Minnesota Electronic Real Estate Recording Guidelines

INTRODUCTION

Electronic recording of real estate documents (“eRecording”) is the process of receiving, examining, recording, endorsing recording information on, and returning electronic documents that individuals and entities have submitted for recording in a county’s land record system. eRecording also includes calculating and collecting fees from the documents’ submitters.[1]

eRecording has been a priority for the State of Minnesota since 1999, when the Secretary of State convened a task force to explore eRecording. The Legislature officially established the Minnesota Electronic Real Estate Recording Task Force (the “Task Force”) in 2000.[2] In 2008 the Minnesota Legislature enacted the Minnesota Real Property Electronic Recording Act (the “Act”),[3] which established the Electronic Real Estate Recording Commission (the “Commission”).[4]

The Legislature created the Commission to adopt standards to implement the Act.[5] The Legislature charged the Commission and others who apply or construe the Act to consider the need to promote uniformity of eRecording standards, practices, and technology between Minnesota and other states that have eRecording statutes similar to the Act.[6]

If Minnesota is to achieve the Legislature’s goal of achieving uniformity between Minnesota and other eRecording states, the Commission believes that all Minnesota county recorders and registrars of title (collectively, “County Recorders”) should (1) accept all real estate documents, whether abstract or Torrens, for eRecording, and do so in a consistent manner, and (2) encourage all individuals and entities that use the land record system to eRecord all of their real estate documents.

With these goals in mind, the Commission has adopted the following Guidelines to advise Minnesota counties and others who interact with County Recorders’ offices throughout the state of the best practices that Minnesota’s eRecording counties follow in applying their technology funds and unallocated fees, managing recording fees and deed and mortgage registry taxes, and recording, indexing, retrieving, reproducing, and archiving eRecorded real estate documents. The Commission encourages all Minnesota counties to regard these Guidelines as the authoritative guide to protocols and procedures for eRecording.

eRECORDING GUIDELINES

1. The Legislature requires County Recorders to charge $46 (the “General Recording Fee”) for indexing and recording deeds and other instruments and $56 (the “Plat Recording Fee”) for recording a plat.[7] Where does that money go?

Every county pays $10.50 of the General Recording Fee to the state treasury, which credits it to the state general fund. Every county also deposits $25.50 of the General Recording Fee in the county general fund and $10 in its County Recorder’s technology fund (a “Technology Fund”).[8]

Every county pays $10.50 of the Plat Recording Fee to the state treasury, which credits it to the general fund. Every county also deposits $35.50 of the Plat Recording Fee in the county general fund and $10 in its County Recorder’s Technology Fund.[9]

The Legislature requires Boards of County Commissioners (“County Boards”) to segregate the $25.50 and $35.50 amounts listed above (the “Unallocated Fees”) in an appropriate account (an “Unallocated Fees Account”) and to use the Unallocated Fees only as the Legislature permits.[10]

2. What is a Technology Fund?

The Minnesota Legislature requires Minnesota counties to establish Technology Funds for their County Recorders for the purpose of “obtaining, maintaining, and updating current technology and equipment to provide services from the record system.”[11] A County Recorder is to disburse the Technology Fund at the County Recorder’s discretion “to provide modern information services from the records system.”[12] A Technology Fund is a supplemental fund. It does not relieve the County Board of its obligation to pay personnel and other expenses that are necessary in the performance of the County Recorder’s official duties.[13]

3. How does the Legislature define “modern information services from the records system”?

The Legislature has not expressly defined “modern information services from the records system.” In the statute in which the Legislature uses that phrase, however, the immediately preceding sentence says that a Technology Fund is to be used for “obtaining, maintaining, and updating current technology and equipment to provide services from the record system.” The Commission believes that “modern information services from the record system” means eRecording and future technological evolutions in the management and use of the land record system, because members of the Commission who helped draft the Act recall that they used phrase just quoted instead of “electronic real estate recording” to reflect their belief that, like other modern information systems, electronic recording would continue to evolve.[14] Thus, the Commission believes that County Recorders should use their Technology Funds only to obtain, maintain, and update technology and equipment that support eRecording and other land-record-related technology.

4. Please provide examples of appropriate—and inappropriate—uses of Technology Funds.

The Commission’s examples of appropriate uses of Technology Funds include funding for:

• eRecording systems
• Servers and other technology-related equipment that support and enhance eRecording systems
• Operating systems that support and enhance eRecording systems
• Provision of online access to land records and related information so that county offices and appropriate third parties can search and retrieve land records electronically
• Travel, lodging, and meal allowances for land records staff who attend eRecording training and conferences
• Printed material, websites, webcasts, podcasts, and other measures to raise public awareness of eRecording and other land-record-related technology
• County Recorder reserve accounts for future acquisitions of equipment and technology that support eRecording and other land-record-related technology.

As stated above, a Technology Fund is a supplemental fund. It does not “diminish the duty of the county governing body to furnish funding for expenses and personnel necessary in the performance of the duties of the [county recorder’s] office[.]”[15] Thus, it is inappropriate for a County Recorder to use the Technology Fund to pay for standard carpeting, office supplies, furniture, fixtures, equipment, and other routine expenses of the County Recorder’s office.

5. How should counties use their Unallocated Fees Accounts?

The Legislature requires County Boards to segregate their Unallocated Fees in appropriate accounts and to use their Unallocated Fees Accounts only “for supporting enhancements to the recording process, including electronic recording, fund[ing efforts to comply with certain statutory recording requirements,] and . . . undertaking data integration and aggregation projects.”[16] The Unallocated Fees must remain in their segregated Unallocated Fees Account until the County Board spends them for one of these authorized purposes.[17]

6. Please provide examples of appropriate—and inappropriate—uses of an Unallocated Fees Account.

The Commission’s examples of appropriate uses of an Unallocated Fees Account include funding for:

• eRecording systems
• GIS
• Integration of technology in the offices of the county recorder, auditor-treasurer, and other offices that maintain or use the county’s land records
• County reserve accounts for future acquisitions of equipment and technology that support eRecording and other land-record-related technology.

The Legislature says that County Boards must not use their Unallocated Fees Accounts “to supplant the normal operating expenses for the office of county recorder or registrar of titles.”[18] Thus, it is inappropriate for county commissioners to use Unallocated Fees Accounts to pay for standard carpeting, office supplies, furniture, fixtures, equipment, and other routine expenses of the County Recorder’s office.

[1] See generally Property Records Industry Association (PRIA), “The Models of eRecording: A Continuum of Electronic Recording Updated” (2013), available at http://www.pria.us/files/public/Committees/Technology/Business_Requirements/2013/eRecordingModels_FinalBRReviewDraft07032013.pdf (last visited April 20, 2016).

[2] See 2000 Minn. Laws ch. 391.

[3] Minn. Stat. §§ 507.0941 to 507.0948.

[4] See 2008 Minn. Laws ch. 238, art. 2. The Commission replaced the Task Force.

[5] Minn. Stat. § 507.0945.

[6] Minn. Stat. §§ 507.0942, 507.946.

[7] See Minn. Stat. §§ 357.18, subd. 1(1) and 1(8). See also Minn. Stat. §§ 508.82 and 508A.82 regarding registrar of titles’s fees.

[8] Minn. Stat. § 357.18, subd. 1(1). See also Minn. Stat. §§ 508.82 and 508A.82 regarding registrar of titles’s fees.

[9] Minn. Stat. § 357.18, subd. 1(9). See also Minn. Stat. §§ 508.82 and 508A.82 regarding registrar of titles’s fees.

[10] See Minn. Stat. § 357.182, subd. 7.

[11] Minn. Stat. § 357.18, subd. 4.

[12] Minn. Stat. § 357.18, subd. 4 (emphasis added).

[13] Minn. Stat. § 357.18, subd. 4.

[14] The drafters were right. Geographic information systems (GIS), for example, are now being integrated with electronic land records.

[15] Minn. Stat. § 357.18, subd. 4.

[16] Minn. Stat. § 357.182, subd. 7. The statutory recording requirements relate to the maximum time allowed for County Recorders to complete the recording process for documents presented in recordable form. See Minn. Stat. § 357.182, subd. 7 (citing the compliance efforts specified in Minn. Stat. § 357.182, subd. 4).

[17] Minn. Stat. § 357.182, subd. 7.

[18] Minn. Stat. § 357.182, subd. 7.