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; prohibiting unreasonable delays in 
  1.7             mortgage loan closings; amending Minnesota Statutes 
  1.8             2002, sections 58.13, subdivision 1; 58.16, 
  1.9             subdivisions 2, 4; 82.17, subdivision 4, by adding 
  1.10            subdivisions; 82.19, subdivisions 3, 5, by adding 
  1.11            subdivisions; 82.195; 82.196; 82.197; 82.20, 
  1.12            subdivisions 3, 4, 8, by adding subdivisions; 82.21, 
  1.13            by adding subdivisions; 82.22, subdivisions 6, 8, 12, 
  1.14            13, by adding subdivisions; 82.24, subdivisions 3, 5, 
  1.15            by adding subdivisions; 82.27, by adding a 
  1.16            subdivision; 513.55, subdivision 1; 513.56, by adding 
  1.17            a subdivision; 515B.4-101; 515B.4-102; 515B.4-106; 
  1.18            515B.4-107; 515B.4-108; 559.21, subdivision 4; 
  1.19            proposing coding for new law in Minnesota Statutes, 
  1.20            chapters 82; 325F; 559; repealing Minnesota Statutes 
  1.21            2002, sections 58.02, subdivision 24; 82.22, 
  1.22            subdivision 9; Minnesota Rules, parts 2800.0100; 
  1.23            2800.0200; 2800.0300; 2800.1100; 2800.1200; 2800.1300; 
  1.24            2800.1400; 2800.1500; 2800.1600; 2800.1700; 2800.1750; 
  1.25            2800.1751; 2800.1800; 2800.1900; 2800.2000; 2800.2100; 
  1.26            2800.2150; 2805.0100; 2805.0200; 2805.0300; 2805.0400; 
  1.27            2805.0500; 2805.0600; 2805.0700; 2805.0800; 2805.0900; 
  1.28            2805.1000; 2805.1100; 2805.1300; 2805.1400; 2805.1500; 
  1.29            2805.1600; 2805.1700; 2805.1800; 2805.1900; 2805.2000. 
  1.30  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.31                             ARTICLE 1 
  1.32                       CHANGES IN REAL ESTATE 
  1.33                        MORTGAGE LENDING LAW 
  1.34     Section 1.  Minnesota Statutes 2002, section 58.13, 
  1.35  subdivision 1, is amended to read: 
  1.36     Subdivision 1.  [GENERALLY.] No person acting as a 
  1.37  residential mortgage originator or servicer, including a person 
  1.38  required to be licensed under this chapter, and no person exempt 
  2.1   from the licensing requirements of this chapter under section 
  2.2   58.04, shall: 
  2.3      (1) fail to maintain a trust account to hold trust funds 
  2.4   received in connection with a residential mortgage loan; 
  2.5      (2) fail to deposit all trust funds into a trust account 
  2.6   within three business days of receipt; commingle trust funds 
  2.7   with funds belonging to the licensee or exempt person; or use 
  2.8   trust account funds for any purpose other than that for which 
  2.9   they are received; 
  2.10     (3) unreasonably delay the processing of a residential 
  2.11  mortgage loan application, or the closing of a residential 
  2.12  mortgage loan.  For purposes of this clause, evidence of 
  2.13  unreasonable delay includes but is not limited to those factors 
  2.14  identified in section 47.206, subdivision 7, clause (d); 
  2.15     (4) fail to disburse funds according to its contractual or 
  2.16  statutory obligations; 
  2.17     (5) fail to perform in conformance with its written 
  2.18  agreements with borrowers, investors, other licensees, or exempt 
  2.19  persons; 
  2.20     (6) charge a fee for a product or service where the product 
  2.21  or service is not actually provided, or misrepresent the amount 
  2.22  charged by or paid to a third party for a product or service; 
  2.23     (7) fail to comply with sections 345.31 to 345.60, the 
  2.24  Minnesota unclaimed property law; 
  2.25     (8) violate any provision of any other applicable state or 
  2.26  federal law regulating residential mortgage loans including, 
  2.27  without limitation, sections 47.20 to 47.208; 
  2.28     (9) make or cause to be made, directly or indirectly, any 
  2.29  false, deceptive, or misleading statement or representation in 
  2.30  connection with a residential loan transaction including, 
  2.31  without limitation, a false, deceptive, or misleading statement 
  2.32  or representation regarding the borrower's ability to qualify 
  2.33  for any mortgage product; 
  2.34     (10) conduct residential mortgage loan business under any 
  2.35  name other than that under which the license or certificate of 
  2.36  exemption was issued; 
  3.1      (11) compensate, whether directly or indirectly, coerce or 
  3.2   intimidate an appraiser for the purpose of influencing the 
  3.3   independent judgment of the appraiser with respect to the value 
  3.4   of real estate that is to be covered by a residential mortgage 
  3.5   or is being offered as security according to an application for 
  3.6   a residential mortgage loan; 
  3.7      (12) issue any document indicating conditional 
  3.8   qualification or conditional approval for a residential mortgage 
  3.9   loan, unless the document also clearly indicates that final 
  3.10  qualification or approval is not guaranteed, and may be subject 
  3.11  to additional review; 
  3.12     (13) make or assist in making any residential mortgage loan 
  3.13  with the intent that the loan will not be repaid and that the 
  3.14  residential mortgage originator will obtain title to the 
  3.15  property through foreclosure; 
  3.16     (14) provide or offer to provide for a borrower, any 
  3.17  brokering or lending services under an arrangement with a person 
  3.18  other than a licensee or exempt person, provided that a person 
  3.19  may rely upon a written representation by the residential 
  3.20  mortgage originator that it is in compliance with the licensing 
  3.21  requirements of this chapter; 
  3.22     (15) claim to represent a licensee or exempt person, unless 
  3.23  the person is an employee of the licensee or exempt person or 
  3.24  unless the person has entered into a written agency agreement 
  3.25  with the licensee or exempt person; 
  3.26     (16) fail to comply with the record-keeping and 
  3.27  notification requirements identified in section 58.14 or fail to 
  3.28  abide by the affirmations made on the application for licensure; 
  3.29     (17) represent that the licensee or exempt person is acting 
  3.30  as the borrower's agent after providing the nonagency disclosure 
  3.31  required by section 58.15, unless the disclosure is retracted 
  3.32  and the licensee or exempt person complies with all of the 
  3.33  requirements of section 58.16; 
  3.34     (18) make, provide, or arrange for a residential mortgage 
  3.35  loan that is of a lower investment grade if the borrower's 
  3.36  credit score or, if the originator does not utilize credit 
  4.1   scoring or if a credit score is unavailable, then comparable 
  4.2   underwriting data, indicates that the borrower may qualify for a 
  4.3   residential mortgage loan, available from or through the 
  4.4   originator, that is of a higher investment grade, unless the 
  4.5   borrower is informed that the borrower may qualify for a higher 
  4.6   investment grade loan with a lower interest rate and/or lower 
  4.7   discount points, and consents in writing to receipt of the lower 
  4.8   investment grade loan. 
  4.9      For purposes of this section, "investment grade" refers to 
  4.10  a system of categorizing residential mortgage loans in which the 
  4.11  loans are:  (i) commonly referred to as "prime" or "subprime"; 
  4.12  (ii) commonly designated by an alphabetical character with "A" 
  4.13  being the highest investment grade; and (iii) are distinguished 
  4.14  by interest rate or discount points or both charged to the 
  4.15  borrower, which vary according to the degree of perceived risk 
  4.16  of default based on factors such as the borrower's credit, 
  4.17  including credit score and credit patterns, income and 
  4.18  employment history, debt ratio, loan-to-value ratio, and prior 
  4.19  bankruptcy or foreclosure; 
  4.20     (19) make, publish, disseminate, circulate, place before 
  4.21  the public, or cause to be made, directly or indirectly, any 
  4.22  advertisement or marketing materials of any type, or any 
  4.23  statement or representation relating to the business of 
  4.24  residential mortgage loans that is false, deceptive, or 
  4.25  misleading; 
  4.26     (20) advertise loan types or terms that are not available 
  4.27  from or through the licensee or exempt person on the date 
  4.28  advertised, or on the date specified in the advertisement.  For 
  4.29  purposes of this clause, advertisement includes, but is not 
  4.30  limited to, a list of sample mortgage terms, including interest 
  4.31  rates, discount points, and closing costs provided by licensees 
  4.32  or exempt persons to a print or electronic medium that presents 
  4.33  the information to the public; and 
  4.34     (21) use or employ phrases, pictures, return addresses, 
  4.35  geographic designations, or other means that create the 
  4.36  impression, directly or indirectly, that a licensee or other 
  5.1   person is a governmental agency, or is associated with, 
  5.2   sponsored by, or in any manner connected to, related to, or 
  5.3   endorsed by a governmental agency, if that is not the case; or 
  5.4      (22) violate section 82.176, relating to table funding. 
  5.5      Sec. 2.  Minnesota Statutes 2002, section 58.16, 
  5.6   subdivision 2, is amended to read: 
  5.7      Subd. 2.  [CONTRACT PROVISIONS.] (a) A residential mortgage 
  5.8   originator who engages in the activities described in 
  5.9   subdivision 1 shall enter into a written contract with each 
  5.10  borrower and shall provide a copy of the written contract to 
  5.11  each borrower at or before the time of receipt of any fee or 
  5.12  valuable consideration paid for mortgage origination services.  
  5.13  The written contract must: 
  5.14     (1) specifically describe the services to be provided by 
  5.15  the residential mortgage originator and if the originator 
  5.16  collects an advance fee, the dates by which the services will be 
  5.17  performed; 
  5.18     (2) specifically identify whether the residential mortgage 
  5.19  originator may receive compensation from sources other than the 
  5.20  borrower in connection with the loan transaction; 
  5.21     (3) state the total amount of commission or compensation 
  5.22  that the borrower agrees to pay for the residential mortgage 
  5.23  originator's services, or the basis on which the compensation 
  5.24  will be computed; 
  5.25     (4) state the maximum rate of interest to be charged on any 
  5.26  residential mortgage loan obtained; 
  5.27     (5) contain a statement that notifies the borrower of the 
  5.28  right to cancel the contract according to subdivision 3 and 
  5.29  disclose the cancellation rights and procedures provided in 
  5.30  subdivision 3; and 
  5.31     (6) disclose, with respect to the 12-month period ending 
  5.32  ten business days before the date of the contract in question, 
  5.33  the percentage of the mortgage originator's customers for whom 
  5.34  loans have actually been funded as a result of the residential 
  5.35  mortgage originator's services.  
  5.36     (b) If an advance fee is solicited or received the contract 
  6.1   must also: 
  6.2      (1) identify the trust account into which the fees or 
  6.3   consideration will be deposited; 
  6.4      (2) set forth the circumstances under which the residential 
  6.5   mortgage originator will be entitled to disbursement from the 
  6.6   trust account; and 
  6.7      (3) set forth the circumstances under which the borrower 
  6.8   will be entitled to a refund of all or part of the fee. 
  6.9      Sec. 3.  Minnesota Statutes 2002, section 58.16, 
  6.10  subdivision 4, is amended to read: 
  6.11     Subd. 4.  [TRUST ACCOUNT.] The residential mortgage 
  6.12  originator shall deposit in a trust account within three 
  6.13  business days all fees received before the time a loan is 
  6.14  actually funded.  The trust account must be in a financial 
  6.15  institution located within the state of Minnesota and must be 
  6.16  controlled by an unaffiliated accountant, attorney, or bank 
  6.17  officer or employee. 
  6.18     Sec. 4.  [325F.691] [UNREASONABLE DELAY IN MORTGAGE LOAN 
  6.19  CLOSING.] 
  6.20     Subdivision 1.  [PROHIBITED CONDUCT.] (a) A lender, as 
  6.21  defined in section 47.206, who causes unreasonable delay in 
  6.22  processing a loan application beyond the expiration date of an 
  6.23  interest rate or discount point agreement is liable to the 
  6.24  borrower for a penalty in an amount not to exceed the borrower's 
  6.25  actual out-of-pocket damages, including the present value of the 
  6.26  increased interest costs over the normal life of the loan, or 
  6.27  specific performance of the agreement.  This paragraph applies 
  6.28  to an agreement entered into after July 1, 2004. 
  6.29     (b) For purposes of this section, evidence of unreasonable 
  6.30  delay includes, but is not limited to: 
  6.31     (1) failure of the lender to return telephone calls or 
  6.32  otherwise respond to the borrower's inquiries concerning the 
  6.33  status of the loan; 
  6.34     (2) the addition by the lender of new requirements for 
  6.35  processing or approving the loan that were not disclosed to the 
  6.36  borrower under section 47.206, subdivision 2, clause (3), unless 
  7.1   the requirements result from governmental agency or secondary 
  7.2   mortgage market changes, other than changes in interest rates, 
  7.3   that occur after the date of the agreement; or 
  7.4      (3) failure by the lender to take actions necessary to 
  7.5   process or approve the loan within a reasonable period of time, 
  7.6   if the borrower provided information requested by the lender in 
  7.7   a timely manner. 
  7.8      Subd. 2.  [ADDITIONAL PENALTY.] In addition to the remedies 
  7.9   in subdivision 1, a lender is liable to the borrower for $500 
  7.10  for each unreasonable delay in processing a loan application 
  7.11  which causes an interest rate or discount point agreement to 
  7.12  expire before closing. 
  7.13     Sec. 5.  Minnesota Statutes 2002, section 513.55, 
  7.14  subdivision 1, is amended to read: 
  7.15     Subdivision 1.  [CONTENTS.] (a) Before signing an agreement 
  7.16  to sell or transfer residential real property, the seller shall 
  7.17  make a written disclosure to the prospective buyer.  The 
  7.18  disclosure must include all material facts pertaining to adverse 
  7.19  physical conditions in the property of which the seller is aware 
  7.20  that could adversely and significantly affect: 
  7.21     (1) an ordinary buyer's use and enjoyment of rights and 
  7.22  interest in the property; or 
  7.23     (2) any intended use of the property of which the seller is 
  7.24  aware.  
  7.25     (b) The disclosure must be made in good faith and based 
  7.26  upon the best of the seller's knowledge at the time of the 
  7.27  disclosure.  
  7.28     Sec. 6.  Minnesota Statutes 2002, section 513.56, is 
  7.29  amended by adding a subdivision to read: 
  7.30     Subd. 4.  [EFFECT ON COMMON LAW.] The limitation on 
  7.31  disclosure in subdivisions 1 and 2 modifies any common law 
  7.32  duties with respect to disclosure of material facts. 
  7.33     Sec. 7.  Minnesota Statutes 2002, section 515B.4-101, is 
  7.34  amended to read: 
  7.35     515B.4-101 [APPLICABILITY; DELIVERY OF DISCLOSURE 
  7.36  STATEMENT.] 
  8.1      (a) Sections 515B.4-101 through 515B.4-118 apply to all 
  8.2   units subject to this chapter, except as provided in subsection 
  8.3   (c) or as modified or waived by agreement of purchasers of a the 
  8.4   unit which is restricted to nonresidential use.  For a 
  8.5   residential unit, the seller may not condition the sale of the 
  8.6   unit on the buyer agreeing to modify or waive the buyer's 
  8.7   ten-day right of rescission under section 515B.4-118. 
  8.8      (b) Subject to subsections (a) and (c), a declarant who 
  8.9   offers a unit to a purchaser shall deliver to the purchaser a 
  8.10  current disclosure statement which complies with the 
  8.11  requirements of section 515B.4-102.  The disclosure statement 
  8.12  shall include any material amendments to the disclosure 
  8.13  statement made prior to the conveyance of the unit to the 
  8.14  purchaser.  The declarant shall be liable to the purchaser to 
  8.15  whom it delivered the disclosure statement for any false or 
  8.16  misleading statement set forth therein or for any omission of a 
  8.17  material fact therefrom.  A disclosure statement is considered 
  8.18  to have been delivered to a purchaser as of the time it is 
  8.19  received by one of the purchasers or by a real estate licensee 
  8.20  representing or assisting one of the purchasers. 
  8.21     (c) Neither a disclosure statement nor a resale disclosure 
  8.22  certificate need be prepared or delivered in the case of: 
  8.23     (1) a gratuitous transfer; 
  8.24     (2) a transfer pursuant to a court order; 
  8.25     (3) a transfer to a government or governmental agency; 
  8.26     (4) a transfer to a secured party by foreclosure or deed in 
  8.27  lieu of foreclosure; 
  8.28     (5) an option to purchase a unit, until exercised; 
  8.29     (6) a transfer to a person who "controls" or is "controlled 
  8.30  by," the grantor as those terms are defined with respect to a 
  8.31  declarant under section 515B.1-103(2); 
  8.32     (7) a transfer by inheritance; 
  8.33     (8) a transfer of special declarant rights under section 
  8.34  515B.3-104; or 
  8.35     (9) a transfer in connection with a change of form of 
  8.36  common interest community under section 515B.2-123. 
  9.1      (d) A purchase agreement for a unit shall contain the 
  9.2   following notice:  "The following notice is required by 
  9.3   Minnesota Statutes.  The purchaser is entitled to receive a 
  9.4   disclosure statement or resale disclosure certificate, as 
  9.5   applicable.  The disclosure statement or resale disclosure 
  9.6   certificate contains important information regarding the common 
  9.7   interest community and the purchaser's cancellation rights." 
  9.8      Sec. 8.  Minnesota Statutes 2002, section 515B.4-102, is 
  9.9   amended to read: 
  9.10     515B.4-102 [DISCLOSURE STATEMENT; GENERAL PROVISIONS.] 
  9.11     (a) A disclosure statement shall fully and accurately 
  9.12  disclose: 
  9.13     (1) the name and, if available, the number of the common 
  9.14  interest community; 
  9.15     (2) the name and principal address of the declarant; 
  9.16     (3) the number of units in the common interest community 
  9.17  and a statement that the common interest community is either a 
  9.18  condominium, cooperative, or planned community; 
  9.19     (4) a general description of the common interest community, 
  9.20  including, at a minimum, (i) the number of buildings, (ii) the 
  9.21  number of dwellings per building, (iii) the type of 
  9.22  construction, (iv) whether the common interest community 
  9.23  involves new construction or rehabilitation, (v) whether any 
  9.24  building was wholly or partially occupied, for any purpose, 
  9.25  before it was added to the common interest community and the 
  9.26  nature of the occupancy, and (vi) a general description of any 
  9.27  roads, trails, or utilities that are located on the common 
  9.28  elements and that the association or a master association will 
  9.29  be required to maintain; 
  9.30     (5) declarant's schedule of commencement and completion of 
  9.31  construction of any buildings and other improvements that the 
  9.32  declarant is obligated to build pursuant to section 515B.4-117; 
  9.33     (6) any expenses or services, not reflected in the budget, 
  9.34  that the declarant pays or provides, which may become a common 
  9.35  expense; the projected common expense attributable to each of 
  9.36  those expenses or services; and an explanation of declarant's 
 10.1   limited assessment liability under section 515B.3-115, 
 10.2   subsection (b); 
 10.3      (7) any initial or special fee due from the purchaser to 
 10.4   the declarant or the association at closing, together with a 
 10.5   description of the purpose and method of calculating the fee; 
 10.6      (8) identification of any liens, defects, or encumbrances 
 10.7   which will continue to affect the title to a unit or to any real 
 10.8   property owned by the association after the contemplated 
 10.9   conveyance; 
 10.10     (9) a description of any financing offered or arranged by 
 10.11  the declarant; 
 10.12     (10) a statement as to whether application has been made 
 10.13  for any project approvals for the common interest community from 
 10.14  the Federal National Mortgage Association (FNMA), Federal Home 
 10.15  Loan Mortgage Corporation (FHLMC), Department of Housing and 
 10.16  Urban Development (HUD) or Department of Veterans Affairs (VA), 
 10.17  and which, if any, such final approvals have been received; 
 10.18     (11) the terms of any warranties provided by the declarant, 
 10.19  including copies of chapter 327A, and sections 515B.4-112 
 10.20  through 515B.4-115, and a statement of any limitations on the 
 10.21  enforcement of warranties or on damages; 
 10.22     (12) a statement that:  (i) within ten days after the 
 10.23  receipt of a disclosure statement, a purchaser may cancel any 
 10.24  contract for the purchase of a unit from a declarant; provided, 
 10.25  that the right to cancel terminates upon the purchaser's 
 10.26  voluntary acceptance of a conveyance of the unit from the 
 10.27  declarant; (ii) if a purchaser receives a disclosure statement 
 10.28  more than ten days before signing a purchase agreement, the 
 10.29  purchaser cannot cancel the purchase agreement; and (iii) if a 
 10.30  declarant obligated to deliver a disclosure statement fails to 
 10.31  deliver a disclosure statement which substantially complies with 
 10.32  this chapter to a purchaser to whom a unit is conveyed, the 
 10.33  declarant shall be liable to the purchaser as provided in 
 10.34  section 515B.4-106(d); and (iv) a disclosure statement is 
 10.35  considered to have been received by a purchaser as of the time 
 10.36  that it is received by one of the purchasers or by a real estate 
 11.1   licensee representing or assisting one of the purchasers; 
 11.2      (13) a statement disclosing to the extent of the 
 11.3   declarant's or an affiliate of a declarant's actual knowledge, 
 11.4   after reasonable inquiry, any unsatisfied judgments or lawsuits 
 11.5   to which the association is a party, and the status of those 
 11.6   lawsuits which are material to the common interest community or 
 11.7   the unit being purchased; 
 11.8      (14) a statement (i) describing the conditions under which 
 11.9   earnest money will be held in and disbursed from the escrow 
 11.10  account, as set forth in section 515B.4-109, (ii) that the 
 11.11  earnest money will be returned to the purchaser if the purchaser 
 11.12  cancels the contract pursuant to section 515B.4-106, and (iii) 
 11.13  setting forth the name and address of the escrow agent; 
 11.14     (15) a detailed description of the insurance coverage 
 11.15  provided by the association for the benefit of unit owners, 
 11.16  including a statement as to which, if any, of the items referred 
 11.17  to in section 515B.3-113, subsection (b), are insured by the 
 11.18  association; 
 11.19     (16) any current or expected fees or charges, other than 
 11.20  assessments for common expenses, to be paid by unit owners for 
 11.21  the use of the common elements or any other improvements or 
 11.22  facilities; 
 11.23     (17) the financial arrangements, including any 
 11.24  contingencies, which have been made to provide for completion of 
 11.25  all improvements that the declarant is obligated to build 
 11.26  pursuant to section 515B.4-118, or a statement that no such 
 11.27  arrangements have been made; 
 11.28     (18) in a cooperative:  (i) whether the unit owners will be 
 11.29  entitled for federal and state tax purposes, to deduct payments 
 11.30  made by the association for real estate taxes and interest paid 
 11.31  to the holder of a security interest encumbering the 
 11.32  cooperative; and (ii) a statement as to the effect on the unit 
 11.33  owners if the association fails to pay real estate taxes or 
 11.34  payments due the holder of a security interest encumbering the 
 11.35  cooperative; 
 11.36     (19) a statement:  (i) that real estate taxes for the unit 
 12.1   or any real property owned by the association are not delinquent 
 12.2   or, if there are delinquent real estate taxes, describing the 
 12.3   property for which the taxes are delinquent, stating the amount 
 12.4   of the delinquent taxes, interest and penalties, and stating the 
 12.5   years for which taxes are delinquent, and (ii) setting forth the 
 12.6   amount of real estate taxes, including the amount of any special 
 12.7   assessment certified for payment with the real estate taxes, due 
 12.8   and payable with respect to the unit in the year in which the 
 12.9   disclosure statement is given, if real estate taxes have been 
 12.10  separately assessed against the unit; 
 12.11     (20) if the association or the purchaser of the unit will 
 12.12  be a member of a master association, a statement to that effect, 
 12.13  and all of the following information with respect to the master 
 12.14  association:  (i) a copy of the declaration, if any (other than 
 12.15  any CIC plat), the articles of incorporation, bylaws, and rules 
 12.16  and regulations for the master association, together with any 
 12.17  amendments thereto; (ii) the name, address and general 
 12.18  description of the master association, including a general 
 12.19  description of any other association, unit owners, or other 
 12.20  persons which are or may become members; (iii) a description of 
 12.21  any nonresidential use permitted on any property subject to the 
 12.22  master association; (iv) a statement as to the estimated maximum 
 12.23  number of associations, unit owners or other persons which may 
 12.24  become members of the master association, and the degree and 
 12.25  period of control of the master association by a declarant or 
 12.26  other person; (v) a description of any facilities intended for 
 12.27  the benefit of the members of the master association and not 
 12.28  located on property owned or controlled by a member; (vi) the 
 12.29  financial arrangements, including any contingencies, which have 
 12.30  been made to provide for completion of the facilities referred 
 12.31  to in subsection (v), or a statement that no arrangements have 
 12.32  been made; (vii) any current balance sheet of the master 
 12.33  association and a projected or current annual budget, as 
 12.34  applicable, which budget shall include with respect to the 
 12.35  master association those items in paragraph (23), clauses (i) 
 12.36  through (iv); (viii) a description of any expenses or services 
 13.1   not reflected in the budget, paid for or provided by a declarant 
 13.2   or a person executing the master declaration, which may become 
 13.3   an expense of the master association in the future; (ix) a 
 13.4   description of any powers delegated to and accepted by the 
 13.5   master association pursuant to section 515B.2-121(f)(2); (x) 
 13.6   identification of any liens, defects or encumbrances that will 
 13.7   continue to affect title to property owned or operated by the 
 13.8   master association for the benefit of its members; (xi) the 
 13.9   terms of any warranties provided by any person for construction 
 13.10  of facilities in which the members of the master association 
 13.11  have or may have an interest, and any known defects in the 
 13.12  facilities which would violate the standards described in 
 13.13  section 515B.4-112(b); (xii) a statement disclosing, to the 
 13.14  extent of the declarant's knowledge, after inquiry of the master 
 13.15  association, any unsatisfied judgments or lawsuits to which the 
 13.16  master association is a party, and the status of those lawsuits 
 13.17  which are material to the master association; (xiii) a 
 13.18  description of any insurance coverage provided for the benefit 
 13.19  of its members by the master association; and (xiv) any current 
 13.20  or expected fees or charges, other than assessments by the 
 13.21  master association, to be paid by members of the master 
 13.22  association for the use of any facilities intended for the 
 13.23  benefit of the members; 
 13.24     (21) a statement as to whether the unit will be 
 13.25  substantially completed at the time of conveyance to a 
 13.26  purchaser, and if not substantially completed, who is 
 13.27  responsible to complete and pay for the construction of the 
 13.28  unit; 
 13.29     (22) a copy of the declaration and any amendments thereto, 
 13.30  (exclusive of the CIC plat), any other recorded covenants, 
 13.31  conditions restrictions, and reservations affecting the common 
 13.32  interest community; the articles of incorporation, bylaws and 
 13.33  any rules or regulations of the association; any agreement 
 13.34  excluding or modifying any implied warranties; any agreement 
 13.35  reducing the statute of limitations for the enforcement of 
 13.36  warranties; any contracts or leases to be signed by purchaser at 
 14.1   closing; and a brief narrative description of any contracts or 
 14.2   leases that are or may be subject to cancellation by the 
 14.3   association under section 515B.3-105; and 
 14.4      (23) any current balance sheet for the association; a 
 14.5   projected annual budget for the association for the year in 
 14.6   which the first unit is conveyed to a purchaser, and thereafter 
 14.7   the current annual budget of the association; and a statement 
 14.8   identifying the party responsible for the preparation of the 
 14.9   budget.  The budget shall include, without limitation:  (i) a 
 14.10  statement of the amount included in the budget as a reserve for 
 14.11  maintenance, repair and replacement; (ii) a statement of any 
 14.12  other reserves; (iii) the projected common expense for each 
 14.13  category of expenditures for the association; and (iv) the 
 14.14  projected monthly common expense assessment for each type of 
 14.15  unit. 
 14.16     (b) A declarant shall promptly amend the disclosure 
 14.17  statement to reflect any material change in the information 
 14.18  required by this chapter. 
 14.19     (c) The master association, within ten days after a request 
 14.20  by a declarant, or any holder of declarant rights, or the 
 14.21  authorized representative of any of them, shall furnish the 
 14.22  information required to be provided by subsection (a)(20).  A 
 14.23  declarant or other person who provides information pursuant to 
 14.24  subsection (a)(20) is not liable to the purchaser for any 
 14.25  erroneous information if the declarant or other person:  (i) is 
 14.26  not an affiliate of or related in any way to a person authorized 
 14.27  to appoint the master association board pursuant to section 
 14.28  515B.2-121(c)(3), and (ii) has no actual knowledge that the 
 14.29  information is incorrect. 
 14.30     Sec. 9.  Minnesota Statutes 2002, section 515B.4-106, is 
 14.31  amended to read: 
 14.32     515B.4-106 [PURCHASER'S RIGHT TO CANCEL.] 
 14.33     (a) A person required to deliver a disclosure statement 
 14.34  pursuant to section 515B.4-101(b) shall provide at least one of 
 14.35  the purchasers of the unit with a copy of the disclosure 
 14.36  statement and all amendments thereto before conveyance of the 
 15.1   unit.  If a purchaser is not given a disclosure statement more 
 15.2   than ten days before execution of the purchase agreement, the 
 15.3   purchaser may, before conveyance, cancel the purchase agreement 
 15.4   within ten days after first receiving the disclosure statement.  
 15.5   If a purchaser is given the disclosure statement more than ten 
 15.6   days before execution of the purchase agreement, the purchaser 
 15.7   may not cancel the purchase agreement pursuant to this section.  
 15.8   For purposes of this section, a disclosure statement, or an 
 15.9   amendment to it, is considered to have been provided, given, or 
 15.10  delivered to a purchaser as of the time it is received by one of 
 15.11  the purchasers or by a real estate licensee assisting or 
 15.12  representing one of the purchasers.  Except as expressly 
 15.13  provided in this chapter, the ten-day rescission period cannot 
 15.14  may be modified or waived by agreement of the purchaser.  For a 
 15.15  residential unit, the seller may not condition the sale of the 
 15.16  unit on the buyer agreeing to modify or waive the buyer's 
 15.17  ten-day right of rescission under sections 515B.4-101 to 
 15.18  515B.4-118. 
 15.19     (b) If an amendment to the disclosure statement materially 
 15.20  and adversely affects a purchaser, then the purchaser shall have 
 15.21  ten days after delivery of the amendment to cancel the purchase 
 15.22  agreement in accordance with this section. 
 15.23     (c) If a purchaser elects to cancel a purchase agreement 
 15.24  pursuant to this section, the purchaser may do so by giving 
 15.25  notice thereof pursuant to section 515B.1-115.  Cancellation is 
 15.26  without penalty, and all payments made by the purchaser before 
 15.27  cancellation shall be refunded promptly.  Notwithstanding 
 15.28  anything in this section to the contrary, the purchaser's 
 15.29  cancellation rights under this section terminate upon the 
 15.30  purchaser's acceptance of a conveyance of the unit. 
 15.31     (d) If a declarant obligated to deliver a disclosure 
 15.32  statement fails to deliver to the purchaser a disclosure 
 15.33  statement which substantially complies with this chapter, the 
 15.34  declarant shall be liable to the purchaser in the amount of 
 15.35  $1,000, in addition to any damages or other amounts recoverable 
 15.36  under this chapter or otherwise.  Any action brought under this 
 16.1   subsection shall be commenced within the time period specified 
 16.2   in section 515B.4-115, subsection (a). 
 16.3      Sec. 10.  Minnesota Statutes 2002, section 515B.4-107, is 
 16.4   amended to read: 
 16.5      515B.4-107 [RESALE OF UNITS.] 
 16.6      (a) In the event of a resale of a unit by a unit owner 
 16.7   other than a declarant, unless exempt under section 
 16.8   515B.4-101(c), the unit owner shall furnish to a purchaser, 
 16.9   before execution of any purchase agreement for a unit or 
 16.10  otherwise before conveyance, the following documents relating to 
 16.11  the association or to the master association, if applicable: 
 16.12     (1) copies of the declaration (other than any CIC plat), 
 16.13  the articles of incorporation and bylaws, any rules and 
 16.14  regulations, and any amendments thereto; 
 16.15     (2) the organizational and operating documents relating to 
 16.16  the master association, if any; and 
 16.17     (3) a resale disclosure certificate from the association 
 16.18  dated not more than 90 days prior to the date of the purchase 
 16.19  agreement or the date of conveyance, whichever is earlier, 
 16.20  containing the information set forth in subsection (b). 
 16.21     (b) The resale disclosure certificate must be in 
 16.22  substantially the following form: 
 16.23                     COMMON INTEREST COMMUNITY
 16.24                   RESALE DISCLOSURE CERTIFICATE
 16.25  Name of Common Interest Community:.............................. 
 16.26  Name of Association:............................................ 
 16.27  Address of Association:......................................... 
 16.28  Unit Number(s) (include principal unit and any garage, storage, 
 16.29  or other auxiliary unit(s)):.....................................
 16.30     The following information is furnished by the association 
 16.31  named above according to Minnesota Statutes, section 515B.4-107. 
 16.32     1.  There is no right of first refusal or other restraint 
 16.33  on the free alienability of the above unit(s) contained in the 
 16.34  declaration, bylaws, rules and regulations, or any amendment to 
 16.35  them, except as follows:........................................ 
 16.36  ................................................................
 17.1   ................................................................
 17.2   ................................................................
 17.3      2.  The following periodic installments of common expense 
 17.4   assessments and special assessments are payable with respect to 
 17.5   the above unit(s): 
 17.6        a.  Annual assessment 
 17.7            installments:      $.......   Due: .............
 17.8        b.  Special assessment
 17.9            installments:      $.......   Due: .............
 17.10       c.  Unpaid assessments, fines, or other charges:
 17.11             (1)   Annual          $.......
 17.12             (2)   Special         $.......
 17.13             (3)   Fines           $.......
 17.14             (4)   Other Charges   $.......
 17.15       d.  The association has/has not (strike one) approved
 17.16           a plan for levying certain common expense
 17.17           assessments against fewer than all the units
 17.18           according to Minnesota Statutes, section 515B.3-115,
 17.19           subsection (e).  If a plan is approved, a description
 17.20           of the plan is attached to this certificate.
 17.21     3.  In addition to the amounts due under paragraph 2, the 
 17.22  following additional fees or charges other than assessments are 
 17.23  payable by unit owners (include late payment charges, user fees, 
 17.24  etc.):..........................................................
 17.25  ................................................................
 17.26  ................................................................
 17.27     4.  There are no extraordinary expenditures approved by the 
 17.28  association, and not yet assessed, for the current and two 
 17.29  succeeding fiscal years, except as follows:..................... 
 17.30  ................................................................
 17.31  ................................................................
 17.32     5.  The association has reserved the following amounts for 
 17.33  maintenance, repair, or replacement:............................ 
 17.34  ................................................................
 17.35  ................................................................
 17.36  The following portions of these reserves are designated for the 
 18.1   following specified projects or uses:........................... 
 18.2   ................................................................ 
 18.3      6.  The following documents are furnished with this 
 18.4   certificate according to statute: 
 18.5        a.  The most recent regularly prepared balance sheet and
 18.6            income and expense statement of the association.
 18.7        b.  The current budget of the association.
 18.8      7.  There are no unsatisfied judgments against the 
 18.9   association, except as follows (identify creditor and amount):.. 
 18.10  ................................................................
 18.11  ................................................................
 18.12     8.  There are no pending lawsuits to which the association 
 18.13  is a party, except as follows (identify and summarize status):.. 
 18.14  ................................................................ 
 18.15  ................................................................
 18.16  ................................................................
 18.17     9.  Description of insurance coverages: 
 18.18     a.  The association provides the following insurance 
 18.19  coverage for the benefit of unit owners:  (Reference may be made 
 18.20  to applicable sections of the declaration or bylaws; however, 
 18.21  any additional coverages should be described in this space) 
 18.22  ................................................................
 18.23  ................................................................
 18.24  ................................................................
 18.25     b.  The following described fixtures, decorating items, or 
 18.26  construction items within the unit referred to in Minnesota 
 18.27  Statutes, section 515B.3-113, subsection (b), are insured by the 
 18.28  association (check as applicable):  
 18.29  ..._____Ceiling or wall finishing materials                     
 18.30  ..._____Floor coverings                                         
 18.31  ..._____Cabinetry                                               
 18.32  ..._____Finished millwork                                       
 18.33  ..._____Electrical or plumbing fixtures serving a single unit   
 18.34  ..._____Built-in appliances                                     
 18.35  ..._____Improvements and betterments as originally constructed  
 18.36  ..._____Additional improvements and betterments installed by
 19.1              unit owners                                          
 19.2      10.  The board of directors of the association has not 
 19.3   notified the unit owner (i) that any alterations or improvements 
 19.4   to the unit or to the limited common elements assigned to it 
 19.5   violate any provision of the declaration; or (ii) that the unit 
 19.6   is in violation of any governmental statute, ordinance, code, or 
 19.7   regulation, except as follows:...................................
 19.8   .................................................................
 19.9      11.  The remaining term of any leasehold estate affecting 
 19.10  the common interest community and the premises governing any 
 19.11  extension or renewal of it are as follows:...................... 
 19.12  ................................................................
 19.13  ................................................................
 19.14     12.  In addition to the above, the following matters 
 19.15  affecting the unit or the unit owner's obligations with respect 
 19.16  to the unit are deemed material. 
 19.17       I hereby certify that the foregoing information and
 19.18  statements are true and correct as of .............
 19.19                                          (Date)
 19.20                                      By:  .......................
 19.21                                      Title: .....................
 19.22                                      (Association representative)
 19.23                                      Address:....................
 19.24                                      Phone Number:...............
 19.25                              RECEIPT 
 19.26  In addition to the foregoing information furnished by the 
 19.27  association, the unit owner is obligated to furnish to the 
 19.28  purchaser before execution of any purchase agreement for a unit 
 19.29  or otherwise before conveyance, copies of the following 
 19.30  documents relating to the association or to the master 
 19.31  association (as applicable):  the declaration (other than any 
 19.32  common interest community plat), articles of incorporation, 
 19.33  bylaws, rules and regulations (if any), and any amendments to 
 19.34  these documents.  Receipt of the foregoing documents, and the 
 19.35  resale disclosure certificate, is acknowledged by the 
 19.36  undersigned buyer(s). 
 20.1        Dated:  ............        .........................
 20.2                                    (Buyer or real estate
 20.3                                    licensee representing or 
 20.4                                    assisting a buyer) 
 20.5                                    .........................
 20.6                                    (Buyer or real estate
 20.7                                    licensee representing or 
 20.8                                    assisting a buyer)
 20.9      (c) If the association is subject to a master association 
 20.10  to which has been delegated the association's powers under 
 20.11  section 515B.3-102(a)(2), then the financial information 
 20.12  required to be disclosed under subsection (b) may be disclosed 
 20.13  on a consolidated basis. 
 20.14     (d) The association, within ten days after a request by a 
 20.15  unit owner, or the unit owner's authorized representative, shall 
 20.16  furnish the certificate required in subsection (a).  The 
 20.17  association may charge a reasonable fee for furnishing the 
 20.18  certificate and any association documents related thereto.  A 
 20.19  unit owner providing a certificate pursuant to subsection (a) is 
 20.20  not liable to the purchaser for any erroneous information 
 20.21  provided by the association and included in the certificate. 
 20.22     (e) A purchaser is not liable for any unpaid common expense 
 20.23  assessments, including special assessments, if any, not set 
 20.24  forth in the certificate required in subsection (a).  A 
 20.25  purchaser is not liable for the amount by which the annual or 
 20.26  special assessments exceed the amount of annual or special 
 20.27  assessments stated in the certificate for assessments payable in 
 20.28  the year in which the certificate was given, except to the 
 20.29  extent of any increases subsequently approved in accordance with 
 20.30  the declaration or bylaws.  A unit owner is not liable to a 
 20.31  purchaser for the failure of the association to provide the 
 20.32  certificate, or a delay by the association in providing the 
 20.33  certificate in a timely manner. 
 20.34     (f) For purposes of this section, a resale disclosure 
 20.35  certificate or other document is considered furnished to a 
 20.36  purchaser as of the time it is given to one of the purchasers or 
 21.1   to a real estate licensee representing or assisting one of the 
 21.2   purchasers. 
 21.3      Sec. 11.  Minnesota Statutes 2002, section 515B.4-108, is 
 21.4   amended to read: 
 21.5      515B.4-108 [PURCHASER'S RIGHT TO CANCEL RESALE.] 
 21.6      (a) Unless a purchaser is given the information required to 
 21.7   be delivered by section 515B.4-107, by a delivery method 
 21.8   described in that section, more than ten days prior to the 
 21.9   execution of the purchase agreement for the unit the purchaser 
 21.10  may, prior to the conveyance, cancel the purchase agreement 
 21.11  within ten days after receiving the information.  Except as 
 21.12  expressly provided in this chapter, the ten-day rescission 
 21.13  period cannot may be modified or waived by agreement of the 
 21.14  purchaser.  For a residential unit, the seller may not condition 
 21.15  the sale of the unit on the buyer agreeing to modify or waive 
 21.16  the buyer's ten-day right of rescission under sections 
 21.17  515B.4-101 to 515B.4-118. 
 21.18     (b) A purchaser who elects to cancel a purchase agreement 
 21.19  pursuant to subsection (a), may do so by hand delivering notice 
 21.20  thereof or mailing notice by postage prepaid United States mail 
 21.21  to the seller or the agent.  Cancellation is without penalty and 
 21.22  all payments made by the purchaser shall be refunded promptly. 
 21.23     Sec. 12.  Minnesota Statutes 2002, section 559.21, 
 21.24  subdivision 4, is amended to read: 
 21.25     Subd. 4.  [LAW PREVAILS OVER CONTRACT; PROCEDURE; 
 21.26  CONDITIONS.] (a) The notice required by this section must be 
 21.27  given notwithstanding any provisions in the contract to the 
 21.28  contrary, except that earnest money contracts, purchase 
 21.29  agreements, and exercised options that are subject to this 
 21.30  section may, unless by their terms they provide for a longer 
 21.31  termination period, be terminated on 30 days' notice, or may be 
 21.32  terminated under section 559.217.  The notice must be served 
 21.33  within the state in the same manner as a summons in the district 
 21.34  court, and outside of the state, in the same manner, and without 
 21.35  securing any sheriff's return of not found, making any 
 21.36  preliminary affidavit, mailing a copy of the notice or doing any 
 22.1   other preliminary act or thing whatsoever.  Service of the 
 22.2   notice outside of the state may be proved by the affidavit of 
 22.3   the person making the same, made before an authorized officer 
 22.4   having a seal, and within the state by such an affidavit or by 
 22.5   the return of the sheriff of any county therein. 
 22.6      (b) If a person to be served is a resident individual who 
 22.7   has departed from the state, or cannot be found in the state; or 
 22.8   is a nonresident individual or a foreign corporation, 
 22.9   partnership, or association, service may be made by publication 
 22.10  as provided in this paragraph.  Three weeks' published notice 
 22.11  has the same effect as personal service of the notice.  The 
 22.12  published notice must comply with subdivision 3 and state (1) 
 22.13  that the person to be served is allowed 90 days after the first 
 22.14  date of publication of the notice to comply with the conditions 
 22.15  of the contract, and (2) that the contract will terminate 90 
 22.16  days after the first date of publication of the notice, unless 
 22.17  before the termination date the purchaser complies with the 
 22.18  notice.  If the real estate described in the contract is 
 22.19  actually occupied, then, in addition to publication, a person in 
 22.20  possession must be personally served, in like manner as the 
 22.21  service of a summons in a civil action in state district court, 
 22.22  within 30 days after the first date of publication of the 
 22.23  notice.  If an address of a person to be served is known, then 
 22.24  within 30 days after the first date of publication of the notice 
 22.25  a copy of the notice must be mailed to the person's last known 
 22.26  address by first class mail, postage prepaid. 
 22.27     (c) The contract is reinstated if, within the time 
 22.28  mentioned, the person served: 
 22.29     (1) complies with the conditions in default; 
 22.30     (2) if subdivision 1d or 2a applies, makes all payments due 
 22.31  and owing to the seller under the contract through the date that 
 22.32  payment is made; 
 22.33     (3) pays the costs of service as provided in subdivision 
 22.34  1b, 1c, 1d, or 2a; 
 22.35     (4) if subdivision 2a applies, pays two percent of the 
 22.36  amount in default, not including the final balloon payment, any 
 23.1   taxes, assessments, mortgages, or prior contracts that are 
 23.2   assumed by the purchaser; and 
 23.3      (5) pays attorneys' fees as provided in subdivision 1b, 1c, 
 23.4   1d, or 2a. 
 23.5      (d) The contract is terminated if the provisions of 
 23.6   paragraph (c) are not met. 
 23.7      (e) In the event that the notice was not signed by an 
 23.8   attorney for the seller and the seller is not present in the 
 23.9   state, or cannot be found in the state, then compliance with the 
 23.10  conditions specified in the notice may be made by paying to the 
 23.11  court administrator of the district court in the county wherein 
 23.12  the real estate or any part thereof is situated any money due 
 23.13  and filing proof of compliance with other defaults specified, 
 23.14  and the court administrator of the district court shall be 
 23.15  deemed the agent of the seller for such purposes.  A copy of the 
 23.16  notice with proof of service thereof, and the affidavit of the 
 23.17  seller, the seller's agent or attorney, showing that the 
 23.18  purchaser has not complied with the terms of the notice, may be 
 23.19  recorded with the county recorder, and is prima facie evidence 
 23.20  of the facts stated in it; but this section in no case applies 
 23.21  to contracts for the sale or conveyance of lands situated in 
 23.22  another state or in a foreign country.  If the notice is served 
 23.23  by publication, the affidavit must state that the affiant 
 23.24  believes that the party to be served is not a resident of the 
 23.25  state, or cannot be found in the state, and either that the 
 23.26  affiant has mailed a copy of the notice by first class mail, 
 23.27  postage prepaid, to the party's last known address, or that such 
 23.28  address is not known to the affiant. 
 23.29     Sec. 13.  [559.217] [DECLARATORY CANCELLATION OF PURCHASE 
 23.30  AGREEMENT.] 
 23.31     Subdivision 1.  [DEFINITIONS.] (a) For purposes of this 
 23.32  section, the terms defined in this subdivision have the meanings 
 23.33  given. 
 23.34     (b) "Purchase agreement" means an earnest money contract, 
 23.35  purchase agreement, or exercised option that could be terminated 
 23.36  under section 559.21, subdivision 4, paragraph (a). 
 24.1      (c) "Residential real property" means real property, 
 24.2   including vacant land, occupied by, or intended to be occupied 
 24.3   by, one to four families as their residence. 
 24.4      Subd. 2.  [USE OF THIS SECTION.] Either the purchaser or 
 24.5   the seller may cancel a purchase agreement for residential real 
 24.6   property under this section. 
 24.7      Subd. 3.  [CANCELLATION WITH RIGHT TO CURE.] (a) If a 
 24.8   default occurs or an unfulfilled condition exists in the terms 
 24.9   of a purchase agreement for the conveyance of residential real 
 24.10  property, which does not by its terms terminate or cancel the 
 24.11  purchase agreement, the purchaser or the seller may initiate a 
 24.12  cancellation by serving upon the other party to the purchase 
 24.13  agreement a notice: 
 24.14     (1) specifying the residential real property that is the 
 24.15  subject of the purchase agreement; 
 24.16     (2) specifying the purchase agreement by date and names of 
 24.17  parties, and the unfulfilled condition or default; and 
 24.18     (3) stating that the purchase agreement will terminate ten 
 24.19  days after service of the notice unless prior to the termination 
 24.20  date the party upon whom the notice is served complies with the 
 24.21  conditions in default and all obligations of that party under 
 24.22  the purchase agreement that were required to be performed as of 
 24.23  the date of service of the notice, including, if applicable, 
 24.24  completion of the purchase or sale of the residential real 
 24.25  property according to the terms of the purchase agreement. 
 24.26     (b) The notice must be served in the manner provided in 
 24.27  section 559.21, subdivision 4, paragraphs (a) and (b). 
 24.28     (c) The purchase agreement is canceled unless, within ten 
 24.29  days after the service of the notice, the party upon whom the 
 24.30  notice was served fully complies with the conditions in default 
 24.31  or secures from a court an order suspending the termination. 
 24.32     Subd. 4.  [DECLARATORY CANCELLATION.] (a) If a default 
 24.33  occurs or an unfulfilled condition exists in the terms of a 
 24.34  purchase agreement for the conveyance of residential real 
 24.35  property, which by the terms of the purchase agreement 
 24.36  terminates or cancels the purchase agreement, either the 
 25.1   purchaser or the seller may confirm the cancellation by serving 
 25.2   upon the other party a notice: 
 25.3      (1) specifying the residential real property that is the 
 25.4   subject of the purchase agreement; 
 25.5      (2) specifying the purchase agreement by date and names of 
 25.6   parties, and the unfulfilled condition or default; and 
 25.7      (3) stating that the purchase agreement has been terminated.
 25.8      (b) The notice must be served in the manner provided in 
 25.9   section 559.21, subdivision 4, paragraphs (a) and (b). 
 25.10     (c) The cancellation of the purchase agreement is complete, 
 25.11  unless, within ten days after the service of the notice, the 
 25.12  party upon whom the notice was served secures from a court an 
 25.13  order suspending the termination. 
 25.14     Subd. 5.  [FORM OF NOTICE OF CANCELLATION.] (a) For 
 25.15  purposes of subdivision 3, the term "notice" means a writing 
 25.16  stating the information required in subdivision 3, paragraph 
 25.17  (a), stating the name, address, and telephone number of that 
 25.18  party serving the notice or of an attorney authorized by such 
 25.19  party to serve the notice, and including the following 
 25.20  information in 12-point or larger underlined uppercase type, or 
 25.21  8-point type if published, or in large legible handwritten 
 25.22  letters: 
 25.23     "THIS NOTICE IS TO INFORM YOU THAT BY THIS NOTICE THE 
 25.24  (SELLER) (PURCHASER) (STRIKE ONE) HAS BEGUN PROCEEDINGS UNDER 
 25.25  MINNESOTA STATUTES, SECTION 559.217, TO TERMINATE YOUR PURCHASE 
 25.26  AGREEMENT FOR THE (PURCHASE) (SALE) (STRIKE ONE) OF THE ABOVE 
 25.27  PROPERTY FOR THE REASONS SPECIFIED IN THIS NOTICE.  THE PURCHASE 
 25.28  AGREEMENT WILL TERMINATE .. DAYS AFTER (SERVICE OF THIS NOTICE 
 25.29  UPON YOU) (THE FIRST DAY OF PUBLICATION OF THIS NOTICE) (STRIKE 
 25.30  ONE) UNLESS BEFORE THEN: 
 25.31     (A) YOU HAVE FULLY COMPLIED WITH ALL OF YOUR OBLIGATIONS 
 25.32  UNDER THE PURCHASE AGREEMENT THAT WERE REQUIRED TO BE PERFORMED 
 25.33  AS OF THE DATE OF SERVICE OF THIS NOTICE, INCLUDING WITHOUT 
 25.34  LIMITATION, THE ITEMS OF DEFAULT SPECIFIED IN THIS NOTICE; OR 
 25.35     (B) YOU SECURE FROM A DISTRICT COURT AN ORDER THAT THE 
 25.36  TERMINATION OF THE PURCHASE AGREEMENT BE SUSPENDED UNTIL YOUR 
 26.1   CLAIMS OR DEFENSES ARE FINALLY DISPOSED OF BY TRIAL, HEARING, OR 
 26.2   SETTLEMENT.  YOUR ACTION MUST SPECIFICALLY STATE THOSE FACTS AND 
 26.3   GROUNDS THAT DEMONSTRATE YOUR CLAIMS OR DEFENSES. 
 26.4      IF YOU DO NOT DO ONE OR THE OTHER OF THE ABOVE THINGS 
 26.5   WITHIN THE TIME PERIOD SPECIFIED IN THIS NOTICE, YOUR PURCHASE 
 26.6   AGREEMENT WILL TERMINATE AT THE END OF THE PERIOD (AND YOU WILL 
 26.7   LOSE ALL EARNEST MONEY YOU HAVE PAID ON THE PURCHASE AGREEMENT) 
 26.8   (STRIKE IF NOT APPLICABLE); AND YOU MAY LOSE YOUR RIGHT TO 
 26.9   ASSERT ANY CLAIMS OR DEFENSES THAT YOU MIGHT HAVE.  IF YOU HAVE 
 26.10  ANY QUESTIONS ABOUT THIS NOTICE, CONTACT AN ATTORNEY 
 26.11  IMMEDIATELY." 
 26.12     (b) For purposes of subdivision 4, the term "notice" means 
 26.13  a writing stating the information required in subdivision 4, 
 26.14  paragraph (a), stating the name, address, and telephone number 
 26.15  of the party serving the notice or of an attorney authorized by 
 26.16  that party to serve the notice, and including the following 
 26.17  information in 12-point or larger underlined uppercase type, or 
 26.18  8-point type if published, or in large legible handwritten 
 26.19  letters: 
 26.20     "THIS NOTICE IS PURSUANT TO MINNESOTA STATUTES, SECTION 
 26.21  559.217, TO INFORM YOU THAT YOUR PURCHASE AGREEMENT FOR THE 
 26.22  (PURCHASE) (SALE) (STRIKE ONE) OF THE ABOVE PROPERTY HAS 
 26.23  TERMINATED FOR THE REASONS SPECIFIED IN THIS NOTICE.  THE 
 26.24  TERMINATION WILL BE FINAL ... DAYS AFTER (SERVICE OF THIS NOTICE 
 26.25  UPON YOU) (THE FIRST DAY OF PUBLICATION OF THIS NOTICE) (STRIKE 
 26.26  ONE) UNLESS BEFORE THEN YOU SECURE FROM A DISTRICT COURT AN 
 26.27  ORDER THAT THE TERMINATION OF THE PURCHASE AGREEMENT BE 
 26.28  SUSPENDED UNTIL YOUR CLAIMS OR DEFENSES ARE FINALLY DISPOSED OF 
 26.29  BY TRIAL, HEARING, OR SETTLEMENT.  YOUR ACTION MUST SPECIFICALLY 
 26.30  STATE THOSE FACTS AND GROUNDS THAT DEMONSTRATE YOUR CLAIMS OR 
 26.31  DEFENSES. 
 26.32     IF YOU DO NOT OBTAIN SUCH A COURT ORDER WITHIN THE TIME 
 26.33  PERIOD SPECIFIED IN THIS NOTICE, THE TERMINATION OF YOUR 
 26.34  PURCHASE AGREEMENT WILL BE FINAL AT THE END OF THE PERIOD (AND 
 26.35  YOU WILL LOSE ALL EARNEST MONEY YOU HAVE PAID ON THE PURCHASE 
 26.36  AGREEMENT) (STRIKE IF NOT APPLICABLE); AND YOU MAY LOSE YOUR 
 27.1   RIGHT TO ASSERT ANY CLAIMS OR DEFENSES THAT YOU MIGHT HAVE.  IF 
 27.2   YOU HAVE ANY QUESTIONS ABOUT THIS NOTICE, CONTACT AN ATTORNEY 
 27.3   IMMEDIATELY." 
 27.4      Subd. 6.  [ATTORNEY FEES AND COSTS OF SERVICE.] If the 
 27.5   party upon whom the notice is served commences a proceeding to 
 27.6   obtain a court order to suspend the termination of a purchase 
 27.7   agreement under this section, the court shall award attorney 
 27.8   fees and costs of service actually expended to the prevailing 
 27.9   party in an amount not to exceed $1,000. 
 27.10     Subd. 7.  [AFFIDAVIT OF CANCELLATION.] (a) After 
 27.11  cancellation under this section, the purchase agreement is void 
 27.12  and of no further force or effect, and any earnest money held 
 27.13  under the purchase agreement must be distributed to, and become 
 27.14  the sole property of, the party completing the cancellation of 
 27.15  the purchase agreement. 
 27.16     (b) When a cancellation under this section has been 
 27.17  completed, the party who served the notice, or that party's 
 27.18  attorney, may execute an affidavit stating that the party caused 
 27.19  a notice of cancellation to be served upon the other party, that 
 27.20  the other party neither complied with the actions required in 
 27.21  the notice, if applicable, nor obtained a court order suspending 
 27.22  the cancellation, and that the property is residential real 
 27.23  property. 
 27.24     (c) A copy of the affidavit of cancellation, when attached 
 27.25  to a copy of the notice, is prima facie evidence of the facts 
 27.26  therein stated. 
 27.27     (d) The affidavit of cancellation, when delivered to a 
 27.28  person holding earnest money under the purchase agreement, is a 
 27.29  sufficient basis for that person to release the earnest money to 
 27.30  the party initiating the cancellation. 
 27.31     Subd. 8.  [ATTORNEY AS AGENT FOR SERVICE.] Any attorney 
 27.32  authorized to serve the notice of cancellation by a party 
 27.33  initiating a cancellation under this section is designated as 
 27.34  the attorney who may receive service as agent for the party 
 27.35  initiating the cancellation of all summons, complaints, orders, 
 27.36  and motions made in connection with an action by the party upon 
 28.1   whom the notice is served to restrain the termination.  Service 
 28.2   in the action may be made upon the party initiating the 
 28.3   cancellation by mailing a copy of the process to such party or 
 28.4   to such party's attorney, by first class mail, postage prepaid, 
 28.5   to the address stated in the notice. 
 28.6      Sec. 14.  [REPEALER.] 
 28.7      Minnesota Statutes 2002, section 58.02, subdivision 24, is 
 28.8   repealed. 
 28.9      Sec. 15.  [EFFECTIVE DATE.] 
 28.10     Sections 1 to 14 are effective August 1, 2004.  Section 13 
 28.11  applies to purchase agreements entered into on or after that 
 28.12  date. 
 28.13                             ARTICLE 2 
 28.14                           RECODIFICATION 
 28.15     Section 1.  Minnesota Statutes 2002, section 82.17, 
 28.16  subdivision 4, is amended to read: 
 28.17     Subd. 4.  [REAL ESTATE BROKER; BROKER.] "Real estate 
 28.18  broker" or "broker" means any person who: 
 28.19     (a) for another and for commission, fee, or other valuable 
 28.20  consideration or with the intention or expectation of receiving 
 28.21  the same directly or indirectly lists, sells, exchanges, buys or 
 28.22  rents, manages, or offers or attempts to negotiate a sale, 
 28.23  option, exchange, purchase or rental of an interest or estate in 
 28.24  real estate, or advertises or holds out as engaged in these 
 28.25  activities; 
 28.26     (b) for another and for commission, fee, or other valuable 
 28.27  consideration or with the intention or expectation of receiving 
 28.28  the same directly or indirectly negotiates or offers or attempts 
 28.29  to negotiate a loan, secured or to be secured by a mortgage or 
 28.30  other encumbrance on real estate, which is not a residential 
 28.31  mortgage loan as defined by section 58.02, subdivision 18; 
 28.32     (c) "real estate broker" or "broker" as set forth in clause 
 28.33  (b) shall not apply to the originating, making, processing, 
 28.34  selling, or servicing of a loan in connection with the broker's 
 28.35  ordinary business activities by a mortgagee, lender, or servicer 
 28.36  approved or certified by the secretary of housing and urban 
 29.1   development, or approved or certified by the administrator of 
 29.2   veterans affairs, or approved or certified by the administrator 
 29.3   of the Farmers Home Administration, or approved or certified by 
 29.4   the federal Home Loan Mortgage Corporation, or approved or 
 29.5   certified by the federal National Mortgage Association; 
 29.6      (d) for another and for commission, fee, or other valuable 
 29.7   consideration or with the intention or expectation of receiving 
 29.8   the same directly or indirectly lists, sells, exchanges, buys, 
 29.9   rents, manages, offers or attempts to negotiate a sale, option, 
 29.10  exchange, purchase or rental of any business opportunity or 
 29.11  business, or its good will, inventory, or fixtures, or any 
 29.12  interest therein; 
 29.13     (d) (e) for another and for commission, fee, or other 
 29.14  valuable consideration or with the intention or expectation of 
 29.15  receiving the same directly or indirectly offers, sells or 
 29.16  attempts to negotiate the sale of property that is subject to 
 29.17  the registration requirements of chapter 83, concerning 
 29.18  subdivided land; 
 29.19     (e) (f) for another and for commission, fee, or other 
 29.20  valuable consideration or with the intention or expectation of 
 29.21  receiving the same, promotes the sale of real estate by 
 29.22  advertising it in a publication issued primarily for this 
 29.23  purpose, if the person:  
 29.24     (1) negotiates on behalf of any party to a transaction; 
 29.25     (2) disseminates any information regarding the property to 
 29.26  any party or potential party to a transaction subsequent to the 
 29.27  publication of the advertisement, except that in response to an 
 29.28  initial inquiry from a potential purchaser, the person may 
 29.29  forward additional written information regarding the property 
 29.30  which has been prepared prior to the publication by the seller 
 29.31  or broker or a representative of either; 
 29.32     (3) counsels, advises, or offers suggestions to the seller 
 29.33  or a representative of the seller with regard to the marketing, 
 29.34  offer, sale, or lease of the real estate, whether prior to or 
 29.35  subsequent to the publication of the advertisement; 
 29.36     (4) counsels, advises, or offers suggestions to a potential 
 30.1   buyer or a representative of the seller with regard to the 
 30.2   purchase or rental of any advertised real estate; or 
 30.3      (5) engages in any other activity otherwise subject to 
 30.4   licensure under this chapter; 
 30.5      (f) (g) engages wholly or in part in the business of 
 30.6   selling real estate to the extent that a pattern of real estate 
 30.7   sales is established, whether or not the real estate is owned by 
 30.8   the person.  A person shall be presumed to be engaged in the 
 30.9   business of selling real estate if the person engages as 
 30.10  principal in five or more transactions during any 12-month 
 30.11  period, unless the person is represented by a licensed real 
 30.12  estate broker or salesperson. 
 30.13     Sec. 2.  Minnesota Statutes 2002, section 82.17, is amended 
 30.14  by adding a subdivision to read: 
 30.15     Subd. 13.  [BUSINESS OF FINANCIAL PLANNING.] "Business of 
 30.16  financial planning" means providing, or offering to provide, 
 30.17  financial planning services or financial counseling or advice, 
 30.18  on a group or individual basis.  A person who, on 
 30.19  advertisements, cards, signs, circulars, letterheads, or in any 
 30.20  other manner, indicates that the person is a "financial planner,"
 30.21  "financial counselor," "financial adviser," "investment 
 30.22  counselor," "estate planner," "investment adviser," "financial 
 30.23  consultant," or any other similar designation or title or 
 30.24  combination thereof, is considered to be representing himself or 
 30.25  herself to be engaged in the business of financial planning. 
 30.26     Sec. 3.  Minnesota Statutes 2002, section 82.17, is amended 
 30.27  by adding a subdivision to read: 
 30.28     Subd. 14.  [ELECTRONIC AGENT.] "Electronic agent" means a 
 30.29  computer program or an electronic or other automated means used 
 30.30  independently to initiate an action or respond to electronic 
 30.31  records or performances, in whole or in part, without review or 
 30.32  action by an individual. 
 30.33     Sec. 4.  Minnesota Statutes 2002, section 82.17, is amended 
 30.34  by adding a subdivision to read: 
 30.35     Subd. 15.  [ELECTRONIC RECORD.] "Electronic record" means a 
 30.36  record created, generated, sent, communicated, received, or 
 31.1   stored by electronic means. 
 31.2      Sec. 5.  Minnesota Statutes 2002, section 82.17, is amended 
 31.3   by adding a subdivision to read: 
 31.4      Subd. 16.  [ELECTRONIC SIGNATURE.] "Electronic signature" 
 31.5   means an electronic sound, symbol, or process attached to or 
 31.6   logically associated with a record and executed or adopted by a 
 31.7   person with the intent to sign the record. 
 31.8      Sec. 6.  Minnesota Statutes 2002, section 82.17, is amended 
 31.9   by adding a subdivision to read: 
 31.10     Subd. 17.  [LICENSEE.] "Licensee" means a person duly 
 31.11  licensed under this chapter. 
 31.12     Sec. 7.  Minnesota Statutes 2002, section 82.17, is amended 
 31.13  by adding a subdivision to read: 
 31.14     Subd. 18.  [LOAN BROKER.] "Loan broker" means a licensed 
 31.15  real estate broker or salesperson who, for another and for a 
 31.16  commission, fee, or other valuable consideration or with the 
 31.17  intention or expectation of receiving the same, directly or 
 31.18  indirectly, negotiates or offers or attempts to negotiate a loan 
 31.19  secured or to be secured by a mortgage or other encumbrance on 
 31.20  real estate, or represents himself or herself or otherwise holds 
 31.21  himself or herself out as a licensed real estate broker or 
 31.22  salesperson, either in connection with any transaction in which 
 31.23  he or she directly or indirectly negotiates or offers or 
 31.24  attempts to negotiate a loan, or in connection with the conduct 
 31.25  of his or her ordinary business activities as a loan broker. 
 31.26     "Loan broker" does not include a licensed real estate 
 31.27  broker or salesperson who, in the course of representing a 
 31.28  purchaser or seller of real estate, incidentally assists the 
 31.29  purchaser or seller in obtaining financing for the real property 
 31.30  in question if the licensee does not receive a separate 
 31.31  commission, fee, or other valuable consideration for this 
 31.32  service. 
 31.33     Sec. 8.  Minnesota Statutes 2002, section 82.17, is amended 
 31.34  by adding a subdivision to read: 
 31.35     Subd. 19.  [OVERPAYMENT.] "Overpayment" means any payment 
 31.36  of money in excess of a statutory fee or for a license for which 
 32.1   a person does not qualify. 
 32.2      Sec. 9.  Minnesota Statutes 2002, section 82.17, is amended 
 32.3   by adding a subdivision to read: 
 32.4      Subd. 20.  [OVERRIDE CLAUSE.] "Override clause" means a 
 32.5   provision in a listing agreement or similar instrument allowing 
 32.6   the broker to receive compensation when, after the listing 
 32.7   agreement has expired, the property is sold to persons with whom 
 32.8   a broker or salesperson had negotiated or exhibited the property 
 32.9   prior to the expiration of the listing agreement. 
 32.10     Sec. 10.  Minnesota Statutes 2002, section 82.17, is 
 32.11  amended by adding a subdivision to read: 
 32.12     Subd. 21.  [PRIMARY BROKER.] "Primary broker" means the 
 32.13  broker on whose behalf salespersons are licensed to act pursuant 
 32.14  to section 82.20, subdivision 6.  In the case of a corporation 
 32.15  licensed as a broker, "primary broker" means each officer of the 
 32.16  corporation who is individually licensed to act as broker for 
 32.17  the corporation.  In the case of a partnership, "primary broker" 
 32.18  means each partner licensed to act as a broker for the 
 32.19  partnership. 
 32.20     Sec. 11.  Minnesota Statutes 2002, section 82.17, is 
 32.21  amended by adding a subdivision to read: 
 32.22     Subd. 22.  [PROTECTIVE LIST.] "Protective list" means the 
 32.23  written list of names and addresses of prospective purchasers 
 32.24  with whom a licensee has negotiated the sale or rental of the 
 32.25  property or to whom a licensee has exhibited the property before 
 32.26  the expiration of the listing agreement.  For the purposes of 
 32.27  this subdivision, "property" means the property that is the 
 32.28  subject of the listing agreement in question. 
 32.29     Sec. 12.  Minnesota Statutes 2002, section 82.17, is 
 32.30  amended by adding a subdivision to read: 
 32.31     Subd. 23.  [RENTAL SERVICE.] "Rental service" means a 
 32.32  person who gathers and catalogs information concerning 
 32.33  apartments or other units of real estate available for rent, and 
 32.34  who, for a fee, provides information intended to meet the 
 32.35  individual needs of specifically identified lessors or 
 32.36  prospective lessees.  "Rental service" does not apply to 
 33.1   newspapers or other periodicals with a general circulation or 
 33.2   individual listing contracts between an owner or lessor of 
 33.3   property and a licensee. 
 33.4      Sec. 13.  Minnesota Statutes 2002, section 82.17, is 
 33.5   amended by adding a subdivision to read: 
 33.6      Subd. 24.  [SPONSOR.] "Sponsor" means a person offering or 
 33.7   providing real estate education. 
 33.8      Sec. 14.  Minnesota Statutes 2002, section 82.19, 
 33.9   subdivision 3, is amended to read: 
 33.10     Subd. 3.  [COMMISSION-SPLITTING, REBATES, AND FEES.] No 
 33.11  real estate broker, salesperson, or closing agents shall offer, 
 33.12  pay, or give, and no person shall accept, any compensation or 
 33.13  other thing of value from any real estate broker, salesperson, 
 33.14  or closing agents by way of commission-splitting, rebate, 
 33.15  finder's fees, or otherwise, in connection with any real estate 
 33.16  or business opportunity transaction.  This subdivision does not 
 33.17  apply to transactions (1) between a licensed real estate broker 
 33.18  or salesperson and the person by whom the broker or salesperson 
 33.19  is engaged to purchase or sell real estate or business 
 33.20  opportunity parties to the transaction, (2) among persons 
 33.21  licensed as provided herein, (3) between a licensed real estate 
 33.22  broker or salesperson and persons from other jurisdictions 
 33.23  similarly licensed in that jurisdiction, (4) involving timeshare 
 33.24  or other recreational lands where the amount offered or paid 
 33.25  does not exceed $150, and payment is not conditioned upon any 
 33.26  sale but is made merely for providing the referral and the 
 33.27  person paying the fee is bound by any representations the person 
 33.28  receiving the fee makes, and (5) involving a person who receives 
 33.29  a referral fee from a person or an agent of a person licensed 
 33.30  under this section, provided that in any 12-month period, no 
 33.31  recipient may earn more than the value of one month's rent, that 
 33.32  the recipient is a resident of the property or has lived there 
 33.33  within 60 days of the payment of the fee, and that the person 
 33.34  paying the fee is bound by any representations made by the 
 33.35  recipient of the fee.  A licensed real estate broker or 
 33.36  salesperson may assign or direct that commissions or other 
 34.1   compensation earned in connection with any real estate or 
 34.2   business opportunity transaction be paid to a corporation, 
 34.3   limited liability company, or sole proprietorship of which the 
 34.4   licensed real estate broker or salesperson is the sole owner. 
 34.5      Sec. 15.  Minnesota Statutes 2002, section 82.19, 
 34.6   subdivision 5, is amended to read: 
 34.7      Subd. 5.  [DISCLOSURE REGARDING REPRESENTATION OF PARTIES.] 
 34.8   (a) No person licensed pursuant to this chapter or who otherwise 
 34.9   acts as a real estate broker or salesperson shall fail to 
 34.10  provide at the first substantive contact with a consumer in a 
 34.11  residential real property transaction an agency disclosure form 
 34.12  as set forth in section 82.197. 
 34.13     (b) The seller may, in the listing agreement, authorize the 
 34.14  seller's broker to disburse part of the broker's compensation to 
 34.15  other brokers, including the buyer's brokers solely representing 
 34.16  the buyer.  A broker representing a buyer shall make known to 
 34.17  the seller or the seller's agent the fact of the agency 
 34.18  relationship before any showing or negotiations are initiated. 
 34.19     Sec. 16.  Minnesota Statutes 2002, section 82.19, is 
 34.20  amended by adding a subdivision to read: 
 34.21     Subd. 10.  [PROHIBITION ON GUARANTEEING FUTURE 
 34.22  PROFITS.] Licensees shall not, with respect to the sale or lease 
 34.23  of real property, guarantee or affirmatively encourage another 
 34.24  person to guarantee future profits or earnings that may result 
 34.25  from the purchase or lease of the real property in question 
 34.26  unless the guarantee and the assumptions upon which it is based 
 34.27  are fully disclosed and contained in the contract, purchase 
 34.28  agreement, or other instrument of sale or lease. 
 34.29     Sec. 17.  Minnesota Statutes 2002, section 82.19, is 
 34.30  amended by adding a subdivision to read: 
 34.31     Subd. 11.  [PROHIBITION AGAINST DISCOURAGING USE OF 
 34.32  ATTORNEY.] Licensees shall not discourage prospective parties to 
 34.33  a real estate transaction from seeking the services of an 
 34.34  attorney. 
 34.35     Sec. 18.  Minnesota Statutes 2002, section 82.19, is 
 34.36  amended by adding a subdivision to read: 
 35.1      Subd. 12.  [FRAUDULENT, DECEPTIVE, AND DISHONEST 
 35.2   PRACTICES.] (a) [PROHIBITIONS.] For the purposes of section 
 35.3   82.32, subdivision 1, clause (b), the following acts and 
 35.4   practices constitute fraudulent, deceptive, or dishonest 
 35.5   practices: 
 35.6      (1) act on behalf of more than one party to a transaction 
 35.7   without the knowledge and consent of all parties; 
 35.8      (2) act in the dual capacity of licensee and undisclosed 
 35.9   principal in any transaction; 
 35.10     (3) receive funds while acting as principal which funds 
 35.11  would constitute trust funds if received by a licensee acting as 
 35.12  an agent, unless the funds are placed in a trust account.  Funds 
 35.13  need not be placed in a trust account if a written agreement 
 35.14  signed by all parties to the transaction specifies a different 
 35.15  disposition of the funds, in accordance with section 82.27, 
 35.16  subdivision 1; 
 35.17     (4) violate any state or federal law concerning 
 35.18  discrimination intended to protect the rights of purchasers or 
 35.19  renters of real estate; 
 35.20     (5) make a material misstatement in an application for a 
 35.21  license or in any information furnished to the commissioner; 
 35.22     (6) procure or attempt to procure a real estate license for 
 35.23  himself or herself or any person by fraud, misrepresentation, or 
 35.24  deceit; 
 35.25     (7) represent membership in any real estate-related 
 35.26  organization in which the licensee is not a member; 
 35.27     (8) advertise in any manner that is misleading or 
 35.28  inaccurate with respect to properties, terms, values, policies, 
 35.29  or services conducted by the licensee; 
 35.30     (9) make any material misrepresentation or permit or allow 
 35.31  another to make any material misrepresentation; 
 35.32     (10) make any false or misleading statements, or permit or 
 35.33  allow another to make any false or misleading statements, of a 
 35.34  character likely to influence, persuade, or induce the 
 35.35  consummation of a transaction contemplated by this chapter; 
 35.36     (11) fail within a reasonable time to account for or remit 
 36.1   any money coming into the licensee's possession which belongs to 
 36.2   another; 
 36.3      (12) commingle with his or her own money or property trust 
 36.4   funds or any other money or property of another held by the 
 36.5   licensee; 
 36.6      (13) demand from a seller a commission to compensation 
 36.7   which the licensee is not entitled, knowing that he or she is 
 36.8   not entitled to the commission compensation; 
 36.9      (14) pay or give money or goods of value to an unlicensed 
 36.10  person for any assistance or information relating to the 
 36.11  procurement by a licensee of a listing of a property or of a 
 36.12  prospective buyer of a property (this item does not apply to 
 36.13  money or goods paid or given to the parties to the transaction); 
 36.14     (15) fail to maintain a trust account at all times, as 
 36.15  provided by law; 
 36.16     (16) engage, with respect to the offer, sale, or rental of 
 36.17  real estate, in an anticompetitive activity; 
 36.18     (17) represent on advertisements, cards, signs, circulars, 
 36.19  letterheads, or in any other manner, that he or she is engaged 
 36.20  in the business of financial planning unless he or she provides 
 36.21  a disclosure document to the client.  The document must be 
 36.22  signed by the client and a copy must be left with the client.  
 36.23  The disclosure document must contain the following: 
 36.24     (i) the basis of fees, commissions, or other compensation 
 36.25  received by him or her in connection with rendering of financial 
 36.26  planning services or financial counseling or advice in the 
 36.27  following language: 
 36.28     "My compensation may be based on the following: 
 36.29     (a) ... commissions generated from the products I sell you; 
 36.30     (b) ... fees; or 
 36.31     (c) ... a combination of (a) and (b).  [Comments]"; 
 36.32     (ii) the name and address of any company or firm that 
 36.33  supplies the financial services or products offered or sold by 
 36.34  him or her in the following language: 
 36.35     "I am authorized to offer or sell products and/or services 
 36.36  issued by or through the following firm(s): 
 37.1      [List] 
 37.2      The products will be traded, distributed, or placed through 
 37.3   the clearing/trading firm(s) of: 
 37.4      [List]"; 
 37.5      (iii) the license(s) held by the person under this chapter 
 37.6   or chapter 60A or 80A in the following language: 
 37.7      "I am licensed in Minnesota as a(n): 
 37.8      (a) ... insurance agent; 
 37.9      (b) ... securities agent or broker/dealer; 
 37.10     (c) ... real estate broker or salesperson; 
 37.11     (d) ... investment adviser"; and 
 37.12     (iv) the specific identity of any financial products or 
 37.13  services, by category, for example mutual funds, stocks, or 
 37.14  limited partnerships, the person is authorized to offer or sell 
 37.15  in the following language: 
 37.16     "The license(s) entitles me to offer and sell the following 
 37.17  products and/or services: 
 37.18     (a) ... securities, specifically the following:  [List]; 
 37.19     (b) ... real property; 
 37.20     (c) ... insurance; and 
 37.21     (d) ... other:  [List]." 
 37.22     (b) [DETERMINING VIOLATION.] A licensee shall be deemed to 
 37.23  have violated this section if the licensee has been found to 
 37.24  have violated sections 325D.49 to 325D.66, by a final decision 
 37.25  or order of a court of competent jurisdiction. 
 37.26     (c) [COMMISSIONER'S AUTHORITY.] Nothing in this section 
 37.27  limits the authority of the commissioner to take actions against 
 37.28  a licensee for fraudulent, deceptive, or dishonest practices not 
 37.29  specifically described in this section. 
 37.30     Sec. 19.  [82.191] [COMPENSATION.] 
 37.31     Subdivision 1.  [LICENSEE TO RECEIVE ONLY FROM BROKER.] A 
 37.32  licensee shall not accept a commission compensation or other 
 37.33  valuable consideration for the performance of any acts requiring 
 37.34  a real estate license from any person except the real estate 
 37.35  broker to whom the licensee is licensed or to whom the licensee 
 37.36  was licensed at the time of the transaction. 
 38.1      Subd. 2.  [UNDISCLOSED COMPENSATION.] A licensee shall not 
 38.2   accept, give, or charge any undisclosed compensation or realize 
 38.3   any direct or indirect remuneration that inures to the benefit 
 38.4   of the licensee on an expenditure made for a principal. 
 38.5      Subd. 3.  [LIMITATION ON BROKER WHEN TRANSACTION NOT 
 38.6   COMPLETED.] When the owner fails or is unable to consummate a 
 38.7   real estate transaction, through no fault of the purchaser, the 
 38.8   listing broker may not claim any portion of any trust funds 
 38.9   deposited with the broker by the purchaser, absent a separate 
 38.10  agreement with the purchaser. 
 38.11     Sec. 20.  Minnesota Statutes 2002, section 82.195, is 
 38.12  amended to read: 
 38.13     82.195 [LISTING AGREEMENTS.] 
 38.14     Subdivision 1. (a)  [REQUIREMENT.] Licensees shall obtain a 
 38.15  signed listing agreement or other signed written authorization 
 38.16  from the owner of real property or from another person 
 38.17  authorized to offer the property for sale or lease before 
 38.18  advertising to the general public that the real property is 
 38.19  available for sale or lease.  
 38.20     For the purposes of this section "advertising" includes 
 38.21  placing a sign on the owner's property that indicates that the 
 38.22  property is being offered for sale or lease.  
 38.23     Subd. 2. (b)  [CONTENTS.] All listing agreements must be in 
 38.24  writing and must include:  
 38.25     (1) a definite expiration date; 
 38.26     (2) a description of the real property involved; 
 38.27     (3) the list price and any terms required by the seller; 
 38.28     (4) the amount of any compensation or commission or the 
 38.29  basis for computing the commission; 
 38.30     (5) a clear statement explaining the events or conditions 
 38.31  that will entitle a broker to a commission; 
 38.32     (6) information regarding an override clause, if 
 38.33  applicable, including a statement to the effect that the 
 38.34  override clause will not be effective unless the licensee 
 38.35  supplies the seller with a protective list within 72 hours after 
 38.36  the expiration of the listing agreement; 
 39.1      (7) the following notice in not less than ten point 
 39.2   boldface type immediately preceding any provision of the listing 
 39.3   agreement relating to compensation of the licensee:  
 39.4      "NOTICE:  THE COMPENSATION FOR THE SALE, LEASE, RENTAL, OR 
 39.5   MANAGEMENT OF REAL PROPERTY SHALL BE DETERMINED BETWEEN EACH 
 39.6   INDIVIDUAL BROKER AND THE BROKER'S CLIENT."; 
 39.7      (8) for residential property listings, the following "dual 
 39.8   agency" disclosure statement: 
 39.9      If a buyer represented by broker wishes to buy your the 
 39.10  seller's property, a dual agency will be created.  This means 
 39.11  that broker will represent both you the seller(s) and the 
 39.12  buyer(s), and owe the same duties to the buyer(s) that broker 
 39.13  owes to you the seller(s).  This conflict of interest will 
 39.14  prohibit broker from advocating exclusively on your the seller's 
 39.15  behalf.  Dual agency will limit the level of representation 
 39.16  broker can provide.  If a dual agency should arise, you the 
 39.17  seller(s) will need to agree that confidential information about 
 39.18  price, terms, and motivation will still be kept confidential 
 39.19  unless you the seller(s) instruct broker in writing to disclose 
 39.20  specific information about you the seller(s).  All other 
 39.21  information will be shared.  Broker cannot act as a dual agent 
 39.22  unless both you the seller(s) and the buyer(s) agree to it.  By 
 39.23  agreeing to a possible dual agency, you the seller(s) will be 
 39.24  giving up the right to exclusive representation in an in-house 
 39.25  transaction.  However, if you the seller(s) should decide not to 
 39.26  agree to a possible dual agency, and you the seller(s) want 
 39.27  broker to represent you the seller(s), you the seller(s) may 
 39.28  give up the opportunity to sell your the property to buyers 
 39.29  represented by broker. 
 39.30                  Seller's Instructions to Broker 
 39.31     
 39.32     Having read and understood this information about dual 
 39.33  agency, seller(s) now instructs broker as follows: 
 39.34  .......     Seller(s) will agree to a dual agency 
 39.35              representation and will consider offers made 
 39.36              by buyers represented by broker. 
 40.1      
 40.2   .......     Seller(s) will not agree to a dual agency
 40.3               representation and will not consider offers
 40.4               made by buyers represented by broker. 
 40.5      
 40.6      
 40.7   .........................      ......................... 
 40.8   Seller                         Broker Real Estate Company Name
 40.9      
 40.10     
 40.11  .........................      By:  .................... 
 40.12  Seller                              Salesperson 
 40.13     
 40.14  Date:  ..................; 
 40.15     (9) a notice requiring the seller to indicate in writing 
 40.16  whether it is acceptable to the seller to have the licensee 
 40.17  arrange for closing services or whether the seller wishes to 
 40.18  arrange for others to conduct the closing; and 
 40.19     (10) for residential listings, a notice stating that after 
 40.20  the expiration of the listing agreement, the seller will not be 
 40.21  obligated to pay the licensee a fee or commission if the seller 
 40.22  has executed another valid listing agreement pursuant to which 
 40.23  the seller is obligated to pay a fee or commission to another 
 40.24  licensee for the sale, lease, or exchange of the real property 
 40.25  in question.  This notice may be used in the listing agreement 
 40.26  for any other type of real estate.  
 40.27     Subd. 3. (c)  [PROHIBITED PROVISIONS.] Except as otherwise 
 40.28  provided in subdivision 4, paragraph (b) (d)(ii), licensees 
 40.29  shall not include in a listing agreement a holdover clause, 
 40.30  automatic extension, or any similar provision, or an override 
 40.31  clause the length of which is more than six months after the 
 40.32  expiration of the listing agreement. 
 40.33     Subd. 4. (d)  [OVERRIDE CLAUSES.] (a) (i) Licensees shall 
 40.34  not seek to enforce an override clause unless a protective list 
 40.35  has been furnished to the seller within 72 hours after the 
 40.36  expiration of the listing agreement.  
 41.1      (b) (ii) A listing agreement may contain an override clause 
 41.2   of up to two years in length when used in conjunction with the 
 41.3   purchase or sale of a business.  The length of the override 
 41.4   clause must be negotiable between the licensee and the seller of 
 41.5   the business.  The protective list provided in connection with 
 41.6   the override clause must include the written acknowledgment of 
 41.7   each party named on the protective list, that the business which 
 41.8   is the subject of the listing agreement was presented to that 
 41.9   party by the licensee. 
 41.10     Subd. 5. (e)  [PROTECTIVE LISTS.] A broker or salesperson 
 41.11  has the burden of demonstrating that each person on the 
 41.12  protective list has, during the period of the listing agreement, 
 41.13  either made an affirmative showing of interest in the property 
 41.14  by responding to an advertisement or by contacting the broker or 
 41.15  salesperson involved or has been physically shown the property 
 41.16  by the broker or salesperson.  For the purpose of this section, 
 41.17  the mere mailing or other distribution by a licensee of 
 41.18  literature setting forth information about the property in 
 41.19  question does not, of itself, constitute an affirmative showing 
 41.20  of interest in the property on the part of a subsequent 
 41.21  purchaser.  
 41.22     For listings of nonresidential real property which do not 
 41.23  contain the notice described in subdivision 2 paragraph (b), 
 41.24  clause (10), the protective list must contain the following 
 41.25  notice in boldface type: 
 41.26     "IF YOU RELIST WITH ANOTHER BROKER WITHIN THE OVERRIDE 
 41.27  PERIOD AND THEN SELL YOUR PROPERTY TO ANYONE WHOSE NAME APPEARS 
 41.28  ON THIS LIST, YOU COULD BE LIABLE FOR FULL COMMISSIONS TO BOTH 
 41.29  BROKERS.  IF THIS NOTICE IS NOT FULLY UNDERSTOOD, SEEK COMPETENT 
 41.30  ADVICE." 
 41.31     Sec. 21.  Minnesota Statutes 2002, section 82.196, is 
 41.32  amended to read: 
 41.33     82.196 [BUYER'S BROKER AGREEMENTS.] 
 41.34     Subdivision 1. (a)  [REQUIREMENTS.] Licensees shall obtain 
 41.35  a signed buyer's broker agreement from a buyer before performing 
 41.36  any acts as a buyer's representative and before a purchase 
 42.1   agreement is signed. 
 42.2      Subd. 2. (b)  [CONTENTS.] All buyer's broker agreements 
 42.3   must be in writing and must include:  
 42.4      (1) a definite expiration date; 
 42.5      (2) the amount of any compensation or commission, or the 
 42.6   basis for computing the commission; 
 42.7      (3) a clear statement explaining the services to be 
 42.8   provided to the buyer by the broker, and the events or 
 42.9   conditions that will entitle a broker to a commission or other 
 42.10  compensation; 
 42.11     (4) a clear statement explaining if the agreement may be 
 42.12  canceled and the terms under which the agreement may be 
 42.13  canceled; 
 42.14     (5) information regarding an override clause, if 
 42.15  applicable, including a statement to the effect that the 
 42.16  override clause will not be effective unless the licensee 
 42.17  supplies the buyer with a protective list within 72 hours after 
 42.18  the expiration of the buyer's broker agreement; 
 42.19     (6) the following notice in not less than ten point 
 42.20  boldface type immediately preceding any provision of the buyer's 
 42.21  broker agreement relating to compensation of the licensee: 
 42.22     "NOTICE:  THE COMPENSATION FOR THE PURCHASE, LEASE, RENTAL, 
 42.23  OR MANAGEMENT OF REAL PROPERTY SHALL BE DETERMINED BETWEEN EACH 
 42.24  INDIVIDUAL BROKER AND THE BROKER'S CLIENT."; 
 42.25     (7) the following "dual agency" disclosure statement: 
 42.26     If you the buyer(s) choose(s) to purchase a property listed 
 42.27  by broker, a dual agency will be created.  This means that 
 42.28  broker will represent both you the buyer(s) and the seller(s), 
 42.29  and owe the same duties to the seller(s) that broker owes to you 
 42.30  the buyer(s).  This conflict of interest will prohibit broker 
 42.31  from advocating exclusively on your the buyer's behalf.  Dual 
 42.32  agency will limit the level of representation broker can 
 42.33  provide.  If a dual agency should arise, you the buyer(s) will 
 42.34  need to agree that confidential information about price, terms, 
 42.35  and motivation will still be kept confidential unless you the 
 42.36  buyer(s) instruct broker in writing to disclose specific 
 43.1   information about you the buyer(s).  All other information will 
 43.2   be shared.  Broker cannot act as a dual agent unless both you 
 43.3   the buyer(s) and the seller(s) agree to it.  By agreeing to a 
 43.4   possible dual agency, you the buyer(s) will be giving up the 
 43.5   right to exclusive representation in an in-house transaction.  
 43.6   However, if you the buyer(s) should decide not to agree to a 
 43.7   possible dual agency, and you the buyer(s) want(s) broker to 
 43.8   represent you the buyer(s), you the buyer(s) may give up the 
 43.9   opportunity to purchase the properties listed by broker. 
 43.10                   Buyer's Instructions to Broker 
 43.11     
 43.12  .......      Buyer(s) will agree to a dual agency representation 
 43.13               and will consider properties listed by broker.
 43.14     
 43.15  .......      Buyer(s) will not agree to a dual agency 
 43.16               representation and will not consider 
 43.17               properties listed by broker. 
 43.18     
 43.19     
 43.20  .........................      ......................... 
 43.21  Buyer                          Broker Real Estate Company Name
 43.22     
 43.23  .........................      By:  .................... 
 43.24  Buyer                               Salesperson 
 43.25     
 43.26  Date:  ...................; and 
 43.27     (8) for buyer's broker agreements which involve residential 
 43.28  real property, a notice stating that after the expiration of the 
 43.29  buyer's broker agreement, the buyer will not be obligated to pay 
 43.30  the licensee a fee or commission if the buyer has executed 
 43.31  another valid buyer's broker agreement pursuant to which the 
 43.32  buyer is obligated to pay a fee or commission to another 
 43.33  licensee for the purchase, lease, or exchange of real property. 
 43.34     Subd. 3. (c)  [PROHIBITED PROVISIONS.] Licensees shall not 
 43.35  include in a buyer's broker agreement a holdover clause, 
 43.36  automatic extension, or any other similar provision, or an 
 44.1   override clause the length of which is more than six months 
 44.2   after the expiration of the buyer's broker agreement.  
 44.3      Subd. 4. (d)  [OVERRIDE CLAUSES.] Licensees shall not seek 
 44.4   to enforce an override clause unless a protective list has been 
 44.5   furnished to the buyer within 72 hours after the expiration of 
 44.6   the buyer's broker agreement.  
 44.7      Subd. 5. (e)  [PROTECTIVE LISTS.] A licensee has the burden 
 44.8   of demonstrating that each property on the protective list has 
 44.9   been shown to the buyer, or specifically brought to the 
 44.10  attention of the buyer, during the time the buyer's broker 
 44.11  agreement was in effect.  
 44.12     Subd. 6. (f)  [APPLICATION.] This section applies only to 
 44.13  residential real property transactions. 
 44.14     Sec. 22.  Minnesota Statutes 2002, section 82.197, is 
 44.15  amended to read: 
 44.16     82.197 [DISCLOSURE REQUIREMENTS.] 
 44.17     Subdivision 1.  [ADVERTISING.] Each licensee shall identify 
 44.18  himself or herself as either a broker or an agent salesperson in 
 44.19  any advertising for the purchase, sale, lease, exchange, 
 44.20  mortgaging, transfer, or other disposition of real property, 
 44.21  whether the advertising pertains to the licensee's own property 
 44.22  or the property of others. 
 44.23     Subd. 2.  [AGENCY DISCLOSURE.] A real estate broker or 
 44.24  salesperson shall provide to a consumer in the sale and purchase 
 44.25  of a residential real property transaction at the first 
 44.26  substantive contact with the consumer an agency disclosure form 
 44.27  in substantially the form set forth in subdivision 4.  The 
 44.28  agency disclosure form shall be intended to provide a 
 44.29  description of available options for agency and facilitator 
 44.30  relationships, and a description of the role of a licensee under 
 44.31  each option.  The agency disclosure form shall provide a 
 44.32  signature line for acknowledgment of receipt by the 
 44.33  consumer.  The disclosures required by this subdivision apply 
 44.34  only to residential real property transactions. 
 44.35     Subd. 2.  [CREATION OF DUAL AGENCY.] If circumstances 
 44.36  create a dual agency situation, the broker must make full 
 45.1   disclosure to all parties to the transaction as to the change in 
 45.2   relationship of the parties to the broker due to dual agency.  A 
 45.3   broker, having made full disclosure, must obtain the consent of 
 45.4   all parties to these circumstances in residential real property 
 45.5   transactions in the purchase agreement in the form set forth 
 45.6   below which shall be set off in a boxed format to draw attention 
 45.7   to it: 
 45.8      Broker represents both the seller(s) and the buyer(s) of 
 45.9   the property involved in this transaction, which creates a dual 
 45.10  agency.  This means that broker and its salespersons owe 
 45.11  fiduciary duties to both seller(s) and buyer(s).  Because the 
 45.12  parties may have conflicting interests, broker and its 
 45.13  salespersons are prohibited from advocating exclusively for 
 45.14  either party.  Broker cannot act as a dual agent in this 
 45.15  transaction without the consent of both seller(s) and buyer(s).  
 45.16  Seller(s) and buyer(s) acknowledge that: 
 45.17     (1) confidential information communicated to broker which 
 45.18  regards price, terms, or motivation to buy or sell will remain 
 45.19  confidential unless seller(s) or buyer(s) instructs broker in 
 45.20  writing to disclose this information.  Other information will be 
 45.21  shared; 
 45.22     (2) broker and its salespersons will not represent the 
 45.23  interests of either party to the detriment of the other; and 
 45.24     (3) within the limits of dual agency, broker and its 
 45.25  salespersons will work diligently to facilitate the mechanics of 
 45.26  the sale. 
 45.27     With the knowledge and understanding of the explanation 
 45.28  above, seller(s) and buyer(s) authorize and instruct broker and 
 45.29  its salespersons to act as dual agents in this transaction. 
 45.30     
 45.31     
 45.32  ...........................      ........................... 
 45.33  Seller                           Buyer 
 45.34     
 45.35  ...........................      ........................... 
 45.36  Seller                           Buyer 
 46.1      
 46.2   ...........................      ........................... 
 46.3   Date                             Date 
 46.4      Subd. 3.  [SCOPE AND EFFECT.] Disclosures made in 
 46.5   accordance with the requirements for disclosure of agency 
 46.6   relationships set forth in this chapter are sufficient to 
 46.7   satisfy common law disclosure requirements.  In addition, when a 
 46.8   principal in the transaction is a licensee or a relative or 
 46.9   business associate of the licensee, that fact must be disclosed 
 46.10  in writing in addition to any other required disclosures.  
 46.11     Subd. 4.  [AGENCY DISCLOSURE FORM.] The agency disclosure 
 46.12  form shall be in substantially the form set forth below: 
 46.13        <b> AGENCY RELATIONSHIPS IN REAL ESTATE TRANSACTIONS </b>
 46.14  <b>Minnesota law requires</b> that early in any relationship, real 
 46.15  estate brokers or salespersons discuss with consumers what type 
 46.16  of agency representation or relationship they desire.(1)  The 
 46.17  available options are listed below.  This is <b>not</b> a contract.  
 46.18  <b>This is an agency disclosure form only.  If you desire</b> 
 46.19  <b>representation, you must enter into a written contract according</b> 
 46.20  <b>to state law</b> (a listing contract or a buyer representation 
 46.21  contract).  Until such time as you choose to enter into a 
 46.22  written contract for representation, you will be treated as a 
 46.23  customer and will not receive any representation from the broker 
 46.24  or salesperson.  The broker or salesperson will be acting as a 
 46.25  Facilitator (see paragraph V below), unless the broker or 
 46.26  salesperson is representing another party as described below. 
 46.27     ACKNOWLEDGMENT:  I/We acknowledge that I/We have been 
 46.28  presented with the below-described options.  I/We understand 
 46.29  that until I/We have signed a representation contract, I/We are 
 46.30  not represented by the broker/salesperson.  I/We understand that 
 46.31  written consent is required for a dual agency relationship.  
 46.32  THIS IS A DISCLOSURE ONLY, NOT A CONTRACT FOR REPRESENTATION. 
 46.33  ...............     .......... 
 46.34  Signature           Date
 46.35  ...............     .......... 
 47.1   Signature           Date
 47.2   I.
 47.3      <b>Seller's Broker:</b>  A broker who lists a property, or a 
 47.4      salesperson who is licensed to the listing broker, 
 47.5      represents the Seller and acts on behalf of the Seller.  A 
 47.6      Seller's broker owes to the Seller the fiduciary duties 
 47.7      described below.(2)  The broker must also disclose to the 
 47.8      Buyer material facts as defined in Minnesota Statutes, 
 47.9      section 82.197, subdivision 6, of which the broker is aware 
 47.10     that could adversely and significantly affect the Buyer's 
 47.11     use or enjoyment of the property.  If a broker or 
 47.12     salesperson working with a Buyer as a customer is 
 47.13     representing the Seller, he or she must act in the Seller's 
 47.14     best interest and must tell the Seller any information 
 47.15     disclosed to him or her, except confidential information 
 47.16     acquired in a facilitator relationship (see paragraph V 
 47.17     below).  In that case, the Buyer will not be represented 
 47.18     and will not receive advice and counsel from the broker or 
 47.19     salesperson. 
 47.20  II. 
 47.21     <b>Subagent:</b>  A broker or salesperson who is working with a 
 47.22     Buyer but represents the Seller.  In this case, the Buyer 
 47.23     is the broker's customer and is not represented by that 
 47.24     broker.  If a broker or salesperson working with a Buyer as 
 47.25     a customer is representing the Seller, he or she must act 
 47.26     in the Seller's best interest and must tell the Seller any 
 47.27     information that is disclosed to him or her.  In that case, 
 47.28     the Buyer will not be represented and will not receive 
 47.29     advice and counsel from the broker or salesperson. 
 47.30  III.
 47.31     <b>Buyer's Broker:</b>  A Buyer may enter into an agreement for 
 47.32     the broker or salesperson to represent and act on behalf of 
 47.33     the Buyer.  The broker may represent the Buyer only, and 
 47.34     not the Seller, even if he or she is being paid in whole or 
 47.35     in part by the Seller.  A Buyer's broker owes to the Buyer 
 47.36     the fiduciary duties described below.(2)  The broker must 
 48.1      disclose to the Buyer material facts as defined in 
 48.2      Minnesota Statutes, section 82.197, subdivision 6, of which 
 48.3      the broker is aware that could adversely and significantly 
 48.4      affect the Buyer's use or enjoyment of the property.  If a 
 48.5      broker or salesperson working with a Seller as a customer 
 48.6      is representing the Buyer, he or she must act in the 
 48.7      Buyer's best interest and must tell the Buyer any 
 48.8      information disclosed to him or her, except confidential 
 48.9      information acquired in a facilitator relationship (see 
 48.10     paragraph V below).  In that case, the Seller will not be 
 48.11     represented and will not receive advice and counsel from 
 48.12     the broker or salesperson. 
 48.13  IV.
 48.14     <b>Dual Agency-Broker Representing both Seller and Buyer:</b>  
 48.15     Dual agency occurs when one broker or salesperson 
 48.16     represents both parties to a transaction, or when two 
 48.17     salespersons licensed to the same broker each represent a 
 48.18     party to the transaction.  Dual agency requires the 
 48.19     informed consent of all parties, and means that the broker 
 48.20     and salesperson owe the same duties to the Seller and the 
 48.21     Buyer.  This role limits the level of representation the 
 48.22     broker and salespersons can provide, and prohibits them 
 48.23     from acting exclusively for either party.  In a dual 
 48.24     agency, confidential information about price, terms, and 
 48.25     motivation for pursuing a transaction will be kept 
 48.26     confidential unless one party instructs the broker or 
 48.27     salesperson in writing to disclose specific information 
 48.28     about him or her.  Other information will be shared.  Dual 
 48.29     agents may not advocate for one party to the detriment of 
 48.30     the other.(3) 
 48.31     Within the limitations described above, dual agents owe to 
 48.32     both Seller and Buyer the fiduciary duties described 
 48.33     below.(2)  Dual agents must disclose to Buyers material 
 48.34     facts as defined in Minnesota Statutes, section 82.197, 
 48.35     subdivision 6, of which the broker is aware that could 
 48.36     adversely and significantly affect the Buyer's use or 
 49.1      enjoyment of the property. 
 49.2   V.
 49.3      <b>Facilitator:</b>  A broker or salesperson who performs services 
 49.4      for a Buyer, a Seller, or both but does not represent 
 49.5      either in a fiduciary capacity as a Buyer's Broker, 
 49.6      Seller's Broker, or Dual Agent.  <b>THE FACILITATOR BROKER OR</b> 
 49.7      <b>SALESPERSON DOES NOT OWE ANY PARTY ANY OF THE FIDUCIARY</b> 
 49.8      <b>DUTIES LISTED BELOW, EXCEPT CONFIDENTIALITY, UNLESS THOSE</b> 
 49.9      <b>DUTIES ARE INCLUDED IN A WRITTEN FACILITATOR SERVICES</b> 
 49.10     <b>AGREEMENT.</b>  The facilitator broker or salesperson owes the 
 49.11     duty of confidentiality to the party but owes no other duty 
 49.12     to the party except those duties required by law or 
 49.13     contained in a written facilitator services agreement, if 
 49.14     any.  In the event a facilitator broker or salesperson, 
 49.15     working with a Buyer, shows a property listed by the 
 49.16     facilitator broker or salesperson, then the facilitator 
 49.17     broker or salesperson must act as a Seller's Broker (see 
 49.18     paragraph I above).  In the event a facilitator broker or 
 49.19     salesperson, working with a Seller, accepts a showing of 
 49.20     the property by a Buyer being represented by the 
 49.21     facilitator broker or salesperson, then the facilitator 
 49.22     broker or salesperson must act as a Buyer's Broker (see 
 49.23     paragraph III above). 
 49.24     
 49.25     
 49.26     
 49.27  ****************************************************************
 49.28     (1) This disclosure is required by law in any transaction 
 49.29  involving property occupied or intended to be occupied by one to 
 49.30  four families as their residence. 
 49.31     (2) The fiduciary duties mentioned above are listed below 
 49.32  and have the following meanings: 
 49.33     Loyalty-broker/salesperson will act only in client(s)' best 
 49.34  interest. 
 49.35     Obedience-broker/salesperson will carry out all client(s)' 
 49.36  lawful instructions. 
 50.1      Disclosure-broker/salesperson will disclose to client(s) 
 50.2   all material facts of which broker/salesperson has knowledge 
 50.3   which might reasonably affect the client's rights and interests. 
 50.4      Confidentiality-broker/salesperson will keep client(s)' 
 50.5   confidences unless required by law to disclose specific 
 50.6   information (such as disclosure of material facts to Buyers). 
 50.7      Reasonable Care-broker/salesperson will use reasonable care 
 50.8   in performing duties as an agent. 
 50.9      Accounting-broker/salesperson will account to client(s) for 
 50.10  all client(s)' money and property received as agent. 
 50.11     (3) If Seller(s) decides not to agree to a dual agency 
 50.12  relationship, Seller(s) may give up the opportunity to sell the 
 50.13  property to Buyers represented by the broker/salesperson.  If 
 50.14  Buyer(s) decides not to agree to a dual agency relationship, 
 50.15  Buyer(s) may give up the opportunity to purchase properties 
 50.16  listed by the broker. 
 50.17     Subd. 5.  [APPLICATION CREATION OF DUAL AGENCY.] The 
 50.18  disclosures required by subdivision 4 apply only to residential 
 50.19  real property transactions. If circumstances create a dual 
 50.20  agency situation, the broker must make full disclosure to all 
 50.21  parties to the transaction as to the change in relationship of 
 50.22  the parties to the broker due to dual agency.  A broker, having 
 50.23  made full disclosure, must obtain the consent of all parties to 
 50.24  these circumstances in residential real property transactions in 
 50.25  the purchase agreement in the form set forth below which shall 
 50.26  be set off in a boxed format to draw attention to it: 
 50.27     Broker represents both the seller(s) and the buyer(s) of 
 50.28  the property involved in this transaction, which creates a dual 
 50.29  agency.  This means that broker and it salespersons owe 
 50.30  fiduciary duties to both seller(s) and buyer(s).  Because the 
 50.31  parties may have conflicting interests, broker and its 
 50.32  salespersons are prohibited from advocating exclusively for 
 50.33  either party.  Broker cannot act as a dual agent in this 
 50.34  transaction without the consent of both seller(s) and buyer(s). 
 50.35     Seller(s) and buyer(s) acknowledge that: 
 50.36     (1) confidential information communicated to broker which 
 51.1   regards price, terms, or motivation to buy or sell will remain 
 51.2   confidential unless seller(s) or buyer(s) instructs broker in 
 51.3   writing to disclose this information.  Other information will be 
 51.4   shared; 
 51.5      (2) broker and its salespersons will not represent the 
 51.6   interests of either party to the detriment of the other; and 
 51.7      (3) within the limits of dual agency, broker and its 
 51.8   salespersons will work diligently to facilitate the mechanics of 
 51.9   the sale. 
 51.10     With the knowledge and understanding of the explanation 
 51.11  above, seller(s) and buyer(s) authorize and instruct broker and 
 51.12  its salespersons to act as dual agents in this transaction. 
 51.13   ...............     ...............
 51.14   Seller              Buyer
 51.15   ...............     ...............
 51.16   Seller              Buyer
 51.17   ...............     ...............
 51.18   Date                Date
 51.19     Subd. 6.  [AGENT OF BROKER DISCLOSURE.] A salesperson shall 
 51.20  only conduct business under the licensed name of and on behalf 
 51.21  of the broker to whom the salesperson is licensed.  An 
 51.22  individual broker shall only conduct business under the broker's 
 51.23  licensed name.  A broker licensed to a corporation or 
 51.24  partnership shall only conduct business under the licensed 
 51.25  corporate or partnership name.  A licensee shall affirmatively 
 51.26  disclose, before the negotiation or consummation of any 
 51.27  transaction, the licensed name of the broker under whom the 
 51.28  licensee is authorized to conduct business in accordance with 
 51.29  this section. 
 51.30     Subd. 7.  [FINANCIAL INTERESTS DISCLOSURE; LICENSEE.] (a) 
 51.31  Prior to the negotiation or consummation of any transaction, a 
 51.32  licensee shall affirmatively disclose to the owner of real 
 51.33  property that the licensee is a real estate broker or agent 
 51.34  salesperson, and in what capacity the licensee is acting, if the 
 51.35  licensee directly, or indirectly through a third party, 
 51.36  purchases for himself or herself or acquires, or intends to 
 52.1   acquire, any interest in, or any option to purchase, the owner's 
 52.2   property. 
 52.3      (b) When a principal in the transaction is a licensee or a 
 52.4   relative or business associate of the licensee, that fact must 
 52.5   be disclosed in writing. 
 52.6      Subd. 6. 8.  [MATERIAL FACTS.] (a) Licensees shall disclose 
 52.7   to any prospective purchaser all material facts of which the 
 52.8   licensees are aware, which could adversely and significantly 
 52.9   affect an ordinary purchaser's use or enjoyment of rights and 
 52.10  interests in the property, or any intended use of the property 
 52.11  of which the licensees are aware. 
 52.12     (b) It is not a material fact relating to real property 
 52.13  offered for sale and no regulatory action shall be brought 
 52.14  against a licensee for failure to disclose in any real estate 
 52.15  transaction the fact or suspicion that the property: 
 52.16     (1) is or was occupied by an owner or occupant who is or 
 52.17  was suspected to be infected with human immunodeficiency virus 
 52.18  or diagnosed with acquired immunodeficiency syndrome; 
 52.19     (2) was the site of a suicide, accidental death, natural 
 52.20  death, or perceived paranormal activity; or 
 52.21     (3) is located in a neighborhood containing any adult 
 52.22  family home, community-based residential facility, or nursing 
 52.23  home.  
 52.24     (c) A licensee or employee of the licensee has no duty to 
 52.25  disclose information regarding an offender who is required to 
 52.26  register under section 243.166, or about whom notification is 
 52.27  made under that section, if the broker or salesperson, in a 
 52.28  timely manner, provides a written notice that information about 
 52.29  the predatory offender registry and persons registered with the 
 52.30  registry may be obtained by contacting local law enforcement 
 52.31  where the property is located or the Department of Corrections. 
 52.32     (d) A licensee is not required to disclose, except as 
 52.33  otherwise provided in paragraph (e), information relating to the 
 52.34  physical condition of the property or any other information 
 52.35  relating to the real estate transaction, if a written report 
 52.36  that discloses the information has been prepared by a qualified 
 53.1   third party and provided to the person.  For the purposes of 
 53.2   this paragraph, "qualified third party" means a federal, state, 
 53.3   or local governmental agency, or any person whom the broker, 
 53.4   salesperson, or a party to the real estate transaction 
 53.5   reasonably believes has the expertise necessary to meet the 
 53.6   industry standards of practice for the type of inspection or 
 53.7   investigation that has been conducted by the third party in 
 53.8   order to prepare the written report and who is acceptable to the 
 53.9   person to whom the disclosure is being made. 
 53.10     (e) A licensee shall disclose to the parties to a real 
 53.11  estate transaction any facts known by the broker or salesperson 
 53.12  that contradict any information included in a written report, if 
 53.13  a copy of the report is provided to the licensee, described in 
 53.14  paragraph (d). 
 53.15     (f) The limitation on disclosures set forth in paragraphs 
 53.16  (b) and (c) shall modify any common law duties with respect to 
 53.17  disclosure of material facts. 
 53.18     Subd. 9.  [NONPERFORMANCE OF ANY PARTY.] If a licensee is 
 53.19  put on notice by any party to a real estate transaction that the 
 53.20  party will not perform in accordance with the terms of a 
 53.21  purchase agreement or other similar written agreement to convey 
 53.22  real estate, the licensee shall immediately disclose the fact of 
 53.23  that party's intent not to perform to the other party or parties 
 53.24  to the transaction.  Whenever reasonably possible, the licensee 
 53.25  shall inform the party who will not perform of the licensee's 
 53.26  obligation to disclose this fact to the other party or parties 
 53.27  to the transaction prior to making the disclosure.  The 
 53.28  obligation required by this section shall not apply to notice of 
 53.29  a party's inability to keep or fulfill any contingency to which 
 53.30  the real estate transaction has been made subject. 
 53.31     Sec. 23.  Minnesota Statutes 2002, section 82.20, is 
 53.32  amended by adding a subdivision to read: 
 53.33     Subd. 2a.  [ADDITIONAL BROKER'S LICENSE.] An individual who 
 53.34  holds a broker's license in his or her own name or for or on 
 53.35  behalf of a corporation or partnership must be issued an 
 53.36  additional broker's license only upon demonstrating that the 
 54.1   additional license is necessary in order to serve a legitimate 
 54.2   business purpose; that the broker will be capable of supervising 
 54.3   all salespersons over whom he or she will have supervisory 
 54.4   responsibility or, in the alternative, that the broker will have 
 54.5   no supervisory responsibilities under the additional license; 
 54.6   and that the broker has a substantial ownership interest in each 
 54.7   corporation or partnership for or on whose behalf he or she 
 54.8   holds or will hold a broker's license. 
 54.9      The requirement of a substantial ownership interest does 
 54.10  not apply where the broker seeking the additional license or 
 54.11  licenses is an officer of a corporation for or on whose behalf 
 54.12  the broker already holds a license and the broker is applying 
 54.13  for the additional license or licenses for or on behalf of an 
 54.14  affiliated corporation or corporations of which he or she is 
 54.15  also an officer.  For the purpose of this section, "affiliated 
 54.16  corporation" means a corporation which is directly or indirectly 
 54.17  controlled by the same persons as the corporation for or on 
 54.18  whose behalf the broker is already licensed to act. 
 54.19     For the purposes of this section, a legitimate business 
 54.20  purpose includes engaging in a different and specialized area of 
 54.21  real estate or maintaining an existing business name. 
 54.22     Sec. 24.  Minnesota Statutes 2002, section 82.20, 
 54.23  subdivision 3, is amended to read: 
 54.24     Subd. 3.  [APPLICATION FOR LICENSE; CONTENTS.] (a) Every 
 54.25  applicant for a license as a real estate broker, real estate 
 54.26  salesperson, or closing agent shall make an application in 
 54.27  writing upon forms prepared and furnished by the commissioner. 
 54.28  Each application shall be signed and sworn to by the applicant 
 54.29  and shall be accompanied by the license fee required by this 
 54.30  chapter.  
 54.31     (b) Each application for a real estate broker license, real 
 54.32  estate salesperson license, or real estate closing agent license 
 54.33  shall contain such information as required by the commissioner 
 54.34  consistent with the administration of the provisions and 
 54.35  purposes of this chapter.  
 54.36     (c) Each application for a real estate salesperson license 
 55.1   shall give the applicant's name, age, residence address, and the 
 55.2   name and place of business of the real estate broker on whose 
 55.3   behalf the salesperson is to be acting. 
 55.4      (d) Each application for a real estate closing agent 
 55.5   license shall give the applicant's name, age, residence address, 
 55.6   and the name and place of business of the closing agent. 
 55.7      (e) The commissioner may require such further information 
 55.8   as the commissioner deems appropriate to administer the 
 55.9   provisions and further the purposes of this chapter. 
 55.10     (f) Applicants for a real estate salesperson license shall 
 55.11  submit to the commissioner, along with the application for 
 55.12  licensure, a copy of the course completion certificate for 
 55.13  courses I, II, and III. 
 55.14     Sec. 25.  Minnesota Statutes 2002, section 82.20, is 
 55.15  amended by adding a subdivision to read: 
 55.16     Subd. 3a.  [APPLICATION FOR BROKER'S LICENSE.] After 
 55.17  successful completion of the real estate broker's examination, 
 55.18  an individual shall have one year from the date of the 
 55.19  examination to apply for a broker's license, unless the 
 55.20  individual is a salesperson who remains continuously active in 
 55.21  the real estate field as a licensee.  Failure to apply for the 
 55.22  broker's license or to remain continuously active in the real 
 55.23  estate field will necessitate a reexamination. 
 55.24     Sec. 26.  Minnesota Statutes 2002, section 82.20, 
 55.25  subdivision 4, is amended to read: 
 55.26     Subd. 4.  [CORPORATE AND PARTNERSHIP LICENSES.] (a) A 
 55.27  corporation applying for a license shall have at least one 
 55.28  officer individually licensed to act as broker for the 
 55.29  corporation.  The corporation broker's license shall extend no 
 55.30  authority to act as broker to any person other than the 
 55.31  corporate entity.  Each officer who intends to act as a broker 
 55.32  shall obtain a license. 
 55.33     (b) A partnership applying for a license shall have at 
 55.34  least one partner individually licensed to act as broker for the 
 55.35  partnership.  Each partner who intends to act as a broker shall 
 55.36  obtain a license. 
 56.1      (c) Applications for a license made by a corporation shall 
 56.2   be verified by the president and one other officer.  
 56.3   Applications made by a partnership shall be verified by at least 
 56.4   two partners. 
 56.5      (d) Any partner or officer who ceases to act as broker for 
 56.6   a partnership or corporation shall notify the commissioner upon 
 56.7   said termination.  The individual licenses of all salespersons 
 56.8   acting on behalf of a corporation or partnership, are 
 56.9   automatically ineffective upon the revocation or suspension of 
 56.10  the license of the partnership or corporation.  The commissioner 
 56.11  may suspend or revoke the license of an officer or partner 
 56.12  without suspending or revoking the license of the corporation or 
 56.13  partnership. 
 56.14     (e) The application of all officers of a corporation or 
 56.15  partners in a partnership who intend to act as a broker on 
 56.16  behalf of a corporation or partnership shall accompany the 
 56.17  initial license application of the corporation or partnership.  
 56.18  Officers or partners intending to act as brokers subsequent to 
 56.19  the licensing of the corporation or partnership shall procure an 
 56.20  individual real estate broker's license prior to acting in the 
 56.21  capacity of a broker.  No corporate officer who maintains a 
 56.22  salesperson's license may exercise any authority over any trust 
 56.23  account administered by the broker nor may they be vested with 
 56.24  any supervisory authority over the broker. 
 56.25     (f) The corporation or partnership applicant shall make 
 56.26  available upon request, such records and data required by the 
 56.27  commissioner for enforcement of this chapter. 
 56.28     (g) The commissioner may require further information, as 
 56.29  the commissioner deems appropriate, to administer the provisions 
 56.30  and further the purposes of this chapter. 
 56.31     Sec. 27.  Minnesota Statutes 2002, section 82.20, is 
 56.32  amended by adding a subdivision to read: 
 56.33     Subd. 7a.  [AUTOMATIC TRANSFER OF SALESPERSON'S LICENSE.] A 
 56.34  salesperson may utilize the automatic license transfer 
 56.35  provisions of subdivision 9, clause (b), if the salesperson 
 56.36  commences association with the broker to whom the salesperson is 
 57.1   transferring, as evidenced by the dates of the signatures of 
 57.2   both brokers on the form prescribed by the commissioner, within 
 57.3   five days after terminating the salesperson's association with 
 57.4   the broker from whom the salesperson is transferring, provided 
 57.5   the salesperson's educational requirements are not past due. 
 57.6      A salesperson may not utilize the automatic license 
 57.7   transfer provisions of subdivision 9, clause (b), if the sales 
 57.8   person has failed to notify the commissioner within ten days of 
 57.9   any change of information contained in the salesperson's license 
 57.10  application on file with the commissioner or of a civil 
 57.11  judgment, disciplinary action, or criminal offense, which notice 
 57.12  is required pursuant to section 82.20, subdivision 11. 
 57.13     Sec. 28.  Minnesota Statutes 2002, section 82.20, 
 57.14  subdivision 8, is amended to read: 
 57.15     Subd. 8.  [TIMELY RENEWALS.] (a) Persons whose applications 
 57.16  have been properly and timely filed who have not received notice 
 57.17  of denial of renewal are deemed to have been approved for 
 57.18  renewal and may continue to transact business either as a real 
 57.19  estate broker, salesperson, or closing agent whether or not the 
 57.20  renewed license has been received on or before July 1 of the 
 57.21  renewal year.  Application for renewal of a license shall be 
 57.22  deemed to have been timely filed if received by the commissioner 
 57.23  by, or mailed with proper postage and postmarked by, June 15 of 
 57.24  the renewal year.  Applications for renewal shall be deemed 
 57.25  properly filed if made upon forms duly executed and sworn to, 
 57.26  accompanied by fees prescribed by this chapter and contain any 
 57.27  information which the commissioner may require.  
 57.28     (b) Persons who have failed to make a timely application 
 57.29  for renewal of a license and who have not received the renewal 
 57.30  license as of July 1 of the renewal year, shall be unlicensed 
 57.31  until such time as the license has been issued by the 
 57.32  commissioner and is received. 
 57.33     Sec. 29.  Minnesota Statutes 2002, section 82.20, is 
 57.34  amended by adding a subdivision to read: 
 57.35     Subd. 8a.  [PROCEDURE.] An application for automatic 
 57.36  transfer shall be made only on the form prescribed by the 
 58.1   commissioner.  The transfer is ineffective if the form is not 
 58.2   completed in its entirety.  
 58.3      The form shall be accompanied by a $10 transfer fee, and 
 58.4   the license renewal fee, if applicable.  Cash will not be 
 58.5   accepted. 
 58.6      The signature of the broker from whom the salesperson is 
 58.7   transferring must predate the signature of the broker to whom 
 58.8   the salesperson is transferring.  The salesperson is unlicensed 
 58.9   for the period of time between the times and dates of both 
 58.10  signatures.  The broker from whom the salesperson is 
 58.11  transferring shall sign and date the transfer application upon 
 58.12  the request of the salesperson and shall destroy the 
 58.13  salesperson's license immediately. 
 58.14     Sec. 30.  Minnesota Statutes 2002, section 82.20, is 
 58.15  amended by adding a subdivision to read: 
 58.16     Subd. 9a.  [EFFECTIVE DATE.] (a) The transfer is effective 
 58.17  when the broker to whom the salesperson is transferring signs 
 58.18  and dates the transfer application form, provided the 
 58.19  commissioner receives the form and fee within 72 hours after the 
 58.20  date and time of the new broker's signature, either by certified 
 58.21  mail or personal delivery to the commissioner's office.  The 
 58.22  commissioner may accept an application for license transfer made 
 58.23  by an electronic agent or an electronic record with an 
 58.24  electronic signature if the commissioner has the capability of 
 58.25  accepting the application electronically.  In the event of a 
 58.26  delay in mail delivery, an application postmarked within 24 
 58.27  hours of the date of the signature of the new broker shall be 
 58.28  deemed timely received.  The properly executed automatic 
 58.29  transfer form serves as a temporary real estate license for no 
 58.30  more than 45 days. 
 58.31     (b) The transfer is ineffective if the fee is paid by means 
 58.32  of a check, draft, or other negotiable or nonnegotiable 
 58.33  instrument or order of withdrawal drawn on an account with 
 58.34  insufficient funds. 
 58.35     (c) The salesperson shall retain the certified mail return 
 58.36  receipt, if the transfer application is delivered to the 
 59.1   commissioner by mail, retain a photocopy of the executed 
 59.2   transfer application, and provide a photocopy of the executed 
 59.3   transfer application to the broker from whom the salesperson is 
 59.4   transferring. 
 59.5      (d) The real estate salesperson automatic transfer must be 
 59.6   in the form prescribed by the commissioner. 
 59.7      Sec. 31.  Minnesota Statutes 2002, section 82.20, is 
 59.8   amended by adding a subdivision to read: 
 59.9      Subd. 11a.  [MANDATORY.] Licensees shall notify the 
 59.10  commissioner of the facts in subdivisions 11b to 11d. 
 59.11     Sec. 32.  Minnesota Statutes 2002, section 82.20, is 
 59.12  amended by adding a subdivision to read: 
 59.13     Subd. 11b.  [CIVIL JUDGMENT.] Licensees must notify the 
 59.14  commissioner in writing within ten days of a final adverse 
 59.15  decision or order of a court, whether or not the decision or 
 59.16  order is appealed, regarding any proceeding in which the 
 59.17  licensee was named as a defendant, and which alleged fraud, 
 59.18  misrepresentation, or the conversion of funds, if the final 
 59.19  adverse decision relates to the allegations of fraud, 
 59.20  misrepresentation, or the conversion of funds. 
 59.21     Sec. 33.  Minnesota Statutes 2002, section 82.20, is 
 59.22  amended by adding a subdivision to read: 
 59.23     Subd. 11c.  [DISCIPLINARY ACTION.] The licensee must notify 
 59.24  the commissioner in writing within ten days of the suspension or 
 59.25  revocation of the licensee's real estate or other occupational 
 59.26  license issued by this state or another jurisdiction. 
 59.27     Sec. 34.  Minnesota Statutes 2002, section 82.20, is 
 59.28  amended by adding a subdivision to read:  
 59.29     Subd. 11d.  [CRIMINAL OFFENSE.] The licensee must notify 
 59.30  the commissioner in writing within ten days if the licensee is 
 59.31  charged with, adjudged guilty of, or enters a plea of guilty or 
 59.32  nolo contendere to a charge of any felony, or of any gross 
 59.33  misdemeanor alleging fraud, misrepresentation, conversion of 
 59.34  funds, or a similar violation of any real estate licensing law. 
 59.35     Sec. 35.  Minnesota Statutes 2002, section 82.20, is 
 59.36  amended by adding a subdivision to read:  
 60.1      Subd. 12a.  [TEMPORARY BROKER'S PERMIT.] In the event of 
 60.2   death or incapacity of a broker, the commissioner may issue a 
 60.3   45-day temporary permit to an individual who has had a minimum 
 60.4   of two years actual experience as a licensed real estate 
 60.5   salesperson and who is otherwise reasonably qualified to act as 
 60.6   a broker.  Upon application prior to its expiration, the 45-day 
 60.7   temporary permit shall be renewed once by the commissioner if 
 60.8   the applicant demonstrates that he or she has made a good faith 
 60.9   effort to obtain a broker's license within the preceding 45 days 
 60.10  and an extension of time will not harm the public interest. 
 60.11     Only those salespersons licensed to the deceased or 
 60.12  incapacitated broker at the time of death or incapacity may 
 60.13  conduct business for or on behalf of the person to whom the 
 60.14  temporary broker's license was issued. 
 60.15     Sec. 36.  Minnesota Statutes 2002, section 82.20, is 
 60.16  amended by adding a subdivision to read: 
 60.17     Subd. 14a.  [WITHDRAWAL OF LICENSE OR APPLICATION.] A 
 60.18  licensee or license applicant may at any time file with the 
 60.19  commissioner a request to withdraw from the status of licensee 
 60.20  or to withdraw a pending license application.  Withdrawal from 
 60.21  the status of licensee or withdrawal of the license application 
 60.22  becomes effective 30 days after receipt of a request to withdraw 
 60.23  or within a shorter period the commissioner determines unless a 
 60.24  revocation, suspension, or denial proceeding is pending when the 
 60.25  request to withdraw is filed or a proceeding to revoke, suspend, 
 60.26  deny, or to impose conditions upon the withdrawal is instituted 
 60.27  within 30 days after the request to withdraw is filed.  If a 
 60.28  proceeding is pending or instituted, withdrawal becomes 
 60.29  effective at the time and upon the conditions the commissioner 
 60.30  determines by order.  If no proceeding is pending or instituted 
 60.31  and withdrawal automatically becomes effective, the commissioner 
 60.32  may institute a revocation or suspension proceeding within one 
 60.33  year after withdrawal became effective and enter a revocation or 
 60.34  suspension order as of the last date on which the license was in 
 60.35  effect. 
 60.36     Sec. 37.  [82.201] [COMPUTATION OF TIME.] 
 61.1      Subdivision 1.  [DAYS.] Where performing or doing any act, 
 61.2   duty, matter, payment, or thing is ordered or directed, and the 
 61.3   period of time or duration for performing or doing it is 
 61.4   prescribed and fixed by law, rule, or order, the time, except as 
 61.5   otherwise provided in subdivision 2, is computed so as to 
 61.6   exclude the first and include the last day of any such 
 61.7   prescribed or fixed period or duration of time.  When the last 
 61.8   day of the period falls on Sunday or on any day made a legal 
 61.9   holiday, by the laws of this state or of the United States, the 
 61.10  day is omitted from the computation. 
 61.11     Subd. 2.  [MONTHS.] When the lapse of a number of months 
 61.12  before or after a certain day is required by law, rule, or 
 61.13  order, the number of months is computed by counting the months 
 61.14  from the day, excluding the calendar month in which the day 
 61.15  occurs, and including the day of the month in the last month so 
 61.16  counted having the same numerical order as the day of the month 
 61.17  from which the computation is made, unless there be not so many 
 61.18  days in the last month so counted, in which case the period 
 61.19  computed shall expire with the last day of the month so counted. 
 61.20     Sec. 38.  Minnesota Statutes 2002, section 82.21, is 
 61.21  amended by adding a subdivision to read: 
 61.22     Subd. 5.  [CASH NOT ACCEPTED.] All fees must be paid by 
 61.23  check, draft, credit card, or other negotiable or nonnegotiable 
 61.24  instrument or order of withdrawal that is drawn against funds 
 61.25  held by a financial institution.  Cash will not be accepted. 
 61.26     Sec. 39.  Minnesota Statutes 2002, section 82.21, is 
 61.27  amended by adding a subdivision to read: 
 61.28     Subd. 6.  [OVERPAYMENT OF FEES.] An overpayment of a fee 
 61.29  paid pursuant to this chapter shall be refunded within a 
 61.30  reasonable time after a letter requesting the refund is received 
 61.31  by the commissioner and signed by the person making the 
 61.32  overpayment. 
 61.33     Refunds shall not be given for other than overpayment of 
 61.34  fees.  A request for a refund of an overpayment must be received 
 61.35  by the commissioner within six months of the date of deposit or 
 61.36  it will be forfeited. 
 62.1      Sec. 40.  Minnesota Statutes 2002, section 82.22, is 
 62.2   amended by adding a subdivision to read: 
 62.3      Subd. 5a.  [WAIVERS.] The commissioner may waive the real 
 62.4   estate licensing experience requirement for the broker's 
 62.5   examination. 
 62.6      (a) An applicant for a waiver shall provide evidence of: 
 62.7      (1) successful completion of a minimum of 90 quarter 
 62.8   credits or 270 classroom hours of real estate-related studies; 
 62.9      (2) a minimum of five consecutive years of practical 
 62.10  experience in real estate-related areas; or 
 62.11     (3) successful completion of 30 credits or 90 classroom 
 62.12  hours and three consecutive years of practical experience in 
 62.13  real estate-related areas. 
 62.14     (b) A request for a waiver shall be submitted to the 
 62.15  commissioner in writing and be accompanied by documents 
 62.16  necessary to evidence qualification as set forth in paragraph 
 62.17  (a). 
 62.18     (c) The waiver will lapse if the applicant fails to 
 62.19  successfully complete the broker's examination within one year 
 62.20  from the date of the granting of the waiver. 
 62.21     Sec. 41.  Minnesota Statutes 2002, section 82.22, is 
 62.22  amended by adding a subdivision to read: 
 62.23     Subd. 5b.  [FAILURE TO RENEW LICENSE.] If a license lapses 
 62.24  or becomes ineffective due to the licensee's failure to file a 
 62.25  timely renewal application or otherwise, the commissioner may 
 62.26  institute a revocation or suspension proceeding within two years 
 62.27  after the license was last effective and enter a revocation or 
 62.28  suspension order as of the last date on which the license was in 
 62.29  effect. 
 62.30     Sec. 42.  Minnesota Statutes 2002, section 82.22, 
 62.31  subdivision 6, is amended to read: 
 62.32     Subd. 6.  [INSTRUCTION; NEW LICENSES.] (a) Every applicant 
 62.33  for a salesperson's license shall be required to successfully 
 62.34  complete a course of study in the real estate field consisting 
 62.35  of 30 hours of instruction approved by the commissioner before 
 62.36  taking the examination specified in subdivision 1.  Every 
 63.1   applicant for a salesperson's license shall be required to 
 63.2   successfully complete an additional course of study in the real 
 63.3   estate field consisting of 60 hours of instruction approved by 
 63.4   the commissioner, of which three hours shall consist of training 
 63.5   in state and federal fair housing laws, regulations, and rules, 
 63.6   and of which two hours must consist of training in laws and 
 63.7   regulations on agency representation and disclosure, before 
 63.8   filing an application for the license.  This subdivision does 
 63.9   not apply to salespeople licensed in Minnesota before July 1, 
 63.10  1969. 
 63.11     (b) The commissioner may approve courses of study in the 
 63.12  real estate field offered in educational institutions of higher 
 63.13  learning in this state or courses of study in the real estate 
 63.14  field developed by and offered under the auspices of the 
 63.15  National Association of Realtors, its affiliates, or private 
 63.16  real estate schools.  The commissioner shall not approve any 
 63.17  course offered by, sponsored by, or affiliated with any person 
 63.18  or company licensed to engage in the real estate business.  The 
 63.19  commissioner may by rule prescribe the curriculum and 
 63.20  qualification of those employed as instructors. 
 63.21     (c) An applicant for a broker's license must successfully 
 63.22  complete a course of study in the real estate field consisting 
 63.23  of 30 hours of instruction approved by the commissioner, of 
 63.24  which three hours shall consist of training in state and federal 
 63.25  fair housing laws, regulations, and rules.  The course must have 
 63.26  been completed within 12 months prior to the date of application 
 63.27  for the broker's license. 
 63.28     (d) (c) An applicant for a real estate closing agent's 
 63.29  license must successfully complete a course of study relating to 
 63.30  closing services consisting of eight hours of instruction 
 63.31  approved by the commissioner. 
 63.32     Sec. 43.  Minnesota Statutes 2002, section 82.22, is 
 63.33  amended by adding a subdivision to read: 
 63.34     Subd. 6a.  [CHANGE OF APPLICATION INFORMATION.] The 
 63.35  commissioner must be notified in writing of a change of 
 63.36  information contained in the license application on file with 
 64.1   the commissioner within ten days of the change. 
 64.2      Sec. 44.  Minnesota Statutes 2002, section 82.22, is 
 64.3   amended by adding a subdivision to read: 
 64.4      Subd. 6b.  [CANCELLATION OF SALESPERSON'S OR BROKER'S 
 64.5   LICENSE.] A salesperson's or broker's license that has been 
 64.6   canceled for failure of a licensee to complete postlicensing 
 64.7   education requirements must be returned to the commissioner by 
 64.8   the licensee's broker within ten days of receipt of notice of 
 64.9   cancellation.  The license shall be reinstated without 
 64.10  reexamination by completing the required instruction, filing an 
 64.11  application, and paying the fee for a salesperson's or broker's 
 64.12  license within two years of the cancellation date. 
 64.13     Sec. 45.  Minnesota Statutes 2002, section 82.22, is 
 64.14  amended by adding a subdivision to read: 
 64.15     Subd. 6c.  [PASSING GRADE FOR EXAMINATION.] A passing grade 
 64.16  for a salesperson's and broker's examination shall be a score of 
 64.17  75 percent or higher on the uniform portion and a score of 75 
 64.18  percent or higher on the state portion of the examination. 
 64.19     The commissioner shall not accept the scores of a person 
 64.20  who has cheated on an examination.  Cheating on a real estate 
 64.21  examination shall be grounds for denying an application for a 
 64.22  broker's or salesperson's license. 
 64.23     Sec. 46.  Minnesota Statutes 2002, section 82.22, 
 64.24  subdivision 8, is amended to read: 
 64.25     Subd. 8.  [DURATION.] No renewal of a salesperson's license 
 64.26  shall be effective beyond a date two years after the granting of 
 64.27  such salesperson's license unless the salesperson has furnished 
 64.28  evidence of compliance with either subdivisions 6 or 7 section 
 64.29  82.22, subdivision 6.  The commissioner shall cancel the license 
 64.30  of any salesperson who fails to comply with subdivisions 6 or 7 
 64.31  section 82.22, subdivision 6.  This subdivision shall not apply 
 64.32  to salespeople licensed in Minnesota prior to July 1, 1969. 
 64.33     Sec. 47.  Minnesota Statutes 2002, section 82.22, 
 64.34  subdivision 12, is amended to read: 
 64.35     Subd. 12.  [RECIPROCITY.] The requirements of this 
 64.36  section subdivisions 6 and 13 may be waived for individuals of 
 65.1   other jurisdictions, provided:  (1) a written reciprocal 
 65.2   licensing agreement is in effect between the commissioner and 
 65.3   the licensing officials of that jurisdiction, (2) the individual 
 65.4   is licensed in that jurisdiction, and (3) the licensing 
 65.5   requirements of that jurisdiction are substantially similar to 
 65.6   the provisions of this chapter. 
 65.7      Sec. 48.  Minnesota Statutes 2002, section 82.22, 
 65.8   subdivision 13, is amended to read: 
 65.9      Subd. 13.  [CONTINUING EDUCATION.] (a) All real estate 
 65.10  salespersons and all real estate brokers shall be required to 
 65.11  successfully complete 30 hours of real estate continuing 
 65.12  education, either as a student or a lecturer, in courses of 
 65.13  study approved by the commissioner, during the initial license 
 65.14  period and during each succeeding 24-month license period.  At 
 65.15  least 15 of the 30 credit hours must be completed during the 
 65.16  first 12 months of the 24-month licensing period.  Licensees may 
 65.17  not claim credit for continuing education not actually completed 
 65.18  as of the date their report of continuing education compliance 
 65.19  is filed. 
 65.20     (b) The commissioner shall may adopt rules defining the 
 65.21  standards for course and instructor approval, and may adopt 
 65.22  rules for the proper administration of this subdivision 
 65.23  prelicense instruction as required under section 82.22, 
 65.24  subdivision 6, and continuing education as required under this 
 65.25  section.  The commissioner may not approve a course which can be 
 65.26  completed by the student at home or outside the classroom 
 65.27  without the supervision of an instructor except accredited 
 65.28  courses using new delivery technology, including interactive 
 65.29  technology, and the Internet.  The commissioner may approve 
 65.30  courses of study in the real estate field offered in educational 
 65.31  institutions of higher learning in this state or courses of 
 65.32  study in the real estate field developed by and offered under 
 65.33  the auspices of the National Association of Realtors, its 
 65.34  affiliates, or private real estate schools.  Courses in 
 65.35  motivation, salesmanship, psychology, or time management shall 
 65.36  not be approved by the commissioner for continuing education 
 66.1   credit.  The commissioner may approve courses in any other 
 66.2   subjects, including, but not limited to, communication, 
 66.3   marketing, negotiation, and technology for continuing education 
 66.4   credit. 
 66.5      (c) Any program approved by Minnesota continuing legal 
 66.6   education shall be approved by the commissioner of commerce for 
 66.7   continuing education for real estate brokers and salespeople if 
 66.8   the program or any part thereof relates to real estate.  
 66.9      (d) As part of the continuing education requirements of 
 66.10  this section, the commissioner shall require that all real 
 66.11  estate brokers and salespersons receive: 
 66.12     (1) at least one hour of training during each license 
 66.13  period in courses in laws or regulations on agency 
 66.14  representation and disclosure; and 
 66.15     (2) at least one hour of training during each license 
 66.16  period in courses in state and federal fair housing laws, 
 66.17  regulations, and rules, other antidiscrimination laws, or 
 66.18  courses designed to help licensees to meet the housing needs of 
 66.19  immigrant and other underserved populations. 
 66.20     Clauses (1) and (2) do not apply to real estate 
 66.21  salespersons and real estate brokers engaged solely in the 
 66.22  commercial real estate business who file with the commissioner a 
 66.23  verification of this status along with the continuing education 
 66.24  report required under paragraph (a). 
 66.25     (e) The commissioner is authorized to establish a procedure 
 66.26  for renewal of course accreditation. 
 66.27     (f) Approved continuing education courses may be sponsored 
 66.28  or offered by a broker of a real estate company and may be held 
 66.29  on the premises of a company licensed under this chapter.  
 66.30  All continuing education course offerings must be open to any 
 66.31  interested individuals.  Access may be restricted by the sponsor 
 66.32  based on class size only.  Courses must not be approved if 
 66.33  attendance is restricted to any particular group of people.  A 
 66.34  broker must comply with all continuing education rules 
 66.35  prescribed by the commissioner.  The commissioner shall not 
 66.36  approve any prelicense instruction courses offered by, sponsored 
 67.1   by, or affiliated with any person or company licensed to engage 
 67.2   in the real estate business. 
 67.3      (g) No more than one-half of the credit hours per licensing 
 67.4   period, including continuing education required under 
 67.5   subdivision 6, may be credited to a person for attending any 
 67.6   combination of courses either: (h) Credit may not be earned if 
 67.7   the licensee has previously obtained credit for the same course 
 67.8   as either a student or instructor during the same licensing 
 67.9   period. 
 67.10     (1) sponsored by, offered by, or affiliated with a real 
 67.11  estate company or its agents; or 
 67.12     (2) offered using new delivery technology, including 
 67.13  interactive technology, and the Internet. 
 67.14     (i) The real estate education course completion certificate 
 67.15  must be in the form set forth by the commissioner. 
 67.16  Students are responsible for maintaining copies of course 
 67.17  completion certificates. 
 67.18     Sec. 49.  Minnesota Statutes 2002, section 82.24, 
 67.19  subdivision 3, is amended to read: 
 67.20     Subd. 3.  [NONDEPOSITABLE ITEMS.] In the event earnest 
 67.21  money or other down payments in a real estate transaction are 
 67.22  received by the broker or salesperson in the form of a 
 67.23  nondepositable item such as a note, bond, stock certificate, 
 67.24  treasury bill, or any other instrument or equity or thing of 
 67.25  value received by a broker, salesperson, or closing 
 67.26  agent received in lieu of cash as earnest money or down payment 
 67.27  in a real estate transaction shall be held by deposited 
 67.28  immediately with an authorized escrow agent, whose authority is 
 67.29  evidenced by a written agreement executed by the offeror and the 
 67.30  escrow agent.  A receipt shall be issued to the buyer for the 
 67.31  value of the nondepositable item.  
 67.32     In the event the broker acts as the escrow agent, the 
 67.33  broker shall obtain written authority from the buyer and seller 
 67.34  to hold such items in escrow.  In all cases, the parties shall 
 67.35  be advised of the details relative to the nondepositable item, 
 67.36  including the nature of the item, the amount, and in whose 
 68.1   custody such item is being held.  The fact that such an item is 
 68.2   being held by the broker shall be duly recorded in the broker's 
 68.3   trust account records. 
 68.4      Sec. 50.  Minnesota Statutes 2002, section 82.24, 
 68.5   subdivision 5, is amended to read: 
 68.6      Subd. 5.  [TRUST ACCOUNTS.] (a) Each broker or closing 
 68.7   agent shall maintain and retain records of all trust funds and 
 68.8   trust accounts.  The commissioner may prescribe information to 
 68.9   be included in the records by appropriate rules.  
 68.10     (b) Unless otherwise agreed upon in writing by the parties 
 68.11  to a transaction, the broker with whom trust funds are to be 
 68.12  deposited in satisfaction of subdivision 1 shall be the listing 
 68.13  broker. 
 68.14     (c) A check received from a potential buyer shall be 
 68.15  deposited into the listing broker's trust account not later than 
 68.16  the third business day after delivery of the check to the 
 68.17  broker, except that the check may be held by the listing broker 
 68.18  until acceptance or rejection of the offer if: 
 68.19     (1) the check by its terms is not negotiable by the broker 
 68.20  or if the potential buyer has given written instructions that 
 68.21  the check shall not be deposited nor cashed until acceptance or 
 68.22  shall be immediately returned if the offer is rejected; and 
 68.23     (2) the potential seller is informed that the check is 
 68.24  being so held before or at the time the offer is presented to 
 68.25  that person for acceptance. 
 68.26     If the offer is accepted, the check shall be deposited in a 
 68.27  neutral escrow depository or the trust fund account of the 
 68.28  listing broker not later than the third business day following 
 68.29  acceptance of the offer unless the broker has received written 
 68.30  authorization from all parties to the transaction to continue to 
 68.31  hold the check.  If the offer is rejected, the check shall be 
 68.32  returned to the potential buyer not later than the next business 
 68.33  day after rejection. 
 68.34     (d) Trust funds must be maintained in a trust account until 
 68.35  disbursement is made in accordance with the terms of the 
 68.36  applicable agreements and proper accounting is made to the 
 69.1   parties entitled to an accounting. 
 69.2      Disbursement must be made within a reasonable time 
 69.3   following the consummation or termination of a transaction if 
 69.4   the applicable agreements are silent as to the time of 
 69.5   disbursement. 
 69.6      Sec. 51.  Minnesota Statutes 2002, section 82.24, is 
 69.7   amended by adding a subdivision to read: 
 69.8      Subd. 9.  [CONSENT TO PLACE IN SPECIAL ACCOUNT.] Trust 
 69.9   funds may be placed by the broker in a special account which may 
 69.10  be an interest-bearing account or certificate of deposit if the 
 69.11  buyer and the seller consent in writing to the special account 
 69.12  and to the disposition of the trust funds, including any 
 69.13  interest thereon. 
 69.14     Sec. 52.  Minnesota Statutes 2002, section 82.24, is 
 69.15  amended by adding a subdivision to read: 
 69.16     Subd. 10.  [LICENSEE AS PRINCIPAL.] Funds which would 
 69.17  constitute trust funds if received by a licensee acting as an 
 69.18  agent must, if received by a licensee acting as principal, be 
 69.19  placed in a trust account unless a written agreement signed by 
 69.20  all parties to the transaction specifies a different disposition 
 69.21  of the funds.  The written agreement shall state that the funds 
 69.22  would otherwise be placed in a real estate trust account. 
 69.23     Sec. 53.  Minnesota Statutes 2002, section 82.24, is 
 69.24  amended by adding a subdivision to read: 
 69.25     Subd. 11.  [TRUST ACCOUNT RECORDS.] (a) Every broker shall 
 69.26  keep a record of all trust funds received, including notes, 
 69.27  savings certificates, uncashed or uncollected checks, or other 
 69.28  similar instruments.  Said records shall set forth: 
 69.29     (1) date funds received; 
 69.30     (2) from whom received; 
 69.31     (3) amount received; 
 69.32     (4) with respect to funds deposited in a trust account, the 
 69.33  date of said deposit; 
 69.34     (5) with respect to funds previously deposited in a trust 
 69.35  account, the check number or date of related disbursements; and 
 69.36     (6) a monthly balance of the trust account. 
 70.1      Each broker shall maintain a formal trust cash receipts 
 70.2   journal and a formal cash disbursement journal, or similar 
 70.3   records, in accordance with generally accepted accounting 
 70.4   principles.  All records and funds shall be subject to 
 70.5   inspection by the commissioner or an agent of the commissioner 
 70.6   at any time. 
 70.7      (b) Each broker shall keep a separate record for each 
 70.8   beneficiary or transaction, accounting for all funds therein 
 70.9   which have been deposited in the broker's trust bank account.  
 70.10  These records shall set forth information sufficient to identify 
 70.11  the transaction and the parties thereto.  At a minimum, each 
 70.12  record shall set forth: 
 70.13     (1) the date funds are deposited; 
 70.14     (2) the amount deposited; 
 70.15     (3) the date of each related disbursement; 
 70.16     (4) the check number of each related disbursement; 
 70.17     (5) the amount of each related disbursement; and 
 70.18     (6) a description of each disbursement. 
 70.19     Sec. 54.  [82.261] [GUARANTEED SALE PROGRAMS.] 
 70.20     If a broker advertises or offers a guaranteed sale program, 
 70.21  or other program whereby the broker undertakes to purchase real 
 70.22  property in the event he or she is unable to effectuate a sale 
 70.23  to a third party within a specified period of time, a written 
 70.24  disclosure that sets forth clearly and completely the general 
 70.25  terms and conditions under which the broker agrees to purchase 
 70.26  the property and the disposition of any profit at the time of 
 70.27  resale by the broker must be provided to the seller prior to the 
 70.28  execution of a listing agreement. 
 70.29     Sec. 55.  Minnesota Statutes 2002, section 82.27, is 
 70.30  amended by adding a subdivision to read: 
 70.31     Subd. 8.  [REVOCATIONS.] If the commissioner finds that any 
 70.32  licensee or applicant is no longer in existence or has ceased to 
 70.33  do business as a broker or salesperson or is subject to an 
 70.34  adjudication of mental incompetence or to the control of a 
 70.35  committee, conservator, or guardian, or cannot be located after 
 70.36  reasonable search, the commissioner may by order revoke the 
 71.1   license or deny the application. 
 71.2      Sec. 56.  [82.36] [LOAN BROKERS.] 
 71.3      Subdivision 1.  [COMPLIANCE.] Loan brokers shall comply 
 71.4   with the requirements of subdivisions 2 to 7. 
 71.5      Subd. 2.  [CONTRACT PROVISIONS.] A loan broker shall enter 
 71.6   into a written contract with each customer and shall provide a 
 71.7   copy of the written contract to each customer at or before the 
 71.8   time of receipt of any fee or valuable consideration paid for 
 71.9   loan brokerage services.  The written contract shall: 
 71.10     (1) identify the escrow account into which the fees or 
 71.11  consideration will be deposited; 
 71.12     (2) set forth the circumstances under which the loan broker 
 71.13  will be entitled to disbursement from the escrow account; 
 71.14     (3) set forth the circumstances under which the customer 
 71.15  will be entitled to a refund of all or part of the fee; 
 71.16     (4) specifically describe the services to be provided by 
 71.17  the loan broker and the dates by which the services will be 
 71.18  performed; 
 71.19     (5) state the maximum rate of interest to be charged on any 
 71.20  loan obtained; 
 71.21     (6) contain a statement which notifies the customer of his 
 71.22  or her rights to cancel the contract pursuant to subdivision 3; 
 71.23     (7) disclose, with respect to the 12-month period ending 
 71.24  ten business days prior to the date of the contract in question, 
 71.25  the percentage of the loan broker's customers for whom loans 
 71.26  have actually been funded as a result of the loan broker's 
 71.27  services.  This disclosure need not be made for any period prior 
 71.28  to September 8, 1986; and 
 71.29     (8) disclose the cancellation rights and procedures set 
 71.30  forth in subdivision 3. 
 71.31     Subd. 3.  [CANCELLATION.] Any customer of a loan broker who 
 71.32  pays a fee prior to the time a loan is actually funded shall 
 71.33  have an unconditional right to rescind the contract for loan 
 71.34  brokerage services at any time until midnight of the third 
 71.35  business day after the day on which the contract is signed.  
 71.36  Cancellation is evidenced by the customer giving written notice 
 72.1   of cancellation to the loan broker at the address stated in the 
 72.2   contract.  Notice of cancellation, if given by mail, is 
 72.3   effective upon deposit in a mailbox properly addressed to the 
 72.4   loan broker with postage prepaid.  Notice of cancellation need 
 72.5   not take a particular form and is sufficient if it indicates by 
 72.6   any form of written expression the intention of the customer not 
 72.7   to be bound by the contract.  No act of a customer of a loan 
 72.8   broker shall be effective to waive the right to rescind as 
 72.9   provided in this subdivision. 
 72.10     Subd. 4.  [ESCROW ACCOUNT.] The loan broker shall deposit 
 72.11  in an escrow account within 48 hours all fees received prior to 
 72.12  the time a loan is actually funded.  The escrow account shall be 
 72.13  in a bank located within the state of Minnesota and shall be 
 72.14  controlled by an unaffiliated accountant, lawyer, or bank 
 72.15  officer or employee. 
 72.16     Subd. 5.  [RECORDS.] The loan broker shall maintain a 
 72.17  separate record of all fees received for services performed or 
 72.18  to be performed as a loan broker.  Each record shall set forth 
 72.19  the date funds are received, the person from whom the funds are 
 72.20  received, the amount received, the date of deposit in the escrow 
 72.21  account, the account number, the date the funds are disbursed 
 72.22  and the check number of the disbursement, and a description of 
 72.23  each disbursement and the justification for the disbursement. 
 72.24     Subd. 6.  [MONTHLY STATEMENT.] The loan broker shall 
 72.25  provide to each customer at least monthly a detailed written 
 72.26  accounting of all disbursements of the customer's funds from the 
 72.27  trust account. 
 72.28     Subd. 7.  [DISCLOSURE OF LENDERS.] The loan broker shall 
 72.29  provide to each customer at the expiration of the contract a 
 72.30  list of the lenders or loan sources to whom loan applications 
 72.31  were submitted on behalf of the customer. 
 72.32     Sec. 57.  [82.37] [NEGOTIATIONS.] 
 72.33     Subdivision 1.  [WRITTEN OFFERS.] All written offers to 
 72.34  purchase or lease shall be promptly submitted in writing to the 
 72.35  seller or lessor. 
 72.36     Subd. 2.  [NONDISCLOSURE OF TERMS OF OFFER.] A licensee 
 73.1   shall not disclose the terms of an offer to another prospective 
 73.2   buyer or the licensee representing or assisting the buyer prior 
 73.3   to the presentation of the offer to the seller. 
 73.4      Subd. 3.  [CLOSING COSTS.] Licensees shall disclose to a 
 73.5   buyer or a seller at or before the time an offer is written or 
 73.6   presented that the buyer or seller may be required to pay 
 73.7   certain closing costs, which may effectively reduce the proceeds 
 73.8   from the sale or increase the cash outlay at closing. 
 73.9      Subd. 4.  [REQUIRED DOCUMENTS.] Licensees shall furnish to 
 73.10  the parties to the transaction at the time the documents are 
 73.11  signed or become available a true and accurate copy of listing 
 73.12  agreements, earnest money receipts, purchase agreements, 
 73.13  contracts for deed, option agreements, closing statements, 
 73.14  truth-in-housing forms, energy audits, and any other record, 
 73.15  instrument, or document that is material to the transaction and 
 73.16  that is in the licensee's possession. 
 73.17     Subd. 5.  [CLOSING STATEMENT.] The listing broker or his or 
 73.18  her designee shall deliver to the seller, at the time of 
 73.19  closing, a complete and detailed closing statement setting forth 
 73.20  all of the receipts and disbursements handled by the broker for 
 73.21  the seller.  The listing broker shall also deliver to the buyer, 
 73.22  at the time of closing, a complete and detailed statement 
 73.23  setting forth the disposition of all money received in the 
 73.24  transaction from the buyer. 
 73.25     Sec. 58.  [82.46] [RENTAL SERVICES.] 
 73.26     Subdivision 1.  [LICENSE.] A rental service shall obtain a 
 73.27  real estate broker's license before engaging in business or 
 73.28  holding itself out as being engaged in business.  No person 
 73.29  shall act as a real estate salesperson on behalf of a rental 
 73.30  service without first obtaining a real estate salesperson's 
 73.31  license on behalf of the rental service. 
 73.32     Subd. 2.  [DISSEMINATION OF UNIT INFORMATION.] A rental 
 73.33  service shall not provide information regarding a rental unit 
 73.34  without the express authority of the owner of the unit. 
 73.35     Subd. 3.  [AVAILABILITY OF UNIT.] A rental service shall 
 73.36  not represent a unit as currently available unless its 
 74.1   availability has been verified within 72 hours preceding the 
 74.2   representation. 
 74.3      Subd. 4.  [ADVERTISING.] A rental service shall not 
 74.4   advertise in a manner that is misleading with regards to fees 
 74.5   charged, services provided, the availability of rental units, or 
 74.6   rental terms or conditions. 
 74.7      Sec. 59.  [82.48] [STANDARDS OF CONDUCT.] 
 74.8      Subdivision 1.  [ACCESS TO GOVERNING STATUTES AND 
 74.9   RULES.] Every real estate office and branch office shall have a 
 74.10  current copy of this chapter and chapter 83 and the rules 
 74.11  adopted under those chapters, available for the use of licensees.
 74.12  Access to the statutes and rules required by this section may be 
 74.13  made available through an electronic agent. 
 74.14     Subd. 2.  [PENALTY FOR NONCOMPLIANCE.] The methods, acts, 
 74.15  or practices set forth in sections 82.19, subdivision 10; 
 74.16  82.191; 82.197; 82.22, subdivision 6a; 82.261; 82.37; and 
 74.17  subdivisions 1 and 3, are standards of conduct governing the 
 74.18  activities of real estate brokers and salespersons.  Failure to 
 74.19  comply with these standards shall constitute grounds for license 
 74.20  denial, suspension, or revocation, or for censure of the 
 74.21  licensee. 
 74.22     Subd. 3.  [RESPONSIBILITIES OF BROKERS.] (a) [SUPERVISION 
 74.23  OF PERSONNEL.] Brokers shall adequately supervise the activities 
 74.24  of their salespersons and employees.  Supervision includes the 
 74.25  ongoing monitoring of listing agreements, purchase agreements, 
 74.26  other real estate-related documents which are prepared or 
 74.27  drafted by the broker's salespersons or employees or which are 
 74.28  otherwise received by the broker's office, and the review of all 
 74.29  trust account books and records.  If an individual broker 
 74.30  maintains more than one place of business, each place of 
 74.31  business shall be under the broker's direction and supervision.  
 74.32  If a partnership or corporate broker maintains more than one 
 74.33  place of business, each place of business shall be under the 
 74.34  direction and supervision of an individual broker licensed to 
 74.35  act on behalf of the partnership or corporation. 
 74.36     The primary broker shall maintain records specifying the 
 75.1   name of each broker responsible for the direction and 
 75.2   supervision of each place of business.  If an individual broker, 
 75.3   who may be the primary broker, is responsible for supervising 
 75.4   more than one place of business, the primary broker shall, upon 
 75.5   written request of the commissioner, file a written statement 
 75.6   specifying the procedures which have been established to ensure 
 75.7   that all salespersons and employees are adequately supervised.  
 75.8   Designation of another broker to supervise a place of business 
 75.9   does not relieve the primary broker of the ultimate 
 75.10  responsibility for the actions of licensees. 
 75.11     (b) [PREPARATION AND SAFEKEEPING OF DOCUMENTS.] Brokers 
 75.12  shall be responsible for the preparation, custody, safety, and 
 75.13  accuracy of all real estate contracts, documents, and records, 
 75.14  even though another person may be assigned these duties by the 
 75.15  broker. 
 75.16     (c) [DOCUMENTATION AND RESOLUTION OF COMPLAINTS.] Brokers 
 75.17  shall investigate and attempt to resolve complaints made 
 75.18  regarding the practices of any individual licensed to them and 
 75.19  shall maintain, with respect to each individual licensed to 
 75.20  them, a complaint file containing all material relating to any 
 75.21  complaints received in writing for a period of three years. 
 75.22     (d) [DISCLOSURE OF LISTED PROPERTY INFORMATION.] A broker 
 75.23  may allow any unlicensed person, who is authorized by the 
 75.24  broker, to disclose any factual information pertaining to the 
 75.25  properties listed with the broker, if the factual information is 
 75.26  provided to the unlicensed person in written form by the broker 
 75.27  representing or assisting the seller(s). 
 75.28     Sec. 60.  [82.51] [UNCLAIMED PROPERTY ACT COMPLIANCE.] 
 75.29     Upon the initial application for a real estate broker's 
 75.30  license and upon each annual application for renewal, the 
 75.31  applicant or broker shall be required to inform the commissioner 
 75.32  of compliance with the requirements set forth in chapter 345 
 75.33  relating to unclaimed property. 
 75.34     Sec. 61.  [REVISOR'S INSTRUCTION.] 
 75.35     The revisor of statutes shall renumber each section of 
 75.36  Minnesota Statutes listed in column A with the number listed in 
 76.1   column B.  The revisor shall also make the necessary 
 76.2   cross-reference changes consistent with the renumbering. 
 76.3             Column A                        Column B
 76.4        82.17, subdivision 13           82.17, subdivision 2
 76.5        82.17, subdivision 10           82.17, subdivision 3
 76.6        82.17, subdivision 3            82.17, subdivision 4
 76.7        82.17, subdivision 11           82.17, subdivision 5
 76.8        82.17, subdivision 14           82.17, subdivision 6
 76.9        82.17, subdivision 15           82.17, subdivision 7
 76.10       82.17, subdivision 16           82.17, subdivision 8
 76.11       82.17, subdivision 17           82.17, subdivision 9
 76.12       82.17, subdivision 18           82.17, subdivision 10
 76.13       82.17, subdivision 19           82.17, subdivision 11
 76.14       82.17, subdivision 20           82.17, subdivision 12
 76.15       82.17, subdivision 2            82.17, subdivision 13
 76.16       82.17, subdivision 21           82.17, subdivision 14
 76.17       82.17, subdivision 22           82.17, subdivision 15
 76.18       82.17, subdivision 9            82.17, subdivision 16
 76.19       82.17, subdivision 8            82.17, subdivision 17
 76.20       82.17, subdivision 4            82.17, subdivision 18
 76.21       82.17, subdivision 5            82.17, subdivision 19
 76.22       82.17, subdivision 23           82.17, subdivision 20
 76.23       82.17, subdivision 12           82.17, subdivision 21
 76.24       82.17, subdivision 24           82.17, subdivision 22
 76.25       82.17, subdivision 6            82.17, subdivision 23
 76.26       82.17, subdivision 7            82.17, subdivision 24
 76.27       82.33                           82.18
 76.28       82.191                          82.19
 76.29       82.201                          82.20
 76.30       82.196                          82.21, subdivision 1
 76.31       82.195                          82.21, subdivision 2
 76.32       82.197                          82.22
 76.33       82.18                           82.23
 76.34       82.21                           82.24
 76.35       82.261                          82.27
 76.36       82.22, subdivision 1            82.29, subdivision 1
 77.1        82.22, subdivision 11           82.29, subdivision 2
 77.2        82.22, subdivision 4            82.29, subdivision 3
 77.3        82.22, subdivision 2            82.29, subdivision 4
 77.4        82.22, subdivision 5a           82.29, subdivision 5
 77.5        82.22, subdivision 6c           82.29, subdivision 6
 77.6        82.22, subdivision 3            82.29, subdivision 7
 77.7        82.22, subdivision 6            82.29, subdivision 8
 77.8        82.20, subdivision 2            82.31, subdivision 1
 77.9        82.20, subdivision 3            82.31, subdivision 2
 77.10       82.20, subdivision 3a           82.31, subdivision 3
 77.11       82.20, subdivision 4            82.31, subdivision 4
 77.12       82.22, subdivision 5            82.31, subdivision 5
 77.13       82.22, subdivision 6a           82.31, subdivision 6
 77.14       82.22, subdivision 13           82.32
 77.15       82.22, subdivision 8            82.33, subdivision 1
 77.16       82.20, subdivision 8,
 77.17          paragraph (a)                82.33, subdivision 2
 77.18       82.20, subdivision 8, 
 77.19          paragraph (b)                82.33, subdivision 3
 77.20       82.22, subdivision 10           82.33, subdivision 4
 77.21       82.22, subdivision 5b           82.33, subdivision 5
 77.22       82.22, subdivision 6b           82.33, subdivision 6
 77.23       82.20, subdivision 1            82.34, subdivision 1
 77.24       82.20, subdivision 2a           82.34, subdivision 2
 77.25       82.20, subdivision 5            82.34, subdivision 3
 77.26       82.20, subdivision 6            82.34, subdivision 4
 77.27       82.20, subdivision 7            82.34, subdivision 5
 77.28       82.20, subdivision 9,
 77.29          paragraphs (a) and (b)       82.34, subdivision 6
 77.30       82.20, subdivision 7a           82.34, subdivision 7
 77.31       82.20, subdivision 8a           82.34, subdivision 8
 77.32       82.20, subdivision 9a           82.34, subdivision 9
 77.33       82.20, subdivision 9,
 77.34          paragraph (c)                82.34, subdivision 10
 77.35       82.20, subdivision 12           82.34, subdivision 11
 77.36       82.20, subdivision 12a          82.34, subdivision 12
 78.1        82.20, subdivision 13           82.34, subdivision 13
 78.2        82.20, subdivision 14           82.34, subdivision 14
 78.3        82.20, subdivision 14a          82.34, subdivision 15
 78.4        82.20, subdivision 15           82.34, subdivision 16
 78.5        82.27, subdivision 1            82.35, subdivision 1
 78.6        82.20, subdivision 10           82.35, subdivision 2
 78.7        82.27, subdivision 2            82.35, subdivision 3
 78.8        82.27, subdivision 2a           82.35, subdivision 4
 78.9        82.27, subdivision 3            82.35, subdivision 5
 78.10       82.27, subdivision 4            82.35, subdivision 6
 78.11       82.27, subdivision 5            82.35, subdivision 7
 78.12       82.27, subdivision 6            82.35, subdivision 8
 78.13       82.27, subdivision 7            82.35, subdivision 9
 78.14       82.27, subdivision 8            82.35, subdivision 10
 78.15       82.31                           82.38
 78.16       82.20, subdivision 11           82.39, subdivision 1
 78.17       82.20, subdivision 11a          82.39, subdivision 2
 78.18       82.20, subdivision 11b          82.39, subdivision 3
 78.19       82.20, subdivision 11c          82.39, subdivision 4
 78.20       82.20, subdivision 11d          82.39, subdivision 5
 78.21       82.32                           82.40
 78.22       82.19, subdivision 1            82.41, subdivision 1
 78.23       82.19, subdivision 2            82.41, subdivision 2
 78.24       82.19, subdivision 3            82.41, subdivision 3
 78.25       82.19, subdivision 4            82.41, subdivision 4
 78.26       82.19, subdivision 4a           82.41, subdivision 5
 78.27       82.19, subdivision 5            82.41, subdivision 6
 78.28       82.19, subdivision 6            82.41, subdivision 7
 78.29       82.19, subdivision 7            82.41, subdivision 8
 78.30       82.19, subdivision 8            82.41, subdivision 9
 78.31       82.19, subdivision 9            82.41, subdivision 10
 78.32       82.19, subdivision 10           82.41, subdivision 11
 78.33       82.19, subdivision 11           82.41, subdivision 12
 78.34       82.19, subdivision 12           82.41, subdivision 13
 78.35       82.29                           82.42
 78.36       82.34                           82.43
 79.1        82.22, subdivision 12           82.44
 79.2        82.23, subdivision 2            82.45, subdivision 1
 79.3        82.23, subdivision 3            82.45, subdivision 2
 79.4        82.23, subdivision 1            82.45, subdivision 3
 79.5        82.28                           82.47
 79.6        82.176                          82.49
 79.7        82.24, subdivision 1            82.50, subdivision 1
 79.8        82.24, subdivision 2            82.50, subdivision 2
 79.9        82.24, subdivision 3            82.50, subdivision 3
 79.10       82.24, subdivision 4            82.50, subdivision 4
 79.11       82.24, subdivision 5            82.50, subdivision 5
 79.12       82.24, subdivision 6            82.50, subdivision 6
 79.13       82.24, subdivision 7            82.50, subdivision 7
 79.14       82.24, subdivision 8            82.50, subdivision 8
 79.15       82.24, subdivision 9            82.50, subdivision 9
 79.16       82.24, subdivision 10           82.50, subdivision 10
 79.17       82.24, subdivision 11           82.50, subdivision 11
 79.18     Sec. 62.  [REPEALER.] 
 79.19     (a) Minnesota Statutes 2002, section 82.22, subdivision 9, 
 79.20  is repealed. 
 79.21     (b) Minnesota Rules, parts 2800.0100; 2800.0200; 2800.0300; 
 79.22  2800.1100; 2800.1200; 2800.1300; 2800.1400; 2800.1500; 
 79.23  2800.1600; 2800.1700; 2800.1750; 2800.1751; 2800.1800; 
 79.24  2800.1900; 2800.2000; 2800.2100; 2800.2150; 2805.0100; 
 79.25  2805.0200; 2805.0300; 2805.0400; 2805.0500; 2805.0600; 
 79.26  2805.0700; 2805.0800; 2805.0900; 2805.1000; 2805.1100; 
 79.27  2805.1300; 2805.1400; 2805.1500; 2805.1600; 2805.1700; 
 79.28  2805.1800; 2805.1900; and 2805.2000, are repealed.