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Five days a week, 52 weeks a year, MNR’s Legal Hotline attorneys provide brokers with insights into myriad legal questions. Inevitably, certain issues dominate the conversations. In 2024, these five questions were most frequently aired by the association’s broker members. 

1. Should my brokerage have a policy manual?

Although Minnesota law does not require your brokerage to have a policy manual, there are advantages you should consider. A manual can protect brokers, salespersons, and brokers’ employees by establishing specific policies everyone is expected to follow. And it can spell out the consequences for not complying. Typically, broker policy manuals include: 

A Word on Noncompete Agreements:

Some brokerages make noncompete agreements part of their policy landscape. If you’re thinking of using one with your salespersons, you should obtain an attorney’s help in drafting the agreement. Be sure your attorney thoroughly advises you on how to use it. 

2. What should a broker do after receiving a complaint about a salesperson licensed with the brokerage? 

Minn. Stat. §82.73, Subd. 3 requires brokers to investigate and attempt to resolve complaints made regarding the practices of any individuals licensed to the broker. The broker is also obligated to maintain a complaint file with respect to each individual licensed to the broker. It should contain all written complaints received for a period of three years. 

3. What are the best practices for handling multiple offers? 

Educate the seller at the time of listing

The best time to talk about multiple offers is long before any are received. Sit down with your clients and explore different strategies and approaches for handling multiple offers. 

Understand the seller’s preferences about disclosure

Whatever your clients’ disclosure preference, it’s important to discuss it with them upfront. That way you’ll protect their interests by only disclosing offers when authorized by the seller. 

Respect the seller’s decision

Although you can advise clients on the pros and cons, the final decision for handling multiple offers lie with the seller. Ultimately, you must comply with their lawful and ethical instructions. 

Inform buyers about multiple-offer situations

It’s a good idea to bring buyers up to speed on the details of multiple offers as soon as the representation agreement is signed. 

Develop a multiple-offers policy for your brokerage

Creating a standardized policy for handling multiple offers can help your agents provide consistent guidance to your brokerage’s clients—both sellers and buyers. 

4. Are brokers allowed to terminate salespeople? What is the legal procedure for doing so? 

You may terminate a salesperson, but you must make sure to notify the Minnesota Department of Commerce (MNDOC) within 10 days of the termination. Notice must be provided in the manner prescribed by MNDOC. See Minn. Stat. §82.63, subd. 6.  

After MNDOC is notified, the salesperson’s license becomes ineffective until he or she files an application for transfer to a new broker. The salesperson may apply for transfer of the license to another broker at any time during the remainder of the license period. 

5. What happens when a broker loses their license? 

All brokerage salespeople become unlicensed 

If a broker loses a license, temporarily or permanently, all salespersons licensed to that broker are unlicensed until the broker is licensed again. Unless they find a new broker to hold their licenses, the salespersons will not have MLS access and cannot do any business. Specifically, they may not: 

 Because salespeople can’t fulfill their fiduciary duties to the clients, those representation contracts are broken. They need to notify their clients that their contracts may have to be canceled and renewed once a broker is active again. 

A qualified salesperson can obtain a temporary broker’s permit