For Immediate Release
New Minnesota Law Will Protect Homebuyers from Predatory Contracts
The American Land Title Association (ALTA), the national trade association of the land title insurance industry, AARP and the Minnesota Land Title Association (MLTA) applaud the Minnesota Legislature for passing Senate File (SF) 4097, which includes provisions protecting homeowners from the predatory practice of filing unfair real estate fee agreements in property records, known as Non-Title Recorded Agreements for Personal Services (NTRAPS). The new law will make NTRAPS unenforceable.
“The property rights of American homebuyers must be protected,” said ALTA Vice President of Government Affairs Elizabeth Blosser. “We have to ensure that there are no unreasonable restraints on a homebuyer’s future ability to sell or refinance their property due to unwarranted transactional costs.”
“The passage of SF 4097 is a continuation of AARP’s advocacy efforts, undertaken in collaboration with ALTA in other states, to put an end to this harmful practice,” said AARP Government Affairs Director Samar Jha. “We look forward to working on similar legislative solutions in other states to help protect homeowners against this predatory real estate practice.”
SF 4097 follows the objective of similar bills introduced across the country to provide a remedy for existing NTRAPS while also discouraging these types of unfair practices impacting homeowners.
“MLTA applauds the Minnesota Legislature for passing a law based on ALTA’s model bill, which will provide relief and protection for numerous Minnesota homeowners,” said MLTA Legislative Co-Chair Chad E. Novak. “We would also like to recognize the Minnesota Department of Commerce, with whom we worked closely in crafting acceptable language for all stakeholders, as well as the bipartisan bill sponsors. This was a long time coming, and we are ecstatic to have shepherded it over the finish line. In Minnesota, the message is clear: Bad actors, you are not welcome here. While it is unfortunate to have to battle schemes like this one, it is nonetheless inspiring to see a broad selection of organizations come together in a single-minded effort to ensure that Minnesota homeowners are not preyed upon by purveyors of unsavory practices.”
“These unfair real estate agreements were unwittingly trapping homeowners in long-term contracts, lasting up to 40 years, with real estate brokerage firms,” said AARP Minnesota State Director Cathy McLeer. “This legislation will ensure that Minnesota Attorney General Keith Ellison can pursue restitution against these bad actors and empower individuals to seek damages through the courts.”
The new law will:
- Make NTRAPS unenforceable by law.
- Restrict and prohibit the recording of NTRAPS in property records.
- Create penalties if NTRAPS are recorded in property records.
- Provide for the removal of NTRAPS from property records and recovery of damages.
Minnesota Gov. Tim Walz signed SF 4097 on May 21, 2024.
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About ALTA
The American Land Title Association, founded in 1907, is a national trade association representing more than 6,000 title insurance companies, title and settlement agents, independent abstracters, title searchers and real estate attorneys. ALTA members conduct title searches, examinations, closings and issue title insurance that protects real property owners and mortgage lenders against losses from defects in titles.
Contact: Megan Hernandez
Office: 202-261-0315
Email: [email protected]