In 1995, a Minnesota property owner registered an abstract parcel as Torrens land. In 2005, the owner granted a mortgage on the property to First Bank, and First Bank memorialized the mortgage on the Certificate of Title. In 2010, the owner also granted an easement to a utility company, but the utility company never registered the easement on the Certificate of Title. In 2024, the owner sells the property to a new buyer who reviews the Certificate of Title, sees no easement listed, and takes title. The utility company now asserts its easement against the new buyer. Under Minnesota's Torrens system, what is the most likely outcome?
Correct Answer
D) The utility company's easement is generally not enforceable against the new buyer because unregistered interests are not binding on Torrens land, and the new buyer took title based on the Certificate of Title
Under Minnesota's Torrens system (Minn. Stat. Ch. 508), the Certificate of Title is conclusive as to the state of title and all encumbrances on the property. Interests not memorialized on the Certificate of Title are generally not binding on the registered owner or a subsequent purchaser who takes based on the certificate. The utility company had the obligation to register its easement on the Certificate of Title. Its failure to do so means the easement is generally unenforceable against the new buyer who relied on the certificate. The utility company's remedy would be against the seller who granted the easement, potentially through the Torrens Assurance Fund if a registration error is involved.
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Related Topics & Key Terms
Key Terms:
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Tenancy in common is a form of co-ownership in which two or more persons hold separate, undivided interests in property without the right of survivorship. Each owner can hold unequal shares and can independently transfer their interest.
A freehold estate conveys ownership rights, while a leasehold estate grants the right to possess and use property for a specific period without ownership.
Riparian rights concern properties bordering flowing bodies of water (rivers, streams), while littoral rights concern properties bordering non-flowing bodies of water (lakes, oceans).
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