1997 Minnesota Statutes

     82.197 Disclosure requirements. 

    Subdivision 1.    Agency disclosure.  A real estate 
 broker or salesperson shall provide to a consumer in 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 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. 

    Subd. 2.    Creation of dual agency.  If circumstances 
 create a 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 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: 

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

    (1) confidential information communicated to broker which 
 regards price, terms, or motivation to buy or sell will remain 
 confidential unless seller(s) or buyer(s) instructs broker in 
 writing to disclose this information.  Other information will be 
 shared; 

    (2) broker and its salespersons will not represent the 
 interests of either party to the detriment of the other; and 

    (3) 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 and instruct broker and 
 its salespersons to act as dual agents in this transaction. 

    

    

 ...........................      ........................... 

 Seller                           Buyer 

    

 ...........................      ........................... 

 Seller                           Buyer 

    

 ...........................      ........................... 

 Date                             Date 

    Subd. 3.    Scope and effect.  Disclosures made in 
 accordance with the requirements for disclosure of agency 
 relationships set forth in this chapter are sufficient to 
 satisfy common law disclosure requirements.  In addition, when a 
 principal in the transaction is a licensee or a relative or 
 business associate of the licensee, that fact must be disclosed 
 in writing in addition to any other required disclosures.  

    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 or assistance, you will be 
 treated as a customer of the broker or salesperson and not 
 represented by the brokerage.  The broker or salesperson would 
 then be acting as a Seller's broker (see paragraph I below), or 
 as a nonagent (see paragraph IV below). 

 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 
    broker or salesperson working with a Buyer may also act as 
    a subagent of the Seller, in which case the Buyer is the 
    broker's customer and is not represented by that broker.  A 
    Seller's broker owes to the Seller the fiduciary duties 
    described below.(2)  The broker must also disclose to the 
    Buyer any material facts of which the broker is aware that 
    could adversely and significantly affect the Buyer's use or 
    enjoyment of the property.  A broker or salesperson who is 
    working with a Buyer as a customer and representing the 
    Seller and to whom any information is disclosed must act in 
    the Seller's interests and must tell the Seller the 
    information.  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 
    the Buyer.  The broker may represent the Buyer only, and 
    not the Seller, even if the broker 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 any material facts of which the 
    broker is aware that could adversely and significantly 
    affect the Buyer's use or enjoyment of the property. 

 III. 

    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 the party writing.  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 any material 
    facts of which the broker is aware that could adversely and 
    significantly affect the Buyer's use or enjoyment of the 
    property. 

 IV. 

    Nonagent:  A broker or salesperson may perform services for 
    either party as a nonagent, if that party signs a nonagency 
    services agreement.  As a nonagent the broker or 
    salesperson facilitates the transaction, but does not act 
    on behalf of either party.  THE NONAGENT BROKER OR 
    SALESPERSON DOES NOT OWE ANY PARTY ANY OF THE FIDUCIARY 
    DUTIES LISTED BELOW, UNLESS THOSE DUTIES ARE INCLUDED IN 
    THE WRITTEN NONAGENCY SERVICES AGREEMENT.  The nonagent 
    broker or salesperson owes only those duties required by 
    law or contained in the written nonagency services 
    agreement. 

 ACKNOWLEDGMENT:  I/We acknowledge that I/We have been presented 
 with the above-described options.  I/We understand that Buyers 
 who have not signed a Buyer representation contract or nonagency 
 services agreement are not represented by the broker/salesperson 
 and information given to the broker/salesperson will be 
 disclosed to the Seller.  I/We understand that written consent 
 is required for a dual agency relationship.  This is a 
 disclosure only, NOT a contract for representation. 

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

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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. 

    Subd. 5.    Application.  The disclosures required by 
 subdivision 4 apply only to residential real property 
 transactions. 

    HIST: 1986 c 444; 1993 c 309 s 9; 1994 c 461 s 1; 1996 c 439 art 3 s 
 5-8