| 1 | 1 | | 1.1 A bill for an act |
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| 2 | 2 | | 1.2 relating to contracts for deed; modifying definition of investor seller; making |
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| 3 | 3 | | 1.3 technical changes; amending Minnesota Statutes 2024, sections 272.12; 559.21, |
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| 4 | 4 | | 1.4 subdivision 4; 559A.01, subdivisions 3, 5, by adding a subdivision; 559A.03, |
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| 5 | 5 | | 1.5 subdivision 3; 559A.04, subdivision 4. |
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| 6 | 6 | | 1.6BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: |
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| 7 | 7 | | 1.7 Section 1. Minnesota Statutes 2024, section 272.12, is amended to read: |
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| 8 | 8 | | 1.8 272.12 CONVEYANCES, TAXES PAID BEFORE RECORDING. |
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| 9 | 9 | | 1.9 When: |
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| 10 | 10 | | 1.10 (a) a deed or other instrument conveying land, |
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| 11 | 11 | | 1.11 (b) a plat of any townsite or addition thereto, |
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| 12 | 12 | | 1.12 (c) a survey required pursuant to section 508.47, |
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| 13 | 13 | | 1.13 (d) a condominium plat subject to chapter 515 or 515A or a declaration that contains |
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| 14 | 14 | | 1.14such a plat, or |
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| 15 | 15 | | 1.15 (e) a common interest community plat subject to chapter 515B or a declaration that |
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| 16 | 16 | | 1.16contains such a plat, |
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| 17 | 17 | | 1.17is presented to the county auditor for transfer, the auditor shall ascertain from the records |
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| 18 | 18 | | 1.18if there be taxes delinquent upon the land described therein within four months of the |
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| 19 | 19 | | 1.19execution of the contract for deed, or if it has been sold for taxes. An assignment of a sheriff's |
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| 20 | 20 | | 1.20or referee's certificate of sale, when the certificate of sale describes real estate, and certificates |
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| 21 | 21 | | 1.21of redemption from mortgage or lien foreclosure sales, when the certificate of redemption |
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| 22 | 22 | | 1.22encompasses real estate and is issued to a junior creditor, are considered instruments |
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| 23 | 23 | | 1Section 1. |
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| 37 | 33 | | 2.2delinquent, the auditor shall certify to the same; and upon payment of such taxes, or in case |
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| 38 | 34 | | 2.3no taxes are delinquent, shall transfer the land upon the books of the auditor's office, and |
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| 39 | 35 | | 2.4note upon the instrument, over official signature, the words, "no delinquent taxes and transfer |
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| 40 | 36 | | 2.5entered," or, if the land described has been sold or assigned to an actual purchaser for taxes, |
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| 41 | 37 | | 2.6the words "paid by sale of land described within;" and, unless such statement is made upon |
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| 42 | 38 | | 2.7such instrument, the county recorder or the registrar of titles shall refuse to receive or record |
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| 43 | 39 | | 2.8the same; provided, that sheriff's or referees' certificates of sale on execution or foreclosure |
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| 44 | 40 | | 2.9of a lien or mortgage, certificates of redemption from mortgage or lien foreclosure sales |
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| 45 | 41 | | 2.10issued to the redeeming mortgagor or lienee, documents evidencing the termination of a |
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| 46 | 42 | | 2.11contract for deed as described in section 559.213, deeds of distribution made by a personal |
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| 47 | 43 | | 2.12representative in probate proceedings, transfer on death deeds under section 507.071, decrees |
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| 48 | 44 | | 2.13and judgments, receivers receipts, patents, and copies of town or statutory city plats, in case |
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| 49 | 45 | | 2.14the original plat filed in the office of the county recorder has been lost or destroyed, and |
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| 50 | 46 | | 2.15the instruments releasing, removing and discharging reversionary and forfeiture provisions |
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| 51 | 47 | | 2.16affecting title to land and instruments releasing, removing or discharging easement rights |
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| 52 | 48 | | 2.17in land or building or other restrictions, may be recorded without such certificate; and, |
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| 53 | 49 | | 2.18provided that instruments conveying land and, as appurtenant thereto an easement over |
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| 54 | 50 | | 2.19adjacent tract or tracts of land, may be recorded without such certificate as to the land |
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| 55 | 51 | | 2.20covered by such easement; and provided further, that any instrument granting an easement |
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| 56 | 52 | | 2.21made in favor of any public utility or pipe line for conveying gas, liquids or solids in |
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| 57 | 53 | | 2.22suspension, in the nature of a right-of-way over, along, across or under a tract of land may |
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| 58 | 54 | | 2.23be recorded without such certificate as to the land covered by such easement. Documents |
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| 59 | 55 | | 2.24governing homeowners associations of condominiums, townhouses, common interest |
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| 60 | 56 | | 2.25ownership communities, and other planned unit developments may be recorded without the |
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| 61 | 57 | | 2.26auditor's certificate to the extent provided in section 515B.1-116 (e). |
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| 62 | 58 | | 2.27 A deed of distribution made by a personal representative in a probate proceeding, a |
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| 63 | 59 | | 2.28decree, or a judgment that conveys land shall be presented to the county auditor, who shall |
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| 64 | 60 | | 2.29transfer the land upon the books of the auditor's office and note upon the instrument, over |
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| 65 | 61 | | 2.30official signature, the words, "transfer entered", and the instrument may then be recorded. |
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| 66 | 62 | | 2.31A decree or judgment that affects title to land but does not convey land may be recorded |
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| 67 | 63 | | 2.32without presentation to the auditor. |
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| 68 | 64 | | 2.33 A violation of this section by the county recorder or the registrar of titles shall be a gross |
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| 69 | 65 | | 2.34misdemeanor, and, in addition to the punishment therefor, the recorder or registrar shall be |
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| 70 | 66 | | 2.35liable to the grantee of any instrument so recorded for the amount of any damages sustained. |
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| 71 | 67 | | 2Section 1. |
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| 73 | 69 | | 3.2the title to real estate previously forfeited to the state under the provisions of sections 281.16 |
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| 74 | 70 | | 3.3to 281.25, county officials, after such real estate has been purchased or repurchased, have |
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| 75 | 71 | | 3.4required the payment of taxes erroneously assumed to have accrued against such real estate |
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| 76 | 72 | | 3.5after forfeiture and before the date of purchase or repurchase, the sum required to be so paid |
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| 77 | 73 | | 3.6shall be refunded to the persons entitled thereto out of moneys in the funds in which the |
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| 78 | 74 | | 3.7sum so paid was placed. Delinquent taxes are those taxes deemed delinquent under section |
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| 79 | 75 | | 3.8279.02. |
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| 80 | 76 | | 3.9 EFFECTIVE DATE.This section is effective the day following final enactment. |
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| 81 | 77 | | 3.10 Sec. 2. Minnesota Statutes 2024, section 559.21, subdivision 4, is amended to read: |
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| 82 | 78 | | 3.11 Subd. 4.Law prevails over contract; procedure; conditions.(a) The notice required |
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| 83 | 79 | | 3.12by this section must be given notwithstanding any provisions in the contract to the contrary, |
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| 84 | 80 | | 3.13except that (1) earnest money contracts, purchase agreements, and exercised options that |
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| 85 | 81 | | 3.14are subject to this section may, unless by their terms they provide for a longer termination |
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| 86 | 82 | | 3.15period, be terminated on 30 days' notice, or may be canceled under section 559.217 and (2) |
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| 87 | 83 | | 3.16contracts for deed executed by an investor seller shall be terminated on 90 days' notice. The |
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| 88 | 84 | | 3.17notice must be served within the state in the same manner as a summons in the district court, |
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| 89 | 85 | | 3.18and outside of the state, in the same manner, and without securing any sheriff's return of |
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| 90 | 86 | | 3.19not found, making any preliminary affidavit, mailing a copy of the notice or doing any other |
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| 91 | 87 | | 3.20preliminary act or thing whatsoever. Service of the notice outside of the state may be proved |
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| 92 | 88 | | 3.21by the affidavit of the person making the same, made before an authorized officer having |
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| 93 | 89 | | 3.22a seal, and within the state by such an affidavit or by the return of the sheriff of any county |
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| 94 | 90 | | 3.23therein. |
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| 95 | 91 | | 3.24 (b) If a person to be served is a resident individual who has departed from the state, or |
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| 96 | 92 | | 3.25cannot be found in the state; or is a nonresident individual or a foreign corporation, |
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| 97 | 93 | | 3.26partnership, or association, service may be made by publication as provided in this paragraph. |
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| 98 | 94 | | 3.27Three weeks' published notice has the same effect as personal service of the notice. The |
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| 99 | 95 | | 3.28published notice must comply with subdivision 3 and state (1) that the person to be served |
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| 100 | 96 | | 3.29is allowed 90 days after the first date of publication of the notice to comply with the |
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| 101 | 97 | | 3.30conditions of the contract, and (2) that the contract will terminate 90 days after the first date |
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| 102 | 98 | | 3.31of publication of the notice, unless before the termination date the purchaser complies with |
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| 103 | 99 | | 3.32the notice. If the real estate described in the contract is actually occupied, then, in addition |
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| 104 | 100 | | 3.33to publication, a person in possession must be personally served, in like manner as the |
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| 105 | 101 | | 3.34service of a summons in a civil action in state district court, within 30 days after the first |
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| 106 | 102 | | 3Sec. 2. |
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| 108 | 104 | | 4.230 days after the first date of publication of the notice a copy of the notice must be mailed |
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| 109 | 105 | | 4.3to the person's last known address by first class mail, postage prepaid. |
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| 110 | 106 | | 4.4 (c) The contract is reinstated if, within the time mentioned, the person served: |
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| 111 | 107 | | 4.5 (1) complies with the conditions in default; |
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| 112 | 108 | | 4.6 (2) if subdivision 1d or 2a applies, makes all payments due and owing to the seller under |
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| 113 | 109 | | 4.7the contract through the date that payment is made; |
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| 114 | 110 | | 4.8 (3) pays the costs of service as provided in subdivision 1b, 1c, 1d, or 2a; |
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| 115 | 111 | | 4.9 (4) if subdivision 2a applies, pays two percent of the amount in default, not including |
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| 116 | 112 | | 4.10the final balloon payment, any taxes, assessments, mortgages, or prior contracts that are |
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| 117 | 113 | | 4.11assumed by the purchaser; and |
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| 118 | 114 | | 4.12 (5) pays attorneys' fees as provided in subdivision 1b, 1c, 1d, or 2a. |
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| 119 | 115 | | 4.13 (d) The contract is terminated if the provisions of paragraph (c) are not met. |
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| 120 | 116 | | 4.14 (e) In the event that the notice was not signed by an attorney for the seller and the seller |
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| 121 | 117 | | 4.15is not present in the state, or cannot be found in the state, then compliance with the conditions |
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| 122 | 118 | | 4.16specified in the notice may be made by paying to the court administrator of the district court |
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| 123 | 119 | | 4.17in the county wherein the real estate or any part thereof is situated any money due and filing |
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| 124 | 120 | | 4.18proof of compliance with other defaults specified, and the court administrator of the district |
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| 125 | 121 | | 4.19court shall be deemed the agent of the seller for such purposes. A copy of the notice with |
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| 126 | 122 | | 4.20proof of service thereof, and the affidavit of the seller, the seller's agent or attorney, showing |
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| 127 | 123 | | 4.21that the purchaser has not complied with the terms of the notice, may be recorded with the |
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| 128 | 124 | | 4.22county recorder or registrar of titles, and is prima facie evidence of the facts stated in it; but |
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| 129 | 125 | | 4.23this section in no case applies to contracts for the sale or conveyance of lands situated in |
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| 130 | 126 | | 4.24another state or in a foreign country. If the notice is served by publication, the affidavit must |
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| 131 | 127 | | 4.25state that the affiant believes that the party to be served is not a resident of the state, or |
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| 132 | 128 | | 4.26cannot be found in the state, and either that the affiant has mailed a copy of the notice by |
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| 133 | 129 | | 4.27first class mail, postage prepaid, to the party's last known address, or that such address is |
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| 134 | 130 | | 4.28not known to the affiant. |
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| 135 | 131 | | 4.29 (f) No notice under this section may be given for a contract for deed executed by an |
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| 136 | 132 | | 4.30investor seller unless, at least 30 days prior to the service of the notice, some part of the |
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| 137 | 133 | | 4.31conditions of default has existed and the investor seller has notified the purchaser of such |
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| 138 | 134 | | 4.32conditions of default by certified mail to the purchaser's last known address. |
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| 139 | 135 | | 4Sec. 2. |
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| 154 | 150 | | 5.15 Sec. 5. Minnesota Statutes 2024, section 559A.01, subdivision 5, is amended to read: |
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| 155 | 151 | | 5.16 Subd. 5.Investor seller.(a) "Investor seller" means a person entering into a contract |
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| 156 | 152 | | 5.17for deed to sell residential real property, or, in the event of a transfer or assignment of the |
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| 157 | 153 | | 5.18seller's interest, the holder of the interest. |
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| 158 | 154 | | 5.19 (b) An investor seller does not include a person entering into a contract for deed who |
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| 159 | 155 | | 5.20is: |
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| 160 | 156 | | 5.21 (1) a natural person who has owned and occupied the residential real property as the |
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| 161 | 157 | | 5.22natural person's primary residence for a continuous 12-month period at any time prior to |
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| 162 | 158 | | 5.23the execution of the contract for deed; |
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| 163 | 159 | | 5.24 (2) any spouse, parent, child, sibling, grandparent, grandchild, uncle, aunt, niece, nephew, |
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| 164 | 160 | | 5.25or cousin a family member of the natural person; |
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| 165 | 161 | | 5.26 (3) a personal representative of the natural person; |
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| 166 | 162 | | 5.27 (4) a devisee of the natural person; |
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| 167 | 163 | | 5.28 (5) a grantee beneficiary under a transfer on death deed made by the natural person; or |
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| 168 | 164 | | 5.29 (6) a trust whose settlor is the natural person; |
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| 169 | 165 | | 5Sec. 5. |
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| 171 | 167 | | 6.2a combination of the two, has owned, and the natural person has occupied, the residential |
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| 172 | 168 | | 6.3real property as the natural person's primary residence for a continuous 12-month period at |
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| 173 | 169 | | 6.4any time prior to the execution of the contract for deed, or any spouse, parent, child, sibling, |
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| 174 | 170 | | 6.5grandparent, grandchild, uncle, aunt, niece, nephew, or cousin a family member of the |
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| 175 | 171 | | 6.6natural person; |
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| 176 | 172 | | 6.7 (8) a natural person selling on contract for deed to any spouse, parent, child, sibling, |
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| 177 | 173 | | 6.8grandparent, grandchild, uncle, aunt, niece, nephew, or cousin a family member of the |
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| 178 | 174 | | 6.9natural person; |
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| 179 | 175 | | 6.10 (9) a bank, credit union, or residential mortgage originator that is under the supervision |
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| 180 | 176 | | 6.11of or regulated by the Office of the Comptroller of the Currency, the Federal Deposit |
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| 181 | 177 | | 6.12Insurance Corporation, the National Credit Union Administration, or the Minnesota |
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| 182 | 178 | | 6.13Department of Commerce; |
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| 183 | 179 | | 6.14 (10) a natural person who has owned and leased the residential real property to the |
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| 184 | 180 | | 6.15purchaser for at least the prior two years; or |
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| 185 | 181 | | 6.16 (11) the person who built the dwelling on the residential real estate and the dwelling has |
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| 186 | 182 | | 6.17not previously been occupied; |
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| 187 | 183 | | 6.18 (12) a state agency or political subdivision; or |
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| 188 | 184 | | 6.19 (13) a legal entity whose sole owner is a natural person described in clause (1), (2), (8), |
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| 189 | 185 | | 6.20or (10). |
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| 190 | 186 | | 6.21 (c) If, substantially contemporaneous with the execution of the contract for deed, the |
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| 191 | 187 | | 6.22seller's interest or the ownership of the seller's interest is assigned or transferred to a person |
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| 192 | 188 | | 6.23who does not meet any of the qualifications of paragraph (b), the assignee or transferee |
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| 193 | 189 | | 6.24shall be deemed to be an investor seller who has executed the contract for deed. |
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| 204 | 200 | | 7.2 Date Investor Seller Acquired Property: |
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| 205 | 201 | | 7.3 (date seller acquired ownership) |
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| 206 | 202 | | 7.4 Price Paid by Investor Seller to Acquire the Property: |
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| 207 | 203 | | 7.5 $ (total purchase price paid by seller to acquire ownership) |
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| 208 | 204 | | 7.6 Contract for Deed Purchase Price: |
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| 209 | 205 | | 7.7 $ (total sale price to the purchaser under the contract)" |
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| 210 | 206 | | 7.8 (c) For the purposes of this subdivision, unless the acquisition occurred more than one |
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| 211 | 207 | | 7.9year two years prior to the execution of the contract for deed, the person who first acquires |
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| 212 | 208 | | 7.10the property is deemed to be the same person as the investor seller where the person who |
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| 213 | 209 | | 7.11first acquires the property: |
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| 214 | 210 | | 7.12 (1) is owned or controlled, in whole or in part, by the investor seller; |
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| 215 | 211 | | 7.13 (2) owns or controls, in whole or in part, the investor seller; |
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| 216 | 212 | | 7.14 (3) is under common ownership or control, in whole or in part, with the investor seller; |
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| 217 | 213 | | 7.15 (4) is a spouse, parent, child, sibling, grandparent, grandchild, uncle, aunt, niece, nephew, |
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| 218 | 214 | | 7.16or cousin family member of the investor seller, or of the natural person who owns or controls, |
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| 219 | 215 | | 7.17in whole or in part, the investor seller; or |
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| 220 | 216 | | 7.18 (5) is an entity owned or controlled, in whole or in part, by a person who is a spouse, |
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| 221 | 217 | | 7.19parent, child, sibling, grandparent, grandchild, uncle, aunt, niece, nephew, or cousin family |
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| 222 | 218 | | 7.20member of the investor seller, or of the natural person who owns or controls, in whole or |
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| 223 | 219 | | 7.21in part, the investor seller. |
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| 234 | 230 | | 8.2for deed for any residential real property, where terminated contracts comprise 20 percent |
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| 235 | 231 | | 8.3or more of all contracts executed by the investor seller during that period. |
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| 236 | 232 | | 8.4 (b) Nothing contained in this subdivision or in section 559A.01, subdivision 3, shall |
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| 237 | 233 | | 8.5invalidate, impair, affect, or give rise to any cause of action with respect to any contract for |
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| 238 | 234 | | 8.6deed or termination proceeding under section 559.21 used as a predicate to establish the |
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| 239 | 235 | | 8.7presumption under paragraph (a). |
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| 240 | 236 | | 8.8 (c) For the purposes of this subdivision, a person who sold residential real property on |
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| 241 | 237 | | 8.9a contract for deed is deemed to be the same person as the investor seller where the person |
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| 242 | 238 | | 8.10who sold on a contract for deed: |
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| 243 | 239 | | 8.11 (1) is owned or controlled, in whole or in part, by the investor seller; |
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| 244 | 240 | | 8.12 (2) owns or controls, in whole or in part, the investor seller; |
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| 245 | 241 | | 8.13 (3) is under common ownership or control, in whole or in part, with the investor seller; |
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| 246 | 242 | | 8.14 (4) is a spouse, parent, child, sibling, grandparent, grandchild, uncle, aunt, niece, nephew, |
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| 247 | 243 | | 8.15or cousin family member of the investor seller, or of the natural person who owns or controls, |
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| 248 | 244 | | 8.16in whole or in part, the investor seller; or |
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| 249 | 245 | | 8.17 (5) is an entity owned or controlled, in whole or in part, by a person who is a spouse, |
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| 250 | 246 | | 8.18parent, child, sibling, grandparent, grandchild, uncle, aunt, niece, nephew, or cousin family |
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| 251 | 247 | | 8.19member of the investor seller, or of the natural person who owns or controls, in whole or |
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| 252 | 248 | | 8.20in part, the investor seller. |
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