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The Landform contract breaks down Landform's compensation into three categories:
<br />Administrative Compensation, Incentive Compensation, and Additional Compensation.
<br />Not all of the services rendered within these three categories fall under the definition of
<br />"real estate broker" services. For example, the Administrative Compensation covers
<br />several items, e.g., "Planning and Engineering," including "Preliminary Engineering,"
<br />"Plan Review and Approval," as well as "Development Feasability," including "Site Use
<br />Evaluation," "Pro Forma Development," etc. Accordingly, payments for such services
<br />would still be required, though it appears that all of this compensation was paid when due
<br />during the one -year "Development Management Services (Administrative
<br />Compensation)" period that ran from April 1, 2010 to March 31, 2011. Accordingly, this
<br />compensation would not be at issue in any potential civil action, nor would the City of
<br />Ramsey be able to recover it if it were at issue as it does not fall under real estate broker
<br />services for which a license is required.
<br />Similarly, the category of Additional Compensation, which is for non - broker services like
<br />land surveying, civil engineering, planning, and landscape architecture, would appear to
<br />fall outside of those services for which a broker's license is required, and therefore any
<br />compensation due for the provision of such services would be recoverable in a civil
<br />action.
<br />The Incentive Compensation, which forms the great bulk of the anticipated compensation
<br />under the agreement, however, is clearly anticipated as payment for services that are
<br />covered under Minn. Stat. § 82.55, subd. 19 defining "real estate broker" and "broker,"
<br />and therefore would not be recoverable because neither Landform nor any of its
<br />principals possess a broker's license.
<br />One final form of compensation required under the contract is the potential $60,000 early
<br />termination fee, payable in the event the contract is terminated prior to March 2013. This
<br />early termination fee is not included in the copy of the contract provided, and which is
<br />the subject of this memorandum. Rather, the existence of this provision is indicated in
<br />the previous memorandum, which defines early termination as termination prior to
<br />"March of 2013." No specific date is provided, so it is unknown whether this means
<br />prior to March 1, 2013, or March 31, 2013. In any event, should the contract be
<br />terminated prior to this date, Landform would be due the $60,000 payment unless the
<br />contract has been validly terminated under paragraph X due to Landform's failure to
<br />comply with the law, e.g., the license requirement in Chapter 82, because as set forth
<br />above, those portions of the contract requiring compensation for non - broker related
<br />activities are legally valid.
<br />This begs the question of whether the City of Ramsey has the right to terminate the
<br />contract immediately by treating Landform's failure to comply with the Chapter 82
<br />licensing requirement as a material breach of the contract. While it is clear that
<br />Landform's promotional activities, efforts to sell land in the COR, and assistance in
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