2004 Minnesota Statutes

     559.17 Mortgage not a conveyance; mortgagee cannot 
  possess. 

    Subdivision 1.    Enforcement of rent assignment.  A 
 mortgage of real property is not to be deemed a conveyance, so 
 as to enable the owner of the mortgage to recover possession of 
 the real property without a foreclosure, except as permitted in 
 subdivision 2.  The enforcement of an assignment of rents of the 
 type described in subdivision 2 shall not be deemed prohibited 
 by this subdivision, nor because a foreclosure sale under the 
 mortgage has extinguished all or part of the mortgage debt. 

    Subd. 2.    Assignment; conditions.  A mortgagor may 
 assign, as additional security for the debt secured by the 
 mortgage, the rents and profits from the mortgaged real 
 property, if the mortgage: 

    (1) was executed, modified or amended subsequent to August 
 1, 1977; 

    (2) secured an original principal amount of $100,000 or 
 more or is a lien upon residential real estate containing more 
 than four dwelling units; and 

    (3) is not a lien upon property which was: 

    (i) entirely homesteaded as agricultural property; or 

    (ii) residential real estate containing four or fewer 
 dwelling units where at least one of the units is homesteaded.  
 The assignment may be enforced, but only against the 
 nonhomestead portion of the mortgaged property, as follows: 

    (a) if, by the terms of an assignment, a receiver is to be 
 appointed upon the occurrence of some specified event, and a 
 showing is made that the event has occurred, the court shall, 
 without regard to waste, adequacy of the security, or solvency 
 of the mortgagor, appoint a receiver who shall, with respect to 
 the excess cash remaining after application as provided in 
 section 576.01, subdivision 2, apply it as prescribed by the 
 assignment.  If the assignment so provides, the receiver shall 
 apply the excess cash in the manner set out herein from the date 
 of appointment through the entire redemption period from any 
 foreclosure sale.  Subject to the terms of the assignment, the 
 receiver shall have the powers and duties as set forth in 
 section 576.01, subdivision 2; or 

    (b) if no provision is made for the appointment of a 
 receiver in the assignment or if by the terms of the assignment 
 a receiver may be appointed, the assignment shall be binding 
 upon the assignor unless or until a receiver is appointed 
 without regard to waste, adequacy of the security or solvency of 
 the mortgagor, but only in the event of default in the terms and 
 conditions of the mortgage, and only in the event the assignment 
 requires the holder thereof to first apply the rents and profits 
 received as provided in section 576.01, subdivision 2, in which 
 case the same shall operate against and be binding upon the 
 occupiers of the premises from the date of filing by the holder 
 of the assignment in the office of the county recorder or the 
 office of the registrar of titles for the county in which the 
 property is located of a notice of default in the terms and 
 conditions of the mortgage and service of a copy of the notice 
 upon the occupiers of the premises.  The holder of the 
 assignment shall apply the rents and profits received in 
 accordance with the terms of the assignment, and, if the 
 assignment so provides, for the entire redemption period from 
 any foreclosure sale.  A holder of an assignment who enforces it 
 in accordance with this clause shall not be deemed to be a 
 mortgagee in possession with attendant liability. 

    Nothing contained herein shall prohibit the right to 
 reinstate the mortgage debt granted pursuant to section 580.30, 
 nor the right to redeem granted pursuant to sections 580.23 and 
 581.10, and any excess cash, as that term is used herein, 
 collected by the receiver under clause (a), or any rents and 
 profits taken by the holder of the assignment under clause (b), 
 shall be credited to the amount required to be paid to effect a 
 reinstatement or redemption. 

    Subd. 3.    Expiration, satisfaction, release, and 
 assignment.  (a) An assignment of rents and profits under this 
 section, whether in the mortgage or in a separate instrument, 
 shall expire: 

    (1) with respect to the rents and profits from all of the 
 mortgaged property, when an action or proceeding to foreclose 
 the mortgage is barred by section 541.03, or upon recording in 
 the office of the county recorder or filing in the office of the 
 registrar of titles of the county where the mortgaged property 
 is located, of a satisfaction of the mortgage or a certificate 
 of release complying with section 507.401 in lieu of a 
 satisfaction of the mortgage; or 

    (2) with respect to the rents and profits from a portion of 
 the mortgaged property, upon recording in the office of the 
 county recorder or filing in the office of the registrar of 
 titles of the county where that portion of the mortgaged 
 property is located, of a release of that portion of the 
 mortgaged property from the lien of the mortgage, or a 
 certificate of release complying with section 507.401 in lieu of 
 a release of that portion of the mortgaged property. 

 No separate reassignment of the rents and profits or 
 satisfaction or release of the assignment is required. 

    (b) An assignment of a mortgage, whether or not the 
 mortgage mentions an assignment of rents and profits, is 
 sufficient to assign both the mortgage and the assignment of 
 rents and profits permitted by this subdivision which secures 
 the debt secured by the mortgage, and no separate assignment of 
 the assignment of rents and profits shall be required. 

    HIST: (9572) RL s 4441; 1969 c 711 s 1; 1977 c 202 s 2; 1986 c 
 444; 1992 c 376 art 2 s 1; 1993 c 6 s 2; 2000 c 450 s 6; 2003 c 
 5 art 2 s 3