This month we alert you to several items passed in the recent legislative session that will become effective August 1 and that affect Minnesota real estate. There are other legislative changes not listed here that may also affect real estate, but we have not highlighted them here because they do not have broad application. All section numbers are to Minnesota Statutes.
1. 507.403: there are some minor changes to recording requirements for satisfactions of mortgages, and the law has now been expanded to partial releases. Mortgage holders should be aware that this section's technical requirements now apply not just to satisfactions, but also to partial releases of mortgages. Such releases and satisfactions are effective by the last assignee of a mortgage even if some prior assignments have not been filed.
2. 541.051: imposed an outside limitation on actions for contribution or indemnity for any construction defect, regardless when the defect is discovered. The outside limitation for an action for contribution or indemnity is now 14 years after substantial completion of the construction.
3. 523.20: changes to the statutory short form power of attorney. Any statutory short form power of attorney executed on or after January 1, 2014, now must contain an acknowledgment that an attorney-in-fact has read and understood a notice that contains specific language required by statute and an acknowledgment that the principal has read and understood a notice that contains specific language required by statute. Thus, the power of attorney must now be executed by both the principal and the attorney-in-fact.
4. 519A: new statute adopting the Uniform Community Property Rights at Death Act. The changes provide a rebuttable presumption that certain property acquired during marriage by a spouse in a jurisdiction where that property could have been community property is presumed to be community property in Minnesota. This means that upon the death of the spouse, one half of the property deemed to be community property is owned by the surviving spouse and is not subject to transfer by will or other estate planning mechanisms.
5. 504B.151: new subdivision imposes a $500 penalty on a landlord who enters into a residential lease with a term exceeding certain parameters after receiving a contract for deed cancellation or mortgage foreclosure notice. Landlords of distressed residential properties should be mindful of this restriction when negotiating residential leases.
6. 582.043: imposes "loss mitigation" obligations on "servicers" of mortgages encumbering residential, owner occupied properties of not more than 4 dwelling units as security for non-commercial loans. This section has a significant impact on the manner in which residential mortgages may be foreclosed.
7. 279.01 (scroll down to line 58.21): new subdivision allows later payment of real estate taxes by servicemen and women. The changes permit servicemen and women to pay their property taxes on homestead properties 4 months beyond the typical deadline.
8. 281.17 (scroll down to line 61.31): revisions shorten redemption period for tax forfeited land from 5 years to 3 years for certain categories of property (agricultural, non-residential recreational, etc.). The changes significantly shorten the tax forfeiture process timeline for these properties.
9. 287.05 (scroll down to line 62.28): addition authorizes Hennepin & Ramsey counties to impose additional MRT for deeds/mortgages on or after July 1, 2013. MRT for these two counties is now calculated at a rate of .34%, rather than .33% (which is the rate that applies to the rest of the state).
10. 290A.04 (scroll down to line 6.1): changes to the homestead credit refund calculation. Homeowners should consult with their tax professionals to determine how the credit refund changes will affect them.
Keep in mind that, with certain exceptions, most new legislation in Minnesota becomes effective August 1. For this reason, it is prudent, each year after August 1, to review the laws that apply to your transaction or matter to ascertain whether they have been modified, amended, etc.