HF 4034

1st Engrossment - 93rd Legislature (2023 - 2024) Posted on 04/02/2024 01:04pm

A bill for an act
relating to commerce; establishing consumer protections with respect to residential
real estate; amending Minnesota Statutes 2022, section 45.011, subdivision 1; proposing coding for new law in Minnesota Statutes, chapters 65A; 332; 513; repealing Minnesota Statutes 2022, section 332.3351.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

Minnesota Statutes 2022, section 45.011, subdivision 1, is amended to read:

Subdivision 1.

Scope.

As used in chapters 45 to 80C, 80E to 83, 155A, 216C, 332, 332A,
332B, 345, and 359, and sections 81A.22 to 81A.37; 123A.21, subdivision 7, paragraph
(a), clause (23); 123A.25; 325D.30 to 325D.42; 326B.802 to 326B.885; 386.62 to 386.78;
471.617; deleted text begin and deleted text end 471.982 deleted text begin , deleted text end new text begin ; and 513.80, new text end unless the context indicates otherwise, the terms defined
in this section have the meanings given them.

Sec. 2.

new text begin [65A.3025] CONDOMINIUM AND TOWNHOUSE POLICIES;
COORDINATION OF BENEFITS FOR LOSS ASSESSMENT.
new text end

new text begin Subdivision 1. new text end

new text begin Definitions. new text end

new text begin (a) For purposes of this section, the following terms have
the meanings given.
new text end

new text begin (b) "Association" has the meaning given in section 515B.1-103, clause (4).
new text end

new text begin (c) "Unit owner" has the meaning given in section 515B.1-103, clause (37).
new text end

new text begin Subd. 2. new text end

new text begin Loss assessment. new text end

new text begin (a) If a loss assessment is charged by an association to an
individual unit owner, the insurance policy in force at the time of the assessable loss must
pay the loss assessment, up to the limits provided in the policy, notwithstanding any policy
provisions regarding when loss assessment coverage accrues, and subject to any other terms,
conditions, and exclusions in the policy, if the following conditions are met:
new text end

new text begin (1) the unit owner at the time of the assessable loss is the owner of the property listed
on the policy at the time the loss assessment is charged; and
new text end

new text begin (2) the insurance policy in force at the time of the assessable loss provides loss assessment
coverage.
new text end

new text begin (b) If a loss assessment is charged by an association to an individual unit owner, the
insurance policy in force at the time the loss assessment is charged must pay the assessment,
up to the limits provided in the policy, notwithstanding any policy provisions regarding
when loss assessment coverage accrues, and subject to any other terms, conditions, and
exclusions in the policy, if the following conditions are met:
new text end

new text begin (1) the unit owner at the time the loss assessment is charged is different than the unit
owner at the time of the assessable loss; and
new text end

new text begin (2) the insurance policy in force at the time the loss assessment is charged provides loss
assessment coverage.
new text end

new text begin (c) For a loss assessment under paragraph (b), an insurer may require evidence
documenting that the transfer of ownership occurred prior to the assessment before the
insurer affords coverage.
new text end

Sec. 3.

new text begin [332.3352] WAIVER OF LICENSING AND REGISTRATION.
new text end

new text begin The commissioner of commerce may, by order, waive the licensing and registration
requirements of this chapter for a nonresident collection agency and its affiliated collectors
if: (1) a written reciprocal licensing agreement is in effect between the commissioner and
the licensing officials of the collection agency's home state; and (2) the collection agency
is licensed in good standing in that state.
new text end

Sec. 4.

new text begin [513.80] RESIDENTIAL REAL ESTATE SERVICE AGREEMENTS;
UNFAIR SERVICE AGREEMENTS.
new text end

new text begin Subdivision 1. new text end

new text begin Definitions. new text end

new text begin (a) For purposes of this section, the following terms have
the meanings given.
new text end

new text begin (b) "County recorder" has the meaning given in section 13.045, subdivision 1.
new text end

new text begin (c) "Person" means natural persons, corporations both foreign and domestic, trusts,
partnerships both limited and general, incorporated or unincorporated associations,
companies, business entities, and any other legal entity or any other group associated in fact
although not a legal entity or any agent, assignee, heir, employee, representative, or servant
thereof.
new text end

new text begin (d) "Record" or "recording" means placement of a document or instrument in the official
county public land records.
new text end

new text begin (e) "Residential real property" means real property that is located in Minnesota and
occupied, or intended to be occupied, by one to four families as their residence.
new text end

new text begin (f) "Service agreement" means a contract under which a person agrees to provide real
estate broker services, as defined in section 82.55, subdivision 19, in connection with the
purchase or sale of residential real property.
new text end

new text begin (g) "Service provider" means an individual or entity that provides services to a person
pursuant to a service agreement.
new text end

new text begin Subd. 2. new text end

new text begin Unfair service agreements; prohibition. new text end

new text begin (a) A service agreement subject to
this section is unfair and prohibited if any part of the agreement provides an exclusive right
to a service provider for a term in excess of one year after the time the service agreement
is entered into and:
new text end

new text begin (1) purports to run with the land or to be binding on future owners of interests in the real
property;
new text end

new text begin (2) allows for assignment of the right to provide service without notice to and consent
of the residential real property's owner, including a contract for deed vendee;
new text end

new text begin (3) is recorded or purports to create a lien, encumbrance, or other real property security
interest; or
new text end

new text begin (4) contains a provision that purports to automatically renew the agreement upon its
expiration.
new text end

new text begin (b) The following are not unfair service agreements under this section:
new text end

new text begin (1) a home warranty or similar product that covers the cost of maintaining a major home
system or appliance for a fixed period;
new text end

new text begin (2) an insurance contract;
new text end

new text begin (3) a mortgage loan or a commitment to make or receive a mortgage loan;
new text end

new text begin (4) an option or right of refusal to purchase a residential real property;
new text end

new text begin (5) a declaration of any covenants, conditions, or restrictions created in the formation
of a homeowners association, a group of condominium owners, or other common interest
community or an amendment to the covenants, conditions, or restrictions;
new text end

new text begin (6) a maintenance or service agreement entered by a homeowners association in a
common interest community;
new text end

new text begin (7) a security agreement governed by chapter 336 that relates to the sale or rental of
personal property or fixtures; or
new text end

new text begin (8) a contract with a gas, water, sewer, electric, telephone, cable, or other utility service
provider.
new text end

new text begin (c) This section does not impair any lien right granted under Minnesota law or that is
judicially imposed.
new text end

new text begin Subd. 3. new text end

new text begin Recording prohibited. new text end

new text begin (a) A person is prohibited from:
new text end

new text begin (1) presenting or sending an unfair service agreement or notice or memorandum of an
unfair service agreement to any county recorder to record; or
new text end

new text begin (2) causing an unfair service agreement or notice or memorandum of an unfair service
agreement to be recorded by a county recorder.
new text end

new text begin (b) If a county recorder records an unfair service agreement, the county recorder does
not incur liability.
new text end

new text begin (c) If an unfair service agreement is recorded, the recording does not create a lien or
provide constructive notice to any third party, bona fide purchaser, or creditor.
new text end

new text begin Subd. 4. new text end

new text begin Unfair service agreements unenforceable. new text end

new text begin A service agreement that is unfair
under this section is unenforceable and does not create a contractual obligation or relationship.
Any waiver of a consumer right, including a right to trial by jury, in an unfair service
agreement is void.
new text end

new text begin Subd. 5. new text end

new text begin Unfair service agreements; solicitation. new text end

new text begin Encouraging any consumer to enter
into an unfair service agreement by any service provider constitutes:
new text end

new text begin (1) an unfair method of competition; and
new text end

new text begin (2) an unfair or deceptive act or practice under sections 82.81, subdivision 12, paragraph
(c), and 325F.69.
new text end

new text begin Subd. 6. new text end

new text begin Enforcement authority. new text end

new text begin (a) This section may be enforced by the attorney
general under section 8.31, except that any private cause of action brought under subdivision
7 is subject to the limitation under subdivision 7, paragraph (d).
new text end

new text begin (b) The commissioner of commerce may enforce this section with respect to a service
provider's real estate license.
new text end

new text begin Subd. 7. new text end

new text begin Remedies. new text end

new text begin (a) A consumer that is party to an unfair service agreement related
to residential real property or a person with an interest in the property that is the subject of
that agreement may bring an action under section 8.31 or 325F.70 in district court in the
county where the property is located.
new text end

new text begin (b) If an unfair service agreement or a notice or memorandum of an unfair service
agreement is recorded against any residential real property, any judgment obtained under
this section, after being certified by the clerk having custody of the unfair service agreement
or notice or memorandum of the unfair service agreement, may be recorded and indexed
against the real property encumbered or clouded by the unfair service agreement.
new text end

new text begin (c) The remedies provided under this section are not exclusive and do not reduce any
other rights or remedies a party may have in equity or in law.
new text end

new text begin (d) No private action may be brought under this section more than six years after the
date the term printed in the unfair service agreement expires.
new text end

Sec. 5. new text begin REPEALER.
new text end

new text begin Minnesota Statutes 2022, section 332.3351, new text end new text begin is repealed.
new text end

APPENDIX

Repealed Minnesota Statutes: H4034-1

332.3351 EXEMPTION FROM LICENSURE.

A collection agency shall be exempt from the licensing and registration requirements of this chapter if all of the following conditions are met:

(1) the agency is located in another state that regulates and licenses collection agencies, but does not require a Minnesota collection agency to obtain a license to collect debts in the agency's state if the agency's collection activities are limited in the same manner;

(2) the agency's collection activities are limited to collecting debts not incurred in this state from consumers located in this state; and

(3) the agency's collection activities in Minnesota are conducted by means of interstate communications, including telephone, mail, electronic mail, or facsimile transmission.