1.1                          A bill for an act 
  1.2             relating to commerce; regulating real estate brokers 
  1.3             and salespersons; making various changes in real 
  1.4             property law; recodifying the laws and rules 
  1.5             regulating these licensees; making technical and 
  1.6             conforming changes; amending Minnesota Statutes 2002, 
  1.7             sections 58.13, subdivision 1; 58.16, subdivisions 2, 
  1.8             4; 82.17, subdivision 4, by adding subdivisions; 
  1.9             82.19, subdivisions 3, 5, by adding subdivisions; 
  1.10            82.195; 82.196; 82.197; 82.20, subdivisions 3, 4, 8, 
  1.11            by adding subdivisions; 82.21, by adding subdivisions; 
  1.12            82.22, subdivisions 6, 8, 12, 13, by adding 
  1.13            subdivisions; 82.24, subdivisions 3, 5, by adding 
  1.14            subdivisions; 82.27, by adding a subdivision; 513.55, 
  1.15            subdivision 1; 513.56, by adding a subdivision; 
  1.16            515B.4-106; 515B.4-108; 559.21, subdivision 4; 
  1.17            proposing coding for new law in Minnesota Statutes, 
  1.18            chapters 82; 325F; 559; repealing Minnesota Statutes 
  1.19            2002, sections 58.02, subdivision 24; 82.22, 
  1.20            subdivision 9; Minnesota Rules, parts 2800.0100; 
  1.21            2800.0200; 2800.0300; 2800.1100; 2800.1200; 2800.1300; 
  1.22            2800.1400; 2800.1500; 2800.1600; 2800.1700; 2800.1750; 
  1.23            2800.1751; 2800.1800; 2800.1900; 2800.2000; 2800.2100; 
  1.24            2800.2150; 2805.0100; 2805.0200; 2805.0300; 2805.0400; 
  1.25            2805.0500; 2805.0600; 2805.0700; 2805.0800; 2805.0900; 
  1.26            2805.1000; 2805.1100; 2805.1300; 2805.1400; 2805.1500; 
  1.27            2805.1600; 2805.1700; 2805.1800; 2805.1900; 2805.2000. 
  1.28  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.29                             ARTICLE 1 
  1.30                     CHANGES IN REAL ESTATE LAW 
  1.31     Section 1.  Minnesota Statutes 2002, section 58.13, 
  1.32  subdivision 1, is amended to read: 
  1.33     Subdivision 1.  [GENERALLY.] No person acting as a 
  1.34  residential mortgage originator or servicer, including a person 
  1.35  required to be licensed under this chapter, and no person exempt 
  1.36  from the licensing requirements of this chapter under section 
  2.1   58.04, shall: 
  2.2      (1) fail to maintain a trust account to hold trust funds 
  2.3   received in connection with a residential mortgage loan; 
  2.4      (2) fail to deposit all trust funds into a trust account 
  2.5   within three business days of receipt; commingle trust funds 
  2.6   with funds belonging to the licensee or exempt person; or use 
  2.7   trust account funds for any purpose other than that for which 
  2.8   they are received; 
  2.9      (3) unreasonably delay the processing of a residential 
  2.10  mortgage loan application, or the closing of a residential 
  2.11  mortgage loan.  For purposes of this clause, evidence of 
  2.12  unreasonable delay includes but is not limited to those factors 
  2.13  identified in section 47.206, subdivision 7, clause (d); 
  2.14     (4) fail to disburse funds according to its contractual or 
  2.15  statutory obligations; 
  2.16     (5) fail to perform in conformance with its written 
  2.17  agreements with borrowers, investors, other licensees, or exempt 
  2.18  persons; 
  2.19     (6) charge a fee for a product or service where the product 
  2.20  or service is not actually provided, or misrepresent the amount 
  2.21  charged by or paid to a third party for a product or service; 
  2.22     (7) fail to comply with sections 345.31 to 345.60, the 
  2.23  Minnesota unclaimed property law; 
  2.24     (8) violate any provision of any other applicable state or 
  2.25  federal law regulating residential mortgage loans including, 
  2.26  without limitation, sections 47.20 to 47.208; 
  2.27     (9) make or cause to be made, directly or indirectly, any 
  2.28  false, deceptive, or misleading statement or representation in 
  2.29  connection with a residential loan transaction including, 
  2.30  without limitation, a false, deceptive, or misleading statement 
  2.31  or representation regarding the borrower's ability to qualify 
  2.32  for any mortgage product; 
  2.33     (10) conduct residential mortgage loan business under any 
  2.34  name other than that under which the license or certificate of 
  2.35  exemption was issued; 
  2.36     (11) compensate, whether directly or indirectly, coerce or 
  3.1   intimidate an appraiser for the purpose of influencing the 
  3.2   independent judgment of the appraiser with respect to the value 
  3.3   of real estate that is to be covered by a residential mortgage 
  3.4   or is being offered as security according to an application for 
  3.5   a residential mortgage loan; 
  3.6      (12) issue any document indicating conditional 
  3.7   qualification or conditional approval for a residential mortgage 
  3.8   loan, unless the document also clearly indicates that final 
  3.9   qualification or approval is not guaranteed, and may be subject 
  3.10  to additional review; 
  3.11     (13) make or assist in making any residential mortgage loan 
  3.12  with the intent that the loan will not be repaid and that the 
  3.13  residential mortgage originator will obtain title to the 
  3.14  property through foreclosure; 
  3.15     (14) provide or offer to provide for a borrower, any 
  3.16  brokering or lending services under an arrangement with a person 
  3.17  other than a licensee or exempt person, provided that a person 
  3.18  may rely upon a written representation by the residential 
  3.19  mortgage originator that it is in compliance with the licensing 
  3.20  requirements of this chapter; 
  3.21     (15) claim to represent a licensee or exempt person, unless 
  3.22  the person is an employee of the licensee or exempt person or 
  3.23  unless the person has entered into a written agency agreement 
  3.24  with the licensee or exempt person; 
  3.25     (16) fail to comply with the record-keeping and 
  3.26  notification requirements identified in section 58.14 or fail to 
  3.27  abide by the affirmations made on the application for licensure; 
  3.28     (17) represent that the licensee or exempt person is acting 
  3.29  as the borrower's agent after providing the nonagency disclosure 
  3.30  required by section 58.15, unless the disclosure is retracted 
  3.31  and the licensee or exempt person complies with all of the 
  3.32  requirements of section 58.16; 
  3.33     (18) make, provide, or arrange for a residential mortgage 
  3.34  loan that is of a lower investment grade if the borrower's 
  3.35  credit score or, if the originator does not utilize credit 
  3.36  scoring or if a credit score is unavailable, then comparable 
  4.1   underwriting data, indicates that the borrower may qualify for a 
  4.2   residential mortgage loan, available from or through the 
  4.3   originator, that is of a higher investment grade, unless the 
  4.4   borrower is informed that the borrower may qualify for a higher 
  4.5   investment grade loan with a lower interest rate and/or lower 
  4.6   discount points, and consents in writing to receipt of the lower 
  4.7   investment grade loan. 
  4.8      For purposes of this section, "investment grade" refers to 
  4.9   a system of categorizing residential mortgage loans in which the 
  4.10  loans are:  (i) commonly referred to as "prime" or "subprime"; 
  4.11  (ii) commonly designated by an alphabetical character with "A" 
  4.12  being the highest investment grade; and (iii) are distinguished 
  4.13  by interest rate or discount points or both charged to the 
  4.14  borrower, which vary according to the degree of perceived risk 
  4.15  of default based on factors such as the borrower's credit, 
  4.16  including credit score and credit patterns, income and 
  4.17  employment history, debt ratio, loan-to-value ratio, and prior 
  4.18  bankruptcy or foreclosure; 
  4.19     (19) make, publish, disseminate, circulate, place before 
  4.20  the public, or cause to be made, directly or indirectly, any 
  4.21  advertisement or marketing materials of any type, or any 
  4.22  statement or representation relating to the business of 
  4.23  residential mortgage loans that is false, deceptive, or 
  4.24  misleading; 
  4.25     (20) advertise loan types or terms that are not available 
  4.26  from or through the licensee or exempt person on the date 
  4.27  advertised, or on the date specified in the advertisement.  For 
  4.28  purposes of this clause, advertisement includes, but is not 
  4.29  limited to, a list of sample mortgage terms, including interest 
  4.30  rates, discount points, and closing costs provided by licensees 
  4.31  or exempt persons to a print or electronic medium that presents 
  4.32  the information to the public; ~~and~~ 
  4.33     (21) use or employ phrases, pictures, return addresses, 
  4.34  geographic designations, or other means that create the 
  4.35  impression, directly or indirectly, that a licensee or other 
  4.36  person is a governmental agency, or is associated with, 
  5.1   sponsored by, or in any manner connected to, related to, or 
  5.2   endorsed by a governmental agency, if that is not the case; or 
  5.3      (22) violate section 82.176, relating to table funding. 
  5.4      Sec. 2.  Minnesota Statutes 2002, section 58.16, 
  5.5   subdivision 2, is amended to read: 
  5.6      Subd. 2.  [CONTRACT PROVISIONS.] (a) A residential mortgage 
  5.7   originator who engages in the activities described in 
  5.8   subdivision 1 shall enter into a written contract with each 
  5.9   borrower and shall provide a copy of the written contract to 
  5.10  each borrower at or before the time of receipt of any fee or 
  5.11  valuable consideration paid for mortgage origination services.  
  5.12  The written contract must: 
  5.13     (1) specifically describe the services to be provided by 
  5.14  the residential mortgage originator and if the originator 
  5.15  collects an advance fee, the dates by which the services will be 
  5.16  performed; 
  5.17     (2) specifically identify whether the residential mortgage 
  5.18  originator may receive compensation from sources other than the 
  5.19  borrower in connection with the loan transaction; 
  5.20     (3) state the total amount of commission or compensation 
  5.21  that the borrower agrees to pay for the residential mortgage 
  5.22  originator's services, or the basis on which the compensation 
  5.23  will be computed; 
  5.24     (4) state the maximum rate of interest to be charged on any 
  5.25  residential mortgage loan obtained; 
  5.26     (5) contain a statement that notifies the borrower of the 
  5.27  right to cancel the contract according to subdivision 3 and 
  5.28  disclose the cancellation rights and procedures provided in 
  5.29  subdivision 3; and 
  5.30     (6) disclose, with respect to the 12-month period ending 
  5.31  ten business days before the date of the contract in question, 
  5.32  the percentage of the mortgage originator's customers for whom 
  5.33  loans have actually been funded as a result of the residential 
  5.34  mortgage originator's services.  
  5.35     (b) If an advance fee is solicited or received the contract 
  5.36  must also: 
  6.1      (1) identify the trust account into which the fees or 
  6.2   consideration will be deposited; 
  6.3      (2) set forth the circumstances under which the residential 
  6.4   mortgage originator will be entitled to disbursement from the 
  6.5   trust account; and 
  6.6      (3) set forth the circumstances under which the borrower 
  6.7   will be entitled to a refund of all or part of the fee. 
  6.8      Sec. 3.  Minnesota Statutes 2002, section 58.16, 
  6.9   subdivision 4, is amended to read: 
  6.10     Subd. 4.  [TRUST ACCOUNT.] The residential mortgage 
  6.11  originator shall deposit in a trust account within three 
  6.12  business days all fees received before the time a loan is 
  6.13  actually funded.  The trust account must be in a financial 
  6.14  institution located within the state of Minnesota and must be 
  6.15  controlled by an unaffiliated accountant, attorney, or bank 
  6.16  officer or employee. 
  6.17     Sec. 4.  [325F.691] [UNREASONABLE DELAY IN MORTGAGE LOAN 
  6.18  CLOSING.] 
  6.19     Subdivision 1.  [PROHIBITED CONDUCT.] (a) A lender, as 
  6.20  defined in section 47.206, who causes unreasonable delay in 
  6.21  processing a loan application beyond the expiration date of an 
  6.22  interest rate or discount point agreement is liable to the 
  6.23  borrower for a penalty in an amount not to exceed the borrower's 
  6.24  actual out-of-pocket damages, including the present value of the 
  6.25  increased interest costs over the normal life of the loan, or 
  6.26  specific performance of the agreement.  This paragraph applies 
  6.27  to an agreement entered into after July 1, 2004. 
  6.28     (b) For purposes of this section, evidence of unreasonable 
  6.29  delay includes, but is not limited to: 
  6.30     (1) failure of the lender to return telephone calls or 
  6.31  otherwise respond to the borrower's inquiries concerning the 
  6.32  status of the loan; 
  6.33     (2) the addition by the lender of new requirements for 
  6.34  processing or approving the loan that were not disclosed to the 
  6.35  borrower under section 47.206, subdivision 2, clause (3), unless 
  6.36  the requirements result from governmental agency or secondary 
  7.1   mortgage market changes, other than changes in interest rates, 
  7.2   that occur after the date of the agreement; or 
  7.3      (3) failure by the lender to take actions necessary to 
  7.4   process or approve the loan within a reasonable period of time, 
  7.5   if the borrower provided information requested by the lender in 
  7.6   a timely manner. 
  7.7      Subd. 2.  [ADDITIONAL PENALTY.] In addition to the remedies 
  7.8   in subdivision 1 of this section, a lender is liable to the 
  7.9   borrower for $500 for each unreasonable delay in processing a 
  7.10  loan application which causes an interest rate or discount point 
  7.11  agreement to expire before closing. 
  7.12     Sec. 5.  Minnesota Statutes 2002, section 513.55, 
  7.13  subdivision 1, is amended to read: 
  7.14     Subdivision 1.  [CONTENTS.] (a) Before signing an agreement 
  7.15  to sell or transfer residential real property, the seller shall 
  7.16  make a written disclosure to the prospective buyer.  The 
  7.17  disclosure must include all material facts ~~pertaining to adverse~~ 
  7.18  ~~physical conditions in the property~~ of which the seller is aware 
  7.19  that could adversely and significantly affect: 
  7.20     (1) an ordinary buyer's use and enjoyment of the property; 
  7.21  or 
  7.22     (2) any intended use of the property of which the seller is 
  7.23  aware.  
  7.24     (b) The disclosure must be made in good faith and based 
  7.25  upon the best of the seller's knowledge at the time of the 
  7.26  disclosure.  
  7.27     Sec. 6.  Minnesota Statutes 2002, section 513.56, is 
  7.28  amended by adding a subdivision to read: 
  7.29     Subd. 4.  [EFFECT ON COMMON LAW.] The limitation on 
  7.30  disclosure in subdivisions 1 and 2 modifies any common law 
  7.31  duties with respect to disclosure of material facts. 
  7.32     Sec. 7.  Minnesota Statutes 2002, section 515B.4-106, is 
  7.33  amended to read: 
  7.34     515B.4-106 [PURCHASER'S RIGHT TO CANCEL.] 
  7.35     (a) A person required to deliver a disclosure statement 
  7.36  pursuant to section 515B.4-101(b) shall provide at least one of 
  8.1   the purchasers of the unit with a copy of the disclosure 
  8.2   statement and all amendments thereto before conveyance of the 
  8.3   unit.  If a purchaser is not given a disclosure statement more 
  8.4   than ~~ten~~ five days before execution of the purchase agreement, 
  8.5   the purchaser may, before conveyance, cancel the purchase 
  8.6   agreement within ~~ten~~ five days after first receiving the 
  8.7   disclosure statement.  If a purchaser is given the disclosure 
  8.8   statement more than ~~ten~~ five days before execution of the 
  8.9   purchase agreement, the purchaser may not cancel the purchase 
  8.10  agreement pursuant to this section.  Except as expressly 
  8.11  provided in this chapter, the ~~ten-day~~ five-day rescission period 
  8.12  cannot be waived. 
  8.13     (b) If an amendment to the disclosure statement materially 
  8.14  and adversely affects a purchaser, then the purchaser shall have 
  8.15  ~~ten~~ five days after delivery of the amendment to cancel the 
  8.16  purchase agreement in accordance with this section. 
  8.17     (c) If a purchaser elects to cancel a purchase agreement 
  8.18  pursuant to this section, the purchaser may do so by giving 
  8.19  notice thereof pursuant to section 515B.1-115.  Cancellation is 
  8.20  without penalty, and all payments made by the purchaser before 
  8.21  cancellation shall be refunded promptly.  Notwithstanding 
  8.22  anything in this section to the contrary, the purchaser's 
  8.23  cancellation rights under this section terminate upon the 
  8.24  purchaser's acceptance of a conveyance of the unit. 
  8.25     (d) If a declarant obligated to deliver a disclosure 
  8.26  statement fails to deliver to the purchaser a disclosure 
  8.27  statement which substantially complies with this chapter, the 
  8.28  declarant shall be liable to the purchaser in the amount of 
  8.29  $1,000, in addition to any damages or other amounts recoverable 
  8.30  under this chapter or otherwise.  Any action brought under this 
  8.31  subsection shall be commenced within the time period specified 
  8.32  in section 515B.4-115, subsection (a). 
  8.33     Sec. 8.  Minnesota Statutes 2002, section 515B.4-108, is 
  8.34  amended to read: 
  8.35     515B.4-108 [PURCHASER'S RIGHT TO CANCEL RESALE.] 
  8.36     (a) Unless a purchaser is given the information required to 
  9.1   be delivered by section 515B.4-107, by a delivery method 
  9.2   described in that section, more than ~~ten~~ five days prior to the 
  9.3   execution of the purchase agreement for the unit the purchaser 
  9.4   may, prior to the conveyance, cancel the purchase agreement 
  9.5   within ~~ten~~ five days after receiving the information.  Except as 
  9.6   expressly provided in this chapter, the ~~ten-day~~ five-day 
  9.7   rescission period cannot be waived. 
  9.8      (b) A purchaser who elects to cancel a purchase agreement 
  9.9   pursuant to subsection (a), may do so by hand delivering notice 
  9.10  thereof or mailing notice by postage prepaid United States mail 
  9.11  to the seller or the agent.  Cancellation is without penalty and 
  9.12  all payments made by the purchaser shall be refunded promptly. 
  9.13     Sec. 9.  Minnesota Statutes 2002, section 559.21, 
  9.14  subdivision 4, is amended to read: 
  9.15     Subd. 4.  [LAW PREVAILS OVER CONTRACT; PROCEDURE; 
  9.16  CONDITIONS.] (a) The notice required by this section must be 
  9.17  given notwithstanding any provisions in the contract to the 
  9.18  contrary, except that earnest money contracts, purchase 
  9.19  agreements, and exercised options that are subject to this 
  9.20  section may, unless by their terms they provide for a longer 
  9.21  termination period, be terminated on 30 days' notice, or may be 
  9.22  canceled under section 559.217.  The notice must be served 
  9.23  within the state in the same manner as a summons in the district 
  9.24  court, and outside of the state, in the same manner, and without 
  9.25  securing any sheriff's return of not found, making any 
  9.26  preliminary affidavit, mailing a copy of the notice or doing any 
  9.27  other preliminary act or thing whatsoever.  Service of the 
  9.28  notice outside of the state may be proved by the affidavit of 
  9.29  the person making the same, made before an authorized officer 
  9.30  having a seal, and within the state by such an affidavit or by 
  9.31  the return of the sheriff of any county therein. 
  9.32     (b) If a person to be served is a resident individual who 
  9.33  has departed from the state, or cannot be found in the state; or 
  9.34  is a nonresident individual or a foreign corporation, 
  9.35  partnership, or association, service may be made by publication 
  9.36  as provided in this paragraph.  Three weeks' published notice 
 10.1   has the same effect as personal service of the notice.  The 
 10.2   published notice must comply with subdivision 3 and state (1) 
 10.3   that the person to be served is allowed 90 days after the first 
 10.4   date of publication of the notice to comply with the conditions 
 10.5   of the contract, and (2) that the contract will terminate 90 
 10.6   days after the first date of publication of the notice, unless 
 10.7   before the termination date the purchaser complies with the 
 10.8   notice.  If the real estate described in the contract is 
 10.9   actually occupied, then, in addition to publication, a person in 
 10.10  possession must be personally served, in like manner as the 
 10.11  service of a summons in a civil action in state district court, 
 10.12  within 30 days after the first date of publication of the 
 10.13  notice.  If an address of a person to be served is known, then 
 10.14  within 30 days after the first date of publication of the notice 
 10.15  a copy of the notice must be mailed to the person's last known 
 10.16  address by first class mail, postage prepaid. 
 10.17     (c) The contract is reinstated if, within the time 
 10.18  mentioned, the person served: 
 10.19     (1) complies with the conditions in default; 
 10.20     (2) if subdivision 1d or 2a applies, makes all payments due 
 10.21  and owing to the seller under the contract through the date that 
 10.22  payment is made; 
 10.23     (3) pays the costs of service as provided in subdivision 
 10.24  1b, 1c, 1d, or 2a; 
 10.25     (4) if subdivision 2a applies, pays two percent of the 
 10.26  amount in default, not including the final balloon payment, any 
 10.27  taxes, assessments, mortgages, or prior contracts that are 
 10.28  assumed by the purchaser; and 
 10.29     (5) pays attorneys' fees as provided in subdivision 1b, 1c, 
 10.30  1d, or 2a. 
 10.31     (d) The contract is terminated if the provisions of 
 10.32  paragraph (c) are not met. 
 10.33     (e) In the event that the notice was not signed by an 
 10.34  attorney for the seller and the seller is not present in the 
 10.35  state, or cannot be found in the state, then compliance with the 
 10.36  conditions specified in the notice may be made by paying to the 
 11.1   court administrator of the district court in the county wherein 
 11.2   the real estate or any part thereof is situated any money due 
 11.3   and filing proof of compliance with other defaults specified, 
 11.4   and the court administrator of the district court shall be 
 11.5   deemed the agent of the seller for such purposes.  A copy of the 
 11.6   notice with proof of service thereof, and the affidavit of the 
 11.7   seller, the seller's agent or attorney, showing that the 
 11.8   purchaser has not complied with the terms of the notice, may be 
 11.9   recorded with the county recorder, and is prima facie evidence 
 11.10  of the facts stated in it; but this section in no case applies 
 11.11  to contracts for the sale or conveyance of lands situated in 
 11.12  another state or in a foreign country.  If the notice is served 
 11.13  by publication, the affidavit must state that the affiant 
 11.14  believes that the party to be served is not a resident of the 
 11.15  state, or cannot be found in the state, and either that the 
 11.16  affiant has mailed a copy of the notice by first class mail, 
 11.17  postage prepaid, to the party's last known address, or that such 
 11.18  address is not known to the affiant. 
 11.19     Sec. 10.  [559.217] [DECLARATORY CANCELLATION OF PURCHASE 
 11.20  AGREEMENT.] 
 11.21     Subdivision 1.  [DEFINITIONS.] (a) For purposes of this 
 11.22  section, the terms defined in this subdivision have the meanings 
 11.23  given. 
 11.24     (b) "Purchase agreement" means an earnest money contract, 
 11.25  purchase agreement, or exercised option that could be canceled 
 11.26  under section 559.21, subdivision 4, paragraph (a). 
 11.27     (c) "Residential real property" means real property, 
 11.28  including vacant land, occupied by, or intended to be occupied 
 11.29  by, one to four families as their residence. 
 11.30     Subd. 2.  [USE OF THIS SECTION.] Either the purchaser or 
 11.31  the seller may cancel a purchase agreement for residential real 
 11.32  property under this section.  If either a seller or purchaser 
 11.33  initiates a cancellation proceeding under this section and 
 11.34  before completion of the proceeding the other party initiates a 
 11.35  cancellation proceeding under this section, whether under 
 11.36  subdivision 3 or 4, the purchase agreement is deemed canceled as 
 12.1   of the date the second cancellation notice is served upon the 
 12.2   other party under this section.  Either party can later pursue 
 12.3   legal remedies at law to recover the earnest money.  A court 
 12.4   shall make a determination of which party is entitled to the 
 12.5   earnest money without regard to which party first initiated the 
 12.6   cancellation proceeding and may consider the terms of the 
 12.7   canceled purchase agreement in making its determination.  
 12.8      Subd. 3.  [CANCELLATION WITH RIGHT TO CURE.] (a) If a 
 12.9   default occurs or an unfulfilled condition exists after the date 
 12.10  specified for fulfillment in the terms of a purchase agreement 
 12.11  for the conveyance of residential real property, which does not 
 12.12  by its terms cancel the purchase agreement, the purchaser or the 
 12.13  seller may initiate a cancellation by serving upon the other 
 12.14  party to the purchase agreement and any third party that is 
 12.15  holding earnest money under the purchase agreement a notice: 
 12.16     (1) specifying the residential real property that is the 
 12.17  subject of the purchase agreement, including the legal 
 12.18  description; 
 12.19     (2) specifying the purchase agreement by date and names of 
 12.20  parties, and the unfulfilled condition or default; and 
 12.21     (3) stating that the purchase agreement will be canceled 15 
 12.22  days after service of the notice unless prior to the 
 12.23  cancellation date the party upon whom the notice is served 
 12.24  complies with the conditions in default and completes the 
 12.25  unfulfilled conditions, including, if applicable, completion of 
 12.26  the purchase or sale of the residential real property according 
 12.27  to the terms of the purchase agreement. 
 12.28     (b) The notice must be served in the manner provided in 
 12.29  section 559.21, subdivision 4, paragraphs (a) and (b). 
 12.30     (c) The purchase agreement is canceled unless, within 15 
 12.31  days after the service of the notice, the party upon whom the 
 12.32  notice was served fully complies with the conditions in default 
 12.33  and completes the unfulfilled conditions or secures from a court 
 12.34  an order suspending the cancellation. 
 12.35     Subd. 4.  [DECLARATORY CANCELLATION.] (a) If a default 
 12.36  occurs or an unfulfilled condition exists after the date 
 13.1   specified for fulfillment in the terms of a purchase agreement 
 13.2   for the conveyance of residential real property, which by the 
 13.3   terms of the purchase agreement cancels the purchase agreement, 
 13.4   either the purchaser or the seller may confirm the cancellation 
 13.5   by serving upon the other party and any third party that is 
 13.6   holding earnest money under the purchase agreement a notice: 
 13.7      (1) specifying the residential real property that is the 
 13.8   subject of the purchase agreement, including the legal 
 13.9   description; 
 13.10     (2) specifying the purchase agreement by date and names of 
 13.11  parties, and the unfulfilled condition or default; and 
 13.12     (3) stating that the purchase agreement has been canceled. 
 13.13     (b) The notice must be served in the manner provided in 
 13.14  section 559.21, subdivision 4, paragraphs (a) and (b). 
 13.15     (c) The cancellation of the purchase agreement is complete, 
 13.16  unless, within 15 days after the service of the notice, the 
 13.17  party upon whom the notice was served secures from a court an 
 13.18  order suspending the cancellation. 
 13.19     Subd. 5.  [FORM OF NOTICE OF CANCELLATION.] (a) For 
 13.20  purposes of subdivision 3, the term "notice" means a writing 
 13.21  stating the information required in subdivision 3, paragraph 
 13.22  (a), stating the name, address, and telephone number of that 
 13.23  party serving the notice or of an attorney authorized by such 
 13.24  party to serve the notice, and including the following 
 13.25  information in 12-point or larger underlined uppercase type, or 
 13.26  8-point type if published, or in large legible handwritten 
 13.27  letters: 
 13.28     "THIS NOTICE IS TO INFORM YOU THAT BY THIS NOTICE THE 
 13.29  (SELLER) (PURCHASER) (STRIKE ONE) HAS BEGUN PROCEEDINGS UNDER 
 13.30  MINNESOTA STATUTES, SECTION 559.217, TO CANCEL YOUR PURCHASE 
 13.31  AGREEMENT FOR THE (PURCHASE) (SALE) (STRIKE ONE) OF THE ABOVE 
 13.32  PROPERTY FOR THE REASONS SPECIFIED IN THIS NOTICE.  THE PURCHASE 
 13.33  AGREEMENT WILL BE CANCELED ... DAYS AFTER (SERVICE OF THIS 
 13.34  NOTICE UPON YOU) (THE FIRST DAY OF PUBLICATION OF THIS NOTICE) 
 13.35  (STRIKE ONE) UNLESS BEFORE THEN: 
 13.36     (A) YOU HAVE FULLY COMPLIED WITH ALL OF YOUR OBLIGATIONS 
 14.1   UNDER THE PURCHASE AGREEMENT THAT WERE REQUIRED TO BE PERFORMED 
 14.2   AS OF THE DATE OF SERVICE OF THIS NOTICE, INCLUDING WITHOUT 
 14.3   LIMITATION, THE ITEMS OF DEFAULT SPECIFIED IN THIS NOTICE; OR 
 14.4      (B) YOU SECURE FROM A DISTRICT COURT AN ORDER THAT THE 
 14.5   TERMINATION OF THE PURCHASE AGREEMENT BE SUSPENDED UNTIL YOUR 
 14.6   CLAIMS OR DEFENSES ARE FINALLY DISPOSED OF BY TRIAL, HEARING, OR 
 14.7   SETTLEMENT.  YOUR ACTION MUST SPECIFICALLY STATE THOSE FACTS AND 
 14.8   GROUNDS THAT DEMONSTRATE YOUR CLAIMS OR DEFENSES. 
 14.9      IF YOU DO NOT DO ONE OR THE OTHER OF THE ABOVE THINGS 
 14.10  WITHIN THE TIME PERIOD SPECIFIED IN THIS NOTICE, YOUR PURCHASE 
 14.11  AGREEMENT WILL BE CANCELED AT THE END OF THE PERIOD (AND YOU 
 14.12  WILL LOSE ALL EARNEST MONEY YOU HAVE PAID ON THE PURCHASE 
 14.13  AGREEMENT) (STRIKE IF NOT APPLICABLE); AND YOU MAY LOSE YOUR 
 14.14  RIGHT TO ASSERT ANY CLAIMS OR DEFENSES THAT YOU MIGHT HAVE.  IF 
 14.15  YOU HAVE ANY QUESTIONS ABOUT THIS NOTICE, CONTACT AN ATTORNEY 
 14.16  IMMEDIATELY." 
 14.17     (b) For purposes of subdivision 4, the term "notice" means 
 14.18  a writing stating the information required in subdivision 4, 
 14.19  paragraph (a), stating the name, address, and telephone number 
 14.20  of the party serving the notice or of an attorney authorized by 
 14.21  that party to serve the notice, and including the following 
 14.22  information in 12-point or larger underlined uppercase type, or 
 14.23  8-point type if published, or in large legible handwritten 
 14.24  letters: 
 14.25     "THIS NOTICE IS PURSUANT TO MINNESOTA STATUTES, SECTION 
 14.26  559.217, TO INFORM YOU THAT YOUR PURCHASE AGREEMENT FOR THE 
 14.27  (PURCHASE) (SALE) (STRIKE ONE) OF THE ABOVE PROPERTY HAS BEEN 
 14.28  CANCELED FOR THE REASONS SPECIFIED IN THIS NOTICE.  THE 
 14.29  CANCELLATION WILL BE CONFIRMED ... DAYS AFTER (SERVICE OF THIS 
 14.30  NOTICE UPON YOU) (THE FIRST DAY OF PUBLICATION OF THIS NOTICE) 
 14.31  (STRIKE ONE) UNLESS BEFORE THEN YOU SECURE FROM A DISTRICT COURT 
 14.32  AN ORDER THAT THE CONFIRMATION OF CANCELLATION OF THE PURCHASE 
 14.33  AGREEMENT BE SUSPENDED UNTIL YOUR CLAIMS OR DEFENSES ARE FINALLY 
 14.34  DISPOSED OF BY TRIAL, HEARING, OR SETTLEMENT.  YOUR ACTION MUST 
 14.35  SPECIFICALLY STATE THOSE FACTS AND GROUNDS THAT DEMONSTRATE YOUR 
 14.36  CLAIMS OR DEFENSES. 
 15.1      IF YOU DO NOT OBTAIN SUCH A COURT ORDER WITHIN THE TIME 
 15.2   PERIOD SPECIFIED IN THIS NOTICE, THE CONFIRMATION OF 
 15.3   CANCELLATION OF YOUR PURCHASE AGREEMENT WILL BE FINAL AT THE END 
 15.4   OF THE PERIOD (AND YOU WILL LOSE ALL EARNEST MONEY YOU HAVE PAID 
 15.5   ON THE PURCHASE AGREEMENT) (STRIKE IF NOT APPLICABLE); AND YOU 
 15.6   MAY LOSE YOUR RIGHT TO ASSERT ANY CLAIMS OR DEFENSES THAT YOU 
 15.7   MIGHT HAVE.  IF YOU HAVE ANY QUESTIONS ABOUT THIS NOTICE, 
 15.8   CONTACT AN ATTORNEY IMMEDIATELY." 
 15.9      Subd. 6.  [ATTORNEY FEES, COURT FEES, AND COSTS OF 
 15.10  SERVICE.] If the party upon whom the notice is served commences 
 15.11  a proceeding to obtain a court order to suspend the cancellation 
 15.12  of a purchase agreement under this section, the court shall 
 15.13  award court filing fees, attorney fees, and costs of service 
 15.14  actually expended to the prevailing party in an amount not to 
 15.15  exceed $3,000. 
 15.16     Subd. 7.  [AFFIDAVIT OF CANCELLATION.] (a) After a 
 15.17  cancellation under subdivision 3 or a confirmation of 
 15.18  cancellation under subdivision 4, the purchase agreement is void 
 15.19  and of no further force or effect, and, except as provided in 
 15.20  subdivision 2, any earnest money held under the purchase 
 15.21  agreement must be distributed to, and become the sole property 
 15.22  of, the party completing the cancellation of the purchase 
 15.23  agreement. 
 15.24     (b) When a cancellation under this section has been 
 15.25  completed, the party who served the notice, or that party's 
 15.26  attorney, may execute an affidavit stating that the party caused 
 15.27  a notice of cancellation to be served upon the other party, that 
 15.28  the other party neither complied with the actions required in 
 15.29  the notice, if applicable, nor obtained a court order suspending 
 15.30  the cancellation, and that the property is residential real 
 15.31  property. 
 15.32     (c) A copy of the affidavit of cancellation, when attached 
 15.33  to a copy of the notice, is prima facie evidence of the facts 
 15.34  therein stated. 
 15.35     (d) Except as provided in subdivision 2, the affidavit of 
 15.36  cancellation, when delivered to a person holding earnest money 
 16.1   under the purchase agreement, is a sufficient basis for that 
 16.2   person to release the earnest money to the party initiating the 
 16.3   cancellation. 
 16.4      (e) If either a seller or purchaser commences a 
 16.5   cancellation proceeding under this section and before completion 
 16.6   of the first proceeding the other party initiates a cancellation 
 16.7   proceeding under this section, either party or that party's 
 16.8   attorney may execute an affidavit stating that both parties 
 16.9   caused the notice of cancellation to be served upon the other 
 16.10  party and further specifying the date the second notice of 
 16.11  cancellation was served upon the other party.  A copy of the 
 16.12  affidavit of cancellation, when attached to copies of both 
 16.13  notices of cancellation, is prima facie evidence of the 
 16.14  cancellation of the purchase agreement and of the effective date 
 16.15  of the cancellation of the purchase agreement. 
 16.16     Subd. 8.  [ATTORNEY AS AGENT FOR SERVICE.] Any attorney 
 16.17  authorized to serve the notice of cancellation by a party 
 16.18  initiating a cancellation under this section is designated as 
 16.19  the attorney who may receive service as agent for the party 
 16.20  initiating the cancellation of all summons, complaints, orders, 
 16.21  and motions made in connection with an action by the party upon 
 16.22  whom the notice is served to restrain the cancellation.  Service 
 16.23  in the action may be made upon the party initiating the 
 16.24  cancellation by mailing a copy of the process to such party or 
 16.25  to such party's attorney, by first class mail, postage prepaid, 
 16.26  to the address stated in the notice. 
 16.27     Sec. 11.  [REPEALER.] 
 16.28     Minnesota Statutes 2002, section 58.02, subdivision 24, is 
 16.29  repealed. 
 16.30     Sec. 12.  [EFFECTIVE DATE.] 
 16.31     Sections 1 to 11 are effective August 1, 2004.  Section 10 
 16.32  applies to purchase agreements entered into on or after that 
 16.33  date.  
 16.34                             ARTICLE 2 
 16.35                           RECODIFICATION 
 16.36     Section 1.  Minnesota Statutes 2002, section 82.17, 
 17.1   subdivision 4, is amended to read: 
 17.2      Subd. 4.  [REAL ESTATE BROKER; BROKER.] "Real estate 
 17.3   broker" or "broker" means any person who: 
 17.4      (a) for another and for commission, fee, or other valuable 
 17.5   consideration or with the intention or expectation of receiving 
 17.6   the same directly or indirectly lists, sells, exchanges, buys or 
 17.7   rents, manages, or offers or attempts to negotiate a sale, 
 17.8   option, exchange, purchase or rental of an interest or estate in 
 17.9   real estate, or advertises or holds out as engaged in these 
 17.10  activities; 
 17.11     (b) for another and for commission, fee, or other valuable 
 17.12  consideration or with the intention or expectation of receiving 
 17.13  the same directly or indirectly negotiates or offers or attempts 
 17.14  to negotiate a loan, secured or to be secured by a mortgage or 
 17.15  other encumbrance on real estate, which is not a residential 
 17.16  mortgage loan as defined by section 58.02, subdivision 18; 
 17.17     (c) "real estate broker" or "broker" as set forth in clause 
 17.18  (b) shall not apply to the originating, making, processing, 
 17.19  selling, or servicing of a loan in connection with the broker's 
 17.20  ordinary business activities by a mortgagee, lender, or servicer 
 17.21  approved or certified by the secretary of housing and urban 
 17.22  development, or approved or certified by the administrator of 
 17.23  veterans affairs, or approved or certified by the administrator 
 17.24  of the Farmers Home Administration, or approved or certified by 
 17.25  the federal Home Loan Mortgage Corporation, or approved or 
 17.26  certified by the federal National Mortgage Association; 
 17.27     (d) for another and for commission, fee, or other valuable 
 17.28  consideration or with the intention or expectation of receiving 
 17.29  the same directly or indirectly lists, sells, exchanges, buys, 
 17.30  rents, manages, offers or attempts to negotiate a sale, option, 
 17.31  exchange, purchase or rental of any business opportunity or 
 17.32  business, or its good will, inventory, or fixtures, or any 
 17.33  interest therein; 
 17.34     ~~(d)~~ (e) for another and for commission, fee, or other 
 17.35  valuable consideration or with the intention or expectation of 
 17.36  receiving the same directly or indirectly offers, sells or 
 18.1   attempts to negotiate the sale of property that is subject to 
 18.2   the registration requirements of chapter 83, concerning 
 18.3   subdivided land; 
 18.4      ~~(e)~~ (f) for another and for commission, fee, or other 
 18.5   valuable consideration or with the intention or expectation of 
 18.6   receiving the same, promotes the sale of real estate by 
 18.7   advertising it in a publication issued primarily for this 
 18.8   purpose, if the person:  
 18.9      (1) negotiates on behalf of any party to a transaction; 
 18.10     (2) disseminates any information regarding the property to 
 18.11  any party or potential party to a transaction subsequent to the 
 18.12  publication of the advertisement, except that in response to an 
 18.13  initial inquiry from a potential purchaser, the person may 
 18.14  forward additional written information regarding the property 
 18.15  which has been prepared prior to the publication by the seller 
 18.16  or broker or a representative of either; 
 18.17     (3) counsels, advises, or offers suggestions to the seller 
 18.18  or a representative of the seller with regard to the marketing, 
 18.19  offer, sale, or lease of the real estate, whether prior to or 
 18.20  subsequent to the publication of the advertisement; 
 18.21     (4) counsels, advises, or offers suggestions to a potential 
 18.22  buyer or a representative of the seller with regard to the 
 18.23  purchase or rental of any advertised real estate; or 
 18.24     (5) engages in any other activity otherwise subject to 
 18.25  licensure under this chapter; 
 18.26     ~~(f)~~ (g) engages wholly or in part in the business of 
 18.27  selling real estate to the extent that a pattern of real estate 
 18.28  sales is established, whether or not the real estate is owned by 
 18.29  the person.  A person shall be presumed to be engaged in the 
 18.30  business of selling real estate if the person engages as 
 18.31  principal in five or more transactions during any 12-month 
 18.32  period, unless the person is represented by a licensed real 
 18.33  estate broker or salesperson. 
 18.34     Sec. 2.  Minnesota Statutes 2002, section 82.17, is amended 
 18.35  by adding a subdivision to read: 
 18.36     Subd. 13.  [BUSINESS OF FINANCIAL PLANNING.] "Business of 
 19.1   financial planning" means providing, or offering to provide, 
 19.2   financial planning services or financial counseling or advice, 
 19.3   on a group or individual basis.  A person who, on 
 19.4   advertisements, cards, signs, circulars, letterheads, or in any 
 19.5   other manner, indicates that the person is a "financial planner,"
 19.6   "financial counselor," "financial adviser," "investment 
 19.7   counselor," "estate planner," "investment adviser," "financial 
 19.8   consultant," or any other similar designation or title or 
 19.9   combination thereof, is considered to be representing himself or 
 19.10  herself to be engaged in the business of financial planning. 
 19.11     Sec. 3.  Minnesota Statutes 2002, section 82.17, is amended 
 19.12  by adding a subdivision to read: 
 19.13     Subd. 14.  [ELECTRONIC AGENT.] "Electronic agent" means a 
 19.14  computer program or an electronic or other automated means used 
 19.15  independently to initiate an action or respond to electronic 
 19.16  records or performances, in whole or in part, without review or 
 19.17  action by an individual. 
 19.18     Sec. 4.  Minnesota Statutes 2002, section 82.17, is amended 
 19.19  by adding a subdivision to read: 
 19.20     Subd. 15.  [ELECTRONIC RECORD.] "Electronic record" means a 
 19.21  record created, generated, sent, communicated, received, or 
 19.22  stored by electronic means. 
 19.23     Sec. 5.  Minnesota Statutes 2002, section 82.17, is amended 
 19.24  by adding a subdivision to read: 
 19.25     Subd. 16.  [ELECTRONIC SIGNATURE.] "Electronic signature" 
 19.26  means an electronic sound, symbol, or process attached to or 
 19.27  logically associated with a record and executed or adopted by a 
 19.28  person with the intent to sign the record. 
 19.29     Sec. 6.  Minnesota Statutes 2002, section 82.17, is amended 
 19.30  by adding a subdivision to read: 
 19.31     Subd. 17.  [LICENSEE.] "Licensee" means a person duly 
 19.32  licensed under this chapter. 
 19.33     Sec. 7.  Minnesota Statutes 2002, section 82.17, is amended 
 19.34  by adding a subdivision to read: 
 19.35     Subd. 18.  [LOAN BROKER.] "Loan broker" means a licensed 
 19.36  real estate broker or salesperson who, for another and for a 
 20.1   commission, fee, or other valuable consideration or with the 
 20.2   intention or expectation of receiving the same, directly or 
 20.3   indirectly, negotiates or offers or attempts to negotiate a loan 
 20.4   secured or to be secured by a mortgage or other encumbrance on 
 20.5   real estate, or represents himself or herself or otherwise holds 
 20.6   himself or herself out as a licensed real estate broker or 
 20.7   salesperson, either in connection with any transaction in which 
 20.8   he or she directly or indirectly negotiates or offers or 
 20.9   attempts to negotiate a loan, or in connection with the conduct 
 20.10  of his or her ordinary business activities as a loan broker. 
 20.11     "Loan broker" does not include a licensed real estate 
 20.12  broker or salesperson who, in the course of representing a 
 20.13  purchaser or seller of real estate, incidentally assists the 
 20.14  purchaser or seller in obtaining financing for the real property 
 20.15  in question if the licensee does not receive a separate 
 20.16  commission, fee, or other valuable consideration for this 
 20.17  service. 
 20.18     Sec. 8.  Minnesota Statutes 2002, section 82.17, is amended 
 20.19  by adding a subdivision to read: 
 20.20     Subd. 19.  [OVERPAYMENT.] "Overpayment" means any payment 
 20.21  of money in excess of a statutory fee or for a license for which 
 20.22  a person does not qualify. 
 20.23     Sec. 9.  Minnesota Statutes 2002, section 82.17, is amended 
 20.24  by adding a subdivision to read: 
 20.25     Subd. 20.  [OVERRIDE CLAUSE.] "Override clause" means a 
 20.26  provision in a listing agreement or similar instrument allowing 
 20.27  the broker to receive compensation when, after the listing 
 20.28  agreement has expired, the property is sold to persons with whom 
 20.29  a broker or salesperson had negotiated or exhibited the property 
 20.30  prior to the expiration of the listing agreement. 
 20.31     Sec. 10.  Minnesota Statutes 2002, section 82.17, is 
 20.32  amended by adding a subdivision to read: 
 20.33     Subd. 21.  [PRIMARY BROKER.] "Primary broker" means the 
 20.34  broker on whose behalf salespersons are licensed to act pursuant 
 20.35  to section 82.20, subdivision 6.  In the case of a corporation 
 20.36  licensed as a broker, "primary broker" means each officer of the 
 21.1   corporation who is individually licensed to act as broker for 
 21.2   the corporation.  In the case of a partnership, "primary broker" 
 21.3   means each partner licensed to act as a broker for the 
 21.4   partnership. 
 21.5      Sec. 11.  Minnesota Statutes 2002, section 82.17, is 
 21.6   amended by adding a subdivision to read: 
 21.7      Subd. 22.  [PROTECTIVE LIST.] "Protective list" means the 
 21.8   written list of names and addresses of prospective purchasers 
 21.9   with whom a licensee has negotiated the sale or rental of the 
 21.10  property or to whom a licensee has exhibited the property before 
 21.11  the expiration of the listing agreement.  For the purposes of 
 21.12  this subdivision, "property" means the property that is the 
 21.13  subject of the listing agreement in question. 
 21.14     Sec. 12.  Minnesota Statutes 2002, section 82.17, is 
 21.15  amended by adding a subdivision to read: 
 21.16     Subd. 23.  [RENTAL SERVICE.] "Rental service" means a 
 21.17  person who gathers and catalogs information concerning 
 21.18  apartments or other units of real estate available for rent, and 
 21.19  who, for a fee, provides information intended to meet the 
 21.20  individual needs of specifically identified lessors or 
 21.21  prospective lessees.  "Rental service" does not apply to 
 21.22  newspapers or other periodicals with a general circulation or 
 21.23  individual listing contracts between an owner or lessor of 
 21.24  property and a licensee. 
 21.25     Sec. 13.  Minnesota Statutes 2002, section 82.17, is 
 21.26  amended by adding a subdivision to read: 
 21.27     Subd. 24.  [SPONSOR.] "Sponsor" means a person offering or 
 21.28  providing real estate education. 
 21.29     Sec. 14.  Minnesota Statutes 2002, section 82.19, 
 21.30  subdivision 3, is amended to read: 
 21.31     Subd. 3.  [COMMISSION-SPLITTING, REBATES, AND FEES.] No 
 21.32  real estate broker, salesperson, or closing agents shall offer, 
 21.33  pay, or give, and no person shall accept, any compensation or 
 21.34  other thing of value from any real estate broker, salesperson, 
 21.35  or closing agents by way of commission-splitting, rebate, 
 21.36  finder's fees, or otherwise, in connection with any real estate 
 22.1   or business opportunity transaction.  This subdivision does not 
 22.2   apply to transactions (1) between a licensed real estate broker 
 22.3   or salesperson and the ~~person by whom the broker or salesperson~~ 
 22.4   ~~is engaged to purchase or sell real estate or business~~ 
 22.5   ~~opportunity~~ parties to the transaction, (2) among persons 
 22.6   licensed as provided herein, (3) between a licensed real estate 
 22.7   broker or salesperson and persons from other jurisdictions 
 22.8   similarly licensed in that jurisdiction, (4) involving timeshare 
 22.9   or other recreational lands where the amount offered or paid 
 22.10  does not exceed $150, and payment is not conditioned upon any 
 22.11  sale but is made merely for providing the referral and the 
 22.12  person paying the fee is bound by any representations the person 
 22.13  receiving the fee makes, and (5) involving a person who receives 
 22.14  a referral fee from a person or an agent of a person licensed 
 22.15  under this section, provided that in any 12-month period, no 
 22.16  recipient may earn more than the value of one month's rent, that 
 22.17  the recipient is a resident of the property or has lived there 
 22.18  within 60 days of the payment of the fee, and that the person 
 22.19  paying the fee is bound by any representations made by the 
 22.20  recipient of the fee.  A licensed real estate broker or 
 22.21  salesperson may assign or direct that commissions or other 
 22.22  compensation earned in connection with any real estate or 
 22.23  business opportunity transaction be paid to a corporation, 
 22.24  limited liability company, or sole proprietorship of which the 
 22.25  licensed real estate broker or salesperson is the sole owner. 
 22.26     Sec. 15.  Minnesota Statutes 2002, section 82.19, 
 22.27  subdivision 5, is amended to read: 
 22.28     Subd. 5.  [DISCLOSURE REGARDING REPRESENTATION OF PARTIES.] 
 22.29  (a) No person licensed pursuant to this chapter or who otherwise 
 22.30  acts as a real estate broker or salesperson shall fail to 
 22.31  provide at the first substantive contact with a consumer in a 
 22.32  residential real property transaction an agency disclosure form 
 22.33  as set forth in section 82.197. 
 22.34     (b) The seller may, in the listing agreement, authorize the 
 22.35  seller's broker to disburse part of the broker's compensation to 
 22.36  other brokers, including the buyer's brokers solely representing 
 23.1   the buyer.  ~~A broker representing a buyer shall make known to~~ 
 23.2   ~~the seller or the seller's agent the fact of the agency~~ 
 23.3   ~~relationship before any showing or negotiations are initiated.~~ 
 23.4      Sec. 16.  Minnesota Statutes 2002, section 82.19, is 
 23.5   amended by adding a subdivision to read: 
 23.6      Subd. 10.  [PROHIBITION ON GUARANTEEING FUTURE 
 23.7   PROFITS.] Licensees shall not, with respect to the sale or lease 
 23.8   of real property, guarantee or affirmatively encourage another 
 23.9   person to guarantee future profits or earnings that may result 
 23.10  from the purchase or lease of the real property in question 
 23.11  unless the guarantee and the assumptions upon which it is based 
 23.12  are fully disclosed and contained in the contract, purchase 
 23.13  agreement, or other instrument of sale or lease. 
 23.14     Sec. 17.  Minnesota Statutes 2002, section 82.19, is 
 23.15  amended by adding a subdivision to read: 
 23.16     Subd. 11.  [PROHIBITION AGAINST DISCOURAGING USE OF 
 23.17  ATTORNEY.] Licensees shall not discourage prospective parties to 
 23.18  a real estate transaction from seeking the services of an 
 23.19  attorney. 
 23.20     Sec. 18.  Minnesota Statutes 2002, section 82.19, is 
 23.21  amended by adding a subdivision to read: 
 23.22     Subd. 12.  [FRAUDULENT, DECEPTIVE, AND DISHONEST 
 23.23  PRACTICES.] (a) [PROHIBITIONS.] For the purposes of section 
 23.24  82.32, subdivision 1, clause (b), the following acts and 
 23.25  practices constitute fraudulent, deceptive, or dishonest 
 23.26  practices: 
 23.27     (1) act on behalf of more than one party to a transaction 
 23.28  without the knowledge and consent of all parties; 
 23.29     (2) act in the dual capacity of licensee and undisclosed 
 23.30  principal in any transaction; 
 23.31     (3) receive funds while acting as principal which funds 
 23.32  would constitute trust funds if received by a licensee acting as 
 23.33  an agent, unless the funds are placed in a trust account.  Funds 
 23.34  need not be placed in a trust account if a written agreement 
 23.35  signed by all parties to the transaction specifies a different 
 23.36  disposition of the funds, in accordance with section 82.27, 
 24.1   subdivision 1; 
 24.2      (4) violate any state or federal law concerning 
 24.3   discrimination intended to protect the rights of purchasers or 
 24.4   renters of real estate; 
 24.5      (5) make a material misstatement in an application for a 
 24.6   license or in any information furnished to the commissioner; 
 24.7      (6) procure or attempt to procure a real estate license for 
 24.8   himself or herself or any person by fraud, misrepresentation, or 
 24.9   deceit; 
 24.10     (7) represent membership in any real estate-related 
 24.11  organization in which the licensee is not a member; 
 24.12     (8) advertise in any manner that is misleading or 
 24.13  inaccurate with respect to properties, terms, values, policies, 
 24.14  or services conducted by the licensee; 
 24.15     (9) make any material misrepresentation or permit or allow 
 24.16  another to make any material misrepresentation; 
 24.17     (10) make any false or misleading statements, or permit or 
 24.18  allow another to make any false or misleading statements, of a 
 24.19  character likely to influence, persuade, or induce the 
 24.20  consummation of a transaction contemplated by this chapter; 
 24.21     (11) fail within a reasonable time to account for or remit 
 24.22  any money coming into the licensee's possession which belongs to 
 24.23  another; 
 24.24     (12) commingle with his or her own money or property trust 
 24.25  funds or any other money or property of another held by the 
 24.26  licensee; 
 24.27     (13) demand from a seller a commission to compensation 
 24.28  which the licensee is not entitled, knowing that he or she is 
 24.29  not entitled to the commission compensation; 
 24.30     (14) pay or give money or goods of value to an unlicensed 
 24.31  person for any assistance or information relating to the 
 24.32  procurement by a licensee of a listing of a property or of a 
 24.33  prospective buyer of a property (this item does not apply to 
 24.34  money or goods paid or given to the parties to the transaction); 
 24.35     (15) fail to maintain a trust account at all times, as 
 24.36  provided by law; 
 25.1      (16) engage, with respect to the offer, sale, or rental of 
 25.2   real estate, in an anticompetitive activity; 
 25.3      (17) represent on advertisements, cards, signs, circulars, 
 25.4   letterheads, or in any other manner, that he or she is engaged 
 25.5   in the business of financial planning unless he or she provides 
 25.6   a disclosure document to the client.  The document must be 
 25.7   signed by the client and a copy must be left with the client.  
 25.8   The disclosure document must contain the following: 
 25.9      (i) the basis of fees, commissions, or other compensation 
 25.10  received by him or her in connection with rendering of financial 
 25.11  planning services or financial counseling or advice in the 
 25.12  following language: 
 25.13     "My compensation may be based on the following: 
 25.14     (a) ... commissions generated from the products I sell you; 
 25.15     (b) ... fees; or 
 25.16     (c) ... a combination of (a) and (b).  [Comments]"; 
 25.17     (ii) the name and address of any company or firm that 
 25.18  supplies the financial services or products offered or sold by 
 25.19  him or her in the following language: 
 25.20     "I am authorized to offer or sell products and/or services 
 25.21  issued by or through the following firm(s): 
 25.22     [List] 
 25.23     The products will be traded, distributed, or placed through 
 25.24  the clearing/trading firm(s) of: 
 25.25     [List]"; 
 25.26     (iii) the license(s) held by the person under this chapter 
 25.27  or chapter 60A or 80A in the following language: 
 25.28     "I am licensed in Minnesota as a(n): 
 25.29     (a) ... insurance agent; 
 25.30     (b) ... securities agent or broker/dealer; 
 25.31     (c) ... real estate broker or salesperson; 
 25.32     (d) ... investment adviser"; and 
 25.33     (iv) the specific identity of any financial products or 
 25.34  services, by category, for example mutual funds, stocks, or 
 25.35  limited partnerships, the person is authorized to offer or sell 
 25.36  in the following language: 
 26.1      "The license(s) entitles me to offer and sell the following 
 26.2   products and/or services: 
 26.3      (a) ... securities, specifically the following:  [List]; 
 26.4      (b) ... real property; 
 26.5      (c) ... insurance; and 
 26.6      (d) ... other:  [List]." 
 26.7      (b) [DETERMINING VIOLATION.] A licensee shall be deemed to 
 26.8   have violated this section if the licensee has been found to 
 26.9   have violated sections 325D.49 to 325D.66, by a final decision 
 26.10  or order of a court of competent jurisdiction. 
 26.11     (c) [COMMISSIONER'S AUTHORITY.] Nothing in this section 
 26.12  limits the authority of the commissioner to take actions against 
 26.13  a licensee for fraudulent, deceptive, or dishonest practices not 
 26.14  specifically described in this section. 
 26.15     Sec. 19.  [82.191] [COMPENSATION.] 
 26.16     Subdivision 1.  [LICENSEE TO RECEIVE ONLY FROM BROKER.] A 
 26.17  licensee shall not accept a commission compensation or other 
 26.18  valuable consideration for the performance of any acts requiring 
 26.19  a real estate license from any person except the real estate 
 26.20  broker to whom the licensee is licensed or to whom the licensee 
 26.21  was licensed at the time of the transaction. 
 26.22     Subd. 2.  [UNDISCLOSED COMPENSATION.] A licensee shall not 
 26.23  accept, give, or charge any undisclosed compensation or realize 
 26.24  any direct or indirect remuneration that inures to the benefit 
 26.25  of the licensee on an expenditure made for a principal. 
 26.26     Subd. 3.  [LIMITATION ON BROKER WHEN TRANSACTION NOT 
 26.27  COMPLETED.] When the owner fails or is unable to consummate a 
 26.28  real estate transaction, through no fault of the purchaser, the 
 26.29  listing broker may not claim any portion of any trust funds 
 26.30  deposited with the broker by the purchaser, absent a separate 
 26.31  agreement with the purchaser. 
 26.32     Sec. 20.  Minnesota Statutes 2002, section 82.195, is 
 26.33  amended to read: 
 26.34     82.195 [LISTING AGREEMENTS.] 
 26.35     ~~Subdivision 1.~~ (a)  [REQUIREMENT.] Licensees shall obtain a 
 26.36  signed listing agreement or other signed written authorization 
 27.1   from the owner of real property or from another person 
 27.2   authorized to offer the property for sale or lease before 
 27.3   advertising to the general public that the real property is 
 27.4   available for sale or lease.  
 27.5      For the purposes of this section "advertising" includes 
 27.6   placing a sign on the owner's property that indicates that the 
 27.7   property is being offered for sale or lease.  
 27.8      ~~Subd. 2.~~ (b)  [CONTENTS.] All listing agreements must be in 
 27.9   writing and must include:  
 27.10     (1) a definite expiration date; 
 27.11     (2) a description of the real property involved; 
 27.12     (3) the list price and any terms required by the seller; 
 27.13     (4) the amount of any compensation or commission or the 
 27.14  basis for computing the commission; 
 27.15     (5) a clear statement explaining the events or conditions 
 27.16  that will entitle a broker to a commission; 
 27.17     (6) information regarding an override clause, if 
 27.18  applicable, including a statement to the effect that the 
 27.19  override clause will not be effective unless the licensee 
 27.20  supplies the seller with a protective list within 72 hours after 
 27.21  the expiration of the listing agreement; 
 27.22     (7) the following notice in not less than ten point 
 27.23  boldface type immediately preceding any provision of the listing 
 27.24  agreement relating to compensation of the licensee:  
 27.25     "NOTICE:  THE COMPENSATION FOR THE SALE, LEASE, RENTAL, OR 
 27.26  MANAGEMENT OF REAL PROPERTY SHALL BE DETERMINED BETWEEN EACH 
 27.27  INDIVIDUAL BROKER AND THE BROKER'S CLIENT."; 
 27.28     (8) for residential property listings, the following "dual 
 27.29  agency" disclosure statement: 
 27.30     If a buyer represented by broker wishes to buy ~~your~~ the 
 27.31  seller's property, a dual agency will be created.  This means 
 27.32  that broker will represent both ~~you~~ the seller(s) and the 
 27.33  buyer(s), and owe the same duties to the buyer(s) that broker 
 27.34  owes to ~~you~~ the seller(s).  This conflict of interest will 
 27.35  prohibit broker from advocating exclusively on ~~your~~ the seller's 
 27.36  behalf.  Dual agency will limit the level of representation 
 28.1   broker can provide.  If a dual agency should arise, ~~you~~ the 
 28.2   seller(s) will need to agree that confidential information about 
 28.3   price, terms, and motivation will still be kept confidential 
 28.4   unless ~~you~~ the seller(s) instruct broker in writing to disclose 
 28.5   specific information about ~~you~~ the seller(s).  All other 
 28.6   information will be shared.  Broker cannot act as a dual agent 
 28.7   unless both ~~you~~ the seller(s) and the buyer(s) agree to it.  By 
 28.8   agreeing to a possible dual agency, ~~you~~ the seller(s) will be 
 28.9   giving up the right to exclusive representation in an in-house 
 28.10  transaction.  However, if ~~you~~ the seller(s) should decide not to 
 28.11  agree to a possible dual agency, and ~~you~~ the seller(s) want 
 28.12  broker to represent ~~you~~ the seller(s), ~~you~~ the seller(s) may 
 28.13  give up the opportunity to sell ~~your~~ the property to buyers 
 28.14  represented by broker. 
 28.15                  Seller's Instructions to Broker 
 28.16     
 28.17     Having read and understood this information about dual 
 28.18  agency, seller(s) now instructs broker as follows: 
 28.19  .......     Seller(s) will agree to a dual agency 
 28.20              representation and will consider offers made 
 28.21              by buyers represented by broker. 
 28.22     
 28.23  .......     Seller(s) will not agree to a dual agency
 28.24              representation and will not consider offers
 28.25              made by buyers represented by broker. 
 28.26     
 28.27     
 28.28  .........................      ......................... 
 28.29  Seller                         ~~Broker~~ Real Estate Company Name
 28.30     
 28.31     
 28.32  .........................      By:  .................... 
 28.33  Seller                              Salesperson 
 28.34     
 28.35  Date:  ..................; 
 28.36     (9) a notice requiring the seller to indicate in writing 
 29.1   whether it is acceptable to the seller to have the licensee 
 29.2   arrange for closing services or whether the seller wishes to 
 29.3   arrange for others to conduct the closing; and 
 29.4      (10) for residential listings, a notice stating that after 
 29.5   the expiration of the listing agreement, the seller will not be 
 29.6   obligated to pay the licensee a fee or commission if the seller 
 29.7   has executed another valid listing agreement pursuant to which 
 29.8   the seller is obligated to pay a fee or commission to another 
 29.9   licensee for the sale, lease, or exchange of the real property 
 29.10  in question.  This notice may be used in the listing agreement 
 29.11  for any other type of real estate.  
 29.12     ~~Subd. 3.~~ (c)  [PROHIBITED PROVISIONS.] Except as otherwise 
 29.13  provided in ~~subdivision 4,~~ paragraph ~~(b)~~ (d)(ii), licensees 
 29.14  shall not include in a listing agreement a holdover clause, 
 29.15  automatic extension, or any similar provision, or an override 
 29.16  clause the length of which is more than six months after the 
 29.17  expiration of the listing agreement. 
 29.18     ~~Subd. 4.~~ (d)  [OVERRIDE CLAUSES.] ~~(a)~~ (i) Licensees shall 
 29.19  not seek to enforce an override clause unless a protective list 
 29.20  has been furnished to the seller within 72 hours after the 
 29.21  expiration of the listing agreement.  
 29.22     ~~(b)~~ (ii) A listing agreement may contain an override clause 
 29.23  of up to two years in length when used in conjunction with the 
 29.24  purchase or sale of a business.  The length of the override 
 29.25  clause must be negotiable between the licensee and the seller of 
 29.26  the business.  The protective list provided in connection with 
 29.27  the override clause must include the written acknowledgment of 
 29.28  each party named on the protective list, that the business which 
 29.29  is the subject of the listing agreement was presented to that 
 29.30  party by the licensee. 
 29.31     ~~Subd. 5.~~ (e)  [PROTECTIVE LISTS.] A broker or salesperson 
 29.32  has the burden of demonstrating that each person on the 
 29.33  protective list has, during the period of the listing agreement, 
 29.34  either made an affirmative showing of interest in the property 
 29.35  by responding to an advertisement or by contacting the broker or 
 29.36  salesperson involved or has been physically shown the property 
 30.1   by the broker or salesperson.  For the purpose of this section, 
 30.2   the mere mailing or other distribution by a licensee of 
 30.3   literature setting forth information about the property in 
 30.4   question does not, of itself, constitute an affirmative showing 
 30.5   of interest in the property on the part of a subsequent 
 30.6   purchaser.  
 30.7      For listings of nonresidential real property which do not 
 30.8   contain the notice described in ~~subdivision 2~~ paragraph (b), 
 30.9   clause (10), the protective list must contain the following 
 30.10  notice in boldface type: 
 30.11     "IF YOU RELIST WITH ANOTHER BROKER WITHIN THE OVERRIDE 
 30.12  PERIOD AND THEN SELL YOUR PROPERTY TO ANYONE WHOSE NAME APPEARS 
 30.13  ON THIS LIST, YOU COULD BE LIABLE FOR FULL COMMISSIONS TO BOTH 
 30.14  BROKERS.  IF THIS NOTICE IS NOT FULLY UNDERSTOOD, SEEK COMPETENT 
 30.15  ADVICE." 
 30.16     Sec. 21.  Minnesota Statutes 2002, section 82.196, is 
 30.17  amended to read: 
 30.18     82.196 [BUYER'S BROKER AGREEMENTS.] 
 30.19     ~~Subdivision 1.~~ (a)  [REQUIREMENTS.] Licensees shall obtain 
 30.20  a signed buyer's broker agreement from a buyer before performing 
 30.21  any acts as a buyer's representative and before a purchase 
 30.22  agreement is signed. 
 30.23     ~~Subd. 2.~~ (b)  [CONTENTS.] All buyer's broker agreements 
 30.24  must be in writing and must include:  
 30.25     (1) a definite expiration date; 
 30.26     (2) the amount of any compensation or commission, or the 
 30.27  basis for computing the commission; 
 30.28     (3) a clear statement explaining the services to be 
 30.29  provided to the buyer by the broker, and the events or 
 30.30  conditions that will entitle a broker to a commission or other 
 30.31  compensation; 
 30.32     (4) a clear statement explaining if the agreement may be 
 30.33  canceled and the terms under which the agreement may be 
 30.34  canceled; 
 30.35     (5) information regarding an override clause, if 
 30.36  applicable, including a statement to the effect that the 
 31.1   override clause will not be effective unless the licensee 
 31.2   supplies the buyer with a protective list within 72 hours after 
 31.3   the expiration of the buyer's broker agreement; 
 31.4      (6) the following notice in not less than ten point 
 31.5   boldface type immediately preceding any provision of the buyer's 
 31.6   broker agreement relating to compensation of the licensee: 
 31.7      "NOTICE:  THE COMPENSATION FOR THE PURCHASE, LEASE, RENTAL, 
 31.8   OR MANAGEMENT OF REAL PROPERTY SHALL BE DETERMINED BETWEEN EACH 
 31.9   INDIVIDUAL BROKER AND THE BROKER'S CLIENT."; 
 31.10     (7) the following "dual agency" disclosure statement: 
 31.11     If ~~you~~ the buyer(s) choose(s) to purchase a property listed 
 31.12  by broker, a dual agency will be created.  This means that 
 31.13  broker will represent both ~~you~~ the buyer(s) and the seller(s), 
 31.14  and owe the same duties to the seller(s) that broker owes to ~~you~~ 
 31.15  the buyer(s).  This conflict of interest will prohibit broker 
 31.16  from advocating exclusively on ~~your~~ the buyer's behalf.  Dual 
 31.17  agency will limit the level of representation broker can 
 31.18  provide.  If a dual agency should arise, ~~you~~ the buyer(s) will 
 31.19  need to agree that confidential information about price, terms, 
 31.20  and motivation will still be kept confidential unless ~~you~~ the 
 31.21  buyer(s) instruct broker in writing to disclose specific 
 31.22  information about ~~you~~ the buyer(s).  All other information will 
 31.23  be shared.  Broker cannot act as a dual agent unless both ~~you~~ 
 31.24  the buyer(s) and the seller(s) agree to it.  By agreeing to a 
 31.25  possible dual agency, ~~you~~ the buyer(s) will be giving up the 
 31.26  right to exclusive representation in an in-house transaction.  
 31.27  However, if ~~you~~ the buyer(s) should decide not to agree to a 
 31.28  possible dual agency, and ~~you~~ the buyer(s) want(s) broker to 
 31.29  represent ~~you~~ the buyer(s), ~~you~~ the buyer(s) may give up the 
 31.30  opportunity to purchase the properties listed by broker. 
 31.31                   Buyer's Instructions to Broker 
 31.32     
 31.33  .......      Buyer(s) will agree to a dual agency representation 
 31.34               and will consider properties listed by broker.
 31.35     
 31.36  .......      Buyer(s) will not agree to a dual agency 
 32.1                representation and will not consider 
 32.2                properties listed by broker. 
 32.3      
 32.4      
 32.5   .........................      ......................... 
 32.6   Buyer                          ~~Broker~~ Real Estate Company Name
 32.7      
 32.8   .........................      By:  .................... 
 32.9   Buyer                               Salesperson 
 32.10     
 32.11  Date:  ...................; and 
 32.12     (8) for buyer's broker agreements which involve residential 
 32.13  real property, a notice stating that after the expiration of the 
 32.14  buyer's broker agreement, the buyer will not be obligated to pay 
 32.15  the licensee a fee or commission if the buyer has executed 
 32.16  another valid buyer's broker agreement pursuant to which the 
 32.17  buyer is obligated to pay a fee or commission to another 
 32.18  licensee for the purchase, lease, or exchange of real property. 
 32.19     ~~Subd. 3.~~ (c)  [PROHIBITED PROVISIONS.] Licensees shall not 
 32.20  include in a buyer's broker agreement a holdover clause, 
 32.21  automatic extension, or any other similar provision, or an 
 32.22  override clause the length of which is more than six months 
 32.23  after the expiration of the buyer's broker agreement.  
 32.24     ~~Subd. 4.~~ (d)  [OVERRIDE CLAUSES.] Licensees shall not seek 
 32.25  to enforce an override clause unless a protective list has been 
 32.26  furnished to the buyer within 72 hours after the expiration of 
 32.27  the buyer's broker agreement.  
 32.28     ~~Subd. 5.~~ (e)  [PROTECTIVE LISTS.] A licensee has the burden 
 32.29  of demonstrating that each property on the protective list has 
 32.30  been shown to the buyer, or specifically brought to the 
 32.31  attention of the buyer, during the time the buyer's broker 
 32.32  agreement was in effect.  
 32.33     ~~Subd. 6.~~ (f)  [APPLICATION.] This section applies only to 
 32.34  residential real property transactions. 
 32.35     Sec. 22.  Minnesota Statutes 2002, section 82.197, is 
 32.36  amended to read: 
 33.1      82.197 [DISCLOSURE REQUIREMENTS.] 
 33.2      Subdivision 1.  [ADVERTISING.] Each licensee shall identify 
 33.3   himself or herself as either a broker or an agent salesperson in 
 33.4   any advertising for the purchase, sale, lease, exchange, 
 33.5   mortgaging, transfer, or other disposition of real property, 
 33.6   whether the advertising pertains to the licensee's own property 
 33.7   or the property of others. 
 33.8      Subd. 2.  [AGENCY DISCLOSURE.] A real estate broker or 
 33.9   salesperson shall provide to a consumer in the sale and purchase 
 33.10  of a residential real property transaction at the first 
 33.11  substantive contact with the consumer an agency disclosure form 
 33.12  in substantially the form set forth in subdivision 4.  The 
 33.13  agency disclosure form shall be intended to provide a 
 33.14  description of available options for agency and facilitator 
 33.15  relationships, and a description of the role of a licensee under 
 33.16  each option.  The agency disclosure form shall provide a 
 33.17  signature line for acknowledgment of receipt by the 
 33.18  consumer.  The disclosures required by this subdivision apply 
 33.19  only to residential real property transactions. 
 33.20     ~~Subd. 2.  [CREATION OF DUAL AGENCY.] If circumstances~~ 
 33.21  ~~create a dual agency situation, the broker must make full~~ 
 33.22  ~~disclosure to all parties to the transaction as to the change in~~ 
 33.23  ~~relationship of the parties to the broker due to dual agency.  A~~ 
 33.24  ~~broker, having made full disclosure, must obtain the consent of~~ 
 33.25  ~~all parties to these circumstances in residential real property~~ 
 33.26  ~~transactions in the purchase agreement in the form set forth~~ 
 33.27  ~~below which shall be set off in a boxed format to draw attention~~ 
 33.28  ~~to it:~~ 
 33.29     ~~Broker represents both the seller(s) and the buyer(s) of~~ 
 33.30  ~~the property involved in this transaction, which creates a dual~~ 
 33.31  ~~agency.  This means that broker and its salespersons owe~~ 
 33.32  ~~fiduciary duties to both seller(s) and buyer(s).  Because the~~ 
 33.33  ~~parties may have conflicting interests, broker and its~~ 
 33.34  ~~salespersons are prohibited from advocating exclusively for~~ 
 33.35  ~~either party.  Broker cannot act as a dual agent in this~~ 
 33.36  ~~transaction without the consent of both seller(s) and buyer(s).~~  
 34.1   ~~Seller(s) and buyer(s) acknowledge that:~~ 
 34.2      ~~(1) confidential information communicated to broker which~~ 
 34.3   ~~regards price, terms, or motivation to buy or sell will remain~~ 
 34.4   ~~confidential unless seller(s) or buyer(s) instructs broker in~~ 
 34.5   ~~writing to disclose this information.  Other information will be~~ 
 34.6   ~~shared;~~ 
 34.7      ~~(2) broker and its salespersons will not represent the~~ 
 34.8   ~~interests of either party to the detriment of the other; and~~ 
 34.9      ~~(3) within the limits of dual agency, broker and its~~ 
 34.10  ~~salespersons will work diligently to facilitate the mechanics of~~ 
 34.11  ~~the sale.~~ 
 34.12     ~~With the knowledge and understanding of the explanation~~ 
 34.13  ~~above, seller(s) and buyer(s) authorize and instruct broker and~~ 
 34.14  ~~its salespersons to act as dual agents in this transaction.~~ 
 34.15     
 34.16     
 34.17  ~~...........................~~      ~~...........................~~ 
 34.18  ~~Seller~~                           ~~Buyer~~ 
 34.19     
 34.20  ~~...........................~~      ~~...........................~~ 
 34.21  ~~Seller~~                           ~~Buyer~~ 
 34.22     
 34.23  ~~...........................~~      ~~...........................~~ 
 34.24  ~~Date~~                             ~~Date~~ 
 34.25     Subd. 3.  [SCOPE AND EFFECT.] Disclosures made in 
 34.26  accordance with the requirements for disclosure of agency 
 34.27  relationships set forth in this chapter are sufficient to 
 34.28  satisfy common law disclosure requirements.  ~~In addition, when a~~ 
 34.29  ~~principal in the transaction is a licensee or a relative or~~ 
 34.30  ~~business associate of the licensee, that fact must be disclosed~~ 
 34.31  ~~in writing in addition to any other required disclosures.~~  
 34.32     Subd. 4.  [AGENCY DISCLOSURE FORM.] The agency disclosure 
 34.33  form shall be in substantially the form set forth below: 
 34.34        <b> AGENCY RELATIONSHIPS IN REAL ESTATE TRANSACTIONS </b>
 34.35  <b>Minnesota law requires</b> that early in any relationship, real 
 34.36  estate brokers or salespersons discuss with consumers what type 
 35.1   of agency representation or relationship they desire.(1)  The 
 35.2   available options are listed below.  This is <b>not</b> a contract.  
 35.3   <b>This is an agency disclosure form only.  If you desire</b> 
 35.4   <b>representation, you must enter into a written contract according</b> 
 35.5   <b>to state law</b> (a listing contract or a buyer representation 
 35.6   contract).  Until such time as you choose to enter into a 
 35.7   written contract for representation, you will be treated as a 
 35.8   customer and will not receive any representation from the broker 
 35.9   or salesperson.  The broker or salesperson will be acting as a 
 35.10  Facilitator (see paragraph V below), unless the broker or 
 35.11  salesperson is representing another party as described below. 
 35.12     ACKNOWLEDGMENT:  I/We acknowledge that I/We have been 
 35.13  presented with the below-described options.  I/We understand 
 35.14  that until I/We have signed a representation contract, I/We are 
 35.15  not represented by the broker/salesperson.  I/We understand that 
 35.16  written consent is required for a dual agency relationship.  
 35.17  THIS IS A DISCLOSURE ONLY, NOT A CONTRACT FOR REPRESENTATION. 
 35.18  ...............     .......... 
 35.19  Signature           Date
 35.20  ...............     .......... 
 35.21  Signature           Date
 35.22  I.
 35.23     <b>Seller's Broker:</b>  A broker who lists a property, or a 
 35.24     salesperson who is licensed to the listing broker, 
 35.25     represents the Seller and acts on behalf of the Seller.  A 
 35.26     Seller's broker owes to the Seller the fiduciary duties 
 35.27     described below.(2)  The broker must also disclose to the 
 35.28     Buyer material facts as defined in Minnesota Statutes, 
 35.29     section 82.197, subdivision 6, of which the broker is aware 
 35.30     that could adversely and significantly affect the Buyer's 
 35.31     use or enjoyment of the property.  If a broker or 
 35.32     salesperson working with a Buyer as a customer is 
 35.33     representing the Seller, he or she must act in the Seller's 
 35.34     best interest and must tell the Seller any information 
 35.35     disclosed to him or her, except confidential information 
 35.36     acquired in a facilitator relationship (see paragraph V 
 36.1      below).  In that case, the Buyer will not be represented 
 36.2      and will not receive advice and counsel from the broker or 
 36.3      salesperson. 
 36.4   II. 
 36.5      <b>Subagent:</b>  A broker or salesperson who is working with a 
 36.6      Buyer but represents the Seller.  In this case, the Buyer 
 36.7      is the broker's customer and is not represented by that 
 36.8      broker.  If a broker or salesperson working with a Buyer as 
 36.9      a customer is representing the Seller, he or she must act 
 36.10     in the Seller's best interest and must tell the Seller any 
 36.11     information that is disclosed to him or her.  In that case, 
 36.12     the Buyer will not be represented and will not receive 
 36.13     advice and counsel from the broker or salesperson. 
 36.14  III.
 36.15     <b>Buyer's Broker:</b>  A Buyer may enter into an agreement for 
 36.16     the broker or salesperson to represent and act on behalf of 
 36.17     the Buyer.  The broker may represent the Buyer only, and 
 36.18     not the Seller, even if he or she is being paid in whole or 
 36.19     in part by the Seller.  A Buyer's broker owes to the Buyer 
 36.20     the fiduciary duties described below.(2)  The broker must 
 36.21     disclose to the Buyer material facts as defined in 
 36.22     Minnesota Statutes, section 82.197, subdivision 6, of which 
 36.23     the broker is aware that could adversely and significantly 
 36.24     affect the Buyer's use or enjoyment of the property.  If a 
 36.25     broker or salesperson working with a Seller as a customer 
 36.26     is representing the Buyer, he or she must act in the 
 36.27     Buyer's best interest and must tell the Buyer any 
 36.28     information disclosed to him or her, except confidential 
 36.29     information acquired in a facilitator relationship (see 
 36.30     paragraph V below).  In that case, the Seller will not be 
 36.31     represented and will not receive advice and counsel from 
 36.32     the broker or salesperson. 
 36.33  IV.
 36.34     <b>Dual Agency-Broker Representing both Seller and Buyer:</b>  
 36.35     Dual agency occurs when one broker or salesperson 
 36.36     represents both parties to a transaction, or when two 
 37.1      salespersons licensed to the same broker each represent a 
 37.2      party to the transaction.  Dual agency requires the 
 37.3      informed consent of all parties, and means that the broker 
 37.4      and salesperson owe the same duties to the Seller and the 
 37.5      Buyer.  This role limits the level of representation the 
 37.6      broker and salespersons can provide, and prohibits them 
 37.7      from acting exclusively for either party.  In a dual 
 37.8      agency, confidential information about price, terms, and 
 37.9      motivation for pursuing a transaction will be kept 
 37.10     confidential unless one party instructs the broker or 
 37.11     salesperson in writing to disclose specific information 
 37.12     about him or her.  Other information will be shared.  Dual 
 37.13     agents may not advocate for one party to the detriment of 
 37.14     the other.(3) 
 37.15     Within the limitations described above, dual agents owe to 
 37.16     both Seller and Buyer the fiduciary duties described 
 37.17     below.(2)  Dual agents must disclose to Buyers material 
 37.18     facts as defined in Minnesota Statutes, section 82.197, 
 37.19     subdivision 6, of which the broker is aware that could 
 37.20     adversely and significantly affect the Buyer's use or 
 37.21     enjoyment of the property. 
 37.22  V.
 37.23     <b>Facilitator:</b>  A broker or salesperson who performs services 
 37.24     for a Buyer, a Seller, or both but does not represent 
 37.25     either in a fiduciary capacity as a Buyer's Broker, 
 37.26     Seller's Broker, or Dual Agent.  <b>THE FACILITATOR BROKER OR</b> 
 37.27     <b>SALESPERSON DOES NOT OWE ANY PARTY ANY OF THE FIDUCIARY</b> 
 37.28     <b>DUTIES LISTED BELOW, EXCEPT CONFIDENTIALITY, UNLESS THOSE</b> 
 37.29     <b>DUTIES ARE INCLUDED IN A WRITTEN FACILITATOR SERVICES</b> 
 37.30     <b>AGREEMENT.</b>  The facilitator broker or salesperson owes the 
 37.31     duty of confidentiality to the party but owes no other duty 
 37.32     to the party except those duties required by law or 
 37.33     contained in a written facilitator services agreement, if 
 37.34     any.  In the event a facilitator broker or salesperson, 
 37.35     working with a Buyer, shows a property listed by the 
 37.36     facilitator broker or salesperson, then the facilitator 
 38.1      broker or salesperson must act as a Seller's Broker (see 
 38.2      paragraph I above).  In the event a facilitator broker or 
 38.3      salesperson, working with a Seller, accepts a showing of 
 38.4      the property by a Buyer being represented by the 
 38.5      facilitator broker or salesperson, then the facilitator 
 38.6      broker or salesperson must act as a Buyer's Broker (see 
 38.7      paragraph III above). 
 38.8      
 38.9      
 38.10     
 38.11  ****************************************************************
 38.12     (1) This disclosure is required by law in any transaction 
 38.13  involving property occupied or intended to be occupied by one to 
 38.14  four families as their residence. 
 38.15     (2) The fiduciary duties mentioned above are listed below 
 38.16  and have the following meanings: 
 38.17     Loyalty-broker/salesperson will act only in client(s)' best 
 38.18  interest. 
 38.19     Obedience-broker/salesperson will carry out all client(s)' 
 38.20  lawful instructions. 
 38.21     Disclosure-broker/salesperson will disclose to client(s) 
 38.22  all material facts of which broker/salesperson has knowledge 
 38.23  which might reasonably affect the client's ~~rights and interests~~ 
 38.24  use and enjoyment of the property. 
 38.25     Confidentiality-broker/salesperson will keep client(s)' 
 38.26  confidences unless required by law to disclose specific 
 38.27  information (such as disclosure of material facts to Buyers). 
 38.28     Reasonable Care-broker/salesperson will use reasonable care 
 38.29  in performing duties as an agent. 
 38.30     Accounting-broker/salesperson will account to client(s) for 
 38.31  all client(s)' money and property received as agent. 
 38.32     (3) If Seller(s) decides not to agree to a dual agency 
 38.33  relationship, Seller(s) may give up the opportunity to sell the 
 38.34  property to Buyers represented by the broker/salesperson.  If 
 38.35  Buyer(s) decides not to agree to a dual agency relationship, 
 38.36  Buyer(s) may give up the opportunity to purchase properties 
 39.1   listed by the broker. 
 39.2      Subd. 5.  [~~APPLICATION~~ CREATION OF DUAL AGENCY.] ~~The~~ 
 39.3   ~~disclosures required by subdivision 4 apply only to residential~~ 
 39.4   ~~real property transactions.~~ If circumstances create a dual 
 39.5   agency situation, the broker must make full disclosure to all 
 39.6   parties to the transaction as to the change in relationship of 
 39.7   the parties to the broker due to dual agency.  A broker, having 
 39.8   made full disclosure, must obtain the consent of all parties to 
 39.9   these circumstances in residential real property transactions in 
 39.10  the purchase agreement in the form set forth below which shall 
 39.11  be set off in a boxed format to draw attention to it: 
 39.12     Broker represents both the seller(s) and the buyer(s) of 
 39.13  the property involved in this transaction, which creates a dual 
 39.14  agency.  This means that broker and it salespersons owe 
 39.15  fiduciary duties to both seller(s) and buyer(s).  Because the 
 39.16  parties may have conflicting interests, broker and its 
 39.17  salespersons are prohibited from advocating exclusively for 
 39.18  either party.  Broker cannot act as a dual agent in this 
 39.19  transaction without the consent of both seller(s) and buyer(s). 
 39.20     Seller(s) and buyer(s) acknowledge that: 
 39.21     (1) confidential information communicated to broker which 
 39.22  regards price, terms, or motivation to buy or sell will remain 
 39.23  confidential unless seller(s) or buyer(s) instructs broker in 
 39.24  writing to disclose this information.  Other information will be 
 39.25  shared; 
 39.26     (2) broker and its salespersons will not represent the 
 39.27  interests of either party to the detriment of the other; and 
 39.28     (3) within the limits of dual agency, broker and its 
 39.29  salespersons will work diligently to facilitate the mechanics of 
 39.30  the sale. 
 39.31     With the knowledge and understanding of the explanation 
 39.32  above, seller(s) and buyer(s) authorize and instruct broker and 
 39.33  its salespersons to act as dual agents in this transaction. 
 39.34   ...............     ...............
 39.35   Seller              Buyer
 39.36   ...............     ...............
 40.1    Seller              Buyer
 40.2    ...............     ...............
 40.3    Date                Date
 40.4      Subd. 6.  [AGENT OF BROKER DISCLOSURE.] A salesperson shall 
 40.5   only conduct business under the licensed name of and on behalf 
 40.6   of the broker to whom the salesperson is licensed.  An 
 40.7   individual broker shall only conduct business under the broker's 
 40.8   licensed name.  A broker licensed to a corporation or 
 40.9   partnership shall only conduct business under the licensed 
 40.10  corporate or partnership name.  A licensee shall affirmatively 
 40.11  disclose, before the negotiation or consummation of any 
 40.12  transaction, the licensed name of the broker under whom the 
 40.13  licensee is authorized to conduct business in accordance with 
 40.14  this section. 
 40.15     Subd. 7.  [FINANCIAL INTERESTS DISCLOSURE; LICENSEE.] (a) 
 40.16  Prior to the negotiation or consummation of any transaction, a 
 40.17  licensee shall affirmatively disclose to the owner of real 
 40.18  property that the licensee is a real estate broker or agent 
 40.19  salesperson, and in what capacity the licensee is acting, if the 
 40.20  licensee directly, or indirectly through a third party, 
 40.21  purchases for himself or herself or acquires, or intends to 
 40.22  acquire, any interest in, or any option to purchase, the owner's 
 40.23  property. 
 40.24     (b) When a principal in the transaction is a licensee or a 
 40.25  relative or business associate of the licensee, that fact must 
 40.26  be disclosed in writing. 
 40.27     Subd. ~~6.~~ 8.  [MATERIAL FACTS.] (a) Licensees shall disclose 
 40.28  to any prospective purchaser all material facts of which the 
 40.29  licensees are aware, which could adversely and significantly 
 40.30  affect an ordinary purchaser's use or enjoyment of the property, 
 40.31  or any intended use of the property of which the licensees are 
 40.32  aware. 
 40.33     (b) It is not a material fact relating to real property 
 40.34  offered for sale ~~and no regulatory action shall be brought~~ 
 40.35  ~~against a licensee for failure to disclose in any real estate~~ 
 40.36  ~~transaction~~ the fact or suspicion that the property: 
 41.1      (1) is or was occupied by an owner or occupant who is or 
 41.2   was suspected to be infected with human immunodeficiency virus 
 41.3   or diagnosed with acquired immunodeficiency syndrome; 
 41.4      (2) was the site of a suicide, accidental death, natural 
 41.5   death, or perceived paranormal activity; or 
 41.6      (3) is located in a neighborhood containing any adult 
 41.7   family home, community-based residential facility, or nursing 
 41.8   home.  
 41.9      (c) A licensee or employee of the licensee has no duty to 
 41.10  disclose information regarding an offender who is required to 
 41.11  register under section 243.166, or about whom notification is 
 41.12  made under that section, if the broker or salesperson, in a 
 41.13  timely manner, provides a written notice that information about 
 41.14  the predatory offender registry and persons registered with the 
 41.15  registry may be obtained by contacting local law enforcement 
 41.16  where the property is located or the Department of Corrections. 
 41.17     (d) A licensee is not required to disclose, except as 
 41.18  otherwise provided in paragraph (e), information relating to the 
 41.19  physical condition of the property or any other information 
 41.20  relating to the real estate transaction, if a written report 
 41.21  that discloses the information has been prepared by a qualified 
 41.22  third party and provided to the person.  For the purposes of 
 41.23  this paragraph, "qualified third party" means a federal, state, 
 41.24  or local governmental agency, or any person whom the broker, 
 41.25  salesperson, or a party to the real estate transaction 
 41.26  reasonably believes has the expertise necessary to meet the 
 41.27  industry standards of practice for the type of inspection or 
 41.28  investigation that has been conducted by the third party in 
 41.29  order to prepare the written report and who is acceptable to the 
 41.30  person to whom the disclosure is being made. 
 41.31     (e) A licensee shall disclose to the parties to a real 
 41.32  estate transaction any facts known by the broker or salesperson 
 41.33  that contradict any information included in a written report, if 
 41.34  a copy of the report is provided to the licensee, described in 
 41.35  paragraph (d). 
 41.36     (f) The limitation on disclosures set forth in paragraphs 
 42.1   (b) and (c) shall modify any common law duties with respect to 
 42.2   disclosure of material facts. 
 42.3      Subd. 9.  [NONPERFORMANCE OF ANY PARTY.] If a licensee is 
 42.4   put on notice by any party to a real estate transaction that the 
 42.5   party will not perform in accordance with the terms of a 
 42.6   purchase agreement or other similar written agreement to convey 
 42.7   real estate, the licensee shall immediately disclose the fact of 
 42.8   that party's intent not to perform to the other party or parties 
 42.9   to the transaction.  Whenever reasonably possible, the licensee 
 42.10  shall inform the party who will not perform of the licensee's 
 42.11  obligation to disclose this fact to the other party or parties 
 42.12  to the transaction prior to making the disclosure.  The 
 42.13  obligation required by this section shall not apply to notice of 
 42.14  a party's inability to keep or fulfill any contingency to which 
 42.15  the real estate transaction has been made subject. 
 42.16     Sec. 23.  Minnesota Statutes 2002, section 82.20, is 
 42.17  amended by adding a subdivision to read: 
 42.18     Subd. 2a.  [ADDITIONAL BROKER'S LICENSE.] An individual who 
 42.19  holds a broker's license in his or her own name or for or on 
 42.20  behalf of a corporation or partnership must be issued an 
 42.21  additional broker's license only upon demonstrating that the 
 42.22  additional license is necessary in order to serve a legitimate 
 42.23  business purpose; that the broker will be capable of supervising 
 42.24  all salespersons over whom he or she will have supervisory 
 42.25  responsibility or, in the alternative, that the broker will have 
 42.26  no supervisory responsibilities under the additional license; 
 42.27  and that the broker has a substantial ownership interest in each 
 42.28  corporation or partnership for or on whose behalf he or she 
 42.29  holds or will hold a broker's license. 
 42.30     The requirement of a substantial ownership interest does 
 42.31  not apply where the broker seeking the additional license or 
 42.32  licenses is an officer of a corporation for or on whose behalf 
 42.33  the broker already holds a license and the broker is applying 
 42.34  for the additional license or licenses for or on behalf of an 
 42.35  affiliated corporation or corporations of which he or she is 
 42.36  also an officer.  For the purpose of this section, "affiliated 
 43.1   corporation" means a corporation which is directly or indirectly 
 43.2   controlled by the same persons as the corporation for or on 
 43.3   whose behalf the broker is already licensed to act. 
 43.4      For the purposes of this section, a legitimate business 
 43.5   purpose includes engaging in a different and specialized area of 
 43.6   real estate or maintaining an existing business name. 
 43.7      Sec. 24.  Minnesota Statutes 2002, section 82.20, 
 43.8   subdivision 3, is amended to read: 
 43.9      Subd. 3.  [APPLICATION FOR LICENSE; CONTENTS.] (a) Every 
 43.10  applicant for a license as a real estate broker, real estate 
 43.11  salesperson, or closing agent shall make an application in 
 43.12  writing upon forms prepared and furnished by the commissioner. 
 43.13  Each application shall be signed and sworn to by the applicant 
 43.14  and shall be accompanied by the license fee required by this 
 43.15  chapter.  
 43.16     (b) Each application for a real estate broker license, real 
 43.17  estate salesperson license, or real estate closing agent license 
 43.18  shall contain such information as required by the commissioner 
 43.19  consistent with the administration of the provisions and 
 43.20  purposes of this chapter.  
 43.21     (c) Each application for a real estate salesperson license 
 43.22  shall give the applicant's name, age, residence address, and the 
 43.23  name and place of business of the real estate broker on whose 
 43.24  behalf the salesperson is to be acting. 
 43.25     (d) Each application for a real estate closing agent 
 43.26  license shall give the applicant's name, age, residence address, 
 43.27  and the name and place of business of the closing agent. 
 43.28     (e) The commissioner may require such further information 
 43.29  as the commissioner deems appropriate to administer the 
 43.30  provisions and further the purposes of this chapter. 
 43.31     (f) Applicants for a real estate salesperson license shall 
 43.32  submit to the commissioner, along with the application for 
 43.33  licensure, a copy of the course completion certificate for 
 43.34  courses I, II, and III. 
 43.35     Sec. 25.  Minnesota Statutes 2002, section 82.20, is 
 43.36  amended by adding a subdivision to read: 
 44.1      Subd. 3a.  [APPLICATION FOR BROKER'S LICENSE.] After 
 44.2   successful completion of the real estate broker's examination, 
 44.3   an individual shall have one year from the date of the 
 44.4   examination to apply for a broker's license, unless the 
 44.5   individual is a salesperson who remains continuously active in 
 44.6   the real estate field as a licensee.  Failure to apply for the 
 44.7   broker's license or to remain continuously active in the real 
 44.8   estate field will necessitate a reexamination. 
 44.9      Sec. 26.  Minnesota Statutes 2002, section 82.20, 
 44.10  subdivision 4, is amended to read: 
 44.11     Subd. 4.  [CORPORATE AND PARTNERSHIP LICENSES.] (a) A 
 44.12  corporation applying for a license shall have at least one 
 44.13  officer individually licensed to act as broker for the 
 44.14  corporation.  The corporation broker's license shall extend no 
 44.15  authority to act as broker to any person other than the 
 44.16  corporate entity.  Each officer who intends to act as a broker 
 44.17  shall obtain a license. 
 44.18     (b) A partnership applying for a license shall have at 
 44.19  least one partner individually licensed to act as broker for the 
 44.20  partnership.  Each partner who intends to act as a broker shall 
 44.21  obtain a license. 
 44.22     (c) Applications for a license made by a corporation shall 
 44.23  be verified by the president and one other officer.  
 44.24  Applications made by a partnership shall be verified by at least 
 44.25  two partners. 
 44.26     (d) Any partner or officer who ceases to act as broker for 
 44.27  a partnership or corporation shall notify the commissioner upon 
 44.28  said termination.  The individual licenses of all salespersons 
 44.29  acting on behalf of a corporation or partnership, are 
 44.30  automatically ineffective upon the revocation or suspension of 
 44.31  the license of the partnership or corporation.  The commissioner 
 44.32  may suspend or revoke the license of an officer or partner 
 44.33  without suspending or revoking the license of the corporation or 
 44.34  partnership. 
 44.35     (e) The application of all officers of a corporation or 
 44.36  partners in a partnership who intend to act as a broker on 
 45.1   behalf of a corporation or partnership shall accompany the 
 45.2   initial license application of the corporation or partnership.  
 45.3   Officers or partners intending to act as brokers subsequent to 
 45.4   the licensing of the corporation or partnership shall procure an 
 45.5   individual real estate broker's license prior to acting in the 
 45.6   capacity of a broker.  No corporate officer who maintains a 
 45.7   salesperson's license may exercise any authority over any trust 
 45.8   account administered by the broker nor may they be vested with 
 45.9   any supervisory authority over the broker. 
 45.10     (f) The corporation or partnership applicant shall make 
 45.11  available upon request, such records and data required by the 
 45.12  commissioner for enforcement of this chapter. 
 45.13     (g) The commissioner may require further information, as 
 45.14  the commissioner deems appropriate, to administer the provisions 
 45.15  and further the purposes of this chapter. 
 45.16     Sec. 27.  Minnesota Statutes 2002, section 82.20, is 
 45.17  amended by adding a subdivision to read: 
 45.18     Subd. 7a.  [AUTOMATIC TRANSFER OF SALESPERSON'S LICENSE.] A 
 45.19  salesperson may utilize the automatic license transfer 
 45.20  provisions of subdivision 9, clause (b), if the salesperson 
 45.21  commences association with the broker to whom the salesperson is 
 45.22  transferring, as evidenced by the dates of the signatures of 
 45.23  both brokers on the form prescribed by the commissioner, within 
 45.24  five days after terminating the salesperson's association with 
 45.25  the broker from whom the salesperson is transferring, provided 
 45.26  the salesperson's educational requirements are not past due. 
 45.27     A salesperson may not utilize the automatic license 
 45.28  transfer provisions of subdivision 9, clause (b), if the sales 
 45.29  person has failed to notify the commissioner within ten days of 
 45.30  any change of information contained in the salesperson's license 
 45.31  application on file with the commissioner or of a civil 
 45.32  judgment, disciplinary action, or criminal offense, which notice 
 45.33  is required pursuant to section 82.20, subdivision 11. 
 45.34     Sec. 28.  Minnesota Statutes 2002, section 82.20, 
 45.35  subdivision 8, is amended to read: 
 45.36     Subd. 8.  [TIMELY RENEWALS.] (a) Persons whose applications 
 46.1   have been properly and timely filed who have not received notice 
 46.2   of denial of renewal are deemed to have been approved for 
 46.3   renewal and may continue to transact business either as a real 
 46.4   estate broker, salesperson, or closing agent whether or not the 
 46.5   renewed license has been received on or before July 1 of the 
 46.6   renewal year.  Application for renewal of a license shall be 
 46.7   deemed to have been timely filed if received by the commissioner 
 46.8   by, or mailed with proper postage and postmarked by, June 15 of 
 46.9   the renewal year.  Applications for renewal shall be deemed 
 46.10  properly filed if made upon forms duly executed and sworn to, 
 46.11  accompanied by fees prescribed by this chapter and contain any 
 46.12  information which the commissioner may require.  
 46.13     (b) Persons who have failed to make a timely application 
 46.14  for renewal of a license and who have not received the renewal 
 46.15  license as of July 1 of the renewal year, shall be unlicensed 
 46.16  until such time as the license has been issued by the 
 46.17  commissioner and is received. 
 46.18     Sec. 29.  Minnesota Statutes 2002, section 82.20, is 
 46.19  amended by adding a subdivision to read: 
 46.20     Subd. 8a.  [PROCEDURE.] An application for automatic 
 46.21  transfer shall be made only on the form prescribed by the 
 46.22  commissioner.  The transfer is ineffective if the form is not 
 46.23  completed in its entirety.  
 46.24     The form shall be accompanied by a $10 transfer fee, and 
 46.25  the license renewal fee, if applicable.  Cash will not be 
 46.26  accepted. 
 46.27     The signature of the broker from whom the salesperson is 
 46.28  transferring must predate the signature of the broker to whom 
 46.29  the salesperson is transferring.  The salesperson is unlicensed 
 46.30  for the period of time between the times and dates of both 
 46.31  signatures.  The broker from whom the salesperson is 
 46.32  transferring shall sign and date the transfer application upon 
 46.33  the request of the salesperson and shall destroy the 
 46.34  salesperson's license immediately. 
 46.35     Sec. 30.  Minnesota Statutes 2002, section 82.20, is 
 46.36  amended by adding a subdivision to read: 
 47.1      Subd. 9a.  [EFFECTIVE DATE.] (a) The transfer is effective 
 47.2   when the broker to whom the salesperson is transferring signs 
 47.3   and dates the transfer application form, provided the 
 47.4   commissioner receives the form and fee within 72 hours after the 
 47.5   date and time of the new broker's signature, either by certified 
 47.6   mail, or personal delivery to the commissioner's office.  The 
 47.7   commissioner may accept an application for license transfer made 
 47.8   by an electronic agent or an electronic record with an 
 47.9   electronic signature if the commissioner has the capability of 
 47.10  accepting the application electronically.  In the event of a 
 47.11  delay in mail delivery, an application postmarked within 24 
 47.12  hours of the date of the signature of the new broker shall be 
 47.13  deemed timely received.  The properly executed automatic 
 47.14  transfer form serves as a temporary real estate license for no 
 47.15  more than 45 days. 
 47.16     (b) The transfer is ineffective if the fee is paid by means 
 47.17  of a check, draft, or other negotiable or nonnegotiable 
 47.18  instrument or order of withdrawal drawn on an account with 
 47.19  insufficient funds. 
 47.20     (c) The salesperson shall retain the certified mail return 
 47.21  receipt, if the transfer application is delivered to the 
 47.22  commissioner by mail, retain a photocopy of the executed 
 47.23  transfer application, and provide a photocopy of the executed 
 47.24  transfer application to the broker from whom the salesperson is 
 47.25  transferring. 
 47.26     (d) The real estate salesperson automatic transfer must be 
 47.27  in the form prescribed by the commissioner. 
 47.28     Sec. 31.  Minnesota Statutes 2002, section 82.20, is 
 47.29  amended by adding a subdivision to read: 
 47.30     Subd. 11a.  [MANDATORY.] Licensees shall notify the 
 47.31  commissioner of the facts in subdivisions 11b to 11d. 
 47.32     Sec. 32.  Minnesota Statutes 2002, section 82.20, is 
 47.33  amended by adding a subdivision to read: 
 47.34     Subd. 11b.  [CIVIL JUDGMENT.] Licensees must notify the 
 47.35  commissioner in writing within ten days of a final adverse 
 47.36  decision or order of a court, whether or not the decision or 
 48.1   order is appealed, regarding any proceeding in which the 
 48.2   licensee was named as a defendant, and which alleged fraud, 
 48.3   misrepresentation, or the conversion of funds, if the final 
 48.4   adverse decision relates to the allegations of fraud, 
 48.5   misrepresentation, or the conversion of funds. 
 48.6      Sec. 33.  Minnesota Statutes 2002, section 82.20, is 
 48.7   amended by adding a subdivision to read: 
 48.8      Subd. 11c.  [DISCIPLINARY ACTION.] The licensee must notify 
 48.9   the commissioner in writing within ten days of the suspension or 
 48.10  revocation of the licensee's real estate or other occupational 
 48.11  license issued by this state or another jurisdiction. 
 48.12     Sec. 34.  Minnesota Statutes 2002, section 82.20, is 
 48.13  amended by adding a subdivision to read:  
 48.14     Subd. 11d.  [CRIMINAL OFFENSE.] The licensee must notify 
 48.15  the commissioner in writing within ten days if the licensee is 
 48.16  charged with, adjudged guilty of, or enters a plea of guilty or 
 48.17  nolo contendere to a charge of any felony, or of any gross 
 48.18  misdemeanor alleging fraud, misrepresentation, conversion of 
 48.19  funds, or a similar violation of any real estate licensing law. 
 48.20     Sec. 35.  Minnesota Statutes 2002, section 82.20, is 
 48.21  amended by adding a subdivision to read:  
 48.22     Subd. 12a.  [TEMPORARY BROKER'S PERMIT.] In the event of 
 48.23  death or incapacity of a broker, the commissioner may issue a 
 48.24  45-day temporary permit to an individual who has had a minimum 
 48.25  of two years actual experience as a licensed real estate 
 48.26  salesperson and who is otherwise reasonably qualified to act as 
 48.27  a broker.  Upon application prior to its expiration, the 45-day 
 48.28  temporary permit shall be renewed once by the commissioner if 
 48.29  the applicant demonstrates that he or she has made a good faith 
 48.30  effort to obtain a broker's license within the preceding 45 days 
 48.31  and an extension of time will not harm the public interest. 
 48.32     Only those salespersons licensed to the deceased or 
 48.33  incapacitated broker at the time of death or incapacity may 
 48.34  conduct business for or on behalf of the person to whom the 
 48.35  temporary broker's license was issued. 
 48.36     Sec. 36.  Minnesota Statutes 2002, section 82.20, is 
 49.1   amended by adding a subdivision to read: 
 49.2      Subd. 14a.  [WITHDRAWAL OF LICENSE OR APPLICATION.] A 
 49.3   licensee or license applicant may at any time file with the 
 49.4   commissioner a request to withdraw from the status of licensee 
 49.5   or to withdraw a pending license application.  Withdrawal from 
 49.6   the status of licensee or withdrawal of the license application 
 49.7   becomes effective 30 days after receipt of a request to withdraw 
 49.8   or within a shorter period the commissioner determines unless a 
 49.9   revocation, suspension, or denial proceeding is pending when the 
 49.10  request to withdraw is filed or a proceeding to revoke, suspend, 
 49.11  deny, or to impose conditions upon the withdrawal is instituted 
 49.12  within 30 days after the request to withdraw is filed.  If a 
 49.13  proceeding is pending or instituted, withdrawal becomes 
 49.14  effective at the time and upon the conditions the commissioner 
 49.15  determines by order.  If no proceeding is pending or instituted 
 49.16  and withdrawal automatically becomes effective, the commissioner 
 49.17  may institute a revocation or suspension proceeding within one 
 49.18  year after withdrawal became effective and enter a revocation or 
 49.19  suspension order as of the last date on which the license was in 
 49.20  effect. 
 49.21     Sec. 37.  [82.201] [COMPUTATION OF TIME.] 
 49.22     Subdivision 1.  [DAYS.] Where performing or doing any act, 
 49.23  duty, matter, payment, or thing is ordered or directed, and the 
 49.24  period of time or duration for performing or doing it is 
 49.25  prescribed and fixed by law, rule, or order, the time, except as 
 49.26  otherwise provided in subdivision 2, is computed so as to 
 49.27  exclude the first and include the last day of any such 
 49.28  prescribed or fixed period or duration of time.  When the last 
 49.29  day of the period falls on Sunday or on any day made a legal 
 49.30  holiday, by the laws of this state or of the United States, the 
 49.31  day is omitted from the computation. 
 49.32     Subd. 2.  [MONTHS.] When the lapse of a number of months 
 49.33  before or after a certain day is required by law, rule, or 
 49.34  order, the number of months is computed by counting the months 
 49.35  from the day, excluding the calendar month in which the day 
 49.36  occurs, and including the day of the month in the last month so 
 50.1   counted having the same numerical order as the day of the month 
 50.2   from which the computation is made, unless there be not so many 
 50.3   days in the last month so counted, in which case the period 
 50.4   computed shall expire with the last day of the month so counted. 
 50.5      Sec. 38.  Minnesota Statutes 2002, section 82.21, is 
 50.6   amended by adding a subdivision to read: 
 50.7      Subd. 5.  [CASH NOT ACCEPTED.] All fees must be paid by 
 50.8   check, draft, credit card, or other negotiable or nonnegotiable 
 50.9   instrument or order of withdrawal that is drawn against funds 
 50.10  held by a financial institution.  Cash will not be accepted. 
 50.11     Sec. 39.  Minnesota Statutes 2002, section 82.21, is 
 50.12  amended by adding a subdivision to read: 
 50.13     Subd. 6.  [OVERPAYMENT OF FEES.] An overpayment of a fee 
 50.14  paid pursuant to this chapter shall be refunded within a 
 50.15  reasonable time after a letter requesting the refund is received 
 50.16  by the commissioner and signed by the person making the 
 50.17  overpayment. 
 50.18     Refunds shall not be given for other than overpayment of 
 50.19  fees.  A request for a refund of an overpayment must be received 
 50.20  by the commissioner within six months of the date of deposit or 
 50.21  it will be forfeited. 
 50.22     Sec. 40.  Minnesota Statutes 2002, section 82.22, is 
 50.23  amended by adding a subdivision to read: 
 50.24     Subd. 5a.  [WAIVERS.] The commissioner may waive the real 
 50.25  estate licensing experience requirement for the broker's 
 50.26  examination. 
 50.27     (a) An applicant for a waiver shall provide evidence of: 
 50.28     (1) successful completion of a minimum of 90 quarter 
 50.29  credits or 270 classroom hours of real estate-related studies; 
 50.30     (2) a minimum of five consecutive years of practical 
 50.31  experience in real estate-related areas; or 
 50.32     (3) successful completion of 30 credits or 90 classroom 
 50.33  hours and three consecutive years of practical experience in 
 50.34  real estate-related areas. 
 50.35     (b) A request for a waiver shall be submitted to the 
 50.36  commissioner in writing and be accompanied by documents 
 51.1   necessary to evidence qualification as set forth in paragraph 
 51.2   (a). 
 51.3      (c) The waiver will lapse if the applicant fails to 
 51.4   successfully complete the broker's examination within one year 
 51.5   from the date of the granting of the waiver. 
 51.6      Sec. 41.  Minnesota Statutes 2002, section 82.22, is 
 51.7   amended by adding a subdivision to read: 
 51.8      Subd. 5b.  [FAILURE TO RENEW LICENSE.] If a license lapses 
 51.9   or becomes ineffective due to the licensee's failure to file a 
 51.10  timely renewal application or otherwise, the commissioner may 
 51.11  institute a revocation or suspension proceeding within two years 
 51.12  after the license was last effective and enter a revocation or 
 51.13  suspension order as of the last date on which the license was in 
 51.14  effect. 
 51.15     Sec. 42.  Minnesota Statutes 2002, section 82.22, 
 51.16  subdivision 6, is amended to read: 
 51.17     Subd. 6.  [INSTRUCTION; NEW LICENSES.] (a) Every applicant 
 51.18  for a salesperson's license shall be required to successfully 
 51.19  complete a course of study in the real estate field consisting 
 51.20  of 30 hours of instruction approved by the commissioner before 
 51.21  taking the examination specified in subdivision 1.  Every 
 51.22  applicant for a salesperson's license shall be required to 
 51.23  successfully complete an additional course of study in the real 
 51.24  estate field consisting of 60 hours of instruction approved by 
 51.25  the commissioner, of which three hours shall consist of training 
 51.26  in state and federal fair housing laws, regulations, and rules, 
 51.27  and of which two hours must consist of training in laws and 
 51.28  regulations on agency representation and disclosure, before 
 51.29  filing an application for the license.  This subdivision does 
 51.30  not apply to salespeople licensed in Minnesota before July 1, 
 51.31  1969. 
 51.32     (b) ~~The commissioner may approve courses of study in the~~ 
 51.33  ~~real estate field offered in educational institutions of higher~~ 
 51.34  ~~learning in this state or courses of study in the real estate~~ 
 51.35  ~~field developed by and offered under the auspices of the~~ 
 51.36  ~~National Association of Realtors, its affiliates, or private~~ 
 52.1   ~~real estate schools.  The commissioner shall not approve any~~ 
 52.2   ~~course offered by, sponsored by, or affiliated with any person~~ 
 52.3   ~~or company licensed to engage in the real estate business.  The~~ 
 52.4   ~~commissioner may by rule prescribe the curriculum and~~ 
 52.5   ~~qualification of those employed as instructors.~~ 
 52.6      ~~(c)~~ An applicant for a broker's license must successfully 
 52.7   complete a course of study in the real estate field consisting 
 52.8   of 30 hours of instruction approved by the commissioner, of 
 52.9   which three hours shall consist of training in state and federal 
 52.10  fair housing laws, regulations, and rules.  The course must have 
 52.11  been completed within 12 months prior to the date of application 
 52.12  for the broker's license. 
 52.13     ~~(d)~~ (c) An applicant for a real estate closing agent's 
 52.14  license must successfully complete a course of study relating to 
 52.15  closing services consisting of eight hours of instruction 
 52.16  approved by the commissioner. 
 52.17     Sec. 43.  Minnesota Statutes 2002, section 82.22, is 
 52.18  amended by adding a subdivision to read: 
 52.19     Subd. 6a.  [CHANGE OF APPLICATION INFORMATION.] The 
 52.20  commissioner must be notified in writing of a change of 
 52.21  information contained in the license application on file with 
 52.22  the commissioner within ten days of the change. 
 52.23     Sec. 44.  Minnesota Statutes 2002, section 82.22, is 
 52.24  amended by adding a subdivision to read: 
 52.25     Subd. 6b.  [CANCELLATION OF SALESPERSON'S OR BROKER'S 
 52.26  LICENSE.] A salesperson's or broker's license that has been 
 52.27  canceled for failure of a licensee to complete postlicensing 
 52.28  education requirements must be returned to the commissioner by 
 52.29  the licensee's broker within ten days of receipt of notice of 
 52.30  cancellation.  The license shall be reinstated without 
 52.31  reexamination by completing the required instruction, filing an 
 52.32  application, and paying the fee for a salesperson's or broker's 
 52.33  license within two years of the cancellation date. 
 52.34     Sec. 45.  Minnesota Statutes 2002, section 82.22, is 
 52.35  amended by adding a subdivision to read: 
 52.36     Subd. 6c.  [PASSING GRADE FOR EXAMINATION.] A passing grade 
 53.1   for a salesperson's and broker's examination shall be a score of 
 53.2   75 percent or higher on the uniform portion and a score of 75 
 53.3   percent or higher on the state portion of the examination. 
 53.4      The commissioner shall not accept the scores of a person 
 53.5   who has cheated on an examination.  Cheating on a real estate 
 53.6   examination shall be grounds for denying an application for a 
 53.7   broker's or salesperson's license. 
 53.8      Sec. 46.  Minnesota Statutes 2002, section 82.22, 
 53.9   subdivision 8, is amended to read: 
 53.10     Subd. 8.  [DURATION.] No renewal of a salesperson's license 
 53.11  shall be effective beyond a date two years after the granting of 
 53.12  such salesperson's license unless the salesperson has furnished 
 53.13  evidence of compliance with ~~either subdivisions 6 or 7~~ section 
 53.14  82.22, subdivision 6.  The commissioner shall cancel the license 
 53.15  of any salesperson who fails to comply with ~~subdivisions 6 or 7~~ 
 53.16  section 82.22, subdivision 6.  This subdivision shall not apply 
 53.17  to salespeople licensed in Minnesota prior to July 1, 1969. 
 53.18     Sec. 47.  Minnesota Statutes 2002, section 82.22, 
 53.19  subdivision 12, is amended to read: 
 53.20     Subd. 12.  [RECIPROCITY.] The requirements of ~~this~~ 
 53.21  ~~section~~ subdivisions 6 and 13 may be waived for individuals of 
 53.22  other jurisdictions, provided:  (1) a written reciprocal 
 53.23  licensing agreement is in effect between the commissioner and 
 53.24  the licensing officials of that jurisdiction, (2) the individual 
 53.25  is licensed in that jurisdiction, and (3) the licensing 
 53.26  requirements of that jurisdiction are substantially similar to 
 53.27  the provisions of this chapter. 
 53.28     Sec. 48.  Minnesota Statutes 2002, section 82.22, 
 53.29  subdivision 13, is amended to read: 
 53.30     Subd. 13.  [~~CONTINUING~~ EDUCATION.] (a) All real estate 
 53.31  salespersons and all real estate brokers shall be required to 
 53.32  successfully complete 30 hours of real estate continuing 
 53.33  education, either as a student or a lecturer, in courses of 
 53.34  study approved by the commissioner, during the initial license 
 53.35  period and during each succeeding 24-month license period.  At 
 53.36  least 15 of the 30 credit hours must be completed during the 
 54.1   first 12 months of the 24-month licensing period.  Licensees may 
 54.2   not claim credit for continuing education not actually completed 
 54.3   as of the date their report of continuing education compliance 
 54.4   is filed. 
 54.5      (b) The commissioner ~~shall~~ may adopt rules defining the 
 54.6   standards for course and instructor approval, and may adopt 
 54.7   rules for the proper administration of ~~this subdivision~~ 
 54.8   prelicense instruction as required under section 82.22, 
 54.9   subdivision 6, and continuing education as required under this 
 54.10  section.  The commissioner may not approve a course which can be 
 54.11  completed by the student at home or outside the classroom 
 54.12  without the supervision of an instructor except accredited 
 54.13  courses using new delivery technology, including interactive 
 54.14  technology, and the Internet.  The commissioner may approve 
 54.15  courses of study in the real estate field offered in educational 
 54.16  institutions of higher learning in this state or courses of 
 54.17  study in the real estate field developed by and offered under 
 54.18  the auspices of the National Association of Realtors, its 
 54.19  affiliates, or private real estate schools.  Courses in 
 54.20  motivation, salesmanship, psychology, or time management shall 
 54.21  not be approved by the commissioner for continuing education 
 54.22  credit.  The commissioner may approve courses in any other 
 54.23  subjects, including, but not limited to, communication, 
 54.24  marketing, negotiation, and technology for continuing education 
 54.25  credit. 
 54.26     (c) Any program approved by Minnesota continuing legal 
 54.27  education shall be approved by the commissioner of commerce for 
 54.28  continuing education for real estate brokers and salespeople if 
 54.29  the program or any part thereof relates to real estate.  
 54.30     (d) As part of the continuing education requirements of 
 54.31  this section, the commissioner shall require that all real 
 54.32  estate brokers and salespersons receive: 
 54.33     (1) at least one hour of training during each license 
 54.34  period in courses in laws or regulations on agency 
 54.35  representation and disclosure; and 
 54.36     (2) at least one hour of training during each license 
 55.1   period in courses in state and federal fair housing laws, 
 55.2   regulations, and rules, other antidiscrimination laws, or 
 55.3   courses designed to help licensees to meet the housing needs of 
 55.4   immigrant and other underserved populations. 
 55.5      Clauses (1) and (2) do not apply to real estate 
 55.6   salespersons and real estate brokers engaged solely in the 
 55.7   commercial real estate business who file with the commissioner a 
 55.8   verification of this status along with the continuing education 
 55.9   report required under paragraph (a). 
 55.10     (e) The commissioner is authorized to establish a procedure 
 55.11  for renewal of course accreditation. 
 55.12     (f) Approved continuing education courses may be sponsored 
 55.13  or offered by a broker of a real estate company and may be held 
 55.14  on the premises of a company licensed under this chapter.  
 55.15  All continuing education course offerings must be open to any 
 55.16  interested individuals.  Access may be restricted by the sponsor 
 55.17  based on class size only.  Courses must not be approved if 
 55.18  attendance is restricted to any particular group of people.  A 
 55.19  broker must comply with all continuing education rules 
 55.20  prescribed by the commissioner.  The commissioner shall not 
 55.21  approve any prelicense instruction courses offered by, sponsored 
 55.22  by, or affiliated with any person or company licensed to engage 
 55.23  in the real estate business. 
 55.24     (g) ~~No more than one-half of the credit hours per licensing~~ 
 55.25  ~~period, including continuing education required under~~ 
 55.26  ~~subdivision 6, may be credited to a person for attending any~~ 
 55.27  ~~combination of courses either:~~ Credit may not be earned if the 
 55.28  licensee has previously obtained credit for the same course as 
 55.29  either a student or instructor during the same licensing period. 
 55.30     ~~(1) sponsored by, offered by, or affiliated with a real~~ 
 55.31  ~~estate company or its agents; or~~ 
 55.32     ~~(2) offered using new delivery technology, including~~ 
 55.33  ~~interactive technology, and the Internet.~~ 
 55.34     (h) The real estate education course completion certificate 
 55.35  must be in the form set forth by the commissioner. 
 55.36  Students are responsible for maintaining copies of course 
 56.1   completion certificates. 
 56.2      Sec. 49.  Minnesota Statutes 2002, section 82.24, 
 56.3   subdivision 3, is amended to read: 
 56.4      Subd. 3.  [NONDEPOSITABLE ITEMS.] In the event earnest 
 56.5   money or other down payments in a real estate transaction are 
 56.6   received by the broker or salesperson in the form of a 
 56.7   nondepositable item such as a note, bond, stock certificate, 
 56.8   treasury bill, or any other instrument or equity or thing of 
 56.9   value received by a broker, salesperson, or closing 
 56.10  agent received in lieu of cash ~~as earnest money or down payment~~ 
 56.11  ~~in a real estate transaction~~ shall be ~~held by~~ deposited 
 56.12  immediately with an authorized escrow agent, whose authority is 
 56.13  evidenced by a written agreement executed by the offeror and the 
 56.14  escrow agent.  A receipt shall be issued to the buyer for the 
 56.15  value of the nondepositable item.  
 56.16     In the event the broker acts as the escrow agent, the 
 56.17  broker shall obtain written authority from the buyer and seller 
 56.18  to hold such items in escrow.  In all cases, the parties shall 
 56.19  be advised of the details relative to the nondepositable item, 
 56.20  including the nature of the item, the amount, and in whose 
 56.21  custody such item is being held.  The fact that such an item is 
 56.22  being held by the broker shall be duly recorded in the broker's 
 56.23  trust account records. 
 56.24     Sec. 50.  Minnesota Statutes 2002, section 82.24, 
 56.25  subdivision 5, is amended to read: 
 56.26     Subd. 5.  [TRUST ACCOUNTS.] (a) Each broker or closing 
 56.27  agent shall maintain and retain records of all trust funds and 
 56.28  trust accounts.  The commissioner may prescribe information to 
 56.29  be included in the records by appropriate rules.  
 56.30     (b) Unless otherwise agreed upon in writing by the parties 
 56.31  to a transaction, the broker with whom trust funds are to be 
 56.32  deposited in satisfaction of subdivision 1 shall be the listing 
 56.33  broker. 
 56.34     (c) A check received from a potential buyer shall be 
 56.35  deposited into the listing broker's trust account not later than 
 56.36  the third business day after delivery of the check to the 
 57.1   broker, except that the check may be held by the listing broker 
 57.2   until acceptance or rejection of the offer if: 
 57.3      (1) the check by its terms is not negotiable by the broker 
 57.4   or if the potential buyer has given written instructions that 
 57.5   the check shall not be deposited nor cashed until acceptance or 
 57.6   shall be immediately returned if the offer is rejected; and 
 57.7      (2) the potential seller is informed that the check is 
 57.8   being so held before or at the time the offer is presented to 
 57.9   that person for acceptance. 
 57.10     If the offer is accepted, the check shall be deposited in a 
 57.11  neutral escrow depository or the trust fund account of the 
 57.12  listing broker not later than the third business day following 
 57.13  acceptance of the offer unless the broker has received written 
 57.14  authorization from all parties to the transaction to continue to 
 57.15  hold the check.  If the offer is rejected, the check shall be 
 57.16  returned to the potential buyer not later than the next business 
 57.17  day after rejection. 
 57.18     (d) Trust funds must be maintained in a trust account until 
 57.19  disbursement is made in accordance with the terms of the 
 57.20  applicable agreements and proper accounting is made to the 
 57.21  parties entitled to an accounting. 
 57.22     Disbursement must be made within a reasonable time 
 57.23  following the consummation or termination of a transaction if 
 57.24  the applicable agreements are silent as to the time of 
 57.25  disbursement. 
 57.26     Sec. 51.  Minnesota Statutes 2002, section 82.24, is 
 57.27  amended by adding a subdivision to read: 
 57.28     Subd. 9.  [CONSENT TO PLACE IN SPECIAL ACCOUNT.] Trust 
 57.29  funds may be placed by the broker in a special account which may 
 57.30  be an interest-bearing account or certificate of deposit if the 
 57.31  buyer and the seller consent in writing to the special account 
 57.32  and to the disposition of the trust funds, including any 
 57.33  interest thereon. 
 57.34     Sec. 52.  Minnesota Statutes 2002, section 82.24, is 
 57.35  amended by adding a subdivision to read: 
 57.36     Subd. 10.  [LICENSEE AS PRINCIPAL.] Funds which would 
 58.1   constitute trust funds if received by a licensee acting as an 
 58.2   agent must, if received by a licensee acting as principal, be 
 58.3   placed in a trust account unless a written agreement signed by 
 58.4   all parties to the transaction specifies a different disposition 
 58.5   of the funds.  The written agreement shall state that the funds 
 58.6   would otherwise be placed in a real estate trust account. 
 58.7      Sec. 53.  Minnesota Statutes 2002, section 82.24, is 
 58.8   amended by adding a subdivision to read: 
 58.9      Subd. 11.  [TRUST ACCOUNT RECORDS.] (a) Every broker shall 
 58.10  keep a record of all trust funds received, including notes, 
 58.11  savings certificates, uncashed or uncollected checks, or other 
 58.12  similar instruments.  Said records shall set forth: 
 58.13     (1) date funds received; 
 58.14     (2) from whom received; 
 58.15     (3) amount received; 
 58.16     (4) with respect to funds deposited in a trust account, the 
 58.17  date of said deposit; 
 58.18     (5) with respect to funds previously deposited in a trust 
 58.19  account, the check number or date of related disbursements; and 
 58.20     (6) a monthly balance of the trust account. 
 58.21     Each broker shall maintain a formal trust cash receipts 
 58.22  journal and a formal cash disbursement journal, or similar 
 58.23  records, in accordance with generally accepted accounting 
 58.24  principles.  All records and funds shall be subject to 
 58.25  inspection by the commissioner or an agent of the commissioner 
 58.26  at any time. 
 58.27     (b) Each broker shall keep a separate record for each 
 58.28  beneficiary or transaction, accounting for all funds therein 
 58.29  which have been deposited in the broker's trust bank account.  
 58.30  These records shall set forth information sufficient to identify 
 58.31  the transaction and the parties thereto.  At a minimum, each 
 58.32  record shall set forth: 
 58.33     (1) the date funds are deposited; 
 58.34     (2) the amount deposited; 
 58.35     (3) the date of each related disbursement; 
 58.36     (4) the check number of each related disbursement; 
 59.1      (5) the amount of each related disbursement; and 
 59.2      (6) a description of each disbursement. 
 59.3      Sec. 54.  [82.261] [GUARANTEED SALE PROGRAMS.] 
 59.4      If a broker advertises or offers a guaranteed sale program, 
 59.5   or other program whereby the broker undertakes to purchase real 
 59.6   property in the event he or she is unable to effectuate a sale 
 59.7   to a third party within a specified period of time, a written 
 59.8   disclosure that sets forth clearly and completely the general 
 59.9   terms and conditions under which the broker agrees to purchase 
 59.10  the property and the disposition of any profit at the time of 
 59.11  resale by the broker must be provided to the seller prior to the 
 59.12  execution of a listing agreement. 
 59.13     Sec. 55.  Minnesota Statutes 2002, section 82.27, is 
 59.14  amended by adding a subdivision to read: 
 59.15     Subd. 8.  [REVOCATIONS.] If the commissioner finds that any 
 59.16  licensee or applicant is no longer in existence or has ceased to 
 59.17  do business as a broker or salesperson or is subject to an 
 59.18  adjudication of mental incompetence or to the control of a 
 59.19  committee, conservator, or guardian, or cannot be located after 
 59.20  reasonable search, the commissioner may by order revoke the 
 59.21  license or deny the application. 
 59.22     Sec. 56.  [82.36] [LOAN BROKERS.] 
 59.23     Subdivision 1.  [COMPLIANCE.] Loan brokers shall comply 
 59.24  with the requirements of subdivisions 2 to 7. 
 59.25     Subd. 2.  [CONTRACT PROVISIONS.] A loan broker shall enter 
 59.26  into a written contract with each customer and shall provide a 
 59.27  copy of the written contract to each customer at or before the 
 59.28  time of receipt of any fee or valuable consideration paid for 
 59.29  loan brokerage services.  The written contract shall: 
 59.30     (1) identify the escrow account into which the fees or 
 59.31  consideration will be deposited; 
 59.32     (2) set forth the circumstances under which the loan broker 
 59.33  will be entitled to disbursement from the escrow account; 
 59.34     (3) set forth the circumstances under which the customer 
 59.35  will be entitled to a refund of all or part of the fee; 
 59.36     (4) specifically describe the services to be provided by 
 60.1   the loan broker and the dates by which the services will be 
 60.2   performed; 
 60.3      (5) state the maximum rate of interest to be charged on any 
 60.4   loan obtained; 
 60.5      (6) contain a statement which notifies the customer of his 
 60.6   or her rights to cancel the contract pursuant to subdivision 3; 
 60.7      (7) disclose, with respect to the 12-month period ending 
 60.8   ten business days prior to the date of the contract in question, 
 60.9   the percentage of the loan broker's customers for whom loans 
 60.10  have actually been funded as a result of the loan broker's 
 60.11  services.  This disclosure need not be made for any period prior 
 60.12  to September 8, 1986; and 
 60.13     (8) disclose the cancellation rights and procedures set 
 60.14  forth in subdivision 3. 
 60.15     Subd. 3.  [CANCELLATION.] Any customer of a loan broker who 
 60.16  pays a fee prior to the time a loan is actually funded shall 
 60.17  have an unconditional right to rescind the contract for loan 
 60.18  brokerage services at any time until midnight of the third 
 60.19  business day after the day on which the contract is signed.  
 60.20  Cancellation is evidenced by the customer giving written notice 
 60.21  of cancellation to the loan broker at the address stated in the 
 60.22  contract.  Notice of cancellation, if given by mail, is 
 60.23  effective upon deposit in a mailbox properly addressed to the 
 60.24  loan broker with postage prepaid.  Notice of cancellation need 
 60.25  not take a particular form and is sufficient if it indicates by 
 60.26  any form of written expression the intention of the customer not 
 60.27  to be bound by the contract.  No act of a customer of a loan 
 60.28  broker shall be effective to waive the right to rescind as 
 60.29  provided in this subdivision. 
 60.30     Subd. 4.  [ESCROW ACCOUNT.] The loan broker shall deposit 
 60.31  in an escrow account within 48 hours all fees received prior to 
 60.32  the time a loan is actually funded.  The escrow account shall be 
 60.33  in a bank located within the state of Minnesota and shall be 
 60.34  controlled by an unaffiliated accountant, lawyer, or bank 
 60.35  officer or employee. 
 60.36     Subd. 5.  [RECORDS.] The loan broker shall maintain a 
 61.1   separate record of all fees received for services performed or 
 61.2   to be performed as a loan broker.  Each record shall set forth 
 61.3   the date funds are received, the person from whom the funds are 
 61.4   received, the amount received, the date of deposit in the escrow 
 61.5   account, the account number, the date the funds are disbursed 
 61.6   and the check number of the disbursement, and a description of 
 61.7   each disbursement and the justification for the disbursement. 
 61.8      Subd. 6.  [MONTHLY STATEMENT.] The loan broker shall 
 61.9   provide to each customer at least monthly a detailed written 
 61.10  accounting of all disbursements of the customer's funds from the 
 61.11  trust account. 
 61.12     Subd. 7.  [DISCLOSURE OF LENDERS.] The loan broker shall 
 61.13  provide to each customer at the expiration of the contract a 
 61.14  list of the lenders or loan sources to whom loan applications 
 61.15  were submitted on behalf of the customer. 
 61.16     Sec. 57.  [82.37] [NEGOTIATIONS.] 
 61.17     Subdivision 1.  [WRITTEN OFFERS.] All written offers to 
 61.18  purchase or lease shall be promptly submitted in writing to the 
 61.19  seller or lessor. 
 61.20     Subd. 2.  [NONDISCLOSURE OF TERMS OF OFFER.] A licensee 
 61.21  shall not disclose the terms of an offer to another prospective 
 61.22  buyer or the licensee representing or assisting the buyer prior 
 61.23  to the presentation of the offer to the seller. 
 61.24     Subd. 3.  [CLOSING COSTS.] Licensees shall disclose to a 
 61.25  buyer or a seller at or before the time an offer is written or 
 61.26  presented that the buyer or seller may be required to pay 
 61.27  certain closing costs, which may effectively reduce the proceeds 
 61.28  from the sale or increase the cash outlay at closing. 
 61.29     Subd. 4.  [REQUIRED DOCUMENTS.] Licensees shall furnish to 
 61.30  the parties to the transaction at the time the documents are 
 61.31  signed or become available a true and accurate copy of listing 
 61.32  agreements, earnest money receipts, purchase agreements, 
 61.33  contracts for deed, option agreements, closing statements, 
 61.34  truth-in-housing forms, energy audits, and any other record, 
 61.35  instrument, or document that is material to the transaction and 
 61.36  that is in the licensee's possession. 
 62.1      Subd. 5.  [CLOSING STATEMENT.] The listing broker or his or 
 62.2   her designee shall deliver to the seller, at the time of 
 62.3   closing, a complete and detailed closing statement setting forth 
 62.4   all of the receipts and disbursements handled by the broker for 
 62.5   the seller.  The listing broker shall also deliver to the buyer, 
 62.6   at the time of closing, a complete and detailed statement 
 62.7   setting forth the disposition of all money received in the 
 62.8   transaction from the buyer. 
 62.9      Sec. 58.  [82.46] [RENTAL SERVICES.] 
 62.10     Subdivision 1.  [LICENSE.] A rental service shall obtain a 
 62.11  real estate broker's license before engaging in business or 
 62.12  holding itself out as being engaged in business.  No person 
 62.13  shall act as a real estate salesperson on behalf of a rental 
 62.14  service without first obtaining a real estate salesperson's 
 62.15  license on behalf of the rental service. 
 62.16     Subd. 2.  [DISSEMINATION OF UNIT INFORMATION.] A rental 
 62.17  service shall not provide information regarding a rental unit 
 62.18  without the express authority of the owner of the unit. 
 62.19     Subd. 3.  [ADVERTISING.] A rental service shall not 
 62.20  advertise in a manner that is misleading with regards to fees 
 62.21  charged, services provided, the availability of rental units, or 
 62.22  rental terms or conditions. 
 62.23     Sec. 59.  [82.48] [STANDARDS OF CONDUCT.] 
 62.24     Subdivision 1.  [ACCESS TO GOVERNING STATUTES AND 
 62.25  RULES.] Every real estate office and branch office shall have a 
 62.26  current copy of this chapter and chapter 83 and the rules 
 62.27  adopted under those chapters, available for the use of licensees.
 62.28  Access to the statutes and rules required by this section may be 
 62.29  made available through an electronic agent. 
 62.30     Subd. 2.  [PENALTY FOR NONCOMPLIANCE.] The methods, acts, 
 62.31  or practices set forth in sections 82.19, subdivision 10; 
 62.32  82.191; 82.197; 82.22, subdivision 6a; 82.261; 82.37; and 
 62.33  subdivisions 1 and 3, are standards of conduct governing the 
 62.34  activities of real estate brokers and salespersons.  Failure to 
 62.35  comply with these standards shall constitute grounds for license 
 62.36  denial, suspension, or revocation, or for censure of the 
 63.1   licensee. 
 63.2      Subd. 3.  [RESPONSIBILITIES OF BROKERS.] (a) [SUPERVISION 
 63.3   OF PERSONNEL.] Brokers shall adequately supervise the activities 
 63.4   of their salespersons and employees.  Supervision includes the 
 63.5   ongoing monitoring of listing agreements, purchase agreements, 
 63.6   other real estate-related documents which are prepared or 
 63.7   drafted by the broker's salespersons or employees or which are 
 63.8   otherwise received by the broker's office, and the review of all 
 63.9   trust account books and records.  If an individual broker 
 63.10  maintains more than one place of business, each place of 
 63.11  business shall be under the broker's direction and supervision.  
 63.12  If a partnership or corporate broker maintains more than one 
 63.13  place of business, each place of business shall be under the 
 63.14  direction and supervision of an individual broker licensed to 
 63.15  act on behalf of the partnership or corporation. 
 63.16     The primary broker shall maintain records specifying the 
 63.17  name of each broker responsible for the direction and 
 63.18  supervision of each place of business.  If an individual broker, 
 63.19  who may be the primary broker, is responsible for supervising 
 63.20  more than one place of business, the primary broker shall, upon 
 63.21  written request of the commissioner, file a written statement 
 63.22  specifying the procedures which have been established to ensure 
 63.23  that all salespersons and employees are adequately supervised.  
 63.24  Designation of another broker to supervise a place of business 
 63.25  does not relieve the primary broker of the ultimate 
 63.26  responsibility for the actions of licensees. 
 63.27     (b) [PREPARATION AND SAFEKEEPING OF DOCUMENTS.] Brokers 
 63.28  shall be responsible for the preparation, custody, safety, and 
 63.29  accuracy of all real estate contracts, documents, and records, 
 63.30  even though another person may be assigned these duties by the 
 63.31  broker. 
 63.32     (c) [DOCUMENTATION AND RESOLUTION OF COMPLAINTS.] Brokers 
 63.33  shall investigate and attempt to resolve complaints made 
 63.34  regarding the practices of any individual licensed to them and 
 63.35  shall maintain, with respect to each individual licensed to 
 63.36  them, a complaint file containing all material relating to any 
 64.1   complaints received in writing for a period of three years. 
 64.2      (d) [DISCLOSURE OF LISTED PROPERTY INFORMATION.] A broker 
 64.3   may allow any unlicensed person, who is authorized by the 
 64.4   broker, to disclose any factual information pertaining to the 
 64.5   properties listed with the broker, if the factual information is 
 64.6   provided to the unlicensed person in written form by the broker 
 64.7   representing or assisting the seller(s). 
 64.8      Sec. 60.  [82.51] [UNCLAIMED PROPERTY ACT COMPLIANCE.] 
 64.9      Upon the initial application for a real estate broker's 
 64.10  license and upon each annual application for renewal, the 
 64.11  applicant or broker shall be required to inform the commissioner 
 64.12  of compliance with the requirements set forth in chapter 345 
 64.13  relating to unclaimed property. 
 64.14     Sec. 61.  [REVISOR'S INSTRUCTION.] 
 64.15     The revisor of statutes shall renumber each section of 
 64.16  Minnesota Statutes listed in column A with the number listed in 
 64.17  column B.  The revisor shall also make the necessary 
 64.18  cross-reference changes consistent with the renumbering. 
 64.19            Column A                        Column B
 64.20       82.17, subdivision 13           82.17, subdivision 2
 64.21       82.17, subdivision 10           82.17, subdivision 3
 64.22       82.17, subdivision 3            82.17, subdivision 4
 64.23       82.17, subdivision 11           82.17, subdivision 5
 64.24       82.17, subdivision 14           82.17, subdivision 6
 64.25       82.17, subdivision 15           82.17, subdivision 7
 64.26       82.17, subdivision 16           82.17, subdivision 8
 64.27       82.17, subdivision 17           82.17, subdivision 9
 64.28       82.17, subdivision 18           82.17, subdivision 10
 64.29       82.17, subdivision 19           82.17, subdivision 11
 64.30       82.17, subdivision 20           82.17, subdivision 12
 64.31       82.17, subdivision 2            82.17, subdivision 13
 64.32       82.17, subdivision 21           82.17, subdivision 14
 64.33       82.17, subdivision 22           82.17, subdivision 15
 64.34       82.17, subdivision 9            82.17, subdivision 16
 64.35       82.17, subdivision 8            82.17, subdivision 17
 64.36       82.17, subdivision 4            82.17, subdivision 18
 65.1        82.17, subdivision 5            82.17, subdivision 19
 65.2        82.17, subdivision 23           82.17, subdivision 20
 65.3        82.17, subdivision 12           82.17, subdivision 21
 65.4        82.17, subdivision 24           82.17, subdivision 22
 65.5        82.17, subdivision 6            82.17, subdivision 23
 65.6        82.17, subdivision 7            82.17, subdivision 24
 65.7        82.33                           82.18
 65.8        82.191                          82.19
 65.9        82.201                          82.20
 65.10       82.196                          82.21, subdivision 1
 65.11       82.195                          82.21, subdivision 2
 65.12       82.197                          82.22
 65.13       82.18                           82.23
 65.14       82.21                           82.24
 65.15       82.261                          82.27
 65.16       82.22, subdivision 1            82.29, subdivision 1
 65.17       82.22, subdivision 11           82.29, subdivision 2
 65.18       82.22, subdivision 4            82.29, subdivision 3
 65.19       82.22, subdivision 2            82.29, subdivision 4
 65.20       82.22, subdivision 5a           82.29, subdivision 5
 65.21       82.22, subdivision 6c           82.29, subdivision 6
 65.22       82.22, subdivision 3            82.29, subdivision 7
 65.23       82.22, subdivision 6            82.29, subdivision 8
 65.24       82.20, subdivision 2            82.31, subdivision 1
 65.25       82.20, subdivision 3            82.31, subdivision 2
 65.26       82.20, subdivision 3a           82.31, subdivision 3
 65.27       82.20, subdivision 4            82.31, subdivision 4
 65.28       82.22, subdivision 5            82.31, subdivision 5
 65.29       82.22, subdivision 6a           82.31, subdivision 6
 65.30       82.22, subdivision 13           82.32
 65.31       82.22, subdivision 8            82.33, subdivision 1
 65.32       82.20, subdivision 8,
 65.33          paragraph (a)                82.33, subdivision 2
 65.34       82.20, subdivision 8, 
 65.35          paragraph (b)                82.33, subdivision 3
 65.36       82.22, subdivision 10           82.33, subdivision 4
 66.1        82.22, subdivision 5b           82.33, subdivision 5
 66.2        82.22, subdivision 6b           82.33, subdivision 6
 66.3        82.20, subdivision 1            82.34, subdivision 1
 66.4        82.20, subdivision 2a           82.34, subdivision 2
 66.5        82.20, subdivision 5            82.34, subdivision 3
 66.6        82.20, subdivision 6            82.34, subdivision 4
 66.7        82.20, subdivision 7            82.34, subdivision 5
 66.8        82.20, subdivision 9,
 66.9           paragraphs (a) and (b)       82.34, subdivision 6
 66.10       82.20, subdivision 7a           82.34, subdivision 7
 66.11       82.20, subdivision 8a           82.34, subdivision 8
 66.12       82.20, subdivision 9a           82.34, subdivision 9
 66.13       82.20, subdivision 9,
 66.14          paragraph (c)                82.34, subdivision 10
 66.15       82.20, subdivision 12           82.34, subdivision 11
 66.16       82.20, subdivision 12a          82.34, subdivision 12
 66.17       82.20, subdivision 13           82.34, subdivision 13
 66.18       82.20, subdivision 14           82.34, subdivision 14
 66.19       82.20, subdivision 14a          82.34, subdivision 15
 66.20       82.20, subdivision 15           82.34, subdivision 16
 66.21       82.27, subdivision 1            82.35, subdivision 1
 66.22       82.20, subdivision 10           82.35, subdivision 2
 66.23       82.27, subdivision 2            82.35, subdivision 3
 66.24       82.27, subdivision 2a           82.35, subdivision 4
 66.25       82.27, subdivision 3            82.35, subdivision 5
 66.26       82.27, subdivision 4            82.35, subdivision 6
 66.27       82.27, subdivision 5            82.35, subdivision 7
 66.28       82.27, subdivision 6            82.35, subdivision 8
 66.29       82.27, subdivision 7            82.35, subdivision 9
 66.30       82.27, subdivision 8            82.35, subdivision 10
 66.31       82.31                           82.38
 66.32       82.20, subdivision 11           82.39, subdivision 1
 66.33       82.20, subdivision 11a          82.39, subdivision 2
 66.34       82.20, subdivision 11b          82.39, subdivision 3
 66.35       82.20, subdivision 11c          82.39, subdivision 4
 66.36       82.20, subdivision 11d          82.39, subdivision 5
 67.1        82.32                           82.40
 67.2        82.19, subdivision 1            82.41, subdivision 1
 67.3        82.19, subdivision 2            82.41, subdivision 2
 67.4        82.19, subdivision 3            82.41, subdivision 3
 67.5        82.19, subdivision 4            82.41, subdivision 4
 67.6        82.19, subdivision 4a           82.41, subdivision 5
 67.7        82.19, subdivision 5            82.41, subdivision 6
 67.8        82.19, subdivision 6            82.41, subdivision 7
 67.9        82.19, subdivision 7            82.41, subdivision 8
 67.10       82.19, subdivision 8            82.41, subdivision 9
 67.11       82.19, subdivision 9            82.41, subdivision 10
 67.12       82.19, subdivision 10           82.41, subdivision 11
 67.13       82.19, subdivision 11           82.41, subdivision 12
 67.14       82.19, subdivision 12           82.41, subdivision 13
 67.15       82.29                           82.42
 67.16       82.34                           82.43
 67.17       82.22, subdivision 12           82.44
 67.18       82.23, subdivision 2            82.45, subdivision 1
 67.19       82.23, subdivision 3            82.45, subdivision 2
 67.20       82.23, subdivision 1            82.45, subdivision 3
 67.21       82.28                           82.47
 67.22       82.176                          82.49
 67.23       82.24, subdivision 1            82.50, subdivision 1
 67.24       82.24, subdivision 2            82.50, subdivision 2
 67.25       82.24, subdivision 3            82.50, subdivision 3
 67.26       82.24, subdivision 4            82.50, subdivision 4
 67.27       82.24, subdivision 5            82.50, subdivision 5
 67.28       82.24, subdivision 6            82.50, subdivision 6
 67.29       82.24, subdivision 7            82.50, subdivision 7
 67.30       82.24, subdivision 8            82.50, subdivision 8
 67.31       82.24, subdivision 9            82.50, subdivision 9
 67.32       82.24, subdivision 10           82.50, subdivision 10
 67.33       82.24, subdivision 11           82.50, subdivision 11
 67.34     Sec. 62.  [REPEALER.] 
 67.35     (a) Minnesota Statutes 2002, section 82.22, subdivision 9, 
 67.36  is repealed. 
 68.1      (b) Minnesota Rules, parts 2800.0100; 2800.0200; 2800.0300; 
 68.2   2800.1100; 2800.1200; 2800.1300; 2800.1400; 2800.1500; 
 68.3   2800.1600; 2800.1700; 2800.1750; 2800.1751; 2800.1800; 
 68.4   2800.1900; 2800.2000; 2800.2100; 2800.2150; 2805.0100; 
 68.5   2805.0200; 2805.0300; 2805.0400; 2805.0500; 2805.0600; 
 68.6   2805.0700; 2805.0800; 2805.0900; 2805.1000; 2805.1100; 
 68.7   2805.1300; 2805.1400; 2805.1500; 2805.1600; 2805.1700; 
 68.8   2805.1800; 2805.1900; and 2805.2000, are repealed.