HF 2324

as introduced - 87th Legislature (2011 - 2012) Posted on 02/16/2012 01:12pm

A bill for an act
relating to real property; reducing the limitations period for actions affecting title
to real estate; amending Minnesota Statutes 2010, sections 365.27, subdivision 3;
541.023, subdivisions 1, 2, 2a, 6, 7.

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

Section 1.

Minnesota Statutes 2010, section 365.27, subdivision 3, is amended to read:

Subd. 3.

Reversion.

If a lot is sold but not used, ownership reverts to the town deleted text begin 40 deleted text end new text begin 25 new text end
years after the sale or deleted text begin 40 deleted text end new text begin 25 new text end years after the most recent recording with the county recorder
of a notice of the kind described in section 541.023 or another document that relates to the
ownership, whichever is latest. The town may take legal action in the same way as any
other person to clarify the ownership or assure the marketability of the lot.

Sec. 2.

Minnesota Statutes 2010, section 541.023, subdivision 1, is amended to read:

Subdivision 1.

Commencement.

As against a claim of title based upon a source
of title, which source has then been of record at least deleted text begin 40 deleted text end new text begin 25 new text end years, no action affecting
the possession or title of any real estate shall be commenced by a person, partnership,
corporation, other legal entity, state, or any political division thereof, to enforce any right,
claim, interest, incumbrance, or lien founded upon any instrument, event or transaction
which was executed or occurred more than deleted text begin 40 deleted text end new text begin 25 new text end years prior to the commencement of
such action, unless within deleted text begin 40 deleted text end new text begin 25 new text end years after such execution or occurrence there has
been recorded in the office of the county recorder in the county in which the real estate
affected is situated, a notice sworn to by the claimant or the claimant's agent or attorney
setting forth the name of the claimant, a description of the real estate affected and of the
instrument, event or transaction on which such claim is founded, and stating whether the
right, claim, interest, incumbrance, or lien is mature or immature. If such notice relates to
vested or contingent rights claimed under a condition subsequent or restriction it shall
affirmatively show why such condition or restriction is not, or has not become nominal so
that it may be disregarded under the provisions of section 500.20, subdivision 1.

Sec. 3.

Minnesota Statutes 2010, section 541.023, subdivision 2, is amended to read:

Subd. 2.

Application.

(a) This section shall apply to every right, claim, interest,
incumbrance, or lien founded by any instrument, event, or transaction that is at least deleted text begin 40 deleted text end new text begin
25 new text end years old.

(b) This section applies to repurchase options or other rights of repurchase that
encumber an interest in land based upon an instrument other than a deed of conveyance
granted by a governmental body, agency, or subdivision, unless within deleted text begin 40 deleted text end new text begin 25 new text end years of the
recording of the instrument a notice is recorded under subdivision 1. This paragraph does
not revive repurchase options or rights of repurchase barred by subdivision 1.

(c) This section does not apply to actions to enforce rights, claims, interests,
encumbrances, or liens arising out of private covenants, conditions, or restrictions to
which section 500.20, subdivision 2a, or successor statutes do not apply.

Sec. 4.

Minnesota Statutes 2010, section 541.023, subdivision 2a, is amended to read:

Subd. 2a.

Registered property not affected.

(a) Except as provided in paragraph
(b), this section does not apply to real property while it remains registered according
to chapter 508 or 508A.

(b) This subdivision does not affect an action or proceeding involving the validity of
a claim of title based upon a source of title which has been of record at least deleted text begin 40 deleted text end new text begin 25 new text end years if:

(i) the action or proceeding is pending on August 1, 2001, or is commenced before
February 1, 2002; and

(ii) a notice of the pendency of the action or proceeding is recorded before February
1, 2002, in the office of the registrar of titles of the county in which the real property
affected by the action or proceeding is located.

Sec. 5.

Minnesota Statutes 2010, section 541.023, subdivision 6, is amended to read:

Subd. 6.

Limitations; certain titles not affected.

This section shall not affect any
rights of the federal government; nor increase the effect as notice, actual or constructive, of
any instrument now of record; nor bar the rights of any person, partnership, or corporation
in possession of real estate. This section shall not impair the record title or record interest,
or title obtained by or through any congressional or legislative grant, of any railroad
corporation or other public service corporation or any trustee or receiver thereof or of any
educational or religious corporation in any real estate by reason of any failure to record
further evidence of such title or interest even though the record thereof is now or hereafter
more than deleted text begin 40 deleted text end new text begin 25 new text end years old; nor shall this section require the recording of any notice as
provided for in this section as to any undischarged mortgage or deed of trust executed by
any such corporation or any trustee or receiver thereof or to any claim or action founded
upon any such undischarged mortgage or deed of trust. The exceptions of this subdivision
shall not include (1) reservations or exceptions of land for right-of-way or other railroad
purposes contained in deeds of conveyance made by a railroad company or by trustees or
receivers thereof, unless said reserved or excepted land shall have been put to railroad use
within deleted text begin 40 deleted text end new text begin 25 new text end years after the date of said deeds of conveyance, (2) nor any rights under any
conditions subsequent or restrictions contained in any such deeds of conveyance.

Sec. 6.

Minnesota Statutes 2010, section 541.023, subdivision 7, is amended to read:

Subd. 7.

Source of title.

For the purposes of this section, the words "source of title"
as used in subdivision 1 hereof shall mean any deed, judgment, decree, sheriff's certificate,
or other instrument which transfers or confirms, or purports to transfer or confirm, a fee
simple title to real estate, including any such instrument which purports to transfer, or to
confirm the transfer of a fee simple title from a person who was not the record owner of
the real estate. However, any such instrument which purports to transfer, or to confirm the
transfer of, a fee simple title from a person who was not the record owner of the real estate
to the grantee or transferee named in such instrument shall be deemed a source of title
"of record at least deleted text begin 40 deleted text end new text begin 25 new text end years" within the meaning of subdivision 1 only if, during the
period of deleted text begin 40 deleted text end new text begin 25 new text end years after it was recorded, the following two conditions are fulfilled: (1)
another instrument was recorded which purports to transfer a fee simple title from said
grantee or transferee to another person and (2) no instrument was recorded which purports
to be or confirm a transfer of any interest in the real estate by or from whoever was the
record owner in fee simple immediately before the commencement of said period of deleted text begin 40 deleted text end new text begin
25 new text end years. The purpose of the next preceding sentence is to limit the effect of erroneous
descriptions or accidental conveyances.

Sec. 7. new text begin EFFECTIVE DATE.
new text end

new text begin This act is effective January 1, 2013.
new text end