Senate File 505, a technical amendment bill to Minnesota's contract-for-deed law enacted last year, was amended and recommended to the Senate floor by the Senate Judiciary Committee on Monday.

Senator Omar Mohamed introduced the author’s A1 amendment and described the measure as primarily technical, adding exemptions for sales by the state and political subdivisions and clarifying that a single-owner limited-liability company whose owner is a natural person should be treated like an individual seller for the statute’s investor-seller exemptions. "This bill is primarily technical," the sponsor said, and he told the committee stakeholders from last year's work, including the Minnesota Association of Realtors and the Minnesota State Bar Association, had been consulted.

Witnesses and testifiers described corrections to last year's law and the rationale for the exemptions. Ron Elwood of Legal Aid told the committee the amendment "simply changes some effective dates" at the request of the Minnesota Association of Realtors. Larry Wertheim, who testified as an expert on contract-for-deed practice, said the substantive change expands exemptions so political subdivisions that sell tax-forfeited land on contract for deed — for example, some counties — are not treated as investor sellers.

Committee members asked detailed questions about how the statute would be enforced and how affected facts would be discovered. Witnesses explained that the statute provides a prima facie statement in the contract form: a seller who declares on the contract that it is not an investor seller creates public-facing evidence, and the statute provides an affidavit procedure tied to cancellations to preserve that record. Mr. Wertheim explained the bill prevents a seller from using a same-day transfer of ownership of an LLC to disguise an investor-seller transaction and that the change is intended to close a potential loophole.

Senate counsel clarified remedies and timing. Counsel said the statute creates a rescission remedy for buyers who can prove investor-seller violations: the buyer may seek cancellation and return of payments, subject to a two-year statute of limitations for bringing the claim. The committee also heard that the prior multiple-sale trigger from an earlier regime was repealed and replaced by the new investor-seller rules that can apply on a first sale if the seller meets the statutory definition of an investor seller.

The committee adopted the A1 amendment by voice vote and later recommended Senate File 505 as amended to pass and be re-referred to the Senate floor; members recorded the voice votes as "aye" and the motions prevailed.

Committee discussion also included broader policy questions about the public-policy goals of promoting homeownership while preventing predatory investors. Some members said they remain concerned about potential limits on contract-for-deed as a pathway to homeownership and asked sponsors to monitor outcomes after the statutory changes.

Votes at a glance: A1 amendment to Senate File 505 — adopted by the committee (voice vote). Final committee action — recommendation that Senate File 505, as amended, pass and be re-referred to the Senate floor (voice vote).