Minnesota Session Laws - 1983, Regular Session

  

                         Laws of Minnesota 1983 

                        CHAPTER 142--H.F.No. 830
           An act relating to manufactured homes; clarifying the 
          prohibition of net listing agreements; adding an 
          appeals provision; correcting cross-references; 
          amending Minnesota Statutes 1982, sections 327B.01, 
          subdivisions 11 and 14; 327B.04, subdivision 4; 
          327B.05, subdivisions 1 and 2, and by adding a 
          subdivision; 327B.07, subdivision 1; and 327B.09, 
          subdivisions 1 and 4. 
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
    Section 1.  Minnesota Statutes 1982, section 327B.01, 
subdivision 11, is amended to read: 
    Subd. 11.  [IN PARK SALE.] "In park sale" has the meaning 
specified in section 327C.01, subdivision 3 2.  
    Sec. 2.  Minnesota Statutes 1982, section 327B.01, 
subdivision 14, is amended to read: 
    Subd. 14.  [MANUFACTURED HOME PARK.] "Manufactured home 
park" has the meaning specified in section 327C.01, subdivision 
6 5.  
    Sec. 3.  Minnesota Statutes 1982, 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 his 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; and 
    (d) the applicant has established a trust account as 
required by section 327B.09 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 has provided evidence of having had at 
least two years' prior experience in the sale of manufactured 
homes, working for a licensed dealer.  
    Sec. 4.  Minnesota Statutes 1982, section 327B.05, 
subdivision 1, is amended to read: 
     Subdivision 1.  [GROUNDS.] The commissioner may by order 
deny, suspend or revoke any license if he finds (1) that the 
order is in the public interest and (2) that the applicant or 
licensee or any of its directors, officers, limited or general 
partners, controlling shareholders or affiliates:  
     (a) has filed an application for a license or a license 
renewal which fails to disclose any material information or 
contains any statement which is false or misleading with respect 
to any material fact;  
     (b) has violated any of the provisions of sections 327B.01 
to 327B.12 or any rule or order issued by the commissioner or 
any prior law providing for the licensing of manufactured home 
dealers or manufacturers;  
     (c) has had a previous manufacturer or dealer license 
revoked in this or any other state;  
     (d) has engaged in acts or omissions which have been 
adjudicated or amount to a violation of any of the provisions of 
section 325D.44, 325F.67 or 325F.69;  
     (e) has sold or brokered the sale of a home containing a 
material violation of sections 327.31 to 327.35 about which the 
dealer knew or which should have been obvious to a reasonably 
prudent dealer; 
     (f) has failed to make or provide to the commissioner all 
listings, notices and reports required by him;  
     (g) has failed to pay a civil penalty assessed under 
subdivision 6 5 within ten days after the assessment becomes 
final; 
    (h) has failed to pay to the commissioner or other 
responsible government agency all taxes, fees and arrearages due;
    (i) has failed to duly apply for license renewal;  
    (j) has violated any applicable manufactured home building 
or safety code;  
    (k) has failed or refused to honor any express or implied 
warranty as provided in section 327B.03;  
    (l) has failed to continuously occupy a permanent, 
established place of business licensed under section 327B.04;  
    (m) has, without first notifying the commissioner, sold a 
new and unused manufactured home other than the make of 
manufactured home described in a franchise or contract filed 
with the application for license or license renewal;  
    (n) has wrongfully failed to deliver a certificate of title 
to a person entitled to it;  
    (o) is insolvent or bankrupt;  
    (p) holds an impaired or canceled bond;  
    (q) has failed to notify the commissioner of bankruptcy 
proceedings within ten days after a petition in bankruptcy has 
been filed by or against the dealer or manufacturer;  
     (r) has, within the previous ten years, been convicted of a 
crime that either related directly to the business of the dealer 
or manufacturer or involved fraud, misrepresentation or misuse 
of funds;  
     (s) has suffered a judgment within the previous five years 
in a civil action involving fraud, misrepresentation or misuse 
of funds; or 
     (t) has failed to reasonably supervise any employee or 
agent of the dealer or manufacturer, resulting in injury or harm 
to the public.  
     The commissioner may establish rules pursuant to section 
327B.10 further specifying, defining or establishing standards 
of conduct for manufactured home dealers and manufacturers.  
    Sec. 5.  Minnesota Statutes 1982, section 327B.05, 
subdivision 2, is amended to read: 
    Subd. 2.  [DENIAL; RECONSIDERATION.] If the commissioner 
denies an application for a license, he shall inform the 
applicant and summarize in writing the reasons for the denial. 
Within 15 days of receiving the commissioner's notice, the 
applicant may request in writing that the commissioner 
reconsider.  The request for reconsideration shall explain why 
the commissioner's previous decision was wrong and shall 
specifically address each reason given by the commissioner for 
the denial.  Within 20 days of receiving the request for 
reconsideration, the commissioner shall decide whether to 
withdraw the denial and grant a license.  If the commissioner 
reaffirms the denial, the applicant may appeal in the manner 
provided in subdivision 7 6.  An applicant whose application is 
denied may also cure the defects in the application cited by the 
commissioner and resubmit the application at no extra charge.  
    Sec. 6.  Minnesota Statutes 1982, section 327B.05, is 
amended by adding a subdivision to read: 
    Subd. 6.  [APPEALS.] The contested case provisions of 
chapter 14 shall apply to appeals from any order by the 
commissioner denying, suspending or revoking a license, or 
assessing penalties. 
    Sec. 7.  Minnesota Statutes 1982, section 327B.07, 
subdivision 1, is amended to read: 
    Subdivision 1.  [LIABILITY.] Each dealer is responsible for 
the activities of any person employed by or acting on behalf of 
that dealer when the activities occur in connection with the 
sale or attempted sale of a manufactured home.  Each officer of 
a corporation licensed as a dealer is responsible for the 
activities of any person employed by or acting on behalf of the 
corporation when such activities occur in connection with the 
sale or attempted sale of a manufactured home.  
    Sec. 8.  Minnesota Statutes 1982, section 327B.09, 
subdivision 1, is amended to read: 
    Subdivision 1.  [LICENSE REQUIRED.] No person shall engage 
in the business, either exclusively or in addition to any other 
occupation of manufacturing, selling, offering to sell, 
soliciting or advertising the sale of manufactured homes, or act 
as a broker without being licensed as a manufacturer or a dealer 
as provided in section 327B.05 327.04.  Any person who 
manufactures, sells, offers to sell, solicits or advertises the 
sale of manufactured homes, or acts as a broker in violation of 
this subdivision shall nevertheless be subject to the duties, 
prohibitions and penalties imposed by sections 327B.01 to 
327B.12.  This subdivision does not prohibit an individual from 
reselling, without a license, a manufactured home which is or 
has been his or her residence.  
    Sec. 9.  Minnesota Statutes 1982, section 327B.09, 
subdivision 4, is amended to read: 
    Subd. 4.  [NET LISTING PROHIBITED.] Except as otherwise 
provided in this subdivision, No dealer shall use or offer to 
use a net listing agreement.  
    Subd. 5.  [BROKER OR DEALER ARRANGEMENT OF FINANCING.] A 
dealer who is acting as a broker for the sale of a manufactured 
home and who can arrange financing for the sale may charge a 
separate fee for that service, if:  
    (a) the listing agreement does not require that the seller 
or buyer use the dealer's services to arrange financing;  
    (b) in arranging the financing, the dealer will pay a fee 
or will guarantee all or part of the buyer's performance to a 
third person; and 
    (c) the listing agreement clearly and conspicuously 
discloses the amount of the fee, the fact that the fee is in 
addition to the dealer's commission and the fact that the seller 
and buyer are not required to use the dealer's services to 
arrange financing. 
    Sec. 10.  [EFFECTIVE DATE.] 
    Sections 1 to 9 are effective the day following final 
enactment. 
    Approved May 12, 1983