2012 North Dakota Century Code Title 43 Occupations and Professions Chapter 43-23 State Real Estate Commission
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CHAPTER 43-23
STATE REAL ESTATE COMMISSION
43-23-01. Real estate commission - Members.
The state real estate commission consists of five members, three of whom must be active
real estate brokers, appointed by the governor. The commission shall organize by the election of
a chairman.
43-23-02. Commission - Term - Duties - Records.
The governor shall appoint each member of the commission for a term of five years. Terms
must be staggered so the term of one member expires each year. At the expiration of the term
of any member of the commission, the governor shall appoint a successor for a term of five
years. In the event of a vacancy on the commission for any reason the governor shall appoint a
member for the unexpired term of that member.
A majority of the commission, in a duly assembled meeting, may perform and exercise all of
the duties and powers devolving on the commission. The commission may submit a biennial
report to the governor and the secretary of state in accordance with section 54-06-04.
The commission shall adopt a seal with North Dakota real estate commission engraved on
the seal, by which it shall authenticate its proceedings. Copies of all records and papers in the
office of the commission, duly certified and authenticated by the seal of such commission, must
be received in evidence in all courts equally and with like effect as the original.
43-23-03. Commission office - Executive director.
The commission shall employ an executive director who shall furnish bond as required by
the commission and who shall keep a record of all proceedings, transactions, communications,
and official acts of the commission, be custodian of all moneys received for licenses which
must, by the executive director, be deposited for safekeeping in depositories designated by the
commission. The executive director must be custodian of all records of the commission and
perform such other duties as the commission may require. The commission is authorized to fix
the salary of the executive director, to employ such other employees as may be necessary to
properly carry out the provisions of this chapter, to fix salaries and prescribe duties of such
employees and to make such other expenditures as are necessary to carry out the provisions of
this chapter. The commission shall meet annually and upon call by the executive director upon a
written request of three or more members of the commission. The place of meeting of the said
commission must be at the office of the executive director. The location of the office of the
executive director must be at such places within the state as the commission may designate.
The commission shall maintain all files, records, and property of the commission at the office of
the executive director.
43-23-04. Commission - Compensation.
The members of the commission shall receive fifty dollars for each day actually engaged in
the service of the commission and must be paid actual and necessary traveling expenses to be
paid only from the fund derived from fees collected in the administration of this chapter. All
moneys or fees collected or received by the commission must be deposited and disbursed in
accordance with section 54-44-12.
43-23-05. Real estate license required.
No person may act as a real estate broker or real estate salesperson, or advertise or
assume to act as such real estate broker or real estate salesperson, without a license issued by
the real estate commission. No person is entitled to collect any fees, compensation, or
commission as a real estate broker or real estate salesperson without having first complied with
the provisions of this chapter. No copartnership, association, corporation, or limited liability
company may be granted a license, unless at least one partner, shareholder, member, manager,
or officer of the copartnership, association, corporation, or limited liability company, actually
engaged as a real estate broker or real estate salesperson as defined herein, holds a license as
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a real estate broker, and unless every employee who acts as a real estate salesperson for such
copartnership, association, corporation, or limited liability company holds a license as a real
estate salesperson.
43-23-05.1. Organization of salesperson or broker associate permitted to be licensed Fees.
1. The commission may license an organization of a salesperson or broker associate if:
a. The organization is owned solely by an individual who is licensed as a
salesperson or broker associate, or by that individual and that individual's
spouse, or by that individual and other salespersons and broker associates within
the same firm as that individual;
b. The organization does not engage in any real estate transactions as a third-party
agent or in any other capacity requiring a license under this chapter; and
c. The organization does not advertise or otherwise portray to the public that the
organization is a real estate broker or real estate brokerage firm.
2. The employing or associating broker of a salesperson or broker associate who is part
of an organization is not relieved of any obligation to supervise the employed or
associated salesperson or broker associate or of any other requirements under this
chapter.
3. An individual who forms an organization is not by nature of that act relieved of any
personal liability for licensed activities.
4. The commission may adopt rules establishing a one-time license fee for an
organization licensed by a salesperson or broker associate.
43-23-06. Definitions.
Repealed by S.L. 1977, ch. 405, § 2.
43-23-06.1. Definitions.
As used in this chapter, unless the context otherwise requires:
1. "Appointed agent" means a licensee appointed by a designated broker of the
licensee's real estate brokerage firm to act solely for a client of that brokerage firm to
the exclusion of other licensees of that brokerage firm.
2. "Client" means a person that has entered a written agency agreement with a real
estate brokerage firm.
3. "Commission" means the North Dakota real estate commission.
4. "Customer" means a buyer, prospective buyer, seller, lessee, or lessor that is not
represented by that real estate brokerage firm in a real property transaction.
5. "Designated broker" means a licensee designated by a real estate brokerage firm to
act on behalf of the brokerage firm.
6. "Dual agency" means a situation in which a real estate brokerage firm or the real
estate brokerage firm's licensees owe a duty to more than one party in a real estate
transaction. Dual agency is established only as follows:
a. When one licensee represents both the buyer and the seller in a real estate
transaction; or
b. When two or more licensees, licensed to the same broker, each represents a
party to the real estate transaction.
"Dual agency" does not exist unless both the seller and the buyer in a real estate
transaction have written agency agreements with the same real estate brokerage firm.
For purposes of "dual agency" a subagency arrangement is not a written agency
agreement.
7. "Licensee" means a real estate broker, an associate real estate broker, or a real estate
salesperson who is associated with a real estate brokerage firm.
8. "Real estate", "real property", "realty", or words of like import, means any interest or
estate in land, including leaseholds, whether such interest or estate is corporeal,
incorporeal, freehold, or nonfreehold, and whether situated in this state or elsewhere;
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9.
10.
11.
provided, however, that the meaning as used in this chapter does not include oil, gas,
or mineral leases, nor does it include any other mineral leasehold, mineral estate, or
mineral interest of any nature whatsoever.
"Real estate broker", or "broker", means any person that, for another, for a fee,
commission, salary, or other consideration, or with the intention or expectation of
receiving or collecting such compensation from another, engages in or offers or
attempts to engage in, either directly or indirectly by a continuing course of conduct or
by a single act or transaction, any of the following acts:
a. Lists, offers, attempts, or agrees to list real estate or any interest in that real
estate, or any improvements affixed on that real estate for sale, exchange, or
lease.
b. Sells, exchanges, purchases, or leases real estate or any interest in that real
estate, or any improvements affixed on that real estate.
c. Offers to sell, exchange, purchase, or lease real estate or any interest in that real
estate, or any improvements affixed on that real estate.
d. Negotiates or offers, attempts, or agrees to negotiate the sale, exchange,
purchase, or leasing of real estate or any interest in that real estate, or any
improvements affixed on that real estate.
e. Buys, sells, offers to buy or sell, or otherwise deals in options on real estate or
any interest in that real estate, or any improvements on that real estate.
f. Who is a licensee under this chapter and performs any of the acts set out in this
subsection while acting in the licensee's own behalf.
g. Advertises or holds out as being engaged in the business of buying, selling,
exchanging, or leasing of real estate or any interest in that real estate, or any
improvements on that real estate.
h. Assists or directs in the procuring of prospects, calculated to result in the sale,
exchange, or leasing of real estate or any interest in that real estate, or any
improvements on that real estate.
"Real estate brokerage firm" means a person that is providing real estate brokerage
services through that person's licensees and which is licensed by the commission as a
real estate brokerage firm.
"Real estate salesperson" means any person that for a fee, compensation, salary, or
other consideration, or in the expectation or upon the promise of that compensation, is
employed or engaged by a licensed real estate broker to do any act or deal in any
transaction as provided in subsection 6 for or on behalf of such licensed real estate
broker.
43-23-07. Real estate brokers and salespersons - Exceptions.
The term "real estate broker" or "real estate salesperson" does not include:
1. Any person, partnership, association, corporation, or limited liability company who is a
bona fide owner or lessor or who accepts or markets leasehold interests in residential
or agricultural property and performs any of the aforesaid acts with reference to
property owned or leased by them, nor does it apply to regular employees thereof,
when the acts are performed in the regular course of or as an incident to the
management of the property and the investment therein.
2. An attorney at law, admitted to practice in this state, handling sales of real estate in the
course of estate or guardianship administration in district court, or trust administration,
bankruptcy proceedings, receiverships, or like actions subject to approval by a court of
competent jurisdiction, or sales of real estate arising in the usual course of the practice
of law.
3. Any person selling real estate as an auctioneer, provided the sale is advertised as a
bona fide public auction.
4. Any bank or trust company or any of its officers or employees in the performance of
their duties as an officer or employee of the bank or trust company.
5. Any person holding in good faith a duly executed power of attorney from the owner,
authorizing a final consummation and execution for the sale, purchase, lease, or
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6.
7.
exchange of real estate when such acts are not of a recurrent nature and done with
the intention of evading this section.
Any person while acting as a receiver, trustee, administrator, executor, guardian, or
under court order, or while acting under authority of a deed, trust, or will.
Public officers while performing their duties.
43-23-08. License standards.
1. Licenses and the renewals thereof may be granted only to persons who bear a good
reputation for honesty, truthfulness, and fair dealing and who are competent to
transact the business of a real estate broker or a real estate salesperson in such
manner as to safeguard the interest of the public, and whose real estate license has
not been revoked in this or any other state within two years prior to date of application.
To determine the competency of applicants, the commission shall prescribe and hold
examinations at designated times and places.
2. In addition to the requirements established by subsection 1, an applicant for a broker's
or salesperson's license must be at least eighteen years of age.
3. Every applicant for a license as a real estate broker:
a. Shall have been actively engaged as a licensed real estate salesperson for a
period of at least one year preceding the date of application, which, beginning
July 1, 1979, is increased to two years; or
b. Shall have had experience as determined by the commission to be substantially
equal to that which a licensed real estate salesperson would ordinarily receive
during a period of one year, which, beginning July 1, 1979, is increased to two
years.
4. As a prerequisite for licensure, an applicant for a salesperson's license shall furnish to
the commission evidence the applicant has successfully completed at least forty-five
hours in courses of study approved by the commission. Within one year after initial
licensure as a salesperson, the salesperson's broker shall furnish to the commission
evidence of the salesperson's successful completion of fifteen postlicensure hours in
courses of study approved by the commission. An applicant for a broker's license must
have successfully completed an additional sixty hours in courses of study approved by
the commission. An applicant for a salesperson's license may take the licensing
examination before fulfillment of the prerequisite educational requirement; however,
the commission may not issue a salesperson's license to an applicant unless
satisfactory evidence of completion of this prerequisite educational requirement is
furnished to the commission. An applicant for a broker's license must have
satisfactorily fulfilled the educational requirement before taking the broker's licensing
examination.
5. If the commission finds that an applicant could not acquire employment as a licensed
real estate salesperson because of conditions existing in the area where the
salesperson resides, then the experience requirements established in subdivisions a
and b of subsection 3 may be waived by the commission. The educational
requirements of subsection 4 may not be waived by the commission, but guidelines
may be established whereby applicants who have engaged in certain educational
courses of study which are closely related to the real estate profession may be
deemed to have satisfied this requirement.
6. The commission may adopt reasonable rules and regulations pursuant to the
provisions of chapter 28-32 relative to procedures for licensing, approval of
coursework, and for the type of certification or proof of coursework completion that
must be submitted.
43-23-08.1. Conviction not bar to licensure - Exceptions.
Conviction of an offense does not disqualify a person from licensure under this chapter
unless the commission determines that the offense has a direct bearing upon a person's ability
to serve the public as a real estate broker or salesperson, or that, following conviction of any
offense, the person is not sufficiently rehabilitated under section 12.1-33-02.1.
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43-23-08.2. License renewal - Continuing education required.
1. The commission may establish the conditions under which each applicant for renewal
of a broker's or salesperson's license, in addition to the requirements of section
43-23-08, shall submit proof of participation in approved continuing education. In
establishing the conditions for continuing education, the commission may determine
the required number of hours, the frequency and conditions of reporting requirements,
and all other terms and conditions of continuing education compliance. The
commission shall set standards for the approval of lectures, seminars, courses of
instruction, and correspondence courses that qualify for satisfaction of this
requirement, and shall maintain a current list of lectures, seminars, courses of
instruction, and correspondence courses so approved. Lectures, seminars, courses of
instruction, and correspondence courses may not require passing of a test to qualify
for satisfaction of this requirement. Licensees must have the option of attending an
approved course of instruction in person or taking an approved correspondence
course. Attendance at a course or the completion of a correspondence course must be
documented in accordance with procedures established by the commission. The
commission may adopt rules concerning implementation of this section pursuant to
chapter 28-32.
2. A license may not be renewed by the commission unless the proper certification
showing fulfillment of the continuing education requirements of this section and the
appropriate licensing fees are submitted to the commission in accordance with section
43-23-13.1.
3. The commission may exempt licensees from the continuing education requirements of
this section for reasons relating to the licensee's health, military service, or for other
good cause. Licensees who have held a real estate license for fifteen continuous
years on January 1, 1984, are exempt from the requirements of this section.
43-23-08.3. Disclosure of sexual offenders.
A licensee is not liable for any action resulting from any disclosure or nondisclosure relating
to the registration of sexual offenders under section 12.1-32-15.
43-23-08.4. Criminal history record checks.
The commission may require an applicant for licensure or a licensee whose licensure is
subject to investigation by the commission to submit to a statewide and nationwide criminal
history record check. The nationwide criminal history record check must be conducted in the
manner provided by section 12-60-24. All costs associated with obtaining a background check
are the responsibility of the applicant or licensee.
43-23-09. License application.
Every application for a real estate broker's license or a real estate salesperson's license
must be in writing upon blanks prepared by the commission and contain such data and
information as the commission may require.
43-23-10. Nonresident brokers - Reciprocity - Consent to service.
A nonresident broker regularly engaged in the real estate business as a vocation and who
maintains a definite place of business and is licensed in some other state, which offers the
same privileges to the licensed brokers of this state, may not be required to maintain a place of
business within this state. The commission shall recognize the license issued to a real estate
broker by another state as satisfactorily qualifying the nonresident broker for license as a
broker; provided, that the nonresident broker has qualified for license in the broker's own state
and also that the other state permits licenses to be issued to licensed brokers in this state.
Every nonresident applicant shall file an irrevocable consent that suits and actions may be
commenced against such applicant in the proper court of any county of the state in which a
claim for relief may arise, in which the plaintiff may reside, by the service of any process or
pleading authorized by the laws of this state, on any member of the commission, or the
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executive director, said consent stipulating and agreeing that such service of such process or
pleading shall be taken and held in all courts to be as valid and binding as if due service had
been made upon said applicant in this state. The consent must be duly acknowledged. Any
service of process or pleading must be by duplicate copies, one of which must be filed in the
office of the commission and the other immediately forwarded by registered mail to the
last-known main office of the applicant against whom said process or pleading is directed, and
no default in any such proceedings or action may be taken except upon affidavit or certificate of
the commission or the executive director, that a copy of said process or pleading was mailed to
the defendant as herein required, and no judgment by default may be taken in any such action
or proceeding until after thirty days from the date of mailing of such process or pleading to the
nonresident defendant.
43-23-11. License refusal, revocation - Hearing - Appeal.
Repealed by S.L. 1973, ch. 357, § 2.
43-23-11.1. Investigations, grounds for refusal, suspension or revocation of license Hearing - Appeal.
1. The commission upon its own motion may, and upon the verified complaint in writing of
any person shall, investigate the activities of any licensee or any person who assumes
to act in such capacity within the state, and has the power to suspend or revoke a
license, impose a monetary fine and actual costs incurred by the commission in the
investigation and prosecution of the complaint, require course attendance, or issue a
letter of reprimand, or any combination thereof, when the licensee, in performing or
attempting to perform any of the acts included within the scope of this chapter, has
performed one or more of the following:
a. Making a material false statement in the licensee's application for a license or in
any information furnished to the commission.
b. Making any substantial and willful misrepresentation with reference to a real
estate transaction which is injurious to any party.
c. Making any false promise of a character such as to influence, persuade, or
induce a party to a real estate transaction to that person's injury or damage.
d. Acting for more than one party in a transaction without the knowledge and
consent of all parties to that transaction for whom the licensee acts.
e. Failure to account for or to remit, within a reasonable time, any moneys coming
into the licensee's possession belonging to others; commingling funds of others
with the licensee's own, failing to keep such funds of others in an escrow or trust
account with a bank or other recognized depository in this state, or keeping
records relative to the deposit, which must contain such information as may be
prescribed by the rules and regulations of the commission relative thereto.
f. Been convicted or pleaded guilty or nolo contendere before any court of any
felony, or of a misdemeanor involving theft, forgery, embezzlement, obtaining
money under false pretenses, bribery, larceny, extortion, conspiracy to defraud, or
other similar offense. A certified copy of the record of conviction is conclusive
evidence of conviction in such cases.
g. Claiming or taking of any secret or undisclosed amount of compensation or
commission or the failure of a licensee to reveal to the licensee's principal or
employer the full amount of such licensee's compensation or commission in
connection with any acts for which a license is required under this chapter.
h. Failing or refusing upon demand to produce any document, book, or record in the
licensee's possession or under that person's control, concerning any real estate
transaction under investigation by the commission.
i. Offering real property for sale or lease without the knowledge and consent of the
owner or the owner's authorized agent or on any terms other than those
authorized by the owner or agent.
j. Refusing, because of race, color, national origin, or ethnic group, to show, sell,
lease, or rent any real estate to prospective renters, lessees, or purchasers.
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k.
2.
Failing or refusing upon demand to furnish copies of any document pertaining to
any transaction dealing with real estate to any person whose signature is affixed
thereto.
l. Paying compensation or commission in connection with any real estate sale,
lease, or other transaction to any person who is not licensed as a real estate
broker or real estate salesperson under this chapter.
m. Failing to disclose to an owner the licensee's intention or true position if the
licensee directly or indirectly through a third party purchases for the licensee or
acquires or intends to acquire any interest in or any option to purchase property
which has been listed with the licensee's office for sale or lease.
n. Failure to include a fixed date of expiration in any written listing agreement and
failure to leave a copy of such agreement with the principal.
o. Failure by a broker to deliver to the party or parties represented by the broker a
complete detailed closing statement in every real estate transaction, at the time
said transaction is consummated, showing all of the receipts and disbursements
handled by such broker for the party or parties represented by the broker, and to
retain true copies of such statements in the broker's files.
p. Violating any provisions of this chapter or rule or regulation promulgated by the
commission.
q. Violation of any provision of such realtor's code of ethics as the commission has
or may promulgate and adopt.
r. Accepting a commission or valuable consideration as a real estate salesperson
for the performance of any of the acts specified in this chapter, or by rule or
regulation of the commission, from any person except the licensed real estate
broker under whom the individual is licensed as a salesperson.
s. If the licensee is a broker, allowing any unlicensed salesperson to do any act or
engage in any activity regulated by this chapter or under rule or regulation of the
commission, which is carried on in the name of or under the authority of the
broker.
t. Failure of a salesperson to place with that person's employing broker for deposit
in the brokerage trust account all real estate trust moneys received by the
salesperson within twenty-four hours of the time of receipt; or failure of the
employing broker to place such moneys for deposit within twenty-four hours of
the time of receipt from the salesperson. Provided that if trust money is received
on a day prior to a holiday or on another day prior to which the depository is
closed where the trust fund is maintained, the moneys must then be deposited
during the next business day of the depository.
u. Failure of the licensee to reduce an offer to writing when a proposed purchaser
requests that such offer be submitted to the seller, or failure of the licensee to
submit all offers to a seller when such offers are received prior to the seller
accepting an offer in writing and until the broker has knowledge of such
acceptance.
v. Any other conduct, whether of the same or of a different character than specified
in this subsection, which constitutes dishonesty or fraudulent conduct, whether
arising within or without the pursuit of that person's licensed privilege.
w. Any conduct which in the determination of the commission does not meet the
generally accepted standard of expertise, care, or professional ability expected of
real estate brokers or salespersons, provided that any disciplinary measures by
the commission under this subdivision must be limited to the issuance of a letter
of reprimand to the offending licensee.
If the commission declines or fails to approve an application submitted to it, it shall
immediately give notice of that fact to the applicant, and upon request from such
applicant, filed within twenty days after the receipt of such notice, shall fix a time and
place for hearing, of which twenty days' notice must be given to such applicant and to
other persons interested or protesting, to offer evidence relating to the application. In
such cases the commission shall fix the time for such hearing on a date within sixty
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3.
4.
days from receipt of the request for the particular hearing, provided the time of hearing
may be continued from time to time with the consent of the applicant. As a result of
such hearing, the commission may either approve the application if all other applicable
provisions of this chapter have been met, and permit the applicant to take the
examination to determine whether the applicant shall be licensed, or it may sustain its
prior decision refusing to approve the application.
A license may not be revoked or suspended, a monetary fine or actual costs may not
be imposed, course attendance may not be required, nor any letter of reprimand
issued except after hearing before the commission with a copy of the charges having
been duly served upon the licensee and upon sustaining of the charges for
suspension, revocation, fine, payment of actual costs incurred, required course
attendance, or reprimand. The provisions of chapter 28-32 apply to and govern all
proceedings for suspension, revocation, fine, payment of actual costs incurred,
required course attendance, or reprimand of licenses or licensees.
In any order or decision issued by the commission in resolution of a disciplinary
proceeding in which disciplinary action is imposed against a licensee, the commission
may direct the licensee to pay a fine not to exceed two thousand five hundred dollars
and actual costs, including attorney's fees, incurred by the commission in the
investigation and prosecution of the case. All fines collected must be deposited in the
commission's license fee account.
43-23-12. Broker's place of business - License of employed salesperson.
1. Every person, partnership, association, corporation, or limited liability company
licensed as a real estate broker is required to have and maintain a definite place of
business within this state, for the transaction of real estate business. The certificate of
registration as broker and the certificate of each real estate salesperson employed by
such broker must be prominently displayed in said office. The said place of business
must be designated in the license, and no license issued under the authority of this
chapter may authorize the licensee to transact business at any other address. In case
of removal from the designated address, the licensee shall make application to the
commission before said removal or within ten days after said removal, designating the
new location of such office, whereupon the commission shall forthwith issue a new
license for the new location for the unexpired period. The broker's home may qualify
as such place of business.
2. All licenses issued to real estate salespersons shall designate the employer of such
salespersons. Prompt notice in writing, within ten days, must be given to the
commission by any real estate salesperson of a change of employer, and of the name
of the licensed broker into whose employ the salesperson is about to enter, and a new
license shall thereupon be issued by the commission to such salesperson for the
unexpired term of the original license, upon the return to the commission of the license
previously issued. The change of employer or employment by any licensed real estate
salesperson, without notice to the commission as aforesaid, shall automatically cancel
that person's license. Upon termination of a real estate salesperson's employment, the
broker employer shall forthwith return the salesperson's license to the commission for
cancellation. It is unlawful for any real estate salesperson to perform any of the acts
contemplated by this chapter either directly or indirectly after that person's employment
has been terminated and license as a salesperson has been returned for cancellation,
until said license has been reissued by the commission.
43-23-12.1. Real estate brokerage firm - Duties required.
1. A real estate brokerage firm and the real estate brokerage firm's licensees, which
provide services through a written agency agreement for a client, are bound to that
client by the duties of loyalty, obedience, disclosure, confidentiality, reasonable care,
diligence, and accounting, subject to the provisions of this chapter and subject to any
rules adopted under this chapter. The agency relationship, which must be established
through a written agency agreement, may be a seller agency, a buyer agency, a dual
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2.
3.
4.
5.
6.
agency, an appointed agency, a subagency, or another form of agency relationship. If
a different relationship, including a nonagency relationship with a customer, between
the real estate brokerage firm and the person for which the real estate brokerage firm
performs the services is intended, the relationship must be disclosed in writing
pursuant to rules adopted by the board.
If a buyer, prospective buyer, or seller is not represented by a real estate brokerage
firm in the real property transaction, that buyer or seller remains a customer, and, as to
that customer, the real estate brokerage firm and the real estate brokerage firm's
licensees are nonagents that owe the following legal duties: to perform customary acts
typically performed by real estate licensees in assisting a transaction to the
transaction's closing or conclusion if these acts are to assist the customer for which
the services are directly provided; to perform these acts with honesty and good faith;
and to disclose to the customer any adverse material facts actually known by the
licensee which pertain to the title of the real property, the physical condition of the real
property, and defects in the real property. These limited duties are subordinate to any
duties the real estate brokerage firm and the real estate brokerage firm's licensees
owe to a client in the same transaction.
Unless otherwise agreed in writing, a real estate brokerage firm and the real estate
brokerage firm's licensees are not obligated to a client, to a customer, or to any other
person to discover defects in any real property, to verify the ownership of any real
property, or to independently verify the accuracy or completeness of any statement or
representation made by any person other than the real estate brokerage firm and the
real estate brokerage firm's licensees involved in the transaction under question.
Unless the licensee is directly involved in a transaction regarding the affected real
property, this section does not result in imputing knowledge, regarding the affected real
property, of one licensee within a real estate brokerage firm to another licensee within
the same real estate brokerage firm or in imposing a duty upon a licensee within a real
estate brokerage firm to disclose facts that are known by that licensee regarding the
affected real property to another licensee within the same real estate brokerage firm.
If a real estate brokerage firm and the real estate brokerage firm's licensees represent
two or more buyers or lessees as clients that desire to make an offer for the purchase
or lease of the same real property, the real estate brokerage firm and the real estate
brokerage firm's licensees do not breach any duty by assisting such clients with
multiple offers, even though the interests of such clients are competing, and are not
required to disclose the existence of competing offers, except as otherwise set forth
under this subsection. The real estate brokerage firm and the real estate brokerage
firm's licensees shall continue to honor agency duties to such clients, except as limited
under this subsection. However, if an individual licensee has a written agency
agreement with two or more buyers that desire to make an offer for the purchase or
lease of the same real property, that licensee shall disclose to those competing buyer
clients the fact that a competing written offer has been submitted by another buyer
client of that licensee.
If a real estate brokerage firm and the real estate brokerage firm's licensees represent
two or more sellers or lessors as clients that desire to offer competing real property for
sale or lease, the real estate brokerage firm and the real estate brokerage firm's
licensees do not breach any duty to such clients by performing such services, even
though the interests of such clients are competing. In such event, the real estate
brokerage firm and the real estate brokerage firm's licensees shall continue to honor
agency duties to such clients, except as limited under this subsection.
43-23-12.2. Duties supersede common law.
1. The duties of a real estate brokerage firm, and the firm's licensees, as specified in this
chapter or in rules adopted to implement this chapter, supersede any fiduciary duties
of that real estate brokerage firm and the firm's licensees, to a person based on
common-law principles of agency to the extent that those common-law fiduciary duties
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2.
3.
4.
are inconsistent with the duties specified in this chapter or in rules adopted to
implement this chapter.
A client is not liable for a wrongful act, an error, an omission, or a misrepresentation
made by a licensee in connection with the licensee providing brokerage services for
the client, including brokerage services provided under a subagency relationship,
unless the client knows or should have known of the wrongful act, error, omission, or
misrepresentation or unless the licensee is repeating a misrepresentation made by the
client. This subsection supersedes any conflicting common-law duty of the client.
A real estate brokerage firm that is providing brokerage services to a client is not liable
for a wrongful act, an error, an omission, or a misrepresentation made by the client,
listing agent of another real estate brokerage firm, or subagent of another real estate
brokerage firm, unless the real estate brokerage firm knew or should have known of
the wrongful act, error, omission, or misrepresentation or unless the client, listing agent
of another real estate brokerage firm, or subagent of another real estate brokerage
firm is repeating a misrepresentation made by the real estate brokerage firm.
This section does not limit the liability of a licensee under section 43-23-11.1 nor of a
client for substantial and willful misrepresentations made in reference to a real estate
transaction. As used in this section, the term "real estate brokerage firm" includes the
firm and brokers and agents who work for the firm.
43-23-12.3. Brokerage firm may appoint agents.
1. A real estate brokerage firm, through a designated broker, may appoint in writing to a
client the licensee or licensees within the brokerage firm who will act as appointed
agent of that client to the exclusion of all other licensees within the brokerage firm.
2. If a real estate brokerage firm appoints an appointed agent for clients of the agency
who are, or may be, parties in the same real estate transaction, the brokerage firm and
its licensees are not dual agents as to those clients, and there is no imputation of
knowledge or information among or between said clients, the real estate brokerage
firm, and the appointed agents.
3. Nothing in this section prevents a real estate brokerage firm from entering a dual
agency relationship with its clients after complying with any disclosure requirements
provided by this chapter or by rules adopted under this chapter.
43-23-13. Fees.
Fees for real estate brokers and real estate salespersons are as follows:
1. A fee of not more than two hundred dollars, as set by the commission, must
accompany an application for an individual's real estate broker's license and for each
annual renewal of the license.
2. For each license issued to a partnership, association, corporation, limited liability
company, trust, cooperative, or other firm or entity, foreign or domestic, and for each
annual renewal of the license, a fee of not more than two hundred dollars, as set by
the commission.
3. For an individual's real estate salesperson's license and for each annual renewal of
the license, a fee of not more than two hundred dollars, as set by the commission.
4. The commission shall set and collect reasonable fees to help offset the cost of
operating the commission.
43-23-13.1. License renewal.
Every person licensed to practice as a real estate broker or real estate salesperson must
register annually with the commission and pay the appropriate annual renewal fee as provided
in section 43-23-13. The application for renewal must be accompanied by such certification as
required by this chapter and rules of the commission to show compliance with the educational
requirements of sections 43-23-08 and 43-23-08.2, and is to be submitted to the commission
with the appropriate fee no later than December thirty-first of each year. A licensee who fails to
file a timely application for the renewal of any license and pay the renewal fee may file a late
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renewal application, together with the required educational certification, before March first of the
subsequent year and shall pay, in addition to the renewal fee, a late fee as set by the
commission for each month or fraction thereof after January first. Any license not renewed by
March first must be canceled. The cancellation must be performed without any notice or
opportunity for hearing. Any person whose license has been canceled and who desires
relicensure must be required to satisfy the application and examination requirements for
prospective licensees in accordance with this chapter and rules of the commission.
No licensee may engage in any activity after December thirty-first of any year for which a
license is required under this chapter unless that person's license has been renewed by the
commission.
43-23-14. Fund handling by broker.
Repealed by S.L. 1973, ch. 358, § 2.
43-23-14.1. Handling of funds by brokers.
Except as otherwise provided in this section, every broker shall, at all times, maintain in the
broker's name or firm name, a separate trust account designated as such in a federally insured
financial institution in this state in which the broker shall immediately place as a demand deposit
all funds not the broker's own coming into the broker's possession, in accordance with rules
adopted by the commission. This requirement extends to funds in which the broker may have
some future interest or claim and includes earnest money deposits. Provided, the deposit of
funds may be made in an interest-bearing account in a federally insured bank, trust company,
savings and loan association, or credit union if all parties having an interest in the funds have
agreed in writing and if a copy of the agreement is maintained on file by the broker. A broker
may not commingle the broker's personal funds or other funds in a trust account, except that a
broker may deposit and keep a sum not to exceed five hundred dollars in the account from the
broker's personal funds, which sum must be specifically identified and deposited to cover
service charges related to the trust account. In conjunction with the account, the broker shall
maintain at the broker's usual place of business, books, records, contracts, and other necessary
documents so that the adequacy of the account may be determined at any time. Trust accounts
and other records must be open to inspection by the commission and its duly authorized agents
at all times during regular business hours at the broker's usual place of business.
A broker who does not accept trust funds in real estate brokerage transactions and who has
applied for and received a waiver from the real estate commission is not required to maintain a
designated trust account. However, if a broker does not maintain a trust account and later
receives trust funds in a real estate brokerage transaction, the broker shall open a designated
trust account as required by this section and deposit any trust funds in accordance with rules
adopted by the commission.
43-23-15. Real estate courses - Studies.
1. The commission may conduct or hold or assist in conducting or holding real estate
courses or institutes, and incur and pay the necessary expenses in connection
therewith, which courses or institutes must be open to any licensee without any charge
or fee.
2. The commission may assist libraries, real estate brokers and real estate salespersons,
and institutes and foundations, with financial aid or otherwise, in providing texts,
sponsoring studies, surveys, and programs for the benefit of real estate and the
elevation of the real estate business.
43-23-16. Licensee list.
The executive director shall publish, at least annually, a list of the names and addresses of
all licensees licensed by the board under the provisions of this chapter, together with such other
information relative to the enforcement of the provisions of this chapter as the board may deem
of interest to the public. One of such lists must be mailed to the recorder in each county, unless
the board of county commissioners designates a different official, and must be held as a public
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record. Such lists must also be provided by the executive director to any person in this state
upon request, and to all licensed brokers without charge.
43-23-17. Penalty.
Any person violating section 43-23-05 or 43-23-14.1 is guilty of an infraction.
43-23-18. Injunctions authorized to enforce law.
If any person or entity has engaged in any act or practice that constitutes or will constitute a
violation of this chapter, the commission may commence an action in the district court of the
county in which the person or entity resides or in the district court of the county in which the act
or practice occurred for an injunction to enforce compliance with this chapter or rules adopted
by the commission. The commission is not required to give any bond for commencing this
action. Upon a showing that the person or entity has engaged in any act or practice in violation
of this chapter or rules adopted by the commission, the district court may enjoin the act or
practice and may make any order necessary to conserve, protect, and disburse any funds
involved.
43-23-19. Errors and omissions insurance required of salespersons and brokers Rules.
The real estate commission shall adopt rules pursuant to chapter 28-32 requiring as a
condition of licensure that, effective January 1, 2002, and thereafter, all real estate salespersons
and brokers, except those who hold inactive licenses, carry errors and omissions insurance
covering all activities contemplated under this chapter.
43-23-20. Group insurance coverage authorized - Independent errors and omissions
coverage.
The real estate commission may negotiate by bid with an insurance provider for a group
policy under which coverage is available to all licensees with no right on the part of the insurer
to cancel coverage provided to any licensee, except as provided by rules adopted by the
commission. A licensee may obtain errors and omissions insurance independently if the
coverage complies with the minimum requirements established by the commission.
43-23-21. Commission to determine conditions of errors and omissions coverage.
The real estate commission shall determine the terms and conditions of errors and
omissions coverage required by this chapter, including the minimum limits of coverage, the
permissible deductible, and the permissible exceptions.
43-23-22. Notice of terms and conditions of errors and omissions - Certificate of
coverage.
Each licensee must be notified of the required terms and conditions of coverage at least
thirty days before the annual license renewal date. A certificate of coverage, showing
compliance with the required terms and conditions of coverage, must be filed annually with the
real estate commission by each licensee who elects not to participate in the group insurance
program administered by the real estate commission.
43-23-23. Errors and omissions coverage not required if premium limit unobtainable.
If the real estate commission is unable to obtain errors and omissions insurance coverage
at a reasonable premium, the errors and omissions insurance requirement of this section does
not apply during the year for which coverage cannot be obtained.
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