Minnesota Legislature
Office of the Revisor of Statutes
Minnesota Session Laws - 2002, Regular Session
Key: (1) language to be deleted (2) new language
CHAPTER 286-S.F.No. 2821
An act relating to commerce; regulating the conduct of
real estate industry licensees; modifying disclosures;
regulating records retention requirements; amending
Minnesota Statutes 2000, sections 82.19, subdivision
9; 82.23, subdivision 1; 82.27, by adding a
subdivision; Minnesota Statutes 2001 Supplement,
section 82.197, subdivisions 1, 4, 6.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
Section 1. Minnesota Statutes 2000, section 82.19,
subdivision 9, is amended to read:
Subd. 9. [EXCLUSIVE AGENCY AGREEMENTS.] (a) Except as
provided in paragraph (b) (c), a licensee shall not negotiate
the sale, exchange, lease, or listing of any real property
directly with the owner or lessor knowing that the owner or
lessor has executed a written contract granting exclusive
listing contract or exclusive contract for nonagency
services representation or assistance in connection with the
property with to another real estate broker, buyer, or lessee,
nor shall a licensee negotiate the purchase, lease, or exchange
of real property knowing that the buyer or lessee has executed a
written contract granting exclusive buyer representation
contract or exclusive contract for nonagency
services representation or assistance for the purchase, lease,
or exchange of the real property with another real estate broker.
(b) Licensees shall not induce any party to a contract of
sale, purchase, lease, or option, or to an exclusive listing
agreement or buyer's agreement, or facilitator services
agreement, to breach the contract, option, or agreement.
(c) A licensee may discuss the terms upon which a listing
or buyer representation contract or a contract for nonagency
facilitator services may be entered into after expiration of any
existing exclusive contract when the inquiry or discussion is
initiated by the owner, lessor, buyer, or lessee. The licensee
must inquire of the owner, lessor, buyer, or lessee whether such
an exclusive contract exists.
Sec. 2. Minnesota Statutes 2001 Supplement, section
82.197, subdivision 1, is amended to read:
Subdivision 1. [AGENCY DISCLOSURE.] A real estate broker
or salesperson shall provide to a consumer in the sale and
purchase of a residential real property transaction at the first
substantive contact with the consumer an agency disclosure form
in substantially the form set forth in subdivision 4. The
agency disclosure form shall be intended to provide a
description of available options for agency and nonagency
facilitator relationships, and a description of the role of a
licensee under each option. The agency disclosure form shall
provide a signature line for acknowledgment of receipt by the
consumer.
Sec. 3. Minnesota Statutes 2001 Supplement, section
82.197, subdivision 4, is amended to read:
Subd. 4. [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 V 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 and information given
to the broker/salesperson may be disclosed. 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 the Seller and acts on behalf of 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 82.197, subdivision 6, 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 V
below). In that case, the Buyer will not be represented
and will not receive advice and counsel from the broker or
salesperson.
II.
Subagent: A broker or salesperson who is working with a
Buyer but represents the Seller. In this case, the Buyer
is the broker's customer and is not represented by that
broker. 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 that is disclosed to him or her. In that case,
the Buyer will not be represented and will not receive
advice and counsel from the broker or salesperson.
III.
Buyer's Broker: A Buyer may enter into an agreement for
the broker or salesperson to represent and act on behalf of
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 82.197, subdivision 6, 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 V below). In that case, the Seller will not be
represented and will not receive advice and counsel from
the broker or salesperson.
IV.
Dual Agency-Broker Representing both Seller and Buyer:
Dual agency occurs when 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. 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, 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. 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 82.197,
subdivision 6, of which the broker is aware that could
adversely and significantly affect the Buyer's use or
enjoyment of the property.
V.
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, or Dual Agent. 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 THE 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).
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(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:
Loyalty-broker/salesperson will act only in client(s)' best
interest.
Obedience-broker/salesperson will carry out all client(s)'
lawful instructions.
Disclosure-broker/salesperson will disclose to client(s)
all material facts of which broker/salesperson has knowledge
which might reasonably affect the client's rights and interests.
Confidentiality-broker/salesperson will keep client(s)'
confidences unless required by law to disclose specific
information (such as disclosure of material facts to Buyers).
Reasonable Care-broker/salesperson will use reasonable care
in performing duties as an agent.
Accounting-broker/salesperson will account to client(s) for
all client(s)' money and property received as agent.
(3) If Seller(s) decides not to agree to a dual agency
relationship, Seller(s) may give up the opportunity to sell the
property to Buyers represented by the broker/salesperson. If
Buyer(s) decides not to agree to a dual agency relationship,
Buyer(s) may give up the opportunity to purchase properties
listed by the broker.
Sec. 4. Minnesota Statutes 2001 Supplement, section
82.197, subdivision 6, is amended to read:
Subd. 6. [MATERIAL FACTS.] (a) Licensees shall disclose to
any prospective purchaser all material facts of which the
licensees are aware, which could adversely and significantly
affect an ordinary purchaser's use or enjoyment of the property,
or any intended use of the property of which the licensees are
aware.
(b) It is not a material fact relating to real property
offered for sale and no regulatory action shall be brought
against a licensee for failure to disclose in any real estate
transaction the fact or suspicion that the property:
(1) is or was occupied by an owner or occupant who is or
was suspected to be infected with human immunodeficiency virus
or diagnosed with acquired immunodeficiency syndrome; or
(2) was the site of an a suicide, accidental death, natural
death, or perceived paranormal activity; or
(3) is located in a neighborhood containing any adult
family home, community-based residential facility, or nursing
home.
(c) A licensee or employee of the licensee has no duty to
disclose information regarding an offender who is required to
register under section 243.166, or about whom notification is
made under that section, if the broker or salesperson, in a
timely manner, provides a written notice that information about
the predatory offender registry and persons registered with the
registry may be obtained by contacting local law enforcement
where the property is located or the department of corrections.
(d) A licensee is not required to disclose, except as
otherwise provided in paragraph (e), information relating to the
physical condition of the property or any other information
relating to the real estate transaction, if a written report
that discloses the information has been prepared by a qualified
third party and provided to the person. For the purposes of
this paragraph, "qualified third party" means a federal, state,
or local governmental agency, or any person whom the broker,
salesperson, or a party to the real estate transaction
reasonably believes has the expertise necessary to meet the
industry standards of practice for the type of inspection or
investigation that has been conducted by the third party in
order to prepare the written report and who is acceptable to the
person to whom the disclosure is being made.
(e) A licensee shall disclose to the parties to a real
estate transaction any facts known by the broker or salesperson
that contradict any information included in a written report, if
a copy of the report is provided to the licensee, described in
paragraph (d).
Sec. 5. Minnesota Statutes 2000, section 82.23,
subdivision 1, is amended to read:
Subdivision 1. [RETENTION.] A licensed real estate broker
shall retain for three years copies of all listings, buyer
representation and facilitator services contracts, deposit
receipts, purchase money contracts, canceled checks, trust
account records, and such other documents as may reasonably be
related to carrying on a real estate brokerage business. The
retention period shall run from the date of the closing of the
transaction, or from the date of the listing document if the
transaction document is not consummated. The following
documents need not be retained:
(1) agency disclosure forms provided to prospective buyers
or sellers, where no contractual relationship is subsequently
created and no services are provided by the licensee; and
(2) facilitator services contracts or buyer representation
contracts entered into with prospective buyers, where the
prospective buyer abandons the contractual relationship before
any services have been provided by the licensee.
Sec. 6. Minnesota Statutes 2000, section 82.27, is amended
by adding a subdivision to read:
Subd. 2a. [MONETARY SETTLEMENTS.] The commissioner shall
not coerce or attempt to coerce a licensee to enter into any
monetary settlement with a consumer in connection with any
complaint investigation. The commissioner may consider the
totality of the circumstances, including any efforts by the
licensee to mitigate any losses by a consumer, in determining
the appropriateness or severity of administrative sanction.
Presented to the governor March 25, 2002
Signed by the governor March 26, 2002, 2:26 p.m.
Official Publication of the State of Minnesota
Revisor of Statutes