1.1 North Dakota Real Estate Commission (NDREC)

The North Dakota Real Estate Commission (NDREC) is the state agency responsible for licensing, regulating, and disciplining real estate professionals in North Dakota. Its authority comes from the North Dakota Real Estate License Law, codified at North Dakota Century Code (NDCC) Chapter 43-23, supplemented by administrative rules in North Dakota Administrative Code (NDAC) Title 70.

Real Estate SalespersonFree exam prep with practice questions & AI tutor

Commission Composition and Terms

NDREC consists of five members appointed by the Governor. By rule (NDAC 70-01-01-01), at least three of the five must be active North Dakota real estate brokers; the remaining members round out the board. Members serve five-year staggered terms, arranged so that one member's term expires each year, which preserves institutional continuity. When a term ends, the Governor appoints a successor for a new five-year term, and members may be reappointed.

Correction / exam trap: The board is five members, three of whom must be active brokers — not "four brokers and one public member." If a question offers "four brokers + one public member," it is wrong.

What NDREC Does

The Commission's powers under NDCC 43-23 cover the full lifecycle of a license.

NDREC may initiate investigations on its own or in response to a consumer complaint, and it has subpoena and audit authority over licensee records.

The North Dakota Real Estate License Law (NDCC 43-23)

Chapter 43-23 is the backbone statute. Key provisions the state exam draws on include:

• Who must be licensed — anyone who, for compensation, lists, sells, buys, leases, or negotiates real estate for others.
• Exemptions — owners dealing with their own property, attorneys acting within their practice, court-appointed fiduciaries, and certain salaried employees of an owner.
• Prohibited conduct — misrepresentation, commingling, acting without disclosure, and dishonest dealing.
• Trust-fund handling — the 24-hour deposit rule and non-interest-bearing account requirement (NDAC 70-02-01-15).
• Grounds for discipline — fraud, conversion of trust funds, and license-law violations.

NDREC's administrative rules (NDAC Title 70) add the operational detail: application procedures, course approval, advertising standards, trust account records, and agency-disclosure timing.

Exam tip: Distinguish the statute (NDCC 43-23, enacted by the Legislature) from the rules (NDAC Title 70, adopted by NDREC). The exam may ask which body created a requirement.

Real Estate Education, Research, and Recovery Fund

The Real Estate Education, Research, and Recovery Fund (NDCC Chapter 43-23.2) compensates consumers who obtain a court judgment against a licensee for fraudulent, deceptive, or dishonest practices, or conversion of trust funds, but cannot collect it.

How a claim works: (1) the consumer is harmed; (2) obtains a final court judgment; (3) makes reasonable efforts to collect and cannot; (4) applies to the court for an order to pay from the fund. When the fund pays, the licensee's license is automatically suspended and cannot be reinstated until the amount is repaid in full plus 4% annual interest. A discharge in bankruptcy does not relieve the licensee of this obligation.

Correction: Both the per-transaction limit and the aggregate per-licensee limit are $15,000 — not "$25,000 per transaction / $50,000 per licensee." The fund pays actual loss only.

NDREC Contact and Resources

Candidates upload PSI score reports to NDREC Online Services; once both portions pass, the system lets you submit the request to issue (or to place on inactive status). Keep your passing score reports — you must upload them to obtain or activate the license.

NDREC vs. PSI: Who Does What

A recurring state-exam theme is the division of labor. NDREC is the regulator: it writes rules, sets education, licenses, audits trust accounts, and disciplines. PSI is only the testing contractor — it builds and delivers the exam under NDREC oversight but has no licensing authority. Direct licensure and discipline questions to NDREC; direct scheduling, rescheduling, and score-report questions to PSI. NDREC also evaluates exam content with PSI on a rolling basis, which is why candidates may flag comments on questions during the test — that comment is the only review of exam material available to candidates.