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Although there are some exceptions to the licensure requirement, none apply to Lazan,
<br />See Minn. Stat. § 82.55 (2012). Among them is an exception for small real estate
<br />developers who engage in fewer than 25 transactions a year and who keep a trust account
<br />in accordance with Minnesota Statutes section 82,75. It would be Lazan's burden to
<br />prove that he qualifies for that exception. See Douglas v. Schuette, 607 N.W,2d 142, 147
<br />(Minn. Ct, App. 2000). Lazan would have difficulty proving that he qualifies for that
<br />exception because it does not appear that he has ever acquired, built, and then resold
<br />property. It also does not appear that Landform is development company. Rather, in
<br />reviewing the dates of formation of Landform Engineering Company, Inc. and Landform
<br />Professional Services, LLC, it appears that its employees were employees solely by
<br />Landform Engineering Company, Inc., until it landed the Ramsey HRA. contract in 2009,
<br />at which point they formed Landform Professional Services, LLC. Moreover, neither
<br />Landform nor Lazan appear to maintain a trust account that is reportable and on file with
<br />the Department of Commerce. The trust account requirements are very strict. See Minn,
<br />Stat. § 82.75. Accordingly, Lazan does not meet this exception and should be licensed.
<br />Because Lazan is not licensed, Landform is not entitled to compensation for any of
<br />Lazan's services. Minnesota Statutes section 82.85, subdivision 1 (2010) states:
<br />No person shall bring or maintain any action in the courts of this state for
<br />the collection of compensation for the performance of any of the acts for
<br />which a license is required under this chapter without alleging and proving
<br />that the person was a duly licensed real estate broker, salesperson, or
<br />closing agent at the time the alleged cause of action arose.
<br />"This section is penal in nature and will defeat a claim for commissions if a plaintiff fails
<br />to allege and prove that they were duly licensed." Ike v. Anderson, 369 N.W.2d 321, 322
<br />(Minn. Ct. App. 1985) (citing Relocation Realty Services Corp. v. Carlson Companies,
<br />Inc., 264 N.W.2d 643, 645 (Minn.1978); Albers v. Fitschen, 274 Minn. 375, 376 -77, 143
<br />N.W.2d 841, 843 (1966)). The section was enacted as "part of a legislative scheme to
<br />protect the public against unqualified brokers." Relocation Realty Services Corp., 264
<br />N.W.2d at 645.
<br />There are no exceptions to the section 82,85's complete bar on compensation for
<br />unlicensed brokerage services. Courts apply it universally. See PEMS, 2011 WL 69098,
<br />at *3 -4 (applying bar); Br'idgeplace Associates, 2005 WL 1869657, at *13 (same); Ike,
<br />369 N.W.2d at 322 (same); Relocation Realty Servs. Corp., 264 N.W.2d at 645 (same).
<br />In the sixties, the Minnesota Supreme Court attempted to carve out an exception for
<br />sophisticated parties, see Paske v. Liberty Equities Corp., 283 Minn. 167, 170, 167
<br />N.W.2d 30, 32 (1969), but the "isolated real estate transaction" exception upon which the
<br />sophisticated - parties exception was based was repealed by the legislature in 1967, see
<br />Gahagan v. Patterson, 316 F. Supp. 1099, 1102 n.2 (D. Minn. 1970). No court has
<br />applied the Paske exception.
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