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Key: (1) language to be deleted (2) new language

                            CHAPTER 119-H.F.No. 367 
                  An act relating to real property; providing for 
                  certain defeasible estates; modifying residential 
                  purchase agreement cancellations; amending the 
                  foreclosure advice notice; modifying the description 
                  of land deleted from the Mississippi Recreational 
                  River Land Use District in Sherburne County; amending 
                  Minnesota Statutes 2004, sections 500.20, subdivision 
                  2a; 513.56, subdivision 3; 513.57, subdivision 2; 
                  559.217; 580.041, by adding subdivisions; Laws 2005, 
                  chapter 30, section 1. 
        BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
           Section 1.  Minnesota Statutes 2004, section 500.20, 
        subdivision 2a, is amended to read: 
           Subd. 2a.  [RESTRICTION OF DURATION OF CONDITION.] Except 
        for any right to reenter or to repossess as provided in 
        subdivision 3, all private covenants, conditions, or 
        restrictions created by which the title or use of real property 
        is affected, cease to be valid and operative 30 years after the 
        date of the deed, or other instrument, or the date of the 
        probate of the will, creating them, and may be disregarded.  
           This subdivision does not apply to covenants, conditions, 
        or restrictions:  
           (1) that were created before August 1, 1988, by deed or 
        other instrument dated on or after August 1, 1982, or by will 
        the date of death of the testator of which was on or after 
        August 1, 1982; 
           (2) that were created before August 1, 1959, under which a 
        person who owns or has an interest in real property against 
        which the covenants, conditions, or restrictions have been filed 
        claims a benefit of the covenant, condition, or restriction if 
        the person records in the office of the county recorder or files 
        in the office of the registrar of titles in the county in which 
        the real estate affected is located, on or before March 30, 
        1989, a notice sworn to by the claimant or the claimant's agent 
        or attorney:  setting forth the name of the claimant; describing 
        the real estate affected; describing the deed, instrument, or 
        will creating the covenant, condition, or restriction; and 
        stating that the covenant, condition, or restriction is not 
        nominal and may not be disregarded under subdivision 1; 
           (3) (2) that are created by the declaration, bylaws, floor 
        plans, or condominium plat of a condominium created before 
        August 1, 1980, under chapter 515, or created on or after August 
        1, 1980, under chapter 515A or 515B, or by any amendments of the 
        declaration, bylaws, floor plans, or condominium plat; 
           (4) (3) that are created by the articles of incorporation, 
        bylaws, or proprietary leases of a cooperative association 
        formed under chapter 308A; 
           (5) (4) that are created by a declaration or other 
        instrument that authorizes and empowers a corporation of which 
        the qualification for being a stockholder or member is ownership 
        of certain parcels of real estate, to hold title to common real 
        estate for the benefit of the parcels; 
           (6) (5) that are created by a deed, declaration, 
        reservation, or other instrument by which one or more portions 
        of a building, set of connecting or adjacent buildings, or 
        complex or project of related buildings and structures share 
        support, structural components, ingress and egress, or utility 
        access with another portion or portions; 
           (7) (6) that were created after July 31, 1959, and before 
        August 1, 1982, under which a person who owns or has an interest 
        in real estate against which covenants, conditions, or 
        restrictions have been filed claims a benefit of the covenants, 
        conditions, or restrictions if the person records in the office 
        of the county recorder or files in the office of the registrar 
        of titles in the county in which the real estate affected is 
        located during the period commencing on the 28th anniversary of 
        the date of the deed or instrument, or the date of the probate 
        of the will, creating them and ending on the 30th anniversary, a 
        notice as described in clause (2) (1); or 
           (8) (7) that are created by a declaration or bylaws of a 
        common interest community created under or governed by chapter 
        515B, or by any amendments thereto. 
           A notice filed in accordance with clause (2) (1) or (7) (6) 
        delays application of this subdivision to the covenants, 
        conditions, or restrictions for a period ending on the later of 
        seven years after the date of filing of the notice, or until 
        final judgment is entered in an action to determine the validity 
        of the covenants, conditions, or restrictions, provided in the 
        case of an action the summons and complaint must be served and a 
        notice of lis pendens must be recorded in the office of the 
        county recorder or filed in the office of the registrar of 
        titles in each county in which the real estate affected is 
        located within seven years after the date of recording or filing 
        of the notice under clause (2) (1) or (7) (6). 
           County recorders and registrars of titles shall accept for 
        recording or filing a notice conforming with this subdivision 
        and charge a fee corresponding with the fee charged for filing a 
        notice of lis pendens of similar length.  The notice may be 
        discharged in the same manner as a notice of lis pendens and 
        when discharged, together with the information included with it, 
        ceases to constitute either actual or constructive notice. 
           Sec. 2.  Minnesota Statutes 2004, section 513.56, 
        subdivision 3, is amended to read: 
           Subd. 3.  [INSPECTIONS.] (a) Except as provided in 
        paragraph (b), a seller is not required to disclose information 
        relating to the physical condition of the real property if a 
        written report that discloses the information has been prepared 
        by a qualified third party and provided to the prospective 
        buyer.  For purposes of this paragraph, "qualified third party" 
        means a federal, state, or local governmental agency, or any 
        person whom the seller, or prospective buyer, reasonably 
        believes has the expertise necessary to meet the industry 
        standards of practice for the type of inspection or 
        investigation that has been conducted by the third party in 
        order to prepare the written report.  
           (b) A seller shall disclose to the prospective buyer 
        material facts known by the seller that contradict any 
        information included in a written report under paragraph (a) if 
        a copy of the report is provided to the seller.  
           Sec. 3.  Minnesota Statutes 2004, section 513.57, 
        subdivision 2, is amended to read: 
           Subd. 2.  [LIABILITY.] A seller who fails to make a 
        disclosure as required by sections 513.52 to 513.60 and was 
        aware of the condition of material facts pertaining to the real 
        property is liable to the prospective buyer.  A person injured 
        by a violation of this section may bring a civil action and 
        recover damages and receive other equitable relief as determined 
        by the court.  An action under this subdivision must be 
        commenced within two years after the date on which the 
        prospective buyer closed the purchase or transfer of the real 
        property. 
           Sec. 4.  Minnesota Statutes 2004, section 559.217, is 
        amended to read: 
           559.217 [DECLARATORY CANCELLATION OF RESIDENTIAL PURCHASE 
        AGREEMENT.] 
           Subdivision 1.  [DEFINITIONS.] (a) For purposes of this 
        section, the terms defined in this subdivision have the meanings 
        given. 
           (b) "Purchase agreement" means an earnest money contract, 
        purchase agreement, or exercised option that could be canceled 
        under section 559.21, subdivision 4, paragraph (a) whether or 
        not the instrument is subject to section 559.21. 
           (c) "Residential real property" means real property, 
        including vacant land, occupied by, or intended to be occupied 
        by, in the aggregate, one to four families as their residence.  
           (d) "Suspend" means to temporarily or permanently restrain 
        or enjoin a cancellation proceeding under subdivision 3 or 4 
        pursuant to the provisions of section 559.211. 
           Subd. 2.  [USE OF THIS SECTION.] Either the purchaser or 
        the seller may cancel a purchase agreement for residential real 
        property under this section.  If either a seller or purchaser 
        initiates a cancellation proceeding under this section and 
        before completion of the proceeding the other party to the 
        purchase agreement initiates a cancellation proceeding under 
        this section, whether under subdivision 3 or 4, the purchase 
        agreement is deemed canceled as of the date the second 
        cancellation notice is served upon the other party to the 
        purchase agreement under this section.  Either party can may 
        later pursue legal remedies at law to recover the earnest 
        money.  A court shall make a determination of which party is 
        entitled to the earnest money without regard to which party 
        first initiated the cancellation proceeding and may consider the 
        terms of the canceled purchase agreement in making its 
        determination.  
           Subd. 3.  [CANCELLATION WITH RIGHT TO CURE.] (a) If a 
        default occurs or an unfulfilled condition exists after the date 
        specified for fulfillment in the terms of a purchase agreement 
        for the conveyance of residential real property, which does not 
        by its terms cancel the purchase agreement, the purchaser or the 
        seller may initiate a cancellation by serving upon the other 
        party to the purchase agreement and any third party that is 
        holding earnest money under the purchase agreement a notice: 
           (1) specifying the residential real property that is the 
        subject of the purchase agreement, including the legal 
        description; 
           (2) specifying the purchase agreement by date and names of 
        parties, and the unfulfilled condition or default; and 
           (3) stating that the purchase agreement will be canceled 15 
        days after service of the notice upon the other party to the 
        purchase agreement unless prior to the cancellation date the 
        party upon whom the notice is served complies with the 
        conditions in default and completes the unfulfilled conditions, 
        including, if applicable, completion of the purchase or sale of 
        the residential real property according to the terms of the 
        purchase agreement. 
           (b) The notice must be served in the manner provided in 
        section 559.21, subdivision 4, paragraphs (a) and (b).  The 
        notice required by this subdivision must be given 
        notwithstanding any provisions in the purchase agreement to the 
        contrary. 
           (c) The purchase agreement is canceled unless, within 15 
        days after the service of the notice upon the other party to the 
        purchase agreement, the party upon whom the notice was served 
        fully complies with the conditions in default and completes the 
        unfulfilled conditions or secures from a court an order 
        suspending the cancellation. 
           Subd. 4.  [DECLARATORY CANCELLATION.] (a) If a default 
        occurs or an unfulfilled condition exists after the date 
        specified for fulfillment in the terms of a purchase agreement 
        for the conveyance of residential real property, which by the 
        terms of the purchase agreement cancels the purchase agreement, 
        either the purchaser or the seller may confirm the cancellation 
        by serving upon the other party to the purchase agreement and 
        any third party that is holding earnest money under the purchase 
        agreement a notice: 
           (1) specifying the residential real property that is the 
        subject of the purchase agreement, including the legal 
        description; 
           (2) specifying the purchase agreement by date and names of 
        parties, and the unfulfilled condition or default; and 
           (3) stating that the purchase agreement has been canceled. 
           (b) The notice must be served in the manner provided in 
        section 559.21, subdivision 4, paragraphs (a) and (b). 
           (c) The cancellation of the purchase agreement is complete, 
        unless, within 15 days after the service of the notice upon the 
        other party to the purchase agreement, the party upon whom the 
        notice was served secures from a court an order suspending the 
        cancellation. 
           Subd. 5.  [FORM OF NOTICE OF CANCELLATION.] (a) For 
        purposes of subdivision 3, the term "notice" means a writing 
        stating the information required in subdivision 3, paragraph 
        (a), stating the name, address, and telephone number of that 
        party serving the notice or of an attorney authorized by such 
        party to serve the notice, and including the following 
        information in 12-point or larger underlined uppercase type, or 
        8-point type if published, or in large legible handwritten 
        letters: 
           "THIS NOTICE IS TO INFORM YOU THAT BY THIS NOTICE THE 
        (SELLER) (PURCHASER) (STRIKE ONE) HAS BEGUN PROCEEDINGS UNDER 
        MINNESOTA STATUTES, SECTION 559.217, TO CANCEL YOUR PURCHASE 
        AGREEMENT FOR THE (PURCHASE) (SALE) (STRIKE ONE) OF THE ABOVE 
        PROPERTY FOR THE REASONS SPECIFIED IN THIS NOTICE.  THE PURCHASE 
        AGREEMENT WILL BE CANCELED ... DAYS AFTER (SERVICE OF THIS 
        NOTICE UPON YOU) (THE FIRST DAY OF PUBLICATION OF THIS NOTICE) 
        (STRIKE ONE) UNLESS BEFORE THEN: 
           (A) YOU HAVE FULLY COMPLIED WITH ALL OF YOUR OBLIGATIONS 
        UNDER THE PURCHASE AGREEMENT THAT WERE REQUIRED TO BE PERFORMED 
        AS OF THE DATE OF SERVICE OF THIS NOTICE, INCLUDING, WITHOUT 
        LIMITATION, THE ITEMS OF DEFAULT SPECIFIED IN THIS NOTICE; 
        OR AND THE UNFULFILLED CONDITIONS SPECIFIED IN THIS NOTICE ARE 
        COMPLETED, INCLUDING, IF APPLICABLE, COMPLETION OF THE PURCHASE 
        OR SALE OF THE RESIDENTIAL REAL PROPERTY ACCORDING TO THE TERMS 
        OF THE PURCHASE AGREEMENT; OR 
           (B) YOU SECURE FROM A DISTRICT COURT AN ORDER THAT THE 
        TERMINATION OF THE PURCHASE AGREEMENT BE SUSPENDED UNTIL YOUR 
        CLAIMS OR DEFENSES ARE FINALLY DISPOSED OF BY TRIAL, HEARING, OR 
        SETTLEMENT.  YOUR ACTION MUST SPECIFICALLY STATE THOSE FACTS AND 
        GROUNDS THAT DEMONSTRATE YOUR CLAIMS OR DEFENSES. 
           IF YOU DO NOT DO ONE OR THE OTHER OF THE ABOVE THINGS 
        WITHIN THE TIME PERIOD SPECIFIED IN THIS NOTICE, YOUR PURCHASE 
        AGREEMENT WILL BE CANCELED AT THE END OF THE PERIOD (AND YOU 
        WILL LOSE ALL EARNEST MONEY YOU HAVE PAID ON THE PURCHASE 
        AGREEMENT) (STRIKE IF NOT APPLICABLE); AND YOU MAY LOSE YOUR 
        RIGHT TO ASSERT ANY CLAIMS OR DEFENSES THAT YOU MIGHT HAVE.  
           HOWEVER, IF WITHIN THE TIME PERIOD SPECIFIED IN THIS NOTICE 
        YOU SERVE YOUR OWN NOTICE UNDER MINNESOTA STATUTES, SECTION 
        559.217, YOUR PURCHASE AGREEMENT WILL BE IMMEDIATELY CANCELED, 
        BUT YOUR ENTITLEMENT TO EARNEST MONEY MUST BE DETERMINED BY A 
        COURT OR DETERMINED BY ARBITRATION IF AGREED TO BY THE PARTIES. 
           IF YOU HAVE ANY QUESTIONS ABOUT THIS NOTICE, CONTACT AN 
        ATTORNEY IMMEDIATELY." 
           (b) For purposes of subdivision 4, the term "notice" means 
        a writing stating the information required in subdivision 4, 
        paragraph (a), stating the name, address, and telephone number 
        of the party serving the notice or of an attorney authorized by 
        that such party to serve the notice, and including the following 
        information in 12-point or larger underlined uppercase type, or 
        8-point type if published, or in large legible handwritten 
        letters: 
           "THIS NOTICE IS PURSUANT TO MINNESOTA STATUTES, SECTION 
        559.217, TO INFORM YOU THAT YOUR PURCHASE AGREEMENT FOR THE 
        (PURCHASE) (SALE) (STRIKE ONE) OF THE ABOVE PROPERTY HAS BEEN 
        CANCELED FOR THE REASONS SPECIFIED IN THIS NOTICE.  THE 
        CANCELLATION WILL BE CONFIRMED ... DAYS AFTER (SERVICE OF THIS 
        NOTICE UPON YOU) (THE FIRST DAY OF PUBLICATION OF THIS NOTICE) 
        (STRIKE ONE) UNLESS BEFORE THEN YOU SECURE FROM A DISTRICT COURT 
        AN ORDER THAT THE CONFIRMATION OF CANCELLATION OF THE PURCHASE 
        AGREEMENT BE SUSPENDED UNTIL YOUR CLAIMS OR DEFENSES ARE FINALLY 
        DISPOSED OF BY TRIAL, HEARING, OR SETTLEMENT.  YOUR ACTION MUST 
        SPECIFICALLY STATE THOSE FACTS AND GROUNDS THAT DEMONSTRATE YOUR 
        CLAIMS OR DEFENSES. 
           IF YOU DO NOT OBTAIN SUCH A COURT ORDER WITHIN THE TIME 
        PERIOD SPECIFIED IN THIS NOTICE, THE CONFIRMATION OF 
        CANCELLATION OF YOUR PURCHASE AGREEMENT WILL BE FINAL AT THE END 
        OF THE PERIOD (AND YOU WILL LOSE ALL EARNEST MONEY YOU HAVE PAID 
        ON THE PURCHASE AGREEMENT) (STRIKE IF NOT APPLICABLE); AND YOU 
        MAY LOSE YOUR RIGHT TO ASSERT ANY CLAIMS OR DEFENSES THAT YOU 
        MIGHT HAVE.  
           HOWEVER, IF WITHIN THE TIME PERIOD SPECIFIED IN THIS NOTICE 
        YOU SERVE YOUR OWN NOTICE UNDER MINNESOTA STATUTES, SECTION 
        559.217, YOUR PURCHASE AGREEMENT WILL BE IMMEDIATELY CANCELED, 
        BUT YOUR ENTITLEMENT TO EARNEST MONEY MUST BE DETERMINED BY A 
        COURT OR DETERMINED BY ARBITRATION IF AGREED TO BY THE PARTIES. 
           IF YOU HAVE ANY QUESTIONS ABOUT THIS NOTICE, CONTACT AN 
        ATTORNEY IMMEDIATELY." 
           Subd. 6.  [SUSPENSION OF CANCELLATION, ATTORNEY FEES, COURT 
        FEES, AND COSTS OF SERVICE.] If the party A seller or a 
        purchaser upon whom the notice is served commences may commence 
        a proceeding under section 559.211 to obtain a court order to 
        suspend the cancellation of a purchase agreement under this 
        section, and in the proceeding the court shall may award court 
        filing fees, attorney fees, and costs of service actually 
        expended to the prevailing party in an amount not to exceed 
        $3,000. 
           Subd. 7.  [AFFIDAVIT OF CANCELLATION.] (a) After a 
        cancellation under subdivision 3 or a confirmation of 
        cancellation under subdivision 4, the purchase agreement is void 
        and of no further force or effect, and, except as provided in 
        subdivision 2, any earnest money held under the purchase 
        agreement must be distributed to, and become the sole property 
        of, the party completing the cancellation of the purchase 
        agreement. 
           (b) When a cancellation under this section has been 
        completed, the party who served the notice, or that party's 
        attorney, may execute an affidavit stating that the party caused 
        a notice of cancellation to be served upon the other party, that 
        the other party neither complied with the actions required in 
        the notice, if applicable, nor obtained a court order suspending 
        the cancellation, and that the property is residential real 
        property. 
           (c) A copy of the affidavit of cancellation, when attached 
        to a copy of the notice, is prima facie evidence of the facts 
        therein stated. 
           (d) Except as provided in subdivision 2, the affidavit of 
        cancellation, when delivered to a person third party holding 
        earnest money under the purchase agreement, is a sufficient 
        basis for that person to release the earnest money to the party 
        initiating and completing the cancellation. 
           (e) If either a seller or purchaser commences a 
        cancellation proceeding under this section and before completion 
        of the first proceeding the other party initiates a cancellation 
        proceeding under this section, either party or that party's 
        attorney may execute an affidavit stating that both parties 
        caused the notice of cancellation to be served upon the other 
        party and further specifying the date the second notice of 
        cancellation was served upon the other party.  A copy of the 
        affidavit of cancellation, when attached to copies of both 
        notices of cancellation, is prima facie evidence of the 
        cancellation of the purchase agreement and of the effective date 
        of the cancellation of the purchase agreement. 
           Subd. 8.  [ATTORNEY AS AGENT FOR SERVICE.] Any attorney 
        authorized to serve the notice of cancellation by a party 
        initiating a cancellation under this section is designated as 
        the attorney who may receive service as agent for the party 
        initiating the cancellation of all summons, complaints, orders, 
        and motions made in connection with an action by the party upon 
        whom the notice is served to restrain the cancellation.  Service 
        in the action may be made upon the party initiating the 
        cancellation by mailing a copy of the process to such party or 
        to such party's attorney, by first class mail, postage prepaid, 
        to the address stated in the notice. 
           [EFFECTIVE DATE.] This section is effective August 1, 2005, 
        and applies to purchase agreements entered into on or after that 
        date. 
           Sec. 5.  Minnesota Statutes 2004, section 580.041, is 
        amended by adding a subdivision to read: 
           Subd. 1a.  [APPLICABILITY.] This section applies to 
        foreclosure of mortgages under this chapter on property 
        consisting of one to four family dwelling units, one of which 
        the owner occupies as the owner's principal place of residency 
        on the date of service of the notice of sale on the owner. 
           Sec. 6.  Minnesota Statutes 2004, section 580.041, is 
        amended by adding a subdivision to read: 
           Subd. 3.  [AFFIDAVIT.] Any person may establish compliance 
        with or inapplicability of this section by recording, with the 
        county recorder or registrar of titles, an affidavit by a person 
        having knowledge of the facts, stating that the notice required 
        by this section has been delivered in compliance with this 
        section or that this section is not applicable because the 
        property described in the notice of foreclosure did not consist 
        of one to four family dwelling units, one of which was occupied 
        by the owner as the owner's principal place of residency.  The 
        affidavit and a certified copy of a recorded affidavit shall be 
        prima facie evidence of the facts stated in the affidavit.  The 
        affidavit may be recorded regarding any foreclosure sale, 
        including foreclosure sales which occurred prior to the 
        effective date of this section, and may be recorded separately 
        or as part of the record of a foreclosure. 
           Sec. 7.  Minnesota Statutes 2004, section 580.041, is 
        amended by adding a subdivision to read: 
           Subd. 4.  [VALIDATION OF FORECLOSURE SALES.] No mortgage 
        foreclosure sale under this chapter shall be invalid because of 
        failure to comply with this section unless an action to 
        invalidate the sale is commenced and a notice of lis pendens is 
        filed with the county recorder or registrar of titles within one 
        year after the last day of the redemption period of the 
        mortgagor, the mortgagor's personal representatives, or assigns. 
        This subdivision shall not affect any action or proceeding 
        pending on August 1, 2005, or which is commenced before February 
        1, 2006, in any court of this state, provided a notice of lis 
        pendens of the action is filed with the county recorder or 
        registrar of titles before February 1, 2006. 
           Sec. 8.  Laws 2005, chapter 30, section 1, is amended to 
        read: 
           Section 1.  [DELETION FROM MISSISSIPPI RECREATIONAL RIVER 
        LAND USE DISTRICT IN WRIGHT AND SHERBURNE COUNTIES.] 
           (a) The following area is deleted from the Mississippi 
        Recreational River Land Use District in Wright County:  That 
        part of government lots 3 and 4 located in Section 26, Township 
        121 North, Range 23 West, lying south and west of Wright County 
        State-Aid Highway Number 42. 
           (b) The following area is deleted from the Mississippi 
        Recreational River Land Use District in Sherburne County:  That 
        part of government lots 1, 2, and 3 in Section 35, Township 33 
        North, Range 28 West, lying north and east of Sherburne County 
        Road Number 14; and that part of government lot 2 of Section 36, 
        Township 33 North, Range 28 West, lying north and east of 
        Sherburne County Road Number 14 That part of Government Lots 1 
        and 2 in Section 35, Township 33 North, Range 28 West, Sherburne 
        County, Minnesota, lying north and east of the centerline of 
        County State Aid Highway No. 14 and that part of said Government 
        Lot 2 and that part of Government Lot 3, said Section 35 lying 
        north and east of County State Aid Highway No. 11.  Together 
        with that part of Government Lot 2, Section 36, said Township 33 
        North, Range 28 West, lying north and east of said centerline of 
        County State Aid Highway No. 14. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 9.  [REVISOR'S INSTRUCTION.] 
           The revisor of statutes shall renumber Minnesota Statutes, 
        section 580.041, subdivision 1, as subdivision 1b. 
           Presented to the governor May 24, 2005 
           Signed by the governor May 27, 2005, 4:41 p.m.