# Title 43 — Occupations and Professions

## Chapter 43-23.2 — Real Estate Education Fund

### § 43-23.2-01. Real estate education, research, and recovery fund - Purposes -

Administration.
There is hereby created a real estate education, research, and recovery fund, which must
be used to provide a fund whereby aggrieved persons may make application for the payment of
unsatisfied judgments, and for the furnishing of education and research in the field of real estate
for the benefit of licensees, all in accordance with the provisions and limitations contained within
this chapter. The fund must be administered by the state real estate commission as provided
within this chapter.
### § 43-23.2-02. Fees paid into fund.

1. In addition to the appropriate licensing fees paid by real estate brokers and
salespersons, any person licensed as a real estate broker or salesperson for the first
time, shall pay a fee of twenty dollars at the time of obtaining the license which must
be credited into the education, research, and recovery fund. Except for assessments
paid into the fund as provided in subsection 2, any person obtaining a broker's or
salesperson's license for the first time, shall pay the fee of twenty dollars into the fund
only once.
2. If, on June thirtieth of any year, following the establishment of the real estate
education, research, and recovery fund, the amount remaining in the fund is less than
sixty thousand dollars, every licensed real estate broker and salesperson, when
renewing that person's license, shall pay, in addition to the annual renewal fee, a sum
not to exceed twenty dollars, which must have been determined by the commission to
be sufficient to restore the balance in the fund to at least sixty thousand dollars.
3. The commission shall maintain a minimum of sixty thousand dollars in the fund for
recovery purposes. Such funds must be invested and reinvested by the commission
and interest from the investments must be deposited to the credit of the fund.
Sufficient liquidity must be maintained so moneys are available to satisfy all claims that
are processed through the commission by means of the procedures established in this
chapter.
4. The commission, in the commission's discretion, may use any moneys in the fund in
excess of sixty thousand dollars, regardless of whether the excess is from education,
research, and recovery fund fees or accrued interest thereon, for the following
purposes:
a. To promote the advancement of education and research in the field of real estate
for the benefit of those licensed under chapter 43-23.
b. To underwrite educational seminars and other forms of educational projects for
the benefit of real estate licensees.
c. To establish a real estate chair or courses at North Dakota institutions of higher
learning for the purpose of making such courses available to licensees and the
general public.
d. To contract for a particular educational or research project in the field of real
estate to further the purposes of chapter 43-23.
5. The executive director of the commission shall furnish a bond in the amount of sixty
thousand dollars, upon such conditions as the commission may prescribe.
### § 43-23.2-03. Claims against fund - Orders for payment.

When any aggrieved person obtains a final judgment in any court of competent jurisdiction
against any person licensed under chapter 43-23, on grounds of fraudulent, deceptive, or
dishonest practices, or conversion of trust funds arising directly out of any act or transaction
when the judgment debtor was licensed and performed acts for which a license is required
under chapter 43-23, the aggrieved person may, upon obtaining such final judgment, file an
application in the court in which the judgment was entered for an order directing payment out of

the fund in the amount of the actual and direct loss up to the sum of fifteen thousand dollars,
unpaid on the judgment, provided that nothing contained within this chapter may be construed
to obligate the fund for more than fifteen thousand dollars per transaction regardless of the
number of persons aggrieved or parcels of real estate involved in the transaction. The
application must be verified and must be served on the commission and upon the judgment
debtor and an affidavit of service filed with the court.
### § 43-23.2-04. Hearings.

The court shall conduct a hearing upon the filing of the application, which may be continued,
within the discretion of the court, for such period as the court may deem appropriate. At such
hearing the aggrieved person must be required to show that:
1. The person is not the spouse of the debtor, or the personal representative of such
spouse.
2. The person has complied with all the requirements of this chapter.
3. The person has obtained a judgment as set out in section 43-23.2-03, stating the
amount thereof and the amount owing thereon at the date of the application.
4. The person has made all reasonable searches and inquiries to ascertain whether the
judgment debtor is possessed of real or personal property or other assets which may
be sold or applied in satisfaction of the judgment.
5. By such search, the person has discovered no personal or real property or other
assets liable to be sold or applied, or that the person has discovered certain of them,
describing them, owned by the judgment debtor and liable to be so applied, and that
the person has taken all necessary action and proceedings for the realization thereof,
and that the amount thereby realized was insufficient to satisfy the judgment, stating
the amount so realized and the balance remaining due on the judgment after
application of the amount realized.
6. The person has diligently pursued available remedies against all the judgment debtors
and all other persons liable to the person in the transaction for which recovery is
sought from the real estate education, research, and recovery fund.
7. The person is making the application not more than one year after the judgment
becomes final.
### § 43-23.2-05. Motion for dismissal - Commission may defend action.

Whenever the court proceeds upon an application as set forth in this chapter, it shall order
payment out of the real estate education, research, and recovery fund only upon a
determination that the aggrieved party has a valid claim for relief within the purview of this
chapter and has complied with the provisions of this chapter. The judgment is only prima facie
evidence of such claim for relief and for the purposes of this chapter is not conclusive. The
commission may defend any such action on behalf of the fund and has recourse to all
appropriate means of defense and review including examination of witnesses. The commission
may move the court at any time to dismiss the application when it appears there are no triable
issues and the petition is without merit. The motion may be supported by affidavit of any person
or persons having knowledge of the facts, and may be made on the basis that the petition, and
the judgment referred to therein, does not form the basis for a meritorious recovery claim within
the purview of this chapter; provided, however, the commission shall give written notice at least
ten days before such motion. The commission may, subject to court approval, compromise a
claim based upon the application of an aggrieved party. It is not bound by any prior compromise
or stipulation of the judgment debtor.
### § 43-23.2-06. Judgment debtor may defend - Default judgments.

The judgment debtor may defend any such action on the judgment debtor's own behalf and
has recourse to all appropriate means of defense and review, including examination of
witnesses. Whenever an applicant's judgment is by default, stipulation, or consent, or whenever
the action against the licensee was defended by a trustee in bankruptcy, the applicant has the
burden of proving any claim for relief for fraudulent, deceptive, or dishonest practices, or

conversion of trust funds. Otherwise, the judgment creates a rebuttable presumption of the
fraudulent, deceptive, or dishonest practices, or conversion of trust funds. This presumption is a
presumption affecting the burden of producing evidence.
### § 43-23.2-07. Order for payment.

If the court finds after the hearing that said claim should be levied against the portion of the
fund allocated for the purpose of carrying out the provisions of this chapter, the court shall enter
an order directed to the commission requiring payment from the fund of whatever sum it shall
find to be payable upon the claim pursuant to the provisions of and in accordance with the
limitations contained in this chapter.
### § 43-23.2-08. Limitation of payment - Pro rata distribution.

Notwithstanding any other provision of this chapter, the liability of that portion of the fund
allocated for the purposes of this chapter may not exceed fifteen thousand dollars for any one
licensee. If the fifteen thousand dollar liability of the fund is insufficient to pay in full the valid
claims of all aggrieved persons by whom claims have been filed against any one licensee, such
fifteen thousand dollars must be distributed among them in the ratio that their respective claims
bear to the aggregate of such valid claims or in such other manner as the court deems
equitable. Distribution of such moneys must be among the persons entitled to share therein,
without regard to the order or priority in which their respective judgments may have been
obtained or their claims have been filed. Upon petition of the commission the court may require
all claimants and prospective claimants against one licensee to be joined in one action, to the
end that the respective rights of all such claimants to the fund may be equitably adjudicated and
settled.
### § 43-23.2-09. Repayment to fund.

Should the commission pay from the fund any amount in settlement of a claim or toward
satisfaction of a judgment against a licensed broker or salesperson, the license of the broker or
salesperson must be automatically suspended upon the effective date of an order by the court
as set forth herein authorizing payment from the fund. No such broker or salesperson may be
granted reinstatement until having repaid in full, plus interest at the rate of four percent a year,
the amount paid from the fund on that person's account. A discharge in bankruptcy does not
relieve a person from the penalties and disabilities provided in this chapter.
### § 43-23.2-10. Claims satisfied in order of filing.

If, at any time, the money deposited in the fund and allocated for purposes other than real
estate education and research is insufficient to satisfy any duly authorized claim or portion
thereof, the commission shall, when sufficient money has been deposited in the fund, satisfy
such unpaid claims or portions thereof, in the order that such claims or portions thereof were
originally filed, plus accumulated interest at the rate of four percent a year.
### § 43-23.2-11. Deposits by commission.

Any sums received by the commission pursuant to any provision of this chapter must be
deposited in a federally insured depository in this state, and credited to the real estate
education, research, and recovery fund, and said sums must be allocated exclusively for the
purposes provided in this chapter.
### § 43-23.2-12. Subrogation rights of commission.

When, upon the order of the court, the commission has paid from the fund any sum to the
judgment creditor, the commission is subrogated to all of the rights of the judgment creditor to
the extent of the amount so paid and the judgment creditor shall assign all the judgment
creditor's right, title, and interest in the judgment to the extent of the amount so paid to the
commission and any amount and interest so recovered by the commission on the judgment
must be deposited in the fund.

### § 43-23.2-13. Disciplinary action by commission.

Nothing contained in this chapter limits the authority of the commission to take disciplinary
action against any licensee under other provisions of chapter 43-23, nor does the repayment in
full of all obligations to the fund by any licensee nullify or modify the effect of any other
disciplinary proceeding brought pursuant to the provisions of chapter 43-23.
