Statutory Requirements Governing the Activities of Licensees
Area III of the North Dakota state outline, and by subtopic count much the largest: PSI prints twelve lettered subtopics here against four, five, and three in the other three areas. Three of the twelve are marked broker only — branch office and license display, trust accounts, and record keeping.
Advertising, Commissions, and the Broker/Salesperson Relationship
Rule 70-02-03-02.1 defines advertising broadly, as all representation, promotion, and solicitation by any means for any purpose related to brokerage activity. Advertising must be done in the brokerage's trade name as licensed with the commission, and the trade name must be equal to or greater than, in size and visibility, the name of any salesperson, associate broker, or team. It must say how the public can contact the agency, must be under the designated broker's supervision, and must be free of deception about the terms of a sale or the firm's services. A broker advertising the broker's own property in the broker's own name must add the words Owner/Licensed Broker after that name, and a salesperson uses Owner/Licensed Salesperson; both apply on inactive status too. A team is two or more licensees at the same brokerage who work together and present themselves under a team name, and a team may not advertise in a way that suggests it is an independent brokerage firm. On compensation, rule 70-02-03-05 requires every listing or sales contract to state the amount of brokerage agreed, either a specific amount or a specific percentage, while the commission neither recommends nor recognizes any uniform-rate agreement and will not hear fee disputes between licensees. Section 43-23-11.1(1)(q) confines a salesperson to accepting compensation from the broker under whom the salesperson is licensed, and subdivision (l) makes paying a commission to an unlicensed person a disciplinary ground. On supervision, rule 70-02-01-10 bars a salesperson from commencing work until the broker receives notification of licensure from the commission, and rule 70-02-01-21 requires the designated broker to keep a written company policy identifying the agency relationships the firm may engage in, plus a written team policy and a chronological record of teams and team membership.
Disclosure, Conflict of Interest, and Agency
Rule 70-02-03-15.1 governs residential property of one through four dwelling units. The licensee must make an affirmative written disclosure identifying which party the licensee represents, at the time of the first substantive contact, by a separate written document offered to the party for signature, with true copies retained in the broker's file. Substantive contact means, for a seller, before the listing agreement is signed; for a buyer, before the buyer's broker agreement is signed; and for anyone else, before personal financial information is discussed or negotiations begin. A new disclosure must be made at once if the representation changes. The written form must explain seller representation, buyer representation, and dual agency, and must say that a dual agency requires a written agreement obtaining both parties' consent before it is authorized, setting out who pays the fee. The duty of confidentiality bars disclosing without the represented party's informed written consent that the party will pay more or accept less, the party's motivating factors, or that the party will accept other financing terms, and it survives the end of the representation until the party permits disclosure, the law or an order requires it, or the information becomes public from another source. It never covers material defects. Failure to disclose has teeth: under subsection 8 a licensee may not maintain any action to recover a commission, fee, or other compensation unless the agency relationship was disclosed as the rule requires. For agricultural and commercial property, residential property of five or more units, and commercial leaseholds, rule 70-02-03-15 makes the licensee the seller's agent unless all parties agree otherwise in writing, with a short prescribed disclosure by each licensee. Rule 70-02-03-15.2 requires a signed written nonagency disclosure to a customer before the licensee performs any service. Section 43-23-12.1 sets the client duties of loyalty, obedience, disclosure, confidentiality, reasonable care, diligence, and accounting, and the narrower customer duties of honesty, good faith, customary acts, and disclosure of adverse material facts actually known about title, physical condition, and defects. Section 43-23-12.3 lets a designated broker appoint agents in writing, which removes dual-agent status between those clients. On personal conflicts, rule 70-02-03-13 bars a broker from buying, or taking an option on, property listed with the broker without first making the broker's true position clearly known to the owner, with written proof on request.
Offers, Listings, Cooperative Transactions, and Public Responsibility
Rule 70-02-03-06 requires a licensee to tender promptly to the seller every written offer to purchase, and on a proper acceptance to deliver true executed copies signed by both parties to both parties; section 43-23-11.1(1)(t) makes it a disciplinary ground to fail to reduce an offer to writing when a proposed purchaser asks that it be submitted, or to fail to submit all offers received before the seller has accepted in writing and the broker knows of it. Rule 70-02-03-14 bars accepting a note or other instrument that is not readily negotiable as a deposit without the principal's knowledge and permission. Rule 70-02-03-04 requires, for residential property of one through four units, a signed written listing agreement identifying the property and containing the price, the commission, the signatures of all parties, and a definite expiration date, obtained before the property is advertised or offered for sale, with no provision requiring the signer to give notice of an intention to cancel after that date; an exclusive agency or exclusive right to sell must say so and a copy goes to the owner at signing. Rule 70-02-03-05.1 requires a signed buyer's broker agreement, with a definite expiration date, the compensation, and a clear statement of services and of the events entitling the licensee to be paid, before the licensee performs any act as the buyer's representative. Rule 70-02-03-11 bars negotiating a listing or a buyer contract with someone the licensee knows is bound by an unexpired exclusive agreement with another broker, unless the owner or buyer initiated the contact and the new agreement takes effect only after the existing one ends. For cooperative transactions, rule 70-02-03-03 and section 43-23-06.1(9)(h) allow a North Dakota broker to split a commission with a broker licensed in another state only if that broker carries on no negotiations in this state, whether by entering the state or by communicating electronically or through other media. On public responsibility, rule 70-02-03-08 tells licensees not to practice law and to recommend title examination and legal counsel where a party's interest requires it; rule 70-02-03-09 makes it misconduct to use documents concealed from a lender to inflate a loan; rule 70-02-03-10 bars for sale signs without the owner's consent; rule 70-02-03-12 requires the deposit to be returned to the purchaser at once where the owner fails to complete the sale through no fault of the purchaser; and rules 70-02-01-19 and 70-02-01-20 provide that a psychologically impacted property is not a material fact requiring disclosure, but that a licensee asked about it must inquire of the owner and advise the buyer of the owner's response, or of a refusal to answer.
Branch Offices, Trust Accounts, and Record Keeping
These three subtopics are marked broker only in PSI's outline. On offices, section 43-23-12(1) requires every licensed broker to maintain a definite place of business in the state except as section 43-23-10 provides for nonresidents, and to display the broker's license and each affiliated salesperson's license in that office or list the licensee's name and number on the broker's website; the broker's home may qualify as the place of business. Rule 70-02-01-11 defines a branch as each additional office where a broker keeps more than one, requires a branch license application, a designated manager responsible for the branch's activities, notice to the commission within five days of a change of branch address or supervisor, display of the branch license bearing the branch address and the manager's name, and operation under the same name as the principal office; where the broker maintains a regular office, the broker's home is not a branch. On trust accounts, section 43-23-14.1 requires a separate noninterest-bearing trust account in the broker's or firm's name at a federally insured financial institution in this state, into which the broker immediately places as a demand deposit all funds not the broker's own, including earnest money; commingling is barred except for up to five hundred dollars of the broker's own money, specifically identified, to cover service charges. A broker who takes no trust funds and has applied for and received a waiver need not keep the account, but must open one if trust funds later arrive, and must keep a record tracking earnest money even where the money goes straight to a title company. Rule 70-02-01-15 adds that the account must be named trust account or escrow account, that the commission must be told of the institution and of any change within ten days, that all trust money received by the broker or a salesperson must be deposited within twenty-four hours of receipt unless the purchase contract provides otherwise, and that a broker is not entitled to any part of the earnest money as a fee until the transaction is consummated or terminated. Section 43-23-11.1(1)(s) states the same twenty-four hour standard as a disciplinary rule on both the salesperson and the employing broker. On record keeping, rule 70-02-01-15(3) requires deposit slips showing date, amount, source, and place; monthly bank statements on file; numbered and designated trust account checks with voided checks retained; a chronological journal with a running balance; a per-transaction ledger naming both parties; monthly reconciliation except in a month with no activity; and permanent records of all funds and property of others kept for not less than six years from receipt.
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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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