Additional Topics: Subdivided Lands, Closing Statements, and the Recovery Fund
Area IV of the North Dakota state outline, with three lettered subtopics. Closing statements is marked broker only. Each of the three sits in its own body of law, and one of them, the Subdivided Lands Disposition Act, applies only to land outside North Dakota.
Subdivided or Out-of-State Land Sales
North Dakota Century Code chapter 43-23.1, the Subdivided Lands Disposition Act, is administered by the state real estate commission. Its central definition is geographic: subdivided lands means land situated outside the state of North Dakota that is divided or proposed to be divided for disposition into five or more lots, parcels, units, or interests, and it also reaches any land, contiguous or not, where five or more are offered as part of a common promotional plan of advertising and sale. Section 43-23.1-04 makes two things unlawful unless an exemption applies: offering or disposing of an interest before registration, and disposing of an interest unless a current public offering statement has been delivered to the purchaser with a reasonable opportunity to examine it beforehand. The public offering statement must disclose the physical characteristics fully and accurately and make known all unusual and material circumstances, and section 43-23.1-07 requires it to name the subdivider, state the number of lots offered, set out encumbrances, easements, liens, restrictions, zoning, taxes and assessments, the intended use, and the improvements with their cost, completion date, and responsibility. It may be used only in its entirety and never for promotion before registration, and no person may advertise or represent that the commission approves or recommends the land. Registration under section 43-23.1-09 costs one hundred dollars, runs one year, and renews for one hundred dollars on application filed at least fifteen days before expiry; the commission must register or reject within ninety days of the notice of filing. Exemptions in section 43-23.1-05 include an isolated purchase for the buyer's own account, fewer than five lots offered in twelve months, builders buying to build for resale, court-ordered dispositions, government dispositions, cemetery lots, registered securities, a plan to dispose to ten or fewer persons, and sales or leases of improved land or land the seller is obliged to build on within two years. Section 43-23.1-17 requires a broker, salesperson, or mortgage broker offering or disposing of subdivided lands within or from this state to be licensed under chapter 43-23. A violating disposition is voidable at the purchaser's election under section 43-23.1-18, and a willful violation is a class C felony under section 43-23.1-23.
Closing Statements
Section 43-23-11.1(1)(o) makes it a disciplinary ground where a broker fails to deliver to the party or parties the broker represents a complete detailed closing statement in every real estate transaction, at the time the transaction is consummated, showing all of the receipts and disbursements the broker handled for that party, or fails to retain true copies in the broker's files. Rule 70-02-03-07 closes the obvious gap: where the closing is handled by an attorney, a bank, or a similarly recognized individual or group other than a real estate broker, it is still the broker's responsibility to see that the represented party receives that complete detailed statement, and the broker must retain true copies. So the duty does not move with the closing agent, and it does not wait for a request. Rule 70-02-01-14 adds that a salesperson may not handle the closing of a transaction except under the direct supervision of the broker, or of a licensed officer or partner of the firm, unless the broker authorizes it.
Real Estate Education, Research, and Recovery Fund
North Dakota Century Code chapter 43-23.2 creates the real estate education, research, and recovery fund, from which aggrieved persons may seek payment of unsatisfied judgments and which also pays for education and research. Every person licensed as a broker or salesperson for the first time pays twenty dollars into the fund once; if the balance falls below sixty thousand dollars on June thirtieth, every licensee pays up to a further twenty dollars at renewal to restore it, and the commission must keep a minimum of sixty thousand dollars for recovery purposes. Money above that minimum may be used to promote education and research, underwrite seminars, establish real estate courses at North Dakota institutions of higher learning, or fund research projects. A claim requires a final judgment against a person licensed under chapter 43-23 on grounds of fraudulent, deceptive, or dishonest practices, or conversion of trust funds, arising out of an act for which a license is required. The aggrieved person applies to the court that entered the judgment, serving the commission and the judgment debtor, and must show at the hearing that the person is not the debtor's spouse or that spouse's personal representative, has complied with the chapter, has searched for and pursued the debtor's assets and other liable persons, and is applying not more than one year after the judgment became final. Payment is limited to the actual and direct loss up to fifteen thousand dollars unpaid on the judgment, and the fund is never obligated for more than fifteen thousand dollars per transaction regardless of how many people or parcels are involved, nor more than fifteen thousand dollars for any one licensee, with pro rata distribution where claims exceed that. On payment, the licensee's license is automatically suspended from the effective date of the court's order and no reinstatement follows until the licensee has repaid the fund in full plus four percent annual interest; a discharge in bankruptcy does not relieve the licensee. The commission is subrogated to the judgment creditor's rights to the extent of what it paid, and nothing in the chapter limits its separate power to discipline the licensee.
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State-specific details
State exam facts
- State regulator
- North Dakota Real Estate Commission (NDREC)
- Exam vendor
- PSI
- Prelicensing education
- 150 hours (90-hour salesperson prerequisite + 60 broker hours)
- Passing score
- 75 of 100 points (national); 30 of 40 points (state)
- Scored questions
- 130
- Time limit
- 240 minutes
Who regulates real estate brokers in North Dakota?
The North Dakota Real Estate Commission (NDREC) licenses real estate salespersons and brokers. The Commission contracts with PSI to deliver both portions of the licensing examination. North Dakota does not issue licenses by specialty — there is no separate residential or commercial license.
What experience do I need before the North Dakota broker exam?
Broker applicants must have been actively engaged full-time as a licensed real estate salesperson for at least two years (N.D.C.C. § 43-23-08(3), with "actively engaged" defined as full time by N.D. Admin. Code § 70-02-01-02(3)), or have experience the Commission determines to be substantially equal. On education, watch the word "additional" in § 43-23-08(4): a salesperson needs 90 approved hours and a broker applicant must complete "an additional sixty hours," so a broker's pre-license total is 150 approved hours, not 60. The Commission may waive the two-year experience requirement where local conditions made salesperson employment unobtainable (§ 43-23-08(5)), but it may not waive the education. North Dakota then distinguishes two broker roles: the designated broker who is responsible for a firm or sole proprietorship, and the broker associate who holds a broker license but is not the designated broker and may not act independently (N.D. Admin. Code § 70-02-01-09).
How is the North Dakota broker exam structured?
The combined broker examination is divided into a general portion and a state portion, which are scored and passed separately. The national broker portion has 90 questions worth 100 points — scenario-based items can be scored up to two points each — with 150 minutes allowed and 75 points required to pass. The state portion has 40 questions worth 40 points with 90 minutes allowed and 30 points required to pass.
What does the North Dakota state portion actually test?
PSI bulletin 4662 prints four state areas — Duties and Powers of the Real Estate Commission; Licensing Requirements; Statutory Requirements Governing the Activities of Licensees; and Additional Topics — with 25 lettered subtopics beneath them, and, unusually, no item count and no percentage for any of the four. That absence is real, not a bad scan: the Commission's own hosted copy of the same bulletin carries a line-for-line identical state outline. So treat any source that quotes a North Dakota per-area split as unsourced. What is published is the total: 40 items, 40 points, 90 minutes, 30 to pass. Four subtopics are marked broker-only and are the state content the salesperson paper does not reach — branch office and license display, trust accounts, record keeping, and closing statements. One printing quirk to know: area I shows "C. Sanctions; License Suspension and" and "D. Revocation, Misdemeanor" as separate letters, but that is a single subtopic broken by a line wrap in PSI's own document.
Sources: https://realestatend.org/how-to-apply/, https://realestatend.org/image/cache/NDREC_Candidate_Information_Bulletin.pdf, https://test-takers.psiexams.com/api/content/bulletin/4662, https://ndlegis.gov/cencode/t43c23.pdf
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