Multiple disclosure and addendum forms required in MN - really??

Question

Today I contacted an attorney to ask for a review of a simple purchase agreement that I put together that I was planning to use. The attorney I spoke with said I need to include multiple disclosures and addendum forms that are required in Minnesota for real estate transactions. She gave me links to eight different forms.  None of these disclosures are referenced in any of the simple 1 to 4 page contract forms I've seen and used as my reference material - except for the typical realtor versions or the State Bar versions.  I want my contract to be legitimate, but not intimidating or full of unnecessary forms.  Does anyone have advice on this subject - or recommend a real estate attorney in MN that I could contact for a second opinion?

Brittany Kuschel · Answer

@DuWayne Jones

Refer to Minn. Stat. 513.52 through 513.61 https://www.revisor.mn.gov/statutes/?id=513 for seller required disclosures.  Also, the standard MN realtor purchase agreement form does reference and provide direction for addenda and disclosures which should be included with a written offer to purchase (with the exception of lead-based paint addendum, which should be included if the property was constructed prior to 1978).  I previously worked as a transactional paralegal for a number of real estate attorneys and we always ensured that our clients either completed the disclosures required by law or specifically agreed to waive those disclosures in writing (Minn. Stat. 513.60).  I now work as a licensed real estate agent and always explain to my clients that disclosures are really their best protection from getting sued.

One of the attorneys that I worked for has been practicing transactional law for 50+ years and would sometimes create a simple purchase agreement form 3-10 pages tailored to the specific transaction.  Typically, such a form ends up costing the client more, as it has to be revised with each new transaction.  Also, even in those instances, he was careful to include the appropriate disclosures.  There were also many instances where we were asked to draw up a purchase agreement using "realtor" or "bar" forms, and applicable disclosures/addenda were always included.

Your most cost effective option is likely have your attorney provide you with the purchase agreement (and applicable addenda/disclosures) for you once all of the negotiations have been ironed out.  Ideally, he or she would charge you a flat rate fee for such a service.  Also, you should be careful to consider that your city and/or county may have specific point of sale inspection and/or disclosure requirements.  These too should be taken into account when preparing your purchase agreement forms.

In a society that has grown to be litigious as ours, drafting and executing contracts should be left to the professionals, whether it be your real estate attorney or licensed real estate agent.

Hope this is helpful.

John Woodrich · Answer

^^  Also need well disclosure, lead based paint disclosure, and I believe a radon disclosure was in my last deal.

It sounds like you are trying to cut corners on the purchase of property.  It may seem like it is easier on the seller but in the long run I think it will give a seller less assurance.  I would recommend coming to terms, use your "easy to understand" contract, and tell them that you will pay a realtor or attorney to draft a final contract.

Nobody is filling out additional disclosures because they want to, they are either required or help protect parties involved.  I imagine it would cost a few hundred bucks to pay a professional to draft a contract for you and IMO that is money well spent.

Todd Dexheimer · Answer

You need to have a disclosure form that says what is wrong with the property (or disclosure Alternative), you need a lead based paint addendum, As-is addendum if applicable, meth disclosure. I am an agent and can help you for a reasonable price if you want.

Tim Swierczek · Answer

@DuWayne Jones just look it up yourself.  https://www.revisor.mn.gov/statutes/?id=82

Start at 82.66 and read downward.  You will know what to look for and you should have your answer.  In the end, if you violate state law on this issue you risk much more than scaring someone in with a purchase contract.  Note:  these laws are for a standard non-distressed sale and do not include disclosure requirements for contract for deeds or owner financing.  Even worse are the requirements for foreclosure bailout transactions.  Do not even consider attempting one of those without having the correct disclosures.  The penalties are more than severe.

Mark Gallagher · Answer

@DuWayne Jones

Without seeing your docs, it can't hurt to be over-protected. Why not just include the disclosures and addenda?

DuWayne Jones · Answer

@Tim Swierczek - thank you for the link.  It looks like the statute you refer to applies to real estate agents and not non-agent/investors like myself, but I will read through it. I am not an agent nor am I working with one.  That being said, my intent is not to violate law, but to make offers that are legitimate and simple for sellers to understand.  My confusion stems from some of the "simple" contract forms I've seen here on BP and from my local REIA which are one to four pages long and include what I understand to be the minimum required information for a real estate transaction.  If the lengthy State Bar version and the added disclosures and addenda are really required, then so be it. I'm new at this so I'm looking for good advice.  Is this unique to MN?  Tomorrow I plan to discuss this further with my attorney for clarity.  The last thing I want to do is proceed with a contract that lacks the required content - to protect me as well as the seller.

Thank you again for sharing your information.

Multiple disclosure and addendum forms required in MN - really??

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