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CHAPTER 43-23.1SUBDIVIDED LANDS DISPOSITION ACT43-23.1-01.Short title.This chapter must be known and may be cited as the&quot;Subdivided Lands Disposition Act&quot;.43-23.1-02.Definitions.When used in this chapter, unless the context otherwiserequires:1.&quot;Commission&quot; means the state real estate commission.2.&quot;Disposition&quot; includes sale, lease, assignment, award by lottery, or any other<br>transaction concerning a subdivision, if undertaken for gain or profit.3.&quot;Offer&quot; includes any inducement, solicitation, or attempt to encourage a person to<br>acquire an interest in land, if undertaken for gain or profit.4.&quot;Person&quot; means an individual, corporation, limited liability company, government, or<br>governmental subdivision or agency, business trust, estate, trust, partnership,<br>unincorporated association, two or more of any of the foregoing having a joint or<br>common interest, or any other legal or commercial entity.5.&quot;Purchaser&quot; means a person who acquires or attempts to acquire or succeeds to an<br>interest in land.6.&quot;Subdivider&quot; means any owner of subdivided land who offers it for disposition or the<br>principal agent of an inactive owner.7.&quot;Subdivision&quot; and &quot;subdivided lands&quot; means any land situated outside the state of<br>North Dakota which is divided or is proposed to be divided for the purpose of<br>disposition into five or more lots, parcels, units, or interests and also includes any<br>land, whether contiguous or not, if five or more lots, parcels, units, or interests are<br>offered as a part of a common promotional plan of advertising and sale.43-23.1-03. Administration of chapter. This chapter must be administered by the statereal estate commission.43-23.1-04. Prohibitions on dispositions of interests in subdivisions. Unless thesubdivided lands or the transaction is exempt under section 43-23.1-05, it is unlawful for any<br>person in this state:1.To offer or to dispose of any interest in subdivided lands located without this state<br>prior to the time that the subdivided lands are registered in accordance with this<br>chapter.2.To dispose of any interest in subdivided lands unless a current public offering<br>statement is delivered to the purchaser and the purchaser is afforded a reasonable<br>opportunity to examine the public offering statement prior to the disposition.43-23.1-05. Exemptions.1.Unless the method of disposition is adopted for the purpose of evasion of this<br>chapter, the registration provisions of this chapter do not apply to offers or<br>disposition of an interest in land:a.By a purchaser of subdivided lands for the purchaser's own account in a single<br>or isolated transaction;Page No. 1b.If fewer than five separate lots, parcels, units, or interests in subdivided lands<br>are offered by a person in a period of twelve months;c.To persons who are engaged in the business of construction of buildings for<br>resale or to persons who acquire an interest in subdivided lands for the purpose<br>of engaging, and do engage, in the business of construction of buildings for<br>resale;d.Pursuant to court order;e.By any government or government agency; orf.As cemetery lots or interests.2.Unless the method of disposition is adopted for the purpose of evasion of this<br>chapter, the registration provisions of this chapter do not apply to:a.Offers and dispositions of securities currently registered with the North Dakota<br>securities commissioner;b.A subdivision as to which the plan of disposition is to dispose to ten or fewer<br>persons; orc.A subdivision as to which the commission has granted an exemption as<br>provided in section 43-23.1-11.3.Unless the method of disposition is adopted for the purpose of evasion of this<br>chapter, the registration provisions of this chapter do not apply to the sale or lease of<br>any improved land on which there is a residential, commercial condominium, or<br>industrial building or the sale or lease of land under a contract obligating the seller or<br>lessor to erect such a building thereon within a period of two years.43-23.1-06. Application for registration.1.The application for registration of subdivided lands shall be filed as prescribed by the<br>commission and shall contain the following documents and information:a.An irrevocable appointment of the commission to receive service of any lawful<br>process in any noncriminal proceeding arising under this chapter against the<br>applicant or the applicant's personal representative.b.A legal description of the subdivided lands offered for registration, together with<br>a map showing the division proposed or made, the dimensions of the lots,<br>parcels, units, or interests, and the relation of the subdivided lands to existing<br>streets, roads, waterways, schools, churches, shopping centers, public<br>transportation facilities, and other offsite improvements.c.The states or jurisdictions in which an application for registration or similar<br>document has been filed, and any adverse order, judgment, or decree entered<br>in connection with the subdivided lands by the regulatory authorities in each<br>jurisdiction or by any court.d.The applicant's name, address, and the form, date, and jurisdiction of<br>organization; and the address of each of its offices in this state.e.The name, address, and principal occupation for the past five years of every<br>director and officer of the applicant or person occupying a similar status or<br>performing similar functions; the extent and nature of that person's interest inPage No. 2the applicant or the subdivided lands as of a specified date within thirty days of<br>the filing of the application.f.A statement, in a form acceptable to the commission, of the condition of the title<br>to the subdivided lands including encumbrances as of a specified date within<br>thirty days of the date of application by a title opinion of a licensed attorney, not<br>a salaried employee, officer, or director of the applicant or owner, or by other<br>evidence of title acceptable to the commission.g.Copies of the instruments which will be delivered to a purchaser to evidence<br>the purchaser's interest in the subdivided lands and of the contracts and other<br>agreements which a purchaser will be required to agree to or sign.h.Copies of the instruments by which the interest in the subdivided lands was<br>acquired and a statement of any lien or encumbrance upon the title and copies<br>of the instruments creating the lien or encumbrance, if any, with data as to<br>recording.i.If there is a lien or encumbrance affecting more than one lot, parcel, unit, or<br>interest, a statement of the consequences for a purchaser of failure to<br>discharge the lien or encumbrance and the steps, if any, taken to protect the<br>purchaser in case of this eventuality.j.Copies of instruments creating easements, restrictions, or other encumbrances<br>affecting the subdivided lands.k.A statement of the zoning and other governmental regulations affecting the use<br>of the subdivided lands and also of any existing tax and existing or proposed<br>special taxes or assessments which affect the subdivided lands.l.A statement of the existing provisions for legal and physical access or, if none<br>exists, a statement to that effect; a statement of the existing or proposed<br>provisions for sewage disposal, water, and other public utilities in the<br>subdivision; a statement of the improvements to be installed, the schedule for<br>their completion, and a statement as to the provisions for improvement<br>maintenance.m.A narrative description of the promotional plan for the disposition of the<br>subdivided lands, including the range of selling prices or rents at which it is<br>proposed to dispose of the lots in the subdivision, together with copies of all<br>advertising material which has been prepared for public distribution by any<br>means of communication.n.A copy of its articles of incorporation, with all amendments thereto, if the<br>subdivider is a corporation; copies of its articles of organization, with all<br>amendments thereto, if the subdivider is a limited liability company; copies of all<br>instruments by which the trust is created or declared, if the subdivider is a trust;<br>copies of its articles of partnership or association and all other papers<br>pertaining to its organization, if the subdivider is a partnership, unincorporated<br>association, or any other legal or commercial entity; and if the purported holder<br>of legal title is a person other than the subdivider, copies of the above<br>documents for such person.o.The proposed public offering statement.p.Such current financial statements, certified or otherwise, as the commission<br>may require.Page No. 3q.Such other information and such other documents and certifications as the<br>commission may require as being reasonably necessary or appropriate for the<br>protection of purchasers.2.If the subdivider registers additional subdivided lands to be offered for disposition,<br>the subdivider may consolidate the subsequent registration with any earlier<br>registration offering subdivided lands for disposition under the same promotional<br>plan.3.The subdivider shall immediately report any material changes in the information<br>contained in an application for registration.43-23.1-07. Public offering statement.1.A public offering statement must disclose fully and accurately the physical<br>characteristics of the subdivided lands offered and must make known to prospective<br>purchasers all unusual and material circumstances or features affecting the<br>subdivided lands.The proposed public offering statement submitted to thecommission must be in a form prescribed by it and must include the following:a.The name and principal address of the subdivider.b.A general description of the subdivided lands stating the total number of lots,<br>parcels, units, or interests in the offering.c.The significant terms of any encumbrances, easements, liens, and restrictions,<br>including zoning and other regulations, affecting the subdivided lands and each<br>unit or lot, and a statement of all existing taxes and existing or proposed special<br>taxes or assessments which affect the subdivided lands.d.A statement of the use for which the property is offered.e.Information concerning improvements, including streets, water supply, levees,<br>drainage control systems, irrigation systems, sewage disposal facilities, and<br>customary utilities, and the estimated cost, date of completion, and<br>responsibility for construction and maintenance of existing and proposed<br>improvements which are referred to in connection with the offering or<br>disposition of any interest in subdivided lands.f.Such of the information contained in the application for registration, and any<br>amendments thereto, and such other information as the commission may<br>require as being necessary or appropriate in the public interest or for the<br>protection of purchasers.2.The public offering statement may not be used for any promotional purposes before<br>registration of the subdivided lands and afterwards only if it is used in its entirety. No<br>person may advertise or represent that the commission approves or recommends<br>the subdivided lands or disposition thereof.No portion of the public offeringstatement may be underscored, italicized, or printed in larger or heavier or different<br>color type than the remainder of the statement unless the commission requires it.3.The commission may require the subdivider to alter or amend the proposed public<br>offering statement in order to assure full and fair disclosure to prospective<br>purchasers, and no change in the substance of the promotional plan or plan of<br>disposition or development of the subdivision may be made after registration without<br>notifying the commission and without making appropriate amendment of the public<br>offering statement. A public offering statement is not current unless all amendments<br>are incorporated.Page No. 443-23.1-08. Inquiry and examination. Upon receipt of an application for registration inproper form, the commission shall forthwith initiate an examination to determine that:1.The subdivider can convey or cause to be conveyed the interest in subdivided lands<br>offered for disposition if the purchaser complies with the terms of the offer, and,<br>when appropriate, that release clauses, conveyances in trust, escrow and<br>impoundage provisions, and other safeguards have been provided;2.There is reasonable assurance that all proposed improvements will be completed as<br>represented;3.The advertising material and the general promotional plan are not false or<br>misleading and comply with the standards prescribed by the commission in its rules<br>and regulations and afford full and fair disclosures;4.The subdivider has not, or if a corporation or limited liability company, its officers,<br>managers, governors, directors, and principals have not been convicted of a crime<br>involving land dispositions or any aspect of the land sales business in this state, the<br>United States, or any other state or foreign country within the past ten years and has<br>not been subject to any injunction or administrative order within the past ten years<br>restraining a false or misleading promotional plan involving land dispositions;5.There is no evidence which would reasonably lead the commission to believe that<br>the subdivider, or if a corporation or limited liability company, its officers, managers,<br>governors, directors, or principals are contemplating a fraudulent or misleading sales<br>promotion; and6.The public offering statement requirements of this chapter have been satisfied.43-23.1-09. Notice of filing - Registration - Fees.1.Upon receipt of the application for registration in proper form and of a registration fee<br>of one hundred dollars, the commission shall issue a notice of filing to the applicant.<br>Within ninety days from the date of the notice of filing, the commission shall enter an<br>order registering the subdivided lands or rejecting the registration. If no order of<br>rejection is entered within ninety days from the date of notice of filing, the land must<br>be deemed registered unless the applicant has consented in writing to a delay.2.If the commission affirmatively determines, upon inquiry and examination, that the<br>requirements of section 43-23.1-08 have been met, it shall enter an order registering<br>the subdivided lands and shall designate the form of the public offering statement.3.If the commission determines, upon inquiry and examination, that any of the<br>requirements of section 43-23.1-08 has not been met, the commission shall notify<br>the applicant that the application for registration must be corrected in the particulars<br>specified within ten days. If the requirements are not met within the time allowed,<br>the commission shall enter an order rejecting the registration which must include the<br>findings of fact upon which the order is based. The order rejecting the registration<br>shall not become effective for twenty days during which time the applicant may<br>petition for reconsideration and is entitled to a hearing.4.Registration under this chapter is effective for a period of one year and may be<br>renewed for additional periods of one year by filing, not later than fifteen days prior to<br>the expiration of a registration, a renewal application in such form and containing<br>such information as the commission shall prescribe, together with the payment of a<br>renewal fee of one hundred dollars. The initial registration and any renewal fees<br>may not be returned or refunded for any reason.43-23.1-10. Annual report.Page No. 51.Within thirty days after each annual anniversary date of an order registering<br>subdivided lands, the subdivider shall file a report in the form prescribed by the<br>commission. The report must reflect any material changes in information contained<br>in the original application for registration.2.The commission, at its option, may permit the filing of annual reports within thirty<br>days after the anniversary date of the consolidated registration in lieu of the<br>anniversary date of the original registration.43-23.1-11. General powers and duties.1.The commission has the authority to promulgate, to amend, and to repeal<br>reasonable rules and regulations for the administration and enforcement of this<br>chapter. Such rules and regulations must include, but not be limited to, provisions<br>for advertising standards to assure full and fair disclosure; provisions for escrow or<br>trust agreements or other means to assure that all improvements referred to in the<br>application for registration and advertising will be completed and that purchasers will<br>receive the interest in land for which they contracted; provisions for operating<br>procedures; and such other rules and regulations as are necessary or proper to<br>accomplish the purposes of this chapter.2.All advertising material of any nature whatsoever prepared for use in connection with<br>the offer and disposition of any interests in subdivided lands registered under this<br>chapter must be submitted to and approved by the commission prior to its use.3.As a condition precedent to the registration of any subdivided lands, the commission<br>shall require that the subdivider file an indemnity bond running to the state of North<br>Dakota for the use, benefit, and protection of any person and conditioned for the<br>faithful compliance by the subdivider, the subdivider's agents and employees with all<br>of the provisions of this chapter, and with all rules, regulations, and orders made<br>pursuant thereto and for the faithful performance and payment of all obligations of<br>the subdivider, the subdivider's agents and employees in connection with the<br>registration. The indemnity bond must be of such type and in such form as must be<br>prescribed by the commission and must be in such amount as the commission<br>deems necessary to protect purchasers when the volume of business of the<br>subdivider and other relevant factors are taken into consideration, but in no event<br>less than twenty-five thousand dollars. Any such bond must have as surety thereon<br>a surety company authorized to do business in this state.4.Whenever it appears that a person has engaged or is about to engage in acts or<br>practices which constitute or will constitute a violation of the provisions of this<br>chapter or of a rule or regulation or order hereunder, the commission, with or without<br>prior administrative proceedings, may bring an action in any district court to enjoin<br>the acts or practices and to enforce compliance with this chapter or any rule or<br>regulation or order hereunder. Upon a proper showing, a permanent or temporary<br>injunction or restraining order must be granted without bond.5.The commission may intervene in a suit involving subdivided lands. In any suit by or<br>against a subdivider involving subdivided lands, the subdivider promptly shall furnish<br>the commission notice of the suit and copies of all pleadings.6.The commission may:a.Accept registrations filed in other states or with the federal government;b.Contract with similar agencies in this state or other jurisdictions to perform<br>investigative functions; andc.Accept grants-in-aid from any source.Page No. 67.The commission shall cooperate with similar agencies in other jurisdictions to<br>establish uniform filing procedures and forms, uniform public offering statements,<br>advertising standards, rules and regulations, and common administrative practices.8.The commission may exempt a subdivision of ten or fewer lots, parcels, units, or<br>interests from the provisions of this chapter if it determines that the plan of<br>promotion and disposition is primarily directed to persons in the local community in<br>which the subdivision is located.43-23.1-12. Fraudulent practices. It is a fraudulent practice, and it is unlawful:1.For any person knowingly to subscribe to or make or cause to be made any material<br>false statement or representation in any application, financial statement, or other<br>document or statement required to be filed under any provision of this chapter, or to<br>omit to state any material statement or fact in any such document or statement<br>which is necessary in order to make the statements made, in the light of the<br>circumstances under which they are made, not misleading;2.For any person, in connection with the offer, disposition, or purchase of subdivided<br>lands, directly or indirectly, to employ any device, scheme, or artifice to defraud;3.For any person, in connection with the offer, disposition, or purchase of subdivided<br>lands, directly or indirectly, to make any untrue statement of a material fact or to omit<br>to state a material fact necessary in order to make the statements made, in the light<br>of the circumstances under which they are made, not misleading; or4.For any person, in connection with the offer, disposition, or purchase of subdivided<br>lands, directly or indirectly, to engage in any act, practice, or course of business<br>which operates or would operate as a fraud or deception upon purchasers or the<br>public.43-23.1-13. Investigations and proceedings.1.The commission shall investigate any subdivision offered for disposition in this state<br>and may:a.Rely upon any relevant information concerning a subdivision obtained from the<br>federal housing administration, the United States veterans administration, or<br>any other federal agency having comparable duties in relation to subdivisions;b.Require the applicant to submit reports prepared by competent engineers as to<br>any hazard to which any subdivision offered for disposition is subject or any<br>factor which affects the utility of interests within the subdivision, and require<br>evidence of compliance in removing or minimizing all hazards reflected in<br>engineering reports;c.Require an onsite inspection of the subdivision by a person or persons<br>designated by it. All expenses incurred in connection with an onsite inspection<br>must be defrayed by the applicant, and the commission shall require a deposit<br>sufficient to defray such expenses in advance;d.Make public or private investigations within or outside this state to determine<br>whether any person has violated or is about to violate this chapter or any rule,<br>regulation, or order hereunder, or to aid in the enforcement of this chapter or in<br>prescribing rules and regulations and forms hereunder; ande.Require or permit any person to file a statement in writing, under oath or<br>otherwise as the commission determines, as to all the facts and circumstances<br>concerning the matter to be investigated.Page No. 72.For the purpose of any investigation or proceeding under this chapter, the<br>commission or any person designated by it may administer oaths or affirmations,<br>and upon its own motion or upon the request of any party shall subpoena witnesses,<br>compel their attendance, take evidence, and require the production of any matter<br>which is relevant to the investigation, including the existence, description, nature,<br>custody, condition, and location of any books, documents, or other tangible things<br>and the identity and location of persons having knowledge of relevant facts or any<br>other matter reasonably calculated to lead to the discovery of material evidence.3.Upon failure to obey a subpoena or to answer questions propounded by the<br>investigator and upon reasonable notice to all persons affected thereby, the agency<br>may apply to the district court for an order compelling compliance.4.The commission may permit a person registered with the commission whose<br>conduct or actions may be under investigation to waive formal proceedings and<br>enter into a consent proceeding whereby orders, rules, or letters of censure or<br>warning, whether formal or informal, may be entered against said person.5.Except as otherwise provided in this chapter, all proceedings under this chapter<br>must be in accordance with chapter 28-32.43-23.1-14. Cease and desist orders.1.If the commission determines after notice and hearing that a person has:a.Violated any provision of this chapter;b.Directly or through an agent or employee knowingly engaged in any false,<br>deceptive, or misleading advertising, promotional, or sales methods to offer or<br>dispose of an interest in subdivided lands;c.Made any substantial change in the plan of disposition and development of the<br>subdivided lands subsequent to the order of registration without obtaining prior<br>written approval from the commission;d.Disposed of any subdivided lands which have not been registered with the<br>commission; ore.Violated any lawful order or rule or regulation of the commission;it may issue an order requiring the person to cease and desist from the unlawful<br>practice and to take such affirmative action as in the judgment of the commission will<br>carry out the purposes of this chapter.2.If the commission makes a finding of fact in writing that the public interest will be<br>irreparably harmed by delay in issuing an order, it may issue a temporary cease and<br>desist order. Prior to issuing the temporary cease and desist order, the commission,<br>whenever possible, by telephone or otherwise shall give notice of the proposal to<br>issue a temporary cease and desist order to the person. Every temporary cease<br>and desist order must include in its terms a provision that upon request a hearing will<br>be held promptly to determine whether or not it becomes permanent.43-23.1-15. Revocation.1.A registration may be revoked after notice and hearing upon a written finding of fact<br>that the subdivider has:a.Failed to comply with the terms of a cease and desist order;Page No. 8b.Been convicted of an offense determined by the commission to have a direct<br>bearing upon a person's ability to serve the public as a real estate subdivider,<br>or the commission determines, following conviction of any offense, that the<br>person is not sufficiently rehabilitated under section 12.1-33-02.1;c.Disposed of, concealed, or diverted any funds or assets of any person so as to<br>defeat the rights of subdivision purchasers;d.Failed faithfully to perform any stipulation or agreement made with the<br>commission as an inducement to grant any registration, to reinstate any<br>registration, or to approve any promotional plan or public offering statement; ore.Made intentional misrepresentations or concealed material facts in an<br>application for registration. Findings of fact, if set forth in statutory language,<br>must be accompanied by a concise and explicit statement of the underlying<br>facts supporting the findings.2.If the commission finds after notice and hearing that the subdivider has been guilty<br>of a violation for which revocation could be ordered, it may issue a cease and desist<br>order instead.43-23.1-16. Judicial review. A person who has exhausted all administrative remediesavailable within the commission and who is aggrieved by an order pertaining to registration, a<br>cease and desist order, an order of revocation, or any other final decision of the commission is<br>entitled to judicial review in accordance with chapter 28-32.43-23.1-17.Real estate license required.No real estate broker, salesperson, ormortgage broker may offer or dispose of subdivided lands within or from this state, except in<br>dispositions and transactions exempt under section 43-23.1-05, unless said real estate broker,<br>salesperson, or mortgage broker is licensed pursuant to chapter 43-23.43-23.1-18. Civil remedy.1.Every disposition made in violation of any of the provisions of this chapter, or of any<br>order issued by the commission under any of the provisions of this chapter, is<br>voidable at the election of the purchaser. The person making such disposition, and<br>every director, officer, salesperson, or agent of or for such person who has<br>participated or aided in any way in making such disposition, shall be jointly and<br>severally liable to such purchaser in any action at law in any court of competent<br>jurisdiction for the consideration paid for the lot, parcel, unit, or interest, together with<br>interest at the rate of six percent per year from the date of payment, property taxes<br>and assessments paid, court costs, and reasonable attorney's fees, less the amount<br>of any income received from the subdivided lands, upon tender of appropriate<br>instruments of reconveyance made at any time before the entry of judgment. If the<br>purchaser no longer owns the lot, parcel, unit, or interest in subdivided lands, that<br>person may recover the amount that would be recoverable upon a tender of a<br>reconveyance less the value of the land when disposed of and less interest at the<br>rate of six percent per year on that amount from the date of disposition.2.No action may be brought under this section for the recovery of the consideration<br>paid after five years from the date of such disposition nor more than three years after<br>the purchaser has received information as to matter or matters upon which the<br>proposed recovery is based, whichever occurs first.3.Any stipulation or provision purporting to bind any person acquiring subdivided lands<br>to waive compliance with this chapter or any rule or regulation or order under it is<br>void.Page No. 94.The rights and remedies provided by this chapter are in addition to any and all other<br>rights and remedies that may exist at law or in equity.43-23.1-19. Jurisdiction. Dispositions of subdivided lands are subject to this chapter,and the district courts of this state have jurisdiction in claims for relief arising under this chapter if:1.The subdivider's principal office is located in this state; or2.Any offer or disposition of subdivided lands is made in this state, whether or not the<br>offeror or offeree is then present in this state, if the offer originates within this state or<br>is directed by the offeror to a person or place in this state and received by the person<br>or at the place to which it is directed.43-23.1-20. Extradition. In proceedings for extradition of a person charged with a crimeunder this chapter, it need not be shown that the person whose surrender is demanded has fled<br>from justice or at the time of the commission of the crime was in the demanding or other state.43-23.1-21. Service of process.1.In addition to the methods of service provided for in the North Dakota Rules of Civil<br>Procedure and statutes, service may be made by delivering a copy of the process to<br>the office of the commission, but it is not effective unless:a.The plaintiff, which may be the commission in a proceeding instituted by it,<br>forthwith sends a copy of the process and of the pleading by registered mail to<br>the defendant or respondent at that person's last-known address.b.The plaintiff's affidavit of compliance with this section is filed in the case on or<br>before the return day of the process, if any, or within such further time as the<br>court allows.2.If any person, including any nonresident of this state, engages in conduct prohibited<br>by this chapter or any rule or regulation or order hereunder, and has not filed a<br>consent to service of process and personal jurisdiction over that person cannot<br>otherwise be obtained in this state, that conduct authorizes the commission to<br>receive service of process in any noncriminal proceeding against that person or that<br>person's successor which grows out of that conduct and which is brought under this<br>chapter or any rule or regulation or order hereunder, with the same force and validity<br>as if served on that person personally.Notice must be given as provided insubsection 1.43-23.1-22. Evidentiary matters.1.In any action, civil or criminal, when a defense is based upon any exemption<br>provided for in this chapter, the burden of proving the existence of such exemption is<br>upon the party raising such defense.2.In any action, civil or criminal, a certificate signed and sealed by the commission<br>stating compliance or noncompliance with the provisions of this chapter is<br>admissible in any such action.43-23.1-23. Penalties. Any person who willfully violates any provision of this chapter orwho willfully violates any rule or regulation or order of the commission made pursuant to the<br>provisions of this chapter, or who engages in any act, practice, or transaction declared by any<br>provision of this chapter to be unlawful, is guilty of a class C felony.Page No. 10Document Outlinechapter 43-23.1 subdivided lands disposition act

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CHAPTER 43-23.1SUBDIVIDED LANDS DISPOSITION ACT43-23.1-01.Short title.This chapter must be known and may be cited as the&quot;Subdivided Lands Disposition Act&quot;.43-23.1-02.Definitions.When used in this chapter, unless the context otherwiserequires:1.&quot;Commission&quot; means the state real estate commission.2.&quot;Disposition&quot; includes sale, lease, assignment, award by lottery, or any other<br>transaction concerning a subdivision, if undertaken for gain or profit.3.&quot;Offer&quot; includes any inducement, solicitation, or attempt to encourage a person to<br>acquire an interest in land, if undertaken for gain or profit.4.&quot;Person&quot; means an individual, corporation, limited liability company, government, or<br>governmental subdivision or agency, business trust, estate, trust, partnership,<br>unincorporated association, two or more of any of the foregoing having a joint or<br>common interest, or any other legal or commercial entity.5.&quot;Purchaser&quot; means a person who acquires or attempts to acquire or succeeds to an<br>interest in land.6.&quot;Subdivider&quot; means any owner of subdivided land who offers it for disposition or the<br>principal agent of an inactive owner.7.&quot;Subdivision&quot; and &quot;subdivided lands&quot; means any land situated outside the state of<br>North Dakota which is divided or is proposed to be divided for the purpose of<br>disposition into five or more lots, parcels, units, or interests and also includes any<br>land, whether contiguous or not, if five or more lots, parcels, units, or interests are<br>offered as a part of a common promotional plan of advertising and sale.43-23.1-03. Administration of chapter. This chapter must be administered by the statereal estate commission.43-23.1-04. Prohibitions on dispositions of interests in subdivisions. Unless thesubdivided lands or the transaction is exempt under section 43-23.1-05, it is unlawful for any<br>person in this state:1.To offer or to dispose of any interest in subdivided lands located without this state<br>prior to the time that the subdivided lands are registered in accordance with this<br>chapter.2.To dispose of any interest in subdivided lands unless a current public offering<br>statement is delivered to the purchaser and the purchaser is afforded a reasonable<br>opportunity to examine the public offering statement prior to the disposition.43-23.1-05. Exemptions.1.Unless the method of disposition is adopted for the purpose of evasion of this<br>chapter, the registration provisions of this chapter do not apply to offers or<br>disposition of an interest in land:a.By a purchaser of subdivided lands for the purchaser's own account in a single<br>or isolated transaction;Page No. 1b.If fewer than five separate lots, parcels, units, or interests in subdivided lands<br>are offered by a person in a period of twelve months;c.To persons who are engaged in the business of construction of buildings for<br>resale or to persons who acquire an interest in subdivided lands for the purpose<br>of engaging, and do engage, in the business of construction of buildings for<br>resale;d.Pursuant to court order;e.By any government or government agency; orf.As cemetery lots or interests.2.Unless the method of disposition is adopted for the purpose of evasion of this<br>chapter, the registration provisions of this chapter do not apply to:a.Offers and dispositions of securities currently registered with the North Dakota<br>securities commissioner;b.A subdivision as to which the plan of disposition is to dispose to ten or fewer<br>persons; orc.A subdivision as to which the commission has granted an exemption as<br>provided in section 43-23.1-11.3.Unless the method of disposition is adopted for the purpose of evasion of this<br>chapter, the registration provisions of this chapter do not apply to the sale or lease of<br>any improved land on which there is a residential, commercial condominium, or<br>industrial building or the sale or lease of land under a contract obligating the seller or<br>lessor to erect such a building thereon within a period of two years.43-23.1-06. Application for registration.1.The application for registration of subdivided lands shall be filed as prescribed by the<br>commission and shall contain the following documents and information:a.An irrevocable appointment of the commission to receive service of any lawful<br>process in any noncriminal proceeding arising under this chapter against the<br>applicant or the applicant's personal representative.b.A legal description of the subdivided lands offered for registration, together with<br>a map showing the division proposed or made, the dimensions of the lots,<br>parcels, units, or interests, and the relation of the subdivided lands to existing<br>streets, roads, waterways, schools, churches, shopping centers, public<br>transportation facilities, and other offsite improvements.c.The states or jurisdictions in which an application for registration or similar<br>document has been filed, and any adverse order, judgment, or decree entered<br>in connection with the subdivided lands by the regulatory authorities in each<br>jurisdiction or by any court.d.The applicant's name, address, and the form, date, and jurisdiction of<br>organization; and the address of each of its offices in this state.e.The name, address, and principal occupation for the past five years of every<br>director and officer of the applicant or person occupying a similar status or<br>performing similar functions; the extent and nature of that person's interest inPage No. 2the applicant or the subdivided lands as of a specified date within thirty days of<br>the filing of the application.f.A statement, in a form acceptable to the commission, of the condition of the title<br>to the subdivided lands including encumbrances as of a specified date within<br>thirty days of the date of application by a title opinion of a licensed attorney, not<br>a salaried employee, officer, or director of the applicant or owner, or by other<br>evidence of title acceptable to the commission.g.Copies of the instruments which will be delivered to a purchaser to evidence<br>the purchaser's interest in the subdivided lands and of the contracts and other<br>agreements which a purchaser will be required to agree to or sign.h.Copies of the instruments by which the interest in the subdivided lands was<br>acquired and a statement of any lien or encumbrance upon the title and copies<br>of the instruments creating the lien or encumbrance, if any, with data as to<br>recording.i.If there is a lien or encumbrance affecting more than one lot, parcel, unit, or<br>interest, a statement of the consequences for a purchaser of failure to<br>discharge the lien or encumbrance and the steps, if any, taken to protect the<br>purchaser in case of this eventuality.j.Copies of instruments creating easements, restrictions, or other encumbrances<br>affecting the subdivided lands.k.A statement of the zoning and other governmental regulations affecting the use<br>of the subdivided lands and also of any existing tax and existing or proposed<br>special taxes or assessments which affect the subdivided lands.l.A statement of the existing provisions for legal and physical access or, if none<br>exists, a statement to that effect; a statement of the existing or proposed<br>provisions for sewage disposal, water, and other public utilities in the<br>subdivision; a statement of the improvements to be installed, the schedule for<br>their completion, and a statement as to the provisions for improvement<br>maintenance.m.A narrative description of the promotional plan for the disposition of the<br>subdivided lands, including the range of selling prices or rents at which it is<br>proposed to dispose of the lots in the subdivision, together with copies of all<br>advertising material which has been prepared for public distribution by any<br>means of communication.n.A copy of its articles of incorporation, with all amendments thereto, if the<br>subdivider is a corporation; copies of its articles of organization, with all<br>amendments thereto, if the subdivider is a limited liability company; copies of all<br>instruments by which the trust is created or declared, if the subdivider is a trust;<br>copies of its articles of partnership or association and all other papers<br>pertaining to its organization, if the subdivider is a partnership, unincorporated<br>association, or any other legal or commercial entity; and if the purported holder<br>of legal title is a person other than the subdivider, copies of the above<br>documents for such person.o.The proposed public offering statement.p.Such current financial statements, certified or otherwise, as the commission<br>may require.Page No. 3q.Such other information and such other documents and certifications as the<br>commission may require as being reasonably necessary or appropriate for the<br>protection of purchasers.2.If the subdivider registers additional subdivided lands to be offered for disposition,<br>the subdivider may consolidate the subsequent registration with any earlier<br>registration offering subdivided lands for disposition under the same promotional<br>plan.3.The subdivider shall immediately report any material changes in the information<br>contained in an application for registration.43-23.1-07. Public offering statement.1.A public offering statement must disclose fully and accurately the physical<br>characteristics of the subdivided lands offered and must make known to prospective<br>purchasers all unusual and material circumstances or features affecting the<br>subdivided lands.The proposed public offering statement submitted to thecommission must be in a form prescribed by it and must include the following:a.The name and principal address of the subdivider.b.A general description of the subdivided lands stating the total number of lots,<br>parcels, units, or interests in the offering.c.The significant terms of any encumbrances, easements, liens, and restrictions,<br>including zoning and other regulations, affecting the subdivided lands and each<br>unit or lot, and a statement of all existing taxes and existing or proposed special<br>taxes or assessments which affect the subdivided lands.d.A statement of the use for which the property is offered.e.Information concerning improvements, including streets, water supply, levees,<br>drainage control systems, irrigation systems, sewage disposal facilities, and<br>customary utilities, and the estimated cost, date of completion, and<br>responsibility for construction and maintenance of existing and proposed<br>improvements which are referred to in connection with the offering or<br>disposition of any interest in subdivided lands.f.Such of the information contained in the application for registration, and any<br>amendments thereto, and such other information as the commission may<br>require as being necessary or appropriate in the public interest or for the<br>protection of purchasers.2.The public offering statement may not be used for any promotional purposes before<br>registration of the subdivided lands and afterwards only if it is used in its entirety. No<br>person may advertise or represent that the commission approves or recommends<br>the subdivided lands or disposition thereof.No portion of the public offeringstatement may be underscored, italicized, or printed in larger or heavier or different<br>color type than the remainder of the statement unless the commission requires it.3.The commission may require the subdivider to alter or amend the proposed public<br>offering statement in order to assure full and fair disclosure to prospective<br>purchasers, and no change in the substance of the promotional plan or plan of<br>disposition or development of the subdivision may be made after registration without<br>notifying the commission and without making appropriate amendment of the public<br>offering statement. A public offering statement is not current unless all amendments<br>are incorporated.Page No. 443-23.1-08. Inquiry and examination. Upon receipt of an application for registration inproper form, the commission shall forthwith initiate an examination to determine that:1.The subdivider can convey or cause to be conveyed the interest in subdivided lands<br>offered for disposition if the purchaser complies with the terms of the offer, and,<br>when appropriate, that release clauses, conveyances in trust, escrow and<br>impoundage provisions, and other safeguards have been provided;2.There is reasonable assurance that all proposed improvements will be completed as<br>represented;3.The advertising material and the general promotional plan are not false or<br>misleading and comply with the standards prescribed by the commission in its rules<br>and regulations and afford full and fair disclosures;4.The subdivider has not, or if a corporation or limited liability company, its officers,<br>managers, governors, directors, and principals have not been convicted of a crime<br>involving land dispositions or any aspect of the land sales business in this state, the<br>United States, or any other state or foreign country within the past ten years and has<br>not been subject to any injunction or administrative order within the past ten years<br>restraining a false or misleading promotional plan involving land dispositions;5.There is no evidence which would reasonably lead the commission to believe that<br>the subdivider, or if a corporation or limited liability company, its officers, managers,<br>governors, directors, or principals are contemplating a fraudulent or misleading sales<br>promotion; and6.The public offering statement requirements of this chapter have been satisfied.43-23.1-09. Notice of filing - Registration - Fees.1.Upon receipt of the application for registration in proper form and of a registration fee<br>of one hundred dollars, the commission shall issue a notice of filing to the applicant.<br>Within ninety days from the date of the notice of filing, the commission shall enter an<br>order registering the subdivided lands or rejecting the registration. If no order of<br>rejection is entered within ninety days from the date of notice of filing, the land must<br>be deemed registered unless the applicant has consented in writing to a delay.2.If the commission affirmatively determines, upon inquiry and examination, that the<br>requirements of section 43-23.1-08 have been met, it shall enter an order registering<br>the subdivided lands and shall designate the form of the public offering statement.3.If the commission determines, upon inquiry and examination, that any of the<br>requirements of section 43-23.1-08 has not been met, the commission shall notify<br>the applicant that the application for registration must be corrected in the particulars<br>specified within ten days. If the requirements are not met within the time allowed,<br>the commission shall enter an order rejecting the registration which must include the<br>findings of fact upon which the order is based. The order rejecting the registration<br>shall not become effective for twenty days during which time the applicant may<br>petition for reconsideration and is entitled to a hearing.4.Registration under this chapter is effective for a period of one year and may be<br>renewed for additional periods of one year by filing, not later than fifteen days prior to<br>the expiration of a registration, a renewal application in such form and containing<br>such information as the commission shall prescribe, together with the payment of a<br>renewal fee of one hundred dollars. The initial registration and any renewal fees<br>may not be returned or refunded for any reason.43-23.1-10. Annual report.Page No. 51.Within thirty days after each annual anniversary date of an order registering<br>subdivided lands, the subdivider shall file a report in the form prescribed by the<br>commission. The report must reflect any material changes in information contained<br>in the original application for registration.2.The commission, at its option, may permit the filing of annual reports within thirty<br>days after the anniversary date of the consolidated registration in lieu of the<br>anniversary date of the original registration.43-23.1-11. General powers and duties.1.The commission has the authority to promulgate, to amend, and to repeal<br>reasonable rules and regulations for the administration and enforcement of this<br>chapter. Such rules and regulations must include, but not be limited to, provisions<br>for advertising standards to assure full and fair disclosure; provisions for escrow or<br>trust agreements or other means to assure that all improvements referred to in the<br>application for registration and advertising will be completed and that purchasers will<br>receive the interest in land for which they contracted; provisions for operating<br>procedures; and such other rules and regulations as are necessary or proper to<br>accomplish the purposes of this chapter.2.All advertising material of any nature whatsoever prepared for use in connection with<br>the offer and disposition of any interests in subdivided lands registered under this<br>chapter must be submitted to and approved by the commission prior to its use.3.As a condition precedent to the registration of any subdivided lands, the commission<br>shall require that the subdivider file an indemnity bond running to the state of North<br>Dakota for the use, benefit, and protection of any person and conditioned for the<br>faithful compliance by the subdivider, the subdivider's agents and employees with all<br>of the provisions of this chapter, and with all rules, regulations, and orders made<br>pursuant thereto and for the faithful performance and payment of all obligations of<br>the subdivider, the subdivider's agents and employees in connection with the<br>registration. The indemnity bond must be of such type and in such form as must be<br>prescribed by the commission and must be in such amount as the commission<br>deems necessary to protect purchasers when the volume of business of the<br>subdivider and other relevant factors are taken into consideration, but in no event<br>less than twenty-five thousand dollars. Any such bond must have as surety thereon<br>a surety company authorized to do business in this state.4.Whenever it appears that a person has engaged or is about to engage in acts or<br>practices which constitute or will constitute a violation of the provisions of this<br>chapter or of a rule or regulation or order hereunder, the commission, with or without<br>prior administrative proceedings, may bring an action in any district court to enjoin<br>the acts or practices and to enforce compliance with this chapter or any rule or<br>regulation or order hereunder. Upon a proper showing, a permanent or temporary<br>injunction or restraining order must be granted without bond.5.The commission may intervene in a suit involving subdivided lands. In any suit by or<br>against a subdivider involving subdivided lands, the subdivider promptly shall furnish<br>the commission notice of the suit and copies of all pleadings.6.The commission may:a.Accept registrations filed in other states or with the federal government;b.Contract with similar agencies in this state or other jurisdictions to perform<br>investigative functions; andc.Accept grants-in-aid from any source.Page No. 67.The commission shall cooperate with similar agencies in other jurisdictions to<br>establish uniform filing procedures and forms, uniform public offering statements,<br>advertising standards, rules and regulations, and common administrative practices.8.The commission may exempt a subdivision of ten or fewer lots, parcels, units, or<br>interests from the provisions of this chapter if it determines that the plan of<br>promotion and disposition is primarily directed to persons in the local community in<br>which the subdivision is located.43-23.1-12. Fraudulent practices. It is a fraudulent practice, and it is unlawful:1.For any person knowingly to subscribe to or make or cause to be made any material<br>false statement or representation in any application, financial statement, or other<br>document or statement required to be filed under any provision of this chapter, or to<br>omit to state any material statement or fact in any such document or statement<br>which is necessary in order to make the statements made, in the light of the<br>circumstances under which they are made, not misleading;2.For any person, in connection with the offer, disposition, or purchase of subdivided<br>lands, directly or indirectly, to employ any device, scheme, or artifice to defraud;3.For any person, in connection with the offer, disposition, or purchase of subdivided<br>lands, directly or indirectly, to make any untrue statement of a material fact or to omit<br>to state a material fact necessary in order to make the statements made, in the light<br>of the circumstances under which they are made, not misleading; or4.For any person, in connection with the offer, disposition, or purchase of subdivided<br>lands, directly or indirectly, to engage in any act, practice, or course of business<br>which operates or would operate as a fraud or deception upon purchasers or the<br>public.43-23.1-13. Investigations and proceedings.1.The commission shall investigate any subdivision offered for disposition in this state<br>and may:a.Rely upon any relevant information concerning a subdivision obtained from the<br>federal housing administration, the United States veterans administration, or<br>any other federal agency having comparable duties in relation to subdivisions;b.Require the applicant to submit reports prepared by competent engineers as to<br>any hazard to which any subdivision offered for disposition is subject or any<br>factor which affects the utility of interests within the subdivision, and require<br>evidence of compliance in removing or minimizing all hazards reflected in<br>engineering reports;c.Require an onsite inspection of the subdivision by a person or persons<br>designated by it. All expenses incurred in connection with an onsite inspection<br>must be defrayed by the applicant, and the commission shall require a deposit<br>sufficient to defray such expenses in advance;d.Make public or private investigations within or outside this state to determine<br>whether any person has violated or is about to violate this chapter or any rule,<br>regulation, or order hereunder, or to aid in the enforcement of this chapter or in<br>prescribing rules and regulations and forms hereunder; ande.Require or permit any person to file a statement in writing, under oath or<br>otherwise as the commission determines, as to all the facts and circumstances<br>concerning the matter to be investigated.Page No. 72.For the purpose of any investigation or proceeding under this chapter, the<br>commission or any person designated by it may administer oaths or affirmations,<br>and upon its own motion or upon the request of any party shall subpoena witnesses,<br>compel their attendance, take evidence, and require the production of any matter<br>which is relevant to the investigation, including the existence, description, nature,<br>custody, condition, and location of any books, documents, or other tangible things<br>and the identity and location of persons having knowledge of relevant facts or any<br>other matter reasonably calculated to lead to the discovery of material evidence.3.Upon failure to obey a subpoena or to answer questions propounded by the<br>investigator and upon reasonable notice to all persons affected thereby, the agency<br>may apply to the district court for an order compelling compliance.4.The commission may permit a person registered with the commission whose<br>conduct or actions may be under investigation to waive formal proceedings and<br>enter into a consent proceeding whereby orders, rules, or letters of censure or<br>warning, whether formal or informal, may be entered against said person.5.Except as otherwise provided in this chapter, all proceedings under this chapter<br>must be in accordance with chapter 28-32.43-23.1-14. Cease and desist orders.1.If the commission determines after notice and hearing that a person has:a.Violated any provision of this chapter;b.Directly or through an agent or employee knowingly engaged in any false,<br>deceptive, or misleading advertising, promotional, or sales methods to offer or<br>dispose of an interest in subdivided lands;c.Made any substantial change in the plan of disposition and development of the<br>subdivided lands subsequent to the order of registration without obtaining prior<br>written approval from the commission;d.Disposed of any subdivided lands which have not been registered with the<br>commission; ore.Violated any lawful order or rule or regulation of the commission;it may issue an order requiring the person to cease and desist from the unlawful<br>practice and to take such affirmative action as in the judgment of the commission will<br>carry out the purposes of this chapter.2.If the commission makes a finding of fact in writing that the public interest will be<br>irreparably harmed by delay in issuing an order, it may issue a temporary cease and<br>desist order. Prior to issuing the temporary cease and desist order, the commission,<br>whenever possible, by telephone or otherwise shall give notice of the proposal to<br>issue a temporary cease and desist order to the person. Every temporary cease<br>and desist order must include in its terms a provision that upon request a hearing will<br>be held promptly to determine whether or not it becomes permanent.43-23.1-15. Revocation.1.A registration may be revoked after notice and hearing upon a written finding of fact<br>that the subdivider has:a.Failed to comply with the terms of a cease and desist order;Page No. 8b.Been convicted of an offense determined by the commission to have a direct<br>bearing upon a person's ability to serve the public as a real estate subdivider,<br>or the commission determines, following conviction of any offense, that the<br>person is not sufficiently rehabilitated under section 12.1-33-02.1;c.Disposed of, concealed, or diverted any funds or assets of any person so as to<br>defeat the rights of subdivision purchasers;d.Failed faithfully to perform any stipulation or agreement made with the<br>commission as an inducement to grant any registration, to reinstate any<br>registration, or to approve any promotional plan or public offering statement; ore.Made intentional misrepresentations or concealed material facts in an<br>application for registration. Findings of fact, if set forth in statutory language,<br>must be accompanied by a concise and explicit statement of the underlying<br>facts supporting the findings.2.If the commission finds after notice and hearing that the subdivider has been guilty<br>of a violation for which revocation could be ordered, it may issue a cease and desist<br>order instead.43-23.1-16. Judicial review. A person who has exhausted all administrative remediesavailable within the commission and who is aggrieved by an order pertaining to registration, a<br>cease and desist order, an order of revocation, or any other final decision of the commission is<br>entitled to judicial review in accordance with chapter 28-32.43-23.1-17.Real estate license required.No real estate broker, salesperson, ormortgage broker may offer or dispose of subdivided lands within or from this state, except in<br>dispositions and transactions exempt under section 43-23.1-05, unless said real estate broker,<br>salesperson, or mortgage broker is licensed pursuant to chapter 43-23.43-23.1-18. Civil remedy.1.Every disposition made in violation of any of the provisions of this chapter, or of any<br>order issued by the commission under any of the provisions of this chapter, is<br>voidable at the election of the purchaser. The person making such disposition, and<br>every director, officer, salesperson, or agent of or for such person who has<br>participated or aided in any way in making such disposition, shall be jointly and<br>severally liable to such purchaser in any action at law in any court of competent<br>jurisdiction for the consideration paid for the lot, parcel, unit, or interest, together with<br>interest at the rate of six percent per year from the date of payment, property taxes<br>and assessments paid, court costs, and reasonable attorney's fees, less the amount<br>of any income received from the subdivided lands, upon tender of appropriate<br>instruments of reconveyance made at any time before the entry of judgment. If the<br>purchaser no longer owns the lot, parcel, unit, or interest in subdivided lands, that<br>person may recover the amount that would be recoverable upon a tender of a<br>reconveyance less the value of the land when disposed of and less interest at the<br>rate of six percent per year on that amount from the date of disposition.2.No action may be brought under this section for the recovery of the consideration<br>paid after five years from the date of such disposition nor more than three years after<br>the purchaser has received information as to matter or matters upon which the<br>proposed recovery is based, whichever occurs first.3.Any stipulation or provision purporting to bind any person acquiring subdivided lands<br>to waive compliance with this chapter or any rule or regulation or order under it is<br>void.Page No. 94.The rights and remedies provided by this chapter are in addition to any and all other<br>rights and remedies that may exist at law or in equity.43-23.1-19. Jurisdiction. Dispositions of subdivided lands are subject to this chapter,and the district courts of this state have jurisdiction in claims for relief arising under this chapter if:1.The subdivider's principal office is located in this state; or2.Any offer or disposition of subdivided lands is made in this state, whether or not the<br>offeror or offeree is then present in this state, if the offer originates within this state or<br>is directed by the offeror to a person or place in this state and received by the person<br>or at the place to which it is directed.43-23.1-20. Extradition. In proceedings for extradition of a person charged with a crimeunder this chapter, it need not be shown that the person whose surrender is demanded has fled<br>from justice or at the time of the commission of the crime was in the demanding or other state.43-23.1-21. Service of process.1.In addition to the methods of service provided for in the North Dakota Rules of Civil<br>Procedure and statutes, service may be made by delivering a copy of the process to<br>the office of the commission, but it is not effective unless:a.The plaintiff, which may be the commission in a proceeding instituted by it,<br>forthwith sends a copy of the process and of the pleading by registered mail to<br>the defendant or respondent at that person's last-known address.b.The plaintiff's affidavit of compliance with this section is filed in the case on or<br>before the return day of the process, if any, or within such further time as the<br>court allows.2.If any person, including any nonresident of this state, engages in conduct prohibited<br>by this chapter or any rule or regulation or order hereunder, and has not filed a<br>consent to service of process and personal jurisdiction over that person cannot<br>otherwise be obtained in this state, that conduct authorizes the commission to<br>receive service of process in any noncriminal proceeding against that person or that<br>person's successor which grows out of that conduct and which is brought under this<br>chapter or any rule or regulation or order hereunder, with the same force and validity<br>as if served on that person personally.Notice must be given as provided insubsection 1.43-23.1-22. Evidentiary matters.1.In any action, civil or criminal, when a defense is based upon any exemption<br>provided for in this chapter, the burden of proving the existence of such exemption is<br>upon the party raising such defense.2.In any action, civil or criminal, a certificate signed and sealed by the commission<br>stating compliance or noncompliance with the provisions of this chapter is<br>admissible in any such action.43-23.1-23. Penalties. Any person who willfully violates any provision of this chapter orwho willfully violates any rule or regulation or order of the commission made pursuant to the<br>provisions of this chapter, or who engages in any act, practice, or transaction declared by any<br>provision of this chapter to be unlawful, is guilty of a class C felony.Page No. 10Document Outlinechapter 43-23.1 subdivided lands disposition act

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CHAPTER 43-23.1SUBDIVIDED LANDS DISPOSITION ACT43-23.1-01.Short title.This chapter must be known and may be cited as the&quot;Subdivided Lands Disposition Act&quot;.43-23.1-02.Definitions.When used in this chapter, unless the context otherwiserequires:1.&quot;Commission&quot; means the state real estate commission.2.&quot;Disposition&quot; includes sale, lease, assignment, award by lottery, or any other<br>transaction concerning a subdivision, if undertaken for gain or profit.3.&quot;Offer&quot; includes any inducement, solicitation, or attempt to encourage a person to<br>acquire an interest in land, if undertaken for gain or profit.4.&quot;Person&quot; means an individual, corporation, limited liability company, government, or<br>governmental subdivision or agency, business trust, estate, trust, partnership,<br>unincorporated association, two or more of any of the foregoing having a joint or<br>common interest, or any other legal or commercial entity.5.&quot;Purchaser&quot; means a person who acquires or attempts to acquire or succeeds to an<br>interest in land.6.&quot;Subdivider&quot; means any owner of subdivided land who offers it for disposition or the<br>principal agent of an inactive owner.7.&quot;Subdivision&quot; and &quot;subdivided lands&quot; means any land situated outside the state of<br>North Dakota which is divided or is proposed to be divided for the purpose of<br>disposition into five or more lots, parcels, units, or interests and also includes any<br>land, whether contiguous or not, if five or more lots, parcels, units, or interests are<br>offered as a part of a common promotional plan of advertising and sale.43-23.1-03. Administration of chapter. This chapter must be administered by the statereal estate commission.43-23.1-04. Prohibitions on dispositions of interests in subdivisions. Unless thesubdivided lands or the transaction is exempt under section 43-23.1-05, it is unlawful for any<br>person in this state:1.To offer or to dispose of any interest in subdivided lands located without this state<br>prior to the time that the subdivided lands are registered in accordance with this<br>chapter.2.To dispose of any interest in subdivided lands unless a current public offering<br>statement is delivered to the purchaser and the purchaser is afforded a reasonable<br>opportunity to examine the public offering statement prior to the disposition.43-23.1-05. Exemptions.1.Unless the method of disposition is adopted for the purpose of evasion of this<br>chapter, the registration provisions of this chapter do not apply to offers or<br>disposition of an interest in land:a.By a purchaser of subdivided lands for the purchaser's own account in a single<br>or isolated transaction;Page No. 1b.If fewer than five separate lots, parcels, units, or interests in subdivided lands<br>are offered by a person in a period of twelve months;c.To persons who are engaged in the business of construction of buildings for<br>resale or to persons who acquire an interest in subdivided lands for the purpose<br>of engaging, and do engage, in the business of construction of buildings for<br>resale;d.Pursuant to court order;e.By any government or government agency; orf.As cemetery lots or interests.2.Unless the method of disposition is adopted for the purpose of evasion of this<br>chapter, the registration provisions of this chapter do not apply to:a.Offers and dispositions of securities currently registered with the North Dakota<br>securities commissioner;b.A subdivision as to which the plan of disposition is to dispose to ten or fewer<br>persons; orc.A subdivision as to which the commission has granted an exemption as<br>provided in section 43-23.1-11.3.Unless the method of disposition is adopted for the purpose of evasion of this<br>chapter, the registration provisions of this chapter do not apply to the sale or lease of<br>any improved land on which there is a residential, commercial condominium, or<br>industrial building or the sale or lease of land under a contract obligating the seller or<br>lessor to erect such a building thereon within a period of two years.43-23.1-06. Application for registration.1.The application for registration of subdivided lands shall be filed as prescribed by the<br>commission and shall contain the following documents and information:a.An irrevocable appointment of the commission to receive service of any lawful<br>process in any noncriminal proceeding arising under this chapter against the<br>applicant or the applicant's personal representative.b.A legal description of the subdivided lands offered for registration, together with<br>a map showing the division proposed or made, the dimensions of the lots,<br>parcels, units, or interests, and the relation of the subdivided lands to existing<br>streets, roads, waterways, schools, churches, shopping centers, public<br>transportation facilities, and other offsite improvements.c.The states or jurisdictions in which an application for registration or similar<br>document has been filed, and any adverse order, judgment, or decree entered<br>in connection with the subdivided lands by the regulatory authorities in each<br>jurisdiction or by any court.d.The applicant's name, address, and the form, date, and jurisdiction of<br>organization; and the address of each of its offices in this state.e.The name, address, and principal occupation for the past five years of every<br>director and officer of the applicant or person occupying a similar status or<br>performing similar functions; the extent and nature of that person's interest inPage No. 2the applicant or the subdivided lands as of a specified date within thirty days of<br>the filing of the application.f.A statement, in a form acceptable to the commission, of the condition of the title<br>to the subdivided lands including encumbrances as of a specified date within<br>thirty days of the date of application by a title opinion of a licensed attorney, not<br>a salaried employee, officer, or director of the applicant or owner, or by other<br>evidence of title acceptable to the commission.g.Copies of the instruments which will be delivered to a purchaser to evidence<br>the purchaser's interest in the subdivided lands and of the contracts and other<br>agreements which a purchaser will be required to agree to or sign.h.Copies of the instruments by which the interest in the subdivided lands was<br>acquired and a statement of any lien or encumbrance upon the title and copies<br>of the instruments creating the lien or encumbrance, if any, with data as to<br>recording.i.If there is a lien or encumbrance affecting more than one lot, parcel, unit, or<br>interest, a statement of the consequences for a purchaser of failure to<br>discharge the lien or encumbrance and the steps, if any, taken to protect the<br>purchaser in case of this eventuality.j.Copies of instruments creating easements, restrictions, or other encumbrances<br>affecting the subdivided lands.k.A statement of the zoning and other governmental regulations affecting the use<br>of the subdivided lands and also of any existing tax and existing or proposed<br>special taxes or assessments which affect the subdivided lands.l.A statement of the existing provisions for legal and physical access or, if none<br>exists, a statement to that effect; a statement of the existing or proposed<br>provisions for sewage disposal, water, and other public utilities in the<br>subdivision; a statement of the improvements to be installed, the schedule for<br>their completion, and a statement as to the provisions for improvement<br>maintenance.m.A narrative description of the promotional plan for the disposition of the<br>subdivided lands, including the range of selling prices or rents at which it is<br>proposed to dispose of the lots in the subdivision, together with copies of all<br>advertising material which has been prepared for public distribution by any<br>means of communication.n.A copy of its articles of incorporation, with all amendments thereto, if the<br>subdivider is a corporation; copies of its articles of organization, with all<br>amendments thereto, if the subdivider is a limited liability company; copies of all<br>instruments by which the trust is created or declared, if the subdivider is a trust;<br>copies of its articles of partnership or association and all other papers<br>pertaining to its organization, if the subdivider is a partnership, unincorporated<br>association, or any other legal or commercial entity; and if the purported holder<br>of legal title is a person other than the subdivider, copies of the above<br>documents for such person.o.The proposed public offering statement.p.Such current financial statements, certified or otherwise, as the commission<br>may require.Page No. 3q.Such other information and such other documents and certifications as the<br>commission may require as being reasonably necessary or appropriate for the<br>protection of purchasers.2.If the subdivider registers additional subdivided lands to be offered for disposition,<br>the subdivider may consolidate the subsequent registration with any earlier<br>registration offering subdivided lands for disposition under the same promotional<br>plan.3.The subdivider shall immediately report any material changes in the information<br>contained in an application for registration.43-23.1-07. Public offering statement.1.A public offering statement must disclose fully and accurately the physical<br>characteristics of the subdivided lands offered and must make known to prospective<br>purchasers all unusual and material circumstances or features affecting the<br>subdivided lands.The proposed public offering statement submitted to thecommission must be in a form prescribed by it and must include the following:a.The name and principal address of the subdivider.b.A general description of the subdivided lands stating the total number of lots,<br>parcels, units, or interests in the offering.c.The significant terms of any encumbrances, easements, liens, and restrictions,<br>including zoning and other regulations, affecting the subdivided lands and each<br>unit or lot, and a statement of all existing taxes and existing or proposed special<br>taxes or assessments which affect the subdivided lands.d.A statement of the use for which the property is offered.e.Information concerning improvements, including streets, water supply, levees,<br>drainage control systems, irrigation systems, sewage disposal facilities, and<br>customary utilities, and the estimated cost, date of completion, and<br>responsibility for construction and maintenance of existing and proposed<br>improvements which are referred to in connection with the offering or<br>disposition of any interest in subdivided lands.f.Such of the information contained in the application for registration, and any<br>amendments thereto, and such other information as the commission may<br>require as being necessary or appropriate in the public interest or for the<br>protection of purchasers.2.The public offering statement may not be used for any promotional purposes before<br>registration of the subdivided lands and afterwards only if it is used in its entirety. No<br>person may advertise or represent that the commission approves or recommends<br>the subdivided lands or disposition thereof.No portion of the public offeringstatement may be underscored, italicized, or printed in larger or heavier or different<br>color type than the remainder of the statement unless the commission requires it.3.The commission may require the subdivider to alter or amend the proposed public<br>offering statement in order to assure full and fair disclosure to prospective<br>purchasers, and no change in the substance of the promotional plan or plan of<br>disposition or development of the subdivision may be made after registration without<br>notifying the commission and without making appropriate amendment of the public<br>offering statement. A public offering statement is not current unless all amendments<br>are incorporated.Page No. 443-23.1-08. Inquiry and examination. Upon receipt of an application for registration inproper form, the commission shall forthwith initiate an examination to determine that:1.The subdivider can convey or cause to be conveyed the interest in subdivided lands<br>offered for disposition if the purchaser complies with the terms of the offer, and,<br>when appropriate, that release clauses, conveyances in trust, escrow and<br>impoundage provisions, and other safeguards have been provided;2.There is reasonable assurance that all proposed improvements will be completed as<br>represented;3.The advertising material and the general promotional plan are not false or<br>misleading and comply with the standards prescribed by the commission in its rules<br>and regulations and afford full and fair disclosures;4.The subdivider has not, or if a corporation or limited liability company, its officers,<br>managers, governors, directors, and principals have not been convicted of a crime<br>involving land dispositions or any aspect of the land sales business in this state, the<br>United States, or any other state or foreign country within the past ten years and has<br>not been subject to any injunction or administrative order within the past ten years<br>restraining a false or misleading promotional plan involving land dispositions;5.There is no evidence which would reasonably lead the commission to believe that<br>the subdivider, or if a corporation or limited liability company, its officers, managers,<br>governors, directors, or principals are contemplating a fraudulent or misleading sales<br>promotion; and6.The public offering statement requirements of this chapter have been satisfied.43-23.1-09. Notice of filing - Registration - Fees.1.Upon receipt of the application for registration in proper form and of a registration fee<br>of one hundred dollars, the commission shall issue a notice of filing to the applicant.<br>Within ninety days from the date of the notice of filing, the commission shall enter an<br>order registering the subdivided lands or rejecting the registration. If no order of<br>rejection is entered within ninety days from the date of notice of filing, the land must<br>be deemed registered unless the applicant has consented in writing to a delay.2.If the commission affirmatively determines, upon inquiry and examination, that the<br>requirements of section 43-23.1-08 have been met, it shall enter an order registering<br>the subdivided lands and shall designate the form of the public offering statement.3.If the commission determines, upon inquiry and examination, that any of the<br>requirements of section 43-23.1-08 has not been met, the commission shall notify<br>the applicant that the application for registration must be corrected in the particulars<br>specified within ten days. If the requirements are not met within the time allowed,<br>the commission shall enter an order rejecting the registration which must include the<br>findings of fact upon which the order is based. The order rejecting the registration<br>shall not become effective for twenty days during which time the applicant may<br>petition for reconsideration and is entitled to a hearing.4.Registration under this chapter is effective for a period of one year and may be<br>renewed for additional periods of one year by filing, not later than fifteen days prior to<br>the expiration of a registration, a renewal application in such form and containing<br>such information as the commission shall prescribe, together with the payment of a<br>renewal fee of one hundred dollars. The initial registration and any renewal fees<br>may not be returned or refunded for any reason.43-23.1-10. Annual report.Page No. 51.Within thirty days after each annual anniversary date of an order registering<br>subdivided lands, the subdivider shall file a report in the form prescribed by the<br>commission. The report must reflect any material changes in information contained<br>in the original application for registration.2.The commission, at its option, may permit the filing of annual reports within thirty<br>days after the anniversary date of the consolidated registration in lieu of the<br>anniversary date of the original registration.43-23.1-11. General powers and duties.1.The commission has the authority to promulgate, to amend, and to repeal<br>reasonable rules and regulations for the administration and enforcement of this<br>chapter. Such rules and regulations must include, but not be limited to, provisions<br>for advertising standards to assure full and fair disclosure; provisions for escrow or<br>trust agreements or other means to assure that all improvements referred to in the<br>application for registration and advertising will be completed and that purchasers will<br>receive the interest in land for which they contracted; provisions for operating<br>procedures; and such other rules and regulations as are necessary or proper to<br>accomplish the purposes of this chapter.2.All advertising material of any nature whatsoever prepared for use in connection with<br>the offer and disposition of any interests in subdivided lands registered under this<br>chapter must be submitted to and approved by the commission prior to its use.3.As a condition precedent to the registration of any subdivided lands, the commission<br>shall require that the subdivider file an indemnity bond running to the state of North<br>Dakota for the use, benefit, and protection of any person and conditioned for the<br>faithful compliance by the subdivider, the subdivider's agents and employees with all<br>of the provisions of this chapter, and with all rules, regulations, and orders made<br>pursuant thereto and for the faithful performance and payment of all obligations of<br>the subdivider, the subdivider's agents and employees in connection with the<br>registration. The indemnity bond must be of such type and in such form as must be<br>prescribed by the commission and must be in such amount as the commission<br>deems necessary to protect purchasers when the volume of business of the<br>subdivider and other relevant factors are taken into consideration, but in no event<br>less than twenty-five thousand dollars. Any such bond must have as surety thereon<br>a surety company authorized to do business in this state.4.Whenever it appears that a person has engaged or is about to engage in acts or<br>practices which constitute or will constitute a violation of the provisions of this<br>chapter or of a rule or regulation or order hereunder, the commission, with or without<br>prior administrative proceedings, may bring an action in any district court to enjoin<br>the acts or practices and to enforce compliance with this chapter or any rule or<br>regulation or order hereunder. Upon a proper showing, a permanent or temporary<br>injunction or restraining order must be granted without bond.5.The commission may intervene in a suit involving subdivided lands. In any suit by or<br>against a subdivider involving subdivided lands, the subdivider promptly shall furnish<br>the commission notice of the suit and copies of all pleadings.6.The commission may:a.Accept registrations filed in other states or with the federal government;b.Contract with similar agencies in this state or other jurisdictions to perform<br>investigative functions; andc.Accept grants-in-aid from any source.Page No. 67.The commission shall cooperate with similar agencies in other jurisdictions to<br>establish uniform filing procedures and forms, uniform public offering statements,<br>advertising standards, rules and regulations, and common administrative practices.8.The commission may exempt a subdivision of ten or fewer lots, parcels, units, or<br>interests from the provisions of this chapter if it determines that the plan of<br>promotion and disposition is primarily directed to persons in the local community in<br>which the subdivision is located.43-23.1-12. Fraudulent practices. It is a fraudulent practice, and it is unlawful:1.For any person knowingly to subscribe to or make or cause to be made any material<br>false statement or representation in any application, financial statement, or other<br>document or statement required to be filed under any provision of this chapter, or to<br>omit to state any material statement or fact in any such document or statement<br>which is necessary in order to make the statements made, in the light of the<br>circumstances under which they are made, not misleading;2.For any person, in connection with the offer, disposition, or purchase of subdivided<br>lands, directly or indirectly, to employ any device, scheme, or artifice to defraud;3.For any person, in connection with the offer, disposition, or purchase of subdivided<br>lands, directly or indirectly, to make any untrue statement of a material fact or to omit<br>to state a material fact necessary in order to make the statements made, in the light<br>of the circumstances under which they are made, not misleading; or4.For any person, in connection with the offer, disposition, or purchase of subdivided<br>lands, directly or indirectly, to engage in any act, practice, or course of business<br>which operates or would operate as a fraud or deception upon purchasers or the<br>public.43-23.1-13. Investigations and proceedings.1.The commission shall investigate any subdivision offered for disposition in this state<br>and may:a.Rely upon any relevant information concerning a subdivision obtained from the<br>federal housing administration, the United States veterans administration, or<br>any other federal agency having comparable duties in relation to subdivisions;b.Require the applicant to submit reports prepared by competent engineers as to<br>any hazard to which any subdivision offered for disposition is subject or any<br>factor which affects the utility of interests within the subdivision, and require<br>evidence of compliance in removing or minimizing all hazards reflected in<br>engineering reports;c.Require an onsite inspection of the subdivision by a person or persons<br>designated by it. All expenses incurred in connection with an onsite inspection<br>must be defrayed by the applicant, and the commission shall require a deposit<br>sufficient to defray such expenses in advance;d.Make public or private investigations within or outside this state to determine<br>whether any person has violated or is about to violate this chapter or any rule,<br>regulation, or order hereunder, or to aid in the enforcement of this chapter or in<br>prescribing rules and regulations and forms hereunder; ande.Require or permit any person to file a statement in writing, under oath or<br>otherwise as the commission determines, as to all the facts and circumstances<br>concerning the matter to be investigated.Page No. 72.For the purpose of any investigation or proceeding under this chapter, the<br>commission or any person designated by it may administer oaths or affirmations,<br>and upon its own motion or upon the request of any party shall subpoena witnesses,<br>compel their attendance, take evidence, and require the production of any matter<br>which is relevant to the investigation, including the existence, description, nature,<br>custody, condition, and location of any books, documents, or other tangible things<br>and the identity and location of persons having knowledge of relevant facts or any<br>other matter reasonably calculated to lead to the discovery of material evidence.3.Upon failure to obey a subpoena or to answer questions propounded by the<br>investigator and upon reasonable notice to all persons affected thereby, the agency<br>may apply to the district court for an order compelling compliance.4.The commission may permit a person registered with the commission whose<br>conduct or actions may be under investigation to waive formal proceedings and<br>enter into a consent proceeding whereby orders, rules, or letters of censure or<br>warning, whether formal or informal, may be entered against said person.5.Except as otherwise provided in this chapter, all proceedings under this chapter<br>must be in accordance with chapter 28-32.43-23.1-14. Cease and desist orders.1.If the commission determines after notice and hearing that a person has:a.Violated any provision of this chapter;b.Directly or through an agent or employee knowingly engaged in any false,<br>deceptive, or misleading advertising, promotional, or sales methods to offer or<br>dispose of an interest in subdivided lands;c.Made any substantial change in the plan of disposition and development of the<br>subdivided lands subsequent to the order of registration without obtaining prior<br>written approval from the commission;d.Disposed of any subdivided lands which have not been registered with the<br>commission; ore.Violated any lawful order or rule or regulation of the commission;it may issue an order requiring the person to cease and desist from the unlawful<br>practice and to take such affirmative action as in the judgment of the commission will<br>carry out the purposes of this chapter.2.If the commission makes a finding of fact in writing that the public interest will be<br>irreparably harmed by delay in issuing an order, it may issue a temporary cease and<br>desist order. Prior to issuing the temporary cease and desist order, the commission,<br>whenever possible, by telephone or otherwise shall give notice of the proposal to<br>issue a temporary cease and desist order to the person. Every temporary cease<br>and desist order must include in its terms a provision that upon request a hearing will<br>be held promptly to determine whether or not it becomes permanent.43-23.1-15. Revocation.1.A registration may be revoked after notice and hearing upon a written finding of fact<br>that the subdivider has:a.Failed to comply with the terms of a cease and desist order;Page No. 8b.Been convicted of an offense determined by the commission to have a direct<br>bearing upon a person's ability to serve the public as a real estate subdivider,<br>or the commission determines, following conviction of any offense, that the<br>person is not sufficiently rehabilitated under section 12.1-33-02.1;c.Disposed of, concealed, or diverted any funds or assets of any person so as to<br>defeat the rights of subdivision purchasers;d.Failed faithfully to perform any stipulation or agreement made with the<br>commission as an inducement to grant any registration, to reinstate any<br>registration, or to approve any promotional plan or public offering statement; ore.Made intentional misrepresentations or concealed material facts in an<br>application for registration. Findings of fact, if set forth in statutory language,<br>must be accompanied by a concise and explicit statement of the underlying<br>facts supporting the findings.2.If the commission finds after notice and hearing that the subdivider has been guilty<br>of a violation for which revocation could be ordered, it may issue a cease and desist<br>order instead.43-23.1-16. Judicial review. A person who has exhausted all administrative remediesavailable within the commission and who is aggrieved by an order pertaining to registration, a<br>cease and desist order, an order of revocation, or any other final decision of the commission is<br>entitled to judicial review in accordance with chapter 28-32.43-23.1-17.Real estate license required.No real estate broker, salesperson, ormortgage broker may offer or dispose of subdivided lands within or from this state, except in<br>dispositions and transactions exempt under section 43-23.1-05, unless said real estate broker,<br>salesperson, or mortgage broker is licensed pursuant to chapter 43-23.43-23.1-18. Civil remedy.1.Every disposition made in violation of any of the provisions of this chapter, or of any<br>order issued by the commission under any of the provisions of this chapter, is<br>voidable at the election of the purchaser. The person making such disposition, and<br>every director, officer, salesperson, or agent of or for such person who has<br>participated or aided in any way in making such disposition, shall be jointly and<br>severally liable to such purchaser in any action at law in any court of competent<br>jurisdiction for the consideration paid for the lot, parcel, unit, or interest, together with<br>interest at the rate of six percent per year from the date of payment, property taxes<br>and assessments paid, court costs, and reasonable attorney's fees, less the amount<br>of any income received from the subdivided lands, upon tender of appropriate<br>instruments of reconveyance made at any time before the entry of judgment. If the<br>purchaser no longer owns the lot, parcel, unit, or interest in subdivided lands, that<br>person may recover the amount that would be recoverable upon a tender of a<br>reconveyance less the value of the land when disposed of and less interest at the<br>rate of six percent per year on that amount from the date of disposition.2.No action may be brought under this section for the recovery of the consideration<br>paid after five years from the date of such disposition nor more than three years after<br>the purchaser has received information as to matter or matters upon which the<br>proposed recovery is based, whichever occurs first.3.Any stipulation or provision purporting to bind any person acquiring subdivided lands<br>to waive compliance with this chapter or any rule or regulation or order under it is<br>void.Page No. 94.The rights and remedies provided by this chapter are in addition to any and all other<br>rights and remedies that may exist at law or in equity.43-23.1-19. Jurisdiction. Dispositions of subdivided lands are subject to this chapter,and the district courts of this state have jurisdiction in claims for relief arising under this chapter if:1.The subdivider's principal office is located in this state; or2.Any offer or disposition of subdivided lands is made in this state, whether or not the<br>offeror or offeree is then present in this state, if the offer originates within this state or<br>is directed by the offeror to a person or place in this state and received by the person<br>or at the place to which it is directed.43-23.1-20. Extradition. In proceedings for extradition of a person charged with a crimeunder this chapter, it need not be shown that the person whose surrender is demanded has fled<br>from justice or at the time of the commission of the crime was in the demanding or other state.43-23.1-21. Service of process.1.In addition to the methods of service provided for in the North Dakota Rules of Civil<br>Procedure and statutes, service may be made by delivering a copy of the process to<br>the office of the commission, but it is not effective unless:a.The plaintiff, which may be the commission in a proceeding instituted by it,<br>forthwith sends a copy of the process and of the pleading by registered mail to<br>the defendant or respondent at that person's last-known address.b.The plaintiff's affidavit of compliance with this section is filed in the case on or<br>before the return day of the process, if any, or within such further time as the<br>court allows.2.If any person, including any nonresident of this state, engages in conduct prohibited<br>by this chapter or any rule or regulation or order hereunder, and has not filed a<br>consent to service of process and personal jurisdiction over that person cannot<br>otherwise be obtained in this state, that conduct authorizes the commission to<br>receive service of process in any noncriminal proceeding against that person or that<br>person's successor which grows out of that conduct and which is brought under this<br>chapter or any rule or regulation or order hereunder, with the same force and validity<br>as if served on that person personally.Notice must be given as provided insubsection 1.43-23.1-22. Evidentiary matters.1.In any action, civil or criminal, when a defense is based upon any exemption<br>provided for in this chapter, the burden of proving the existence of such exemption is<br>upon the party raising such defense.2.In any action, civil or criminal, a certificate signed and sealed by the commission<br>stating compliance or noncompliance with the provisions of this chapter is<br>admissible in any such action.43-23.1-23. Penalties. Any person who willfully violates any provision of this chapter orwho willfully violates any rule or regulation or order of the commission made pursuant to the<br>provisions of this chapter, or who engages in any act, practice, or transaction declared by any<br>provision of this chapter to be unlawful, is guilty of a class C felony.Page No. 10Document Outlinechapter 43-23.1 subdivided lands disposition act