1.1                          A bill for an act 
  1.2             relating to real property; making various technical, 
  1.3             clarifying, and conforming changes relating to 
  1.4             registration of title, liens, and mortgages; amending 
  1.5             Minnesota Statutes 2002, sections 481.13, subdivision 
  1.6             3; 508.08; 508.35; 508.52; 508.67, subdivision 1; 
  1.7             508.70, subdivisions 1, 2, by adding subdivisions; 
  1.8             559.17, subdivision 3; proposing coding for new law in 
  1.9             Minnesota Statutes, chapter 507. 
  1.10  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.11                             ARTICLE 1
  1.12                         TORRENS PROVISIONS
  1.13     Section 1.  Minnesota Statutes 2002, section 508.08, is 
  1.14  amended to read: 
  1.15     508.08 [APPLICATION, CONTENTS LAND INCLUDED.] 
  1.16     Subdivision 1.  [ADJACENT LAND SEPARATE TRACTS; COMMON 
  1.17  OWNER.] Any number of adjoining tracts of land in the same 
  1.18  county and owned by the same person and in the same right, or 
  1.19  any number of tracts of land in the same county having the same 
  1.20  chain of title, and belonging to the same person, may be 
  1.21  included in one application.  When approved by the examiner of 
  1.22  titles, nonadjoining tracts of land owned by the same person or 
  1.23  persons in the same right having different chains of title may 
  1.24  be included in one application.  
  1.25     Subd. 2.  [ADJACENT LAND; COMMON TITLE DEFECT.] When 
  1.26  approved by the examiner of titles, Owners of adjacent separate 
  1.27  tracts of land which have a common title defect may join in one 
  2.1   application to register the title to their individual tracts.  
  2.2   The application must list separately all of the information 
  2.3   required by section 508.06 for the owner or owners of each of 
  2.4   the tracts included in the application. 
  2.5      Sec. 2.  Minnesota Statutes 2002, section 508.35, is 
  2.6   amended to read: 
  2.7      508.35 [FORM OF CERTIFICATE.] 
  2.8      The certificate of title shall contain the name and 
  2.9   residence of the owner, a description of the land, and of the 
  2.10  estate of the owner therein, and shall by memorial contain a 
  2.11  description of all encumbrances, liens, and interests in which 
  2.12  the estate of the owner is subject.  It shall state whether the 
  2.13  owner is 18 years of age or older and, if under any legal 
  2.14  incapacity, the nature of it.  It shall also state whether or 
  2.15  not the owner is married and, if married, the name of the 
  2.16  spouse.  In case the land is held in trust or subject to any 
  2.17  condition or limitation, it shall state the nature and character 
  2.18  of it.  It shall be substantially in the following form: 
  2.19                        CERTIFICATE OF TITLE 
  2.20     First certificate of title, pursuant to the order of the 
  2.21  district court, ............... judicial district, county of 
  2.22  ................., and state of Minnesota, date................, 
  2.23  ....... 
  2.24                            REGISTRATION 
  2.25    State of Minnesota               )                      
  2.26                                     )  ss.                 
  2.27    County of ....................   )                      
  2.28     This is to certify that ..............., residing at whose 
  2.29  address is ..............., in the .................... of 
  2.30  ...................., county of ...................., and state 
  2.31  of ...................., is now the owner of an estate, 
  2.32  ......................... of and in the following described land 
  2.33  situated in the county of ............... and state of 
  2.34  Minnesota, .........................  
  2.35     Subject to the encumbrances, liens, and interest noted by 
  2.36  the memorial underwritten or endorsed hereon; and subject to the 
  3.1   following rights or encumbrances subsisting, as provided in Laws 
  3.2   1905, chapter 305, section 24, namely: 
  3.3      (1) Liens, claims, or rights arising under the laws or the 
  3.4   Constitution of the United States, which the statutes of this 
  3.5   state cannot require to appear of record; 
  3.6      (2) Any real property tax or special assessment; 
  3.7      (3) Any lease for a period not exceeding three years, when 
  3.8   there is actual occupation of the premises under the lease; 
  3.9      (4) All rights in public highways upon the land; 
  3.10     (5) Such right of appeal or right to appear and contest the 
  3.11  application as is allowed by law; 
  3.12     (6) The rights of any person in possession under deed or 
  3.13  contract for deed from the owner of the certificate of title; 
  3.14     (7) Any outstanding mechanics lien rights which may exist 
  3.15  under sections 514.01 to 514.17. 
  3.16     That the said .......................... (is/is not) of the 
  3.17  age of 18 years or older, is under no legal incapacity except 
  3.18  ......................... and is (single/married to 
  3.19  .........................), who (is/is not) of the age of 18 
  3.20  years or older and is under no legal incapacity except 
  3.21  ......................... 
  3.22     In witness whereof, I have hereunto subscribed my name and 
  3.23  affixed the seal of my office, this ............... day of 
  3.24  ..........., ..........  
  3.25     .............................................  
  3.26     Registrar of Titles, in and for the county of 
  3.27     ..................... and State of Minnesota.  
  3.28     All certificates issued subsequent to the first certificate 
  3.29  of title shall be in like form except that they shall be 
  3.30  entitled "Transfer from number (here give the number of the next 
  3.31  previous certificate relating to the same land)," and shall also 
  3.32  contain the words "Originally registered (date, volume, and page 
  3.33  of registration)."  
  3.34     Sec. 3.  Minnesota Statutes 2002, section 508.52, is 
  3.35  amended to read: 
  3.36     508.52 [CONVEYANCE; CANCELLATION OF OLD AND ISSUANCE OF NEW 
  4.1   CERTIFICATE.] 
  4.2      An owner of registered land who desires to convey the land, 
  4.3   or a portion thereof, in fee, shall execute a deed of 
  4.4   conveyance, and file the deed with the registrar.  The registrar 
  4.5   shall require an affidavit by the grantee, or some person in the 
  4.6   grantee's behalf, which affidavit shall set forth the name and 
  4.7   residence of the grantee, whether the grantee is 18 years of age 
  4.8   or older, and whether the grantee is or is not under legal 
  4.9   incapacity, whether or not married, and, if married, the name of 
  4.10  the spouse.  The deed of conveyance shall be filed and endorsed 
  4.11  with the number and place of registration of the certificate of 
  4.12  title.  Before canceling the outstanding certificate of title 
  4.13  the registrar shall show by memorial thereon the registration of 
  4.14  the deed on the basis of which it is canceled.  The 
  4.15  encumbrances, claims, or interests adverse to the title of the 
  4.16  registered owner shall be stated upon the new certificate, 
  4.17  except so far as they may be simultaneously released or 
  4.18  discharged.  The certificate of title shall be marked "Canceled" 
  4.19  by the registrar, who shall enter in the register a new 
  4.20  certificate of title to the grantee and prepare and deliver to 
  4.21  the grantee a copy of the new certificate of title.  If a deed 
  4.22  in fee is for a portion of the land described in a certificate 
  4.23  of title, the memorial of the deed entered by the registrar 
  4.24  shall include the legal description contained in the deed and 
  4.25  the registrar shall enter a new certificate of title to the 
  4.26  grantee for the portion of the land conveyed and, except as 
  4.27  otherwise provided in this section, issue a residue certificate 
  4.28  of title to the grantor for the portion of the land not 
  4.29  conveyed.  The registrar shall prepare and deliver to each of 
  4.30  the parties a copy of their respective certificates of title.  
  4.31  In lieu of canceling the grantor's certificate of title and 
  4.32  issuing a residue certificate to the grantor for the portion of 
  4.33  the land not conveyed, the registrar may if the grantor's deed 
  4.34  does not divide a parcel of unplatted land, and in the absence 
  4.35  of a request to the contrary by the registered owner, mark by 
  4.36  the land description on the certificate of title "Part of land 
  5.1   conveyed, see memorials."  The fee for a residue certificate of 
  5.2   title shall be paid to the registrar only when the grantor's 
  5.3   certificate of title is canceled after the conveyance by the 
  5.4   grantor of a portion of the land described in the grantor's 
  5.5   certificate of title.  When two or more successive conveyances 
  5.6   of the same property are filed for registration on the same day 
  5.7   the registrar may enter a certificate in favor of the grantee or 
  5.8   grantees in the last of the successive conveyances, and the 
  5.9   memorial of the previous deed or deeds entered on the prior 
  5.10  certificate of title shall have the same force and effect as 
  5.11  though the prior certificate of title had been entered in favor 
  5.12  of the grantee or grantees in the earlier deed or deeds in the 
  5.13  successive conveyances.  The fees for the registration of the 
  5.14  earlier deed or deeds shall be the same as the fees prescribed 
  5.15  for the entry of memorials.  The registrar of titles, with the 
  5.16  consent of the transferee, may mark "See memorials for new 
  5.17  owner(s)" by the names of the registered owners on the 
  5.18  certificate of title and also add to the memorial of the 
  5.19  transferring conveyance a statement that the memorial shall 
  5.20  serve in lieu of a new certificate of title in favor of the 
  5.21  grantee or grantees therein noted and may refrain from canceling 
  5.22  the certificate of title until the time it is canceled by a 
  5.23  subsequent transfer, and the memorial showing such transfer of 
  5.24  title shall have the same effect as the entry of a new 
  5.25  certificate of title for the land described in the certificate 
  5.26  of title; the fee for the registration of a conveyance without 
  5.27  cancellation of the certificate of title shall be the same as 
  5.28  the fee prescribed for the entry of a memorial.  
  5.29     Sec. 4.  Minnesota Statutes 2002, section 508.67, 
  5.30  subdivision 1, is amended to read: 
  5.31     Subdivision 1.  [COURT ORDER.] Upon the expiration of the 
  5.32  time allowed by law for redemption of registered land, after it 
  5.33  has been set off, or sold on execution, or taken or sold for the 
  5.34  enforcement of any lien, including a tax lien, or charge of any 
  5.35  nature, the person who claims under such execution, or under any 
  5.36  certificate, deed, or other instrument made in the course of 
  6.1   proceedings to enforce such execution or lien, may apply to the 
  6.2   court for an order directing the entry of a new certificate to 
  6.3   that person, and upon such notice as the court may require, the 
  6.4   petition shall be heard and a proper order rendered therein.  In 
  6.5   case the claim of title is based upon a tax certificate, tax or 
  6.6   assessment deed, the petition shall be filed with the court 
  6.7   administrator, who shall docket the same in the land 
  6.8   registration docket.  The petition shall be referred to the 
  6.9   examiner of titles for examination and report in like manner as 
  6.10  herein provided for the reference of initial applications for 
  6.11  registration.  The summons shall be issued in the form and 
  6.12  served in the manner as in initial applications.  The petition 
  6.13  shall be heard by the court and the petitioner shall be required 
  6.14  to show affirmatively that all the requirements of the statute 
  6.15  to entitle the petitioner to register the title have been 
  6.16  complied with.  The order shall show the condition of the title 
  6.17  to such land and who is the owner thereof.  It shall provide, if 
  6.18  the petitioner is found to be the owner, for the cancellation of 
  6.19  the outstanding certificate of title and the registrar shall 
  6.20  issue a new certificate of title for the land in lieu and in 
  6.21  place of the outstanding certificate upon presentation to the 
  6.22  registrar of a duly certified copy of such order, according to 
  6.23  its terms.  
  6.24     Sec. 5.  Minnesota Statutes 2002, section 508.70, 
  6.25  subdivision 1, is amended to read: 
  6.26     Subdivision 1.  [PROCEDURE; COSTS.] (a) Any person claiming 
  6.27  any right, title, or interest in registered land adverse to the 
  6.28  registered owner arising subsequent to or created after the date 
  6.29  of the original registration, which does not appear on the 
  6.30  certificate of title, may, if no other provision is made in this 
  6.31  chapter for there is some impediment to registering the same 
  6.32  claimed interest, file with the registrar of titles a verified 
  6.33  statement in writing setting forth fully claim of unregistered 
  6.34  interest, made by or at the instance of the claimant, stating: 
  6.35     (1) the alleged right or interest, and; 
  6.36     (2) how or from whom it was acquired, and a reference to 
  7.1   the volume and page of; 
  7.2      (3) the reason the interest cannot be registered; 
  7.3      (4) the number of the affected certificate of title of the 
  7.4   registered owner, together with; 
  7.5      (5) a description of the affected land, the adverse 
  7.6   claimant's residence, and designating; 
  7.7      (6) a place at which all notices may be served upon the 
  7.8   adverse claimant.  Such statement; and 
  7.9      (7) that the claim is not made for the purpose of avoiding 
  7.10  the payment of mortgage registry tax under section 287.01 or 
  7.11  deed tax under section 287.21, or avoiding obtaining the 
  7.12  auditor's statement on an instrument under section 272.12. 
  7.13     (b) If the claimant claims an interest in an unregistered 
  7.14  mortgage that is subject to the imposition of mortgage registry 
  7.15  tax upon recording, the notice must contain evidence 
  7.16  satisfactory to the registrar of titles that the mortgage 
  7.17  registry tax has been paid.  A copy of the claim must be mailed 
  7.18  to the persons whose registered interests are affected by the 
  7.19  claim at their addresses shown on the certificate of title.  An 
  7.20  affidavit stating the names and addresses of the persons to whom 
  7.21  copies of the claim were mailed must be attached to the claim.  
  7.22  The claim with attached affidavit regarding mailing shall be 
  7.23  entitled to registration as an adverse claim, and the court, 
  7.24  upon the petition of any party in interest, shall grant a speedy 
  7.25  hearing upon the validity of such adverse claim and enter 
  7.26  such decision and decree therein order as justice and equity may 
  7.27  require.  If the court determines that the adverse claim is 
  7.28  adjudged to be invalid, the registration thereof shall be 
  7.29  canceled it shall order the cancellation of the memorial of the 
  7.30  claim.  The court may, in any case, award such costs and 
  7.31  damages, including a reasonable attorney's fee, as it may deem 
  7.32  just.  
  7.33     Sec. 6.  Minnesota Statutes 2002, section 508.70, 
  7.34  subdivision 2, is amended to read: 
  7.35     Subd. 2.  [TEN-YEAR LIMIT UNLESS NEW FILING.] On and after 
  7.36  March 1, 1995, no adverse claim statement, or claim of 
  8.1   unregistered interest, shall be notice, either actual or 
  8.2   constructive, of any matters referred to in the statement after 
  8.3   it has been of record for ten years unless a new statement or 
  8.4   claim realleging the facts is filed within the ten-year period 
  8.5   upon the affected certificate of title or unless a certified 
  8.6   copy of a petition in a subsequent proceeding or a notice of lis 
  8.7   pendens to adjudicate the matters alleged in the statement or 
  8.8   claim is filed within the ten-year period.  The registrar of 
  8.9   titles shall not carry forward to new certificates of title the 
  8.10  memorial of any statement of adverse claim, or of any claim of 
  8.11  unregistered interest, that has terminated as notice pursuant to 
  8.12  this subdivision. 
  8.13     Sec. 7.  Minnesota Statutes 2002, section 508.70, is 
  8.14  amended by adding a subdivision to read: 
  8.15     Subd. 4.  [DEMAND FOR DISCHARGE.] A person whose registered 
  8.16  interest is affected by a statement of adverse claim filed 
  8.17  before August 1, 2003, or by a claim of unregistered interest, 
  8.18  or the person's agent, may file a demand for discharge of the 
  8.19  claim of unregistered interest.  A copy of the demand must be 
  8.20  mailed to the claimant at the address stated on the claim.  An 
  8.21  affidavit stating the name and address of the person to whom a 
  8.22  copy of the demand was mailed must be attached to the demand.  
  8.23  The demand must be substantially in the following form: 
  8.24     "DEMAND FOR DISCHARGE OF CLAIM OF UNREGISTERED INTEREST 
  8.25  Date: .......................... 
  8.26  ................................................................ 
  8.27  ..................................., having a registered 
  8.28  interest in (name of person having a registered interest) 
  8.29  certificate of title No. ............., hereby demands that 
  8.30  ..............................................................  
  8.31                                          (name of claimant)
  8.32  either (1) discharge the claimant's claim of unregistered 
  8.33  interest regarding the certificate of title, or (2) petition the 
  8.34  court for a determination of the validity of the claim pursuant 
  8.35  to Minnesota Statutes, section 508.70, subdivision 1.  If the 
  8.36  claimant fails to do so the claim will terminate and be of no 
  9.1   effect 90 days after this demand for discharge is filed with the 
  9.2   registrar of titles of .................... county, Minnesota. 
  9.3   .......................................................... 
  9.4   (signature of person having registered interest or agent)" 
  9.5      Unless the claimant has petitioned the court as provided in 
  9.6   subdivision 1 and filed with the registrar of titles a certified 
  9.7   copy of the petition, the claim shall terminate and be of no 
  9.8   effect 90 days after the filing of a demand for discharge with 
  9.9   attached affidavit regarding mailing.  The registrar of titles 
  9.10  shall not carry forward to new certificates of title the 
  9.11  memorial of any claim that has terminated or has been discharged 
  9.12  pursuant to this subdivision. 
  9.13     Sec. 8.  Minnesota Statutes 2002, section 508.70, is 
  9.14  amended by adding a subdivision to read: 
  9.15     Subd. 5.  [PRIORITY OF CLAIM.] The registration of a claim 
  9.16  of unregistered interest has the same effect as to priority as 
  9.17  the registration of any instrument under this chapter.  If the 
  9.18  instrument, under which the claim is made, is filed before the 
  9.19  claim has been terminated or discharged, the instrument shall 
  9.20  have the same priority as the claim and the registrar of titles 
  9.21  shall include in the memorial of the instrument a reference to 
  9.22  the document number of the claim. 
  9.23     Sec. 9.  [EFFECTIVE DATE.] 
  9.24     This article is effective August 1, 2003. 
  9.25                             ARTICLE 2
  9.26                      MISCELLANEOUS PROVISIONS
  9.27     Section 1.  Minnesota Statutes 2002, section 481.13, 
  9.28  subdivision 3, is amended to read: 
  9.29     Subd. 3.  [ONE-YEAR LIMITATION.] No lien against real 
  9.30  property shall be enforced unless the lienholder, by filing 
  9.31  either a complaint or an answer with the court administrator, 
  9.32  asserts a lien within one year after the filing of the notice of 
  9.33  intention to claim a lien, unless within the one-year time 
  9.34  period the owner has agreed to a longer time period to assert 
  9.35  the lien.  This agreement must be in a written instrument signed 
  9.36  by the owner containing the legal description of the affected 
 10.1   real property and a description of the recording information of 
 10.2   the filed lien and the written instrument must be recorded in 
 10.3   the same office as the lien within one year after the filing of 
 10.4   the notice of intention to claim a lien.  In no event may the 
 10.5   lien be asserted more than three years after filing.  No person 
 10.6   is bound by any judgment in the action unless made a party to 
 10.7   the action within the time limit.  The absence from the record 
 10.8   in the office of the county recorder or the registrar of titles, 
 10.9   where appropriate, of a notice of lis pendens of an action after 
 10.10  the expiration of the time limit in which the lien could be so 
 10.11  asserted is conclusive evidence that the lien may no longer be 
 10.12  enforced as to a bona fide purchaser, mortgagee, or encumbrancer 
 10.13  without notice.  In the case of registered land, the registrar 
 10.14  of titles shall refrain from carrying forward to new 
 10.15  certificates of title the memorials of lien statements when no 
 10.16  notice of lis pendens has been registered within the time limit. 
 10.17     Sec. 2.  [507.402] [DISCHARGE OF MORTGAGE FROM CONTRACT FOR 
 10.18  DEED SELLER.] 
 10.19     A mortgage that encumbers the seller's interest in a 
 10.20  contract for deed ceases to encumber real property described in 
 10.21  a deed given pursuant to the contract if the purchaser has not 
 10.22  joined in or consented to the mortgage in a recorded instrument 
 10.23  and the mortgage is recorded subsequent to the recording of the 
 10.24  contract. 
 10.25     Sec. 3.  Minnesota Statutes 2002, section 559.17, 
 10.26  subdivision 3, is amended to read: 
 10.27     Subd. 3.  [EXPIRATION, SATISFACTION, RELEASE, AND 
 10.28  ASSIGNMENT.] (a) An assignment of rents and profits under this 
 10.29  section, whether in the mortgage or in a separate instrument, 
 10.30  shall expire: 
 10.31     (1) with respect to the rents and profits from all of the 
 10.32  mortgaged property, when an action or proceeding to foreclose 
 10.33  the mortgage is barred by section 541.03, or upon recording in 
 10.34  the office of the county recorder or filing in the office of the 
 10.35  registrar of titles of the county where the mortgaged property 
 10.36  is located, of a satisfaction of the mortgage or a certificate 
 11.1   of release complying with section 507.401 in lieu of a 
 11.2   satisfaction of the mortgage; or 
 11.3      (2) with respect to the rents and profits from a portion of 
 11.4   the mortgaged property, upon recording in the office of the 
 11.5   county recorder or filing in the office of the registrar of 
 11.6   titles of the county where that portion of the mortgaged 
 11.7   property is located, of a release of that portion of the 
 11.8   mortgaged property from the lien of the mortgage, or a 
 11.9   certificate of release complying with section 507.401 in lieu of 
 11.10  a release of that portion of the mortgaged property. 
 11.11  No separate reassignment of the rents and profits or 
 11.12  satisfaction or release of the assignment is required. 
 11.13     (b) An assignment of a mortgage, whether or not the 
 11.14  mortgage mentions an assignment of rents and profits, is 
 11.15  sufficient to assign both the mortgage and the assignment of 
 11.16  rents and profits permitted by this subdivision which secures 
 11.17  the debt secured by the mortgage, and no separate assignment of 
 11.18  the assignment of rents and profits shall be required. 
 11.19     Sec. 4.  [EFFECTIVE DATE.] 
 11.20     (a) Section 1 is effective the day following final 
 11.21  enactment and applies to all liens filed on or after August 1, 
 11.22  2002. 
 11.23     (b) Sections 2 and 3 apply to all mortgages and assignments 
 11.24  of rents and profits created before, on, or after August 1, 2003.