Paul is a licensed Minnesota salesperson who also holds a valid contractor's license. A client asks Paul to negotiate the purchase of a fixer-upper and then personally perform the renovation work for a separate fee. Paul discloses both his real estate license and contractor's license to the client in writing. Under Minnesota law, which of the following best describes Paul's situation?
Correct Answer
C) Paul may perform both roles, but he must obtain written informed consent from all parties to the transaction and his broker before doing so, as the dual role creates a potential conflict of interest.
Under Minn. Stat. Ch. 82, a real estate licensee who has a personal financial interest in a transaction — including receiving additional compensation for services beyond the real estate commission — must disclose that interest and obtain informed written consent from all parties. Paul's dual role as buyer's agent and paid contractor creates a direct conflict of interest that must be fully disclosed and consented to by all parties and his supervising broker. Disclosure alone is not sufficient; affirmative informed consent is required.
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Related Topics & Key Terms
Key Terms:
Related Concepts
Price fixing is an illegal antitrust practice in which competing real estate brokerages agree to charge the same commission rates, fees, or other pricing for their services. It is a per se violation of the Sherman Antitrust Act.
Florida brokers are required to maintain transaction records and escrow records for a minimum of five years.
A tie-in arrangement is an illegal antitrust practice in which a seller conditions the purchase of one product or service on the buyer's agreement to purchase a separate product or service.
More Practice Of Real Estate Questions
In Wyoming real estate practice, an associate broker or salesperson is not associated with a responsible broker at renewal. What should the licensee remember?
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A Wyoming licensee is reviewing an out-of-state salesperson applicant prepares for testing. What is the best answer?
In Wyoming real estate practice, a salesperson applicant age is reviewed. What should the licensee remember?
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