Minnesota Real Estate Broker Exam — All Questions

Minnesota's definition of "subdivided land" reaches real estate that is:

• a.Located in Minnesota only, and divided into six or more separate lots
• b.Located anywhere, if divided or proposed to be divided for sale or lease✓
• c.Located anywhere, if the parcels are unimproved and larger than ten acres
• d.Located in Minnesota only, and held by an out-of-state subdivider

Minn. Stat. 83.20, subd. 11 defines "subdivision" or "subdivided land" as any real estate, wherever located, improved or unimproved, which is divided or proposed to be divided for the purpose of sale or lease, including sales or leases of any timeshare interest, unit in a common interest community, or similar interest in real estate. The phrase "wherever located" is the point: a Minnesota licensee who offers out-of-state land to Minnesota buyers is within chapter 83. The other three options graft on a Minnesota-situs limit, a lot count, a subdivider residency test, or an improvement and acreage test, none of which appears in the definition.

The Minnesota Common Interest Ownership Act governs all common interest communities created in Minnesota on and after:

• a.January 1, 2000
• b.August 1, 1980
• c.June 1, 1994✓
• d.July 1, 2010

Minn. Stat. 515B.1-102, paragraph (a) provides that except as that section otherwise provides, chapter 515B, and not chapters 515 and 515A, applies to all common interest communities created within this state on and after June 1, 1994. Paragraph (b) then sets out how the Act reaches communities created earlier: it applies to condominiums created under chapter 515A as to events and circumstances occurring on and after that same date, and a listed set of its sections applies to condominiums created under chapter 515. The other dates match nothing in the Act, and choosing one would leave a licensee looking in chapter 515 or 515A for rules that chapter 515B now supplies.

On the resale of a Minnesota common interest community unit, the resale disclosure certificate the owner furnishes must be dated no more than:

• a.30 days before the purchase agreement or the conveyance
• b.90 days before the purchase agreement or the conveyance✓
• c.180 days before the purchase agreement or the conveyance
• d.12 months before the purchase agreement or the conveyance

Minn. Stat. 515B.4-107, paragraph (a), clause (3) requires the unit owner, before execution of any purchase agreement or otherwise before conveyance, to furnish a resale disclosure certificate from the association dated not more than 90 days prior to the date of the purchase agreement or the date of conveyance, whichever is earlier. Thirty days is stricter than the Act, and 180 days and 12 months would let the buyer rely on assessment and reserve figures the association may have changed. The owner must also furnish the declaration, articles, bylaws, rules and regulations, and any amendments, together with the master association documents where the community is subject to a master declaration.

A Minnesota unit owner asks the association for a resale disclosure certificate. The association must furnish it within:

• a.Three days after the request, and may not charge any fee
• b.Thirty days after the request, and may charge a reasonable fee
• c.Ten days after the request, and may charge a reasonable fee✓
• d.Sixty days after the request, and may charge its actual cost

Minn. Stat. 515B.4-107, paragraph (d) requires the association, within ten days after a request by a unit owner or the owner's authorized representative, to furnish the certificate required in paragraph (a), and permits the association to charge a reasonable fee for the certificate and any related association documents. Three days is shorter than the Act allows and a no-fee rule contradicts the express permission to charge. Thirty and sixty days would stall a closing timeline built around a certificate that must be no more than 90 days old. The same paragraph protects the owner: a unit owner is not liable to the purchaser for erroneous information the association supplied and included in the certificate.

A Minnesota association's lien for unpaid assessments is perfected by:

• a.Recording the declaration, with no further recording required✓
• b.Serving a written assessment demand on the delinquent unit owner
• c.Filing a claim with the registrar of titles within 120 days
• d.Recording a notice of lien with the county recorder each year

Minn. Stat. 515B.3-116, paragraph (a) gives the association a lien on a unit for any assessment levied against it from the time the assessment becomes due, and provides that recording of the declaration constitutes record notice and perfection of any assessment lien, so no further recording of a notice or claim of lien is required. Annual notices, a demand on the owner, and a filing deadline are all mechanics the Act deliberately does without. Paragraph (b) sets the lien's rank: it is prior to other liens and encumbrances except encumbrances recorded before the declaration, any first mortgage on the fee, real estate tax and governmental liens, and a master association lien, and it does not affect the priority of mechanic's liens.

Minnesota real property taxes exceeding $100 on a parcel are payable in two installments due:

• a.Before May 16 and before the following October 16✓
• b.Before April 16 and before the following September 16
• c.Before June 16 and before the following November 16
• d.Before March 16 and before the following August 16

Minn. Stat. 279.01, subd. 1, paragraph (a) provides that when the taxes against any tract or lot exceed $100, one-half of the amount due must be paid prior to May 16 and the remaining one-half prior to the following October 16, with penalties of two percent on homestead and four percent on nonhomestead property if an installment is unpaid at its due date. The other date pairs shift the schedule by a month or more and would put a proration or a closing statement wrong. Paragraph (c) adds that when taxes are $100 or less, the first-half due date and penalties apply to the entire amount, and certain seasonal recreational and class 3a commercial property has a first-half date of June 1.

After a Minnesota residential tenancy ends and the tenant gives a mailing address, the landlord must return the deposit or send a written statement of the reason for withholding within:

• a.Ten days after termination of the tenancy
• b.Six weeks after termination of the tenancy
• c.Three weeks after termination of the tenancy✓
• d.Sixty days after termination of the tenancy

Minn. Stat. 504B.178, subd. 3, paragraph (a) requires every landlord, within three weeks after termination of the tenancy and after receipt of the tenant's mailing address or delivery instructions, to return the deposit with interest or furnish a written statement showing the specific reason for withholding it, with a five-day period instead where the tenant leaves because the building was legally condemned through no fault of the tenant. Ten days is shorter than the statute allows, and six weeks and sixty days are longer. The landlord may withhold only amounts reasonably necessary to remedy defaults in rent or other funds due, or to restore the premises to their condition at the start of the tenancy, ordinary wear and tear excepted, and bears the burden of proving the reason.

A Minnesota residential security deposit held by a landlord is:

• a.Not received in a fiduciary capacity, and bears one percent simple interest✓
• b.Received in a fiduciary capacity, and bears three percent simple interest
• c.Received in a fiduciary capacity, and must sit in a broker trust account
• d.Not received in a fiduciary capacity, and bears no interest of any kind

Minn. Stat. 504B.178, subd. 2 provides that a deposit of money securing performance of a residential rental agreement is not considered received in a fiduciary capacity within the meaning of section 82.55, subdivision 26, but is held by the landlord for the tenant and bears simple noncompounded interest at the rate of one percent per annum, with any interest amount under $1 excluded. That express carve-out from the trust funds definition is why a security deposit is not automatically brokerage trust money, though section 82.75, subdivision 7 lets a broker maintain interest bearing accounts for deposits in accordance with section 504B.178. Three percent and a no-interest rule both misstate the rate the subdivision fixes.

A Minnesota buyer takes a deed and does not record it. A later buyer of the same land purchases in good faith for value and records first. As between them, the earlier deed is:

• a.Valid against the later buyer, because it was delivered first
• b.Valid against the later buyer, if the earlier buyer took possession
• c.Void against the later buyer only if the later deed is a warranty deed
• d.Void against the later buyer who recorded first✓

Minn. Stat. 507.34 provides that every conveyance of real estate must be recorded in the county where the land is situated, and that an unrecorded conveyance is void as against any subsequent purchaser in good faith and for a valuable consideration whose conveyance is first duly recorded, and as against an attachment or judgment against the record owner. Delivery alone therefore does not win the race. The section says nothing about possession as a cure. Its closing sentence rejects the last option directly: the fact that the first recorded conveyance is a quitclaim deed does not affect the subsequent purchaser's good faith or by itself give notice of an unrecorded conveyance.

A purchaser of Torrens land in Minnesota receives a certificate of title in good faith and for value. That certificate is subject to:

• a.A purchase agreement the prior owner signed and never performed
• b.A lease of three years or less where the tenant is in actual occupation✓
• c.An unrecorded mortgage the prior owner gave to a private lender
• d.A restrictive covenant that was omitted from the certificate of title

Minn. Stat. 508.25 provides that a person receiving a certificate of title in good faith and for valuable consideration holds it free from all encumbrances and adverse claims except those noted on the last certificate and a short list of statutory exceptions, which includes any lease for a period not exceeding three years when there is actual occupation of the premises under it, along with federal claims, real property tax and special assessment liens, rights in public highways, appeal rights, the rights of a person in possession under a deed or contract for deed from the certificate owner, and outstanding mechanic's lien rights. An unperformed purchase agreement, an unrecorded mortgage, and an omitted covenant are exactly the interests the Torrens certificate cuts off.

Minnesota's mortgage registry tax is imposed at what rate, and on whom?

• a.0.0033 of the secured debt, and the mortgagee is liable
• b.0.0023 of the secured debt, and the mortgagor is liable✓
• c.0.0023 of the property's assessed value, and the mortgagee is liable
• d.0.0033 of the property's sale price, and the mortgagor is liable

Minn. Stat. 287.035 imposes a tax on the privilege of recording a mortgage at a rate of .0023 of the debt or portion of a debt secured by a recorded mortgage of Minnesota real property, and names the mortgagor as the person liable; the tax does not reach lawful interest that may accrue on the debt. The rate .0033 belongs to the deed tax, which section 287.21, subdivision 1 imposes on the net consideration for a deed, with a flat $1.65 where the consideration is $3,000 or less. Assessed value and sale price are the wrong bases: the registry tax follows the debt secured, not the value or the price.

Minnesota's statutory warranties on a new dwelling run for one year, two years, and ten years. The ten-year warranty covers:

• a.Faulty workmanship and defective materials in the finished interior
• b.Major construction defects due to noncompliance with building standards✓
• c.Faulty installation of plumbing, electrical, heating, and cooling systems
• d.Ordinary wear on appliances and fixtures supplied by the builder

Minn. Stat. 327A.02, subd. 1 requires the vendor of a completed dwelling to warrant that for one year from the warranty date the dwelling is free from defects caused by faulty workmanship and defective materials due to noncompliance with building standards, that for two years it is free from defects caused by faulty installation of plumbing, electrical, heating, and cooling systems, and that for ten years it is free from major construction defects. The first two distractors are the one-year and two-year coverages, so pairing either with the ten-year term misreads the ladder. Ordinary wear is not a defect due to noncompliance with building standards. Subdivision 2 provides that these warranties survive the passing of legal or equitable title to the vendee.

Which characteristic is protected in the sale or rental of real property by the Minnesota Human Rights Act but not named in the federal Fair Housing Act?

• a.Familial status of the prospective occupants
• b.National origin of the prospective occupants
• c.Disability of the prospective occupants
• d.Status with regard to public assistance✓

Minn. Stat. 363A.09, subd. 1 lists the characteristics protected in real property transactions as race, color, creed, religion, national origin, sex, gender identity, marital status, status with regard to public assistance, disability, sexual orientation, and familial status. Status with regard to public assistance, along with creed, marital status, sexual orientation, and gender identity, is a Minnesota addition, so refusing to rent because a prospective tenant would pay with a housing voucher raises a state law problem the federal list does not reach. Familial status, national origin, and disability are federally protected as well, so none of them distinguishes Minnesota law. Subdivision 2 applies the same list to brokers, salespersons, and their employees and agents.

A Minnesota salesperson tells owners that the racial composition of their block is changing and that values will fall. Under the Minnesota Human Rights Act this is an unfair discriminatory practice when it is done:

• a.To induce a transaction from which the licensee may benefit financially✓
• b.In writing rather than in a spoken conversation with the owner
• c.Without documentary support for the licensee's prediction of values
• d.After the owner has already signed a listing agreement with the firm

Minn. Stat. 363A.09, subd. 4 makes it an unfair discriminatory practice for a broker or salesperson, for the purpose of inducing a real property transaction from which the person, the person's firm, or any of its members may benefit financially, to represent that a change has occurred or may occur in the composition of owners or occupants with respect to the listed characteristics and to represent that the change will or may result in undesirable consequences such as lower property values, more crime, or worse schools. The prohibition turns on that inducement purpose, not on whether the statement was written, and not on the presence or absence of supporting data. Nothing in the subdivision limits it to conduct before a listing is signed.

Under Minnesota's statute of frauds, a contract for the sale of land signed by the seller's agent is:

• a.Not enforceable unless the seller separately ratifies it in writing
• b.Not entitled to record unless the agent's authority is also recorded✓
• c.Not enforceable unless the agent holds an active real estate license
• d.Not entitled to record unless the agent signs before a notary public

Minn. Stat. 513.05 makes every contract for the leasing of land for longer than one year, or for the sale of any lands or interest in lands, void unless the contract or a note or memorandum of it, expressing the consideration, is in writing and subscribed by the party by whom the lease or sale is to be made or by that party's lawful agent authorized in writing; the section then adds that no such contract, when made by an agent, is entitled to record unless the authority of the agent is also recorded. The written authority is what the section requires, so a later ratification is not the mechanism it names, and licensure is a chapter 82 question rather than a statute of frauds question. Notarization is an acknowledgment requirement and does not supply the missing recorded authority.

Minn. Stat. 336.2A-201, cited in the Minnesota state content outline under the heading "Minnesota Statute of Frauds," actually governs:

• a.Lease contracts for goods under Uniform Commercial Code Article 2A✓
• b.Options to purchase real property held open for consideration
• c.Leases of real property in Minnesota for a term of more than one year
• d.Contracts for deed conveying residential real property

Minn. Stat. 336.2A-201 is the statute of frauds of Uniform Commercial Code Article 2A, which covers leases of goods: a lease contract is unenforceable unless the total payments, excluding payments for options to renew or buy, are less than $1,000, or there is a signed record indicating a lease contract was made and describing the goods leased and the lease term. Leases of real property for more than a year fall under section 513.05, and options and contracts for deed are interests in land governed by chapter 513 and, for contracts for deed, chapters 559 and 559A. The bulletin's heading is broader than the section it cites, so read the citation rather than the heading.

Minnesota requires a seller to disclose the status and location of known wells:

• a.Within ten days after the purchase agreement is fully signed
• b.At the closing, on the settlement statement the closer prepares
• c.Before signing an agreement to sell or transfer the real property✓
• d.Only when the buyer's inspection identifies a well on the property

Minn. Stat. 103I.235, subd. 1, paragraph (a) requires the seller, before signing an agreement to sell or transfer real property, to disclose in writing to the buyer either a statement that the seller does not know of any wells or a disclosure statement giving the legal description and county and a map showing each well's location, indicating for each whether it is in use, not in use, or sealed. A separate well disclosure certificate is signed at closing under paragraph (b), which is why a closing-only answer is incomplete rather than merely late. The duty does not wait on an inspection. A county recorder or registrar may not record a covered deed without the certificate or the statutory "no wells" statement in the deed.

A Minnesota seller whose property is served by a septic system must, before signing an agreement to sell, deliver a written statement that the sewage:

• a.System will be brought into compliance at the seller's expense
• b.Was tested for coliform bacteria within the previous 24 months
• c.Goes to a permitted facility, or is subject to applicable requirements✓
• d.System was installed by a licensed Minnesota plumbing contractor

Minn. Stat. 115.55, subd. 6, paragraph (a) requires the seller, before signing an agreement to sell or transfer real property, to disclose in writing how sewage generated at the property is managed, by delivering a statement that the sewage either goes to a facility permitted by the Pollution Control Agency or does not and is therefore subject to applicable requirements. Where the sewage is not sent to a permitted facility, paragraph (b) requires a description of the system, the legal description and county, a map of its location, disclosure of what the seller knows about compliance status and any straight pipe, and a copy of any inspection report the seller holds. Note that section 115.55 is now titled SUBSURFACE SEWAGE TREATMENT SYSTEMS; the bulletin still calls it Individual Sewage Treatment Systems.

A Minnesota seller knows the property contains an underground storage tank. Before the sale the seller must:

• a.Remove the tank and file a closure report with the Pollution Control Agency
• b.Obtain a written release of liability from the Petroleum Tank Release account
• c.Inform the purchaser in writing of the owner's notification requirements✓
• d.Certify that the tank has been tested for leaks within the past six months

Minn. Stat. 116.48, subd. 5 requires a person who sells a tank intended to be used as an underground or aboveground storage tank, or property that the seller knows contains such a tank, to inform the purchaser in writing of the owner's notification requirements under that section, which include notifying the agency of the tank's age, size, type, location, uses, and contents. Removal and closure are separate regulatory obligations that section 116.48 does not make a condition of sale. No release of liability is issued out of the petroleum tank release program in sections 115C.01 to 115C.09, which provides reimbursement for cleanup costs. A recent leak test is not the disclosure the subdivision calls for.

The ordinary redemption period for a Minnesota mortgagor after a foreclosure sale by advertisement is:

• a.Thirty days after the sale
• b.Three months after the sale
• c.Two years after the sale
• d.Six months after the sale✓

Minn. Stat. 580.23, subd. 1 gives the mortgagor, the mortgagor's personal representatives, or assigns six months after the sale to redeem by paying the sum for which the land was sold with interest at the rate stated in the certificate of sale, or six percent if no rate is stated, together with any further sums payable under sections 582.03 and 582.031. Thirty days and three months are shorter than the statute allows, and two years appears nowhere in chapter 580. Redemption funds and documents must be delivered at the recipient's normal place of business on a business day between 9:00 a.m. and 4:00 p.m., and the sheriff may accept less than the full amount if the certificate holder confirms in writing that it has agreed to do so.

Which fact extends a Minnesota mortgagor's redemption period to 12 months?

• a.The mortgaged premises were the mortgagor's homestead at the sale
• b.The mortgagor filed a written objection before the sheriff's sale
• c.The mortgage was assigned at least once before the foreclosure began
• d.The mortgaged premises exceeded 40 acres when the mortgage was executed✓

Minn. Stat. 580.23, subd. 2 lists the cases in which the period is 12 months rather than six, including a mortgage executed before July 1, 1967, an amount due at the notice of sale that is less than 66-2/3 percent of the original principal, mortgaged premises that exceeded 40 acres at execution, several dated rules for parcels between ten and 40 acres in agricultural use, and a reverse mortgage as defined in section 47.58. Homestead status is not on that list; Minnesota's homestead protection operates through chapter 510, not through the redemption period. A written objection and an assignment of the mortgage appear nowhere in the subdivision.

A Minnesota lender forecloses a mortgage through the courts rather than by publishing a notice of sale. That proceeding is governed by:

• a.Chapter 559, cancellation of contracts for deed
• b.Chapter 580, foreclosure by advertisement
• c.Chapter 582, foreclosure general provisions
• d.Chapter 581, foreclosure by action✓

Minnesota provides two mortgage foreclosure routes, and the state content outline cites both: chapter 580 governs foreclosure by advertisement, the nonjudicial route in which the mortgagee publishes a notice and the sheriff conducts the sale, while chapter 581 governs foreclosure by action, the judicial route begun by a complaint. Chapter 582 carries general provisions that apply to both, such as the additional sums recoverable under sections 582.03 and 582.031, so it is not itself the proceeding. Chapter 559 governs statutory cancellation of a contract for deed, which is a different security device with a different remedy and is not a mortgage foreclosure at all.

A Minnesota contract for deed executed in 2019 goes into default. The statutory notice of cancellation ordinarily terminates the contract:

• a.15 days after service of the notice on the purchaser
• b.60 days after service of the notice on the purchaser✓
• c.30 days after service of the notice on the purchaser
• d.180 days after service of the notice on the purchaser

Minn. Stat. 559.21, subd. 2a provides that for a contract for the conveyance of real estate executed on or after August 1, 1985, the notice must state that the contract will terminate 60 days after service, subject to a shorter period allowed or a longer period required by subdivision 4. Fifteen days matches nothing in the section. Thirty days is the shorter period subdivision 4 allows for earnest money contracts, purchase agreements, and exercised options, and 90 days is required for a contract for deed executed by an investor seller, so neither is the ordinary rule. The purchaser reinstates by curing the default, making payments due, paying the costs of service, paying two percent of the amount in default, and paying the statutory attorney fee amount.

Chapter 559A, which requires disclosures on a residential contract for deed, applies when the seller is:

• a.An investor seller, as that chapter defines the term✓
• b.A relocation company reselling a transferred employee's home
• c.A licensed real estate broker acting for the record owner
• d.A lender that acquired the property through a foreclosure sale

Minn. Stat. 559A.02 provides that chapter 559A applies only to residential real property where a purchaser is entering into a contract for deed with an investor seller, and lets a contract for deed recite that the property is not residential real property or that the seller is not an investor seller as prima facie evidence that the chapter does not apply. The chapter is not triggered by the presence of a licensee, by a relocation sale, or by the seller having been a foreclosing lender, unless that seller meets the investor seller definition. Section 559A.03 then requires the disclosures to be affixed to the front of the purchase agreement, and bars the investor seller from entering the contract for deed earlier than ten calendar days after the purchase agreement is executed and the disclosures are provided. PSI's Minnesota reference list cites chapter 559 but omits chapter 559A.

Minnesota's homestead exemption from creditors' claims may include a quantity of land not exceeding:

• a.160 acres✓
• b.80 acres
• c.320 acres
• d.40 acres

Minn. Stat. 510.02, subd. 1 provides that the homestead may include any quantity of land not exceeding 160 acres, and separately caps the exemption in value, whether claimed by one or more debtors, at a dollar figure that is higher for a homestead used primarily for agricultural purposes. Forty, eighty, and 320 acres are not the figure the subdivision names. Subdivision 2 requires those dollar amounts to change periodically in the manner provided under section 550.37, subdivision 4a, with the commissioner of commerce publishing the adjusted figures, so the acreage limit is the stable number to carry into the exam while the value limit must be checked against the current publication.

A Minnesota mechanic's lien ceases unless, within 120 days after the last work or material, the claimant:

• a.Obtains the owner's written acknowledgment of the unpaid balance
• b.Files a complaint in the district court where the land lies
• c.Sends the owner a demand letter by certified mail, return receipt
• d.Records a lien statement and serves a copy on the owner✓

Minn. Stat. 514.08, subd. 1 provides that the lien ceases at the end of 120 days after doing the last of the work or furnishing the last item of skill, material, or machinery unless within that period a statement of the claim is filed for record with the county recorder, or with the registrar of titles for registered land, and a copy of the statement is served personally or by certified mail on the owner, the owner's authorized agent, or the person who contracted with the contractor. Both steps are required, so recording alone or serving alone is not enough. Commencing the foreclosure action comes later, under section 514.11, and is not what preserves the lien within the 120 days. A demand letter and an owner's acknowledgment are not statutory substitutes.