HF 1890

as introduced - 84th Legislature (2005 - 2006) Posted on 12/15/2009 12:00am

A bill for an act
relating to housing; providing for the licensure of
manufactured and industrialized/modular home sales;
authorizing rules; amending Minnesota Statutes 2004,
sections 327B.01, by adding a subdivision; 327B.04,
subdivisions 1, 4; proposing coding for new law in
Minnesota Statutes, chapters 16B; 327B.

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

Section 1.

new text begin [16B.751] SALES OF INDUSTRIALIZED/MODULAR
BUILDINGS.
new text end

new text begin Salespersons and brokers of industrialized/modular homes
must be licensed under sections 327B.041 to 327B.045. A dealer
of industrialized/modular homes must be a licensed manufactured
home dealer under chapter 327B, a licensed residential
contractor under chapter 326, or a licensed real estate broker
under chapter 82.
new text end

Sec. 2.

Minnesota Statutes 2004, section 327B.01, is
amended by adding a subdivision to read:

new text begin Subd. 7a. new text end

new text begin Employer. new text end

new text begin "Employer" means a licensed
manufactured home dealer, a licensed residential contractor
under chapter 326, or a licensed real estate broker under
chapter 82.
new text end

Sec. 3.

Minnesota Statutes 2004, section 327B.04,
subdivision 1, is amended to read:

Subdivision 1.

License and bond required.

No person
shall act as a dealer in manufactured homes, new or used,
without a license and a surety bond as provided in this
section. No person shall manufacture manufactured homes without
a license and a surety bond as provided in this section. The
licensing and bonding requirements of this section do not apply
to any bank, savings bank, savings association, or credit union,
chartered by either this state or the federal government, which
acts as a dealer only by repossessing manufactured homes and
then offering the homes for resale.

new text begin A dealer of industrialized/modular homes, as defined in
section 16B.75, must be licensed as a dealer under this section,
as a residential contractor under chapter 326, or as a real
estate broker under chapter 82.
new text end

Sec. 4.

Minnesota Statutes 2004, section 327B.04,
subdivision 4, is amended to read:

Subd. 4.

License prerequisites.

No application shall be
granted nor license issued until the applicant proves to the
commissioner that:

(a) the applicant has a permanent, established place of
business at each licensed location. An "established place of
business" means a permanent enclosed building other than a
residence, or a commercial office space, either owned by the
applicant or leased by the applicant for a term of at least one
year, located in an area where zoning regulations allow
commercial activity, and where the books, records and files
necessary to conduct the business are kept and maintained. The
owner of a licensed manufactured home park who resides in or
adjacent to the park may use the residence as the established
place of business required by this subdivision, unless
prohibited by local zoning ordinance.

If a license is granted, the licensee may use unimproved
lots and premises for sale, storage, and display of manufactured
homes, if the licensee first notifies the commissioner in
writing;

(b) if the applicant desires to sell, solicit or advertise
the sale of new manufactured homes, it has a bona fide contract
or franchise in effect with a manufacturer or distributor of the
new manufactured home it proposes to deal in;

(c) the applicant has secured a surety bond in the amount
of $20,000 for the protection of consumer customers, executed by
the applicant as principal and issued by a surety company
admitted to do business in this state. The bond shall be
exclusively for the purpose of reimbursing consumer customers
and shall be conditioned upon the faithful compliance by the
applicant with all of the laws and rules of this state
pertaining to the applicant's business as a dealer or
manufacturer, including sections 325D.44, 325F.67 and 325F.69,
and upon the applicant's faithful performance of all its legal
obligations to consumer customers;

(d) the applicant has established a trust account as
required by section 327B.08, subdivision 3, unless the applicant
states in writing its intention to limit its business to
selling, offering for sale, soliciting or advertising the sale
of new manufactured homes; and

(e) the applicant deleted text begin has provided evidence of having had at
least two years' prior experience in the sale of manufactured
homes, working for a licensed dealer deleted text end new text begin holds a salesperson license
under sections 327B.041 to 327B.045 and has: (1) a minimum of
two years' experience as an active salesperson for a licensed
dealer within the past four years; or (2) two years' continuous
experience as an active salesperson for a licensed dealer within
the past ten years. This requirement does not apply to dealers
holding valid licenses prior to November 1, 2005 new text end .

Sec. 5.

new text begin [327B.041] SALESPERSON LICENSE; EXAMINATION.
new text end

new text begin Subdivision 1. new text end

new text begin License required for salesperson or
broker. new text end

new text begin A person may not act as a salesperson or broker of
manufactured homes, new or used, or of industrialized/modular
buildings as defined in section 16B.75, without a salesperson
license as provided in sections 327B.041 to 327B.045.
new text end

new text begin Subd. 2. new text end

new text begin Examination eligibility; revocation. new text end

new text begin A person
is not eligible to take the examination for a salesperson
license under this section if the applicant has had any related
professional or trade license, as defined by the commissioner,
revoked or suspended in this or any other state within five
years of the date of the application.
new text end

new text begin Subd. 3. new text end

new text begin Examination frequency. new text end

new text begin The commissioner shall
hold examinations at times and places the commissioner
determines, except that the examinations must be held at least
every 90 days.
new text end

new text begin Subd. 4. new text end

new text begin Examination format. new text end

new text begin The examination must
consist of not more than 100 multiple-choice questions in an
open-book format. The examination must be developed by the
commissioner with input and guidance from the Minnesota
Manufactured Home Association or its successor organization. A
passing grade for the examination is a score of 70 percent or
higher.
new text end

new text begin Subd. 5. new text end

new text begin Exemption from salesperson examination. new text end

new text begin The
testing provisions of this section do not apply to a person who,
as of July 1, 2006, holds a salesperson license under sections
327B.041 to 327B.045 and has acted as a salesperson or broker of
manufactured homes, new or used, or of industrialized/modular
buildings as defined in section 16B.75, for an employer for a
continuous period of two years immediately prior to July 1, 2006.
new text end

new text begin Subd. 6. new text end

new text begin Reexaminations. new text end

new text begin An examination is required
before the renewal of a salesperson license that has been
suspended, or before the issuance of a license to a person whose
license has been ineffective for a period of two years, except
no reexamination is required of an individual who has failed to
renew an existing license because of absence from the state
while on active duty with the armed forces of the United States.
new text end

Sec. 6.

new text begin [327B.042] SALESPERSON LICENSING; APPLICATION.
new text end

new text begin Subdivision 1. new text end

new text begin Qualification of applicants. new text end

new text begin An applicant
for a salesperson license must be at least 18 years of age at
the time of applying for the license.
new text end

new text begin Subd. 2. new text end

new text begin Application for license; contents. new text end

new text begin (a) An
applicant for a license as a salesperson shall apply in writing
on forms prepared and furnished by the commissioner. Each
application must be signed and sworn to by the applicant and be
accompanied by a license fee set by the commissioner.
new text end

new text begin (b) An application for a salesperson license must contain:
new text end

new text begin (1) information required by the commissioner consistent
with the administration of this chapter;
new text end

new text begin (2) the applicant's name, age, Social Security number,
residence address, employment history for the past ten years,
and the name and place of business of the employer on whose
behalf the salesperson will be acting;
new text end

new text begin (3) the names of any company, partnership, or corporation
licensed or registered in Minnesota in which the applicant has
held any ownership interest or over which the applicant has
exercised control as either owner or management; and
new text end

new text begin (4) whether the applicant or any entity identified in
clause (3) has ever filed for bankruptcy laws or been declared
insolvent.
new text end

new text begin (c) The commissioner may require further information the
commissioner deems appropriate to administer sections 327B.041
to 327B.045.
new text end

new text begin (d) An applicant for a salesperson license must submit to
the commissioner, along with the application for licensure,
consents for credit and criminal background checks. The
criminal background check must be multistate for all states of
past residency over the previous ten years. A salesperson
license may not be issued to an applicant who the commissioner
determines may not be of fit character or has, in the conduct of
the applicant's affairs, been shown to be incompetent,
untrustworthy, or financially irresponsible, or has engaged in
criminal, fraudulent, deceptive, or dishonest practices.
new text end

new text begin Subd. 3. new text end

new text begin Provisional 90-day license. new text end

new text begin An applicant who
has submitted a complete application to the commissioner must be
issued a provisional license under which the applicant may work
for the employer identified in the license application, but may
not sign purchase agreements or any financing documents, all of
which must be signed by the employer. The applicant has 90 days
to pass the salesperson's examination. Upon obtaining a passing
score on the examination and issuance of a salesperson's
license, the provisional license expires and the employer must
surrender it to the commissioner. No more than two provisional
licenses may be issued to an applicant within any 24-month
period. A provisional 90-day license must not be issued to
brokers.
new text end

new text begin Subd. 4. new text end

new text begin Change of application information. new text end

new text begin The
commissioner must be notified in writing of a change of
information contained in the license application on file with
the commissioner within ten days of the change.
new text end

Sec. 7.

new text begin [327B.043] SALESPERSON LICENSING; CONTINUING
EDUCATION.
new text end

new text begin (a) A person holding a salesperson license must
successfully complete ten hours of continuing education, either
as a student or a lecturer, in courses of study approved by the
commissioner, during the initial license period and during each
succeeding 24-month license period. During the initial term of
licensure, at least six of the ten credit hours must be
completed during the first 12 months of the 24-month licensing
period. A salesperson may not claim credit for continuing
education not actually completed as of the date the report of
continuing education compliance is filed.
new text end

new text begin (b) The commissioner may adopt rules defining the standards
for course and instructor approval and continuing education as
required under this section. The commissioner may not approve a
course which can be completed by the salesperson at home or
outside the classroom without the supervision of an instructor
except accredited courses using new delivery technology,
including interactive technology, and the Internet. The
commissioner may approve courses of study in the field offered
in educational institutions of higher learning in this state or
courses of study in the field developed by and offered under the
auspices of the Manufactured Housing Institute, the Minnesota
Manufactured Home Association, or their successors and
affiliates, or private schools. Courses in motivation,
salesmanship, psychology, or time management are not eligible
for continuing education credit. Courses in professionalism in
home sales and legal requirements involving purchase agreements
and other salesperson legal and regulatory obligations are
eligible for approval.
new text end

new text begin (c) Any program approved by the commissioner of commerce
for continuing education for real estate brokers and licensees
under chapter 82 must be approved by the commissioner for
continuing education for salespersons under this section. A
program approved by the commissioner of commerce for continuing
education for contractors under chapter 326 must be approved by
the commissioner for continuing education for salespersons under
this section.
new text end

new text begin (d) As part of the continuing education requirements of
this section, a salesperson must receive:
new text end

new text begin (1) at least four hours of training during each license
period in courses regarding laws or regulations on dual agency
representation and disclosure; laws or regulations governing the
sale, construction standards, and installation of manufactured
homes or prefabricated modular homes; and the Minnesota State
Building Code; and
new text end

new text begin (2) at least one hour of training during each license
period in courses in state and federal fair housing laws and
regulations or other antidiscrimination laws or regulations or
courses designed to assist in meeting the housing needs of
immigrant and other underserved populations; and courses in
consumer fair credit laws and consumer privacy requirements.
new text end

new text begin (e) The commissioner may establish a procedure for renewal
of course accreditation and must apply broadly the requirements
of this section when reviewing courses submitted for approval.
The commissioner may expand the list of qualifying subject areas
for course approval based on changes within the industry or
changes related to state and federal requirements.
new text end

new text begin (f) Credit may not be earned if the salesperson has
previously obtained credit for the same course as either a
student or instructor during the same licensing period.
new text end

new text begin (g) The continuing education course completion certificate
must be in the form prescribed by the commissioner.
new text end

new text begin (h) Salespersons are responsible for maintaining copies of
course completion certificates.
new text end

Sec. 8.

new text begin [327B.044] SALESPERSON LICENSING; RENEWAL.
new text end

new text begin Subdivision 1. new text end

new text begin Duration. new text end

new text begin A salesperson license is not
effective for more than two years except as provided in section
327B.045, subdivision 4, for certain new licenses. The
commissioner shall cancel and not renew the license of any
person who fails to comply with the continuing education
requirements of section 327B.043.
new text end

new text begin Subd. 2. new text end

new text begin Timely renewals. new text end

new text begin A salesperson whose renewal
application has been properly and timely filed who has not
received notice of denial of renewal is considered to have been
approved for renewal and may continue to transact business
whether or not the renewed license has been received on or
before July 1 of the renewal year. An application for renewal
of a license is considered timely filed if received by the
commissioner by, or mailed with proper postage and postmarked
by, June 15 of the renewal year. An application for renewal is
properly filed if made on notarized forms accompanied by fees
set by the commissioner, and containing information the
commissioner requires.
new text end

new text begin Subd. 3. new text end

new text begin Failure to renew. new text end

new text begin A salesperson who has failed
to make a timely application for renewal of a salesperson
license and who has not received the renewal license as of July
1 of the renewal year is unlicensed until the license has been
issued by the commissioner and is received.
new text end

new text begin Subd. 4. new text end

new text begin Effect of failure to renew license. new text end

new text begin If a
salesperson license lapses or becomes ineffective, the
commissioner may institute a revocation or suspension proceeding
within two years after the license was last effective and enter
a revocation or suspension order as of the last date on which
the license was in effect and may require that the salesperson
take the salesperson license examination.
new text end

new text begin Subd. 5. new text end

new text begin Cancellation of salesperson license. new text end

new text begin A
salesperson license that has been canceled for failure of a
salesperson to complete continuing education requirements must
be returned to the commissioner by the employer within ten days
of receipt of notice of cancellation. The license must be
reinstated without reexamination if the salesperson completes
the required instruction, filing an application, and pays the
fee for a salesperson license prior to the expiration date of
the license.
new text end

Sec. 9.

new text begin [327B.045] SALESPERSON LICENSING; OTHER.
new text end

new text begin Subdivision 1. new text end

new text begin Generally. new text end

new text begin The commissioner shall issue a
salesperson license to any person who qualifies for the license
under sections 327B.041 to 327B.045. A salesperson license must
be issued in the name of the applicant to the employer
identified in the license application.
new text end

new text begin Subd. 2. new text end

new text begin Responsibility. new text end

new text begin Each employer is responsible
for the acts of all of the employer's salespersons while acting
as agents on the employer's behalf. Each officer of a
corporation or partner in a partnership licensed as an employer
has the same responsibility under sections 327B.041 to 327B.045
as a corporate or partnership employer with regard to the acts
of the salespersons acting on behalf of the corporation or
partnership.
new text end

new text begin Subd. 3. new text end

new text begin Issuance of salesperson license. new text end

new text begin A salesperson
is licensed to act on behalf of an employer and may not be
licensed to act on behalf of more than one employer in this
state during the same period of time. The license of each
salesperson must be mailed to and remain in the possession of
the employer with whom the salesperson is or will be associated
until canceled or until the salesperson leaves the employer.
new text end

new text begin Subd. 4. new text end

new text begin Effective date of license. new text end

new text begin Licenses renewed
under sections 327B.041 to 327B.045 are valid for 24 months.
New licenses expire on June 30 of the following year unless the
term of the new license would be less than 18 months in which
case the new license expires on June 30 of the subsequent year.
Implementation of the 24-month licensing program must be
staggered so that approximately one-half of the licenses will
expire on June 30 of each even-numbered year and the other
one-half on June 30 of each odd-numbered year. Those
salespersons who will receive a 36-month license on July 1,
2006, because of the staggered implementation schedule, must pay
for the license a fee increased by an amount equal to one-half
the fee for renewal of the license.
new text end

new text begin Subd. 5. new text end

new text begin Terminations; transfers. new text end

new text begin (a) Except as provided
in paragraph (b), if a salesperson terminates activity on behalf
of an employer, the salesperson's license is ineffective.
Within ten days of the termination, the employer shall notify
the commissioner in writing and return the license of the
salesperson to the commissioner. The salesperson may apply for
transfer of the license to another employer at any time during
the remainder of the license period on forms provided by the
commissioner. If the application for transfer qualifies, the
commissioner shall grant the application. Upon receipt of a
transfer application and payment of the transfer fee, the
commissioner may issue a 45-day probationary license. If an
application for transfer is not made within the license period,
the commissioner shall require that an application for a new
license be filed.
new text end

new text begin (b) If a salesperson terminates activity on behalf of an
employer in order to begin association immediately with another
employer, the commissioner shall permit the automatic transfer
of the salesperson's license. The transfer is effective either
upon the mailing of the required fee and the executed documents
by certified mail or upon personal delivery of the fee and
documents to the commissioner's office. The commissioner may
adopt rules and prescribe forms as necessary to implement this
paragraph. Upon submission of an application for automatic
transfer, the salesperson's license held by the employer from
whom the salesperson is transferring shall be void and returned
to the commissioner.
new text end

new text begin (c) The transfer is ineffective if the fee is paid by means
of a check, draft, or other instrument or order of withdrawal
drawn on an account with insufficient funds.
new text end

new text begin (d) The salesperson shall retain the certified mail return
receipt if the transfer application is delivered to the
commissioner by mail, retain a photocopy of the executed
transfer application, and provide a photocopy of the executed
transfer application to the employer from whom the salesperson
is transferring.
new text end

new text begin (e) The salesperson's automatic transfer must be in the
form prescribed by the commissioner.
new text end

new text begin Subd. 6. new text end [AUTOMATIC TRANSFER OF DEALER'S LICENSE.] new text begin If a
dealer terminates activity in order to begin association with
another dealer, the commissioner shall permit the automatic
transfer of the dealer license to a salesperson license. If
there are salespersons working for the dealer, the dealer shall:
new text end

new text begin (1) certify to the commissioner that another dealer will
remain in the company that the dealer is leaving prior to
issuance of the transfer and shall identify the dealer
remaining;
new text end

new text begin (2) certify to the commissioner that the salespersons will
be transferring with the dealer, in which case the salespersons
must comply with subdivision 5; or
new text end

new text begin (3) return the licenses of all salespersons to the
commissioner.
new text end

new text begin The transfer is effective either upon the mailing of the
required fee and the executed documents by certified mail or
upon personal delivery of the fee and documents to the
commissioner's office.
new text end

new text begin Subd. 7. new text end

new text begin Nonresidents. new text end

new text begin A nonresident of Minnesota may be
licensed as a salesperson upon compliance with sections 327B.041
to 327B.045.
new text end

new text begin Subd. 8. new text end [TEMPORARY DEALER'S LICENSE.] new text begin In the event of the
death or incapacity of a dealer, the commissioner may issue a
60-day temporary dealer license to a salesperson of the dealer
if the salesperson has had a minimum of two years' experience as
a salesperson and is otherwise reasonably qualified to act as a
dealer. Upon application prior to its expiration, the 60-day
temporary permit may be renewed once for an additional 45 days
by the commissioner if the applicant demonstrates a good-faith
effort to obtain a dealer's license within the preceding 60 days
and an extension of time will not harm the public interest.
new text end

new text begin Only those salespersons licensed at the time of the
dealer's death or incapacity may conduct business for or on
behalf of the person to whom the temporary dealer's license was
issued.
new text end

new text begin Subd. 9. new text end

new text begin Withdrawal of license or application. new text end

new text begin A
salesperson or salesperson license applicant may at any time
file with the commissioner a request to withdraw from the status
of salesperson or to withdraw a pending license application.
Withdrawal from the status of salesperson or withdrawal of the
license application becomes effective 30 days after receipt of a
request to withdraw or within a shorter period the commissioner
determines, unless a revocation, suspension, or denial
proceeding is pending when the request to withdraw is filed or a
proceeding to revoke, suspend, deny, or impose conditions upon
the withdrawal is instituted within 30 days after the request to
withdraw is filed. If a proceeding is pending or instituted,
withdrawal becomes effective at the time and upon the conditions
the commissioner determines by order. If no proceeding is
pending or instituted and withdrawal automatically becomes
effective, the commissioner may institute a revocation or
suspension proceeding within one year after withdrawal became
effective and enter a revocation or suspension order as of the
last date on which the license was in effect.
new text end

new text begin Subd. 10. new text end

new text begin Exemption. new text end

new text begin The following persons, when acting
as salespersons, are exempt from sections 327B.041 to 327B.045:
new text end

new text begin (1) a licensed residential contractor under chapter 326;
new text end

new text begin (2) a licensed real estate broker or salesperson under
chapter 82; and
new text end

new text begin (3) a salesperson who is employed by a manufacturer of
manufactured homes or modular homes who engages in sales only at
the wholesale level but not to the public.
new text end

Sec. 10. new text begin FEES.
new text end

new text begin The commissioner of administration may set initial fees
under sections 5 to 9 by rule, notwithstanding Minnesota
Statutes, section 16A.1283.
new text end

Sec. 11. new text begin EFFECTIVE DATE.
new text end

new text begin Sections 1 to 10 are effective November 1, 2005.
new text end