Minnesota's Seller Disclosure Statute Is Built Around What the Seller Knew. That Makes the File, Not the House, the Evidence.

Six months after closing, the basement takes on water. The buyer’s contractor finds a patched foundation crack, a sump pump that was clearly replaced, and a drain tile system that was clearly installed by somebody who knew there was a problem.

The seller’s answer is the one I hear in nearly every one of these disputes: the property was sold as is, the buyer had an inspection, and the disclosure form didn’t say anything about water because there wasn’t any water while the seller lived there.

Whether that answer works has almost nothing to do with the basement. Minnesota’s residential seller disclosure statute is built around the seller’s knowledge — the duty, the defenses, the liability provision, all of it. So the case turns on what can be proved about what the seller knew: the prior owner’s disclosure form, the contractor’s invoice, the insurance claim, the permit record, the seller’s own emails.

The house is the damages. The file is the liability.

The duty, in one sentence, with the clause people drop

Minn. Stat. § 513.55, subd. 1(a):

Before signing an agreement to sell or transfer residential real property, the seller shall make a written disclosure to the prospective buyer. The disclosure must include all material facts of which the seller is aware that could adversely and significantly affect:

(1) an ordinary buyer’s use and enjoyment of the property; or

(2) any intended use of the property of which the seller is aware.

Clause (2) is the half that gets left off, and it isn’t decoration. The standard isn’t purely objective. If the seller knows the buyer intends a particular use — an in-law apartment, a home daycare, a shop in the outbuilding, a lot split — then facts that wouldn’t trouble an “ordinary buyer” but would defeat that use are within the duty.

Subdivision 1(b) sets the measure: “The disclosure must be made in good faith and based upon the best of the seller’s knowledge at the time of the disclosure.”

And the duty doesn’t end at signing. Under § 513.58, subd. 1, a seller “must notify the prospective buyer in writing as soon as reasonably possible, but in any event before closing, if the seller learns that the seller’s disclosure required by section 513.55 was inaccurate.” Failing to update carries the same liability as failing to disclose in the first place. In my experience this is where a lot of sellers actually lose: the disclosure was honest in March and the seller learned otherwise in May.

A seller may deliver the disclosure to the real estate licensee “representing or assisting the prospective buyer,” and it’s then “considered to have been provided to the prospective buyer” — the licensee “shall provide a copy” to the buyer. (§ 513.55, subd. 2.)

Who the statute reaches

The definitions are tighter than the phrase “seller disclosure” suggests.

“Residential real property” means “property occupied as, or intended to be occupied as, a single-family residence, including a unit in a common interest community as defined in section 515B.1-103, clause (10), regardless of whether the unit is in a common interest community not subject to chapter 515B.” (§ 513.52, subd. 4.)

But the covered transactions are broad. Section 513.53: the requirements “apply to the transfer of any interest in residential real estate, whether by sale, exchange, deed, contract for deed, lease with an option to purchase, or any other option.” A seller financing on a contract for deed owes the same disclosure as a seller taking cash.

And then there are fourteen exceptions in § 513.54. The requirements do not apply to: (1) property that is not residential real property; (2) a gratuitous transfer; (3) a transfer pursuant to a court order; (4) a transfer to a government or governmental agency; (5) a transfer by foreclosure or deed in lieu of foreclosure; (6) a transfer to heirs or devisees of a decedent; (7) a transfer from a cotenant to one or more other cotenants; (8) a transfer to a spouse, parent, grandparent, child, or grandchild of the seller; (9) a transfer between spouses resulting from a dissolution decree or an incidental property settlement; (10) a transfer of newly constructed residential property that has not been inhabited; (11) an option to purchase a CIC unit, until exercised; (12) a transfer to a person who controls or is controlled by the grantor as defined for a declarant under § 515B.1-103, clause (2); (13) a transfer to a tenant who is in possession of the property; and (14) a transfer of special declarant rights under § 515B.3-104.

Exceptions (5), (10), and (13) do the most work in the files I see — the REO sale, the builder’s new construction, and the tenant buyout. Hang on to (10). It comes back below, and builders don’t see it coming.

What you don’t have to disclose — and the catch

Section 513.56 is a set of safe harbors, and I’d put it among the most frequently truncated provisions in Minnesota real estate practice. Lawyers quote the shelter and skip the condition that comes with it.

Subdivision 1 provides that § 513.55 does not create a duty to disclose that the property “is or was occupied by an owner or occupant who is or was suspected to be infected with human immunodeficiency virus or diagnosed with acquired immunodeficiency syndrome”; “was the site of a suicide, accidental death, natural death, or perceived paranormal activity”; or “is located in a neighborhood containing any adult family home, community-based residential facility, or nursing home.”

Subdivision 2 removes any duty to disclose information about a registered predatory offender — but only if the seller “in a timely manner, provides a written notice that information about the predatory offender registry and persons registered with the registry may be obtained by contacting the local law enforcement agency where the property is located or the Department of Corrections.” No notice, no safe harbor.

Subdivision 4 makes those two subdivisions bite against the common law: “The limitation on disclosure in subdivisions 1 and 2 modifies any common law duties with respect to disclosure of material facts.” Watch the scope — subdivisions 1 and 2, not the whole section.

Subdivision 3 is the inspection-report shelter, and it has a second half. Paragraph (a) provides that “[e]xcept as provided in paragraph (b), a seller is not required to disclose information relating to the real property if a written report that discloses the information has been prepared by a qualified third party and provided to the prospective buyer” — a qualified third party being a governmental agency or “any person whom the seller, or prospective buyer, reasonably believes has the expertise necessary to meet the industry standards of practice for the type of inspection or investigation that has been conducted.”

Then paragraph (b):

A seller shall disclose to the prospective buyer material facts known by the seller that contradict any information included in a written report under paragraph (a) if a copy of the report is provided to the seller.

A seller who gets the inspection report and stays quiet about the thing the report got wrong hasn’t been sheltered. When a seller points to the buyer’s own inspection as a defense, paragraph (b) is the first thing I check.

Paragraph (c) adds a conditional shelter for airport zoning regulations, again contingent on giving a written notice about where the regulations may be reviewed or obtained.

Liability: what triggers it and how long you have

Section 513.57, subd. 1 is the seller’s protection, and every clause in it is about knowledge:

Unless the prospective buyer and seller agree to the contrary in writing, a seller is not liable for any error, inaccuracy, or omission of any information delivered under sections 513.52 to 513.60 if the error, inaccuracy, or omission was not within the personal knowledge of the seller, or was based entirely on information provided by other persons as specified in section 513.56, subdivision 3, and ordinary care was exercised in transmitting the information. It is not a violation of sections 513.52 to 513.60 if the seller fails to disclose information that could be obtained only through inspection or observation of inaccessible portions of the real estate or could be discovered only by a person with expertise in a science or trade beyond the knowledge of the seller.

Two things are hiding in there. The parties can contract into liability — the whole subdivision opens “[u]nless the prospective buyer and seller agree to the contrary in writing.” And the “inaccessible portions” and “expertise beyond the knowledge of the seller” sentence is a genuine defense for a seller who genuinely didn’t know. That’s why I build a buyer’s case from paper rather than from the defect itself.

Section 513.57, subd. 2 is the liability provision, and it’s a knowledge provision too:

A seller who fails to make a disclosure as required by sections 513.52 to 513.60 and was aware of material facts pertaining to the real property is liable to the prospective buyer. A person injured by a violation of this section may bring a civil action and recover damages and receive other equitable relief as determined by the court. An action under this subdivision must be commenced within two years after the date on which the prospective buyer closed the purchase or transfer of the real property.

(Bold emphasis added. The quotation is the complete subdivision.)

The clock runs from closing, not from discovery. A latent defect that shows up in year three has run out of statutory time before anyone knew there was a claim. That’s a hard deadline written into the statute itself, and it’s why I want these matters on my desk as soon as the problem appears — not after the repair estimates come in.

Section 513.57, subd. 3 is the escape valve: “Nothing in sections 513.52 to 513.60 precludes liability for an action based on fraud, negligent misrepresentation, or other actions allowed by law.” Those claims have their own elements and their own limitations rules — this section doesn’t supply them. Where the facts show affirmative misrepresentation rather than silence, Minnesota’s consumer protection statutes may also be in play, and who gets to use them depends on who the plaintiff is.

Section 513.59 sets the remedial ceiling and floor: a transfer “is not invalidated solely because of the failure of any person to comply,” but “[t]his section does not prevent a court from ordering a rescission of the transfer.”

“As is,” and what § 513.60 actually does

Minnesota allows waiver, and says so plainly. Section 513.60:

The written disclosure required under sections 513.52 to 513.60 may be waived if the seller and the prospective buyer agree in writing. Waiver of the disclosure required under sections 513.52 to 513.60 does not waive, limit, or abridge any obligation for seller disclosure created by any other law.

Read both sentences. The first one is real: a written mutual waiver eliminates the § 513.55 disclosure. The second is a fence around it, and the fence is where most of the “as is” arguments I run into fall apart.

Here’s what a § 513.60 waiver — or an “as is” clause generally — doesn’t do:

1. It doesn’t waive disclosure duties created by other statutes. The second sentence of § 513.60 says so in terms.
2. It doesn’t bar fraud or negligent misrepresentation. Section 513.57, subd. 3 preserves them, and a waiver of a disclosure obligation isn’t a license for an affirmative false statement.
3. It doesn’t by itself defeat liability the parties agreed to. Section 513.57, subd. 1 begins “[u]nless the prospective buyer and seller agree to the contrary in writing” — the same document that waives one thing can create another.
4. It doesn’t stop a court from ordering rescission under § 513.59 where rescission is otherwise warranted.

Minnesota is generally willing to enforce what parties actually agreed to, but it draws lines around agreements that would bury information — a pattern I traced across several statutes here. Section 513.60 is a clean example: you can waive inside the box the legislature drew, not outside it.

The four disclosure duties an “as is” clause can’t reach

These are separate statutes with separate scopes, separate remedies, and — for two of them — separate recording consequences.

Three of the four reach all real property, not just houses. Sections 103I.235, subd. 1(a), 115.55, subd. 6(a), and 152.0275, subd. 2(m) each begin “[b]efore signing an agreement to sell or transfer real property.” A commercial or bare-land deal that’s entirely outside § 513.55 can still carry a well, septic, and methamphetamine duty.

The well duty is enforced at the recorder’s counter. Under § 103I.235, subd. 1(h), a county recorder or registrar of titles “may not record a deed or other instrument of conveyance” for which a certificate of value is required unless the instrument contains the no-wells statement or is accompanied by a completed well disclosure certificate, and “must not accept a certificate unless it contains all the required information.” The fee is $54, of which $46.50 goes to the commissioner of health. A no-wells certification can instead be made on the face of the deed in the statutory words: “The Seller certifies that the Seller does not know of any wells on the described real property.”

And on a contract for deed, the buyer signs the certificate. Section 103I.235, subd. 1(d): “If a deed is given pursuant to a contract for deed, the well disclosure certificate required by this subdivision shall be signed by the buyer or a person authorized to act on behalf of the buyer.” That’s one of several ways a Minnesota contract for deed does not behave like an ordinary sale.

The septic duty carries its own damages formula and its own clock. Section 115.55, subd. 6(c): unless the parties agree otherwise in writing before closing, a seller who fails to disclose the existence or known status of a subsurface sewage treatment system “and who knew or had reason to know” of it is liable “for costs relating to bringing the system into compliance with the subsurface sewage treatment system rules and for reasonable attorney fees for collection of costs.” That action, like § 513.57’s, “must be commenced within two years after the date on which the buyer or transferee closed the purchase or transfer.”

Here’s the gap that catches builders. Section 513.54(10) exempts “a transfer of newly constructed residential property that has not been inhabited” from the § 513.55 disclosure. The Radon Awareness Act’s exception list at § 144.496, subd. 3(d) has thirteen items that otherwise track § 513.54 nearly word for word — and newly constructed uninhabited property isn’t one of them. A builder selling a never-occupied home is outside the general disclosure statute and inside the radon statute.

How I work these cases

For a buyer with a problem after closing, my first move is the calendar, not the contractor. Two years from closing under § 513.57, subd. 2 and § 115.55, subd. 6(c), and two years from closing under § 144.496, subd. 5(b) — none of these run from discovery, so I date the problem and count backwards right away. Then I go after the seller’s own purchase file, not just my client’s: the disclosure the seller got when they bought the house is the single most productive document in these cases, and I’ve seen it decide more than one. I pull the public record — building permits, septic and well records, municipal point-of-sale inspection files, code enforcement history — all obtainable, all dated. I look for the repair, not the defect: an invoice, a warranty registration, a homeowner’s insurance claim, or a receipt for a sump pump proves knowledge in a way the water stain never will. I check whether an inspection report went to the seller, because if it did, § 513.56, subd. 3(b) required the seller to speak up about known facts contradicting it. And I check whether the waiver was actually signed in writing by both sides — § 513.60 requires that the seller “and the prospective buyer agree in writing.” An “as is” line buried in an addendum isn’t automatically a § 513.60 waiver.

For a seller, my advice is shorter. Disclose what you know, in writing, and keep the copy — the statute’s protections are all built around what was and wasn’t within your personal knowledge, and your file is what establishes it. Update the disclosure when facts change; § 513.58 requires it before closing, and skipping it is the most common avoidable liability in the statute. Don’t treat “as is” as a substitute for the well, septic, methamphetamine, and radon disclosures — § 513.60’s second sentence takes them off the table. If you get a copy of the buyer’s inspection report, read it against what you know, because silence about a contradiction is expressly outside the safe harbor. And sign the well disclosure certificate accurately: it’s a condition of recording, and it becomes a permanent record filed with the commissioner of health.

A statute about a person, not a house

Most people read Minnesota’s disclosure statute as a list of things about the house. It isn’t. It’s a statute about a person.

Section 513.55 requires disclosure of material facts “of which the seller is aware.” Section 513.56, subd. 3(b) reaches facts “known by the seller.” Section 513.57, subd. 1 excuses errors “not within the personal knowledge of the seller.” Section 513.57, subd. 2 imposes liability on a seller who “was aware of material facts.” Section 152.0275, subd. 2(m) turns on what is “to the seller’s or transferor’s knowledge.” Section 115.55, subd. 6(c) reaches a seller who “knew or had reason to know.” Section 144.496, subd. 5(a) reaches a seller who “is aware of material facts.”

Every operative provision in the scheme is a knowledge provision. So you don’t win these cases by proving the foundation leaks. You win them — or lose them — by proving what the person selling the house had already been told about it, and by whom, and when.

That evidence is on paper almost every time. It’s just usually in somebody else’s file. My job is to go get it.

Madgett Law, LLC represents Minnesota buyers and sellers in residential real estate disclosure disputes — failure to disclose, misrepresentation, well and septic disclosure claims, radon and methamphetamine disclosure, and the scope of “as is” and waiver language. Because the statutory clock runs from the closing date rather than from discovery, an early phone call is worth more than a finished repair estimate. Send us a message or call 612-470-6529.

Sources: Minn. Stat. § 513.52, subds. 2–5 (definitions of prospective buyer, real estate licensee, residential real property, and seller); § 513.53 (applicability to any interest in residential real estate, including contract for deed and lease with option); § 513.54 (the fourteen exceptions, including foreclosure or deed in lieu, newly constructed uninhabited property, and transfer to a tenant in possession); § 513.55, subds. 1 and 2 (the written disclosure of “all material facts of which the seller is aware that could adversely and significantly affect” an ordinary buyer’s use and enjoyment or any intended use of which the seller is aware; good faith and best of the seller’s knowledge; delivery through the buyer’s licensee); § 513.56, subds. 1–4 (facts for which no disclosure duty is created; the conditional predatory-offender-registry notice; the qualified-third-party inspection report shelter and the paragraph (b) duty to disclose known contradicting facts; the airport zoning notice; modification of common law duties by subdivisions 1 and 2); § 513.57, subds. 1–3 (no liability outside the seller’s personal knowledge, subject to written agreement to the contrary; inaccessible portions and specialized expertise; liability of a seller who was aware of material facts; the two-year period running from the date the buyer closed; preservation of fraud, negligent misrepresentation, and other actions); § 513.58 (duty to notify of an inaccurate disclosure before closing, with § 513.57 liability); § 513.59 (transfer not invalidated; rescission not precluded); § 513.60 (waiver by written agreement, and its express non-extension to disclosure obligations created by any other law); § 513.61 (radon disclosure via § 144.496); Minn. Stat. § 103I.235, subd. 1(a)–(d), (h) (well disclosure before signing; well disclosure certificate at closing; the deed certification language; the buyer’s signature on a contract-for-deed deed; the recorder’s refusal to record and the $54 fee); Minn. Stat. § 115.55, subd. 6(a)–(c) (subsurface sewage treatment system disclosure; map and compliance status; liability for compliance costs and reasonable attorney fees, and the two-year period from closing); Minn. Stat. § 152.0275, subd. 2(m)–(n) (methamphetamine production disclosure before signing); Minn. Stat. § 144.496, subds. 2–5 (Minnesota Radon Awareness Act — definitions; required disclosure contents; the thirteen exceptions, which do not include newly constructed uninhabited property; the statutory Radon Warning Statement; liability and the two-year period from closing; transfer not invalidated) (Minnesota Office of the Revisor of Statutes). What a particular seller knew, and whether a particular fact is “material,” are fact questions this article does not resolve. Claims preserved by § 513.57, subd. 3 are governed by their own elements and limitations rules, which this article does not state. This article is general legal information about Minnesota law, not legal advice, and reading it does not create an attorney–client relationship. No outcome is promised or implied.