House votes to ease requirements on plats, contracts for deed

It would cost thousands of dollars less to cancel a contract for deed, under a bill the House passed 128-0 Thursday.

HF262, sponsored by Rep. Dennis Smith (R-Maple Grove), also includes another proposed reform of Minnesota real estate law: letting local governments use evidence besides abstracts to create new plats.

Rep. Dennis Smith

The bill, Smith’s first as a state legislator, now moves to the Senate, where Sen. Dave Thompson (R-Lakeville) is the sponsor.

Smith called the bill “cost effective” and “consumer friendly.”

“The only group who loses is the attorneys,” Smith said, “and even with that they still brought this bill forward for the common good.”

The bill would make it easier for property owners to cancel a contract for deed that’s five or more years old. They could remove it from the property’s certificate of title with a simple examiner’s directive (a letter to the examiner of titles) — saving them a lot of money, Kevin Dunlevy, co-chair of the real property section of the Minnesota State Bar Association, told the House Civil Law and Data Practices Committee Jan. 27.

“There are a lot of situations where ma and pa sell the farm or the house to the young couple on a contract for deed. But the young couple doesn’t pay and so mom and dad have to pay to cancel the contract. What a lot of them don’t know is that, with Torrens property, there’s another step. They have to go do a petition subsequent. And petitions subsequently cost about five grand.”

That makes Torrens property — the system used to register some real estate in Minnesota — “more user friendly,” Dunlevy said.

The bill’s second provision would loosen rules on the types of evidence of title local governments can use in platting land. Added to abstracts — which Dunlevy says are “becoming rare” — are other “reliable types of title evidence” such as easements and mortgages.