
designated buyer's agent of the buyer's
choosing, and the seller is represented by a
designated listing agent of the seller's
choosing. A designated buyer's agent may
advocate exclusively on behalf of the buyer,
and a designated listing agent may advocate
exclusively on behalf of the seller.
new text end
new text begin new text begin What is the supervising broker's role in a
dual agency?
new text end
The supervising broker's responsibility is to
supervise the activities of the broker's
salespersons and employees. In a dual agency
transaction, a broker is responsible for
maintaining a neutral position when advising
and supervising each of the dual agents.
new text end
new text begin new text beginWhat is the supervising broker's role in a
designated agency?
new text end
The supervising broker's responsibility is to
supervise the activities of the broker's
salespersons and employees. In a designated
agency transaction, a broker is responsible
for maintaining a neutral position when
advising and supervising the buyer's agent,
as designated in the buyer's broker agreement
and the listing agent, as designated in the
seller's broker agreement.
new text end

Buyer's Instructions to Broker

new text begin Having read and understood this information about single-brokerage agency
representation, the buyer(s) now instructs the broker as follows (check only one of the three
below):
new text end

.
new text begin I consent to designated agency (the same brokerage may represent me
and the other party as long as the same agent is not representing us
both).
new text end
.
deleted text beginBuyer(s) will agree to a dual agency representation and will consider
properties listed by broker
deleted text endnew text begin I consent to dual agency (the same brokerage
may represent me and the other party, but the brokerage and its agent
must remain neutral regardless if one or more different agents are
involved)
new text end.
.
deleted text beginBuyer(s) will not agree to a dual agency representation and will not
consider properties listed by broker
deleted text endnew text begin I do not consent to dual agency
or designated agency (I reject any form of single-brokerage agency
representation)
new text end.
.
.
Buyer
Real Estate Company Name
.
By:
.
Buyer
Salesperson
Date: .
; and

(8) for buyer's broker agreements which involve residential real property, a notice stating
that after the expiration of the buyer's broker agreement, the buyer will not be obligated to
pay the licensee a fee or commission if the buyer has executed another valid buyer's broker
agreement pursuant to which the buyer is obligated to pay a fee or commission to another
licensee for the purchase, lease, or exchange of real property.

(c) Prohibited provisions. Licensees shall not include in a buyer's broker agreement a
holdover clause, automatic extension, or any other similar provision, or an override clause
the length of which is more than six months after the expiration of the buyer's broker
agreement.

(d) Override clauses. (1) 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.

(2) A buyer's broker 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 buyer of the business. The
protective list provided in connection with the override clause must include the written
deleted text begin acknowledgementdeleted text endnew text begin acknowledgmentnew text end of each party named on the protective list, that the
business that is the subject of the buyer's broker agreement was presented to that party by
the licensee.

(e) Protective lists. A licensee has the burden of demonstrating that each property on
the protective list has been shown to the buyer, or specifically brought to the attention of
the buyer, during the time the buyer's broker agreement was in effect.

(f) Application. This section applies only to residential real property transactions.

Sec. 6.

Minnesota Statutes 2018, section 82.67, subdivision 3, is amended to read:


Subd. 3.

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 deleted text beginIVdeleted text endnew text begin Vnew text end 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 new text beginonly new text endthe Seller and acts on behalf of new text beginonly new text endthe 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 82.68,
subdivision 3
, 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 deleted text beginIVdeleted text endnew text begin Vnew text end below).
In that case, the Buyer will not be represented and will not receive advice and counsel
from the broker or salesperson.

II.

Buyer's Broker: A Buyer may enter into an agreement for the broker or salesperson to
represent and act on behalf of new text beginonly new text endthe 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 82.68,
subdivision 3
, 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 deleted text beginIVdeleted text endnew text begin Vnew text end below).
In that case, the Seller will not be represented and will not receive advice and counsel
from the broker or salesperson.

III.

Dual deleted text beginAgency-Broker Representing both Seller and Buyerdeleted text endnew text begin Agency Representationnew text end:
Dual agency occurs when deleted text beginone 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.
deleted text endnew text begin the Buyer(s) and Seller(s) in a real estate transaction are both
represented by the same real estate brokerage and all agents of that brokerage act in a
dual agency capacity by representing each side equally. A dual agent cannot act
exclusively on behalf of one party, or advocate for the detriment of the other party.
new text end 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 82.68, subdivision 3, of which the broker is
aware that could adversely and significantly affect the Buyer's use or enjoyment of the
property.

IV.

new text begin Designated Agency, Single-Brokerage Agency Representation: new text end new text begin Designated agency
occurs when the Buyer(s) and Seller(s) in a real estate transaction are both represented
by the same real estate brokerage, and a designated buyer's agent and a designated listing
agent are designated by the buyer and seller, respectively, in a written agreement with
the brokerage. During the course of a designated agency real estate transaction, the
designated buyer's agent owes the fiduciary duties, as defined in Minnesota Statutes,
section 82.55, subdivision 9a, to only the buyer, and the designated listing agent owes
the fiduciary duties, as defined in Minnesota Statutes, section 82.55, subdivision 9a, to
only the seller. Any other confidential information that either buyer or seller has identified
as confidential must not be disclosed by either designated agent to any party or third
party, unless disclosure of the information is otherwise required by statute or rule.
new text end

new text begin V.
new text end

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, deleted text beginordeleted text end Dual Agentnew text begin, or Designated Agentnew text end. THE FACILITATOR BROKER OR
SALESPERSON DOES NOT OWE ANY PARTY ANY OF THE FIDUCIARY
DUTIES LISTED BELOW, EXCEPT CONFIDENTIALITY, UNLESS THOSE
DUTIES ARE INCLUDED IN A WRITTEN FACILITATOR SERVICES
AGREEMENT.
The facilitator broker or salesperson owes the duty of confidentiality
to the party but owes no other duty to the party except those duties required by law or
contained in a written facilitator services agreement, if any. In the event a facilitator
broker or salesperson, working with a Buyer, shows a property listed by the facilitator
broker or salesperson, then the facilitator broker or salesperson must act as a Seller's
Broker (see paragraph I above). In the event a facilitator broker or salesperson, working
with a Seller, accepts a showing of the property by a Buyer being represented by the
facilitator broker or salesperson, then the facilitator broker or salesperson must act as a
Buyer's Broker (see paragraph III above).

.

(1) This disclosure is required by law in any transaction involving property occupied or
intended to be occupied by one to four families as their residence.

(2) The fiduciary duties mentioned above are listed below and have the following
meanings:

Loyalty-broker/salesperson will act only in client(s)' best interest.

Obedience-broker/salesperson will carry out all client(s)' lawful instructions.

Disclosure-broker/salesperson will disclose to client(s) all material facts of which
broker/salesperson has knowledge which might reasonably affect the client's use and
enjoyment of the property.

Confidentiality-broker/salesperson will keep client(s)' confidences unless required by
law to disclose specific information (such as disclosure of material facts to Buyers).

Reasonable Care-broker/salesperson will use reasonable care in performing duties as an
agent.

Accounting-broker/salesperson will account to client(s) for all client(s)' money and
property received as agent.

(3) If Seller(s) elect(s) not to agree to deleted text beginadeleted text endnew text begin either a designated agency ornew text end dual agency
relationship, Seller(s) may give up the opportunity to sell the property to Buyers represented
by the broker/salesperson. If Buyer(s) elect(s) not to agree to deleted text beginadeleted text endnew text begin either a designated ornew text end dual
agency relationship, Buyer(s) may give up the opportunity to purchase properties listed by
the broker.

Sec. 7.

Minnesota Statutes 2018, section 82.67, subdivision 4, is amended to read:


Subd. 4.

Creation of new text begindesignated agency or new text enddual agency.

If circumstances create a
new text begin designated agency or new text enddual 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
new text begin designated agency or new text enddual 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:

deleted text begin 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).
deleted text end

Seller(s) and buyer(s) acknowledge that:

(1) new text beginin a designated agency situation, the supervising broker who supervises the
salespersons representing a party in the transaction must not represent the interests of either
party to the detriment of the other. Each designated salesperson represents the salesperson's
party, subject to the same duties required of a seller's broker and a buyer's broker,
respectively;
new text end

new text begin (2) in a dual agency transaction, new text endconfidential information communicated to broker new text beginand
broker's salespersons
new text endwhich regards price, terms, or motivation to buy or sell will remain
confidential unless seller(s) or buyer(s) instruct(s) broker in writing to disclose this
informationdeleted text begin. Other information will be shareddeleted text end;

deleted text begin (2)deleted text endnew text begin (3) in a dual agency situation,new text end broker and its salespersons will not represent the
interests of either party to the detriment of the other; and

deleted text begin (3)deleted text endnew text begin (4)new text end within the limits of dual agency, broker and its salespersons will work diligently
to facilitate the mechanics of the sale.

With the knowledge and understanding of the explanation above, seller(s) and buyer(s)
authorize(s) and instruct(s) broker and its salespersons to deleted text beginact as dual agents in this transaction.deleted text endnew text begin
(authorize one):
new text end

new text begin Act as designated agents in this transaction.
new text end

.
.
Seller
Buyer
.
.
Seller
Buyer
.
.
Date
Date

new text begin OR
new text end

new text begin Act as dual agents in this transaction.
new text end

new text begin .
new text end
new text begin .
new text end
new text begin Seller
new text end
new text begin Buyer
new text end
new text begin .
new text end
new text begin .
new text end
new text begin Seller
new text end
new text begin Buyer
new text end
new text begin .
new text end
new text begin .
new text end
new text begin Date
new text end
new text begin Date
new text end

Sec. 8.

Minnesota Statutes 2018, section 82.73, subdivision 3, is amended to read:


Subd. 3.

Responsibilities of brokers.

(a) Supervision of personnel. A new text beginprimary new text endbroker
shall adequately supervise the activities of the broker's 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 deleted text beginan individualdeleted text endnew text begin anew text end broker maintains more than one place of
business, each place of business shall be under the new text beginprimary new text endbroker's direction and supervision.
If a brokerage new text beginor business entity new text endmaintains more than one place of business, each place of
business shall be under the direction and supervision of deleted text beginan individualdeleted text endnew text begin anew text end broker licensed to
act on behalf of the brokerage.

The primary broker shall maintain records specifying the name of each broker responsible
for the direction and supervision of each place of business. If deleted text beginan individualdeleted text endnew text begin anew text end 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. A broker is 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. A broker shall investigate and attempt
to resolve complaints made regarding the practices of any individual licensed to the broker
and shall maintain, with respect to each individual licensed to the broker, 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).

(e) Property management functions for individually owned or entity-owned real
estate.
A broker shall not be responsible for supervising, nor shall the licensee be responsible
for operating, within the scope of the brokerage or within the requirements of this chapter,
activities that would be considered property management, including leasing, maintenance,
and repair, so long as the real estate being managed is "individually owned" or "entity-owned"
as defined below:

(1) "individually owned" real estate is real property in which the licensee holds an
ownership interest; and

(2) "entity-owned" real estate is real property owned by a corporation, limited liability
company, partnership, or trust, within which entity the licensee holds an ownership interest
as an owner, trustee, partner, or officer, or in another beneficiary capacity.

Sec. 9.

Minnesota Statutes 2018, section 82.73, is amended by adding a subdivision to
read:


new text begin Subd. 4. new text end

new text begin Prohibition. new text end

new text begin Any supervising broker engaged in the practice of real estate is
prohibited from acting as a designated agent on behalf of one party to a transaction if the
supervising broker is responsible for supervising the salesperson or broker representing the
other party in the single-brokerage transaction.
new text end

Sec. 10. new text beginEFFECTIVE DATE.
new text end

new text begin This act is effective January 1, 2020.
new text end