SF 1962

Introduction - 94th Legislature (2025 - 2026)

Posted on 04/07/2025 09:39 a.m.

A bill for an act
relating to real property; limiting due-on-sale clauses in certain instances; providing
a private right of action; amending Minnesota Statutes 2024, section 58.13, by
adding a subdivision.

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

Section 1.

Minnesota Statutes 2024, section 58.13, is amended by adding a subdivision
to read:

new text begin Subd. 3. new text end

new text begin Due-on-sale clauses; limitation. new text end

new text begin (a) With respect to a loan secured by residential
real estate, a lender is prohibited from exercising a due-on-sale clause with respect to the
following:
new text end

new text begin (1) a transfer-on-death deed that conveys or assigns the deceased borrower's interest in
the residential real estate to a grantee beneficiary;
new text end

new text begin (2) a transfer by devise, decent, or operation of law upon a joint tenant's death;
new text end

new text begin (3) a transfer by which the borrower's spouse or children become an owner of the
residential real estate;
new text end

new text begin (4) a transfer resulting from a dissolution of marriage decree, legal separation agreement,
or incidental property settlement agreement by which the borrower's spouse becomes an
owner of the residential real estate; or
new text end

new text begin (5) a transfer into an inter vivos trust by which the borrower is and remains a beneficiary,
and that does not relate to a transfer of occupancy rights in the residential real estate.
new text end

new text begin (b) Paragraph (a) does not apply to a reverse mortgage made under section 47.58.
new text end

new text begin (c) Notwithstanding section 58.18, subdivision 4, a person aggrieved by a violation of
this subdivision has a private right of action for equitable relief, reasonable attorney fees,
and costs.
new text end