HF 3389

2nd Engrossment - 93rd Legislature (2023 - 2024) Posted on 03/14/2024 04:06pm

A bill for an act
relating to natural resources; requiring disclosure of subsurface drain tile; proposing
coding for new law in Minnesota Statutes, chapter 103F.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

new text begin [103F.49] DRAIN TILE SELLER'S DISCLOSURE REQUIRED.
new text end

new text begin Subdivision 1. new text end

new text begin Definition. new text end

new text begin For purposes of this section, "drain tile" means a system of
tile, corrugated plastic tubing, pipe, or other conduit installed beneath the ground surface
to collect and convey water.
new text end

new text begin Subd. 2. new text end

new text begin Disclosure required. new text end

new text begin (a) Before signing an agreement to sell or transfer real
property classified for purposes of taxation under section 273.13 as class 2a or 2b, the seller
must disclose in writing to the buyer the status and location of all known drain tile on the
property by delivering to the buyer:
new text end

new text begin (1) a statement by the seller that the seller does not know of any drain tile on the property;
or
new text end

new text begin (2) a disclosure statement indicating the legal description and county and, to the extent
practicable, a map drawn from available information and accurate to scale identifying the
location of drain tile on the property, including tile diameter and all outlets and control
structures, and the drainage water flow path for the first mile downstream of the drain tile.
new text end

new text begin (b) At the time of closing the sale, the disclosure statement information, name and mailing
address of the buyer, and the quartile, section, township, and range in which drain tile is
located must be provided on a drain tile disclosure certificate signed by the seller or a person
authorized to act on behalf of the seller.
new text end

new text begin (c) A drain tile certificate need not be provided if the seller does not know of any drain
tile on the property and the deed or other instrument of conveyance contains the statement:
"The Seller certifies that the Seller does not know of any drain tile on the described real
property."
new text end

new text begin (d) If a deed is given pursuant to a contract for deed, the drain tile disclosure certificate
required by this subdivision must be signed by the buyer or a person authorized to act on
behalf of the buyer. If the buyer knows of no drain tile on the property, a drain tile disclosure
certificate is not required if the following statement appears on the deed, followed by the
signature of the grantee or, if there is more than one grantee, the signature of at least one
of the grantees: "The Grantee certifies that the Grantee does not know of any drain tile on
the described real property." The statement and signature of the grantee may be on the front
or back of the deed or on an attached sheet, and an acknowledgment of the statement by
the grantee is not required for the deed to be recordable.
new text end

new text begin (e) If the seller fails to provide a required drain tile disclosure certificate, the buyer, or
a person authorized to act on behalf of the buyer, may sign a drain tile disclosure certificate
based on the information provided on the disclosure statement required by this section or
based on other available information.
new text end

new text begin (f) A county recorder or registrar of titles may not record a deed or other instrument of
conveyance dated after January 1, 2025, for which a certificate of value is required under
section 272.115, or any deed or other instrument of conveyance dated after January 1, 2025,
from a governmental body exempt from the payment of state deed tax, unless the deed or
other instrument of conveyance contains the statement made in accordance with paragraph
(c) or (d) or is accompanied by the drain tile disclosure certificate containing all the
information required by paragraph (b) or (d).
new text end

new text begin (g) The county recorder or registrar of titles must not accept a certificate unless it contains
all required information. The county recorder or registrar of titles must note on each deed
or other instrument of conveyance accompanied by a drain tile disclosure certificate that
the drain tile disclosure certificate was received. The notation must include the statement
"No drain tile on property" if the disclosure certificate states that there is no drain tile on
the property.
new text end

new text begin (h) The drain tile disclosure certificate must not be filed or recorded in the records
maintained by the county recorder or registrar of titles. After noting "No drain tile on
property" on the deed or other instrument of conveyance, the county recorder or registrar
of titles must destroy or return to the buyer the drain tile disclosure certificate.
new text end

new text begin (i) The county recorder or registrar of titles must collect from the buyer or the person
seeking to record a deed or other instrument of conveyance a fee of $50 for receipt of a
completed drain tile disclosure certificate. By the tenth day of each month, the county
recorder or registrar of titles must transmit the drain tile disclosure certificates to the Board
of Water and Soil Resources. By the tenth day after the end of each calendar quarter, the
county recorder or registrar of titles must transmit to the Board of Water and Soil Resources
$42.50 of the fee for each drain disclosure certificate received during the quarter. The board
must maintain the drain tile disclosure certificate for at least six years. The board may store
the certificate as an electronic image. A copy of that image is as valid as the original.
new text end

new text begin (j) The Board of Water and Soil Resources, in consultation with county recorders, must
prescribe the form for a drain tile disclosure certificate and provide drain tile disclosure
certificate forms to county recorders, registrars of titles, and other interested persons.
new text end

new text begin (k) Failure to comply with a requirement of this section does not impair:
new text end

new text begin (1) the validity of a deed or other instrument of conveyance as between the parties to
the deed or instrument or as to any other person who otherwise would be bound by the deed
or instrument; or
new text end

new text begin (2) the record, as notice, of any deed or other instrument of conveyance accepted for
filing or recording contrary to the provisions of this subdivision.
new text end

new text begin Subd. 3. new text end

new text begin Liability for failure to disclose. new text end

new text begin Unless the buyer and seller agree to the
contrary, in writing, before the closing of the sale, a seller who fails to disclose the existence
or known status of drain tile at the time of sale and knew or had reason to know of the
existence or known status of the drain tile is liable to the buyer for costs incurred to repair
the drain tile and reasonable attorney fees for collection of costs from the seller, if the action
is commenced within six years after the date the buyer closed the purchase of the real
property where the drain tile is located.
new text end