1.1 A bill for an act
1.2 relating to contracts for deed; modifying definition of investor seller; making
1.3 technical changes; amending Minnesota Statutes 2024, sections 272.12; 559.21,
1.4 subdivision 4; 559A.01, subdivisions 3, 5, by adding a subdivision; 559A.03,
1.5 subdivision 3; 559A.04, subdivision 4.
1.6BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.7 Section 1. Minnesota Statutes 2024, section 272.12, is amended to read:
1.8 272.12 CONVEYANCES, TAXES PAID BEFORE RECORDING.
1.9 When:
1.10 (a) a deed or other instrument conveying land,
1.11 (b) a plat of any townsite or addition thereto,
1.12 (c) a survey required pursuant to section 508.47,
1.13 (d) a condominium plat subject to chapter 515 or 515A or a declaration that contains
1.14such a plat, or
1.15 (e) a common interest community plat subject to chapter 515B or a declaration that
1.16contains such a plat,
1.17is presented to the county auditor for transfer, the auditor shall ascertain from the records
1.18if there be taxes delinquent upon the land described therein within four months of the
1.19execution of the contract for deed, or if it has been sold for taxes. An assignment of a sheriff's
1.20or referee's certificate of sale, when the certificate of sale describes real estate, and certificates
1.21of redemption from mortgage or lien foreclosure sales, when the certificate of redemption
1.22encompasses real estate and is issued to a junior creditor, are considered instruments
1Section 1.
REVISOR JSK/AD 25-0164312/27/24
State of Minnesota
This Document can be made available
in alternative formats upon request
HOUSE OF REPRESENTATIVES
H. F. No. 1792
NINETY-FOURTH SESSION
Authored by Mahamoud and Dotseth03/03/2025
The bill was read for the first time and referred to the Committee on Judiciary Finance and Civil Law 2.1conveying land for the purposes of this section and section 272.121. If there are taxes
2.2delinquent, the auditor shall certify to the same; and upon payment of such taxes, or in case
2.3no taxes are delinquent, shall transfer the land upon the books of the auditor's office, and
2.4note upon the instrument, over official signature, the words, "no delinquent taxes and transfer
2.5entered," or, if the land described has been sold or assigned to an actual purchaser for taxes,
2.6the words "paid by sale of land described within;" and, unless such statement is made upon
2.7such instrument, the county recorder or the registrar of titles shall refuse to receive or record
2.8the same; provided, that sheriff's or referees' certificates of sale on execution or foreclosure
2.9of a lien or mortgage, certificates of redemption from mortgage or lien foreclosure sales
2.10issued to the redeeming mortgagor or lienee, documents evidencing the termination of a
2.11contract for deed as described in section 559.213, deeds of distribution made by a personal
2.12representative in probate proceedings, transfer on death deeds under section 507.071, decrees
2.13and judgments, receivers receipts, patents, and copies of town or statutory city plats, in case
2.14the original plat filed in the office of the county recorder has been lost or destroyed, and
2.15the instruments releasing, removing and discharging reversionary and forfeiture provisions
2.16affecting title to land and instruments releasing, removing or discharging easement rights
2.17in land or building or other restrictions, may be recorded without such certificate; and,
2.18provided that instruments conveying land and, as appurtenant thereto an easement over
2.19adjacent tract or tracts of land, may be recorded without such certificate as to the land
2.20covered by such easement; and provided further, that any instrument granting an easement
2.21made in favor of any public utility or pipe line for conveying gas, liquids or solids in
2.22suspension, in the nature of a right-of-way over, along, across or under a tract of land may
2.23be recorded without such certificate as to the land covered by such easement. Documents
2.24governing homeowners associations of condominiums, townhouses, common interest
2.25ownership communities, and other planned unit developments may be recorded without the
2.26auditor's certificate to the extent provided in section 515B.1-116 (e).
2.27 A deed of distribution made by a personal representative in a probate proceeding, a
2.28decree, or a judgment that conveys land shall be presented to the county auditor, who shall
2.29transfer the land upon the books of the auditor's office and note upon the instrument, over
2.30official signature, the words, "transfer entered", and the instrument may then be recorded.
2.31A decree or judgment that affects title to land but does not convey land may be recorded
2.32without presentation to the auditor.
2.33 A violation of this section by the county recorder or the registrar of titles shall be a gross
2.34misdemeanor, and, in addition to the punishment therefor, the recorder or registrar shall be
2.35liable to the grantee of any instrument so recorded for the amount of any damages sustained.
2Section 1.
REVISOR JSK/AD 25-0164312/27/24 3.1 When, as a condition to permitting the recording of deed or other instrument affecting
3.2the title to real estate previously forfeited to the state under the provisions of sections 281.16
3.3to 281.25, county officials, after such real estate has been purchased or repurchased, have
3.4required the payment of taxes erroneously assumed to have accrued against such real estate
3.5after forfeiture and before the date of purchase or repurchase, the sum required to be so paid
3.6shall be refunded to the persons entitled thereto out of moneys in the funds in which the
3.7sum so paid was placed. Delinquent taxes are those taxes deemed delinquent under section
3.8279.02.
3.9 EFFECTIVE DATE.This section is effective the day following final enactment.
3.10 Sec. 2. Minnesota Statutes 2024, section 559.21, subdivision 4, is amended to read:
3.11 Subd. 4.Law prevails over contract; procedure; conditions.(a) The notice required
3.12by this section must be given notwithstanding any provisions in the contract to the contrary,
3.13except that (1) earnest money contracts, purchase agreements, and exercised options that
3.14are subject to this section may, unless by their terms they provide for a longer termination
3.15period, be terminated on 30 days' notice, or may be canceled under section 559.217 and (2)
3.16contracts for deed executed by an investor seller shall be terminated on 90 days' notice. The
3.17notice must be served within the state in the same manner as a summons in the district court,
3.18and outside of the state, in the same manner, and without securing any sheriff's return of
3.19not found, making any preliminary affidavit, mailing a copy of the notice or doing any other
3.20preliminary act or thing whatsoever. Service of the notice outside of the state may be proved
3.21by the affidavit of the person making the same, made before an authorized officer having
3.22a seal, and within the state by such an affidavit or by the return of the sheriff of any county
3.23therein.
3.24 (b) If a person to be served is a resident individual who has departed from the state, or
3.25cannot be found in the state; or is a nonresident individual or a foreign corporation,
3.26partnership, or association, service may be made by publication as provided in this paragraph.
3.27Three weeks' published notice has the same effect as personal service of the notice. The
3.28published notice must comply with subdivision 3 and state (1) that the person to be served
3.29is allowed 90 days after the first date of publication of the notice to comply with the
3.30conditions of the contract, and (2) that the contract will terminate 90 days after the first date
3.31of publication of the notice, unless before the termination date the purchaser complies with
3.32the notice. If the real estate described in the contract is actually occupied, then, in addition
3.33to publication, a person in possession must be personally served, in like manner as the
3.34service of a summons in a civil action in state district court, within 30 days after the first
3Sec. 2.
REVISOR JSK/AD 25-0164312/27/24 4.1date of publication of the notice. If an address of a person to be served is known, then within
4.230 days after the first date of publication of the notice a copy of the notice must be mailed
4.3to the person's last known address by first class mail, postage prepaid.
4.4 (c) The contract is reinstated if, within the time mentioned, the person served:
4.5 (1) complies with the conditions in default;
4.6 (2) if subdivision 1d or 2a applies, makes all payments due and owing to the seller under
4.7the contract through the date that payment is made;
4.8 (3) pays the costs of service as provided in subdivision 1b, 1c, 1d, or 2a;
4.9 (4) if subdivision 2a applies, pays two percent of the amount in default, not including
4.10the final balloon payment, any taxes, assessments, mortgages, or prior contracts that are
4.11assumed by the purchaser; and
4.12 (5) pays attorneys' fees as provided in subdivision 1b, 1c, 1d, or 2a.
4.13 (d) The contract is terminated if the provisions of paragraph (c) are not met.
4.14 (e) In the event that the notice was not signed by an attorney for the seller and the seller
4.15is not present in the state, or cannot be found in the state, then compliance with the conditions
4.16specified in the notice may be made by paying to the court administrator of the district court
4.17in the county wherein the real estate or any part thereof is situated any money due and filing
4.18proof of compliance with other defaults specified, and the court administrator of the district
4.19court shall be deemed the agent of the seller for such purposes. A copy of the notice with
4.20proof of service thereof, and the affidavit of the seller, the seller's agent or attorney, showing
4.21that the purchaser has not complied with the terms of the notice, may be recorded with the
4.22county recorder or registrar of titles, and is prima facie evidence of the facts stated in it; but
4.23this section in no case applies to contracts for the sale or conveyance of lands situated in
4.24another state or in a foreign country. If the notice is served by publication, the affidavit must
4.25state that the affiant believes that the party to be served is not a resident of the state, or
4.26cannot be found in the state, and either that the affiant has mailed a copy of the notice by
4.27first class mail, postage prepaid, to the party's last known address, or that such address is
4.28not known to the affiant.
4.29 (f) No notice under this section may be given for a contract for deed executed by an
4.30investor seller unless, at least 30 days prior to the service of the notice, some part of the
4.31conditions of default has existed and the investor seller has notified the purchaser of such
4.32conditions of default by certified mail to the purchaser's last known address.
4Sec. 2.
REVISOR JSK/AD 25-0164312/27/24 5.1 (g) For purposes of this subdivision, "investor seller" has the meaning given in section
5.2559A.01, subdivision 6 5.
5.3 EFFECTIVE DATE.This section is effective the day following final enactment.
5.4 Sec. 3. Minnesota Statutes 2024, section 559A.01, subdivision 3, is amended to read:
5.5 Subd. 3.Churning."Churning" means the act of an investor seller executing a contract
5.6for deed on or after August 1, 2024, if previously the investor seller had frequently or
5.7repeatedly executed contracts for deed and subsequently terminated those contracts under
5.8section 559.21.
5.9 EFFECTIVE DATE.This section is effective the day following final enactment.
5.10 Sec. 4. Minnesota Statutes 2024, section 559A.01, is amended by adding a subdivision to
5.11read:
5.12 Subd. 4a.Family member."Family member" means any spouse, parent, child, sibling,
5.13grandparent, grandchild, uncle, aunt, niece, nephew, or cousin.
5.14 EFFECTIVE DATE.This section is effective the day following final enactment.
5.15 Sec. 5. Minnesota Statutes 2024, section 559A.01, subdivision 5, is amended to read:
5.16 Subd. 5.Investor seller.(a) "Investor seller" means a person entering into a contract
5.17for deed to sell residential real property, or, in the event of a transfer or assignment of the
5.18seller's interest, the holder of the interest.
5.19 (b) An investor seller does not include a person entering into a contract for deed who
5.20is:
5.21 (1) a natural person who has owned and occupied the residential real property as the
5.22natural person's primary residence for a continuous 12-month period at any time prior to
5.23the execution of the contract for deed;
5.24 (2) any spouse, parent, child, sibling, grandparent, grandchild, uncle, aunt, niece, nephew,
5.25or cousin a family member of the natural person;
5.26 (3) a personal representative of the natural person;
5.27 (4) a devisee of the natural person;
5.28 (5) a grantee beneficiary under a transfer on death deed made by the natural person; or
5.29 (6) a trust whose settlor is the natural person;
5Sec. 5.
REVISOR JSK/AD 25-0164312/27/24 6.1 (7) a trust whose beneficiary is a natural person where the trust or the natural person, or
6.2a combination of the two, has owned, and the natural person has occupied, the residential
6.3real property as the natural person's primary residence for a continuous 12-month period at
6.4any time prior to the execution of the contract for deed, or any spouse, parent, child, sibling,
6.5grandparent, grandchild, uncle, aunt, niece, nephew, or cousin a family member of the
6.6natural person;
6.7 (8) a natural person selling on contract for deed to any spouse, parent, child, sibling,
6.8grandparent, grandchild, uncle, aunt, niece, nephew, or cousin a family member of the
6.9natural person;
6.10 (9) a bank, credit union, or residential mortgage originator that is under the supervision
6.11of or regulated by the Office of the Comptroller of the Currency, the Federal Deposit
6.12Insurance Corporation, the National Credit Union Administration, or the Minnesota
6.13Department of Commerce;
6.14 (10) a natural person who has owned and leased the residential real property to the
6.15purchaser for at least the prior two years; or
6.16 (11) the person who built the dwelling on the residential real estate and the dwelling has
6.17not previously been occupied;
6.18 (12) a state agency or political subdivision; or
6.19 (13) a legal entity whose sole owner is a natural person described in clause (1), (2), (8),
6.20or (10).
6.21 (c) If, substantially contemporaneous with the execution of the contract for deed, the
6.22seller's interest or the ownership of the seller's interest is assigned or transferred to a person
6.23who does not meet any of the qualifications of paragraph (b), the assignee or transferee
6.24shall be deemed to be an investor seller who has executed the contract for deed.
6.25 EFFECTIVE DATE.This section is effective the day following final enactment.
6.26 Sec. 6. Minnesota Statutes 2024, section 559A.03, subdivision 3, is amended to read:
6.27 Subd. 3.Disclosure of price paid by investor seller to acquire property.(a) The
6.28investor seller must disclose to the purchaser the purchase price and the date of earliest
6.29acquisition of the property by the investor seller, unless the acquisition occurs more than
6.30two years prior to the execution of the contract for deed.
6.31 (b) The disclosure must be in the following form, with the title in 14-point type and the
6.32text in 12-point type:
6Sec. 6.
REVISOR JSK/AD 25-0164312/27/24 7.1 "INVESTOR SELLER'S PRICE TO BUY HOUSE BEING SOLD TO BUYER
7.2 Date Investor Seller Acquired Property:
7.3 (date seller acquired ownership)
7.4 Price Paid by Investor Seller to Acquire the Property:
7.5 $ (total purchase price paid by seller to acquire ownership)
7.6 Contract for Deed Purchase Price:
7.7 $ (total sale price to the purchaser under the contract)"
7.8 (c) For the purposes of this subdivision, unless the acquisition occurred more than one
7.9year two years prior to the execution of the contract for deed, the person who first acquires
7.10the property is deemed to be the same person as the investor seller where the person who
7.11first acquires the property:
7.12 (1) is owned or controlled, in whole or in part, by the investor seller;
7.13 (2) owns or controls, in whole or in part, the investor seller;
7.14 (3) is under common ownership or control, in whole or in part, with the investor seller;
7.15 (4) is a spouse, parent, child, sibling, grandparent, grandchild, uncle, aunt, niece, nephew,
7.16or cousin family member of the investor seller, or of the natural person who owns or controls,
7.17in whole or in part, the investor seller; or
7.18 (5) is an entity owned or controlled, in whole or in part, by a person who is a spouse,
7.19parent, child, sibling, grandparent, grandchild, uncle, aunt, niece, nephew, or cousin family
7.20member of the investor seller, or of the natural person who owns or controls, in whole or
7.21in part, the investor seller.
7.22 EFFECTIVE DATE.This section is effective the day following final enactment.
7.23 Sec. 7. Minnesota Statutes 2024, section 559A.04, subdivision 4, is amended to read:
7.24 Subd. 4.Churning prohibited.(a) An investor seller is prohibited from churning. There
7.25is a rebuttable presumption that the investor seller has violated this subdivision if, on or
7.26after August 1, 2024, the investor seller executes a contract for deed and, within the previous
7.2748 months, the investor seller either:
7.28 (1) had completed two or more termination proceedings under section 559.21 on the
7.29same residential real property being sold by the contract for deed; or
7Sec. 7.
REVISOR JSK/AD 25-0164312/27/24 8.1 (2) had completed four or more termination proceedings under section 559.21 on contracts
8.2for deed for any residential real property, where terminated contracts comprise 20 percent
8.3or more of all contracts executed by the investor seller during that period.
8.4 (b) Nothing contained in this subdivision or in section 559A.01, subdivision 3, shall
8.5invalidate, impair, affect, or give rise to any cause of action with respect to any contract for
8.6deed or termination proceeding under section 559.21 used as a predicate to establish the
8.7presumption under paragraph (a).
8.8 (c) For the purposes of this subdivision, a person who sold residential real property on
8.9a contract for deed is deemed to be the same person as the investor seller where the person
8.10who sold on a contract for deed:
8.11 (1) is owned or controlled, in whole or in part, by the investor seller;
8.12 (2) owns or controls, in whole or in part, the investor seller;
8.13 (3) is under common ownership or control, in whole or in part, with the investor seller;
8.14 (4) is a spouse, parent, child, sibling, grandparent, grandchild, uncle, aunt, niece, nephew,
8.15or cousin family member of the investor seller, or of the natural person who owns or controls,
8.16in whole or in part, the investor seller; or
8.17 (5) is an entity owned or controlled, in whole or in part, by a person who is a spouse,
8.18parent, child, sibling, grandparent, grandchild, uncle, aunt, niece, nephew, or cousin family
8.19member of the investor seller, or of the natural person who owns or controls, in whole or
8.20in part, the investor seller.
8.21 EFFECTIVE DATE.This section is effective the day following final enactment.
8Sec. 7.
REVISOR JSK/AD 25-0164312/27/24