HF 685

2nd Engrossment - 93rd Legislature (2023 - 2024) Posted on 04/15/2024 03:44pm

A bill for an act
relating to housing; restricting residential rentals by corporate home owners;
establishing a statewide landlord database; proposing coding for new law in
Minnesota Statutes, chapters 462A; 500; 504B.

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

Section 1.

new text begin [462A.45] STATEWIDE LANDLORD DATABASE.
new text end

new text begin Subdivision 1. new text end

new text begin Definitions. new text end

new text begin (a) For the purposes of this section, the terms defined in this
subdivision have the meanings given.
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new text begin (b) "Landlord" has the meaning given in section 504B.001, subdivision 7.
new text end

new text begin (c) "Residential building" has the meaning given in section 504B.001, subdivision 11.
new text end

new text begin (d) "Tenant" has the meaning given to "residential tenant" in section 504B.001,
subdivision 12.
new text end

new text begin Subd. 2. new text end

new text begin Statewide landlord database. new text end

new text begin The commissioner of the Housing Finance
Agency, in consultation with the secretary of state and the Department of Commerce, shall
create a statewide landlord database that collects and retains the information required in
this section. The agency must not charge a fee to a landlord for annually submitting
information to the database. Access to the database must be at no cost and the information
submitted must be accessible to the public through a public website that can be searched
by a public user. The database must allow tenants and prospective tenants to report rental
units or landlords who cannot be found in the database.
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new text begin Subd. 3. new text end

new text begin Landlord database; annual submissions. new text end

new text begin (a) Before renting a rental unit in
a residential building in the state or within 30 days of renting a rental unit in the state, a
landlord must provide the following information to the statewide landlord database:
new text end

new text begin (1) the complete legal names of the owners of the residential building where the rental
property is located and, if the property is owned by a company or group of investors, the
complete legal names of each natural person who has an economic interest in the residential
building;
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new text begin (2) the business address of each natural person who owns an interest in the property;
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new text begin (3) the name, address, and contact information for the landlord or manager of the property;
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new text begin (4) the rent for each residential rental unit on the first day that the property is rented or
on January 1 of the year of the filing for a renewal; and
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new text begin (5) if the rental unit or the residential building has a rental license, the date of issue,
expiration, and jurisdiction issuing the license.
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new text begin (b) A landlord must annually update a submission for each rental unit or residential
building that the landlord is renting by February 1 or, if a unit is vacant, before or during
the first 30 days that the rental unit is occupied.
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new text begin (c) A landlord who fails to comply with this subdivision is subject to penalties under
subdivision 4.
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new text begin Subd. 4. new text end

new text begin Enforcement. new text end

new text begin (a) A tenant who is unable to locate a property or property owner
in the statewide landlord database shall notify the Housing Finance Agency that the landlord
or unit could not be found, and the tenant must provide their contact information, the unit
address, and the contact information for the landlord. The Housing Finance Agency must
send a letter to the landlord with information on the database and notice that the landlord
must provide the landlord's annual submission to the database within 30 days of the date
that the landlord received notice of the letter. The Housing Finance Agency must send the
tenant a copy of the letter. An enforcement action under paragraph (b) may not be brought
until 31 days after the date of the letter sent under this paragraph.
new text end

new text begin (b) The attorney general may enforce this section. The court may award a civil penalty
of up to $5,000 if the court finds that the landlord has repeated knowing and willful violations
of this section.
new text end

Sec. 2.

new text begin [500.35] SINGLE-FAMILY HOME RENTALS; CORPORATE
RESTRICTIONS.
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) "Corporate owner" includes any person, partnership, company, corporation, or
organization. Corporate owner does not include an individual who is a natural person, a
married couple, or a trust for the benefit of a natural person, married couple, or a trust where
the majority of the beneficiaries are related by law.
new text end

new text begin (c) "Residential tenant" has the meaning given in section 504B.001, subdivision 12.
new text end

new text begin Subd. 2. new text end

new text begin Single-family home rentals restricted. new text end

new text begin (a) The corporate owner of a
single-family home is prohibited from renting the home out to a residential tenant when:
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new text begin (1) the owner has a property interest in ten or more single-family nonhomestead properties
that have a current residential tenant, or are available for rent or have been rented within
the last 12 months by a residential tenant; and
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new text begin (2) the owner is not a named exception to this restriction under subdivision 3.
new text end

new text begin (b) The individual owner of a single-family home is prohibited from renting the home
to a residential tenant when the owner has a property interest in 20 or more single-family
nonhomestead properties that have a current residential tenant, or are available for rent or
have been rented within the last 12 months by a residential tenant and the owner is not a
named exception to this restriction under subdivision 3.
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new text begin (c) For the purposes of this section, a "single-family home" is a single home and does
not include a duplex, triplex, or fourplex.
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new text begin (d) "Homestead" has the meaning given in chapter 273. A property that is classified as
class 1a under section 273.13, subdivision 22, is an exempt property and should not be
counted as a property under paragraph (a), clause (1).
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new text begin Subd. 3. new text end

new text begin Exceptions; exemptions. new text end

new text begin (a) The owner or corporate owner of a single-family
home is exempt from the residential rental restriction in subdivision 2, if the owner is:
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new text begin (1) a local, state, or federal unit of government, including a state or federal agency;
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new text begin (2) a land trust as defined by section 462A.31;
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new text begin (3) a nonprofit as defined by chapter 317A;
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new text begin (4) the owner of a home licensed under chapter 245D;
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new text begin (5) an employer and the home is a home rented by the employer to an employee;
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new text begin (6) a corporation primarily engaged in housing development through the construction
and rehabilitation of single-family residences; or
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new text begin (7) a sheriff certificate mortgage note holder that owns the single-family residences
through foreclosure.
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new text begin (b) If a person who is renting a single-family home as a short-term rental for less than
30 days and is in compliance with any state and local regulations governing short-term
rentals, then that home is not considered a residential tenancy for the purposes of this section.
new text end

new text begin (c) An owner or a corporate owner may apply for an exemption from subdivision 2 with
the commissioner of the Housing Finance Agency. The commissioner may issue an
exemption if (1) the exemption to the corporate owner would not have an impact upon the
availability of affordable housing, and (2) the exemption does not limit the supply of
affordable, safe single-family homes available to purchasers who plan to be owner-occupants.
The commissioner shall have 60 days from the time an application for exemption is filed
to determine if the exemption shall be granted. The corporate owner may make a request
for reconsideration if the application has been denied and the commissioner or their appointee
must meet with the corporate owner within ten days of the request for reconsideration and
make a determination on that request within 20 days of the request. The agency may charge
a reasonable fee to process applications for exemptions and renewals of exemptions under
this section. Each corporate owner that is issued an exemption under this section must file
an annual request to continue the exemption. The agency shall grant the request if the
applicant continues to meet the criteria. If a corporate owner fails to meet the criteria, the
commissioner shall withdraw the exemption and the corporate owner is subject to
enforcement proceedings under subdivision 4.
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new text begin (d) The commissioner shall submit a report with a list of each corporate owner that is
issued an exemption under this paragraph to the chairs and ranking minority members of
the senate and house of representatives housing policy committees by October 1 of each
year.
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new text begin Subd. 4. new text end

new text begin Enforcement. new text end

new text begin (a) If the attorney general or a local government has reason to
believe that a corporate owner has violated this section, or has taken substantial steps to
purchase real property with the intent to rent that property in violation of subdivision 2,
then the attorney general shall commence an action in the district court in which any real
property related to the violation is situated.
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new text begin (b) If the court finds that the business entity violated subdivision 2, it shall award a
$100,000 civil fine for each single-family home rented in excess of the amount allowed
under this section, as well as court costs and attorney fees. Civil fines collected pursuant to
this section shall be deposited in the workforce and affordable homeownership development
program.
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new text begin (c) The parties may agree to a settlement that allows the sale of an earlier acquired rental
property owned by a corporate owner in violation of this section.
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new text begin EFFECTIVE DATE. new text end

new text begin This section is effective August 1, 2024. Corporate owners who
own more than ten residential rental properties shall have two years to divest of properties
in violation of this section from the date of enactment.
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Sec. 3.

new text begin [504B.112] OWNERSHIP DISCLOSURE.
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new text begin A landlord must disclose to a tenant in writing the name and contact information for all
parties with any interest in the real property subject to the lease.
new text end