2001 Minnesota Statutes

CHAPTER 327B. Manufactured home sales

     327B.01 Definitions. 

    Subdivision 1.    Terms.  As used in sections 327B.01 to 
 327B.12 the terms defined in this section have the meanings 
 given them.  

    Subd. 2.    Affiliate.  "Affiliate" of another person 
 means any person directly or indirectly controlling, controlled 
 by, or under common control with the other person.  

    Subd. 3.    Broker.  "Broker" means any person who:  

    (a) For another and for commission, fee or other valuable 
 consideration or with the intention or expectation of receiving 
 the same directly or indirectly lists, sells, exchanges, buys or 
 rents, manages, or offers or attempts to negotiate a sale, 
 option, exchange, purchase or rental of an interest in a 
 manufactured home or advertises or holds out as engaged in such 
 activities; 

    (b) For another and for commission, fee or other valuable 
 consideration or with the intention or expectation of receiving 
 the same directly or indirectly negotiates or offers or attempts 
 to negotiate a loan, secured or to be secured by a security 
 interest in or other encumbrance on a manufactured home; or 

    (c) Engages in the business of charging an advance fee or 
 contracting for collection of a fee in connection with any 
 contract to undertake to promote the sale of a manufactured home 
 through its listing in a publication issued primarily for the 
 purpose of promoting the sale of manufactured homes or real 
 estate.  

    Subd. 4.    Commissioner.  "Commissioner" means the 
 commissioner of administration.  

    Subd. 5.    Consumer customer.  "Consumer customer" 
 means any natural person who, primarily for personal, household 
 or family purposes, buys, sells, or seeks to buy or sell, a 
 manufactured home from, to or through a dealer or manufacturer.  

    Subd. 6.    Controlling shareholder.  "Controlling 
 shareholder" means a shareholder whose legal, equitable and 
 beneficial holdings, and whose family's such holdings, in a 
 dealership amount to more than ten percent of the outstanding 
 shares.  

    Subd. 7.    Dealer.  "Dealer" means any person who 
 engages in the business, either exclusively or in addition to 
 any other occupation, of selling or brokering manufactured 
 homes, new or used, or who offers to sell, solicit, broker or 
 advertise the sale of manufactured homes, new or used.  

    Subd. 8.    Express warranty.  "Express warranty" means 
 a warranty as defined by section 336.2-313.  

    Subd. 9.    Implied warranty of fitness for particular 
 purpose.  "Implied warranty of fitness for particular purpose" 
 means a warranty as defined by section 336.2-315.  

    Subd. 10.    Implied warranty of merchantability.  
 "Implied warranty of merchantability" means a warranty as 
 defined by section 336.2-314.  

    Subd. 11.    In park sale.  "In park sale" has the 
 meaning specified in section 327C.01, subdivision 2.  

    Subd. 12.    Manufacturer.  "Manufacturer" means any 
 person who manufactures, assembles or produces manufactured 
 homes.  

    Subd. 13.    Manufactured home.  "Manufactured home" 
 means a structure, not affixed to or part of real estate, 
 transportable in one or more sections, which in the traveling 
 mode, is eight body feet or more in width or 40 body feet or 
 more in length, or, when erected on site, is 320 or more square 
 feet, and which is built on a permanent chassis and designed to 
 be used as a dwelling with or without a permanent foundation 
 when connected to the required utilities, and includes the 
 plumbing, heating, air conditioning, and electrical systems 
 contained in it.  

    Subd. 14.    Manufactured home park.  "Manufactured home 
 park" has the meaning specified in section 327C.01, subdivision 
 5.  

    Subd. 15.    Net listing agreement.  "Net listing 
 agreement" means any agreement by any dealer to sell, offer for 
 sale, solicit, broker or advertise the sale of a manufactured 
 home on behalf of any person which provides for the dealer to 
 receive any consideration from any person other than a 
 commission based on a single percentage of the price at which 
 the home is actually sold.  

    Subd. 16.    New manufactured home.  "New manufactured 
 home" means a manufactured home which is purchased for the first 
 time other than for purposes of resale.  

    Subd. 17.    Person.  "Person" means any individual, 
 corporation, firm, partnership, incorporated and unincorporated 
 association, or any other legal or commercial entity.  

    Subd. 18.    Sale.  "Sale" means:  

    (a) The passing of title from one person to another for 
 consideration; or 

    (b) Any agreement to sell under which possession is 
 delivered to the buyer but title is retained in the seller; or 

    (c) Any agreement in the form of a bailment or lease of 
 goods if the bailee or lessee agrees to pay as compensation for 
 use a sum substantially equivalent to or in excess of the 
 aggregate value of the goods involved and it is agreed that the 
 bailee or lessee will become, or for no other than a nominal 
 consideration has the option to become, the owner of the goods 
 upon full compliance with the bailee's or lessee's obligations 
 under the agreement; or 

    (d) Any legally binding executory agreement to make a sale. 

    Subd. 19.    Salesperson.  "Salesperson" means a person 
 who acts on behalf of a dealer in performing any act which 
 sections 327B.01 to 327B.12 authorize or require to be performed 
 by a dealer.  

    Subd. 20.    Trust account.  "Trust account" means a 
 demand deposit, share draft or checking account maintained for 
 the purpose of segregating trust funds from other funds.  

    Subd. 21.    Trust funds.  "Trust funds" means funds 
 received by a broker in a fiduciary capacity as a part of a 
 manufactured home sale transaction, pending the consummation or 
 termination of a transaction, and includes all down payments, 
 earnest money deposits, rents for clients, tax and insurance 
 escrow payments, damage deposits, and any funds received on 
 behalf of any person.  

    HIST: 1982 c 526 art 1 s 1; 1983 c 142 s 1,2; 1983 c 216 art 1 
 s 52,53; 1986 c 444 

     327B.02 Warranties. 

    Subdivision 1.    Implied warranties.  Every sale of a 
 new manufactured home in this state is made with an implied 
 warranty that the manufactured home conforms in all material 
 aspects to applicable federal or state laws and regulations 
 establishing standards of safety or quality, and with implied 
 warranties of merchantability and fitness for particular purpose 
 as permanent housing in the climate of this state.  

    Subd. 2.    Express warranties permitted.  This section 
 does not prohibit a manufacturer or dealer from making express 
 warranties with respect to a manufactured home, but a 
 manufacturer or dealer may not limit, modify or disclaim the 
 warranties implied by subdivision 1.  

    Subd. 3.    Limitations void.  Any attempt to exclude, 
 limit or modify any rights or remedies created by the warranties 
 implied by this section is void.  

    HIST: 1982 c 526 art 1 s 2 

     327B.03 Warranties; duration, honoring. 

    Subdivision 1.    Duration.  The warranties implied by 
 section 327B.02 shall run for a period of one year from the date 
 of delivery of the manufactured home to the consumer customer.  

    Subd. 2.    Notice and cooperation by buyer.  To invoke 
 either a warranty implied by section 327B.02 or an express 
 warranty made by the manufacturer the buyer must notify the 
 dealer and the manufacturer within a reasonable time after 
 discovering the breach and not later than 90 days after the 
 expiration of the warranty.  To invoke an express warranty made 
 by the dealer, the buyer must notify the dealer within a 
 reasonable time after discovering the breach and not later than 
 90 days after the expiration of the warranty.  After giving the 
 notice the buyer must allow reasonable opportunity for the 
 service or repair.  

    Subd. 3.    Responsibility to honor.  The manufacturer 
 and dealer, jointly and severally, shall service or repair a 
 manufactured home at its site within a reasonable time after 
 receiving written notice of breach of either a warranty implied 
 by section 327B.02 or an express warranty made by the 
 manufacturer.  The dealer shall service or repair a manufactured 
 home at its site within a reasonable time after receiving 
 written notice of breach of an express warranty made by the 
 dealer.  

    HIST: 1982 c 526 art 1 s 3 

     327B.04 Manufacturers and dealers; licenses; bonds. 

    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.  

    Subd. 2.    Subagency licenses.  Any dealer who has a 
 place of business at more than one location shall designate one 
 location as its principal place of business, one name as its 
 principal name, and all other established places of business as 
 subagencies.  A subagency license shall be required for each 
 subagency.  No dealer shall do business as a dealer under any 
 other name than the name on its license.  

    Subd. 3.    License application.  Application for a 
 license and its renewal shall be made to the commissioner, shall 
 be in writing, and duly verified by oath.  The applicant shall 
 submit any information required by the commissioner, upon forms 
 provided by the commissioner for that purpose, including: 

    (a) proof of identity; 

    (b) the name under which the applicant will be licensed and 
 do business in this state; 

    (c) the applicant's type and place of business; 

    (d) The name, home and business address of the applicant's 
 directors, officers, limited and general partners, controlling 
 shareholders and affiliates; 

    (e) whether the applicant, or any of its directors, 
 officers, limited or general partners, controlling shareholders 
 or affiliates, has been convicted of a crime within the previous 
 ten years that either related directly to the business for which 
 the license is sought or involved fraud, misrepresentation or 
 misuse of funds, or has suffered a judgment in a civil action 
 involving fraud, misrepresentation, or conversion within the 
 previous five years or has had any government license or permit 
 suspended or revoked as a result of an action brought by a 
 federal or state governmental agency in this or any other state 
 within the last five years; and 

    (f) the applicant's qualifications and business history, 
 including whether the applicant, or any of its directors, 
 officers, limited or general partners, controlling shareholders 
 or affiliates has ever been adjudged bankrupt or insolvent, or 
 has any unsatisfied court judgments outstanding against it or 
 them.  

    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 has provided evidence of having had at 
 least two years' prior experience in the sale of manufactured 
 homes, working for a licensed dealer.  

    Subd. 5.    Exemption for real estate brokers and 
 salespeople.  Any person licensed as a real estate broker or 
 salesperson under chapter 82 who brokers the sale of used 
 manufactured homes is not required to obtain a license or a bond 
 as required by this section, but is subject to all other 
 provisions of sections 327B.01 to 327B.12.  Any real estate 
 broker or salesperson who violates a provision of sections 
 327B.06 to 327B.09 in selling or offering for sale a used 
 manufactured home shall be deemed to have violated a provision 
 of chapter 82.  

    Subd. 6.    Certificate of license.  For each license 
 granted the commissioner shall issue a certificate which 
 includes the name of the licensee, the name of the surety 
 company and the amount of the surety bond, the names and 
 addresses of any related principal or subagencies, and a license 
 number.  

    Subd. 7.    Fees; licenses; when granted.  Each 
 application for a license or license renewal must be accompanied 
 by a fee in an amount established by the commissioner by rule 
 pursuant to section 327B.10.  The fees shall be set in an amount 
 which over the fiscal biennium will produce revenues 
 approximately equal to the expenses which the commissioner 
 expects to incur during that fiscal biennium while administering 
 and enforcing sections 327B.01 to 327B.12.  All money collected 
 by the commissioner through fees prescribed in sections 327B.01 
 to 327B.12 shall be deposited in the state government special 
 revenue fund and is appropriated to the commissioner for 
 purposes of administering and enforcing the provisions of this 
 chapter.  The commissioner shall grant or deny a license 
 application or a renewal application within 60 days of its 
 filing.  If the license is granted, the commissioner shall 
 license the applicant as a dealer or manufacturer for the 
 remainder of the calendar year.  Upon application by the 
 licensee, the commissioner shall renew the license for a two 
 year period, if:  

    (a) the renewal application satisfies the requirements of 
 subdivisions 3 and 4; 

    (b) the renewal applicant has made all listings, 
 registrations, notices and reports required by the commissioner 
 during the preceding year; and 

    (c) the renewal applicant has paid all fees owed pursuant 
 to sections 327B.01 to 327B.12 and all taxes, arrearages, and 
 penalties owed to the state.  

    Subd. 8.    Limited dealer's license.  The commissioner 
 shall issue a limited dealer's license to an owner of a 
 manufactured home park authorizing the licensee as principal 
 only to engage in the sale, offering for sale, soliciting, or 
 advertising the sale of used manufactured homes located in the 
 owned manufactured home park.  The licensee must be the title 
 holder of the homes and may engage in no more than ten sales 
 annually.  An owner may, upon payment of the applicable fee and 
 compliance with this subdivision, obtain a separate license for 
 each owned manufactured home park and is entitled to sell up to 
 ten homes per license provided that only one limited dealer 
 license may be issued for each park.  The license shall be 
 issued after: 

    (1) receipt of an application on forms provided by the 
 commissioner containing the following information: 

    (i) the identity of the applicant; 

    (ii) the name under which the applicant will be licensed 
 and do business in this state; 

    (iii) the name and address of the owned manufactured home 
 park, including a copy of the park license, serving as the basis 
 for the issuance of the license; and 

    (iv) the name, home, and business address of the applicant; 

    (2) payment of a $100 annual fee; and 

    (3) provision of a surety bond in the amount of $5,000.  A 
 separate surety bond must be provided for each limited license. 

    The applicant need not comply with section 327B.04, 
 subdivision 4, paragraph (e).  The holding of a limited dealer's 
 license does not satisfy the requirement contained in section 
 327B.04, subdivision 4, paragraph (e), for the licensee or 
 salespersons with respect to obtaining a dealer license.  The 
 commissioner may, upon application for a renewal of a license, 
 require only a verification that copies of sales documents have 
 been retained and payment of a $100 renewal fee.  "Sales 
 documents" mean only the safety feature disclosure form defined 
 in section 327C.07, subdivision 3a, title of the home, financing 
 agreements, and purchase agreements. 

    The license holder shall, upon request of the commissioner, 
 make available for inspection during business hours sales 
 documents required to be retained under this subdivision.  

    HIST: 1982 c 526 art 1 s 4; 1983 c 142 s 3; 1983 c 216 art 1 s 
 54; 1986 c 444; 1995 c 202 art 2 s 28; 1997 c 202 art 2 s 44; 
 1998 c 280 s 1; 2000 c 352 s 1 

     327B.05 Denial, suspension and revocation of licenses. 

    Subdivision 1.    Grounds.  The commissioner may by 
 order deny, suspend or revoke any license on finding(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 all listings, notices and 
 reports required by the commissioner; 

    (g) has failed to pay a civil penalty assessed under 
 subdivision 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.  

    Subd. 2.    Denial; appeal; reconsideration.  The 
 commissioner shall inform the applicant and summarize in writing 
 the reasons for a 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 
 accordance with chapter 14.  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. 

    Subd. 3.    License suspension or revocation; hearing.  
 Upon the commissioner's motion or upon the complaint of another, 
 the commissioner may prepare and serve upon a licensee a written 
 notice or complaint summarizing the violations charged, and 
 requiring the licensee to appear at a specified time and place 
 to show cause why the license should not be revoked.  The 
 hearing on the suspension or revocation shall be conducted 
 pursuant to the contested case provisions of the Administrative 
 Procedure Act.  Upon the completion of the hearing, if the 
 commissioner finds the existence of any of the causes for 
 suspension or revocation set forth in subdivision 1 and 
 determines that the license should be revoked or suspended, the 
 commissioner shall make a written order of revocation or 
 suspension.  A copy of the order shall be served upon the 
 licensee in the manner provided by law for the service of 
 summons in a civil action.  

    If the commissioner revokes or suspends the license of any 
 person holding more than one license under the provisions of 
 section 327B.04, subdivision 2, the commissioner shall revoke or 
 suspend all of the licenses of that person and of the affiliates 
 of that person.  

    Subd. 4.    Summary license suspension.  The 
 commissioner may by order summarily suspend a license pending 
 final determination of any order to show cause if necessary to 
 prevent immediate and substantial public harm.  If a license is 
 suspended pending final determination of an order to show cause, 
 a hearing on the merits shall be held within 30 days of the 
 issuance of the order of suspension.  

    Subd. 5.    Penalties.  After having conducted the 
 hearing provided for in subdivision 3, the commissioner may, in 
 addition to or in lieu of revoking or suspending a license, 
 order restitution to an injured consumer customer, or assess a 
 penalty or penalties of not more than $10,000 against any person 
 who commits any act that is grounds for the suspension or 
 revocation of a license under subdivision 1.  

    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. 

    HIST: 1982 c 526 art 1 s 5; 1983 c 142 s 4,6; 1983 c 216 art 1 
 s 55; 1983 c 247 s 133; 1986 c 444 

     327B.06 Dealer's records. 

    Subdivision 1.    Retention.  A dealer shall retain for 
 three years copies of all listings, deposit receipts, credit 
 applications, contracts, disclosure forms, canceled checks, 
 trust account records and other documents reasonably related to 
 carrying on the business of a dealer.  The retention period 
 shall run from the date of the closing of the transaction or 
 from the date of the listing if the transaction is not 
 consummated.  

    Subd. 2.    Examination of records.  The commissioner 
 may make examinations within or without this state of each 
 dealer's records at such reasonable time and in such scope as is 
 necessary to enforce the provisions of sections 327B.01 to 
 327B.12.  

    HIST: 1982 c 526 art 1 s 6 

     327B.07 Responsibility of dealers. 

    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 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.  

    Subd. 2.    Salespeople.  Every dealer shall report in 
 writing to the commissioner the full name, date of birth, 
 business and home address of every salesperson employed by the 
 dealer.  Within ten days of hiring, firing or otherwise changing 
 the employment status of a salesperson, the dealer shall notify 
 the commissioner in writing.  No salesperson shall work for more 
 than one dealer during the same time period.  

    HIST: 1982 c 526 art 1 s 7; 1983 c 142 s 7 

     327B.08 Duties. 

    Subdivision 1.    Disclosure required.  Prior to the 
 consummation of the sale of any manufactured home where a dealer 
 acts as a broker, the dealer shall disclose in writing to all 
 parties to the transaction all charges, payments, commissions 
 and other fees paid or payable in connection with the 
 transaction.  Any commission charged by the dealer shall be 
 expressed both as a dollar amount and as a percentage of the 
 sales price.  If the home being sold is located in a 
 manufactured home park, prior to the buyer's signing of the 
 purchase agreement the dealer shall disclose in writing to the 
 buyer the state law concerning the in park sale of manufactured 
 homes.  This subdivision does not require any dealer to disclose 
 any consideration received (1) for having acted as an insurance 
 agent, as defined in section 60A.02, subdivision 7, in 
 connection with the transaction, or (2) in return for the dealer 
 having agreed to any contingent liability in connection with the 
 financing of the sale.  The commissioner may prescribe a form to 
 be used to comply with this subdivision and may require all 
 dealers to use that form.  

    Subd. 2.    Presence of parties at closing.  A dealer 
 shall not prohibit, prevent or restrain any party to the 
 brokered sale of a manufactured home from being present at the 
 closing.  If a dealer at a closing purports to have authority to 
 act for one of the parties who is not present, the dealer shall 
 exhibit the document granting that authority and shall give a 
 copy of that document to the other parties.  

    Subd. 3.    Trust account required.  Each dealer who 
 acts as a broker shall maintain a trust account.  A trust 
 account shall not be an interest bearing account except by 
 agreement of the parties and subject to rules of the 
 commissioner.  

    Subd. 4.    Segregation of funds.  A dealer shall 
 deposit all trust funds received in a trust account.  A dealer 
 shall not commingle personal funds or other funds with the funds 
 in a trust account, except that a dealer may deposit and 
 maintain a sum from personal funds not to exceed $100 in a trust 
 account, which sum shall be specifically identified and used to 
 pay service charges relating to the trust account.  

    Subd. 5.    Trust information required.  At the time of 
 application for a license or renewal of license, each dealer who 
 acts or intends to act as a broker shall tell the commissioner 
 the name of the financial institutions and the trust account 
 identification numbers used to comply with the provisions of 
 this section.  A dealer shall immediately report to the 
 commissioner any change of trust account status including 
 changes in financial institutions, account identification 
 numbers, or additional accounts in the same or another financial 
 institution.  No dealer may close an existing trust account 
 without giving ten days' written notice to the commissioner.  

    HIST: 1982 c 526 art 1 s 8; 1986 c 444 

     327B.09 Prohibitions. 

    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.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 chapter does not prohibit either an individual 
 from reselling, without a license, a manufactured home which is 
 or has been the individual's residence or any bank, savings 
 bank, savings association, or credit union, chartered by either 
 this state or the federal government, from reselling, without a 
 license, a repossessed manufactured home.  

    Subd. 2.    Advertising.  No person shall advertise as a 
 manufactured home dealer, or as a lister, broker or agent for 
 the sale of manufactured homes, without being licensed as a 
 dealer as provided in section 327B.04.  

    Subd. 3.    Display of license.  No person shall act as 
 a dealer or manufacturer unless the certificate authorizing that 
 activity is prominently displayed on the business premises 
 covered by the license.  Before moving to a new location from 
 the established place of business occupied when the license is 
 granted, the licensee must first secure the commissioner's 
 written permission.  To obtain that permission, the licensee 
 must prove that the proposed new premises conform to the 
 requirements of section 327B.04, subdivision 4.  

    Subd. 4.    Net listing prohibited.  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. 

    HIST: 1982 c 526 art 1 s 9; 1983 c 142 s 9; 1983 c 216 art 1 s 
 56; 1986 c 444; 1995 c 202 art 2 s 29 

     327B.10 Rulemaking authority. 

    The commissioner may promulgate rules and issue orders 
 reasonably necessary to implement and administer the provisions 
 of sections 327B.01 to 327B.12.  

    HIST: 1982 c 526 art 1 s 10 

     327B.11 Recourse to the bond. 

    Subdivision 1.    Consumer claimants.  Any consumer 
 customer sustaining injuries within the terms of a surety bond 
 issued pursuant to section 327B.04 may proceed against the 
 principal and surety without making the state a party to the 
 proceedings.  Provided, however, that the aggregate liability of 
 the surety to all persons for all losses or damages shall in no 
 event exceed the amount of the bond. 

    Subd. 2.    Payment of claims; notice to commissioner.  
 Before paying any claim against a surety bond, the surety 
 company must first notify the commissioner in writing of the 
 amount of the claim, the basis of the claim and the surety 
 company's intention to pay the claim.  Unless the commissioner 
 objects in writing within ten days of receiving the notice, the 
 surety company may proceed upon its intention.  The 
 commissioner's failure to object is not evidence of the validity 
 of the claim or of the propriety of paying the claim.  The 
 commissioner shall object only with reasonable grounds to 
 believe that paying the claim will reduce the obligation of the 
 bond to an amount less than the total amount of other 
 outstanding and valid claims against the bond.  

    Subd. 3.    Application for a referee.  Within 15 days 
 of objecting to the payment of a claim, the commissioner shall 
 apply to the district court for an order:  

    (a) directing the surety company to pay the full obligation 
 of the bond into court; and 

    (b) appointing a referee to hear claims against the bond 
 and to propose to the court the proper distribution of the bond 
 proceeds.  

    The surety company and the principals on the bond shall be 
 parties to the proceedings.  

    HIST: 1982 c 526 art 1 s 11; 1986 c 444 

     327B.12 Additional remedies and enforcement. 

    Subdivision 1.    Private remedies.  Any person injured 
 or threatened with injury by a dealer or manufacturer's 
 violation of sections 327B.01 to 327B.12 may bring a private 
 action in any court of competent jurisdiction.  

    Subd. 2.    Fraud remedies.  In addition to the remedies 
 provided in sections 327B.01 to 327B.12, any violation of 
 section 327B.08 or 327B.09 is a violation of section 325F.69, 
 subdivision 1 and the provisions of section 8.31 shall apply.  

    HIST: 1982 c 526 art 1 s 12