Disclaimer: This article provides general legal information and does not constitute legal advice. Consult a licensed attorney in Minnesota for advice on your specific situation.
Detailed Answer
Under Minnesota law, paying property taxes on real estate does not by itself create an ownership interest, lien or equitable claim against that property. Minnesota’s conveyancing system requires a written, signed and properly recorded document—such as a deed or mortgage—to transfer or secure any real estate interest. See Minn. Stat. § 507.24 (Recording Required for Real Estate Instruments).
Here are three key points to understand:
- No Automatic Title Transfer: Simply covering another party’s tax bill does not substitute for a deed or other conveyance. The county treasurer does not issue title or partial ownership to a tax‐payer unless you purchase the tax certificate at a tax‐forfeiture sale.
- Tax‐Forfeiture Purchases: If property taxes go unpaid for several years, the county may initiate forfeiture proceedings under Minn. Stat. §§ 281.16–281.17. A third party may bid at the sheriff’s sale and, upon expiration of the statutory redemption period, obtain a deed. Paying past due taxes at such a sale is essentially a purchase, not a gift, and is governed by Minn. Stat. § 281.16.
- Equitable Liens by Agreement: In limited cases, Minnesota courts recognize that a written agreement to pay property taxes or to maintain property may give rise to an equitable lien. You must show clear evidence of the parties’ intention that tax payments secure repayment of funds. Absent such an agreement, courts will not impose an equitable lien simply because you paid taxes.
When Paying Taxes Might Lead to Rights
If you and the property owner enter into a written agreement stating that your tax payments create a security interest or equitable lien, that document must be executed and (where appropriate) recorded. Consulting an attorney to draft or review your agreement helps ensure it meets Minnesota requirements.
Helpful Hints
- Obtain a written agreement: Clearly spell out any security interest or reimbursement right if you plan to pay someone else’s taxes.
- Record your interest: If you create an equitable lien by contract, consider recording a memorandum or lien notice in the county recorder’s office.
- Monitor tax notices: Watch for delinquencies or forfeiture filings under Minn. Stat. § 281.16 to protect your potential investment.
- Seek title insurance: If you plan to acquire property through tax sale, purchase title insurance to guard against hidden defects.
- Consult a real estate attorney: Professional advice helps you navigate forfeiture sales, lien issues and recording rules in Minnesota.