# Title 47 — Property

## Chapter 47-38 — Residential Real Estate Service Agreements

### § 47-38-01. Definitions.

As used in this chapter:
1. "Recording" means the act of presenting a patent, deed, mortgage, bill of sale, security
agreement, judgment, decree, lien, certificate of sale, or other instrument required to
be filed or admitted to record, to the county recorder of the county in which the
property is situated, for the purposes of placing the document in the proper books or
other storage media as described in section 11-18-01.
2. "Residential real estate" means real property located in this state which is used
primarily for personal, family, or household purposes and which is improved by one to
four dwelling units.
3. "Service agreement" means a contract under which a person agrees to provide
services in connection with the maintenance, purchase, or sale of residential real
estate.
4. "Service provider" means a person that enters a service agreement with a person that
has an interest in residential real estate.
### § 47-38-02. Unfair service agreements - Prohibition.

1. A service agreement is deemed unfair under this chapter if the service obligations of
the agreement are not to be performed within one year after the agreement is
executed and the agreement:
a. Purports to be a covenant running with the land as described in section 47-04-25;
b. Purports to be binding on future owners of interests in the real property;
c. Allows for assignment of the right to provide service without notice and
agreement of the owner of residential real estate; or
d. Purports to create a lien, encumbrance, or other real property security interest.
2. This chapter does not:
a. Apply to a home warranty or other type of similar product that covers the cost of
maintenance of a major housing system for a set period of time from the date a
house is sold;
b. Apply to an insurance contract;
c. Apply to an option to purchase or right of refusal;
d. Apply to a maintenance or repair agreement executed between a landowner and
a homeowners' association in a common interest community; and
e. Impair the rights and remedies provided in chapter 35-27.
### § 47-38-03. Actions to terminate service agreements for unfairness - Unfair agreements

void and unenforceable - Recording of court order.
1. A person claiming to be subject to an unfair service agreement under this chapter may
bring an action to terminate the agreement in the district court of the county in which
the property is situated.
2. If a service agreement is found to be unfair under this chapter:
a. The agreement is void; and
b. A certified copy of the court order finding the service agreement void must be filed
for recording along with a copy or memorandum of the original service agreement
if the original service agreement is not of record.
### § 47-38-04. Actual damages - Costs and attorney's fees.

The district court shall award the actual damages arising from the unfair service agreement,
actual attorney's fees proven against the service provider, and costs incurred by the challenging
party if the party with an interest in residential real estate subject to a service agreement has
been found to be unfair by a district court.
