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HF 2188

1st Engrossment - 88th Legislature (2013 - 2014) Posted on 03/31/2014 05:08pm

KEY: stricken = removed, old language.
underscored = added, new language.

Current Version - 1st Engrossment

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A bill for an act
relating to real property; making clarifying and conforming changes relating to
ownership of real estate by spouses and mortgage redemption periods; modifying
transfer on death deeds; amending Minnesota Statutes 2012, sections 287.20,
subdivision 3a; 358.14; 507.02; 507.071, subdivisions 1, 2, 3, 6, 8, 10; 580.26;
Minnesota Statutes 2013 Supplement, section 507.403, subdivision 5a.

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

Section 1.

Minnesota Statutes 2012, section 287.20, subdivision 3a, is amended to read:


Subd. 3a.

Designated transfer.

"Designated transfer" means any of the following:

(1) a transfer between (i) an entity owned by a sole owner, and (ii) that sole owner;

(2) a transfer between (i) an entity in which deleted text begina husband, a wife, or bothdeleted text endnew text begin one or both
spouses who are married to each other
new text end are the sole owners, and (ii) deleted text beginthe husband, wife, or
both
deleted text endnew text begin one or both of the spousesnew text end;

(3) a transfer between (i) an entity with multiple co-owners, and (ii) all of the
co-owners, so long as each of the co-owners maintains the same percentage ownership
interest in the transferred real property, whether directly or through ownership of a
percentage of the entity;

(4) a transfer between (i) a revocable trust, and (ii) the grantor or grantors of the
revocable trust; or

(5) a transfer of substantially all of the assets of one or more entities pursuant to a
reorganization, as defined in section 287.20, subdivision 9.

For purposes of this definition of designated transfer, an interest in an entity that is
owned, directly or indirectly, by or for another entity shall be considered as being owned
proportionately by or for the owners of the other entity under provisions similar to those
of section 267(c)(1) and (5) of the Internal Revenue Code.

Sec. 2.

Minnesota Statutes 2012, section 358.14, is amended to read:


358.14 MARRIED PERSONS.

No separate examination of each spouse shall be required, but if deleted text beginhusband and wife
deleted text endnew text begin spousesnew text end join in and acknowledge the execution of any instrument, they shall be described
in the certificate of acknowledgment deleted text beginas husband and wifedeleted text endnew text begin in a manner that indicates
they are married to each other
new text end; and, if they acknowledge it before different officers, or
before the same officer at different times, each shall be described in the certificate as
the spouse of the other.

Sec. 3.

Minnesota Statutes 2012, section 507.02, is amended to read:


507.02 CONVEYANCES BY SPOUSES; POWERS OF ATTORNEY.

If the owner is married, no conveyance of the homestead, except a mortgage for
purchase money under section 507.03, a conveyance between spouses pursuant to section
500.19, subdivision 4, or a severance of a joint tenancy pursuant to section 500.19,
subdivision 5
, shall be valid without the signatures of both spouses. A spouse's signature
may be made by the spouse's duly appointed attorney-in-fact.

deleted text begin A husband and wife, by their joint deed,deleted text endnew text begin Spouses who are married to each othernew text end may
convey the real estate of eithernew text begin by their joint deednew text end. A spouse, by separate deed, may convey
any real estate owned by that spouse, except the homestead, subject to the rights of the
other spouse therein; and either spouse may, by separate conveyance, relinquish all rights in
the real estate so conveyed by the other spouse. Subject to the foregoing provisions, either
spouse may separately appoint an attorney-in-fact to sell or convey any real estate owned
by that spouse, or join in any conveyance made by or for the other spouse. Use of a power
of attorney is subject to section 518.58, subdivision 1a. A minor spouse has legal capacity
to join in a conveyance of real estate owned by the other spouse, so long as the minor
spouse is not incapacitated because of some reason other than that spouse's minor age.

Sec. 4.

Minnesota Statutes 2012, section 507.071, subdivision 1, is amended to read:


Subdivision 1.

Definitions.

For the purposes of this section the following terms
have the meanings given:

(a) "Beneficiary" or "grantee beneficiary" means a person or entity named as a
grantee beneficiary in a transfer on death deed, including a successor grantee beneficiary.

(b) "County agency" means the county department or office designated to recover
medical assistance benefits from the estates of decedents.

(c) "Grantor owner" means an ownernew text begin, whether individually, as a joint tenant, or as
a tenant in common,
new text end named as a grantor in a transfer on death deed upon whose death
the conveyance or transfer of the described real property is conditioned. Grantor owner
does not include a spouse who joins in a transfer on death deed solely for the purpose
of conveying or releasing statutory or other marital interests in the real property to be
conveyed or transferred by the transfer on death deed.

(d) "Owner" means a person having an ownership or other interest in all or part of
the real property to be conveyed or transferred by a transfer on death deednew text begin either at the
time the deed is executed or at the time the transfer becomes effective
new text end. Owner does not
include a spouse who joins in a transfer on death deed solely for the purpose of conveying
or releasing statutory or other marital interests in the real property to be conveyed or
transferred by the transfer on death deed.

new text begin (e) "Property" and "interest in real property" mean any interest in real property
located in this state which is transferable on the death of the owner and includes, without
limitation, an interest in real property defined in chapter 500, a mortgage, a deed of trust, a
security interest in, or a security pledge of, an interest in real property, including the rights
to payments of the indebtedness secured by the security instrument, a judgment, a tax lien,
both the seller's and purchaser's interest in a contract for deed, land contract, purchase
agreement, or earnest money contract for the sale and purchase of real property, including
the rights to payments under such contracts, or any other lien on, or interest in, real property.
new text end

deleted text begin (e)deleted text endnew text begin (f)new text end "Recorded" means recorded in the office of the county recorder or registrar of
titles, as appropriate for the real property described in the instrument to be recorded.

deleted text begin (f)deleted text endnew text begin (g)new text end "State agency" means the Department of Human Services or any successor
agency.

deleted text begin (g)deleted text endnew text begin (h)new text end "Transfer on death deed" means a deed authorized under this section.

Sec. 5.

Minnesota Statutes 2012, section 507.071, subdivision 2, is amended to read:


Subd. 2.

Effect of transfer on death deed.

A deed that conveys or assigns an
interest in real property, deleted text beginincluding a mortgage, judgment, or any other lien on real property,
deleted text end to a grantee beneficiary and that expressly states that the deed is only effective on the death
of one or more of the grantor owners, transfers the interest to the grantee beneficiary upon
the death of the grantor owner upon whose death the conveyance or transfer is stated to be
effective, but subject to the survivorship provisions and requirements of section 524.2-702.
A transfer on death deed must comply with all provisions of Minnesota law applicable
to deeds of real property including, but not limited to, the provisions of sections 507.02,
507.24, 507.34, 508.48, and 508A.48.new text begin If a spouse who is neither a grantor owner nor an
owner joins in the execution of, or consents in writing to, the transfer on death deed, such
joinder or consent shall be conclusive proof that upon the transfer becoming effective, the
spouse no longer has or can claim any statutory interest or other marital interest in the
interest in real property transferred by the transfer on death deed. However, such transfer
shall remain an interest as identified in section 256B.15 for purposes of complying with
and satisfying any claim or lien as authorized by subdivision 3 of this section.
new text end

Sec. 6.

Minnesota Statutes 2012, section 507.071, subdivision 3, is amended to read:


Subd. 3.

Rights of creditors and rights of state and county under sections 246.53,
256B.15, 256D.16, 261.04, and 514.981.

The interest transferred to a beneficiary under a
transfer on death deed after the death of a grantor owner is transferred subject to all effective
conveyances, assignments, contracts, mortgages, deeds of trust, liens, security pledges,
judgments, tax liens, and new text beginany new text endother new text beginmatters or new text endencumbrances deleted text beginmade by the grantor owner or
deleted text end to which the deleted text beginpropertydeleted text endnew text begin interestnew text end was subject deleted text beginduringdeleted text endnew text begin on the date of death ofnew text end the grantor deleted text beginowner's
lifetime
deleted text endnew text begin ownernew text end, new text beginupon whose death the transfer becomes effective new text endincludingnew text begin,new text end but not limited
to, any claim by a surviving spouse deleted text beginordeleted text endnew text begin who did not join in the execution of, or consent in
writing to, the transfer on death deed, and
new text end any claim or lien by the state or county agency
authorized by deleted text beginsectiondeleted text endnew text begin sectionsnew text end 246.53, 256B.15, 256D.16, 261.04, deleted text beginordeleted text endnew text begin andnew text end 514.981, if other
assets of the deceased deleted text beginowner'sdeleted text endnew text begin grantor'snew text end estate are insufficient to pay the amount of any such
claim. A beneficiary to whom the interest is transferred after the death of a grantor owner
shall be liable to account to the state or county agency with a claim or lien authorized by
section 246.53, 256B.15, 256D.16, 261.04, or 514.981, to the extent necessary to discharge
any such claim remaining unpaid after application of the assets of the deceased grantor
owner's estate, but such liability shall be limited to the value of the interest transferred
to the beneficiary. To establish compliance with this subdivision and subdivision 23, the
beneficiary must record a clearance certificate issued in accordance with subdivision 23 in
each county in which the real property described in the transfer on death deed is located.

Sec. 7.

Minnesota Statutes 2012, section 507.071, subdivision 6, is amended to read:


Subd. 6.

Multiple joint tenant grantors.

If an interest in real property is owned as
joint tenants, a transfer on death deed executed by all of the owners new text beginand, if required by
section 507.02, their respective spouses, if any,
new text endthat conveys an interest in real property
to one or more grantee beneficiaries transfers the interest to the grantee beneficiary or
beneficiaries effective only after the death of the last surviving grantor owner. If the
last surviving joint tenant owner did not execute the transfer on death deed, the deed is
ineffective to transfer any interest and the deed is void. An estate in joint tenancy is not
severed or affected by the subsequent execution of a transfer on death deed and the right of
a surviving joint tenant owner who did not execute the transfer on death deed shall prevail
over a grantee beneficiary named in a transfer on death deed unless the deed specifically
states that it severs the joint tenancy ownership.

Sec. 8.

Minnesota Statutes 2012, section 507.071, subdivision 8, is amended to read:


Subd. 8.

Recording requirements and authorization.

A transfer on death deed
is valid if the deed is recorded in a county in which at least a part of the real property
described in the deed is located and is recorded before the death of the grantor owner
upon whose death the conveyance or transfer is effective. A transfer on death deed is not
effective for purposes of section 507.34, 508.47, or 508A.47 until the deed is recorded in
the county in which the real property is located. When a transfer on death deed is presented
for recording, no certification by the county auditor as to transfer of ownership and current
and delinquent taxes shall be required or made and the transfer on death deed shall not
be required to be accompanied by a certificate of real estate value. A transfer on death
deed that otherwise satisfies all statutory requirements for recording may be recorded and
shall be accepted for recording in the county in which the property described in the deed is
located. If any part of the property described in the transfer on death deed is registered
property, the registrar of titles shall accept the transfer on death deed for recording only if
at least one of the grantors who executes the transfer on death deed appears of record to
have an ownership interest new text beginor other interest new text endin the new text beginreal new text endproperty described in the deed. No
certification or approval of a transfer on death deed shall be required of the examiner of
titles prior to recording of the deed in the office of the registrar of titles.

Sec. 9.

Minnesota Statutes 2012, section 507.071, subdivision 10, is amended to read:


Subd. 10.

Revocation or modification of transfer on death deed.

(a) A transfer on
death deed may be revoked at any time by the grantor owner or, if there is more than one
grantor owner, by any of the grantor owners. new text beginA revocation revokes the transfer on death
deed in its entirety.
new text endTo be effective, the revocation must be recorded in deleted text beginthedeleted text endnew text begin anew text end county in
which at least a part of the real property is located before the death of the grantor owner or
owners who execute the revocation. The revocation is not effective for purposes of section
507.34, 508.47, or 508A.47 until the revocation is recorded in deleted text beginthedeleted text endnew text begin anew text end county in which the
real property is located. deleted text beginSubject to subdivision 6, if the real property is owned as joint
tenants and if the revocation is not executed by all of the grantor owners, the revocation is
not effective unless executed by the last surviving grantor owner.
deleted text end

(b) If a grantor owner conveys to a third party, subsequent to the recording of the
transfer on death deed, by means other than a transfer on death deed, all or a part of such
grantor owner's interest in the property described in the transfer on death deed, no transfer
of the conveyed interest shall occur on such grantor owner's death and the transfer on
death deed shall be ineffective as to the conveyed or transferred interests, but the transfer
on death deed remains effective with respect to the conveyance or transfer on death of
any other interests described in the transfer on death deed owned by the grantor owner
at the time of the grantor owner's death.

(c) A transfer on death deed is a "governing instrument" within the meaning of
section 524.2-804 and, except as may otherwise be specifically provided for in the
transfer on death deed, is subject to the same provisions as to revocation, revival, and
nonrevocation set forth in section 524.2-804.

Sec. 10.

Minnesota Statutes 2013 Supplement, section 507.403, subdivision 5a,
is amended to read:


Subd. 5a.

Liability.

Execution or recording of a wrongful, erroneous, or
unauthorized certificate under this section does not relieve the mortgagor or the
mortgagor's successors or assigns from any personal liability on the obligations secured by
the mortgage, and, in addition to any other remedies provided by law, a person new text beginor entity
new text endwho wrongfully, erroneously, or without authority executes deleted text beginor recordsdeleted text end the certificate deleted text beginand
any entity on whose behalf the certificate is wrongfully, erroneously, or without authority
executed or recorded,
deleted text end is liable to the mortgagee, the mortgagee's assigns, deleted text beginordeleted text endnew text begin andnew text end any person
or entity for actual damages sustained due to the execution or recording of the certificate,
together with reasonable attorney fees, costs, and disbursements incurred by the damaged
party as a result. deleted text beginFor purposes of this section, "entity" does not include a natural person.
deleted text end

Sec. 11.

Minnesota Statutes 2012, section 580.26, is amended to read:


580.26 CERTIFICATE OF REDEMPTION; RECORD.

The person or officer from whom such redemption is made shall make and deliver to
the person redeeming a certificate executed and acknowledged in the same manner as a
conveyance, containing:

(1) the name of the person redeeming, and the amount paid by the person on such
redemption;

(2) a description of the sale for which such redemption is made, and of the property
redeemed;

(3) a statement of the claim upon which such redemption is made and, if upon a lien,
the amount claimed to be due thereon at the date of redemption.

If redemption is made by the owner of the property sold, the owner's heirs, personal
representatives, or assigns, such certificate shall be recorded within four days after the
expiration of the deleted text beginyeardeleted text endnew text begin periodnew text end allowed new text beginby law to new text endthe owner for redemption and, if made
by a creditor holding a lien, the certificate shall be recorded within four days after such
redemption. Unless so recorded, the certificate shall be void as against any person in good
faith redeeming from the same person or lien.