ND Property Law Changes August 1, 2023
May 23, 2023
News from the N.D. Real Estate Commission –
40-year home listing contracts, “Homeowner Benefit Agreements” could be unfair service agreements
Long-term home listing agreements could be deemed “unfair” in North Dakota after a new chapter to
NDCC title 47 takes effect August 1, 2023.
The N.D. Real Estate Commission is not aware of any long-term home listing agreements being
promoted in this state by N.D.-licensed real estate brokerages at this time. However, after the new
law comes into effect on August 1, 2023, if N.D. homeowners sign a long-term agreement to list
their home, and services are not to be performed within 1 year:
1. Homeowners could then bring an action to terminate the agreement in district court.
2. If the court finds the agreement is unfair under this new chapter, the agreement is void and
3. The court order must be filed for recording, along with a copy of the original service
agreement, if that agreement was not already of record.
4. If the court finds the agreement is unfair, homeowners will receive actual damages arising from
the unfair service agreement, actual attorney’s fees proven against the service provider, and costs
incurred by the homeowner.
The new chapter does not indicate whether a homeowner can challenge an agreement in court under the
chapter if the agreement was signed prior to August 1, 2023.
Under the new law, “A service agreement is deemed unfair under this chapter if the service
obligations of the agreement are not to be performed within 1 year after the agreement is executed
and the agreement” also meets 1 or more of the following criteria:
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.”
The new “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 in chapter 35-27.”
The new law applies to “residential real estate” which “means real property located in this state
which is used primarily for personal, family, or household purposes and which is improved by 1 to 4
At the 2023 N.D. legislature, the N.D. licensed real estate community and allied organizations
testified to their concerns about vulnerable populations and other states’ experiences with
long-term listing agreement practices, described below:
• Some brokerages in other states offer cash of a few hundred or a thousand dollars up-front to
homeowners in those states when they sign a long-term service agreement to list their home with the
brokerage at some point in the future.
• These agreements may be most appealing to low-income, or other vulnerable, homeowners.
• The agreement is sometimes called a “Homeowner Benefit Agreement.”
• In these agreements, homeowners agree to list their home with the brokerage any time over the
next 40 years.
• The brokerage secures the agreement with a lien on the homeowners’ title, binding the owners and
• Terminating or breaching the agreement can result in the homeowners paying fees and costs far
exceeding the initial cash amount paid to them by the brokerage, even before the brokerage has done
any work for the homeowners.
To protect the N.D. public from the potential harms of long-term home listing agreements, the N.D.
legislature unanimously passed HB 1188 earlier this year. See the law changes, which add a new
chapter to title 47, property law, here.
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