1.1 	A bill for an act
1.2 	relating to real property; providing for certain
1.3 	defeasible estates; modifying residential purchase
1.4 	agreement cancellations; amending the foreclosure
1.5 	advice notice; amending Minnesota Statutes 2004,
1.6 	sections 500.20, subdivision 2a; 559.217, subdivisions
1.7 	1, 3, 4, 5, 6; 580.041, by adding subdivisions.
1.8 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.9 	Section 1. Minnesota Statutes 2004, section 500.20,
1.10 	subdivision 2a, is amended to read:
1.11 		Subd. 2a.Restriction of duration of condition.  Except
1.12 	for any right to reenter or to repossess as provided in
1.13 	subdivision 3, all private covenants, conditions, or
1.14 	restrictions created by which the title or use of real property
1.15 	is affected, cease to be valid and operative 30 years after the
1.16 	date of the deed, or other instrument, or the date of the
1.17 	probate of the will, creating them, and may be disregarded.
1.18 	This subdivision does not apply to covenants, conditions,
1.19 	or restrictions:
1.20 	(1) ~~that were created before August 1, 1988, by deed or~~
1.21 	~~other instrument dated on or after August 1, 1982, or by will~~
1.22 	~~the date of death of the testator of which was on or after~~
1.23 	~~August 1, 1982;~~
1.24 	~~(2)~~ that were created before August 1, 1959, under which a
1.25 	person who owns or has an interest in real property against
1.26 	which the covenants, conditions, or restrictions have been filed
2.1 	claims a benefit of the covenant, condition, or restriction if
2.2 	the person records in the office of the county recorder or files
2.3 	in the office of the registrar of titles in the county in which
2.4 	the real estate affected is located, on or before March 30,
2.5 	1989, a notice sworn to by the claimant or the claimant's agent
2.6 	or attorney:  setting forth the name of the claimant; describing
2.7 	the real estate affected; describing the deed, instrument, or
2.8 	will creating the covenant, condition, or restriction; and
2.9 	stating that the covenant, condition, or restriction is not
2.10 	nominal and may not be disregarded under subdivision 1;
2.11 	~~(3)~~ (2) that are created by the declaration, bylaws, floor
2.12 	plans, or condominium plat of a condominium created before
2.13 	August 1, 1980, under chapter 515, or created on or after August
2.14 	1, 1980, under chapter 515A or 515B, or by any amendments of the
2.15 	declaration, bylaws, floor plans, or condominium plat;
2.16 	~~(4)~~ (3) that are created by the articles of incorporation,
2.17 	bylaws, or proprietary leases of a cooperative association
2.18 	formed under chapter 308A;
2.19 	~~(5)~~ (4) that are created by a declaration or other
2.20 	instrument that authorizes and empowers a corporation of which
2.21 	the qualification for being a stockholder or member is ownership
2.22 	of certain parcels of real estate, to hold title to common real
2.23 	estate for the benefit of the parcels;
2.24 	~~(6)~~ (5) that are created by a deed, declaration,
2.25 	reservation, or other instrument by which one or more portions
2.26 	of a building, set of connecting or adjacent buildings, or
2.27 	complex or project of related buildings and structures share
2.28 	support, structural components, ingress and egress, or utility
2.29 	access with another portion or portions;
2.30 	~~(7)~~ (6) that were created after July 31, 1959, ~~and before~~
2.31 	~~August 1, 1982,~~under which a person who owns or has an interest
2.32 	in real estate against which covenants, conditions, or
2.33 	restrictions have been filed claims a benefit of the covenants,
2.34 	conditions, or restrictions if the person records in the office
2.35 	of the county recorder or files in the office of the registrar
2.36 	of titles in the county in which the real estate affected is
3.1 	located during the period commencing on the 28th anniversary of
3.2 	the date of the deed or instrument, or the date of the probate
3.3 	of the will, creating them and ending on the 30th anniversary, a
3.4 	notice as described in clause ~~(2)~~ (1); or
3.5 	~~(8)~~ (7) that are created by a declaration or bylaws of a
3.6 	common interest community created under or governed by chapter
3.7 	515B, or by any amendments thereto.
3.8 	A notice filed in accordance with clause ~~(2)~~ (1) or ~~(7)~~ (6) 
3.9 	delays application of this subdivision to the covenants,
3.10 	conditions, or restrictions for a period ending on the later of
3.11 	seven years after the date of filing of the notice, or until
3.12 	final judgment is entered in an action to determine the validity
3.13 	of the covenants, conditions, or restrictions, provided in the
3.14 	case of an action the summons and complaint must be served and a
3.15 	notice of lis pendens must be recorded in the office of the
3.16 	county recorder or filed in the office of the registrar of
3.17 	titles in each county in which the real estate affected is
3.18 	located within seven years after the date of recording or filing
3.19 	of the notice under clause ~~(2)~~ (1) or ~~(7)~~ (6).
3.20 	County recorders and registrars of titles shall accept for
3.21 	recording or filing a notice conforming with this subdivision
3.22 	and charge a fee corresponding with the fee charged for filing a
3.23 	notice of lis pendens of similar length.  The notice may be
3.24 	discharged in the same manner as a notice of lis pendens and
3.25 	when discharged, together with the information included with it,
3.26 	ceases to constitute either actual or constructive notice.

3.27 	Sec. 2. Minnesota Statutes 2004, section 559.217,
3.28 	subdivision 1, is amended to read:
3.29 		Subdivision 1.Definitions.  (a) For purposes of this
3.30 	section, the terms defined in this subdivision have the meanings
3.31 	given.
3.32 	(b) "Purchase agreement" means an earnest money contract,
3.33 	purchase agreement, or exercised option ~~that could be canceled~~
3.34 	~~under section 559.21, subdivision 4, paragraph (a)~~ , whether or
3.35 	not such instrument is subject to section 559.21.
3.36 	(c) "Residential real property" means real property,
4.1 	including vacant land, occupied by, or intended to be occupied
4.2 	by, in the aggregate,one to four families as their residence.
4.3 	(d) "Suspend" means to temporarily or permanently restrain
4.4 	or enjoin a cancellation proceeding under subdivision 3 or 4
4.5 	pursuant to the provisions of section 559.211.

4.6 	Sec. 3. Minnesota Statutes 2004, section 559.217,
4.7 	subdivision 3, is amended to read:
4.8 		Subd. 3.Cancellation with right to cure.  (a) If a
4.9 	default occurs or an unfulfilled condition exists after the date
4.10 	specified for fulfillment in the terms of a purchase agreement
4.11 	for the conveyance of residential real property, which does not
4.12 	by its terms cancel the purchase agreement, the purchaser or the
4.13 	seller may initiate a cancellation by serving upon the other
4.14 	party to the purchase agreement and any third party that is
4.15 	holding earnest money under the purchase agreement a notice:
4.16 	(1) specifying the residential real property that is the
4.17 	subject of the purchase agreement, including the legal
4.18 	description;
4.19 	(2) specifying the purchase agreement by date and names of
4.20 	parties, and the unfulfilled condition or default; and
4.21 	(3) stating that the purchase agreement will be canceled 15
4.22 	days after service of the notice upon the other party to the
4.23 	purchase agreement unless prior to the cancellation date the
4.24 	party upon whom the notice is served complies with the
4.25 	conditions in default and completes the unfulfilled conditions,
4.26 	including, if applicable, completion of the purchase or sale of
4.27 	the residential real property according to the terms of the
4.28 	purchase agreement.
4.29 	(b) The notice must be served in the manner provided in
4.30 	section 559.21, subdivision 4, paragraphs (a) and (b). The
4.31 	notice required by this subdivision must be given
4.32 	notwithstanding any provisions in the purchase agreement to the
4.33 	contrary.
4.34 	(c) The purchase agreement is canceled unless, within 15
4.35 	days after the service of the notice upon the other party to the
4.36 	purchase agreement, the party upon whom the notice was served
5.1 	fully complies with the conditions in default and completes the
5.2 	unfulfilled conditions or secures from a court an order
5.3 	suspending the cancellation.

5.4 	Sec. 4. Minnesota Statutes 2004, section 559.217,
5.5 	subdivision 4, is amended to read:
5.6 		Subd. 4.Declaratory cancellation.  (a) If ~~a default~~
5.7 	~~occurs or~~ an unfulfilled condition exists after the date
5.8 	specified for fulfillment in the terms of a purchase agreement
5.9 	for the conveyance of residential real property, which by the
5.10 	terms of the purchase agreement cancels the purchase agreement,
5.11 	either the purchaser or the seller may confirm the cancellation
5.12 	by serving upon the other party and any third party that is
5.13 	holding earnest money under the purchase agreement a notice:
5.14 	(1) specifying the residential real property that is the
5.15 	subject of the purchase agreement, including the legal
5.16 	description;
5.17 	(2) specifying the purchase agreement by date and names of
5.18 	parties, and the unfulfilled condition ~~or default~~; and
5.19 	(3) stating that the purchase agreement has been canceled.
5.20 	(b) The notice must be served in the manner provided in
5.21 	section 559.21, subdivision 4, paragraphs (a) and (b).
5.22 	(c) The cancellation of the purchase agreement is complete~~,~~
5.23 	unless, within 15 days after the service of the notice upon the
5.24 	other party to the purchase agreement, the party upon whom the
5.25 	notice was served secures from a court an order suspending the
5.26 	cancellation.

5.27 	Sec. 5. Minnesota Statutes 2004, section 559.217,
5.28 	subdivision 5, is amended to read:
5.29 		Subd. 5.Form of notice of cancellation.  (a) For
5.30 	purposes of subdivision 3, the term "notice" means a writing
5.31 	stating the information required in subdivision 3, paragraph
5.32 	(a), stating the name, address, and telephone number of that
5.33 	party serving the notice or of an attorney authorized by such
5.34 	party to serve the notice, and including the following
5.35 	information in 12-point or larger underlined uppercase type, or
5.36 	8-point type if published, or in large legible handwritten
6.1 	letters:
6.2 	"THIS NOTICE IS TO INFORM YOU THAT BY THIS NOTICE THE
6.3 	(SELLER) (PURCHASER) (STRIKE ONE) HAS BEGUN PROCEEDINGS UNDER
6.4 	MINNESOTA STATUTES, SECTION 559.217, TO CANCEL YOUR PURCHASE
6.5 	AGREEMENT FOR THE (PURCHASE) (SALE) (STRIKE ONE) OF THE ABOVE
6.6 	PROPERTY FOR THE REASONS SPECIFIED IN THIS NOTICE.  THE PURCHASE
6.7 	AGREEMENT WILL BE CANCELED ... DAYS AFTER (SERVICE OF THIS
6.8 	NOTICE UPON YOU) (THE FIRST DAY OF PUBLICATION OF THIS NOTICE)
6.9 	(STRIKE ONE) UNLESS BEFORE THEN:
6.10 	(A) YOU HAVE FULLY COMPLIED WITH ALL OF YOUR OBLIGATIONS
6.11 	UNDER THE PURCHASE AGREEMENT THAT WERE REQUIRED TO BE PERFORMED
6.12 	AS OF THE DATE OF SERVICE OF THIS NOTICE, INCLUDING WITHOUT
6.13 	LIMITATION, THE ITEMS OF DEFAULT SPECIFIED IN THIS NOTICE AND,
6.14 	THE UNFULFILLED CONDITIONS SPECIFIED IN THIS NOTICE ARE
6.15 	COMPLETED, INCLUDING, IF APPLICABLE, COMPLETION OF THE PURCHASE
6.16 	OR SALE OF THE RESIDENTIAL REAL PROPERTY ACCORDING TO THE TERMS
6.17 	OF THE PURCHASE AGREEMENT; OR
6.18 	(B) YOU SECURE FROM A DISTRICT COURT AN ORDER THAT THE
6.19 	TERMINATION OF THE PURCHASE AGREEMENT BE SUSPENDED UNTIL YOUR
6.20 	CLAIMS OR DEFENSES ARE FINALLY DISPOSED OF BY TRIAL, HEARING, OR
6.21 	SETTLEMENT.  YOUR ACTION MUST SPECIFICALLY STATE THOSE FACTS AND
6.22 	GROUNDS THAT DEMONSTRATE YOUR CLAIMS OR DEFENSES.
6.23 	IF YOU DO NOT DO ONE OR THE OTHER OF THE ABOVE THINGS
6.24 	WITHIN THE TIME PERIOD SPECIFIED IN THIS NOTICE, YOUR PURCHASE
6.25 	AGREEMENT WILL BE CANCELED AT THE END OF THE PERIOD (AND YOU
6.26 	WILL LOSE ALL EARNEST MONEY YOU HAVE PAID ON THE PURCHASE
6.27 	AGREEMENT) (STRIKE IF NOT APPLICABLE); AND YOU MAY LOSE YOUR
6.28 	RIGHT TO ASSERT ANY CLAIMS OR DEFENSES THAT YOU MIGHT HAVE.
6.29 	HOWEVER, IF WITHIN THE TIME PERIOD SPECIFIED IN THIS NOTICE
6.30 	YOU SERVE YOUR OWN NOTICE UNDER MINNESOTA STATUTES, SECTION
6.31 	559.217, YOUR PURCHASE AGREEMENT WILL BE IMMEDIATELY CANCELED,
6.32 	BUT YOUR ENTITLEMENT TO EARNEST MONEY MUST BE DETERMINED BY A
6.33 	COURT.
6.34 	IF YOU HAVE ANY QUESTIONS ABOUT THIS NOTICE, CONTACT AN
6.35 	ATTORNEY IMMEDIATELY."
6.36 	(b) For purposes of subdivision 4, the term "notice" means
7.1 	a writing stating the information required in subdivision 4,
7.2 	paragraph (a), stating the name, address, and telephone number
7.3 	of the party serving the notice or of an attorney authorized by
7.4 	that party to serve the notice, and including the following
7.5 	information in 12-point or larger underlined uppercase type, or
7.6 	8-point type if published, or in large legible handwritten
7.7 	letters:
7.8 	"THIS NOTICE IS PURSUANT TO MINNESOTA STATUTES, SECTION
7.9 	559.217, TO INFORM YOU THAT YOUR PURCHASE AGREEMENT FOR THE
7.10 	(PURCHASE) (SALE) (STRIKE ONE) OF THE ABOVE PROPERTY HAS BEEN
7.11 	CANCELED FOR THE REASONS SPECIFIED IN THIS NOTICE.  THE
7.12 	CANCELLATION WILL BE CONFIRMED ... DAYS AFTER (SERVICE OF THIS
7.13 	NOTICE UPON YOU) (THE FIRST DAY OF PUBLICATION OF THIS NOTICE)
7.14 	(STRIKE ONE) UNLESS BEFORE THEN YOU SECURE FROM A DISTRICT COURT
7.15 	AN ORDER THAT THE CONFIRMATION OF CANCELLATION OF THE PURCHASE
7.16 	AGREEMENT BE SUSPENDED UNTIL YOUR CLAIMS OR DEFENSES ARE FINALLY
7.17 	DISPOSED OF BY TRIAL, HEARING, OR SETTLEMENT.  YOUR ACTION MUST
7.18 	SPECIFICALLY STATE THOSE FACTS AND GROUNDS THAT DEMONSTRATE YOUR
7.19 	CLAIMS OR DEFENSES.
7.20 	IF YOU DO NOT OBTAIN SUCH A COURT ORDER WITHIN THE TIME
7.21 	PERIOD SPECIFIED IN THIS NOTICE, THE CONFIRMATION OF
7.22 	CANCELLATION OF YOUR PURCHASE AGREEMENT WILL BE FINAL AT THE END
7.23 	OF THE PERIOD (AND YOU WILL LOSE ALL EARNEST MONEY YOU HAVE PAID
7.24 	ON THE PURCHASE AGREEMENT) (STRIKE IF NOT APPLICABLE); AND YOU
7.25 	MAY LOSE YOUR RIGHT TO ASSERT ANY CLAIMS OR DEFENSES THAT YOU
7.26 	MIGHT HAVE.
7.27 	HOWEVER, IF WITHIN THE TIME PERIOD SPECIFIED IN THIS NOTICE
7.28 	YOU SERVE YOUR OWN NOTICE UNDER MINNESOTA STATUTES, SECTION
7.29 	559.217, YOUR PURCHASE AGREEMENT WILL BE IMMEDIATELY CANCELED,
7.30 	BUT YOUR ENTITLEMENT TO EARNEST MONEY MUST BE DETERMINED BY A
7.31 	COURT.
7.32 	IF YOU HAVE ANY QUESTIONS ABOUT THIS NOTICE, CONTACT AN
7.33 	ATTORNEY IMMEDIATELY."

7.34 	Sec. 6. Minnesota Statutes 2004, section 559.217,
7.35 	subdivision 6, is amended to read:
7.36 		Subd. 6.suspension of cancellation,attorney fees, court
8.1 	fees, and costs of service. ~~If the party~~ A seller or a
8.2 	purchaser upon whom the notice is served ~~commences~~ may commence 
8.3 	a proceeding under section 559.211to obtain a court order to
8.4 	suspend the cancellation of a purchase agreement under this
8.5 	section~~,~~and in such proceeding the court ~~shall~~ may award court
8.6 	filing fees, attorney fees, and costs of service actually
8.7 	expended to the prevailing party in an amount not to exceed
8.8 	$3,000.

8.9 	Sec. 7. Minnesota Statutes 2004, section 580.041, is
8.10 	amended by adding a subdivision to read:
8.11 		Subd. 1a.Applicability. This section applies to
8.12 	foreclosure of mortgages under chapter 580 on property
8.13 	consisting of one to four family dwelling units, one of which
8.14 	the owner occupies as the owner's principal place of residency
8.15 	on the date of service of the notice of sale on the owner.

8.16 	Sec. 8. Minnesota Statutes 2004, section 580.041, is
8.17 	amended by adding a subdivision to read:
8.18 		Subd. 3.Affidavit. Any person may establish compliance
8.19 	with or inapplicability of this section by recording, with the
8.20 	county recorder or registrar of titles, an affidavit by a person
8.21 	having knowledge of the facts, stating that the notice required
8.22 	by this section has been delivered in compliance with this
8.23 	section or that this section is not applicable because the
8.24 	property described in the notice of foreclosure did not consist
8.25 	of one to four family dwelling units, one of which was occupied
8.26 	by the owner as the owner's principal place of residency.  The
8.27 	affidavit and a certified copy of a recorded affidavit shall be
8.28 	prima facie evidence of the facts stated in the affidavit.  The
8.29 	affidavit may be recorded regarding any foreclosure sale,
8.30 	including foreclosure sales which occurred prior to the
8.31 	effective date of this section, and may be recorded separately
8.32 	or as part of the record of a foreclosure.

8.33 	Sec. 9. Minnesota Statutes 2004, section 580.041, is
8.34 	amended by adding a subdivision to read:
8.35 		Subd. 4.Validation of foreclosure sales. No mortgage
8.36 	foreclosure sale under chapter 580 shall be invalid because of
9.1 	failure to comply with this section unless an action to
9.2 	invalidate the sale is commenced and a notice of lis pendens is
9.3 	filed with the county recorder or registrar of titles within one
9.4 	year after the last day of the redemption period of the
9.5 	mortgagor, the mortgagor's personal representatives, or assigns.
9.6 	The provisions of this subdivision shall not affect any action
9.7 	or proceeding pending on August 1, 2005, or which is commenced
9.8 	before February 1, 2006, in any court of this state, provided a
9.9 	notice of lis pendens of the action is filed with the county
9.10 	recorder or registrar of titles before February 1, 2006.

9.11 	Sec. 10. REVISOR'S INSTRUCTION.
 9.12 	The revisor of statutes shall renumber Minnesota Statutes,
9.13 	section 580.041, subdivision 1 as subdivision 1b.