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HF 1254

1st Engrossment - 87th Legislature (2011 - 2012) Posted on 02/20/2012 03:27pm

KEY: stricken = removed, old language.
underscored = added, new language.

Bill Text Versions

Engrossments
Introduction Posted on 03/21/2011
1st Engrossment Posted on 02/20/2012

Current Version - 1st Engrossment

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A bill for an act
relating to real property; expanding and defining certain residential property
rights; modifying certain association lien provisions of the Minnesota Common
Interest Ownership Act; amending Minnesota Statutes 2010, sections 500.215,
subdivision 2; 515B.3-116; proposing coding for new law in Minnesota Statutes,
chapter 500.

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

Section 1.

Minnesota Statutes 2010, section 500.215, subdivision 2, is amended to read:


Subd. 2.

Exceptions.

(a) This section does not prohibit limitations narrowly tailored
to protect health or safety.

(b) This section does not prohibit limitations that restrict:

(1) the size of the flag to be displayed to a size customarily used on residential
property;

(2) the installation and display of the flag to a portion of the residential property to
which the person who displays the flag has exclusive usenew text begin, provided that a limitation must
not restrict the right of an owner of a detached single-family dwelling to install a flagpole
on real property to which the owner has exclusive use, subject to clauses (1) and (3)
new text end; or

(3) illuminating the flag.

(c) This section does not prohibit a requirement that the flag be displayed in a legal
manner under Minnesota law, that the flag be in good condition and not altered or defaced,
or that the flag not be affixed in a permanent manner to that portion of property to be
maintained by others or in a way that causes more than inconsequential damage to others'
property. A person who causes damage is liable for the repair costs.

Sec. 2.

new text begin [500.216] LIMITS ON CERTAIN RESIDENTIAL PROPERTY RIGHTS
PROHIBITED; SIGNS.
new text end

new text begin Subdivision 1. new text end

new text begin Political campaign signs. new text end

new text begin (a) Any provision of any homeowners
association document that limits the right of an owner of a townhome or single-family
dwelling to display a political campaign sign during the calendar dates specified in section
211B.045 is void and unenforceable.
new text end

new text begin (b) "Homeowners association document" includes the declaration, articles of
incorporation, bylaws, and rules and regulations of:
new text end

new text begin (1) a common interest community, as defined in section 515B.1-103(10), regardless
of whether the common interest community is subject to chapter 515B; and
new text end

new text begin (2) a residential community that is not a common interest community, as defined in
section 515B.1-103(10).
new text end

new text begin Subd. 2. new text end

new text begin Exceptions. new text end

new text begin (a) This section does not prohibit limitations narrowly tailored
to protect health or safety.
new text end

new text begin (b) This section does not prohibit limitations that restrict:
new text end

new text begin (1) the size of a sign to be displayed to a size customarily used on residential
property;
new text end

new text begin (2) the installation and display of a sign to a portion of the residential property to
which the person who displays the sign has exclusive use; or
new text end

new text begin (3) illuminating a sign.
new text end

new text begin (c) This section does not prohibit a requirement that a sign be displayed in a legal
manner under Minnesota law, that the sign be in good condition and not altered or defaced,
or that the sign not be affixed in a permanent manner to that portion of property to be
maintained by another person or in a way that causes more than inconsequential damage
to another person's property. A person who causes damage is liable for the repair costs.
new text end

new text begin Subd. 3. new text end

new text begin Recovery of attorney fees. new text end

new text begin If an owner of residential property is denied
a right provided by this section, the owner is entitled to recover, from the party who
denied the right, reasonable attorney fees and expenses if the owner prevails in enforcing
the right. If a sign is installed or displayed in violation of an enforceable restriction or
limitation, the party enforcing the restriction or limitation is entitled to recover, from the
party displaying the sign, reasonable attorney fees and expenses if the enforcing party
prevails in enforcing the restriction or limitation.
new text end

new text begin Subd. 4. new text end

new text begin Applicability. new text end

new text begin (a) This section applies to all homeowners association
documents executed on or after August 1, 2012.
new text end

new text begin (b) An association governed by a homeowners association document executed
before August 1, 2012 may retain existing restrictions that conflict with this section by
affirmative vote of the association, conducted no later than July 30, 2013. If a vote
to retain the existing restrictions is unsuccessful or is not conducted by that date, the
prohibitions contained in this section apply to the association's homeowners association
document effective August 1, 2013.
new text end

Sec. 3.

Minnesota Statutes 2010, section 515B.3-116, is amended to read:


515B.3-116 LIEN FOR ASSESSMENTS.

(a) The association has a lien on a unit for any assessment levied against that unit
from the time the assessment becomes due. If an assessment is payable in installments, the
full amount of the assessment is a lien from the time the first installment thereof becomes
due. Unless the declaration otherwise provides, fees, charges, late charges, deleted text beginfinesdeleted text end and
interest charges pursuant to section 515B.3-102(a)(10), (11) and (12) are liens, and are
enforceable as assessments, under this section. Recording of the declaration constitutes
record notice and perfection of any assessment lien under this section, and no further
recording of any notice of or claim for the lien is required.

(b) Subject to subsection (c), a lien under this section is prior to all other liens and
encumbrances on a unit except (i) liens and encumbrances recorded before the declaration
and, in a cooperative, liens and encumbrances which the association creates, assumes, or
takes subject to, (ii) any first mortgage encumbering the fee simple interest in the unit, or,
in a cooperative, any first security interest encumbering only the unit owner's interest in
the unit, (iii) liens for real estate taxes and other governmental assessments or charges
against the unit, and (iv) a master association lien under section 515B.2-121(h). This
subsection shall not affect the priority of mechanic's liens.

(c) If a first mortgage on a unit is foreclosed, the first mortgage was recorded after
June 1, 1994, and no owner or person who acquires the owner's interest in the unit redeems
pursuant to chapter 580, 581, or 582, the holder of the sheriff's certificate of sale from the
foreclosure of the first mortgage or any person who acquires title to the unit by redemption
as a junior creditor shall take title to the unit subject to a lien in favor of the association
for unpaid assessments for common expenses levied pursuant to section 515B.3-115(a),
(e)(1) to (3), (f), and (i) which became due, without acceleration, during the six months
immediately preceding the end of the owner's period of redemption. The common
expenses shall be based upon the association's then current annual budget, notwithstanding
the use of an alternate common expense plan under section 515B.3-115(a)(2). If a first
security interest encumbering a unit owner's interest in a cooperative unit which is
personal property is foreclosed, the secured party or the purchaser at the sale shall take
title to the unit subject to unpaid assessments for common expenses levied pursuant to
section 515B.3-115(a), (e)(1) to (3), (f), and (i) which became due, without acceleration,
during the six months immediately preceding the first day following either the disposition
date pursuant to section 336.9-610 or the date on which the obligation of the unit owner is
discharged pursuant to section 336.9-622.

(d) Proceedings to enforce an assessment lien shall be instituted within three years
after the last installment of the assessment becomes payable, or shall be barred.

(e) The unit owner of a unit at the time an assessment is due shall be personally
liable to the association for payment of the assessment levied against the unit. If there are
multiple owners of the unit, they shall be jointly and severally liable.

(f) This section does not prohibit actions to recover sums for which subsection (a)
creates a lien nor prohibit an association from taking a deed in lieu of foreclosure.

(g) The association shall furnish to a unit owner or the owner's authorized agent
upon written request of the unit owner or the authorized agent a statement setting forth
the amount of unpaid assessments currently levied against the owner's unit. If the unit
owner's interest is real estate, the statement shall be in recordable form. The statement
shall be furnished within ten business days after receipt of the request and is binding
on the association and every unit owner.

(h) The association's lien may be foreclosed as provided in this subsection.

(1) In a condominium or planned community, the association's lien may be
foreclosed in a like manner as a mortgage containing a power of sale pursuant to chapter
580, or by action pursuant to chapter 581. The association shall have a power of sale to
foreclose the lien pursuant to chapter 580.

(2) In a cooperative whose unit owners' interests are real estate, the association's
lien shall be foreclosed in a like manner as a mortgage on real estate as provided in
paragraph (1).

(3) In a cooperative whose unit owners' interests in the units are personal property,
the association's lien shall be foreclosed in a like manner as a security interest under
article 9 of chapter 336. In any disposition pursuant to section 336.9-610 or retention
pursuant to sections 336.9-620 to 336.9-622, the rights of the parties shall be the same as
those provided by law, except (i) notice of sale, disposition, or retention shall be served on
the unit owner 90 days prior to sale, disposition, or retention, (ii) the association shall be
entitled to its reasonable costs and attorney fees not exceeding the amount provided by
section 582.01, subdivision 1a, (iii) the amount of the association's lien shall be deemed to
be adequate consideration for the unit subject to disposition or retention, notwithstanding
the value of the unit, and (iv) the notice of sale, disposition, or retention shall contain the
following statement in capital letters with the name of the association or secured party
filled in:

"THIS IS TO INFORM YOU THAT BY THIS NOTICE (fill in name of association
or secured party) HAS BEGUN PROCEEDINGS UNDER MINNESOTA STATUTES,
CHAPTER 515B, TO FORECLOSE ON YOUR INTEREST IN YOUR UNIT FOR THE
REASON SPECIFIED IN THIS NOTICE. YOUR INTEREST IN YOUR UNIT WILL
TERMINATE 90 DAYS AFTER SERVICE OF THIS NOTICE ON YOU UNLESS
BEFORE THEN:

(a) THE PERSON AUTHORIZED BY (fill in the name of association or secured
party) AND DESCRIBED IN THIS NOTICE TO RECEIVE PAYMENTS RECEIVES
FROM YOU:

(1) THE AMOUNT THIS NOTICE SAYS YOU OWE; PLUS

(2) THE COSTS INCURRED TO SERVE THIS NOTICE ON YOU; PLUS

(3) $500 TO APPLY TO ATTORNEYS FEES ACTUALLY EXPENDED OR
INCURRED; PLUS

(4) ANY ADDITIONAL AMOUNTS FOR YOUR UNIT BECOMING DUE TO
(fill in name of association or secured party) AFTER THE DATE OF THIS NOTICE; OR

(b) YOU SECURE FROM A DISTRICT COURT AN ORDER THAT THE
FORECLOSURE OF YOUR RIGHTS TO YOUR UNIT BE SUSPENDED UNTIL
YOUR CLAIMS OR DEFENSES ARE FINALLY DISPOSED OF BY TRIAL,
HEARING, OR SETTLEMENT. YOUR ACTION MUST SPECIFICALLY STATE
THOSE FACTS AND GROUNDS THAT DEMONSTRATE YOUR CLAIMS OR
DEFENSES.

IF YOU DO NOT DO ONE OR THE OTHER OF THE ABOVE THINGS WITHIN
THE TIME PERIOD SPECIFIED IN THIS NOTICE, YOUR OWNERSHIP RIGHTS
IN YOUR UNIT WILL TERMINATE AT THE END OF THE PERIOD, YOU WILL
LOSE ALL THE MONEY YOU HAVE PAID FOR YOUR UNIT, YOU WILL LOSE
YOUR RIGHT TO POSSESSION OF YOUR UNIT, YOU MAY LOSE YOUR RIGHT
TO ASSERT ANY CLAIMS OR DEFENSES THAT YOU MIGHT HAVE, AND YOU
WILL BE EVICTED. IF YOU HAVE ANY QUESTIONS ABOUT THIS NOTICE,
CONTACT AN ATTORNEY IMMEDIATELY."

(4) In any foreclosure pursuant to chapter 580, 581, or 582, the rights of the parties
shall be the same as those provided by law, except (i) the period of redemption for unit
owners shall be six months from the date of sale or a lesser period authorized by law, (ii)
in a foreclosure by advertisement under chapter 580, the foreclosing party shall be entitled
to costs and disbursements of foreclosure and attorneys fees authorized by the declaration
or bylaws, notwithstanding the provisions of section 582.01, subdivisions 1 and 1a, (iii) in
a foreclosure by action under chapter 581, the foreclosing party shall be entitled to costs
and disbursements of foreclosure and attorneys fees as the court shall determine, and (iv)
the amount of the association's lien shall be deemed to be adequate consideration for the
unit subject to foreclosure, notwithstanding the value of the unit.

new text begin (5) Minor violations of the declaration, bylaws, or rules and regulations of
the association for which late charges, interest, or fines are imposed under section
515B.3-102(a)(11) may not be the basis for initiating a foreclosure proceeding under
this section.
new text end

(i) If a holder of a sheriff's certificate of sale, prior to the expiration of the period of
redemption, pays any past due or current assessments, or any other charges lienable as
assessments, with respect to the unit described in the sheriff's certificate, then the amount
paid shall be a part of the sum required to be paid to redeem under section 582.03.

(j) In a cooperative, if the unit owner fails to redeem before the expiration of the
redemption period in a foreclosure of the association's assessment lien, the association
may bring an action for eviction against the unit owner and any persons in possession of
the unit, and in that case section 504B.291 shall not apply.

(k) An association may assign its lien rights in the same manner as any other secured
party.