The following topics were discussed at the December 11, 2009 meeting of the MLTA Legislative Affairs Committee.

Summary Real Estate Disposition vs. Divorce Decree
The Minnesota County Recorders Association (MCRA) Legislative Committee in conjunction with MN PREP encourages the recording of a Summary Real Estate Disposition in real estate transactions impacted by divorce rather than recording a Judgment and Decree. The latter document contains personal information which ends up as public record.

Mechanic's Lien case – Imperial Developer's v. Calhoun Development, et. al.
In this case, a construction mortgage for 3 lots was recorded properly before construction began, but the registrar only posted it on one certificate but not the other two.  Mechanic’s liens were subsequently filed, and the court held that the liens were prior in time and had priority because the mortgage was not memorialized on the certificate until after construction began. This case reflects a frequent question, namely when is a document considered properly recorded with the registrar, e.g. when it has a document number on it or when it is memorialized in the court?

MCIOA – Lien for Assessments
An item of interest in a recent proposal put forward by the Minnesota Common Interest Ownership Act (MCIOA) Committee is a revision to Minnesota Statute 515B.3-116 regarding assessment liens.  The Committee has proposed an assessment lien against units owner by the declarant in the event there is an operating deficit. The issue for title insurers is that they won’t know when they close on the sale of a unit from the declarant to a new buyer whether or not there is an operating deficit because the association might not even know there is an operating deficit at the time of closing.

CIC Certificate "supplemental declarations
Due to confusion over how to memorialize supplemental declarations on CIC Certificates, this proposal seeks to add the phrase “supplemental declaration” anywhere where the words “declaration” or “amendment to a declaration” appear.

Indian Burial Mound Case
A Hennepin County, Minn., District Court judge, recently ruled that a couple’s title insurance policy provided coverage involving a property that was built on a federally protected Indian burial site by granting a $250,000 judgment to the homeowners. The homeowners discovered their property sat on a burial ground after they attempted to replace their garage. The city denied a building permit because it was suspected the property included burial mounds. Eventually, the state archeologist officially designated part of the property as an Indian cemetery.

The judge noted that the title commitment stated that it relied on public records in making its commitment and that the location of the Indian mounds is a matter of public record because the records are maintained by the Minnesota state archeologist.

Interest on Escrow Accounts
A bill was proposed during the last legislative session that would require closing agents to manage pooled interest-bearing trust accounts for the benefit of the state. The bill died quickly due to a weak financial note, but it is likely to be revived during the 2010 session.

Notaries Reported to DOC by County Recorders
County recorders have been reporting notaries to the DOC for potential violations such as lapsed licenses.

2009 Minnesota Legislative Update

Set forth in the attached is a final summary of real estate-related bills that passed the Minnesota Legislature and were signed in to law by Governor Pawlenty.  The new laws took effect August 1, 2009 unless otherwise indicated.

2009 Minnesota Legislative Update