Klun Law is your Minnesota Real Estate firm.   Private development often includes zoning, land use, platting, and subdivision issues.  Our diversified background provides us with the unique ability to resolve even the most complicated issues.  We are prepared to represent individual and business clients' interests before governmental bodies, including city councils, planning commissions, and economic development authorities.

• The seller discloses to the buyer that there is not a sewage treatment system on the property
• The property has a sewage treatment system with a vaild certificate of compliance or notice of non-conformity
• The seller and buyer file a transfer agreement with the St. Louis County Environmental Services Center

Surveys in Real Estate Transactions 

The survey is used to confirm that the real estate described in legal documents is the same real estate that is contemplated by the parties to a transaction.  It is used to describe how other real estate interests impact the subject property and to understand their significance The survey is a visual tool used to understand complex real estate interests and that may serve as the basis for a legal claim if the survey is inaccurate, either against the surveyor or a title company.

Does the law supply a right of access to every landlocked parcel?

Septic Inspection

Twenty-five percent of homes have a septic system.  To protect home buyers from costly and frustrating septic issues, St. Louis County created an ordinance often called a point of sale requirement, states that a home cannot be sold unless one of the following requirements is met:

• The seller discloses to the buyer that there is not a sewage treatment system on the property
• The property has a sewage treatment system with a vaild certificate of compliance or notice of non-conformity
• The seller and buyer file a transfer agreement with the St. Louis County Environmental Services Center

If you are a home owner, it is in your best interest to get a septic inspection often.  A valid certificate of compliance lasts three years, so having the system inspected in a timely manner can save the property owner, a potential property buyer, and other parties a vast amount of time and money.

Well Disclosure

At the time of sale a home owner must disclose the status of all wells on the property along with a valid sketch of the location of each well.  In St. Louis County and Lake County a well is not required to be tested or inspected at the time of sale, but often the lending institution may require a well test and inspection in order to protect the buyer.  Often water contaminentsare found leaving the seller distraught and unable to close on a home.  Having well testing and inspections done regularly along with the above mentioned septic testing can truly save a land transaction.

Surveys in Real Estate Transactions

 
The survey is used to confirm that the real estate described in legal documents is the same real estate that is contemplated by the parties to a transaction.  It is used to describe how other real estate interests impact the subject property and to understand their significance The survey is a visual tool used to understand complex real estate interests and that may serve as the basis for a legal claim if the survey is inaccurate, either against the surveyor or a title company.

Does the law supply a right of access to every landlocked parcel?

 Not necessarily, while Minnesota law has established the cartway as a statutory mechanism to provide access where none is otherwise available, this mechanism does not guarantee access in every situation.

The proper body to establish a cartway is the town board or, if the township is unorganized, the board of county commissioners for the county in which the tract to be accessed by the cartway is located. Two statutes are relevant. Minn. Stat. § 164.08, subd. 1 provides that a cartway may be established in extremely limited circumstances: the cartwaycannot be more than one-half mile in length, must be sought by a petition signed by at least five voters who are "freeholders of the town," must be established on a section line, and must serve a tract of land consisting of at least 150 acres, of which at least 100 are tillable.  By contrast, § 164.08, subd. 2 provides that a cartwayshall be established upon petition by the owner of a tract containing at least five acres, and who has no access except over the lands of others, or whose access is less than two rods (33 feet) in width. Subd. 2 also provides that a cartway shall be established upon petition of an owner of a tract that, as of January 1, 1998, was of record as a separate parcel, contains at least two but less than five acres, and otherwise has no access.

Cabin Succession Planning

 
The Lake is truly a magical place. For years or perhaps decades, family, friends and loved ones have gathered at the family cabin to build and share memories that span generations. The fun-filled campfire conversations are priceless. Of equal importance, are the conversations spent discussing the future of the family cabin.
 If your goal is to pass on the family cabin to the next generation, planning ahead is crucial.  Together you can determine how the cabin will best fit into the family’s future. For example, perhaps not all family members are interested in continuing to own the cabin or perhaps not all family members have the financial resources to maintain the cabin. Inevitably, part of the communication process involves the preparation of an estate plan. The plan must be tailored to fit your family’s needs. A cabin trust just one estate planning tool that can be utilized to help maintain and pass on the family hideaway. For example, specific trust provisions could provide future instruction to your family on important issues such as taxes, maintenance, insurance, ownership and a potential sale.
 
Through open, honest communication and with the right planning, you and your family can ensure the family cabin remains a source of joy and respite for your family. The preparation of an estate plan should be thought of as a priceless preventative tool. Talk with your family today and take that next step of developing an estate plan that protects both your family and your private hideaway.
 
Setting the Stage for Future Generations to Keep the Cabin. 
 
Problems frequently arise when the "do nothing" plan results in equal undivided interests in the adult children as tenants in common, whether they acquired title in that fashion as a result of lifetime gift, or inheritance by Will, Trust, or intestate succession.  The Attorneys at Klun Law Firm will help you navigate the estate planning waters.  For over 30 years, we help helped thousand of families pass on the family cabin.  
 
The Usual Problem: Unequal Use, Maintenance, and Payment of Costs.

The common situation is where three adult children, for example, inherit the cabin. One pays the majority of the costs, and the other two will justify that to themselves and to each other by referring to the fact that this adult child has the best ability to pay. A second adult child is a handyman, and is constantly at the lake fixing things and keeping the place maintained. The other two children may justify that by stating that this adult child is the best at doing this.  A third adult child is an avid fisherman, and doesn't chip in much at paying the expenses (he's put too much money into his expensive boat) or helping out with maintenance (it takes time away from being out on the water, and that's what it's all about, anyway). Layered on top of this is that the cabin can't accommodate all three of them with their families at once. They need some sort of lottery system to address the use. Add to the facts that child one lives out of state, loves the place dearly, and really wants exclusive use of it during July 4th week, and we have the formula for disaster. Unfortunately, cabins have been sold in many of these situations.

 Other Concerns

There are a number of other issues that also arise if this is considered in a long-term perspective.

1. What if one of the adult children dies?

2. Is the one-third interest an available asset if one child goes to a nursing home?

3. What if one of the one of the adult children has a financial problem: bankruptcy, judgment, tax lien, or child support arrearage?

4. How to handle major repairs or improvements to the property?

Cabin Trusts

One answer to the problem, probably from an estate planning attorney, is to use a trust agreement. They may include a life estate to an aging parent or parents, and leave ownership in the trust itself until the last of the adult children dies. At that point, the trust can distribute to the grandchildren of the settlor. To avoid a violation of the rule against perpetuities, the trust probably shouldn't continue beyond the generation of the adult children.

Advantages of Cabin Trusts

1. Familiarity. Trusts are entities that estate planners use all the time. Existing trust forms can be modified to work.

2. Superior device for distribution. Trusts are true estate planning entities, and probably work best at the distribution to the right people whenever they terminate.

Drawbacks of Cabin Trusts

1. No perpetual existence. They don't have perpetual existence, because the rule against perpetuities applies.

2. They aren't easy to amend. They are either irrevocable in the first place if they are intended to shelter from nursing home costs, or else they become irrevocable once the aging parent/settlor dies.

3. Shares can't be changed. The shares can't be changed over time to reflect the unequal contribution of labor or money or the unequal use of the property.

4. Distribution can't be changed. The ultimate payout provisions are probably cast in stone. About the only flexibility that can be easily built in is a general or special power of appointment.

5. Choice of Fiduciary. Who is the trustee? This can be a true dilemma. Are all three adult children named as co-trustees, and a majority vote sufficient to bind the trust? Is one child chosen? Is there any power of removal?

6. Difficulty in fulfilling fiduciary duties owed to remainder beneficiaries. The adult children are essentially lifetime beneficiaries of the trust. If they also serve as trustee(s) and make certain decisions benefitting them individually and negatively affecting the remainder beneficiaries, their fiduciary duty may have been breached.

Using a Business Entity

Using a business entity seems to make some sense to eliminate some of the above problems.

Advantages of Using a Business Entity

1. Perpetual Existence. An entity with perpetual existence solves a number of the problems.

2. Ability to Amend Controlling Documents. The ability to amend the controlling documents over time is very appealing.

3. Ability to Alter the Shareholders and Number of Shares. The ability to alter the number of shares is probably something that the family will want or need as time goes by.

4. Transfer Restrictions. Just as any other small business entity, one established for ownership of the cabin can contain transfer restrictions intended to accomplish several goals: preventing sale to an outside party without agreement; valuation and payment provisions in case of a bona fide sale; and valuation at lowest justifiable level and payout provisions at the slowest possible rate in case of divorce, bankruptcy, or other involuntary transfer.

Disadvantages of Using a Business Entity.

1. A corporation or LLC will need corporate minutes and will need to generally comply with the formalities of any small incorporated business to maintain its integrity as a separate legal entity. If a business entity is used to make the cabin an unavailable asset for Medical Assistance
   purposes, this should be taken seriously by both the attorney and the family.

2. If any income is recognized, there will be additional tax returns. The entity will need an employer's identification number from the IRS. From a tax perspective, it is probably cleanest to recommend an entity that is a pass through entity, reporting its income, deductions, and credits to the shareholders on K-1 schedules without any change in character.

3. Need for a "Business Purpose." Minnesota's business entity statutes require a business purpose. If an entity is scrutinized by the IRS in a tax audit, it will need a business purpose. Query whether this is met by owning real estate for future appreciation in value. Payment of rent by family members should fulfill the requirement.

4. Loss of Potential to Exclude Capital Gains on Sale. Had the cabin been kept in mom and dad's names individually, they could have potentially made it their principal residence within the tax code definition to exclude gain on sale. The 1997 amendment to the tax code permits exclusion of up to $250,000 of gain by an individual or $500,000 by a married couple on the sale of their principal residence. The property must have been their principal residence for two out of the last five years. IRC §121.

Many Minnesota snowbirds have sold their lifelong family home (excluding the gain on the sale under §121) and used the proceeds for "fixing up" the cabin and purchasing or renting a place in the sunbelt for the winter months. If the cabin is later sold, the gains on its sale can also be excluded under §121 if the "two of the last five years" test is met. The exclusion is available to the taxpayer as often as every two years §121(b)(3). Short absences, such as two-month vacations, don't interrupt the period of use, even if the property is rented out during those times. Reg. 1.121-1(d). Considering that most cabins have considerable gains against them, this can be the loss of a significant tax advantage.

Loss of Potential to Receive Minnesota Homestead Real Estate Tax Exemption

If mom and dad sell their house, move to the cabin as their primary residence, and hold title individually, the cabin should qualify for the Minnesota homestead real estate tax exemption. Minn. Stat. §273.13, Subd. 22. Changing ownership to a business entity will result in loss of the exemption because businesses don't qualify. Given the difference in rates, this can be a big drawback that should be discussed with clients and memorialized in a letter to avoid finger pointing later.

Residential, Country, & Cabin Purchases

Residential, Country, & Cabin Purchases
For most individuals, the purchase of a home represents the largest investment they will ever make.  Whether it is a "starter" home in Ely, a country home Duluth, or a cabin on Lake Vermilion, protecting your investment is our primary concern.  Each lawyer at Klun Law Firm strives to take the worry and anxiety out of buying or selling a home.

Typical Real Estate Transaction with Lender

A real estate lending transaction often begins with a mortgage application. The loan application is usually prepared by the lender for the borrower's signature. Upon receipt of the application, the lender completes its underwriting process and decides whether or not to offer to make a mortgage loan to the borrower. If the lender decides to make the mortgage loan, it usually prepares a written offer—called a mortgage loan commitment—to make a mortgage loan. Mortgage loan commitments are frequently prepared by loan officers or in-house lawyers. In complicated or unusual transactions, however, a lender might ask its outside counsel to prepare the commitment. Upon receipt of the mortgage loan commitment, if the borrower decides to proceed with the transaction, the borrower accepts the commitment by signing and returning it to the lender, often accompanied with a fee paid to the lender.
 
Upon the borrower's acceptance of the commitment, the lender will usually obtain an appraisal of the real estate serving as collateral for the loan, and an environmental study of the real estate, called a Phase I. The lender will also order title work in the form of a title insurance commitment from a title insurance company and sometimes obtain an engineering or other professional analysis of the real property and its operating systems.
 
At some point in this process, the lender will also direct its lawyer to prepare the documents. When the lender's lawyer has completed the documents, the documents will be forwarded to the borrower and the borrower's lawyer for review. After negotiations, the lender's lawyer will place the documents in final form.
 
If the appraisal of the property, environmental reports, title insurance commitment, engineering or other professional reports, and documents are satisfactory, the parties will close the loan transaction. This process often (but not always) involves a face-to-face meeting between the lender and borrower, called a "closing." At the closing, the borrower will execute the loan documents, and the lender will provide the loan proceeds to the borrower. It is not uncommon, however, for the loan to be made without a formal closing. In this situation, without meeting face-to-face, the borrower will make arrangements to execute the closing documents, often through the services of a closer at a title insurance company, and the lender will make arrangements to make the loan upon the borrower's execution of the documents.
 
Septic Inspection

Twenty-five percent of homes have a septic system.  To protect home buyers from costly and frustrating septic issues, St. Louis County created an ordinance often called a point of sale requirement, states that a home cannot be sold unless one of the following requirements is met:

• The seller discloses to the buyer that there is not a sewage treatment system on the property

• The property has a sewage treatment system with a vaild certificate of compliance or notice of non-conformity

• The seller and buyer file a transfer agreement with the St. Louis County Environmental Services Center

If you are a home owner, it is in your best interest to get a septic inspection often.  A valid certificate of compliance lasts three years, so having the system inspected in a timely manner can save the property owner, a potential property buyer, and other parties a vast amount of time and money.  
 
Well Disclosure
 
At the time of sale a home owner must disclose the status of all wells on the property along with a valid sketch of the location of each well.  In St. Louis County and Lake County a well is not required to be tested or inspected at the time of sale, but often the lending institution may require a well test and inspection in order to protect the buyer.  Often water contaminentsare found leaving the seller distraught and unable to close on a home.  Having well testing and inspections done regularly along with the above mentioned septic testing can truly save a land transaction.

Commercial Real Estate Purchases and Business Development

At Klun, we have experience working withbusinesses to support commercial and business development.  In order to complete a mutually agreeable transaction we regularly draft agreements involving retail buildings, office buildings, manufacturing facilities, land with developmental potential and the construction of commercial buildings.  We can provide advice regarding joint ventures, construction planning, development funding, loan and grant assistance and environmental issues.
 
Commercial development typically includes the coordination of land developers, surveyors, building contracts, real estate agents and small businesses.  Working with all these entities, we help facilitate property purchases, sale and leasing contracts.  We can help facilitate contracts to build business parks, office buildings, ports and water fronts, retail parks, shopping malls and centers, shopping streets and districts and warehouses.
 
At Klun, we also want your business to grow.  We provide business development assistance to your business to support marketing, sales, attracting new customers and penetrating markets.  We want to help you boost your business and maximize profitability.  We do this by assisting you in fostering relationships with your customers and clients.  Sometimes this may mean you need our sharp negotiation skills.  Sometimes you might need us to review a contract for you.  Either way, it is our objective to help you implement strategies for development to satisfy your clients.
 
We understand the businesses want to identify new business opportunities. At Klun, we are here to support your business, whether you are identifying new markets, new partnerships withother businesses, new ways to reach existing markets or new products/.services to better meet the needs of existing markets, our job is to support your business.  We can help you bring new opportunities you have identified to fruition.  We can assist you in closing deals withorganizations you want to develop business with.
 
We can help you by:

• Reviewing sales development strategies
• Negotiate new sales relationships to increase business volume
• Creating sales contracts
• Negotiating and closing real estate purchases and business deals

What is Deed?

A deed is a legal document that transfers the title of a property from one individual to another.  It contains the names of the old and new owners, a legal description of the property, and is signed by the person transferring the property.  A deed helps to protect the interest of boththe buyers and sellers of a property.  A deed discloses any issues with the property, which helps to guarantee a reliable and fair agreement.   At Klun, we can help you through your next real estate transaction.  Call us today at 1-877-365-3221.

Warranty Deed

Generally, in Minnesota, title is transferred by a general warranty deed.  A general warranty deed provides the greatest protection to the purchaser because the seller pledges that he or she legally owns the property and that there are no outstanding liens, mortgages, or other encumbrances against it.  A warranty deed is also a guarantee of title, which means that the seller may be held liable for damages if the buyer discovers that the title is defective.

Quit Claim Deed

Another type of deed is a quitclaim deed.  A quitclaim deed transfers only the interest in a piece of real estate that the seller actually has.  A quitclaim deed gives the buyer the least protection of any deed. If the seller is the sole owner of the property, the quitclaim deed is enough to transfer title, but the buyer takes a risk by accepting a quitclaim deed because it offers the buyer no guarantee that the title is valid.

Quitclaim deeds are frequently used when marketable title to the real estate is not of concern.  Common situations where a quitclaim deed is used include during the property settlement phase of a marriage dissolution to add or remove a spouse from title, real estate transfers between family members and transferring real estate to an LLC, corporation or trust.

Recording

The deed should be recorded in the county where the property is located.  Every county in Minnesota has their own formatting requirements for the recording of deed forms.  Owners and parties with real estate interests are required to file, in the county, all documents affecting their interest in property in order to give public notice of the interest.  Once a deed in recorded, everyone is on notice of the grantee’s interest in the property.

 Titles in Minnesota may be registered under the abstract system or the Torrens system.  Abstract records go back hundreds of years and an abstract of title is a record of all the entries for that property. Torrens or registered property is much simpler, more modern, and more efficient.  Instead of a thick abstract of title, Torrens property has a certificate of title.

When must spouses sign real estate documents?

The general rule, set forth in Minn. Stat. §507.02, is that the homestead may not be conveyed — again, regardless of whether the conveyance is of a fee interest or some lesser interest , such as a mortgage, life estate, etc. — unless signatures are given by both the owner and his or her spouse.  The common rule you will hear real estate agents and attorneys in Minnesota state: "One signature to buy, two signatures to sell."

Drafting and Executing Deeds

A contract for deed is typically used in transactions between private parties, where the seller, rather than a lending institution, is financing the purchase of the home for the buyer.  Typically, the contract requires the buyer make payments over time withinterest payable on the unpaid balance.  After the deed is signed, the seller has legal possession of the property until the buyer repays the loan in full, usually through monthly installments.  This type of transaction can help encourage the sale of a home when the buyer cannot secure financing through a bank.  A contract for deed is recorded by the buyer with the country recorder where the property is located.  At Klun Law Firm, we can review the contract and explain any pending questions, making the transaction simpler.
  
Advantages and Disadvantages for the Buyer

A contract for deed is attractive to buyers who might not otherwise qualify for a loan due to lack of credit or a prior foreclosure.  Additionally, closing costs in a contract for deed is typically lower than a traditional mortgage since there are no applications or origination fees and the paperwork usually takes less time.  However, there are risks for a buyer in a contract for deed.  When a contract for deed is cancelled, the buyer loses the real estate, any money paid for improvements to the property and all money paid on the property to that point.  This can be especially difficult in contract for deed transactions involving farms and crops.  Also, the buyer does not become the owner of the property until payment is completed.  Until that date, the buyer only retains an equitable interest in the property.
   
Advantages and Disadvantages for the Seller

The advantage of a contract for deed to a seller is that the seller usually earns interest income on the property and retains legal title to the land.  However, a major disadvantage of doing a contract for deed is that the seller has to carry the financing themselves.  Additionally, the seller may need to offer credit terms to the buyer that a conventional lender may be unwilling to offer thereby increasing the potential sale price of a piece of property.  There is also a risk to the seller that the buyer may default and the seller may have to repossess the property.
 
Contract with Mortgage
 
Like a mortgage, a contract for deed is a financing device which allows a buyer to purchase the property by borrowing funds from the seller who retains security in the property sold.  However, in a mortgage, a mortgagor-borrower obtains fee title at the outset and the mortgagee-lender has only a lien interest on the mortgagor's fee simple to secure repayment. In contrast, a contract vendor holds the fee simple legal title until paid in full.
 
Why must a contract for deed or other debt instrument contain an interest component?
 
The Internal Revenue Code recognizes the economic truth that a sum of money received today is worth more than the right to receive the same sum on some future date. A deferred payment transaction (such as a contract for deed sale) that does not contain an interest component fails to reflect the time value of money. Consequently, IRC Sections 1274 and 483 require that deferred payment transactions earn the seller a certain yield tied to rates periodically established by the Department of the Treasury.

Liens

A lien allows a creditor or bank to sell a mortgaged or collateral property in order to recoup losses when an individual fails to meet the loan specifications or payments.  A lien can be voluntarily placed through the signing of a mortgage/loan or by the government if taxes are left unpaid.

Mortgage

The mortgage is an interest in real estate that the borrower gives to the lender as security for performance of the borrower's obligation to repay the debt. In Minnesota, a mortgage is a lien on the borrower's property and the borrower retains title to the property. If the borrower does not repay the loan according to the terms agreed to by the parties, the lender may foreclose on the mortgage.

Issues addressed include:

• Warranties of Title: Except where disclaimed, sellers warrant that they have good and valid title to the goods being sold and that they may rightfully transfer title to the buyer.

• Payment of Taxes, Charges and Liens:  Properties may have unpaid taxes and liens against them.  It is important to thoroughly research a property before purchase.

• Environmental Representations and Indemnities:  Many times environmental issues can arise in business transactions and there are several phases of environmental due diligence when building.

• Insurance Requirements: When improving property, there is additional insurance needed to protect the property owner.

• Application of Insurance and Condemnation Proceeds: When a public entity exercises its powers of eminent domain over a property owner, the property owner wants to get as much as possible from the sale.

• Defaults: With mortgage defaults reaching record levels, it is important that if you are a property owner who has been served with a default notice to contact us immediately for assistance.

Mechanic's Liens

A mechanic's lien is a document that guarantees payment for contract services or improvement services on a piece of property.  If a bill is left unpaid, a contractor can sign a mechanic's lien which will ensure payment.  A mechanic's lien gives incentive to the property owner to pay the contractor and is a prerequisite for a foreclosure filing.  By placing a mechanic’s lien on a property, the encumbrance makes it difficult for the property owner to sell or re-finance the property without first paying the lien.
  
Contractors, as well as subcontractors and suppliers who have a contract with a general contractor, can file a mechanic’s lien.  A lien claimant must file a Statement of Lien with the county recorder within 120 days of the completion of work.  A copy must be personally serviced or sent by certified mail to the owner or his/her agent.  The lien claimant must bring a legal action to enforce the lien within 1 year of the date of the last labor, skill or material provided under Minnesota Statute Section 514.12.

In order for a contractor or subcontract to claim a lien, a contractor must provide the form language under Minnesota Statute Section 514.011 advising the property owner of his rights and the possibility of a lien. 
The property owner has the right to demand the lien holder furnish an itemized account of the lien, the total amount due and the full name and address of the lien claimant within 15 days of the completion of the contract.
 
Mechanic’s liens have complicated rules under Minnesota law.  At Klun, we can assist you navigate these laws, whether you are the contractor or property owner.  Do not wait to call us if you have been served with documents.  Call us today to schedule an appointment to discuss your matter.

Klun Law Firm can help you through your next real estate transaction.  Call us today at 1-877-365-3221.

Neighbor & Boundary Disputes

Difficulties with neighbors and boundary disputes usually start as small problems and quickly become big problems.  Sometimes, the boundaries of real property as recorded in legal documents do not match the boundaries as established in practice.   Common issues that come up between neighbors can include:

• Encroachments: fences or buildings that cross over a property line.

• Improvements:  add-on structures or landscaping that are not compatible with the use and enjoyment of property.

• Roadways, trails or crops: may cross over a neighbor’s property and cause problems with roads or soil.

• Incompatible uses: Excessive noise, smells, lights or zoning problems that rise to the level of a nuisance.

• Animals doing property damage: pets or cattle/livestock may do damage to property.

Is it Trespass for Trees to Overhang into a Neighbor's Yard?
 
Generally.  Keep in mind that an owner's interest in real property is three-dimensional: the owner of a parcel owns from the center of the earth to the limits of the sky. Subject to applicable land use regulations, a landowner may extract minerals below the surface and build structures above the surface. Trees whose trunks are located on adjacent property but whose branches overhang a property boundary may create a trespass.   Although, there is an exception for trees planted on the boundary and intended by neighbors to be boundary-line trees; in such cases the neighbors are considered to be tenants in common, with neither having the exclusive right of control.
 
What is an Encroachment?

An encroachment is when a neighbor illegally builds a structure that is wholly or partially on an owner's property.  These are a result of a lack of clear land boundaries and or planning, as a result, encroachments often occur on lakeshore properties where construction of saunas, homes, and other buildings took place before the clarified boundaries were set.  Encroachments often cause title issues and can harm the purchase and sale of a property.
 
A common remedy to encroachments is an easement.  An easement is a document that gives an individual other than the owner right or access to a property.  It gives a person the right to use another person’s land for a specifically stated purpose.  An easement can involve a general or specific portion of the property.  One of the most common types of easements is a right-of-way easement, which gives someone the right to travel across the property owned by another person.  Another common easement is that given to a utility company to erect power lines or bury a gas pipeline across a piece of property.  Easements should be included in a deed description.  Careful research into a piece of property is essential prior to purchase to know whether any easements exist on the property.
 
Whether you have encountered a boundary dispute witha new neighbor or want to defend an easement under a theory of adverse possession, we can handle your real estate concerns.   Our attorneys routinely handle disputes involving: fence lines, boundaries, easements, lake shore, and shared driveway disputes along with adverse possession, prescriptive easements, and abandonment of property.  From our home in Ely, KlunLaw Firm provides legal services throughout the state of Minnesota.  This includes the Minneapolis and St. Paul metro area, along with northeastern Minnesota: the communities of Virginia, Hibbing, Ely, Grand Rapids, Bemidji, Cloquet, International Falls, and Duluth.  Property disputes can be especially complicated due to the fact local government zoning codes typically regulate such matters.  It is important to have expert advice.  We can help with any property disputes you may have.  Give us a call today for all your legal needs.

Easements

An easement is a document that gives an individual other than the owner right or access to a property.  It gives a person the right to use another person’s land for a specifically stated purpose.  An easement can involve a general or specific portion of the property.  Creating an easement or sub-dividing land involving fence lines, shared roads, lakeshore, and boundaries can solve disputes and improve relations between neighbors.

Easement Terminology

Easement: An easement is an interest in the land of another, which gives the holder a right to use the land in a specified manner, or to restrict the owner's use and enjoyment of the land. An easement is not an "estate" in land.
 
Affirmative Easement:Easement which gives the holder the right to use another's land (e.g., allowing access to or across the property, trail, road, flowage easements); may be limited in scope.
Negative Easement: Easement which gives the holder, or designated third party beneficiaries, the right to require the owner of land to refrain from exercising specific ownership rights (e.g., "no build" easements, most conservation easements, not building a structure more than one story high, not blocking a view, easements of light and air)
 
Appurtenant Easement: Easement which "runs with the land," typically benefiting adjacent land (e.g., a right to maintain a driveway across a neighbor's land).  These generally automatically transfer when the estate is transferred.
 
Easement in Gross: Easement which benefits a specific person or entity but doesn't run with land.  This type of easement can be for person use, like an easement to use a boat ramp, or a commercial use.

Burdened Parcel (Servient Estate): Land burdened by the easement.

Benefited Parcel (Dominant Estate): Land benefited by an appurtenant easement.

Easement Area: Portion of the burdened parcel that is subject to the easement rights; may be all or part of the burdened parcel; may be subject to diminution for "specific location" if originally a blanket easement.
 
Conservation Easements: A voluntary transfer of specified land use and development rights to a qualifying organization for conservation purposes. Often, more in the nature of a restriction or equitable servitude than an easement.
 
Minnesota has adopted the Uniform Conservation Easement Act, Minn. Stat. Ch. 84C (effective 1985).  The term "conservation easement" has a specific meaning under Chapter 84C of Minnesota statutes: "A nonpossessory interest of a holder in real property imposing limitations or affirmative obligations the purposes of which include retaining or protecting natural, scenic, or open-space values of real property, assuring its availability for agricultural, forest, recreation, or open-space use, protecting natural resources, maintaining or enhancing air or water quality, or preserving the historical, architectural, archaeological, or cultural aspects of real property.

Under Minnesota law, whenever the owner (the landlord) of a house, apartment, room, or any other living space agrees to let someone else (the tenant) use the space for a fee, the two have entered into a legally binding rental contract. General contract principals are discussed in the Contract Law Chapter. Rental contracts are a special class of contracts that are governed by many unique rules. This section discusses the laws applicable to rental contracts.
Some common issues that come up between landlord and tenants:

What are some rights and responsibilities of the landlord and tenant?
How do I evict a tenant?
How do I defend against an eviction action?
What courts handle housing matters?
What is the interest rate for security deposits?

Common Landlord/Tenant Issues & Topics

Leases
The terms of any rental agreement are stated in the lease, which can be an oral agreement or a written document. There are two general types of leases-periodic leases and term leases. A periodic lease continues for a specific time period and is automatically renewed at the end of the period for an indefinite time without a specific end date. For example, parties may agree on a month-to-month lease without specifying how many months the renter will stay and the lease continues until one party terminates it. Most periodic leases will state the timing of a termination notice and the form the notice must take. If the periodic lease does not specify when or how notice is to be given, state law requires that notice be given at least one full rental period plus one day before the lease ends.
A term lease is a rental agreement specifying a definite time period. For example, a lease for one year is a term lease. Term leases are almost always written. If they are for more than one year, the law requires that they be in writing. If the parties to the lease do not state when and what kind of termination notice is required, the lease automatically ends on the last day of the time period.
Landlords have a right to insist that renters pay a security deposit before moving in. The security deposit is used to pay for any damage beyond ordinary wear and tear that the tenant might do to the rental property, or to satisfy any debts between the tenant and landlord under an agreement or any unpaid rent. The deposit cannot be used by the renter to pay rent. There is no limit to how much the landlord can require for a security deposit. The landlord can increase the security deposit at any time during a periodic lease if the tenant is given proper notice-generally, one rental period plus one day. If the lease is a term lease, no changes can be made to the deposit until the lease comes up for renewal or the parties agree otherwise. At the end of the tenancy, the landlord must return the deposit to the renter with interest (four percent non-compounded per year). The landlord is allowed to keep the amount necessary to repair damages, or to pay off debts owed to the landlord as part of the lease. If the landlord fails to return all or part of the security deposit, he or she must give the tenant, within 21 days after the tenancy ends and the tenant has given the landlord a forwarding address, a written explanation as to why money is being withheld.
Owners of rental property are required to keep the property in reasonable repair. This requirement cannot be waived by the parties, but the tenant can agree to make repairs or perform maintenance if the arrangement is in writing and the tenant receives compensation in return. For example, a renter might agree to make routine plumbing repairs in return for a reduction in rent or payment from the owner. If the owner refuses to make repairs, the renter has five options.
Calling An Inspector
Calling An Inspector
The renter can call local fire, health, housing, or energy inspectors to investigate whether there is a code violation in the unit. If an inspector finds a code violation in the unit, the inspector has authority to summon the owner to appear in court. The law provides protection for a renter if the owner attempts to evict the renter in retaliation for calling an inspector. Often, an inspector's report of a code violation is enough to convince a landlord to correct problems. Calling an inspector is a necessary first step to several of the other options described in the following sections.

Rent Escrow
 
A renter may pay rent into a court escrow account and ask the court to order the owner to make repairs. The procedures for using the rent escrow option are complex and must be strictly followed. Typically, the renter must have contacted a housing inspector, as described above, and received a written report of housing violations. If there is neither a housing code nor an inspector in the area but the unit has so many serious problems that it is unlivable, the tenant must notify the landlord in writing and give the landlord 14 days to correct the problem. If the landlord fails to fix problems, the tenant can file a rent escrow action along with the inspector's report or a copy of written notice to the landlord. Once the rent is deposited with the court, the court schedules a hearing within 10 to 14 days. The landlord can begin eviction proceedings if the tenant does not deposit the full amount in escrow. After the hearing, if the court finds that a violation does exist, it has a variety of options, including ordering the landlord to fix the problem, allowing the renter to fix the problem and deduct the cost from rent, fining the landlord, and returning all, none, or part of the rent to the tenant.

Withholding Rent
 
If there is a serious problem in a unit, the renter can withhold rent. Before withholding rent, the renter should notify the owner, in writing, of the needed repairs and give the owner an opportunity to make repairs. If the landlord does not make repairs, the tenant should notify local inspectors, as described above, and get a written copy of the inspector's report. If repairs are still not made, the tenant should notify the landlord, in writing, that all or part of the rent will be withheld until repairs are made. Withholding rent is a drastic step that should only be taken if the tenant has a strong case against the landlord. It is very likely that the landlord will sue to get the rent or begin eviction proceedings against the renter. If the court agrees with the renter, it has a number of options it can pursue against the owner, including reducing the rent. If the tenant loses, he or she can be made to pay all of the rent withheld and court costs. In some cases, the renter may have to pay the landlord's attorney fees to avoid being evicted, but only if the lease allows this.

Tenant's Remedies Act

Under the Minnesota Tenant's Remedies Act, a tenant can sue a landlord for a health or housing code violation, a violation of the landlord's obligation to keep the unit in reasonable repair, or a violation of an agreement or term of the lease. Before going to court, the tenant should talk to the landlord and give him or her an opportunity to correct the problem. If the landlord does not correct the problem and there are local inspectors, the tenant should contact them, as described above. A written report from an inspector will describe the problem and give the landlord a number of days to fix it. If there are no inspectors, the tenant should give the landlord written notice of the problem at least 14 days before filing a lawsuit. If the required amount of time passes and repairs have not begun, the renter can bring an action in state district court.

Rent Abatement

A rent abatement action is a lawsuit that a tenant can bring to get his or her rent lowered. Before bringing a rent abatement action, the tenant should try to work with the landlord to have problems fixed. In court, a tenant must prove that a serious problem exists that affects the safety, health, or fitness of the dwelling as a place to live. Minnesota law is unclear on how much the tenant has a right to recover, but he or she may recover the difference in value between the unit if the landlord had made repairs and the present value or the extent to which the tenant's enjoyment of the unit is decreased by the problem. A rent rebatement action may be brought in conciliation court if the tenant's claim is for less than $7500.

Eviction

Under no circumstances can a landlord forcibly remove a tenant from rental property. In order to get a tenant out of a rental unit, the landlord must bring an unlawful detainer action against the tenant in state district court. Legitimate grounds for bringing an unlawful detainer action include nonpayment of rent, breach of a lease, or refusal to leave a unit after the tenancy expires.
The landlord must file a complaint against the tenant in district court and have someone serve the tenant with a summons at least seven days before the court date ordering the tenant to appear in court. The landlord cannot personally serve the summons. A hearing takes place within 7 to 14 days after the court issues the summons. At the hearing, each side has an opportunity to present its side of the story and the judge delivers an opinion. If the tenant does not show up to the court on time, the judge can order the tenant to move immediately. If the judge decides the tenant has no legal reason for refusing to leave the property, the judge orders the tenant to leave and can order the sheriff to force the tenant out.
If the sheriff has to perform the eviction, the tenant's property can be stored on-site or in a warehouse. If the property is stored on-site, the landlord must prepare an inventory of the items and mail it to the former tenant at his or her last known address. The tenant has 60 days to request the return of the items in writing. The tenant then has 48 hours to retrieve the items without any fee or charges. If the items are stored off-site in a warehouse, the former tenant is responsible for all transfer and storage fees. In either case, after 60 days, the landlord can sell the tenant's personal possessions. Regardless of where the items are stored, the former tenant does not have to pay back rent, security deposit, or late charges as a pre-condition to getting the items back.
Tenants enjoy a number of rights, even if those rights are not specified in the rental contract.

Cold Weather Utility Rule

Regulated utility companies can not shut off service to any residence, whether rented or owner-occupied, between October 15 and April 15 if:

• Disconnection will affect the primary heat source.

• Customer is unable to pay the bill.

• Customer has no overdue bill from the previous winter or, if there is an overdue bill, the customer has made arrangements to repay it; and:

• Customer is willing to pay off the bill in amount agreed between the customer and the utility.

Rules adopted by the Minnesota Public Utilities Commission forbid shut-off by a regulated utility if the customer pays ten percent of his or her monthly income or ten percent of his or her utility bill, whichever is less.

Discrimination in Housing

Federal and Minnesota law prohibits home sellers and landlords from discriminating on the basis of race, color, creed, religion, national origin, sex, marital status, disability, or reliance on public assistance. Some areas have local laws that provide additional protection from discrimination. For example, Minneapolis has a city ordinance forbidding discrimination on the basis of sexual orientation.

Landlords generally cannot discriminate against children unless a unit is in an owner-occupied duplex, triplex, or fourplex, or the building is intended to provide housing for elderly persons. In order to qualify as a building for elderly persons, the building must meet additional requirements, such as operating under a state or federal program specifically designed to assist the elderly or offering significant facilities or services designed to meet the needs of the elderly.

 Tenant's Rights

Privacy
 
Generally, landlords may enter a tenant's unit only with the tenant's consent, except in an emergency. Landlords also may enter for a "reasonable business purpose," such as maintenance, only after giving the tenant reasonable notice. If a landlord fails to get permission or give notice, the landlord is trespassing and can be sued in court. The tenant whose privacy rights have been violated may recover damages. As of July 1, 1995, owners must have a criminal history check conducted on any applicant for a position as a building manager, as well as persons already employed in such positions. Convictions for certain serious crimes will prevent an applicant from being hired. Managers hired before July 1, 1995 who have been convicted of serious crimes may keep their jobs, but the tenants must be informed of the criminal record.

Access

Tenants have a right of access to the property they rent. It is a misdemeanor for a landlord to lock a tenant out of his or her unit without a court order. A tenant who is unlawfully locked out may petition the court to get back in. The court has authority to order law enforcement officers to help the tenant get back in. If the court finds that the landlord knew or should have known that the lockout was illegal, it can order the landlord to pay triple damages or $500, whichever is greater.

Use of Personal Property

A landlord cannot confiscate a tenant's personal property for nonpayment of rent or other charges. If a landlord takes personal property, the tenant can demand its return within 24 hours (48 hours if it is off the premises). If the landlord refuses to return the property, he or she can be sued in conciliation court for actual damages, punitive damages of up to $300, and attorney's fees.

Sublease
 
Subleasing is having someone else take over a tenant's rights and obligations under a lease before the original lease expires. The tenant has a right to sublet a unit if the lease does not prohibit doing so. If the new tenant does not pay rent, damages the unit, leaves before the lease expires, or breaches another condition of the lease, the landlord can hold the original tenant responsible. The original tenant can then sue the new tenant for those costs.

Land Use Law
 
The attorneys at KlunLaw Firm are experienced in the area of land use.  They can help you with the most complex zoning, land use, subdivision, and platting issues.  We are confident in our ability in these areas and regularly represent clients in front of area councils, boards, commissions, and other organizations.