SF 5064

as introduced - 93rd Legislature (2023 - 2024) Posted on 04/19/2024 10:04am

A bill for an act
relating to real property; prohibiting common interest communities from charging
fees for estoppel letters or certificates; amending Minnesota Statutes 2022, section
513.73, subdivision 3; proposing coding for new law in Minnesota Statutes, chapter
515B.

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

Section 1.

Minnesota Statutes 2022, section 513.73, subdivision 3, is amended to read:

Subd. 3.

Private transfer fee.

"Private transfer fee" means a fee or charge required by
a private transfer fee obligation and payable upon the transfer of an interest in real property,
or payable for the right to make or accept the transfer, regardless of whether the fee or
charge is a fixed amount or is determined as a percentage of the value of the property, the
purchase price, or other consideration given for the transfer. The following are not private
transfer fees for purposes of this section:

(1) consideration payable by the grantee to the grantor for the interest in real property
being transferred, including any subsequent additional consideration for the property payable
by the grantee based upon any subsequent appreciation, development, or sale of the property,
provided that the additional consideration is payable on a onetime basis only, and the
obligation to make the payment does not bind successors in title to the property. For the
purposes of this clause, an interest in real property may include a separate mineral estate
and its appurtenant surface access rights;

(2) commission payable to a licensed real estate broker for the transfer of real property
pursuant to an agreement between the broker and the grantor or the grantee, including any
subsequent additional commission for that transfer payable by the grantor or the grantee
based upon any subsequent appreciation, development, or sale of the property;

(3) interest, charges, fees, or other amounts payable by a borrower to a lender pursuant
to a loan secured by a mortgage against real property, including but not limited to a fee
payable to the lender for consenting to an assumption of the loan or a transfer of the real
property subject to the mortgage, fees, or charges payable to the lender for estoppel letters
or certificates, and shared appreciation interest or profit participation or other consideration
and payable to the lender in connection with the loan;

(4) rent, reimbursement, charge, fee, or other amount payable by a lessee to a lessor
under a lease, including but not limited to a fee payable to the lessor for consenting to an
assignment, subletting, encumbrance, or transfer of the lease;

(5) consideration payable to the holder of an option to purchase an interest in real property
or the holder of a right of first refusal or first offer to purchase an interest in real property
for waiving, releasing, or not exercising the option or right upon the transfer of the property
to another person;

(6) consideration payable by a contract for deed vendee to the vendor pursuant to the
terms of a recorded contract for deed, including any subsequent additional consideration
for the property payable by the vendee based upon any subsequent appreciation, development,
or sale of the property;

(7) a tax, fee, charge, assessment, fine, or other amount payable to or imposed by a
governmental authority;

(8) a fee, charge, assessment, fine, or other amount payable to a homeowner's
condominium, cooperative, mobile home, or property owner's association pursuant to a
declaration or covenant or law applicable to the association deleted text begin , including but not limited to
fees or charges payable for estoppel letters or certificates issued by the association or its
authorized agent deleted text end ;

(9) a fee, a charge, an assessment, dues, a contribution, or other amount pertaining to
the purchase or transfer of a club membership relating to real property owned by the member,
including but not limited to any amount determined by reference to the value, purchase
price, or other consideration given for the transfer of the real property; and

(10) a mortgage from the purchaser of real property granted to the seller or to a licensed
real estate broker.

Sec. 2.

new text begin [515B.1-118] ESTOPPEL LETTERS OR CERTIFICATES; FEES
PROHIBITED.
new text end

new text begin An association or the association's authorized agent may not directly or indirectly charge
a fee for the preparation or delivery of an estoppel letter or certificate. Unauthorized fees
or charges issued in violation of this section are void.
new text end