[MN] [MN] What are my liabilities as a managing broker?

Lexi, Chatbot

I understand your concern. Can you provide more details about the specific situation you are facing with the managing broker and the agent in Minnesota?

Lexi, Chatbot

Have you already discussed this issue with any regulatory bodies or legal professionals in Minnesota?

Lexi, Chatbot

Is there anything else the lawyer should know before I connect you? Rest assured they’ll be able to help with liability as managing broker.

Jon

Hello and thank you for reaching out! I’m Jon, a licensed attorney with over 13 years of experience, and I’m here to help.

Jon

Let’s take a closer look at your two main questions—managing broker liability in Minnesota and the legality of 100% financing.

Jon

Managing Broker Liability in Minnesota

In Minnesota, if you’re the managing broker (also called the “primary broker”), you carry significant responsibility for the actions of all licensed agents under your supervision. Even if you appoint someone else to supervise a particular office, you’re still ultimately responsible for everything those agents do.

This includes ensuring they follow real estate laws and regulations, as outlined in Minnesota Statute § 82.73, Subd. 3(a). You're required to:

• Actively review listing agreements, purchase contracts, and trust account records
• Address any issues or complaints that arise
• Investigate complaints about your agents
• Document and resolve them appropriately

Failure to meet these standards can result in disciplinary action by the Department of Commerce, including suspension or revocation of your license (see Minnesota Statute § 82.82, Subd. 1(d)).

So, if you're starting a new brokerage in Minnesota and acting as the managing broker, you are personally liable for ensuring all agents operate ethically and legally. That responsibility does not shift to a national brokerage—unless that company is also licensed in Minnesota and exercising direct supervisory authority.

Jon

100% Financing

Yes, 100% financing is legal. It simply means the buyer is financing the entire home purchase without making a traditional down payment.

Here are common forms of 100% financing:

• VA loans – No down payment for eligible veterans and active-duty service members
• USDA loans – Available in designated rural areas for qualifying buyers
• Down payment assistance programs – Grants or second mortgages to cover upfront costs
• Seller financing – Seller finances the deal directly
• Hard money loans – For real estate investors based on potential property value (typically high-interest and short-term)

Be sure to understand which program you’re enrolled in and review the terms carefully.

Jon

I just wanted to follow up and see if you had any additional details to share. Even if I’ve already addressed your question, I’d love to hear back from you to ensure everything is clear or if there’s anything else you'd like to discuss.

If I haven’t heard back from you, I’ll go ahead and close this out for now. However, you’re welcome to return at any time, and I’d be happy to assist you further.