SF 1020

1st Engrossment - 91st Legislature (2019 - 2020) Posted on 03/07/2019 04:09pm

A bill for an act
relating to commerce; allowing for designated agency in real estate transactions;
amending Minnesota Statutes 2018, sections 82.55, subdivision 6, by adding
subdivisions; 82.66, subdivisions 1, 2; 82.67, subdivisions 3, 4; 82.73, subdivision
3, by adding a subdivision.

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

Section 1.

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

new text begin Subd. 5a. new text end

new text begin Designated agency. new text end

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

Sec. 2.

Minnesota Statutes 2018, section 82.55, subdivision 6, is amended to read:

Subd. 6.

Dual agency.

"Dual agency" means deleted text begin a situation in which a licensee owes a duty
to more than one party to the transaction.
deleted text end

deleted text begin Circumstances which establish dual agency deleted text end new text begin the buyer and seller in a real estate transaction
are both represented by the same real estate brokerage and all salespersons of that brokerage
represent each side equally. A dual agent cannot act exclusively on behalf of one party, or
advocate to the detriment of the other party and must not disclose confidential information,
unless the disclosure of the information is otherwise required by statute or rule or one party
instructs the broker or salesperson in writing. Situations where dual agency could arise new text end
include the following:

(1) when one licensee represents both the buyer and the seller in a real estate transaction;
or

(2) when two or more licensees, licensed to the same broker, each represent a party to
the transaction.

Sec. 3.

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

new text begin Subd. 9a. new text end

new text begin Fiduciary duties. new text end

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

new text begin (1) "accounting" means a broker or salesperson must account for all money and property
entrusted to them and not commingle client monies with their personal or business funds;
new text end

new text begin (2) "reasonable care" means a broker or salesperson must use reasonable care and
diligence to perform duties on behalf of the client;
new text end

new text begin (3) "confidentiality" means a broker or salesperson must keep confidential any
information given to them by the client, unless the disclosure of information is otherwise
required by law or the client instructs the broker or salesperson in writing to disclose specific
information;
new text end

new text begin (4) "disclosure" means a broker or salesperson must disclose to the client all material
facts the broker or salesperson has knowledge of that might reasonably affect the client's
use or enjoyment of the property;
new text end

new text begin (5) "loyalty" means a broker or salesperson acts solely in the client's best interests to the
exclusion of all other interests, including the broker's or salesperson's and avoids any conflicts
of interest; and
new text end

new text begin (6) "obedience" means a broker or salesperson carries out all the client's lawful
instructions.
new text end

Sec. 4.

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

new text begin Subd. 24a. new text end

new text begin Supervising broker. new text end

new text begin A "supervising broker" is the broker responsible for
supervising the activities of the broker's salespersons and employees in a dual or designated
agency transaction. In a dual or designated agency transaction, a supervising broker is
responsible for supervising both sides of the transaction. This conflict of interest requires
that the supervising broker not advocate for one party or the other when supervising and
advising all parties involved in the transaction.
new text end

Sec. 5.

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

Subdivision 1.

Listing agreements.

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

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

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

(1) a definite expiration date;

(2) a description of the real property involved;

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

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

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

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

(7) information regarding an override clause, if applicable, including a statement to the
effect that the override clause will not be effective unless the licensee supplies the seller
with a protective list within 72 hours after the expiration of the listing agreement;

(8) the following notice in not less than ten-point boldface type immediately preceding
any provision of the listing agreement relating to compensation of the licensee:

"NOTICE: THE COMPENSATION FOR THE SALE, LEASE, RENTAL, OR
MANAGEMENT OF REAL PROPERTY SHALL BE DETERMINED BETWEEN EACH
INDIVIDUAL BROKER AND THE BROKER'S CLIENT.";

(9) for residential property listings, the following "dual agency new text begin or designated agency new text end "
disclosure statement:

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

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

new text begin The fiduciary duties mentioned above are listed below and have the following meanings:
Accounting: means a broker or salesperson must account for all money and property entrusted
to them and not commingle client monies with their personal or business funds;
Reasonable Care: means a broker or salesperson must use reasonable care and diligence to
perform duties on behalf of the client;
Confidentiality: means a broker or salesperson must keep confidential any information given
to them by the client, unless the disclosure of information is otherwise required by law or
the client instructs the broker or salesperson in writing to disclose specific information;
Disclosure: means a broker or salesperson must disclose to the client all material facts the
broker or salesperson has knowledge of that might reasonably affect the client's use or
enjoyment of the property;
Loyalty: means a broker or salesperson acts solely in the client's best interests to the exclusion
of all other interests, including the broker's or salesperson's and avoids any conflicts of
interest; and
Obedience: means a broker or salesperson carries out all the client's lawful instructions.
new text end

new text begin "NOTICE: IN A DUAL AGENCY OR DESIGNATED AGENCY TRANSACTION,
THE SUPERVISING BROKER IS SUPERVISING BOTH SIDES OF THE
TRANSACTION. THIS CONFLICT OF INTEREST REQUIRES THAT THE
SUPERVISING BROKER NOT ADVOCATE FOR ONE PARTY OR THE OTHER
WHEN SUPERVISING AND ADVISING ALL PARTIES INVOLVED IN THE
TRANSACTION."
new text end

Seller's Instructions to Broker

Having read and understood this information about dual agency new text begin or designated agency
representation new text end , seller(s) now instructs broker as follows new text begin (check only one of the three below) new text end :

.		new text begin I (seller(s)) choose designated agency representation and consent that the same brokerage may represent both me and the buyer(s) in the transaction, with my designated agent(s) exclusively representing my interests and another designated agent(s) exclusively representing the interests of the buyer(s). new text end
.		deleted text begin Seller(s) will agree to a dual agency representation and will consider offers made by buyers represented by broker deleted text end new text begin I (seller(s)) choose dual agency representation and consent that the same brokerage may represent both me and the buyers(s) in the transaction. In dual agency, the broker and its salespersons (including my agent(s)) must not advocate for one party or the other in a transaction involving buyer(s) and seller(s) represented by the same brokerage, regardless if one or more different salespersons are involved. In a dual agency, all confidential information must not be disclosed by either designated agent(s) or the broker to any party or third party, unless disclosure of the information is otherwise required by statute or rule, or one party instructs the broker or salesperson in writing new text end .
.		deleted text begin Seller(s) will not agree to a dual agency representation and will not consider offers made by buyers represented by broker deleted text end new text begin I (seller(s)) reject dual agency and designated agency representation and I will not consider offers made by buyer(s) represented by the brokerage new text end .

.		.
Seller		Real Estate Company Name
.		By:	.
Seller			Salesperson
Date : .	;

new text begin NOTE: A seller may modify this selection by written notice to the brokerage at any time.
new text end

(10) a notice requiring the seller to indicate in writing whether it is acceptable to the
seller to have the licensee arrange for closing services or whether the seller wishes to arrange
for others to conduct the closing; and

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

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

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

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

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

For listings of nonresidential real property which do not contain the notice described in
paragraph (b), clause (11), the protective list must contain the following notice in boldface
type:

"IF YOU RELIST WITH ANOTHER BROKER WITHIN THE OVERRIDE PERIOD
AND THEN SELL YOUR PROPERTY TO ANYONE WHOSE NAME APPEARS ON
THIS LIST, YOU COULD BE LIABLE FOR FULL COMMISSIONS TO BOTH
BROKERS. IF THIS NOTICE IS NOT FULLY UNDERSTOOD, SEEK COMPETENT
ADVICE."

Sec. 6.

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

Subd. 2.

Buyer's broker agreements.

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

(b) Contents. All buyer's broker agreements must be in writing and must include:

(1) a definite expiration date;

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

(3) a clear statement explaining the services to be provided to the buyer by the broker,
and the events or conditions that will entitle a broker to a commission or other compensation;

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

(5) information regarding an override clause, if applicable, including a statement to the
effect that the override clause will not be effective unless the licensee supplies the buyer
with a protective list within 72 hours after the expiration of the buyer's broker agreement;

(6) the following notice in not less than ten-point boldface type immediately preceding
any provision of the buyer's broker agreement relating to compensation of the licensee:

"NOTICE: THE COMPENSATION FOR THE PURCHASE, LEASE, RENTAL, OR
MANAGEMENT OF REAL PROPERTY SHALL BE DETERMINED BETWEEN EACH
INDIVIDUAL BROKER AND THE BROKER'S CLIENT.";

(7) the following "dual agency new text begin or designated agency representation new text end " disclosure statement:

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

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

new text begin The fiduciary duties mentioned above are listed below and have the following meanings:
Accounting: means a broker or salesperson must account for all money and property entrusted
to them and not commingle client monies with their personal or business funds;
Reasonable Care: means a broker or salesperson must use reasonable care and diligence to
perform duties on behalf of the client;
Confidentiality: means a broker or salesperson must keep confidential any information given
to them by the client, unless the disclosure of information is otherwise required by law or
the client instructs the broker or salesperson in writing to disclose specific information;
Disclosure: means a broker or salesperson must disclose to the client all material facts the
broker or salesperson has knowledge of that might reasonably affect the client's use or
enjoyment of the property;
Loyalty: means a broker or salesperson acts solely in the client's best interests to the exclusion
of all other interests, including the broker's or salesperson's and avoids any conflicts of
interest; and
Obedience: means a broker or salesperson carries out all the client's lawful instructions.
new text end

new text begin "NOTICE: IN A DUAL AGENCY OR DESIGNATED AGENCY TRANSACTION,
THE SUPERVISING BROKER IS SUPERVISING BOTH SIDES OF THE
TRANSACTION. THIS CONFLICT OF INTEREST REQUIRES THAT THE
SUPERVISING BROKER NOT ADVOCATE FOR ONE PARTY OR THE OTHER
WHEN SUPERVISING AND ADVISING ALL PARTIES INVOLVED IN THE
TRANSACTION."
new text end

Buyer's Instructions to Broker

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

.		new text begin I (buyer(s)) choose designated agency representation and consent that the same brokerage may represent both me and the seller(s) in the transaction, with my designated agent(s) exclusively representing my interests and another designated agent(s) exclusively representing the interests of the seller(s). new text end
.		deleted text begin Buyer(s) will agree to a dual agency representation and will consider properties listed by broker deleted text end new text begin I (buyer(s)) choose dual agency representation and consent that the same brokerage may represent both me and the seller(s) in the transaction. In dual agency, the broker and its salespersons (including my agent(s)) must not advocate for one party or the other in a transaction involving buyer(s) and seller(s) represented by the same brokerage, regardless if one or more different salespersons are involved. In a dual agency, all confidential information must not be disclosed by either designated agent(s) or the broker to any party or third party, unless disclosure of the information is otherwise required by statute or rule, or one party instructs the broker or salesperson in writing new text end .
.		deleted text begin Buyer(s) will not agree to a dual agency representation and will not consider properties listed by broker deleted text end new text begin I (buyer(s)) reject dual agency and designated agency representation and I will not consider properties listed by the brokerage new text end .

.		.
Buyer		Real Estate Company Name
.		By:	.
Buyer			Salesperson
Date: .	; and

new text begin NOTE: A buyer may modify this selection by written notice to the brokerage at any
time.
new text end

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

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

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

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

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

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

Sec. 7.

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

Subd. 3.

Agency disclosure form.

The agency disclosure form shall be in substantially
the form set forth below:

AGENCY RELATIONSHIPS IN REAL ESTATE TRANSACTIONS

Minnesota law requires that early in any relationship, real estate brokers or salespersons
discuss with consumers what type of agency representation or relationship they desire.(1)
The available options are listed below. This is not a contract. This is an agency disclosure
form only. If you desire representation, you must enter into a written contract according
to state law (a listing contract or a buyer representation contract). Until such time as you
choose to enter into a written contract for representation, you will be treated as a customer
and will not receive any representation from the broker or salesperson. The broker or
salesperson will be acting as a Facilitator (see paragraph deleted text begin IV deleted text end new text begin V new text end below), unless the broker or
salesperson is representing another party as described below.

ACKNOWLEDGMENT: I/We acknowledge that I/We have been presented with the
below-described options. I/We understand that until I/We have signed a representation
contract, I/We are not represented by the broker/salesperson. I/We understand that written
consent is required for a dual agency relationship. THIS IS A DISCLOSURE ONLY, NOT
A CONTRACT FOR REPRESENTATION.

.		.
Signature		Date
.		.
Signature		Date

I.

Seller's Broker: A broker who lists a property, or a salesperson who is licensed to the
listing broker, represents new text begin only new text end the Seller and acts on behalf of new text begin only new text end the Seller. A Seller's
broker owes to the Seller the fiduciary duties described below.(2) The broker must also
disclose to the Buyer material facts as defined in Minnesota Statutes, section 82.68,
subdivision 3, of which the broker is aware that could adversely and significantly affect
the Buyer's use or enjoyment of the property. If a broker or salesperson working with a
Buyer as a customer is representing the Seller, he or she must act in the Seller's best
interest and must tell the Seller any information disclosed to him or her, except
confidential information acquired in a facilitator relationship (see paragraph deleted text begin IV deleted text end new text begin V new text end below).
In that case, the Buyer will not be represented and will not receive advice and counsel
from the broker or salesperson.

II.

Buyer's Broker: A Buyer may enter into an agreement for the broker or salesperson to
represent and act on behalf of new text begin only new text end the Buyer. The broker may represent the Buyer only,
and not the Seller, even if he or she is being paid in whole or in part by the Seller. A
Buyer's broker owes to the Buyer the fiduciary duties described below.(2) The broker
must disclose to the Buyer material facts as defined in Minnesota Statutes, section 82.68,
subdivision 3, of which the broker is aware that could adversely and significantly affect
the Buyer's use or enjoyment of the property. If a broker or salesperson working with a
Seller as a customer is representing the Buyer, he or she must act in the Buyer's best
interest and must tell the Buyer any information disclosed to him or her, except
confidential information acquired in a facilitator relationship (see paragraph deleted text begin IV deleted text end new text begin V new text end below).
In that case, the Seller will not be represented and will not receive advice and counsel
from the broker or salesperson.

III.

Dual deleted text begin Agency-Broker Representing both Seller and Buyer deleted text end new text begin Agency Representation new text end :
Dual agency occurs when deleted text begin one broker or salesperson represents both parties to a
transaction, or when two salespersons licensed to the same broker each represent a party
to the transaction. deleted text end new text begin the Buyer(s) and Seller(s) in a real estate transaction are both
represented by the same real estate brokerage and all salespersons of that brokerage act
in a dual agency capacity by representing each side equally. A dual agent cannot act
exclusively on behalf of one party, or advocate to the detriment of the other party. new text end Dual
agency requires the informed consent of all parties, and means that the broker and
salesperson owe the same duties to the Seller and the Buyer. This role limits the level
of representation the broker and salespersons can provide, and prohibits them from acting
exclusively for either party. In a dual agency, deleted text begin confidential information about price, terms,
and motivation for pursuing a transaction will be kept confidential unless one party
instructs the broker or salesperson in writing to disclose specific information about him
or her. Other information will be shared deleted text end new text begin all confidential information must not be disclosed
by either dual agents or the broker to any party or third party, unless the disclosure of
the information is otherwise required by statute or rule, or one party instructs the broker
or salesperson in writing new text end . Dual agents may not advocate for one party to the detriment
of the other.(3)

Within the limitations described above, dual agents owe to both Seller and Buyer the
fiduciary duties described below.(2) Dual agents must disclose to Buyers material facts
as defined in Minnesota Statutes, section 82.68, subdivision 3, of which the broker is
aware that could adversely and significantly affect the Buyer's use or enjoyment of the
property.

IV.

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

new text begin V.
new text end

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

.

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

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

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

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

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

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

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

deleted text begin Accounting-broker/salesperson will account to client(s) for all client(s)' money and
property received as agent. deleted text end new text begin Accounting: means a broker or salesperson must account for all
money and property entrusted to them and not commingle client monies with their personal
or business funds;
new text end

new text begin Reasonable Care: means a broker or salesperson must use reasonable care and diligence
to perform duties on behalf of the client;
new text end

new text begin Confidentiality: means a broker or salesperson must keep confidential any information
given to them by the client, unless the disclosure of information is otherwise required by
law or the client instructs the broker or salesperson in writing to disclose specific information;
new text end

new text begin Disclosure: means a broker or salesperson must disclose to the client all material facts
the broker or salesperson has knowledge of that might reasonably affect the client's use or
enjoyment of the property;
new text end

new text begin Loyalty: means a broker or salesperson acts solely in the client's best interests to the
exclusion of all other interests, including the broker's or salesperson's and avoids any conflicts
of interest; and
new text end

new text begin Obedience: means a broker or salesperson carries out all the client's lawful instructions.
new text end

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

Sec. 8.

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

Subd. 4.

Creation of new text begin designated agency or new text end dual agency.

If circumstances create a
new text begin designated agency or new text end dual agency situation, the broker must make full disclosure to all
parties to the transaction as to the change in relationship of the parties to the broker due to
new text begin designated agency or new text end dual agency. A broker, having made full disclosure, must obtain the
consent of all parties to these circumstances in residential real property transactions in the
purchase agreement in the form set forth below which shall be set off in a boxed format to
draw attention to it:

deleted text begin Broker represents both the seller(s) and the buyer(s) of the property involved in this
transaction, which creates a dual agency. This means that broker and its salespersons owe
fiduciary duties to both seller(s) and buyer(s). Because the parties may have conflicting
interests, broker and its salespersons are prohibited from advocating exclusively for either
party. Broker cannot act as a dual agent in this transaction without the consent of both
seller(s) and buyer(s).
deleted text end

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

(1) deleted text begin confidential information communicated to broker which regards price, terms, or
motivation to buy or sell will remain confidential unless seller(s) or buyer(s) instruct(s)
broker in writing to disclose this information. Other information will be shared; deleted text end new text begin in a
designated agency situation, the supervising broker who supervises the salespersons
representing a party in the transaction must not represent the interests of either party to the
detriment of the other. Each designated salesperson represents the salesperson's party, subject
to the same duties required of a seller's broker and a buyer's broker, respectively;
new text end

(2) new text begin in a dual agency transaction, all confidential information must not be disclosed by
either dual agents or the broker to any party or third party, unless disclosure of the
information is otherwise required by statute or rule, or one party instructs the broker or
salesperson in writing;
new text end

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

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

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

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

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

new text begin OR
new text end

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

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

Sec. 9.

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

Subd. 3.

Responsibilities of brokers.

(a) Supervision of personnel. A new text begin primary new text end broker
shall adequately supervise the activities of the broker's salespersons and employees. new text begin In the
case of a transaction involving designated agency, in addition to the primary broker, the
supervising broker shall adequately supervise the activities of the designated agents and
employees involved in the transaction. new text end Supervision includes the ongoing monitoring of
listing agreements, purchase agreements, other real estate-related documents which are
prepared or drafted by the broker's salespersons or employees or which are otherwise received
by the broker's office, and the review of all trust account books and records. If an individual
broker maintains more than one place of business, each place of business shall be under the
broker's direction and supervision. If a brokerage maintains more than one place of business,
each place of business shall be under the direction and supervision of an individual broker
licensed to act on behalf of the brokerage.

The primary broker shall maintain records specifying the name of each broker responsible
for the direction and supervision of each place of business. If an individual broker, who
may be the primary broker, is responsible for supervising more than one place of business,
the primary broker shall, upon written request of the commissioner, file a written statement
specifying the procedures which have been established to ensure that all salespersons and
employees are adequately supervised. Designation of another broker to supervise a place
of business does not relieve the primary broker of the ultimate responsibility for the actions
of licensees.

(b) Preparation and safekeeping of documents. A broker is responsible for the
preparation, custody, safety, and accuracy of all real estate contracts, documents, and records,
even though another person may be assigned these duties by the broker.

(c) Documentation and resolution of complaints. A broker shall investigate and attempt
to resolve complaints made regarding the practices of any individual licensed to the broker
and shall maintain, with respect to each individual licensed to the broker, a complaint file
containing all material relating to any complaints received in writing for a period of three
years.

(d) Disclosure of listed property information. A broker may allow any unlicensed
person, who is authorized by the broker, to disclose any factual information pertaining to
the properties listed with the broker, if the factual information is provided to the unlicensed
person in written form by the broker representing or assisting the seller(s).

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

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

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

Sec. 10.

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

new text begin Subd. 4. new text end

new text begin Prohibition. new text end

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

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

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