Minnesota Real Estate Salesperson Exam — All Questions

Which state agency licenses and regulates real estate salespersons and brokers in Minnesota?

• a.The Minnesota Department of Commerce✓
• b.The Minnesota Department of Labor and Industry
• c.The Minnesota Association of Realtors
• d.The Minnesota Real Estate Board within the Attorney General's office

Real estate licensing in Minnesota is administered by the Minnesota Department of Commerce under Minnesota Statutes Chapter 82. The Commissioner of Commerce issues, renews, and disciplines licenses. A trade association such as the Minnesota Association of Realtors is a private membership group and has no licensing authority.

In Minnesota, a real estate salesperson's license authorizes the licensee to act only when:

• a.Approved individually for each transaction by the Department of Commerce
• b.Registered with the local county recorder
• c.Employed by and acting on behalf of a licensed real estate broker✓
• d.Working independently as long as the license is active

Under Minnesota's license law, a salesperson may perform licensed real estate activity only for and in the name of the licensed broker who employs and supervises the salesperson. A salesperson cannot operate independently or accept compensation directly from a client; commissions flow through the employing broker.

The Minnesota Real Estate Education, Research, and Recovery Fund primarily exists to:

• a.Pay the operating budget of the Department of Commerce
• b.Reimburse members of the public who suffer an actual monetary loss from certain licensee misconduct✓
• c.Fund the marketing efforts of licensed brokerages
• d.Provide low-interest loans to first-time homebuyers

The Recovery Fund compensates consumers who obtain a final court judgment against a licensee based on fraud, misrepresentation, or deceit in a licensed transaction and cannot otherwise collect. When the fund pays a claim, the licensee's license is suspended until the fund is repaid with interest. It is not a general operating or lending fund.

Which statement describes how a Minnesota salesperson's license attaches to a broker?

• a.A salesperson may be licensed to two affiliated brokerages
• b.A salesperson may accept assignments from any licensed broker
• c.A salesperson may act on behalf of only one broker at a time✓
• d.A salesperson may hold an independent, unattached license

A salesperson must be licensed to act on behalf of a licensed broker and may not be licensed to act for more than one broker in this state during the same period of time. Cite: Minn. Stat. 82.63, subd. 4.

A Minnesota salesperson terminates her activity on behalf of her brokerage. What happens to her license?

• a.It stays active for 30 days while she finds another broker to join
• b.It transfers automatically to the next broker who accepts her
• c.It is canceled outright, and she must reapply and retake the exam
• d.It becomes ineffective, and the broker notifies the commissioner✓

On termination the salesperson's license is ineffective, and within ten days the broker must notify the commissioner in the prescribed form. The salesperson may apply to transfer the license to active status with another broker at any time during the remainder of the license period. Cite: Minn. Stat. 82.63, subd. 6.

A Minnesota primary broker dies. What may the commissioner issue so the brokerage's business can be concluded?

• a.A 45-day temporary broker's permit, renewable once✓
• b.A 90-day temporary broker's permit, renewable twice
• c.A six-month provisional brokerage license
• d.A one-year estate brokerage authorization

On the death, incapacity or loss of license of a broker the commissioner may issue a 45-day temporary permit to someone with at least three years of actual experience as a licensed salesperson, renewable once on a good-faith showing. Only salespersons licensed to that broker at the time of death or incapacity may conduct business under it. Cite: Minn. Stat. 82.63, subd. 12.

A Minnesota licensee changes her business location. How long does she have to notify the commissioner?

• a.Not later than 30 days after the change
• b.Not later than ten days after the change✓
• c.At the next license renewal
• d.Within three business days

Written notice of any change of information contained in the license application on file, including personal name, trade name, address or business location, must reach the commissioner not later than ten days after the change. Cite: Minn. Stat. 82.65, subd. 1.

Which event must a Minnesota real estate licensee report to the commissioner in writing?

• a.Receiving a written complaint from a client
• b.Changing the brokerage's payroll bank
• c.Being charged with any felony offense✓
• d.Being sued by a seller

A licensee must notify the commissioner within ten days if charged with, adjudged guilty of, or entering a plea of guilty or nolo contendere to any felony, or to a gross misdemeanor alleging fraud, misrepresentation or conversion of funds. Suspension or revocation of any occupational license and certain adverse civil judgments carry the same duty. Cite: Minn. Stat. 82.65, subds. 2 to 5.

How long must a Minnesota broker keep listings, purchase contracts, canceled checks and trust account records?

• a.Six years, running from the transaction's closing✓
• b.Three years from the date of the document
• c.Six years from the end of the two-year license period
• d.Ten years from the date of the listing

The retention period is six years, running from the closing of the transaction, or from the date of the document if the transaction was never consummated. Storage may be electronic. Agency disclosure forms given to prospects where no contractual relationship followed need not be kept. Cite: Minn. Stat. 82.72, subds. 3 and 4.

A purchase agreement says nothing about when earnest money is deposited. Minnesota then requires the listing broker to deposit it within three business days of which event?

• a.Receipt of the funds
• b.Final acceptance of the purchase agreement
• c.Receipt or final acceptance, whichever is earlier
• d.Receipt or final acceptance, whichever is later✓

Earnest money goes into the listing broker's trust account on the terms the parties wrote. Where the written agreement is silent on timing, the deposit is due within three business days of either receipt of the earnest money or final acceptance of the purchase agreement, whichever is later. Cite: Minn. Stat. 82.75, subd. 5(c).

A Minnesota seller rejects an offer. When must the earnest money go back to the would-be buyer?

• a.No later than the next business day✓
• b.Within three business days of the rejection
• c.Within ten business days of the rejection
• d.After the parties sign a written release

If the offer is rejected the earnest money must be returned to the potential buyer not later than the next business day after rejection. The ten-business-day rule is the separate deadline for disbursing trust funds after a transaction is consummated or terminated where the agreements are silent. Cite: Minn. Stat. 82.75, subd. 5(c) and (d).

Interest earned on a Minnesota broker's pooled trust account, less reasonable transaction costs, is paid to whom?

• a.The broker, as a fee for administering the account
• b.The Minnesota Housing Finance Agency's trust fund✓
• c.The buyer whose earnest money generated the interest
• d.The Department of Commerce consumer education fund

Each broker maintains a pooled interest-bearing trust account, and the financial institution pays the interest at least quarterly, less reasonable transaction costs, to the Minnesota Housing Finance Agency for the housing trust fund account, unless the parties to a transaction expressly agree otherwise in writing. Cite: Minn. Stat. 82.75, subd. 8 (as amended 2024).

Minnesota lets a broker keep a specifically identified sum of personal money in the trust account. For what purpose?

• a.To advance earnest money for a buyer at closing
• b.To fund a reserve against commission disputes
• c.To pay service charges or meet the minimum balance✓
• d.To cover the brokerage's payroll between closings

Only trust funds belong in a trust account. The single exception is a specifically identified sum of the broker's own money used to pay account service charges or satisfy minimum balance requirements. Commingling otherwise is a fraudulent, deceptive or dishonest practice. Cite: Minn. Stat. 82.75, subd. 4; 82.81, subd. 12(a)(12).

Absent written authorization from her own broker, from whom may a Minnesota salesperson accept a commission?

• a.From the seller, if the listing agreement provides
• b.Only from the broker to whom she is licensed✓
• c.From any cooperating broker in the transaction
• d.From the closing agent at settlement

Unless authorized in writing by the broker to whom the licensee is licensed, a licensee may neither pay nor accept a commission, referral fee or other valuable consideration for acts requiring a license from anyone except that broker. Cite: Minn. Stat. 82.70, subd. 1.