Bill Text: MN SF167 | 2011-2012 | 87th Legislature | Engrossed
Bill Title: Broker price opinions (BPO) on residential real estate regulation
Spectrum: Bipartisan Bill
Status: (Introduced - Dead) 2011-04-07 - HF substituted on General Orders HF323 [SF167 Detail]
Download: Minnesota-2011-SF167-Engrossed.html
1.2relating to real estate professionals; regulating the provision of broker price
1.3opinions on residential real estate;amending Minnesota Statutes 2010, sections
1.482.55, by adding subdivisions; 82.81, subdivision 9; 82B.021, subdivision 19;
1.582B.035, by adding a subdivision; proposing coding for new law in Minnesota
1.6Statutes, chapter 82.
1.7BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.8 Section 1. Minnesota Statutes 2010, section 82.55, is amended by adding a subdivision
1.9to read:
1.10 Subd. 1a. Automated valuation model. For purposes of this chapter, "automated
1.11valuation model" means a computerized model used by mortgage originators and
1.12secondary market issuers to determine the collateral worth of a mortgage secured, or to be
1.13secured, by a consumer's principal dwelling.
1.14EFFECTIVE DATE.This section is effective August 1, 2011.
1.15 Sec. 2. Minnesota Statutes 2010, section 82.55, is amended by adding a subdivision to
1.16read:
1.17 Subd. 1b. Broker price opinion (BPO). For purposes of this chapter, "broker price
1.18opinion" means an estimate prepared by a real estate broker, real estate salesperson, or
1.19licensed real estate appraiser that details the probable selling price of a particular parcel
1.20of real property and provides a varying level of detail about the property's condition,
1.21market, and neighborhood, and information on comparable sales, but does not include
1.22an automated valuation model.
1.23EFFECTIVE DATE.This section is effective August 1, 2011.
2.1 Sec. 3. [82.735] BROKER PRICE OPINION: REQUIREMENTS; DUTIES OF
2.2LICENSEE; REGULATIONS.
2.3 Subdivision 1. Requirements. A person licensed under this chapter or chapter 82B
2.4may prepare and provide a broker price opinion and may charge and collect a fee for it if
2.5the license of that licensee is active and in good standing.
2.6 Subd. 2. Duties of licensee. Notwithstanding any provision of the laws of this
2.7state to the contrary, a person licensed under this chapter or chapter 82B may prepare a
2.8broker price opinion for:
2.9(1) an existing or potential seller for the purposes of listing and selling a parcel of
2.10real property;
2.11(2) an existing or potential buyer of a parcel of real property;
2.12(3) a third party making decisions or performing due diligence related to the
2.13potential listing, offering, sale, exchange, option, lease, or acquisition price of a parcel of
2.14real property when prepared as required by subdivision 3; or
2.15(4) an existing or potential lienholder or other third party for any purpose other than
2.16as the primary basis to determine the value of a piece of property for the purpose of a loan
2.17origination of a residential mortgage loan secured by such piece of property, when done
2.18in conjunction with the purchase of a consumer's principal dwelling, when prepared as
2.19required by subdivision 3.
2.20 Subd. 3. Written report; requirement. (a) Unless the party requesting the opinion
2.21requires a specific report, a broker price opinion prepared for a party under subdivision 2,
2.22clause (3) or (4), must be in writing and contain the following:
2.23(1) a statement of the intended purpose of the broker price opinion;
2.24(2) a brief description of the subject property and property interest to be priced;
2.25(3) the basis of reasoning used to reach the opinion on the price, including the
2.26applicable market data;
2.27(4) any assumptions or limiting conditions;
2.28(5) a disclosure of any existing or contemplated interest of the broker or salesperson
2.29issuing the opinion;
2.30(6) the name of the broker or salesperson issuing the price opinion;
2.31(7) the name of the real estate brokerage that the broker or salesperson is acting
2.32on behalf of;
2.33(8) the date of the price opinion; and
2.34(9) a disclaimer stating, "This opinion is not an appraisal of the market value of
2.35the property, and may not be used in lieu of an appraisal. If an appraisal is desired, the
2.36services of a licensed or certified appraiser must be obtained."
3.1(b) A copy of the broker price opinion report required under this subdivision together
3.2with any supporting materials and documents used in its preparation shall be retained as
3.3required under section 82.72, subdivisions 3 and 4.
3.4(c) A licensee may produce or transmit a broker price opinion report electronically
3.5to any person entitled to receive it.
3.6EFFECTIVE DATE.This section is effective August 1, 2011.
3.7 Sec. 4. Minnesota Statutes 2010, section 82.81, subdivision 9, is amended to read:
3.8 Subd. 9. Exclusive agreements. (a) Except as provided in paragraph (c), a licensee
3.9shall not negotiate the sale, exchange, lease, or listing of any real property directly with the
3.10owner or lessor knowing that the owner or lessor has executed a written contract granting
3.11exclusive representation or assistance for the same service in connection with the property
3.12to another real estate broker, buyer, or lessee, nor shall a licensee negotiate the purchase,
3.13lease, or exchange of real property knowing that the buyer or lessee has executed a written
3.14contract granting exclusive representation or assistance for the same service of purchase,
3.15lease, or exchange of the real property with another real estate broker.
3.16(b)Licensees A licensee shall not induce any party to a contract of sale, purchase,
3.17lease, or option, or to an exclusive listing agreement or buyer's agreement, or facilitator
3.18services agreement, to breach the contract, option, or agreement.
3.19(c) A licensee may discuss the terms upon which a listing or buyer representation
3.20contract or a contract for facilitator services may be entered into after expiration of any
3.21existing exclusive contract when the inquiry or discussion is initiated by the owner, lessor,
3.22buyer, or lessee. The licensee must inquire of the owner, lessor, buyer, or lessee whether
3.23such an exclusive contract exists.
3.24EFFECTIVE DATE.This section is effective August 1, 2011.
3.25 Sec. 5. Minnesota Statutes 2010, section 82B.021, subdivision 19, is amended to read:
3.26 Subd. 19. Market analysis; broker price opinion. "Market analysis" or "broker
3.27price opinion" means a price opinion prepared by a licensed real estate salespersonor,
3.28brokerfor marketing purposes, or real estate appraiser in accordance with section 82.735.
3.29EFFECTIVE DATE.This section is effective August 1, 2011.
3.30 Sec. 6. Minnesota Statutes 2010, section 82B.035, is amended by adding a subdivision
3.31to read:
4.1 Subd. 1a. Broker price opinion. (a) This chapter does not apply to a licensed real
4.2estate salesperson, broker, or real estate appraiser who prepares a broker price opinion in
4.3accordance with section 82.735. In connection with the purchase of a consumer's principal
4.4dwelling, a broker price opinion may not be used as the primary basis to determine the
4.5value of a parcel of property for the purpose of a loan origination of a residential mortgage
4.6loan secured by the parcel of property.
4.7(b) A broker price opinion shall not be subject to USPAP or any rule promulgated by
4.8the appraisal foundation.
4.9EFFECTIVE DATE.This section is effective August 1, 2011.
1.3opinions on residential real estate;amending Minnesota Statutes 2010, sections
1.482.55, by adding subdivisions; 82.81, subdivision 9; 82B.021, subdivision 19;
1.582B.035, by adding a subdivision; proposing coding for new law in Minnesota
1.6Statutes, chapter 82.
1.7BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.8 Section 1. Minnesota Statutes 2010, section 82.55, is amended by adding a subdivision
1.9to read:
1.10 Subd. 1a. Automated valuation model. For purposes of this chapter, "automated
1.11valuation model" means a computerized model used by mortgage originators and
1.12secondary market issuers to determine the collateral worth of a mortgage secured, or to be
1.13secured, by a consumer's principal dwelling.
1.14EFFECTIVE DATE.This section is effective August 1, 2011.
1.15 Sec. 2. Minnesota Statutes 2010, section 82.55, is amended by adding a subdivision to
1.16read:
1.17 Subd. 1b. Broker price opinion (BPO). For purposes of this chapter, "broker price
1.18opinion" means an estimate prepared by a real estate broker, real estate salesperson, or
1.19licensed real estate appraiser that details the probable selling price of a particular parcel
1.20of real property and provides a varying level of detail about the property's condition,
1.21market, and neighborhood, and information on comparable sales, but does not include
1.22an automated valuation model.
1.23EFFECTIVE DATE.This section is effective August 1, 2011.
2.1 Sec. 3. [82.735] BROKER PRICE OPINION: REQUIREMENTS; DUTIES OF
2.2LICENSEE; REGULATIONS.
2.3 Subdivision 1. Requirements. A person licensed under this chapter or chapter 82B
2.4may prepare and provide a broker price opinion and may charge and collect a fee for it if
2.5the license of that licensee is active and in good standing.
2.6 Subd. 2. Duties of licensee. Notwithstanding any provision of the laws of this
2.7state to the contrary, a person licensed under this chapter or chapter 82B may prepare a
2.8broker price opinion for:
2.9(1) an existing or potential seller for the purposes of listing and selling a parcel of
2.10real property;
2.11(2) an existing or potential buyer of a parcel of real property;
2.12(3) a third party making decisions or performing due diligence related to the
2.13potential listing, offering, sale, exchange, option, lease, or acquisition price of a parcel of
2.14real property when prepared as required by subdivision 3; or
2.15(4) an existing or potential lienholder or other third party for any purpose other than
2.16as the primary basis to determine the value of a piece of property for the purpose of a loan
2.17origination of a residential mortgage loan secured by such piece of property, when done
2.18in conjunction with the purchase of a consumer's principal dwelling, when prepared as
2.19required by subdivision 3.
2.20 Subd. 3. Written report; requirement. (a) Unless the party requesting the opinion
2.21requires a specific report, a broker price opinion prepared for a party under subdivision 2,
2.22clause (3) or (4), must be in writing and contain the following:
2.23(1) a statement of the intended purpose of the broker price opinion;
2.24(2) a brief description of the subject property and property interest to be priced;
2.25(3) the basis of reasoning used to reach the opinion on the price, including the
2.26applicable market data;
2.27(4) any assumptions or limiting conditions;
2.28(5) a disclosure of any existing or contemplated interest of the broker or salesperson
2.29issuing the opinion;
2.30(6) the name of the broker or salesperson issuing the price opinion;
2.31(7) the name of the real estate brokerage that the broker or salesperson is acting
2.32on behalf of;
2.33(8) the date of the price opinion; and
2.34(9) a disclaimer stating, "This opinion is not an appraisal of the market value of
2.35the property, and may not be used in lieu of an appraisal. If an appraisal is desired, the
2.36services of a licensed or certified appraiser must be obtained."
3.1(b) A copy of the broker price opinion report required under this subdivision together
3.2with any supporting materials and documents used in its preparation shall be retained as
3.3required under section 82.72, subdivisions 3 and 4.
3.4(c) A licensee may produce or transmit a broker price opinion report electronically
3.5to any person entitled to receive it.
3.6EFFECTIVE DATE.This section is effective August 1, 2011.
3.7 Sec. 4. Minnesota Statutes 2010, section 82.81, subdivision 9, is amended to read:
3.8 Subd. 9. Exclusive agreements. (a) Except as provided in paragraph (c), a licensee
3.9shall not negotiate the sale, exchange, lease, or listing of any real property directly with the
3.10owner or lessor knowing that the owner or lessor has executed a written contract granting
3.11exclusive representation or assistance for the same service in connection with the property
3.12to another real estate broker, buyer, or lessee, nor shall a licensee negotiate the purchase,
3.13lease, or exchange of real property knowing that the buyer or lessee has executed a written
3.14contract granting exclusive representation or assistance for the same service of purchase,
3.15lease, or exchange of the real property with another real estate broker.
3.16(b)
3.17lease, or option, or to an exclusive listing agreement or buyer's agreement, or facilitator
3.18services agreement, to breach the contract, option, or agreement.
3.19(c) A licensee may discuss the terms upon which a listing or buyer representation
3.20contract or a contract for facilitator services may be entered into after expiration of any
3.21existing exclusive contract when the inquiry or discussion is initiated by the owner, lessor,
3.22buyer, or lessee. The licensee must inquire of the owner, lessor, buyer, or lessee whether
3.23such an exclusive contract exists.
3.24EFFECTIVE DATE.This section is effective August 1, 2011.
3.25 Sec. 5. Minnesota Statutes 2010, section 82B.021, subdivision 19, is amended to read:
3.26 Subd. 19. Market analysis; broker price opinion. "Market analysis" or "broker
3.27price opinion" means a price opinion prepared by a licensed real estate salesperson
3.28broker
3.29EFFECTIVE DATE.This section is effective August 1, 2011.
3.30 Sec. 6. Minnesota Statutes 2010, section 82B.035, is amended by adding a subdivision
3.31to read:
4.1 Subd. 1a. Broker price opinion. (a) This chapter does not apply to a licensed real
4.2estate salesperson, broker, or real estate appraiser who prepares a broker price opinion in
4.3accordance with section 82.735. In connection with the purchase of a consumer's principal
4.4dwelling, a broker price opinion may not be used as the primary basis to determine the
4.5value of a parcel of property for the purpose of a loan origination of a residential mortgage
4.6loan secured by the parcel of property.
4.7(b) A broker price opinion shall not be subject to USPAP or any rule promulgated by
4.8the appraisal foundation.
4.9EFFECTIVE DATE.This section is effective August 1, 2011.
